The table below outlines the Group’s actions in addressing risks and opportunities that are related to the Group’s top 18 material ESG issues identified. They are mapped to 15 relevant UN SDGs and the four pillars of the TCFD and TNFD frameworks. Some of these ESG risks and opportunities are also captured in CDL’s Enterprise Risk Management (ERM) framework, which can be found in the Risk Management section in CDL’s Annual Report 2023. Legend for TCFD and TNFD Pillars: Governance (G) | Strategy (S) | Risk Management (RM) | Metrics & Targets (M&T) CDL Group's Top Material ESG Issues Risks and Opportunities CDL Group's Responses and Achievements 1. Energy Efficiency and Adoption of Renewables Supporting SDGs: TCFD Pillars: G, S, RM, M&T TNFD Pillars: G, S, RM In Singapore, clean and renewable energy options are limited. As Singapore charts its progress towards achieving its 2030 Green Plan targets, particularly green energy procurement, the Group remains committed to be early adopters. Energy consumption contributes a large portion of the Group’s carbon footprint. As a leading green developer, the Group implements low carbon strategies for its managed buildings and continuously sources for emerging solutions that can optimise energy efficiency across its diversified portfolio. In 2023, the Company achieved three BCA Green Mark Platinum SLE awards for its corporate headquarters, Republic Plaza, and residential developments, Tembusu Grand and Lumina Grand, and one BCA Green Mark GoldPLUS award for The Myst. The BCA Green Mark SLE is awarded to the best-in-class energy performing Green Mark buildings that achieve at least 60% energy savings above Singapore’s Green Mark 2005 building codes for Green Mark energy savings. Through dedicated tracking, monitoring and improvements in energy efficiency, the Company has achieved cost savings of approximately $42 million from reduced energy expenses across all its locally managed buildings since 2012. Regular asset upgrading and enhancement efforts since 2004 have helped the Company to maintain good energy performance for its existing managed buildings. 2. Climate Resilience and Adaptation Supporting SDGs: TCFD Pillars: G, S, RM, M&T TNFD Pillars: G, S, RM, M&T Monitoring stranding risks is critical in the property and construction sector as extreme weather patterns continue to pose devaluation concerns. Embedding climate resilience in line with a low carbon future is therefore key to the Group’s sustainable growth strategy. The built sector contributes to some 40% of global energy-related carbon emissions, and remains heavily reliant on natural resources. Heightened demand for clean energy, cost-efficient and market-ready circular economy solutions are both opportunities and risks to maintaining profitability and sustained growth in the short- to medium-term. With no significant change to its business in FY2023, the Company continued to leverage findings from its third climate change scenario6 analysis completed in December 2022. In line with the TCFD recommendations which it has adopted since 2017, the third study focused on the financial impact from potential physical and transition risks based on orderly and disorderly scenarios for a 1.5°C and 2°C warmer scenario in 2030. The scope included the Group’s portfolio comprising hotels, investment properties and new developments across five key markets, namely: United States, United Kingdom, China, Singapore and New Zealand. Findings supplement the Company’s decarbonisation roadmap in the near term, including its pledge to the WorldGBC's Net Zero Carbon Buildings Commitment made in February 2021.7 In 2023, the Company submitted its interim progress to WorldGBC. The Company’s decarbonisation roadmap aims to achieve a 63% reduction in Scope 1 and 2 emissions, alongside a Scope 3 emissions reduction of 41% in embodied carbon and 58.8% in investments. Based on its SBTi-validated targets to align with 1.5°C, the Company’s decarbonisation efforts continues to involve multi-business unit collaboration facilitated by the Green Building, Decarbonisation and Safety department. 3. Innovation Supporting SDGs: TCFD Pillars: S, RM TNFD Pillars: S, RM Innovation remains one of the Group’s top material issues. It is a key enabler in allowing it to achieve its ESG goals and targets, while future-proofing its business. Through partnerships and collaborations, the Group has actively sourced for low carbon and innovative solutions to test bed at its development projects and managed buildings. The Group also works on in-house solutions leveraging technology to deliver exceptional value to its customers and prospective homebuyers. The Group’s GET strategy focuses on leveraging innovative and green solutions for the business to grow, enhance and transform. In 2023, the Company intensified its use of innovative and viable green building technology and decarbonisation solutions. At Irwell Hill Residences, it initiated the CarbonCure Concrete pilot, a novel carbon removal technology where recycled carbon dioxide is introduced into fresh concrete and becomes permanently embedded in it. This creates sustainable concrete without any compromise on performance. The Company also piloted several cross-functional business solutions, including an electrostatic filtration system which reduces energy consumption for air handling units (AHUs); carbon dioxide solutions to reduce carbon dioxide in air conditioned space; in-room energy management system with room control units; hybrid cooling fan to reduce the reliance on air conditioner; digital room inspection management for hotel rooms; and a smart water valve to reduce water-related costs. The Company’s in-house developed app, CDL Homes Sale (CHS) was designed to provide homebuyers with a more transparent and efficient purchasing experience. It was awarded the Digital – Real Estate Award at 2023 SBR Technology Excellence Awards. 4. Cyber-readiness, Security and Data Privacy Supporting SDGs: TCFD Pillars: G, RM The number of security breaches have risen with the evolving cyberthreat landscape. Cybersecurity is now a financially material issue that must be diligently managed to protect corporate value. Ensuring the security and resilience of the Group’s networks and information systems is critical. Strengthening the Group’s capabilities to protect itself and respond to cyber-attacks is vital in preventing data theft, financial loss, and disruption of operations. The Group has established holistic IT governance structures and developed robust detection and mitigation measures to protect its critical business systems and data. The Company’s response plans are tested by internal auditors and an external professional firm and aligned with industry best practices. The Group has adopted a robust Cybersecurity Framework that aligns with industry best practices to protect the confidentiality, integrity and availability of its digital assets. This framework includes updated policies and standards that ensure its processes and technologies remain relevant in addressing the current threat landscape. The Company’s Computer Security Policies and Standards were updated in early 2024 to reflect the latest cybersecurity practices. The Company’s employees’ IT security awareness and vigilance remains heightened through a series of in-person and online cybersecurity trainings, which are further reinforced by periodic phishing attack simulations. Tapping into Sustainable Finance to Advance Climate Action Aligned with Singapore’s aim to transition to a low carbon economy, the Company is committed to driving its Growth, Enhancement and Transformation (GET) strategy with a sustainability-focused mindset to ensure that its financial objectives dovetail with its broader goals seamlessly. The Company's strong sustainability track record enables it to leverage sustainable financing solutions to advance action. Since the Company issued its first green bond in 2017, it has completed over $6.3 billion of sustainable finance including various green loans, a green revolving credit facility and sustainability-linked loans. In December 2023, the Company marked a new sustainable financing milestone with a three-year £200 million (approximately $338.2 million) sustainability-linked loan from OCBC aligned to a SBTi 1.5°C pathway. This reflects the Company’s commitment to decarbonising its business via its initial net-zero carbon target by 2030 for new and existing wholly-owned assets and developments under its direct operational and management control and aligning its capital management with its sustainability goals. Amplifying Impact through Collaboration and Advocacy 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. The Company has continued its advocacy and training 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. In 2023, SSA hosted over 190 advocacy events and training classes. The Company is proud to announce that the 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 office space for non-governmental organisation (NGO) UN Global Compact Network Singapore and community engagement facilities to local and international NGOs linked to the UN SDGs, namely WorldGBC, 100 Resilient Cities, Jane Goodall Institute (Singapore), GRI, Financial Women’s Association, Silver Ribbon, Association of Women in Construction Singapore, One Young World and more. The Company also announced its new Eco Train Project at City Square Mall. A first-of-its-kind repurposed train carriage, it will focus on educating and raising eco-awareness amongst kids and youths on a broad range of sustainability topics and climate issues. A collaboration with Just Keep Thinking, Singapore’s biggest science, nature and sustainability social media channel, the Eco Train is slated to open in 2024. The Company’s other key community initiatives included the 4th My Tree House “We Love Our Planet” Storytelling Contest, the 13th CDL-GCNS Youth SDG Leaders Award, the 7th edition of its flagship Youth4Climate Festival with an expanded network of eco-partners, in support of the Ministry of Sustainability and the Environment’s Go Green SG initiative. The Company has also been invited to share its ESG integration journey and business case on local and international platforms. In 2023, the Company’s CSO spoke at over 90 local and international forums and conferences, covering topics such as green building, decarbonisation, nature-based solutions (NbS), SDGs, sustainability reporting and finance. STRATEGIC MANAGEMENT OF TOP MATERIAL ESG ISSUES Since 2014, materiality assessments are conducted annually and facilitated by a third party to determine the key EESG issues that are important to the Group’s stakeholders. Identified by internal and external stakeholders, the top ESG issues are foundational to the Company’s annual sustainability reporting. Corresponding EESG targets, metrics, initiatives and progress are reviewed by the management team, reported to the BSC and the Board for endorsement, before they are published annually in CDL’s ISR. In 2023, the materiality assessment was updated to align qualitatively with the IFRS S1 and S2. Endorsed by Monetary Authority of Singapore (MAS), Singapore Exchange (SGX) and Accounting and Corporate Regulatory Authority (ACRA), the ISSB Standards require companies to assess the ESG issues that are considered material to the company, taking into account both financial and non-financial information, including the impact of climate-related risks and opportunities. 6 Orderly scenario: climate policies introduced early and gradually tightened. Disorderly scenario: climate policies introduced later and more abruptly from 2030 resulting in higher transition risks. 7 In February 2021, the Company committed to achieve net-zero operational carbon by 2030 for its new and existing wholly-owned assets and developments under the Company’s 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. GROWTH ENHANCEMENT TRANSFORMATION • Build development pipeline and recurring income streams • Enhance asset portfolio through asset enhancement initiatives, asset repositioning and redevelopment • Drive operational efficiency • Transform business via new platforms - Strategic investments - Fund management • Innovation and venture capital • Apply the CDL Sustainable Investment Principles to steward responsible capital allocation and decision-making in investments • Align with UN Principles for Responsible Investment (PRI) as an investor committed to the six principles • Enhance the building and corporate sustainability performance of existing assets • Decarbonise new and retrofitted assets to complement net-zero commitment • Ensure best Environmental, Social, and Governance (ESG) practices to tap fast-growing ESG investments and sustainable finance for further growth • Accelerate impact investing in PropTech funds, start-ups and scale-ups to uncover and testbed building innovations for our properties • Strengthen alignment with key subsidiaries on the Group’s ESG strategy, goals, and actions via a phased approach • Advance ESG-focused fund management initiatives What This Means for the Group's Sustainability Strategy What This Means for the Group's Corporate Strategy SUSTAINABILITY 81 80 SUSTAINABILITY ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED
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