ENSURING SUPPLY CHAIN RESILIENCE AND SUSTAINABLE SOURCING
With CDL’s pledge to the WorldGBC’s Net Zero Carbon Buildings Commitment and responsibility towards green and responsible procurement, consistent engagement with our supply chain is pivotal for a net zero whole life carbon-built environment.
As a testament to our robust efforts in working with our supplier network to address climate change, we were the only real estate company in Southeast Asia and only Singapore company to be awarded the 2022 CDP Supplier Engagement Leader for the third consecutive year. This recognition places CDL amongst the top 8% of companies assessed by CDP for supplier engagement on climate change.
As the real estate sector transitioned with the phased re-opening of travel, work and play, CDL ensured business continuity and operational excellence with the diversification of our supply chain.
Supply Chain and Supplier Risk Analysis
Singapore is CDL’s key market of operations with by far the largest share of Development Projects (DP) and Investment Properties (IP). Our Supplier Code of Conduct expects all vendors to respect and uphold fundamental human rights principles.1 It also guides our operational assessment and risk mitigation of any health and safety, environmental sustainability as well as trade compliance issues.
Critical Supplier Identification
CDL engages various types of supply chain partners across our value chain and operations. We identify and work closely together with our tier 1 supply chain partners to prevent disruption to delivering quality products and services.
In 2022, approximately 15% of CDL’s almost 400 tier 1 suppliers are considered as our significant suppliers*. These suppliers are based mainly in Singapore as most of CDL’s project developments and managed assets are in Singapore. Our significant suppliers make up almost 30% of our total spend. As part of our supplier assessment, suppliers with substantial actual/potential negative ESG impacts will not be approved to work with CDL and as of end 2022, we had no suppliers observed to have substantial actual/potential negative ESG impacts that were terminated.
|*||Our significant suppliers are identified to have the possibility of substantial risks of negative ESG impacts and/or significant business relevance to our operations. As such, ESG risks and impacts are considered for these suppliers.|
Procurement of Sustainable Materials
For more than a decade, CDL has been implementing sustainable procurement guidelines that set clear specifications for responsible sourcing along our supply chain. This includes the Responsible Procurement Guidelines2 since 2008, and the Green Procurement Guidelines for property developments since 2009. In line with our corporate EHS Policy introduced in 2003, these guidelines encourage the use of eco-friendly and recycled materials that have been certified by approved local certification bodies, such as Singapore Green Building Council (SGBC) and Singapore Environment Council (SEC).
In 2021, we updated our 3S Green Building Framework to align with the latest BCA Green Mark 2021, an internationally recognised green building certification scheme, to stay focused on advancing our commitment to sustainability. The revised framework also includes net zero targets such as embodied carbon management, to guide our stakeholders to adopt sustainable building practices such as low embodied carbon materials.
Our green procurement guidelines also indicate our preference for ISO 14001, OHSAS 18001, ISO 45001, and bizSAFE level 3 certified vendors. In key operations like property development and asset 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, including environment, health, safety, and ethical employment.
Supply Chain Engagement
CDL assesses risks in our supply chain through regular engagement with our upstream suppliers and operational policy alignment with latest regulatory developments. We conducted a detailed supply chain segmentation study on our top 100 suppliers covering manufacture and supplying of raw materials as well as our top five raw materials in 2019. This helped to strengthen our understanding of how emerging trends (e.g., automation and climate change), current risks (e.g., forced labour and migrant risks) and opportunities can affect our supply chain strategy. With no significant change to our supply chain in 2022, the study continues to guide our approach in addressing labour risks within the region. In 2022, through our third climate change scenario study, we also identified heat stress as an additional impact on labour productivity in markets with projected temperature rise, namely Singapore and China.
Sustainability Workshop for Supply Chain on Climate Change and Carbon Management
In December 2022, CDL invited our suppliers from our Asset Management and Property Development departments to better understand and appreciate sustainability-related risks, impacts and the importance of integrating sustainability into their organisations to drive transformative change. Conducted by an external consultant, the session reached out to 60 participants and provided insights into the main drivers of climate change and its impacts, including physical and transitional risks, as well as how GHG emissions can be estimated.
|1||Just and favourable work conditions that respect the employees’ right to freedom of association and collective bargaining; that is free from abuse/harassment and promotes diversity and inclusion with no involvement in unethical labour practices such as child, forced and any form of human trafficking. For foreign workers hired to work on-site: ensure they are employed through fair and ethical sourcing practices and treated with dignity and respect. For workers in instances where suppliers provide on-site or off-site workers’ accommodation, including purpose-bult dormitories and factory-converted dormitories: ensure safe, clean, healthy and dignified living and working conditions.|
|2||Renamed from Green Procurement Guidelines in 2020.|