RESPONSIBLE SUPPLY CHAIN AND SOURCING

Procurement of Sustainable Materials

In a constantly shifting environment fraught with challenges presented by the pandemic and climate change, building resilience into the supply chain is key. Supply chain risk management and robust systems and processes are essential to prepare any business for disruptions that threaten to weaken supply chain capability.

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 Guidelines1 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.

We have established a target to ensure 100% of appointed suppliers2 are certified by recognised EHS standards by 2030. In 2021, 100% of our main contractors and key consultants for property development obtained recognised EHS certifications. Before awarding development project contracts, CDL reviews and evaluates the EHS culture and track record of potential suppliers and contractors. In 2021, 93%3 of suppliers appointed by the asset management division were certified by recognised EHS standards. Going forward, we will review our targets and deepen supplier engagement to progressively enhance our supply chain.

For CDL’s 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 2021 CDP Supplier Engagement Leader for the second consecutive year. This recognition places CDL amongst the top 8% of companies assessed by CDP for supplier engagement on climate change.
1 Renamed from Green Procurement Guidelines in 2020.
2 These refer to suppliers appointed by AM, and main contractors and key consultants (architects, civil & structural engineers, mechanical & electrical engineers) appointed by PD.
3 Of the new suppliers appointed in 2021, 88% were certified by recognised health and safety standards (e.g. ISO 45001, OHSAS 18001, and minimum bizSAFE Level 3 certificates), and 17% were certified by recognised environmental standards (e.g. ISO 14001).

Embodied Carbon Emissions from Construction Materials

Embodied carbon refers to the carbon dioxide equivalent or GHG emissions associated with the non-operational phase of a building and has become an increasingly important area for the built environment sector to address. It includes emissions caused by extraction, manufacturing, transportation, assembly, maintenance, replacement, deconstruction, disposal and end-of-life aspects of the materials and systems that make up a building.

The manufacturing of construction materials such as steel, cement and glass contribute to 10% of the building and construction industry’s global energy related CO2 emissions.4 A universal whole life carbon assessment will be key to accelerate the achievement of net-zero emissions across the entire built environment lifecycle. As part of our renewed SBTi-validated GHG reduction targets, CDL has committed to reduce the embodied carbon of our building materials by 41%, instead of their conventional equivalents, by 2030. Furthermore, we anticipate carbon-intensive construction materials, such as steel and cement, to become increasingly costly.

We also monitor and report the embodied carbon performance of our projects against our adopted targets. This enhances CDL’s supply chain management and encourages the use of low-carbon alternatives.

An interim 2021 target of a 7% reduction in embodied carbon of building materials compared to their conventional equivalents was set for all new projects awarded since 2018. Several projects are expected to obtain TOP by 2022. We track the performance of these projects against the current interim target,5 and raise the next interim target where necessary to map our phased progress towards the 2030 SBTi-validated target of 41% reduction.

The Tapestry project obtained TOP in 2021 and achieved 24.8% reduction in embodied carbon with use of sustainable materials. The next project to be assessed will obtain TOP in 2022.

Managing Impact Of Top Building Materials

Globally, cement manufacturing and steel production are responsible for around 7%6 and 7% to 9%7 of global carbon emissions, respectively. Hence, it is vital to reduce the use of these materials. At CDL, we apply a circular economy approach to materials used for our development projects. To close the waste loop, we use recycled construction materials, such as recycled steel and concrete, wherever applicable. On top of this, we encourage the use of alternative low-carbon materials at our sites. We are also constantly on the lookout for innovative building materials and methods to facilitate the transition to net-zero.

Since 2016, CDL has been tracking and reporting the top five building materials and embodied carbon intensities of the construction materials used in our property development activities to determine the wider carbon lifecycle impact of our projects. The embodied carbon emission intensities for our projects have been derived using BCA’s Carbon Calculator, based on the type and quantity of construction materials used.

4 2021 Global Status Report for Buildings and Construction: Towards a Zero-emission, Efficient and Resilient Buildings and Construction Sector. United Nations Environment Programme, 19 October 2021.
5 Based on the lifecycle of CDL’s project developments, embodied carbon data for building materials is only available upon TOP attainment.
6 Global Cement and Concrete Industry Announces Roadmap to Achieve Groundbreaking ‘Net Zero’ CO2 Emissions by 2050. Global Cement and Concrete Association, 12 October 2021.
7 Net Zero Steel: Sector Transition Strategy. Mission Possible Partnership, 19 October 2021.

 

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CDL’s Top Five Building Materials (Tonnes)

2017# 2018# 2019 2020 2021
Granite 138,312 Granite 67,396 Granite 77,854 Granite 77,885 Granite 71,214
Fine Aggregate (Sand) 87,557 Fine Aggregate (Sand) 52,867 Fine Aggregate (Sand) 58,846 Fine Aggregate (Sand) 58,921 Fine Aggregate (Sand) 53,046
Cement 54,131 Cement 23,738 Cement 20,674 Cement 21,410 Cement 18,289
Steel 18,007 Steel 11,306 Steel 12,823 Steel 12,548 Steel 13,028
Timber 2,799 Ceramic tiles 1,452 Ceramic tiles 2,227 Ceramic & Porcelain Tiles 2,160 Ceramic & Porcelain Tiles 2,086
Top building materials for 2021 pertains to seven project sites that were still under development, hence figures reported were based on the project design stage.
# Figures have been restated to more accurately capture the building materials utilised in the year, instead of the previously used method of reporting the top five building materials for the projects that achieved TOP in the respective years.

Supply Chain and Supplier Risk Analysis

For many businesses worldwide, Scope 3 emissions can account for more than 70% of their carbon footprint.8 Measuring and managing these emissions can motivate a company to choose more sustainable suppliers, improve the energy efficiency of its products, and rethink its sourcing and distribution network — measures that can significantly reduce the overall climate impact.

In 2021, close to 100 management and operation staff of CDL Group attended a virtual Corporate Sustainability Workshop on supply chain risks and climate risks conducted by external consultants. The workshop shared findings from two major studies that CDL had completed in 2020 — the Supply Chain Segmentation Study and the second climate change scenario analysis for a 1.5 C warmer scenario. During the workshop, we discussed topics like migrant and forced labour risks, and raw material sourcing risks, in alignment with international best practices in the construction industry.

In the supply chain segmentation study, environmental and social risks, such as embodied carbon intensity and forced labour, were assessed for CDL’s top 100 suppliers and top five building materials procured for our developments. The study helped to strengthen our understanding of potential risk hotspots within the supply chain and improved our supply chain strategy. There was no significant change in our supply chain in 2021, as such the findings for the study remain relevant. Separately, the climate change scenario analysis identified and assessed physical and transition risks and opportunities as a result of climate change, based on a projected 1.5 C warmer scenario in 2030. More information can be found in the CDL Integrated Sustainability Report 2021.

Through the CDL 5-Star EHS Seminar conducted in 2021, we extended learnings from the Supply Chain Segmentation Study to more than 90 internal and external stakeholders. The training covered supply chain risks and opportunities, suppliers’ risk scores, and possible impacts from COVID-19.

8 Greenhouse Gas Protocol, 4 April 2016.