Group CEO and Executive Director’s Statement

In our relentless battle against climate change, we recognise the increased urgency for the built environment to act swiftly, as buildings are responsible for almost 40% of energy-related global carbon emissions and 50% of global material use.

Dear Stakeholders,

2020 was one of the most unpredictable and challenging years in modern civilisation. With a global lockdown and unprecedented disruption to travel, transportation, supply chains, industries and production, millions of people lost their lives and livelihoods because of the COVID-19 pandemic. The global economy also plunged into its worst recession since World War II. In addition to this economic crisis, 2020 experienced a climate crisis with one of hottest temperatures on record1, exacerbated by devastating bush fires and extreme weather conditions.

In our relentless battle against climate change, we recognise the increased urgency for the built environment to act swiftly, especially since buildings are responsible for almost 40% of energy-related global carbon emissions and 50% of global material use. Based on the 2020 Global Status Report for Buildings and Construction, emissions from building operations hit an all-time high in 2019 as energy demand grew, with the majority of it still met by fossil fuels2. The high environmental impact of the real estate sector places us in a position to drive change towards a low-carbon and sustainable future.

An Urgency to Advance Change Resilience

We believe that change is the only way forward for the sustained growth of our business. Raising the bar on our decarbonisation efforts, CDL became the first real estate developer in Singapore and the first real estate conglomerate in Southeast Asia to sign on to the WorldGBC’s Net Zero Carbon Buildings Commitment. We have committed to achieving net zero operational carbon by 2030 for our new and existing wholly-owned assets and developments under our direct operational and management control.

CDL has remained proactive in exploring the latest green building technologies and solutions. As a leading sustainable developer, we have continued to reduce our carbon footprint, prioritise energy efficiency, and advance the global agenda for liveable and healthy spaces—a critical need amidst the pandemic.

When reflecting on our achievements in 2020, I am confident that our strong fundamentals in sustainability, underpinned by our four strategic pillars—Integration, Innovation, Investment, and Impact—will position us well to tackle future challenges and drive forward a green and resilient recovery. There are boundless opportunities to tap on in the new normal, and we will continue to work closely with our key stakeholders to ride through this storm and emerge stronger.

INTEGRATION: Building Back Better with Strong Sustainability Fundamentals

The CDL Future Value 2030 sustainability blueprint, which maps out our strategic goals and ESG targets, has remained effectively integrated into CDL’s business strategies and operations. We have continued to track and report our performance annually since 2008 and every quarter since 2017. In the year under review, I am glad to report that we are on track to achieve all our key ESG targets, with some areas requiring further examination due to the impact of COVID-19.

To address changing stakeholder expectations, tackle emerging risks and future-proof our business, we have conducted annual materiality assessments since 2014. Given the impact of COVID-19 on businesses (particularly the real estate industry), a more comprehensive materiality study was conducted.

Our 2020 materiality study revealed the reprioritisation of CDL’s top 2019 critical material ESG issues, where the top five priorities are now: occupational health, safety, and well-being; innovation; product/service quality and responsibility; economic contribution to society; and energy efficiency and adoption of renewables. As anticipated, COVID-19 has emphasised the importance of wellness, health, and safety, catapulting the “S” in “ESG” to the top of the list. This bodes well for CDL’s longstanding dedication to green and healthy buildings, as we have already been focussing on indoor air quality, ventilation, and occupant comfort long before the pandemic.

We remain committed to providing investors with relevant and meaningful ESG information that is aligned with our top material ESG issues. Building on our robust ESG reporting, we have further expanded our SASB and TCFD reporting to provide greater insights on our comprehensive disclosures to investors. The GRI Standards remain the core of CDL’s blended sustainability report framework using IIRC’s integrated approach to make strong business and financial sense of ESG. Embracing 14 out of 17 SDGs has continued to help us track and report on our long-term strategies towards sustainable development, addressing the fast-growing stakeholder capitalism.

To communicate and align our expectations to our internal and external stakeholders, we enhanced our Environmental, Health and Safety Policy, Human Rights Policy, and Supplier Code of Conduct—all of which have been integrated into our operations for over a decade. We also published a Biodiversity Protection Policy and Green Building Policy, which are benchmarked against global best practices. These policies are fully integrated into our business operations.

INNOVATION: Digital Transformation Towards Greener, Healthier and Smarter Buildings

Innovation has become key to the long-term resilience of businesses in the new normal. As a frontrunner in smart building solutions, CDL takes pride in developing strategic low-carbon buildings for over two decades. With innovation identified as our top ESG issue from 2017 to 2019, we have intensified our search and application of viable innovations and technologies to reduce our carbon footprint.

CDL’s strategic R&D partnership with the NUS School of Design and Environment since 2017 has served us well. In 2020, the NUS-CDL Smart Green Home developed an Acoustic Friendly Ventilation Window prototype that reduces noise while achieving air change efficiency of up to four times more than conventional windows. Such innovative experimental studies on smart green building features will help CDL to set benchmarks in building innovation and sustainable development.

The CDL Future Value 2030 sustainability blueprint, which maps out our strategic goals and ESG targets, has remained effectively integrated into CDL’s business strategies and operations.

Accelerating our shift towards renewable energy, we partnered with SERIS to apply for a Solar Competitive Research Programme in 2020 to testbed cost-effective high-power density Building-Integrated Photovoltaics (BIPV) modules with the potential for implementation at CDL’s properties. Another partnership with SERIS in late 2020 was to pilot printed bifacial BIPV panels at City Square Mall as a testbed for more efficient PV installations.

Keeping a pulse on the latest innovation trends, CDL remains an active investor in PropTech venture capital funds such as Fifth Wall and Dragonrise Capital. We also actively explore PropTech solutions such as digiHub, an in-house digital platform that focusses on predictive and integrated facilities management solutions, and Pupil, a real estate AI measurement startup which uses 3D spatial data to measure real-world interiors.

With increased demands for safety and wellness, we leveraged innovative technologies such as UVC disinfection robots to create a safe environment for building occupants while increasing operational efficiency and minimising exposure risk for frontline staff.

In 2020, we achieved a 44% reduction in carbon emissions intensity against 2007 levels, putting us on track to achieving our SBTi-validated target of 59% by 2030.

The CDL eMall was launched to increase sales for our retail tenants from City Square Mall, Palais Renaissance and Republic Plaza through an online retail presence. CDL has also embraced digitalisation, launching more virtual tours of our Singapore and UK properties and allowing homebuyers to view our properties anytime, anywhere.

Digitalisation and decarbonisation are drivers for our transformation. With a focus on customer- and digital-centric solutions, CDL will continue to nurture an innovative culture within the organisation while also prioritising our communities’ health and well-being.

INVESTMENT: Building Leverage for Our Future

CDL Group’s performance for FY 2020 was affected by the combination of COVID-19’s impact on the global hospitality sector and losses in China, resulting from a weaker operating environment and policy changes to the real estate sector. The Group reported a loss after tax and non-controlling interest of $1.9 billion for FY 2020 (FY 2019: PATMI of $564.6 million). The results reflected significant losses attributable to its joint venture investment in Sincere Property Group (Sincere Property) in China and impairment losses for its hotels and investment properties, and allowance for foreseeable losses for development projects, with global market conditions and economic growth ravaged by the prolonged COVID-19 pandemic.

For FY 2020, gross profit margin was 39%, as compared to 48% achieved in FY 2019. The lower gross profit margin for FY 2020 is mainly due to allowance for foreseeable losses of $35.0 million made on development properties, coupled with thinner profit margins achieved for Singapore residential projects that are still under construction as well as a more compressed margin from the hotel operations segment, led by lower room rate seen in most countries.

To move towards a low-carbon economy, innovation and new technology must be supported by sustainable investments and financing. CDL’s robust ESG track record has helped the company to gain access to sustainable finance. Last year, CDL secured a $470 million green revolving credit facility for the refinancing of Republic Plaza—CDL’s flagship commercial property—and on-lending to other eligible green projects. As of 31 December 2020, CDL has secured more than $1.3 billion of sustainable financing, through a green bond, green loans and a sustainability-linked loan.

Beyond infrastructure, we have also invested in building capacity and people development. In 2020, we facilitated the efficient transition to Work From Home (WFH) arrangements by leveraging digital working tools and providing relevant virtual training to ensure business continuity. Our workforce has now acclimatised to WFH arrangements and become adept using digital tools to maintain work productivity and connectivity. We also stepped up on training by expanding our suite of online capacity building offerings for our workforce. Webinars focussing on leadership building, digital tools, sustainability, occupational health and safety, and cultivation of healthy lifestyles and mental resilience were well-received by our employees.

IMPACT: Maintaining Resilience and Amassing a Climate Force

Giving back to the community remains one of CDL’s core tenets. To support vulnerable communities and advocate for social inclusion during these tough times, CDL launched several community initiatives, including donating more than $400,000 to The Invictus Fund administered by Singapore’s Community Chest. We also organised an internal dollar-to-dollar matching fundraiser raising $88,000 for migrant workers at our development projects, providing them with necessities during the Circuit Breaker period.

Our low-carbon strategies and programmes have been designed to contribute to Singapore’s goal to achieve net zero emissions “as soon as viable” in the second half of the century. From 2012 to 2020, we reported energy savings of more than $30 million due to energy-efficient retrofitting and initiatives implemented across all managed properties. In 2020, we achieved a 44% reduction in carbon emissions intensity against 2007 levels, putting us on track to achieving our SBTi-validated target of 59% by 2030.

Our continued progress in 2020 is widely recognised by 12 leading global sustainability ratings and rankings, including:

  • Bloomberg Gender-Equality Index, of which CDL is listed for four consecutive years
  • Global Real Estate Sustainability Benchmark (GRESB), of which CDL is recognised as a Global Sector Leader (Diversified-Office/Retail-listed) and Overall Regional Sector Leader (Diversified)
  • Dow Jones Sustainability Indices (DJSI), of which CDL continued our inclusion in the DJSI World and Asia Pacific indices for the 10th consecutive year
  • MSCI ESG Research, of which CDL received an ‘AAA’ rating for the 11th consecutive year
  • Sustainalytics, of which CDL is ESG Industry Top Rated and Global 50 Top Rated
  • FTSE4Good Index Series, of which CDL continued our inclusion for the 19th consecutive year.

Amongst the distinguished accolades, we are proud to be named one of the world’s 50 Sustainability & Climate Leaders in a documentary hosted by Bloomberg.

Building a sustainable future requires the collaboration of a larger ecosystem. During Singapore’s Circuit Breaker period and the subsequent social distancing restrictions, we stepped up on our community investments through active digital engagements, continuing to boost sustainability thought leadership and advocacy at a local and global scale.

In 2017, we designed and built the Singapore Sustainability Academy (SSA), the first ground-up and zero-energy facility in Singapore dedicated to advocacy and capacity building for the collective achievement of the SDGs. An extensive partnership involving government agencies, industry peers and non-governmental organisations (NGOs), the SSA has become a hallmark of CDL’s community engagement and Singapore’s leading knowledge and networking hub for sustainability. The SSA has gone virtual due to COVID-19, continuing our outreach efforts through free virtual workshops in Singapore and beyond. Last year, the Virtual SSA events reached out to over 1,200 participants from over 25 countries, including Switzerland, Nigeria, Malaysia, Thailand and the United States.

While some of our community programmes were postponed due to COVID-19, we furthered our community impact and youth empowerment through online initiatives like the inaugural My Tree House’s Eco-Storytelling Contest, Youth4Climate Concert, the 10th CDL-Global Compact Network Singapore Young SDG Leaders Award, and partnership with the Jane Goodall Institute (Singapore), amplifying positive impact across our community.

LOOKING AHEAD – Advancing Change Resilience is Key to Sustainable Growth

The Singapore government announced its enhanced 2030 Nationally Determined Contribution and its Long-Term Low-Emissions Development Strategy to secure Singapore’s future as a climate-resilient nation. Businesses are expected to play their part, and CDL certainly aims to intensify our climate action in 2021 to help achieve both global and national goals.

In the global race to a low-carbon future, CDL will remain steadfast in fulfilling its commitment to Decarbonisation, Digitalisation & Innovation, and Disclosure.

Decarbonisation — Commitment to Green Buildings and a Low-Carbon Economy

In 2021, we were the first real estate developer in Singapore and the first major real estate conglomerate in Southeast Asia to sign on to the WorldGBC’s Net Zero Carbon Buildings Commitment. By joining the Commitment, CDL is dedicated to achieving net zero operational carbon by 2030 for our new and existing wholly-owned assets and developments under our direct operational and management control.

To achieve this ambitious goal, we will strive to reduce our carbon emissions, including retrofitting our managed buildings to further enhance energy efficiency and accelerating the transition to renewable energy. Plans are underway to roll out BCA Green Mark Super Low Energy (SLE) certified buildings in Singapore by 2023.

In deepening our ambitious decarbonisation goals, we are reviewing our SBTi-validated GHG reduction targets to align with a 1.5°C warmer scenario-compliant business model. This complements CDL’s pledge of support to the Business Ambition for 1.5°C led by the UNGC, SBTi and We Mean Business coalition, of which CDL was one of the pioneering 87 companies to sign on to the campaign in September 2019.

As a signatory to the WorldGBC’s Net Zero Carbon Buildings Commitment, CDL is also a member of EP100, pledging to improve its energy productivity by deploying energy efficient technologies and practices.

Complementing CDL’s target to achieve net zero for its buildings by 2030, a new Smart, Sustainable and Super Low Energy (3S) Green Building Framework was established. An expansion of CDL’s green procurement guidelines, this holistic framework is aligned with the BCA SLE building requirements, as well as international standards for advancing health and well-being in buildings.

To accelerate the sustainability agenda in Singapore, the Singapore Green Plan 2030 was unveiled 10 February 2021. It entails multi-ministry and 3P efforts to drive ambitious and collective action through interventions such as increased carbon tax, stricter green building policies, energy efficiency and waste reduction policies. As a staunch supporter of the Singapore Government’s green initiatives, we will continue to work closely with like-minded partners as Singapore ramps up its sustainability drive.

Digitalisation & Innovation — Driving Cutting-edge Green Building Technology Applications

Riding on CDL’s firm commitment to technological advancement and its recognition of innovation as one of our top-voted material ESG issues since 2017, a dedicated Green Building & Technology Application team was set up in 2020. This aims to support the Company’s intensifying efforts in the search and application of innovative solutions.

Working together with the internal Enterprise Innovation Committee formed in 2018, the team will contribute to the company’s strategy by applying cutting-edge technology to reduce its carbon footprint in the way it designs, builds, and manages assets. As part of our efforts to reduce embodied carbon, we are also set to advance circular solutions in the years ahead, including studying the feasibility of adopting carbon-absorbing construction materials.

Accelerating Healthy, Green and Smart Buildings

Today, incorporating health considerations in a building’s design is not just a luxury but also a necessity. In 2020, “Healthy Buildings” emerged as a new material issue and “Occupational Health, Safety and Well-being” was rated as the top ESG issue for CDL.

Through CDL’s Green Building Policy, we will continue to place a strong focus on the health performance of our buildings by designing buildings with the following thrusts: (i) creating liveable and healthy buildings through thoughtful and intentional spaces by placing health and wellness at the centre of design and construction; (ii) developing healthy and low-carbon buildings using materials that are safe and made with low embodied carbon; (iii) promoting biophilic design by increasing connectivity to the natural environment through more exposure to greenery and nature; and (iv) creating safe and accessible spaces for users of all abilities, which puts users’ needs as a priority.

Disclosure — Unlocking Financial Value with Global Growth of ESG Investing

The asset management industry weathered the COVID-19 crisis stronger than many in 2020. Assets under management in the global marketplace rose to USD110 trillion. The robust performance of ESG funds and indices have fuelled the shift towards ESG investing more than ever.

Given CDL’s strong commitment to ESG integration for over two decades and its proven track record in sustainability, we are in a strong position to benefit from the fast-growing trend of global sustainable investment and finance. The trend is expected to accelerate and we look forward to engaging more like-minded investors who believe in our long-term ESG-centric business approach. We will continue to tap on alternative financing streams to accelerate our green building development and capture potential sustainable investment.

Recovering Stronger and More Sustainably through Collaboration and Thought Leadership

As a firm advocate for capacity building, knowledge sharing and partnership, CDL has been actively engaging our stakeholders to build a larger sustainability ecosystem. Our extensive network includes UN agencies, government, academia, NGOs, and industry organisations like WorldGBC, Urban Land Institute, GRI, Asia Pacific Real Estate Association and SGBC.

Creating positive social and economic impact aligned with the UN SDGs will remain a key focus of CDL’s ESG strategy and business. In the wake of COVID-19, we have deployed and will continue to explore novel modes of community engagement for outreach and collaboration, without letting our guard down from the pandemic.

CDL will continue to stay the course and create impactful collaborations by engaging issues that matter most. With greater collaboration amongst more stakeholders, ideas will spark and actions will amplify to build a more resilient future for all.

To conclude, I would like to thank our stakeholders and investors for their support of CDL’s commitment and efforts towards a net zero future. The faith and encouragement we have received from investors, customers, business partners, colleagues, and communities across the value chain over the years is a key driver enabling CDL to come this far.

In the year ahead, we are confident that our multi-pronged sustainability strategy will put us on the path to renew, transform and emerge stronger, embracing change for a more resilient future together.

Sherman Kwek
Group Chief Executive Officer and
Executive Director
April 2021

1 2020 was one of the warmest years on record. World Meteorological Organization. 15 January 2020.
2 2020 Global status report for buildings and construction. Global Alliance for Buildings and Construction, 16 December 2020.