‘Without a healthy planet, no people or business will thrive’: CDL’s chief sustainability officer
FOR Esther An and real estate giant City Developments Ltd (CDL), a job interview nearly 30 years ago in 1995 was transformative.
At the time, the company’s managing director, the late Kwek Leng Joo, asked the young An what she thought the real estate sector and CDL could do better. “I said that it could improve its environmental performance, and was hired to help it do that,” she recalled.
As CDL’s first chief sustainability officer, she quickly championed an ethos that still guides the company’s business practices today: “conserving as we construct”.
As the Singapore-headquartered company built and acquired homes, hotels, offices, malls and other properties – it currently has assets in 29 countries and regions – it also became a pioneer in sustainability.
In 2008, it was the first organisation in Singapore to begin publishing sustainability reports, and in 2017, it became the first local firm to issue a green bond. Proceeds from the bond were used to repay a loan spent on retrofitting and upgrading works at Republic Plaza, its headquarters, to maintain high levels of performance in energy and water management.
“At the time, we had to explain to local banks how green financing would work for buildings,” explained An. “Today, sustainable finance is becoming mainstream, and banks are well-versed in supporting green buildings and climate action.”
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
In 2024, CDL became the first corporate in Singapore to adopt the global Taskforce on Nature-related Financial Disclosures (TNFD) framework. In its latest sustainability report, the company set out its strategy and the actions it has taken to minimise its impact on nature as well as mitigate nature-related risks, among other TNFD-recommended disclosures.
These are only snapshots of CDL’s accomplishments and leadership in the sustainability space. In 2007, it launched a “1 degree Celsius Up” campaign to encourage its tenants to raise their air-conditioning temperatures to save energy.
Over the years, CDL has also led green efforts such as energy-efficient retrofitting and initiatives that have helped the company save about S$42 million in energy costs from 2012 to 2023.
In 2014, CDL was the first Singapore real estate company to launch the green lease campaign for its tenants, with the support of the Building and Construction Authority. In 2017, it achieved 100 per cent participation from its retail and office tenants.
“In the early days of our sustainability journey, most in the built environment sector saw sustainability only as a cost,” said An. “Now, more businesses consider sustainability initiatives an important investment to generate long-term value, to reduce their climate-related risks, capture opportunities, and get ahead of environmental regulations. We’re glad that we started our environmental journey early and are pioneers in many areas, including reporting on TNFD, which we published in March this year.”
Four pillars of sustainability
An explained that real estate companies in particular have a social responsibility to reduce their carbon footprint, given that buildings and construction account for nearly 40 per cent of global greenhouse gas emissions. “Apart from new developments, it is crucial to better manage buildings and their operations, and continual efforts to retrofit older buildings are key because some 70 per cent of buildings that exist today will still be around in 2050.”
CDL has articulated four key pillars in its sustainability strategy: integration, innovation, investment and impact.
“Integration is critical to effectively embed sustainability into your business strategy and operations,” An shared, adding that innovation “enables you to accelerate change and impact by developing or adapting solutions”.
Meanwhile, investment is essential for deploying technologies and solutions for decarbonisation.
“Businesses with strong sustainability (strategies) and performance have better access to responsible investment and sustainable finance,” said An. “Most, if not all, companies need the support of banks and investors for long-term growth.”
As for impact, she pointed out that every business decision matters. “Everything we do has positive or negative consequences, or both. That is why sustainability reporting is essential.
“What you don’t measure, you don’t know, and what you don’t know, you can’t manage. If you want to improve performance and be future-ready, you need to identify and work on gaps.”
By tracking past and present performance, companies can embark on and hone their forward-looking scenario planning. “The cost of inaction can be substantial if companies are not prepared for the physical and transitional risks that lie ahead,” added An.
“CDL has conducted three rounds of climate change scenario studies since 2018. This has allowed us to gain insight into potential risks caused by more severe and frequent climate threats, new regulations and changing expectations of investors, financiers and insurance companies.”
Going green for the long haul
As CDL forges ahead in sustainability, it has always had the full support of its board and management. “Leadership commitment is key to sustainability integration. More companies have been stepping up on building or enhancing their sustainability capabilities in recent years,” An said. “To be effective, the sustainability portfolio needs to be empowered as an independent and dedicated unit for it to ensure that ESG (environmental, social and governance) standards can be integrated into every business and operational unit.”
She cautioned that “parking sustainability under the remit of risk management, finance or corporate communications is not advisable, as the expertise required is very different”.
CDL’s sustainability team reports only to the board sustainability committee, which comprises group chief executive officer Sherman Kwek and five independent directors.
“We are entrusted with a weighty task, and we need to be trusted and empowered to do our work well,” said An. She added that Kwek is dedicated to further enhancing CDL’s sustainability leadership by integrating it into the company’s growth, enhancement and transformation strategy.
“I think the fact that CDL is a listed company with Hong Leong Investment Holdings as its major shareholder is an advantage,” noted An.
“Like many successful global family businesses, it takes a long-term view to sustain growth by future-proofing its business for investors and generations to come.”
She is also doing her part to ensure the company’s continued care for the environment and pursuit of ESG excellence, by nurturing the next generation of sustainability leaders within the company and the community at large.
“I hire people who are passionate about sustainability, and help them to develop the skills and expertise they need. CDL has long been committed to raising awareness and building sustainable communities through its active stakeholder and community engagement programmes.”
She pointed out that the company’s Singapore Sustainability Academy – the country’s first ground-up initiative on sustainability, which is supported by six government agencies and 15 founding industry and NGO partners – has hosted more than 1,000 events and training courses for some 35,000 visitors since its opening in June 2017. “With a fast-growing network, the Academy is a strong force for positive change and impact,” said An.
For companies that have yet to move towards sustainability, she urges them to take the first step. “2023 was the hottest year on record and 2024 is set to break this record. These severe climate conditions and events are threatening the survival of humanity.”
She added: “Some people have asked me why I remain positive, and what keeps me going after so many years. As a responsible citizen and a parent, I am concerned about the depleting natural resources and environmental degradation. We are living in an era of ‘global boiling’ and time is ticking.
“There is real urgency to fast-forward collective action to fight climate change together. Without a healthy planet, no people or business will thrive.”
This article is from ESG Brew, a regular column by SGX Research in collaboration with investment firm Beansprout
Copyright SPH Media. All rights reserved.
