CDL has its eye on a triple bottom line

FOR Singapore-listed developer City Developments Ltd (CDL), good corporate governance and sustainability are not just buzzwords or part of business ethics and responsibility, but they form the bedrock of doing business.

For more than two decades, sustainability has been integrated into CDL's business and operations, says CDL's chief sustainability officer Esther An.

Being a pioneer in green building and sustainability has its opportunities and challenges, Ms An recalls.

"As the first mover in adopting sustainability in business operations and corporate reporting, the learning curve was steep. Along the value chain, there was a lack of awareness and knowledge among our suppliers, partners, investors and consumers about the benefits of green products and practices in the early days," she says.

"Till today, consumers are still not willing to pay a premium for green homes, giving very little market signals and incentives for sustainable products."

Still, CDL has chosen the path of a "triple bottom line" to optimise the mix of financial and ethical performance, environmental stewardship, and social engagement.

"This has shaped a culture of strong corporate governance and sustainability, from the chairman and board to all levels of the company, helping us to operate more efficiently, mitigate risks, build trust, strengthen our brand and create lasting value," says CDL chief financial officer Yiong Yim Ming.

A flurry of activities took place over the past one year to enhance corporate governance, shareholders' engagement and sustainability. This includes the setting up of a dedicated investor relations (IR) function in 2016 to strengthen engagement with the investment community, Ms Yiong says.

Since then, CDL's senior management team has met more than 200 institutional shareholders and potential investors in Singapore, Hong Kong and Japan last year alone; it also participated in various investor conferences and non-deal roadshows locally and internationally.

Over 30 site visits to CDL's developments in Singapore, China and the UK were organised for fund managers and analysts.

The IR team also reached out to more than 20 sell-side analysts with open interactions with CDL's senior executives and access to property visits, allowing research analysts to gain insights on market conditions, as well as CDL's operations and strategic plans.

In addition, CDL introduced a live webcast of its financial results briefings and made refinements to its financial presentations, providing greater data granularity, Ms Yiong says.

"We are glad that our investors and shareholders have become more informed about CDL's business directions," she adds. "Our active engagement and communications with the investment community has been received positively, resulting in increased liquidity and resilience of the stock."

CDL's disclosures in its 2016 annual report was further enhanced to include disclosure of key executives' aggregate remuneration and its Audit & Risk Committee's commentary and responses to significant matters raised by external auditors in their audit report.

To better reflect the role of the board in advancing sustainability within CDL, the Corporate Social Responsibility & Corporate Governance Committee was renamed the Board Sustainability Committee (BSC) last year.

The BSC's terms of reference include oversight of matters relating to the Environmental, Social and Governance (ESG) framework, ESG targets, sustainability reporting framework and CDL's policies, practices and performance on material ESG factors.

Ms An shares that CDL's unique ESG integration model shows how sustainability targets translate into operational benefits of mitigating risks, improving operational performance and innovation of products.

The investment community's support for CDL's sustainability efforts was demonstrated when financial institutions and fund managers bought into CDL's inaugural green bond, the first by a listed developer here. The green bond was issued in April to repay loans taken up for Republic Plaza, which has undertaken green upgrading and retrofitting.

"There is an increased interest in socially responsible investments and a growing demand for relevant products," Ms An observes. "We would certainly be keen to explore more green bond issuances in future."

In its latest 2017 Integrated Sustainability Reporting, CDL has gone a step further in sustainability reporting by introducing CDL Future Value 2030 sustainability blueprint, covering a set of long-term ESG targets to address issues which are most material to its business and stakeholders.

For the building industry, 2030 is the focal point for Singapore to green 80 per cent of its buildings based on the Green Building Masterplan. CDL's long-term ESG targets under the sustainability blueprint are set with this in mind.

"The blueprint is fundamental to our integrated sustainability strategy to build enhanced value for our business, stakeholders, community and the environment," Ms An says.

For all its efforts, CDL is recognised at this year's SIAS award ceremony, clinching runner-up for the Singapore Corporate Governance Award under the real estate category, Shareholder Communications Excellence Award and Sustainability Award.