NATURAL CAPITAL

RESPONSIBLE SUPPLY CHAIN AND SOURCING

Responsible Material Use and Green Procurement

Development and management of buildings involves an extensive use of materials and waste generation. Hence, we set clear guidelines and specifications on the procurement of materials and construction management to reduce the overall impact of our projects across their life-cycle. We also acknowledge that the use of virgin materials can impact the environment and human health. By specifying the use of sustainable and non-toxic building materials in our developments, we can deliver environmental, social, and business benefits.

Since 2008, CDL has had the Green Procurement Guideline in place with clear specifications for responsible sourcing along our supply chain. In line with our Corporate EHS Policy, which was introduced in 2003, the guidelines encourage the use of eco-friendly and recycled materials that have been certified by approved local certification bodies, such as SGBC and SEC.

Our guidelines also indicate our preference for vendors that are ISO 14001, OHSAS 18001, ISO 45001, and/or BizSAFE Level 3 certified. In key operations like project development and property management, major suppliers and builders must meet the EHS pre-qualification criteria. All suppliers are required to sign a Supplier Code of Conduct, which provides comprehensive guiding principles for our vendors and suppliers to comply with CDL’s expectations of ethical standards, including health, safety and environment.

We have established targets for our critical suppliers, which are the suppliers for our key business units in asset management and property development, including our builders and consultants.

Our target is to ensure 100% of appointed suppliers are certified by recognised EHS standards, by 2030. In 2019, 100% of our builders and consultants for property development obtained ISO 14001 and/or OHSAS 18001 certifications. Prior to the awarding of a development project contract, CDL places considerable emphasis on the EHS culture and track record of potential suppliers and contractors. In 2019, 85% of suppliers appointed by asset management department were certified by recognised EHS standards.¹ Going forward, we will review our targets and deepen supplier engagement to progressively enhance our supply chain.

CDL’S TOP FIVE BUILDING MATERIALS (TONNES)

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For the SSA, which started construction in 2016, at least 80% of the structure was built with Cross Laminated Timber (CLT) and Glued Laminated Timber (Glulam). CLT in particular is harvested from sustainably managed forests. Both the CLT and Glulam used in the construction of the Academy were verified by the Nature’s Barcode^TM system as coming from responsible sources. The system entails scientific tests like DNA analysis to minimise the risk that the wood materials are derived from illegal logging activities.

In anticipation that consumers may shift their preference to low-carbon premises, and carbon construction materials such as steel and cement may become increasingly costly, CDL has set a target to reduce the embodied carbon of our building materials by 24%, instead of their conventional equivalents, by 2030. Monitoring and reporting of the embodied carbon performance of our projects against the adopted targets will enhance CDL’s supply chain management and encourage the use of lowcarbon and recycled alternatives to address and reduce the total emissions impact. An interim target of 7% reduction was set for all new projects awarded from 2018 onwards, where the performance will be monitored closely towards 2020¹⁶.

At CDL, green features, such as energy-efficient of the lighting and air-conditioning, water-efficient irrigation system and passive cool design architecture, are highlighted in our marketing collateral Eco Page for every residential project development. At the sales galleries, the information is displayed prominently on the Eco Wall to educate and create awareness amongst potential home-buyers. Outstanding green features and facilities such as the smart home devices and free-to-use electric bikes are also highlighted in the cdlhomes website. We also provide Your Personal Green Living Guide to homebuyers during the unit hand over. The green guide explains the green features within the home as well as the common areas, so that residents can better appreciate the sustainability concept that go into the design of the condominiums.

For our tenants, we provide equipment manuals for residential units and fitting out manuals for commercial spaces. The fitting out manual specifies the required standard for materials used in fitting out works and recommends green design guidelines for the tenants to follow when designing the leased premises.

Supply Chain and Supplier Risk Analysis

Supply chain risk management is essential to prepare businesses for events such as natural disasters, extreme weather conditions and health pandemics that can lead to transport or supply chain disruptions. To better understand CDL’s business risks from our supply chain, we commenced a Supply Chain Segmentation Study on our top 100 suppliers last year. Findings from this comprehensive study will enable the company to better prioritise supplier engagement efforts and enhance supplier management programmes. Based on preliminary findings, an estimated 19% of our top 100 suppliers, from whom we source our building materials from, fall into the ‘Priority’ category due to potentially high social risks and high leverage.² Social risk scores are calculated based on factors which include human rights vulnerability and forced labour. Targeted to be completed in Q1 2020, the analysis will further identify the impacts of inherent environmental sourcing risks.

The study is an expansion of the supply chain scenario planning conducted in 2017, which helped strengthen the company’s understanding of how emerging trends, such as automation and climate change, presented risks and opportunities to our supply chain strategy. Based on the outcomes of the 2017 study, CDL employed a shield-and-sword approach, allowing us to implement plans to protect and defend our current supply chain against immediate risks, while building our organisational agility and capability to optimise near and long-term opportunities.