DYNAMIC APPROACH TO DOUBLE MATERIALITY ASSESSMENT

Anchored on a multi-stakeholder approach, the Group’s 2024 materiality assessment provides an inside-out and outside-in perspective of our financial and ESG impacts on our stakeholders and business. The latest addition of the ISSB Standards into our reporting framework has prioritised financial materiality. This is a continuation of our double materiality approach, which assesses sustainability-related risks and opportunities in a holistic manner.

Since 2014, materiality assessments have been conducted annually and facilitated by a third party to determine the key economic, environmental, social and governance (EESG) issues that are important to our stakeholders. These issues are foundational to the Group’s sustainability strategy, focus and mid-term target setting in our annual sustainability reporting. Corresponding EESG targets, metrics, initiatives and progress are reviewed by the management team, and reported to the BSC for approval, before they are published annually in our ISR.

In 2024, in efforts towards progressive full alignment with the IFRS S1 and S2, we conducted a double materiality assessment.

To incorporate and understand financial materiality, CDL’s stakeholders, including the Company’s ExCo and CDL staff, ranked 17 prioritised ESG issues based on both impact and financial materiality. Online surveys were circulated to key stakeholder groups, including the BSC. More than 382 responses were received. Interviews with selected management staff of the Company and key subsidiaries, investors, regulators, industry and sustainability experts, tenants and suppliers, provided insights into how the Group can manage and strategically address our ESG issues. The preliminary material issues were validated by the Company’s ExCo, senior management and key executives from business units, and presented to the BSC thereafter.

2024 MATERIAL ESG ISSUES

With the urgency of the global energy transition, “Energy Efficiency and Adoption of Renewables” remained the top material issue in 2024. “Cyber-readiness, Security and Data Privacy” has risen to become the second most material issue, with growing cyber risks of misinformation and disinformation threatening supply chains and financial stability. “Occupational Health, Safety and Well-being” also rose to take third place. All material topics have been categorised as “Critical” and “Highly Critical”, signalling that the Group views sustainability as a critical subject across our business and operations.1

HIGHLY CRITICAL MATERIAL ISSUES

  1. Energy Efficiency and Adoption of Renewables
  2. Cyber-readiness, Security and Data Privacy
  3. Occupational Health, Safety and Well-being
  4. Green and Healthy Buildings ▲
  5. Governance and Business Conduct ▲
  6. Climate Resilience and Adaptation
  7. Product/Service Quality and Responsibility ▲

CRITICAL MATERIAL ISSUES

  1. Future-ready Workforce and Talent Retention & Attraction
  2. Innovation
  3. Waste Management and Circularity
  4. Nature and Biodiversity Conservation ▲
  5. Water Management
  6. Human Rights and Labour Conditions
  7. Responsible Supply Chain
  8. Stakeholder Impact and Partnerships
  9. Sustainable Finance
  10. Diversity, Equity and Inclusion

Note: ▲ Ranking increased significantly from the previous year’s materiality study

IDENTIFICATION AND ASSESSMENT OF SUSTAINABILITY-RELATED RISKS AND OPPORTUNITIES (SROs)

In an era of environmental, political, social and economic challenges and despite the recent backlash against ESG, the business case for sustainability remains clear and enduring. Businesses will not thrive on an unhealthy planet gripped by severe climate- and nature-related risks, and capturing opportunities is key to catalyse action towards achieving global climate goals.

Taking reference from ISSB, GRI, TCFD, SASB and CDSB frameworks, an independent consultant was engaged to conduct a study across the Group’s value chain to identify sustainability-related risks and opportunities, mapping to the material issues identified from our latest materiality assessment.

The study extensively mapped all possible risks and opportunities that could affect the Group’s operations or value chain. External factors such as extreme weather events or carbon pricing policies as well as customer-driven factors such as changing demand patterns were considered over varying time horizons, and the likelihood and magnitude of impact were then quantified on a scale of 1 to 5. Given the complex dependencies and relationships, it was important to consider all the pathways and stakeholders which a risk or opportunity could impact. All relevant stakeholders were asked to provide feedback on the scores, before they were aggregated to provide an overall score. In total, there were 470 possible discrete impacts which were aggregated into 40 SROs.

As climate change-related risks and opportunities are deemed to warrant significant attention, our top 10 climate-related SROs were extracted and included in this report to focus on mitigation and adaptation. For more information outlining the Group’s actions in addressing risks and opportunities that are related to our top 17 material ESG issues, please refer to page 41 of the CDL ISR 2025.

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Rank SRO Material issue(s) Value-chain stakeholders impacted Business activities Time horizons
1 Transition towards a low-carbon economy leading to increased expectations for green or energy-efficient buildings that meet sustainability targets for buildings Energy Efficiency and Adoption of Renewables, Green and Healthy Buildings All Design and architecture, Construction, Property acquisition, Production of raw materials and consumables, Procurement, Human resource management, Property management and operations, Property and asset management, Sales and marketing, Service delivery, Use of leased spaces Short-term, medium-term
2 Increased occurrence and severity of extreme weather events (e.g., cyclones, inland flooding, wildfires) Climate Resilience and Adaptation, Governance and Business Conduct, Occupational Health, Safety and Well-being All Construction, Production of raw materials and consumables, Procurement, Property management and operations, Property and asset management, Sales and marketing, Human resource management, Service delivery, Use of leased spaces Medium-term, long-term
3 Increasingly stringent emissions-related regulations (e.g., carbon pricing) that present transition risks such as increasing prices of energy/fuel Energy Efficiency and Adoption of Renewables, Responsible Supply Chain, Climate Resilience and Adaptation All Construction, Production of raw materials and consumables, Procurement, Property management and operations, Property and asset management, Firm infrastructure, Sales and marketing, Service delivery, Use of leased spaces Short-term, medium-term, long-term
4 Increasing expectations to incorporate ESG factors in investment management and supply chain management Climate Resilience and Adaptation, Energy Efficiency and Adoption of Renewables, Sustainable Finance Upstream, Own operations Construction, Production of raw materials and consumables, Procurement, Human resource management, Property management and operations, Property and asset management, Sales and marketing, Service delivery Short-term, medium-term, long-term
5 Increasing demand and supply for sustainable products and low carbon solutions for climate adaptation and mitigation (e.g., green buildings, green leases, green bonds) Energy Efficiency and Adoption of Renewables, Green and Healthy Buildings, Innovation, Product/Service Quality and Responsibility, Sustainable Finance Upstream, Own operations Design and architecture, Construction, Technology Development, Production of raw materials and consumables, Property acquisition, Procurement, Human resource management, Financing and investment, Property management and operations, Property and asset management, Sales and marketing, Service delivery Medium-term, long-term
6 Increasing options for greener energy sources (e.g., renewable energy, alternative fuel, etc.) Energy Efficiency and Adoption of Renewables Upstream, Own operations Production of raw materials and consumables, Procurement, Human resource management, Property management and operations, Property and asset management, Sales and marketing, Service delivery Medium-term
7 Increasing nature-based solutions to reduce emissions and environmental impact Nature and Biodiversity Conservation Upstream, Own operations Construction, Technology Development, Human Resource Management, Sales and marketing, Service Delivery Medium-term
8 Incentives provided by government entities for climate adaptation and mitigation solutions Sustainable Finance All Financing and investment, Property management and operations, Property and asset management, Technology development, Use of leased spaces Medium-term
9 Implementation of climate risk mitigation strategies on water and wastewater infrastructure (e.g., diversification of water supplies, sustainable withdrawal levels, etc.) Water Management Upstream, Own operations Construction, Property management and operations, Property and asset management, Sales and marketing, Service delivery Medium-term
10 Increased cost of materials and consumables due to supply chain vulnerabilities Responsible Supply Chain Upstream, Own operations Production of raw materials and consumables, Procurement, Construction, Property management and operations, Property and asset management Short-term

 

1 There are no major changes to the material topics, except for the renaming of two material topics (“Nature and Biodiversity Conservation” and “Governance and Business Conduct”) and the rolling up of “Economic Contribution to Society” into “Stakeholder Impact and Partnerships”.