Group CEO's Statement
CDL is well placed to navigate the ever-evolving sustainability development and rising investor expectations globally and locally. Our Environmental, Social and Governance (ESG) strategy and ethos has positioned us well in the race to zero.
The world is in a dire climate emergency. The warmest period in the past 170 years is the last seven years1, making the past 10 years from 2012 to 2021 the warmest decade on record. South Asia countries such as India, China, Thailand and Myanmar continued to experience raging floods. Closer to home, Singapore was hit with flash floods incidents and warmer temperatures.
In 2021, the Intergovernmental Panel on Climate Change’s 6th Assessment Report was deemed a “code red for humanity”.2 Embracing sustainability is no longer a choice, but a critical necessity.
The World Economic Forum’s (WEF) Global Risks Report 2022 reported that environmental risks were perceived to be the five most critical long-term threats in the next 10 years. Climate action failure was deemed the most critical, with most commentators positing that too little was being done.3 WEF even asserted that the COVID-19 pandemic pales in comparison to the long-term risks of climate change.4 This signals the severity of climate change concerns.
It is no longer just about short-term profitability for companies across the globe. For companies to retain their competitive advantage and create enduring value, leaders must first accept that sustainability is material to a company’s long-term growth. Integrating sustainability into their business strategies is critical to building resilience and being ready for unprecedented challenges.
However, COP26 gave renewed hope for global collaboration to galvanise change for a 1.5°C warmer scenario by 2030.
Zeroing in on Future Value
CDL is well placed to navigate the ever-evolving sustainability landscape and rising investor expectations globally. Our Environmental, Social and Governance (ESG) strategy, coupled with our ethos of “Conserving as We Construct”, has positioned us well in the race to zero. We remain committed to achieving three deliverables: “Decarbonisation”, “Digitalisation & Innovation” and “Disclosure and Communication”. Our value creation business model, anchored on four key pillars—Integration, Innovation, Investment, and Impact has helped us establish a strong foundation for further advancement.
As a demonstration of our commitment, in February 2021, CDL signed the World Green Building Council (WorldGBC)’s Net Zero Carbon Buildings Commitment, and is the first real estate conglomerate in Southeast Asia to do so. This is our pledge to achieve net zero operational carbon by 2030. In November, we expanded our commitment towards a net-zero whole life carbon-built environment, which will include reducing embodied carbon. This decision marks a leap forward in our decarbonisation journey, and we will continue enhancing our emissions pathways to reach this ambitious goal.
We have also stepped up our decarbonisation commitment, aligning ourselves with even more ambitious carbon emissions reduction targets that have been assessed and validated by the Science Based Targets Initiative (SBTi). The revised targets will help accelerate climate action to limit global warming to 1.5°C and support CDL’s WorldGBC Net Zero Carbon Buildings Commitment.
In November 2021, through the pilot auction of Climate Impact X (CIX), CDL successfully secured high-quality carbon credits for offsetting greenhouse gas emissions from our operations. These credits, which are sourced from natural climate solutions, will be utilised over the next three years to offset an estimated 6% to 7% of emissions from our operations per year to complement CDL’s net zero targets by 2030. We will continue to explore more of such innovative solutions to support our decarbonisation efforts.
Racing to net zero as one will remain the cornerstone for our sustainability strategy in this decade of action.
Whilst we have made good progress over the past two decades, there is always room to do more. CDL will continue to embrace change, transform our business, and champion innovative solutions to future-proof our business and create value for our stakeholders. Racing to net zero as one will remain the cornerstone for our sustainability strategy in this decade of action.
Integration: Ensuring Strong Fundamentals for Business and Climate Resilience
Climate risks are investment risks, and the business case for sustainability reporting has never been stronger. CDL was the first Singapore company to publish a dedicated sustainability report in 2008. Since then, we have released 15 sustainability reports covering an increasingly wider scope and aligning ourselves to the best market standards each time. Target setting, tracking, and reporting have helped us to align ourselves with global and local goals, identify gaps and commit to strategic action for better deliverables. CDL also continues to cultivate responsible business values and supports the United Nations Global Compact’s initiatives, upholding its Ten Principles.
To emphasise the urgency and importance of climate action, the Singapore Exchange Regulation announced in August 2021 that climate-related disclosures guided by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) would be progressively made mandatory in the coming years. Additionally, in October 2021, the GRI Standards were strengthened, setting a new global benchmark for corporate transparency built on concepts of impact, material topics, human rights due diligence and stakeholder engagement. In February 2022, the Singapore government announced an enhanced climate ambition and commitment for the country to achieve net zero emissions by or around 2050. The Singapore Budget 2022 also included plans to progressively increase carbon tax from 2024 to 2030, to help achieve the national net zero goal.
The CDL Future Value 2030 Sustainability Blueprint established in 2017 maps out our strategic goals and ESG targets and is effectively integrated into CDL’s business strategy and operations. Since then, we have continued to track and report our performance quarterly and annually.
To address the changing stakeholder expectations, tackle emerging risks, and future-proof our business, we have conducted annual materiality assessments since 2014. Today, the top five issues comprise: climate resilience, energy efficiency and adoption of renewables, innovation, stakeholder impact and partnerships, as well as product/service quality and responsibility.
Innovation: Digitalisation and Sustainable Technologies for a Green Revolution
A low-carbon future is not possible without smart and sustainable solutions. Innovation has been one of CDL’s top ESG issues since 2017. In 2021, it was once again ranked as one of the top three material issues. In the past year, we have prioritised and intensified our search and application of viable green technology solutions, whilst tapping on the power of cross-sector partnerships.
CDL’s strategic R&D partnership with the NUS College of Design and Engineering to develop smart home innovations continues to deliver impactful results. CDL piloted the Acoustic Friendly Ventilation Window at Irwell Hill Residences in 2021. This provides four times better ventilation as compared to an open conventional window, and reduces environment noise up to four times more than usual. CDL also invested in Taronga Ventures, an APAC-based PropTech VC fund, to accelerate the implementation of sustainability-focused innovations that will support our commitment to achieve net-zero operational carbon by 2030 for new and existing wholly-owned assets and developments under our direct operational and management control.
To further complement CDL’s net zero goal, CDL introduced a Smart, Sustainable and Super Low Energy (3S) Green Building framework in 2020. This was established to expand CDL’s green procurement guidelines and is aligned with BCA’s Super Low Energy (SLE) programme requirements, as well as international standards for advancing health and well-being in buildings. In 2021, in alignment with the expanded WorldGBC Net Zero Carbon Commitment, we updated the 3S Green Building Framework to include embodied carbon management.
From encouraging Electric Vehicle (EV) adoption via deploying EV chargers at our properties to greening our city, we are well placed to accelerate Singapore’s national sustainability agenda. We will continue to search for and adopt sustainable building technologies to support the national vision for a smarter, greener and more liveable Singapore.
Investment: Building Leverage for the Future via Sustainable Finance
CDL Group reported a return to profitability with net attributable profit after tax and non-controlling interest (PATMI) of $129.7 million for the second half-year 2021 (2H 2021) and $97.7 million for the full year ended 31 December 2021 (FY 2021). Revenue for 2H 2021 increased by 38.4% to $1.4 billion (2H 2020: $1.0 billion) and 24.5% to $2.6 billion for FY 2021 (FY 2020: $2.1 billion). For 2H 2021, the Group saw a jump in revenue contribution from its hotel operations segment across all regions, particularly in the US and Europe, driven by accelerated global vaccine distribution and the gradual relaxation of travel restrictions.
As the demand for green financing grows in the acceleration towards climate action, companies with strong ESG performance will gain better access to ESG investment funds, and sustainable finance. In September 2021, CDL became a proud signatory of the UN Principles for Responsible Investment (PRI), an investor initiative in partnership with UNEP Finance Initiative and the UN Global Compact. As of November 2021, the total AUM of companies that are committed to PRI was more than US$121 trillion, signalling a rapidly accelerating transition towards sustainable assets.
In September 2021, CDL became a proud signatory of the UN Principles for Responsible Investment (PRI), an investor initiative in partnership with UNEP Finance Initiative and the UN Global Compact.
In December 2021, we rolled out our Sustainable Investment Principles (SIP). This reinforces CDL’s commitment in taking proactive action in assessing potential portfolio risks and opportunities for sustainable investment decisions. The SIP complements our existing ESG policies and guidelines. Furthermore, the SIP is formulated in line with the Glasgow Climate Pact and aligned with the global best practices laid out in the United Nations Sustainable Development Goals (UN SDGs), UN PRI, TCFD, United Nations Environment Programme Finance Initiative (UNEP FI) and other relevant frameworks.
Since issuing our first green bond in 2017, we have amassed more than $3 billion of sustainable finance, including various green loans, a green revolving credit facility, and a sustainability-linked loan. In April 2021, CDL’s South Beach Consortium secured a 5-year green loan totalling $1.22 billion – one of Singapore’s largest green loans to date. In August 2021, CDL and its JV partner jointly secured green loans amounting to $847 million for the financing of two upcoming developments in Singapore – Piccadilly Grand and Tengah Garden Walk EC. As a green developer, we are heartened that our strong sustainability track record enables CDL to tap into the fast-growing sustainable financing pool to benefit our joint venture projects, sharing our green vision of a low-carbon future with our like-minded partners.
For our successful R&D and pilot of DigiHUB, CDL secured a discount on the SDG Innovation Loan provided by DBS Bank, making us the first Singapore entity to achieve a discount on a sustainability-linked loan through the adoption of an innovative project that supports the UN SDGs on a large-scale basis. More information can be found on page 17 of this report.
Impact: A Nexus for Change
From aligning with global agendas to our recognition as a thought leader, CDL continues to be a driving force in the sustainability landscape.
What gets measured gets managed. Tracking the impact of our corporate sustainability efforts drives continuous improvement. We are glad that our performance has been affirmed by leading global sustainability benchmarks and rankings. For the full listing, please refer to page 7 of this report for more details:
- Global 100 Most Sustainable Corporations in the World by Corporate Knights: Ranked 5th in 2022, maintaining ranking as the world’s most sustainable real estate management and development company for the fourth consecutive year as well as the only Singapore Company listed for 13 consecutive years
- CDP: The only company in Southeast Asia and Hong Kong to maintain double ‘A’s for climate change (since 2018) and water security (since 2019)
- Dow Jones Sustainability Indices (DJSI): Recognised as an index component in the DJSI World and DJSI Asia Pacific Indices since 2011
- MSCI ESG Research: Maintained ‘AAA’ leader rating since 2010
- Global Real Estate Sustainability Benchmark (GRESB) 2021: Global Sector Leader (Diversified – Office/Retail) and Overall Regional Sector Leader (Diversified – Office/Retail)
- Bloomberg Gender-Equality Index (GEI): Listed on the Bloomberg GEI 2022 since 2018
- Sustainalytics: 2022 Industry Top-Rated and Regional Top-Rated
We are also proud to be one of 45 global companies and the only Singapore company to receive His Royal Highness The Prince of Wales’ Terra Carta Seal. This seal is part of the Sustainable Markets Initiative and recognises sustainability leaders in the private sector with globally recognised and credible decarbonisation roadmaps.
Building a sustainable future requires the collaboration of a larger ecosystem and value chain. Through the years, CDL has amplified its impact by investing time and resources into thought leadership and partnerships.
In 2021, CDL actively hosted, moderated, and participated in a record of 124 speaking engagements from global forums to webinars in partnership with esteemed institutions. We were proud to have Ms Esther An, our Chief Sustainability Officer, represent both the Singapore private sector and CDL at COP26, where she was invited to take part in the Built Environment Leaders Panel that was jointly hosted by United Nations Framework Convention on Climate Change, the World Business Council for Sustainable Development and the World Green Building Council. Youth empowerment to fight climate change has always been CDL’s belief and in partnership with the Singapore Youth for Climate Action, CDL curated a series of initiatives under the Keep Calm & Love our Planet campaign to turn climate anxiety amongst youths into positive action.
CDL’s commitment to building sustainable communities across sectors and countries remained undeterred during the pandemic in 2020 and 2021. Designed and built in 2017 as the first ground-up and zero-energy facility in Singapore, the Singapore Sustainability Academy (SSA) has been a key platform for CDL’s advocacy work in climate action aligned with the UN SDGs. Despite tightened measures to mitigate the spread of COVID-19, we adopted virtual and hybrid event formats at the SSA to remain connected and expand our impact beyond geographical borders and communities, reaching out to thousands of participants locally and overseas in 2021. Some of our key initiatives included The Conscious Festival by Green is the New Black, Sustainable Fashion 2.0, the second instalment of My Tree House’s Eco-Storytelling Contest, and our Youth4Climate Concert 2021.
Amidst growing demands for ESG training, CDL and Global Green Connect (GGC) launched Sustainability Connect, a platform to connect and empower sustainability professionals. Leveraging on CDL’s and GGC’s global network of experienced sustainability professionals from diverse sectors and industries, Sustainability Connect aims to equip practitioners with the necessary skills to transform and help their employers future-proof their businesses for long-term success by using workshops, panels and other training initiatives.
Active collaboration with the public sector continues to be critical in CDL’s sustainability drive, as seen in our partnership with National Parks Board to hold our “Change the Present, Save the Future” exhibition in support of the Ministry of Sustainability and the Environment’s Climate Action Week 2021 and the Singapore Green Plan 2030, which has been attracting an average of 2,000 visitors per month. We will be launching the second edition of our Climate Action Exhibition series in April 2022, themed “Change the Present, Save the Oceans”, focusing on marine biodiversity, plastic pollution, and sustainable living.
Looking Ahead – Winning the Race to Zero, Adding Purpose to the Triple Bottom Line
As Singapore’s real estate pioneer and green building leader, CDL steadfastly aligns our business with global and national goals to mitigate the negative impact of climate change. With CDL’s Future Value 2030 Sustainability Blueprint as the bedrock for our ambitious ESG goals and strategies, we are well placed to accelerate our net zero goals. Contributing to a sustainable future will remain the purpose of our business.
The pandemic has challenged us to continuously push the envelope with climate-focused strategies and reinforced our conviction towards climate action. Climate threats on the planet have a severe impact on people and the performance of businesses, and no one can thrive without a healthy planet.
In closing, I would like to thank everyone who has journeyed alongside us for your continued support of CDL’s vision in creating a more sustainable planet. The cooperation and encouragement we have received from all stakeholders has played a vital role in future-proofing our business and pushing the green agenda.
It is time to turn ambition into action.
Group Chief Executive Officer
|1||2021 Among Earth’s Hottest Years, UN Says as Climate Meetings Start. Bloomberg. 31 October 2021.|
|2||Climate change: IPCC report is ‘code red for humanity. BBC. 9 August 2021.|
|3||The Global Risks Report 2022, 17th Edition. World Economic Forum.|
|4||Global Risks Report 2022: What you need to know. 11 January 2022.|