LEADERSHIP COMMITMENT & TRACK RECORD

Group CEO's Statement

Dear Stakeholders,

Biodiversity loss and ecosystem collapse are major concerns. According to the World Economic Forum’s (WEF) Global Risks Report 2024, extreme weather events are the top global risk for humanity in the next 10 years. Unfortunately, with only 15% of the United Nations (UN) Sustainable Development Goals (SDGs) on track and many going in reverse, much more must be done.

This sentiment was echoed at the COP15 UN Biodiversity Conference, where a historic agreement was made to protect 30% of land and seas by 2030. COP28 also saw increased support for nature-based climate action, with US$186.6 million in new financing for nature and climate.

Investors have found that focusing on ESG enabled them to make more informed decisions. This reassures us that our corporate ethos, “Conserving as We Construct”, established in 1995, has steered us in the right direction.

CDL’s ESG strategy aligns business growth and profitability with a two-pillar framework of ‘impact’ and ‘value’. The four strategic pillars – Integration, Innovation, Investment and Impact – help us to achieve three deliverables: “Decarbonisation”, “Digitalisation & Innovation”, and “Disclosure & Communication”. Since 2016, CDL has embedded the SDGs into our business, adding social purpose into our business practices and facilitating sustained growth. This approach enables CDL to confidently navigate the complexities of the sustainability landscape, with an increasing focus on nature-related risks and opportunities.

Zero in on Nature

In September 2023, TNFD released its final recommendations for companies to address nature-related risks and opportunities. As CDL had already embraced recommendations from TCFD in 2017, adopting TNFD was a natural progression. As one of the pioneering Singapore companies amongst 320 companies in the world¹ to voluntarily report according to the TNFD Recommendations, CDL aims to assess, disclose and manage our nature-related risks and opportunities and provide consistent and comparable reporting to our stakeholders.

CDL is committed to nature and biodiversity conservation through our efforts to minimise and mitigate the impact of our developments on natural habitats. Since 2010, CDL has conducted Biodiversity Impact Assessments (BIAs) on greenfield sites located within or adjacent to natural habitats before construction. In 2020, we launched a Biodiversity Policy² and in 2021, we aligned it with Singapore’s “City in Nature” vision, adding “Biodiversity Conservation” to CDL’s list of material ESG issues.

Esther An, CDL’s Chief Sustainability Officer (CSO), is a newly appointed member of the World Economic Forum’s Global Commission on Nature-Positive Cities.³ Her role is to raise awareness about the importance of healthy ecosystems for a resilient built environment. Her appointment reflects CDL’s commitment to promoting nature-positive solutions in urban development. In 2023, we have embraced nature into our four-pillar sustainability strategy.

Integration: For People and Planet

What gets measured gets managed. Since 2008, CDL has been building on our robust sustainability reporting framework to help us systematically review and improve our strategy.

In June 2023, ISSB issued its inaugural IFRS S1 and S2, to provide companies with a baseline reporting standard – a common language – to disclose climate-related risks and opportunities in global capital markets.

Complementing the global launch, Singapore’s Sustainability Reporting Advisory Committee (SRAC) brought together experts from public and private sectors, academia, and trade associations and chambers, to provide recommendations that will guide listed and large non-listed companies in reporting climate-related disclosures aligned with ISSB Standards. SRAC and market regulators have proposed that by FY2025, all Singapore-listed issuers should report and file annual climate-related disclosures aligned with ISSB Standards, and large non-listed companies with at least S$1 billion in annual revenue and total assets of at least S$500 million to report by FY2027. On 28 February 2024, Second Minister for Finance Chee Hong Tat announced at the Ministry of Finance Committee of Supply that Singapore will introduce mandatory climate-related disclosures in a phased approach, in line with the recommendations from the SRAC.⁴ Eventually, climate-related disclosures will become a licence to operate.

CDL, with our 16 years of reporting experience, has pioneered a two-pillar sustainability reporting framework in our previous Integrated Sustainability Report. The framework integrates ISSB Standards’ focus on financial and business value with GRI’s priority on the impact on the planet and people. The addition of ISSB Standards into our reporting framework has made the financial materiality of ESG an added consideration. This qualitative double materiality approach provides a more comprehensive view of sustainability-related risks and opportunities.

We are working towards complete adoption of IFRS S1 and S2 by FY2025. An external consultant is conducting a gaps analysis and providing a roadmap to achieving full alignment. We have also expanded the scope of this report to include relevant and available ESG data to cover a wider coverage of entities as per CDL’s annual report.⁵

The latest materiality study concluded that CDL’s top five issues which rank highest on both impact and financial materiality are: “energy efficiency and adoption of renewables”, “climate resilience and adaptation”, “innovation”, “cyber-readiness, security and data privacy”, and “occupational health, safety, and well-being”.

Innovation: Building with Nature

Innovation is key to driving positive impact on the built environment. CDL has been exploring new frontiers in how we design, construct, and manage our properties, applying new solutions and technologies to accelerate change in harmony with Nature. Over a decade ago, we built the Tree House condominium with 77% of its site area dedicated to landscaping and and communal facilities. The Tree House condominium achieved a Guinness World Record in 2014 for having the world’s largest vertical garden. Since then, we have embarked on several other notable projects that exemplify our efforts to build with nature in mind, such as Amber Park, where 65% of its site area is dedicated to facilities, lifestyle space and landscaping with native plant species. Newport Residences – which is located at the site of the former Fuji Xerox Towers on Anson Road and part of a 45-storey mixed development called Newport Plaza – incorporates green features for higher energy efficiency that translates to annual cost savings of about S$450,000. Construction of Newport Plaza is in progress and is expected to complete in 2027.

In the past year, CDL has intensified the use of innovative and viable green building technology and decarbonisation solutions. For instance, at Irwell Hill Residences, we initiated CarbonCure Concrete pilot, which embeds recycled carbon dioxide in fresh concrete to create sustainable concrete without compromising performance. We are also gradually replacing belt-driven fans with electronically commutative (EC) fans for our local assets to improve energy efficiency. To manage our biodiversity footprint, CDL has subscribed to Xylo Systems, a cloud-based AI platform that supports our efforts to measure and manage biodiversity impact, conduct in-depth assessments, predict potential consequences of our activities, and make informed decisions backed by data.

Investment: Thriving with Nature

Sustainable finance is a critical enabler for implementing green building innovations and decarbonisation initiatives. In January 2024, the Singapore Sustainable Finance Association (SSFA) was set up by the MAS to support the nation’s transition to a low carbon economy. The SSFA aims to cultivate Singapore’s sustainable finance ecosystem and promote the adoption of best practices while enhancing the state’s sustainable finance capabilities, among other objectives.

Aligned with the nation’s aim, CDL is committed to driving our Growth, Enhancement and Transformation (GET) strategy with a sustainability-focused mindset to ensure that our financial objectives dovetail with our broader goals seamlessly. Our strong sustainability track record enables us to leverage sustainable financing solutions to advance action.

CDL issued the first green bond by a Singapore company in April 2017 and has since accumulated have over S$6.3 billion in sustainable finance, including green loans, a green revolving credit facility, and sustainability-linked loans. In December 2023, CDL marked a new sustainable financing milestone with a three-year £200 million (approximately S$338.2 million), first-of-its-kind sustainability-linked loan from OCBC aligned to a SBTi 1.5°C pathway. This reflects our commitment to decarbonising our business via an initial net-zero carbon target by 2030 for new and existing wholly-owned assets and developments under our direct operational and management control and aligning our capital management with our sustainability goals.

In anticipation of Singapore’s carbon tax being raised to S$25/tCO₂e from January 2024, CDL kickstarted an Internal Carbon Pricing (ICP) study in 2023. Piloted at CDL’s headquarters at Republic Plaza, a successful implementation of ICP will help CDL financially internalise the cost of environmental impacts by factoring such costs into our financial and investment decisions. We believe in eventually scaling and implementing ICP across our wider portfolio to help us achieve our SBTi targets and net-zero ambitions.

CDL has been offsetting carbon since 2017 to counterbalance hard-to-abate carbon emissions from selected projects and to carbon neutralise our corporate headquarters operations. In 2023, the Company secured blue carbon credits for the first time, in addition to nature-based green carbon credits, purchased through an auction by Climate Impact X. The credits were generated from Pakistan’s Delta Blue Carbon Project, the world’s largest mangrove restoration project that aims to protect and restore 350,000 hectares of mangrove forests, improving the well-being and livelihoods of over 42,000 people in the local communities, 70% of whom live below the poverty line.

Impact: Planet Business and People

CDL’s unwavering commitment to sustainability and strong performance has secured our place on leading global ESG ratings and rankings for over two decades. For the full listing that recognises the impact of our ESG leadership, please refer to page 9-10 in this report. Some of our achievements include:

• Global 100 Most Sustainable Corporations in the World by Corporate Knights: Ranked 22^nd in 2024 and maintained ranking as the world’s most sustainable real estate management and development company for the sixth consecutive year, as well as the only Singapore company listed for 15 consecutive years
• CDP: The only company in Southeast Asia and Hong Kong to remain on the CDP A List for six consecutive years; only Singapore company to score double ‘A’s for climate change (since 2018) and water security (since 2019). Top 2% amongst CDP Participants for Supplier Engagement on Climate Change.
• MSCI ESG Ratings: Maintained ‘AAA’ leader rating since 2010
• Bloomberg Gender-Equality Index (GEI): The only Singapore real estate company listed since 2018
• The Edge Singapore Billion Dollar Club: The inaugural Best ESG Risk Ratings award
• The Asset Triple A Sustainable Finance Awards 2024: Best Sustainability-Linked Loan – Real Estate

As a pioneer green developer in Singapore, we have constructed 123 BCA Green Mark certified developments since the launch of this scheme in 2008. In 2023, CDL achieved one BCA Green Mark Gold^PLUS award for The Myst as well as three BCA Green Mark Platinum Super Low Energy (SLE) awards for our corporate headquarters, Republic Plaza, and two residential developments, Tembusu Grand and Lumina Grand. Additionally, Tembusu Grand and Lumina Grand each earned a BCA Whole Life Carbon Badge, further recognising their sustainability achievements beyond their Platinum SLE status. Our long-standing green building efforts have resulted in financial savings, with approximately S$42 million in energy savings from energy-efficient retrofitting and initiatives across all our locally managed buildings from 2012 to 2023.

CDL conducted our first Whole Life Carbon Assessment (WLCA) in Singapore using five existing CDL assets across different typologies – residential, retail, hotel and mixed development, including offices, in 2H 2023. This study aims to provide valuable insights into the carbon footprint of our buildings’ components and the different stages of their life cycle – from construction to operations to maintenance. This will help CDL identify challenges and opportunities for future projects, reducing embodied and operational carbon.

In 2023, eight CDL properties in Singapore received the WELL Health-Safety Rating, a globally recognised evidence-based, third-party verified rating that prioritises the health and safety of building users. We are committed to paving the way for more health and wellness design provisions in our buildings.

Expanding Partnerships for Greater Social Impact

Engaging stakeholders and changing mindsets are essential in the global race to zero. This can only be achieved through multi-stakeholder collaborations to amplify social impact. CDL has continued our advocacy and training work in climate action aligned with the SDGs through the Singapore Sustainability Academy (SSA), designed and built in 2017 as Singapore’s first ground-up and zero-energy facility.

After more than six years of dedicated climate advocacy and action, SSA is entering its next phase with the addition of a new SSA Annex (SSAA). As an expanded hub for capacity building and collaboration, the SSAA is a net-zero building with circularity in action. It offers a co-working space and community engagement facilities to local and international NGOs linked to the UN SDGs, namely UN Global Compact Network Singapore (GCNS), World Green Building Council, UN Development Programme Innovation Centre, Jane Goodall Institute Singapore and GRI.

The Company is excited to announce our new Eco Train Project at City Square Mall. It is a first-of-its-kind repurposed train carriage focused on engaging and raising eco-awareness amongst the community on a broad range of sustainability topics and issues. In collaboration with “Just Keep Thinking”, Singapore’s biggest Science, Nature and Sustainability social media channel, the Eco Train will showcase a series of interactive displays, installations, exhibits, training and workshops with educational and inspirational themes.

In 2023, we actively hosted, moderated, and participated in over 190 events at the SSA, ranging from panel discussions to interactive events with esteemed institutions. To continue our efforts in nurturing sustainable communities, some key initiatives included the 4^th My Tree House “We Love Our Planet” Storytelling Contest, the 13^th CDL-GCNS Young SDG Leaders Award, as well as collaborations with like-minded partners such as CDP to launch their inaugural Global Forests Report 2023. After its physical comeback in 2022, the seventh edition of our flagship Youth4Climate Festival continued in 2023 with an expanded network of eco-partners supporting the Ministry of Sustainability and the Environment’s Go Green SG initiative.

CDL has also been invited to speak at various local and international platforms to share our ESG integration journey. In 2023, our CSO spoke at over 90 local and international forums and conferences, covering topics such as nature-based solutions for sustainable and resilient communities, the path to nature-positive decision-making, accelerating SDG innovation and more. For the second year running, CDL was honoured to be invited to share our experiences at the Singapore Pavilion at COP28, led by the Singapore Government.

In September 2023, CDL signed a Memorandum of Understanding (MOU) renewing our 10-year partnership with the National Parks Board to continue operating the CDL Green Gallery for another decade. The MOU includes extensive infrastructural refurbishments to maintain the gallery’s net-zero status. This renewal reinforces CDL’s continual efforts to educate and raise awareness to the public through 3P Partnerships.

We commemorated the MOU renewal with the opening of the “Melting Ice, Sinking Cities: An Urgent Call to Change the Present and Save Humanity” exhibition – CDL’s third and final instalment of our three-part Climate Action Exhibition series held at the CDL Green Gallery in Singapore Botanic Gardens in June 2023. The exhibition showcased the impact of climate change, rising temperatures and melting glaciers, and how this threatens life in the Antarctic. By illustrating the interconnectedness of climate change and the health of our ocean, people and the planet, the exhibition aimed to raise awareness and inspire action for positive change. The exhibition was held in conjunction with CDL’s 60^th anniversary celebration and renews our commitment to host more exhibitions and related engagement programmes for visitors to the Singapore Botanic Gardens. The gallery will remain a free platform for all to learn about global climate and nature-related issues.

Looking Ahead – Stepping Up to Reverse Environmental Degradation

We remain respectful of nature within our built environment and we strive to create positive environmental and social impacts while maintaining a strong triple bottom line. Our ESG aspirations are aligned with CDL’s Future Value 2030 sustainability blueprint for a harmonious coexistence between business and nature.

We are grateful for your continued support and confidence as we navigate the ever-changing ESG landscape. People, economies, industries and cultures must work together to accelerate transformative action and zero in on nature to achieve the UN SDGs and climate goals. Together, we look forward to another year of opportunities to do better for future generations.

 
Sherman Kwek
Group Chief Executive Officer