CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 SUSTAINABILITY 72 73 Glasgow Climate Pact, UN Sustainable Development Goals (UN SDGs), UN PRI and more. In 2021, CDL’s Group Chief Financial Officer (CFO), Ms Yiong Yim Ming, joined the UN Global Compact’s CFO Taskforce for the SDGs alongside members from other leading companies to support the Taskforce in the global transformation of corporate and sustainable finance. Green finance is a key enabler in accelerating climate action. Since issuing its first green bond in 2017, CDL has amassed more than $3 billion of sustainable finance, including various green loans and a green revolving credit facility. For its successful R&D and pilot of DigiHUB, CDL also secured a discount for the SDG Innovation Loan provided by DBS Bank Ltd. in 2019, making the Company the first Singapore entity to achieve a discount on a sustainability-linked loan. In October 2022, CDL renewed its $250 million SDG Innovation Loan, which was secured in 2019. CDL’s strong sustainability track record has enabled the Company to tap into the fast-growing sustainable financing pool, benefitting its projects and promoting a low-carbon future. Amplifying Impact Through Collaboration and Advocacy Collaboration is key to a sustainable future and corporates play a critical role in tackling climate, social and community issues. Through the years, CDL has amplified its impact by investing time and resources on partnerships and thought leadership to create meaningful outcomes. In 2022, CDL actively hosted, moderated, and participated in 80 events at the Singapore Sustainability Academy (SSA), ranging from panel discussions to educational webinars in partnership with esteemed institutions. To continue building sustainable communities, some key initiatives included the 3rd My Tree House “We Love Our Planet” Eco-Storytelling Contest, 6th CDL E-Generation Challenge, 12th CDL-GCNS Youth SDG Leaders Award and its “Keep Calm and Love Our Planet” campaign. The Company's flagship environmental outreach programme, the Youth4Climate Festival, also made a physical comeback in 2022 after a two-year in-person hiatus, rallying youths to accelerate climate action. With a two-decade-strong business case on ESG integration, CDL is often invited to share at various local and international platforms. In 2022, CDL’s CSO spoke at 104 local and international forums and conferences, covering topics such as strategic UN SDG integration, moving towards a net zero carbon future and more. CDL was also amongst selected Singapore private sector companies to share its business case at the inaugural Singapore Pavilion at COP27, led by the Prime Minister’s Office of Singapore alongside the National Council of Social Service, Monetary Authority of Singapore, Ministry of Sustainability and the Environment, Ministry of National Development, Ministry of Trade and Industry and Temasek Holdings (Pte Ltd). STRATEGIC MANAGEMENT OF TOP MATERIAL ESG ISSUES Since 2014, materiality assessments have been conducted annually and facilitated by an external consultant to survey and determine the key EESG issues that are important to its stakeholders. Learning from the unprecedented disruptions caused by COVID-19, CDL adopted a more dynamic approach on the assessment of key ESG issues from 2020 to 2022, addressing the fast-changing landscape and supply chain issues. Anchored on a multi-stakeholder approach, the exercise determined the actual and potential impacts of these issues on CDL’s longterm value creation. The table below outlines CDL’s actions in addressing risks and capturing opportunities related to CDL’s 17 material ESG issues. It is mapped to 14 relevant SDGs and the four pillars of the TCFD framework. CDL’s disclosures on the Sustainability Accounting Standards Board (SASB) Real Estate Sector Standards, TCFD Recommendations, and Climate Disclosure Standards Board (CDSB) framework can be found in CDL’s ISR 2023. Legend for TCFD Pillars: Governance (G) | Strategy (S) | Risk Management (RM) | Metrics & Targets (M&T) CDL’s Top Material ESG Issues Risks and Opportunities CDL’s Responses and Achievements 1. Innovation Supporting SDGs: TCFD Pillars: S, RM Innovation is CDL’s top material issue in 2022. It is a key enabler in achieving its ESG goals and targets, while futureproofing its business and creating social and economic value for its stakeholders. By investing in R&D and emerging proptech solutions, CDL ensures that its products and services are resilient against disruptions and operate at the highest quality for its customers and building occupiers. As the world transitions to a smart and low-carbon future, innovation has been pivotal in allowing CDL to achieve strong ESG performance. In 2022, CDL piloted cross-functional business solutions to accelerate the group’s focus on digitalisation and decarbonisation. These included a centralised payment platform; digital procurement processes; in-house proprietary home sales platform; micro-climate solution for air-conditioning optimisation in office spaces; cool paints to mitigate thermal heat transfer via window facades; remote monitoring and diagnostics for lift maintenance; smart energy storage system to power construction equipment as well as ensuring accuracy of defects inspection rates via automated solutions. CDL continues to work with its R&D partners, such as SERIS, NUS-CDL Smart Green Home, NUS-CDL Tropical Technologies Lab and Singapore University of Technology and Design to facilitate the commercialisation of emerging research. 2. Energy Efficiency and Adoption of Renewables Supporting SDGs: TCFD Pillars: G, S, RM, M&T With the launch of the Singapore Green Plan in 2021 and related refreshed BCA Green Mark 2021 standards and the impending increase in carbon tax, more stringent regulations on the energy performance of buildings are expected. Energy consumption contributes a large portion of CDL’s carbon footprint. As a leading green developer, CDL implements low-carbon strategies for its managed buildings. Ahead of its 2023 goal, CDL achieved the first BCA Green Mark Platinum Super Low Energy (SLE) award for its mixed-use integrated development - Newport Plaza (formerly Fuji Xerox Towers). The award was accorded for both its residential as well as non-residential components (serviced residences, offices and retail). Designed with sustainability in mind, Copen Grand is also Singapore’s first BCA Green Mark Platinum Super Low Energy Executive Condominium. It obtained the GM Platinum SLEB award with Health & Wellbeing, Whole Life Carbon and Maintainability badge, based on GM 2021 standards. Through dedicated tracking, monitoring and improvements in energy efficiency, CDL has achieved cost savings of more than $38 million from reduced energy expenses across all its managed properties since 2012. Regular asset upgrading and enhancement efforts since 2004 have helped CDL to maintain good energy performance for its existing commercial properties. 3. Climate Resilience Supporting SDGs: TCFD Pillars: G, S, RM, M&T Climate-proofing CDL’s buildings in line with a low-carbon future is key to its sustainable growth strategy. The built environment contributes to some 40% of global energy-related carbon emissions, and remains heavily reliant on natural resources for operations. Including physical risks such as stranding risks from extreme weather patterns and transition risks such as carbon tax, increase in water and electricity tariffs. Locally, stricter building design requirements, competition for green materials and heightened demand for clean energy and circular economy solutions will pose challenges to maintain profitability and sustain growth in the short to medium term. In December 2022, CDL completed its third climate change scenario analysis in line with TCFD recommendations. The study focused on orderly and disorderly scenarios for a 1.5°C and 2°C warmer scenario in the year 2030, presenting updated physical and transitional risks for the group portfolio consisting of hotels, investment properties and new developments. The analysis also covered climate-related risks from the COVID-19 pandemic as well as emerging net-zero regulatory landscapes across five key CDL markets, namely: United States, United Kingdom, China, Singapore and New Zealand. Findings supplement CDL’s pledge to the WorldGBC’s Net Zero Carbon Buildings Commitment. In February 2021, CDL committed to achieve net zero operational carbon by 2030 for its new and existing wholly-owned assets and developments under its direct operational and management control. In November 2021, this commitment expanded to include maximum reduction in embodied carbon in new developments, compensating for any remaining residual operational and upfront embodied emissions via offsetting for new developments by 2030 and for all buildings to be net zero carbon by 2050. CDL also operationalised its revised SBTi-validated GHG emissions intensity reduction targets (Scope 1, 2 and 3) from 2H 2022. 4. Ethical and Transparent Business Supporting SDGs: TCFD Pillars: G, RM Bribery and corruption are amongst the highest risks that could lead to financial and reputational loss. Legal noncompliance can lead to the erosion of trust by CDL’s stakeholders, causing CDL to lose its social license to operate. Taking a firm stance on its zero-tolerance policy towards fraud, bribery and corruption provides 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. The company operates according to industry standards. Antimoney laundering workshops are conducted annually for its employees. In 2022, CDL started to provide mandatory training for all new joiners on key risk management-related topics (namely AML/CFT, Data Privacy, and Incident Escalation). 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, its corporate and sustainability policies and guidelines are published on its corporate website, sustainability microsite and staff intranet, CDL360. 5. Water and Waste Management Supporting SDGs: TCFD Pillars: G, S, RM, M&T Water remains a crucial natural resource, with the total value of ocean assets estimated at US$24 trillion. Waste management is a growing concern in Singapore as the country is projected to run out of landfill space by 2035. With increased regulation, changing consumer behaviour and shifting corporate practices, accelerated momentum into greener water and waste practices are expected over the short to medium term. CDL is proud to maintain its inclusion in the 2022 CDP A List for water security. This marks its fourth consecutive year of receiving an ‘A’ score. 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 system, which are implemented at many of its commercial and residential developments. The Singapore government has implemented a Zero Waste Masterplan since 2019 with specific targets to improve national recycling, reuse, and reduction rates as it transits towards a circular economy. At CDL’s commercial and retail properties, recycling bins and facilities are provided to encourage the recycling of paper, plastic and metal by shoppers and tenants. SUSTAINABILITY BOARD STATEMENT
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