TURNING RISKS TO OPPORTUNITIES FOR SUSTAINABILITY

The table below outlines our actions in addressing risks and opportunities related to CDL’s top 17 material ESG issues identified. They are mapped to 14 relevant UN SDGs and the four pillars of the TCFD framework. Some of these ESG risks and opportunities are also captured in CDL’s Enterprise Risk Management (ERM) framework, which can be found in the Risk Management section in CDL’s Annual Report 2021.

Legend for TCFD Pillars:
G – Governance; S – Strategy; RM – Risk Management; M&T – Metrics & Targets

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CDL’S Top Material ESG Issues Risks and Opportunities CDL’s Responses and Achievements
1. Climate Resilience

Supporting SDGs:

TCFD Pillars: G, S, RM, M&T

The built sector contributes to some 40% of global energy-related carbon emissions and is heavily reliant on natural resources for operations.

Regulatory transition risks such as carbon tax, water pricing, electricity tariffs and potentially stricter building design requirements will pose challenges to maintain profitability and sustain growth.

Extreme weather patterns can lead to stranded assets and affect the well-being of building occupants. Climate-proofing of CDL’s buildings in line with a low-carbon future is key to our growth strategy.

Climate change is a material strategic risk under CDL’s enterprise risk assessment framework. We are committed to implementing mitigation and adaptation measures to combat the effects of climate change on our portfolio of assets.

For close to a decade, CDL has been achieving our voluntary target of at least BCA Green Mark GoldPLUS certification for all new developments, two tiers above the previous mandatory requirement.1 To date, 85% of CDL’s portfolio of owned and managed buildings, based on gross floor area, have achieved the BCA Green Mark certification.

In February 2021, CDL pledged support to the WorldGBC’s Net Zero Carbon Buildings Commitment to achieve net zero operational carbon by 2030 for our new and existing wholly-owned assets and developments under our direct operational and management control. In November 2021, this commitment expanded to include maximum reduction in embodied carbon and compensation of all residual upfront emissions via offsetting for new developments by 2030 and for all buildings to be net zero carbon by 2050.

To align with a 1.5°C warmer scenario, CDL revised our SBTi-validated GHG emissions intensity reduction targets (Scope 1, 2 and 3) in December 2021; with additional targets to reduce Scope 3 emissions.

To better understand physical and transition risks from COP26 negotiation outcomes and impact from COVID-19, CDL commenced our third climate analysis study in December 2021.

In November 2021, CDL was the only Singapore company amongst 19 pioneering companies to participate and secure carbon credits in Climate Impact X’s pilot auction featuring a curated portfolio of verified natural climate solutions projects.

2. Energy Efficiency and Adoption of Renewables

Supporting SDGs:

TCFD Pillars: G, S, RM, M&T

The global green energy transition following COP26 agreements entails the phasing down of fossil fuels in favour of renewables and rapidly decreasing carbon emissions.

More stringent regulations on the energy performance of buildings and rising carbon tax are expected, with the launch of the Singapore Green Plan 2030 and BCA Green Mark 2021.

With energy consumption contributing to a large portion of CDL’s carbon footprint, CDL implements robust low-carbon strategies for our managed buildings to maintain our leadership as a green developer.

Through robust resource management and regular asset upgrading and enhancement efforts, CDL has been maintaining good energy performance for our existing commercial properties.

Since 2004, CDL has retrofitted all our existing managed buildings. From 2012 to 2021, CDL achieved savings of more than $34 million in energy expenses across all managed properties.

CDL achieved our first BCA Green Mark Super Low Energy (SLE) award for residential developments as well as for serviced apartments, office and retail ahead of our 2023 goal, for 80 Anson Road (former Fuji Xerox Towers).

3. Innovation

Supporting SDGs:

TCFD Pillars: S, RM

Innovation is a key enabler to achieve our ESG goals and targets, while also creating value for our bottom line.

By investing in green, smart and healthy building technologies, CDL ensures that our products and services operate at the highest quality for our building users, and remain resilient against disruptions.

Partnerships with research institutions, innovators and start-ups allow CDL to tap on emerging PropTech innovations for large-scale implementations.

Innovation is a top priority in CDL’s growth and investment strategy. Our pipeline of innovation projects in green buildings and digitalisation continues to grow, generating environmental, social and economic benefits.

CDL piloted several technologies including autonomous UVC disinfection robots, automated thermal scanners, indoor air quality sensors, and anti-microbial disposable films, to create safer and healthier environments for our building users. We continue to monitor the progress and results of these innovation testbeds with our R&D partners, such as SERIS, NUS-CDL Smart Green Home, NUS-CDL Tropical Technologies Lab and Singapore University of Technology and Design (SUTD).

CDL also piloted DigiHUB, an in-house digital platform that offers predictive and integrated facilities management solutions, developed by CBM Pte Ltd, a wholly-owned subsidiary of CDL.

In partnership with Seven Clean Seas, a Singapore-based ocean cleanup organisation, 11 Tampines Concourse was certified with a first-of-its-kind plastic neutrality certification for a building, under the Ocean-Bound Plastic’s Plastic Producer Standard.

4. Stakeholder Impact and Partnerships

Supporting SDGs:

TCFD Pillars: G, S

Building goodwill in the community provides CDL with a strong social license to operate. Through working with like-minded partners, CDL has pioneered and developed partnerships that multiply our outreach and impact on climate action and UN SDGs. In partnership with NParks, CDL launched a climate exhibition themed “Change the Present, Save the Future” at the CDL Green Gallery. Held in support of the Ministry of Sustainability and the Environment’s (MSE) Climate Action Week 2021, it amplified the call to action in support of global and national climate efforts.

CDL also partnered with Singapore Youth for Climate Action to launch the “Keep Calm and Love Our Planet” campaign at COP26 in November 2021, which aims to turn climate anxiety into positive action.

In light of national COVID-19 measures, CDL held both virtual and hybrid events to continue our engagement efforts. The “Future of Sustainability Reporting” webinar series was supported by key partners such as Singapore Exchange (SGX), Singapore Institute of Directors (SID) and Global Reporting Initiative (GRI). Other Virtual SSA events include Storytelling @ My Tree House with National Library Board (NLB) and the Green Is the New Black’s Conscious Festival.

5. Product/Service Quality and Responsibility

Supporting SDGs:

TCFD Pillars: S, RM

Rising costs of building materials and labour shortages due to COVID-19 can result in delays in completion and impact our reputation and financials.

As an asset owner and manager, CDL takes pride in ensuring a safe and healthy environment for our building users.

CDL remains committed to delivering safe and high-quality products and services for our homebuyers and tenants.

To ensure compliance and prevent latent defects, CDL has a robust process guided by the Design for Safety regulations to identify design risks and assess the severity of EHS impacts throughout the construction stages of our developments.

CDL unveiled its new in-house proprietary electronic system for expressions of interest, balloting and satellite sales bookings for the sales launch of Irwell Hill Residences and CanningHill Piers.

Potential homebuyers can access 3D virtual tours of CDL’s new launches and online sales presentations from the comfort of their homes.

The Virtual Unit Handover initiative piloted in 2020 will continue to serve us well for future projects that obtain TOP. Homeowners can opt for a virtual walkthrough, led by CDL’s Customer Service Officers.

6. Economic Contribution to Society

Supporting SDGs:

TCFD Pillars: G, S

CDL’s financial performance impacts the vested interests of our employees, shareholders, investors and supply chain.

The generation of employment contributes to the economic growth of the markets that we operate in and the livelihoods in our supply chain.

Stabilising and reopening our commercial and retail operations whilst establishing recovery protocols help to ensure the commercial viability of our business and tenants.

Direct donations to the community are part of CDL’s community investments strategy to give back to the community.

As CDL remains resilient against the prolonged impact of the pandemic, we continue to uphold high standards of ethical business practices. We maintain strong branding and deliver quality products to generate profits and provide optimal returns for investors in our fiduciary duty as stewards of capital.

CDL has committed more than $40 million in property tax rebates and rental relief to our Singapore and overseas retail and commercial tenants. This includes passing on the full quantum of property tax rebates from the Singapore government to local tenants. Rent restructuring was extended to selected tenants whose businesses were badly affected, as well as rental payment flexibility for those facing severe cash flow issues. Rental, operational and marketing support was provided to tenants adversely impacted by the stricter measures. Close to 90% of CDL’s retail tenants have received rental assistance.

A long-standing partner of Assisi Hospice since 1999, CDL raised more than $113,000 for the hospice in 2021 through the CDL Challenge and Assisi e-Fun Day. The CDL Challenge is an in-house fundraising campaign that rallied donations from stakeholders, namely staff and business partners. At the Assisi e-Fun Day 2021, CDL and our subsidiary, Millennium & Copthorne Hotels Limited (M&C), raised funds through virtual stalls and provided donations-in-kind, namely shopping, F&B and hotel vouchers towards the event’s lucky draw and game prizes.

7. Occupational Health, Safety and Well-being

Supporting SDGs:

TCFD Pillars: S, RM, M&T

Most activities at CDL’s construction sites and managed buildings are carried out by our appointed contractors. Safety lapses by our contractors can expose CDL to reputation and regulatory risks, and endanger the well-being of the site workers and building users.

Safe management measures continue to be enforced to prevent community transmission of COVID-19 at CDL’s construction sites and managed buildings.

Prolonged Work-From-Home (WFH) arrangements have the potential to affect employees’ mental well-being, due to lack of physical connection at the workplace and blurring of work and personal boundaries.

The safety, health and wellness of CDL’s employees and contractors’ workers have always been amongst our top priorities.

CDL complies with ISO 45001 Occupational Health and Safety for our key operations in Singapore to effectively manage the safety, health and well-being of our employees and workers, directly or indirectly hired.

Established since the early 2000s, CDL’s EHS Policy and CDL 5-Star EHS Assessment have been continually enhanced in standard and scope. CDL works closely with the appointed contractors, where possible, to ensure migrant workers’ work and living conditions are in line with national guidelines. Additionally, the CDL 5-Star EHS Assessment also recognises and awards contractor companies that display EHS excellence and promote workers’ welfare. This Assessment also gives awards to exemplary workers. All six project sites are currently averaging above 90% of the total score for their EHS performance.

Since the start of Phase 1 post-Circuit Breaker on 2 June 2020, CDL’s EHS team regularly conducts compliance checks on the implementation of Safe Management Measures (SMM) across all its managed properties. CDL has also incorporated SMM inspection checks into the regular EHS inspections to ensure compliance. Strict monitoring and response procedures continue to be reviewed and updated to align with the latest public health advisories.

8. Sustainable Finance

Supporting SDGs:

TCFD Pillars: G, S

The rise of ESG investing and responsible banking has unlocked alternative financing streams and granted CDL the access to a wider pool of ESG-centric investors and lenders.

Companies that lag in their ESG performance could be penalised through higher cost of debt financing and face divestment from shareholders.

As of 31 December 2021, CDL has secured more than $3 billion of sustainable financing, including a green bond, several green loans and a sustainability-linked loan.

In 2021, CDL and our JV partner jointly secured green loans of $847 million to finance the development of two Government Land Sales (GLS) sites at Piccadilly Grand and Tengah Garden Walk.

South Beach Consortium, a CDL JV, obtained a $1.22 billion green loan for the refinancing of South Beach—a double BCA Green Mark Platinum mixed-use development.

As an investor, CDL is a signatory to the UN PRI. We have developed the CDL Sustainable Investment Principles to steward responsible capital allocation and investments decision-making.

9. Water and Waste Management

Supporting SDGs:

TCFD Pillars: G, S, RM, M&T

Prudent water usage can help to lower operational costs of CDL’s managed buildings, and conserve water.

Waste management is a growing concern in Singapore as the country is projected to run out of landfill space by 2035. The Singapore government has stepped up on recycling efforts across the key waste streams to drive circular economy solutions.

CDL’s developments are designed with a lifecycle approach to water sustainability and sound waste management. We adopt technologies to raise water efficiency and manage waste, such as rainwater harvesting and twin-chute pneumatic waste disposal systems, which are implemented at many of our commercial and residential developments.

At our commercial and retail properties, recycling bins and facilities are provided to encourage the recycling of paper, plastic and metal cans by tenants and shoppers.

CDL maintained our inclusion in the 2021 CDP A List for water security, marking our third consecutive year of receiving an ‘A’ score.

10. Ethical and Transparent Business

Supporting SDGs:

TCFD Pillars: G, RM

Bribery and corruption are amongst the highest risks for businesses that could lead to financial and reputational loss. Legal non-compliance can lead to the erosion of trust by CDL’s stakeholders, causing CDL to lose our social license to operate.

By taking a firm stance on our zero-tolerance policy towards fraud, bribery and corruption, CDL can provide strong assurance to our stakeholders, including investors and customers.

CDL benchmarks our practices with the voluntary SS ISO 37001 Anti-bribery Management Systems to minimise gaps. We operate according to industry standards. Anti-money laundering workshops are conducted annually for our employees.

CDL implements clear and transparent policies, risk management systems, and ESG disclosures to continuously monitor and validate business processes. Within CDL’s robust EHS Management System, applicable legal requirements are regularly monitored and evaluated for compliance. Incentives and penalties are also implemented to strengthen contractors’ site management.

For transparency, our corporate and sustainability policies and guidelines are published on our corporate website, sustainability microsite and staff intranet, CDL360.

11. Healthy Buildings

Supporting SDGs:

TCFD Pillars: G, S, RM, M&T

Apart from green features, building occupants appreciate healthy building features that contribute to their health, well-being and productivity.

Buildings with poor IAQ and sanitisation practices are susceptible to viral transmissions.

CDL designs and manages our buildings with the health and wellness of our building occupants in mind. We seek to maximise acoustic comfort, natural ventilation, thermal comfort and biophilic design in our buildings.

Developed in 2020, the CDL Smart, Sustainable and Super Low Carbon (3S) Green Building Framework is a holistic framework that is aligned with BCA SLE buildings requirements and international standards for advancing health and well-being in buildings. In 2021, the 3S Green Building Framework was updated to include embodied carbon management and renamed to CDL Smart, Sustainable and Super Low Carbon (3S) Green Building Framework.

12. Diversity and Inclusion (NEW)

Supporting SDGs:

TCFD Pillars: G, S

Workplace diversity encompasses a wide spectrum, such as gender, race, age and employees with accessibility needs.

A workplace culture that embraces diversity and inclusion will attract and retain talent, while encouraging innovation and empathy.

Diversity and inclusion principles should be embedded into recruitment practices, opportunities for advancement and remuneration policies.

CDL’s recruitment process adheres to strict guidelines on non-discrimination and fairness, regardless of gender, ethnicity, religion, or age. As a company committed to meritocracy, CDL’s compensation and rewards policies are performance-based.

Women represent 69% of CDL’s workforce and close to half of HODs at our Singapore headquarters. CDL is committed to providing equal remuneration and actively monitors gender pay gaps across various staff levels.

CDL embraces an inclusive workplace. Our multi-racial workforce hails from diverse backgrounds. Due to Singapore’s predominantly Chinese population, our workforce comprises a larger percentage of Chinese employees.

13. Responsible Supply Chain

Supporting SDGs:

TCFD Pillars: G, S, RM, M&T

The procurement of unsustainable building materials and unfair labour practices that go against human rights can negatively impact CDL’s ESG performance and reputation, and contribute to the proliferation of such practices in the supply chain.

Usage of toxic building materials can also harm the health of building users and workers.

For more than a decade, CDL has specified responsible sourcing guidelines along our supply chain. This includes the implementation of the Responsible Procurement Guidelines2 since 2008 and the Green Procurement Guideline for property developments since 2009.

In line with our corporate EHS Policy which has undergone regular updates since 2003, these guidelines encourage the use of eco-friendly and recycled materials that have been certified by approved local certification bodies, such as the Singapore Green Building Council (SGBC) and Singapore Environment Council (SEC).

All suppliers are required to sign a Supplier Code of Conduct which provides comprehensive guiding principles for compliance.

CDL completed a supply chain segmentation study in 2020, where environmental (e.g. embodied carbon intensity) and social risks (e.g. forced or child labour) were assessed for our top suppliers and building materials procured for our developments. In 2020 and 2021, the results were shared with the BSC and the relevant business units to further enhance such initiatives.

14. Cyber-readiness, Security and Data Privacy

Supporting SDGs:

TCFD Pillars: G, RM

Strengthening CDL’s capabilities to protect itself and recover from cyber-attacks is vital to preventing data theft, financial loss, and disruption of operations.

In enhancing digital connectivity, the rapid shift to virtual and remote working environment can increase vulnerability in business systems due to user behaviour or external factors such as malware and phishing attacks.

Given rising data privacy concerns both locally and globally, CDL needs to be mindful of compliance requirements for international and local data privacy protection laws.

Besides establishing holistic IT governance structures and developing robust detection and mitigation measures to protect CDL’s critical business systems and data, our response plans are tested by internal auditors and an external professional firm and aligned with industry best practices.

Given the recent developments in data privacy regulations and the increasing impact of potential data privacy breaches, CDL’s risk assessment framework has identified data privacy as a key risk. As such, CDL has been carrying out various mitigating measures including staff awareness training, as well as the monitoring of local and international data privacy developments that are relevant to our businesses.

Recognising that cyber-readiness, security and data privacy are constantly evolving and there will be the emergence of new threats and vulnerabilities, CDL is committed to continuously improving our network security and data protection measures.

15. Future-ready Workforce

Supporting SDGs:

TCFD Pillars: S, RM

Companies need to remain nimble to adapt to changing work conditions and arrangements (e.g. flexiwork and hybrid work models).

A workforce that does not keep up with industry developments, knowledge and technological trends will have a negative impact on human capital, operational efficiency, and business continuity.

Building a workforce with skill sets that future-proof CDL’s business in a fast-evolving global economy is a priority. We actively foster a culture of continuous learning, enabling employees to acquire holistic skills and competencies to stay relevant and adapt to changing job demands.

With most of our workforce working from home in 2021, virtual learning and career development opportunities were made available to our employees. Topics covered include project management, mindfulness, big data and data analytics, sustainability, occupational health and safety, and the cultivation of healthy lifestyles.

16. Human Rights and Labour Conditions

Supporting SDGs:

TCFD Pillars: G, S, RM

Respecting and promoting the rights and dignity of employees, workers and communities help to build a more resilient supply chain, which is expected from responsible businesses.

Creating a workplace that provides a decent work environment, fair remuneration, security in the workplace, freedom of expression, work-life balance, and career growth, is key to building a sustainable workforce. This allows CDL to strengthen employee loyalty and increase work productivity.

CDL engages our contractors and suppliers to abide by our fundamental principles and policies such as the Supplier Code of Conduct, Human Rights Policy, and Universal Design Policy. Since 2001, the CDL 5-Star EHS Assessment – an independent audit tool to assess, measure, and improve the main contractors’ EHS management and performance – has been in place to ensure a comprehensive, audited, and appraised approach.

To help our workforce adapt to WFH arrangements, CDL ensured that our staff were equipped with the knowledge to use digital tools to facilitate effective communication.

CDL conducts a biennial employee engagement survey to understand our employees’ concerns and engagement levels, enabling CDL to be an employer of choice.

17. Biodiversity Conservation (NEW)

Supporting SDGs:

TCFD Pillars: G, S, RM

The health of biodiversity systems is intrinsically linked to climate change.

Without proper assessment and mitigation and prevention measures, the natural habitats of flora and fauna could be negatively impacted during building development and management.

Since 2010, CDL has been voluntarily conducting Biodiversity Impact Assessments (BIA) on greenfield sites before construction. To advance biodiversity protection and urban greenery at our sites and buildings, a Biodiversity Policy, expanding on our BIA practices, was formulated in 2020. The policy complements Singapore’s “City in Nature” vision established in 2021. In 2016, CDL piloted an Environmental Impact Assessment (EIA) study for our Forest Woods residential development. Based on this pilot, CDL is exploring possibilities of applying it for future developments.

This is aligned with CDL’s commitment to adopt nature-based solutions (e.g. biophilic building design) to promote the integration of the built environment with nature.

 

1 In 2021, the new BCA Green Mark 2021 was launched, where new and existing buildings are recognised for building performance that is “above mandatory, regulated standards, that include robust levels of energy efficiency, indoor air quality, greenery provision, active mobility considerations, materials and waste management and water efficiency.” There are now two tiers under the Green Mark Series – GoldPLUS and Platinum. Green Mark 2021 Certification Standard. Building and Construction Authority, 2021.
2 Renamed from Green Procurement Guidelines in 2020.