Racing to Zero, Raising Business Value

By Esther An

Environmental, Social and Governance (ESG) integration is no longer a choice today. In the global Race to Zero^[1], led by UNFCCC, over 5,200 businesses, 1,040 cities and 440 investors have stepped up their ambition and joined the global alliance to catalyse climate change. Following COP26, over 90% of global GDP has committed to achieving net zero by or near mid-century.^[2] According to the 17^th Edition of the World Economic Forum Global Risks Report, environmental risks were perceived to be the five most critical long-term threats over the next 10 years.^[3] Climate risks are investment and business risks – the damage caused by climate change is projected to result in an increase of up to 41% of global property premiums until 2040.^[4] With the building and construction sector accounting for about 40% of global carbon emissions^[5], the real estate sector is in a prime position to advance sustainable development.  

Integration: Strong Fundamentals for Business and Climate Resilience

City Developments Limited (CDL)’s ESG strategy stems from its corporate ethos, “Conserving as we Construct” established in 1995. Its value creation business model is anchored on four key pillars—Integration, Innovation, Investment, and Impact; guiding CDL to achieve three key deliverables: “Decarbonisation”, “Digitalisation & Innovation” and “Disclosure and Communication”. The CDL Future Value 2030 sustainability blueprint, implemented in 2017, maps out clear strategic goals and ESG targets across CDL’s business strategies and operations.

CDL’s sustainability portfolio reports directly to the Board Sustainability Committee with ESG factors effectively integrated into its business, operations and growth strategy. In 2018, the CDL Group introduced its G.E.T. strategy—focusing on Growth while adopting an ESG lens, Enhancement of assets to drive operational efficiency and Transformation to deliver long-term and sustained value.

Innovation: Scaling up Sustainable Technologies for a Green Revolution

Recognising that innovation is a key accelerator of climate solutions, CDL set up a Green Building & Technology Application team in 2020. The team collaborates with the organisation’s Enterprise Innovation Committee, leveraging cutting-edge technology to reduce CDL’s carbon footprint in the way it designs, builds, and manages its assets.  

To advance circularity solutions, CDL is studying the feasibility of advanced low-carbon construction methods and materials to reduce embodied carbon. To do this, CDL has ramped up on buildable designs moving towards less labour-intensive processes, and focuses on Integrated Digital Delivery and Design for manufacturing and Assembly (DfMA) technologies. Through this, CDL can reduce reliance on on-site workers, enhance workplace safety and health, and drive productivity improvements in construction and facility management.

CDL also capitalises on the power of cross-sector partnerships to develop low-carbon technologies. The company has partnered with the Solar Energy Research Institute of Singapore to pilot Building-Integrated Photovoltaics (BIPV) modules and panels at various developments. The pilot on Bifacial BIPV panels with prints at CDL’s Sustainability Academy aims to optimise aesthetic value whilst generating power.

CDL and SERIS piloted a new generation of PV art wall (bifacial BIPV panels) at the Singapore Sustainability Academy at City Square Mall in 2020. This serves as a testbed for more efficient PV Installations

In order to achieve a net zero world, zero energy buildings are the way forward.  To date, CDL has built two net zero facilities using eco-friendly technologies—the Singapore Sustainability Academy (SSA) and the CDL Green Gallery at the Singapore Botanic Gardens. The SSA, a BCA Green Mark Platinum-certified building, is the first in Singapore to have its construction materials, Cross Laminated Timber and Glued Laminated Timber, verified by the Nature’s Barcode^TM system as coming from responsible sources.

The SSA is the first ground-up initiative and zero-energy facility in Singapore dedicated to capacity building and thought leadership for climate action. Since its opening in 2017, it has tapped on 3,200 sq ft of solar panels on its rooftop as its energy source. The entire facility is built with over 80% of structural materials that come from sustainable sources.

In February 2021, CDL became the first real estate conglomerate in Southeast Asia to sign on to the World Green Building Council’s (WorldGBC) Net Zero Carbon Buildings Commitment. At COP26, CDL was one of 44 pioneering companies to expand its commitment towards a net-zero whole life carbon-built environment. Through this commitment, CDL pledged net zero operational carbon by 2030 for its new and existing wholly-owned assets and developments under its direct operational and management control. This also entails a reduction in embodied carbon and compensating residual upfront emissions via offsetting for new developments by 2030 and for all buildings to be net zero carbon by 2050.

To move towards a low carbon economy, CDL has aligned itself with even more ambitious carbon emissions reduction targets that have been successfully assessed and validated by Science Based Targets Initiative (SBTi) in 2021, in line with a 1.5°C warmer scenario. CDL was the first Singapore real estate company to validate its targets by SBTi for a 2°C warmer scenario in 2018.

The CDL Green Gallery is built with several eco-friendly technologies, including two innovative features – the biomaterial known as Hempcrete (largely made from the hemp plant) and a prefabricated modular system.

Investment: Building Leverage for the Future via Sustainable Finance 

CDL’s Republic Plaza Green Bond was the first green bond issued by a Singapore company in April 2017.

CDL has secured more than $3 billion worth of sustainable finance, in the form of various green loans, a green bond, and a sustainability-linked loan, to help accelerate its green building action. It takes pride in issuing the first green bond by a Singapore company in 2017, which has helped to tap into alternative financing streams. In September 2021, CDL secured a discount for the SDG Innovation Loan provided by DBS Bank Ltd, for its successful R&D and pilot of digiHUB. This enabled CDL to be the first Singapore entity to achieve a discount on a sustainability-linked loan through the adoption of an innovative project that supports the SDGs on a large-scale basis.

At CDL’s mixed-use development South Beach, PV panels have been installed at the tower roof and louver modules, covering a total area of approximately 1,800 m².

Impact: Sustainable Buildings, Sustainable Communities

What gets measured gets managed—CDL’s longstanding experience in ESG disclosure and sustainability has helped it identify gaps and improve its ESG performance. Its robust ESG integration and disclosures are widely recognised by 13 global ratings, rankings and indexes, including double ‘A’s in the 2021 CDP Global A List for corporate climate action and water security.

CDL is honoured to have achieved its best performance in the Corporate Knights’ 2022 Global 100 Most Sustainable Corporations in the World, jumping from 40^th place in 2021 to 5^th position this year.  In addition, it has maintained its ranking as the world’s top real estate management and development company and Singapore’s top sustainable company for the fourth consecutive year, and has been the first and only Singapore company to be included in the renowned index for 13 consecutive years.

The race to zero requires conviction and engagement with all stakeholders. After two decades of integrating ESG into our business, we have captured growth opportunities while mitigating ESG risks, enhancing value for our investors, communities, and the planet. 

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^[1] Home - Climate Champions (unfccc.int)
^[2] COP26 signals accelerated zero carbon investment drive; severe climate risks remain – Investor Group on Climate Change (igcc.org.au)
^[3] WEF_The_Global_Risks_Report_2022.pdf (weforum.org)
^[4] In a world of growing risk the insurance industry has a crucial role to play | Swiss Re
^[5] https://www.worldgbc.org/news-media/WorldGBC-embodied-carbon-report-published