EXECUTIVE CHAIRMAN'S STATEMENT
Attaining net zero is a challenging feat. It will require concerted action and collaboration with our stakeholders, value chain, industry partners, employees and global organisations to achieve our targets.
Dear Stakeholders,
2022 saw some of the starkest and most disconcerting effects of rising temperatures on our planet. On 28 July 2022, Earth hit its “Overshoot Day”, the earliest in 50 years, indicating that humanity’s demand for ecological resources and services exceeds what our planet can regenerate that year.1 With the world at 1.2o C warmer than pre-industrial times, extreme weather events are already affecting at least 85% of the world’s population, with an increased frequency and severity of natural disasters over the last few years.
Planets and economies are interconnected and codependent. A report from Swiss Re2 estimates that by 2050, global warming could reduce global GDP by as much as 14% or US$23 trillion. This does not bode well for businesses. However, with a concerted global effort, this scenario can still be mitigated.
After the 27th Conference of the Parties (COP27), all signs pointed to the world surpassing the 1.5o C global warming limit, a level many scientists consider a dangerous threshold. With advanced technologies and innovative solutions, the world could theoretically still meet this 1.5o C goal. However, cutting emissions globally will require extraordinary and unprecedented effort. In end-2022, the COP15 United Nations (UN) Biodiversity Conference showed encouraging collective action to combat climate change, with nearly 200 nations reaching a historic agreement to protect 30% of lands and waters by 2030.
In support of the heightened global commitment and pledges to net zero, the Singapore Government raised its climate ambition further in October 2022, pledging to achieve net zero emissions by 2050. To support this national target, the regulatory requirements for sustainability integration and reporting became more stringent. Notable changes include mandatory environmental, social and governance (ESG) training for all directors of listed companies since May 2022 and more robust board diversity policies that address Diversity, Equity and Inclusion (DEI) issues. Listed companies must provide climate-related disclosures based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.3 In June 2022, the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange Regulation (SGX RegCo) jointly set up the Sustainability Reporting Advisory Committee (SRAC) committee to advise on a sustainability reporting roadmap for Singapore-incorporated companies. Additionally, from 1 January 2023, a Government Chief Sustainability Officer was appointed to drive the Government’s sustainable development efforts under the Singapore Green Plan 2030 to realise a sustainable, resource-efficient and climate-resilient Singapore.
It is heartening to see the convergence of global and national efforts in climate action and the enhanced commitment to safeguarding biodiversity on our lands and oceans. The cost of inaction outweighs the cost of action. Cognisant of this correlation between the blue economy and green agenda, the Board fully supports CDL’s pioneering pledge to the World Green Building Council (WorldGBC) Net Zero Carbon Buildings Commitment and the initiative to revise our Science Based Targets initiative (SBTi) greenhouse gas (GHG) reduction targets to align with a 1.5o C warmer scenario. At COP27 in November 2022, CDL signed the Action Declaration on Climate Policy Engagement launched by Corporate Knights and the Global 100 Council to tackle climate emergencies through urgent and collective action in the global Race to Zero.
For over two decades, sustainability has been integral to CDL’s business strategy. Since mid-2022, with the Group’s hotel operations emerging from COVID-19 disruptions, CDL proactively engaged our key subsidiaries Millennium & Copthorne Hotels Limited (M&C) and CBM Pte Ltd in setting clear targets and committing to strategic action aligned with CDL’s net zero 2030 goals. This will help the Group to future-proof our business, mitigating ESG risks today that are synonymous with business and investment risks. With the greater urgency of climate change, the Board remains committed to supporting the Management to raise the bar for ESG and create long-term value for our investors and stakeholders.
Maintaining Operational Resilience
Despite a challenging economic backdrop, the CDL Group is pleased to have delivered record earnings with net profit after tax and non-controlling interest (PATMI) of S$1.3 billion for the full year ended 31 December 2022 (FY 2022), the highest ever since the Group’s inception in 1963. Prudent divestments and strong operational performance from our core business segments drove the stellar performance.
The Group’s revenue increased 25.4% to S$3.3 billion for FY 2022 mainly due to our hotel operations segment, which reported an outstanding performance with a 58.1% increase in revenue and a 91% growth in revenue per available room, spurred by the continued recovery and restored confidence of global travel. Notably, our hotel operations made a strong rebound, having recovered in most markets to prepandemic levels. Our property development and investment properties segments continued to be resilient. Riding on the return of corporate travel and unabated pent-up demand for leisure travel, our hospitality segment will continue to strengthen and is poised to be a star performer for the year ahead. A key focus for our hospitality portfolio will be to accelerate plans for asset optimisation, alignment to the Group’s sustainability goals and driving growth.
Amidst global uncertainties and challenges, CDL remains committed to integrating ESG issues into our core business. This has enabled us to pre-empt and mitigate enterprise risk and capture growth opportunities.
Leadership Commitment for Over Two Decades
Climate risks are business risks. Regulators, investors, insurers and banks increasingly use ESG criteria to measure a company’s performance. Companies with better ESG performance are set to gain greater access to ESG funds and sustainable financing. According to Bloomberg, global ESG assets may surpass US$50 trillion by 2025, one-third of the projected total assets under management globally.4
In 2022, CDL continued to be recognised in multiple ESG indices and accolades. We are honoured to remain listed on 14 global ratings, rankings and indices. We have maintained double ‘A’s in the 2022 CDP Global A List for climate change and water security. We are the only company in Southeast Asia to score ‘A’ for climate change action for five consecutive years.
CDL also maintained our position as the top real estate management and development company globally to be listed on the 2023 Global 100 Most Sustainable Corporations in the World. This is the 14th consecutive year we have been ranked on the Global 100. CDL has also remained Singapore’s most sustainable company in the world, a position held for the fifth consecutive year.
We are proud to be one of four Singapore companies listed on the FT-Nikkei-Statista Asia-Pacific Climate Leaders 2022.
Tireless Dedication towards Net Zero and Creating Positive Impact
Attaining net zero is a challenging feat. It will require concerted action and collaboration with our stakeholders, value chain, industry partners, employees and global organisations to achieve our targets.
Our responsibility is to create long-term value for our shareholders, customers, communities, employees and the planet. The CDL Future Value 2030 Sustainability Blueprint is closely aligned with the UN Sustainable Development Goals and remains the bedrock of our ambitious ESG goals and strategies.
As CDL celebrates our 60th Anniversary in 2023, sustainability remains the Group’s priority to strengthen our competitive advantage for continued growth. On behalf of the Board, I thank all our stakeholders for supporting CDL’s pioneering ESG journey for over two decades, enabling us to advance ESG integration into our business and operations. I thank the management for their hard work and dedication in raising the bar for greater ESG integration and performance. Let us all work towards building a stronger business and a more sustainable planet for future generations.
Kwek Leng Beng
Executive Chairman