CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 SUSTAINABILITY 68 69 CDL’s Top Material ESG Issues Risks and Opportunities CDL’s Responses and Achievements 4. Stakeholder Impact and Partnerships Supporting SDGs: TCFD Pillars: G, S Building goodwill in the community provides CDL with a strong social license to operate. Through working with like-minded partners, CDL has pioneered and developed partnerships that multiply its outreach and impact on climate action and UN SDGs. Together with NParks, CDL launched a climate exhibition themed “Change the Present, Save the Future” at the CDL Green Gallery. Held in support of the Ministry of Sustainability and the Environment’s (MSE) Climate Action Week 2021, it amplified the call to action in support of global and national climate efforts. CDL also partnered with Singapore Youth for Climate Action to launch the “Keep Calm and Love Our Planet” campaign at COP26 in November 2021, which aims to turn climate anxiety into positive action. In light of national COVID-19 measures, CDL held both virtual and hybrid events to continue its engagement efforts. The “Future of Sustainability Reporting” webinar series was supported by key partners such as Singapore Exchange (SGX), Singapore Institute of Directors (SID) and Global Reporting Initiative (GRI). Other Virtual SSA events include Storytelling @My Tree House with National Library Board (NLB) and the Green Is the New Black’s Conscious Festival. 5. Product/ Service Quality and Responsibility Supporting SDGs: TCFD Pillars: S, RM Rising costs of building materials and labour shortages due to COVID-19 can result in delays in completion and impact CDL’s reputation and financials. As an asset owner and manager, CDL takes pride in ensuring a safe and healthy environment for its building users. CDL remains committed to delivering safe and high-quality products and services for its homebuyers and tenants. To ensure compliance and prevent latent defects, CDL has a robust process guided by the Design for Safety regulations to identify design risks and assess the severity of EHS impacts throughout the construction stages of its developments. CDL unveiled its new in-house proprietary electronic system for expressions of interest, balloting and satellite sales bookings for the sales launch of Irwell Hill Residences and CanningHill Piers. Potential homebuyers can access 3D virtual tours of CDL’s new launches and online sales presentations from the comfort of their homes. The Virtual Unit Handover initiative piloted in 2020 will continue to serve CDL well for future projects that obtain TOP. Homeowners can opt for a virtual walkthrough, led by CDL’s Customer Service Officers. 6. Economic Contribution to Society Supporting SDGs: TCFD Pillars: G, S CDL’s financial performance impacts the vested interests of its employees, shareholders, investors and supply chain. The generation of employment contributes to the economic growth of the markets that CDL operates in and the livelihoods in its supply chain. Stabilising and reopening CDL’s commercial and retail operations whilst establishing recovery protocols help to ensure commercial viability of its business and tenants. Direct donations to the community are part of CDL’s community investments strategy to give back to the community. As CDL remains resilient against the prolonged impact of the pandemic, it continues to uphold high standards of ethical business practices. CDL maintains strong branding and delivers quality products to generate profits and provide optimal returns for investors as a steward of capital. CDL has committed more than $40 million in property tax rebates and rental relief to its Singapore and overseas retail and commercial tenants. This includes passing on the full quantum of property tax rebates from the Singapore government to local tenants. Rent restructuring was extended to selected tenants whose businesses were badly affected, as well as rental payment flexibility for those facing severe cash flow issues. Rental, operational and marketing support were provided to tenants adversely impacted by the stricter measures. Close to 90% of CDL’s retail tenants have received rental assistance. A long-standing partner of Assisi Hospice since 1999, CDL raised more than $113,000 for the hospice in 2021 through the CDL Challenge and Assisi e-Fun Day. The CDL Challenge is an in-house fundraising campaign that rallied donations from stakeholders, namely staff and business partners. At the Assisi e-Fun Day 2021, CDL and its subsidiary, Millennium & Copthorne Hotels Limited (M&C), raised funds through virtual stalls and provided donations-in-kind, namely shopping, F&B and hotel vouchers towards the event’s lucky draw and game prizes. 7. Occupational Health, Safety and Well-being Supporting SDGs: TCFD Pillars: S, RM, M&T Most activities at CDL’s construction sites and managed buildings are carried out by its appointed contractors. Safety lapses by CDL’s contractors can expose the Company to reputation and regulatory risks, and endanger the well-being of the site workers and building users. SMM continue to be enforced to prevent community transmission of COVID-19 at CDL’s construction sites and managed buildings. Prolonged Work-From-Home (WFH) arrangements have the potential to affect employees’ mental well-being, due to lack of physical connection at the workplace and blurring of work and personal boundaries. The safety, health and wellness of CDL’s employees and contractors’ workers have always been amongst the Company’s top priorities. CDL complies with ISO 45001 Occupational Health and Safety for its key operations in Singapore to effectively manage the safety, health and well-being of its employees and workers, directly or indirectly hired. Established since the early 2000s, CDL’s EHS Policy and CDL 5-Star EHS Assessment have been continually enhanced in standard and scope. CDL works closely with the appointed contractors, where possible, to ensure migrant workers’ work and living conditions are in line with national guidelines. Additionally, the CDL 5-Star EHS Assessment also recognises and awards contractor companies that display EHS excellence and promote workers’ welfare. This Assessment also gives awards to exemplary workers. All six project sites are averaging above 90% of the total score for their EHS performance. Since the start of Phase 1 post-Circuit Breaker on 2 June 2020, CDL’s EHS team regularly conducts compliance checks on the implementation of SMM across all its managed properties. CDL has also incorporated SMM inspection checks into the regular EHS inspections to ensure compliance. Strict monitoring and response procedures continue to be reviewed and updated to align with the latest public health advisories. CDL’s Top Material ESG Issues Risks and Opportunities CDL’s Responses and Achievements 8. Sustainable Finance Supporting SDGs: TCFD Pillars: G, S The rise of ESG investing and responsible banking has unlocked alternative financing streams and granted CDL the access to a wider pool of ESG-centric investors and lenders. Companies that lag in their ESG performance could be penalised through higher cost of debt financing and face divestment from shareholders. As of 31 December 2021, CDL has secured more than $3 billion of sustainable financing, including a green bond, several green loans and a sustainability-linked loan. In 2021, CDL and its JV partner MCL Land jointly secured green loans of $847 million to finance the development of two upcoming developments – Piccadilly Grand and Tengah Garden Walk EC – in Singapore. South Beach Consortium, a CDL JV, obtained a $1.22 billion green loan for the refinancing of South Beach—a double BCA Green Mark Platinum mixed-use development. As an investor, CDL is a signatory to the UN Principles for Responsible Investment. CDL also developed the CDL Sustainable Investment Principles to steward responsible capital allocation and investments decision-making. 9. Water and Waste Management Supporting SDGs: TCFD Pillars: G, S, RM, M&T Prudent water usage can help to lower operational costs of CDL’s managed buildings, and conserve water. Waste management is a growing concern in Singapore as the country is projected to run out of landfill space by 2035. The Singapore government has stepped up on recycling efforts across the key waste streams to drive circular economy solutions. CDL’s developments are designed with a lifecycle approach to water sustainability and sound waste management. The Company adopts technologies to raise water efficiency and manage waste, such as rainwater harvesting and twin-chute pneumatic waste disposal systems, which are implemented at many of its commercial and residential developments. At CDL’s commercial and retail properties, recycling bins and facilities are provided to encourage the recycling of paper, plastic and metal cans by tenants and shoppers. CDL maintained its inclusion in the 2021 CDP A List for water security, marking its third consecutive year of receiving an ‘A’ score. 10. Ethical and Transparent Business Supporting SDGs: TCFD Pillars: G, RM Bribery and corruption are amongst the highest risks for businesses that could lead to financial and reputational loss. Legal non-compliance can lead to the erosion of trust by CDL’s stakeholders, causing CDL to lose its social license to operate. By taking a firm stance on its zero-tolerance policy towards fraud, bribery and corruption, CDL can provide strong assurance to its stakeholders, including investors and customers. CDL benchmarks its practices with the voluntary SS ISO 37001 Anti-bribery Management Systems to minimise gaps. It operates according to industry standards. Anti-money laundering workshops are conducted annually for its employees. CDL implements clear and transparent policies, risk management systems, and ESG disclosures to continuously monitor and validate business processes. Within CDL’s robust EHS Management System, applicable legal requirements are regularly monitored and evaluated for compliance. Incentives and penalties are also implemented to strengthen contractors’ site management. For transparency, CDL’s corporate and sustainability policies and guidelines are published on its corporate website, sustainability microsite and staff intranet, CDL360. 11. Healthy Buildings Supporting SDGs: TCFD Pillars: G, S, RM, M&T Apart from green features, building occupants appreciate healthy building features that contribute to their health, well-being and productivity. Buildings with poor indoor air quality (IAQ) and sanitisation practices are susceptible to viral transmissions. CDL designs and manages its buildings with the health and wellness of its building occupants in mind. CDL seeks to maximise acoustic comfort, natural ventilation, thermal comfort and biophilic design in its buildings. Developed in 2020, the CDL Smart, Sustainable and Super Low Energy (3S) Green Building Framework is a holistic framework that is aligned with BCA SLE buildings requirements and international standards for advancing health and well-being in buildings. In 2021, the 3S Green Building Framework was updated to include embodied carbon management and renamed to CDL Smart, Sustainable and Super Low Carbon (3S) Green Building Framework. 12. Diversity and Inclusion (NEW) Supporting SDGs: TCFD Pillars: G, S Workplace diversity encompasses a wide spectrum, such as gender, race, age and employees with accessibility needs. A workplace culture that embraces diversity and inclusion will attract and retain talent, while encouraging innovation and empathy. Diversity and inclusion principles should be embedded into recruitment practices, opportunities for advancement and remuneration policies. CDL’s recruitment process adheres to strict guidelines on non-discrimination and fairness, regardless of gender, ethnicity, religion, or age. As a company committed to meritocracy, CDL’s compensation and rewards policies are performance-based. Women represent 69% of CDL’s workforce and close to half of HODs at CDL’s headquarters in Singapore. CDL is committed to providing equal remuneration and actively monitors gender pay gaps across various staff levels. CDL embraces an inclusive workplace. Its multi-racial workforce hails from diverse backgrounds. Due to Singapore’s predominantly Chinese population, CDL’s workforce comprises a larger percentage of Chinese employees. 13. Responsible Supply Chain Supporting SDGs: TCFD Pillars: G, S, RM, M&T The procurement of unsustainable building materials and unfair labour practices that go against human rights can negatively impact CDL’s ESG performance and reputation, and contribute to the proliferation of such practices in the supply chain. Usage of toxic building materials can also harm the health of building users and workers. For more than a decade, CDL has specified responsible sourcing guidelines along its supply chain. This includes the implementation of the Responsible Procurement Guidelines2 since 2008 and the Green Procurement Guidelines for property developments since 2009. In line with its corporate EHS Policy which has undergone regular updates since 2003, these guidelines encourage the use of eco-friendly and recycled materials that have been certified by approved local certification bodies, such as the Singapore Green Building Council (SGBC) and Singapore Environment Council (SEC). All suppliers are required to sign a Supplier Code of Conduct which provides comprehensive guiding principles for compliance. CDL completed a supply chain segmentation study in 2020, where environmental (e.g. embodied carbon intensity) and social risks (e.g. forced or child labour) were assessed for its top suppliers and building materials procured for its developments. In 2020 and 2021, the results were shared with the BSC and the relevant business units to further enhance such initiatives. SUSTAINABILITY BOARD STATEMENT Note: 2 Renamed from Green Procurement Guidelines in 2020.
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