For Esther An and real estate giant City Developments (CDL), a job interview nearly 30 years ago in 1995 has been transformative. At the time, the firm’s then-managing director the late Mr 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 says.
As CDL’s first chief sustainability officer, she quickly championed an ethos that still guides its 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.
CDL was the first organisation in Singapore to begin publishing sustainability reports in 2008 and was the first Singapore firm to issue a green bond in 2017. Proceeds from its first green bond were used to repay a loan spent on retrofitting and upgrading efforts at Republic Plaza, its flagship headquarters, to maintain high levels of building performance in energy and water management. “At the time, we had to explain to local banks how green financing would work for buildings. Today, sustainable finance is becoming mainstream and banks are well versed in supporting green buildings and climate action,” An recalls.
This year, it became the first corporation in Singapore to adopt the global Taskforce on Nature-related Financial Disclosures (TNFD) framework. In its latest sustainability report, it set out its strategy and actions taken to minimise its impact on nature and mitigate nature-related risks, among other TNFD-recommended disclosures.
These are only a snapshot of its accomplishments and leadership in the sustainability space. In 2007, it launched a “1°C Up” campaign to encourage its tenants to raise their air-conditioning temperature to save energy. Over the years, it has also led green efforts, for example, energy-efficient retrofitting and initiatives that have helped the company to save approximately $42 million in energy savings 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 (BCA). In 2017, it achieved 100% participation from its retail and office tenants.
An says: “In the early days of our sustainability journey, most in the built environment sector saw sustainability only as a cost. Now, more businesses consider sustainability initiatives an important investment to generate long-term value, 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 the Task Force on Climate-related Financial Disclosures in 2017, and Taskforce on Nature-related Financial Disclosures, which we published in March this year.”
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The four I’s of sustainability
She notes that real estate companies in particular have a social responsibility to reduce their carbon footprint, given that buildings and construction account for nearly 40% 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% 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. Innovation enables you to accelerate change and impact by developing or adapting solutions.”
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“Investment is essential to deploy technologies and solutions for decarbonisation. Businesses with a strong sustainability strategy and performance have better access to responsible investment and sustainable finance. Most, if not all, companies need the support of banks and investors for long-term growth.”
As for impact, An points out that every business decision matters. She explains: “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. 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. An highlights: “Leadership commitment is key to sustainability integration. More companies have been stepping up on building or enhancing their sustainability capabilities in recent years. To be effective, the sustainability portfolio needs to be empowered as an independent and dedicated unit for it to ensure that ESG can be integrated into every business and operational unit. 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 CEO 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.”
An shares that Kwek is dedicated to further enhancing CDL’s sustainability leadership by integrating it into the company’s GET (Growth, Enhancement and Transformation) strategy he has established. She says: “I think the fact that CDL is a listed company with Hong Leong Investment Holdings as its major shareholder is an advantage. 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.”
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She is also doing her part to ensure the firm’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. Its Singapore Sustainability Academy, the country’s first ground-up initiative on sustainability, 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.”
For companies that have yet to move towards sustainability, An 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. 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.”
About City Developments
City Developments (CDL) is a leading global real estate company with a network spanning 163 locations in 29 countries and regions. Listed on the Singapore Exchange S68 , the Group is one of the largest companies by market capitalisation. Its income-stable and geographically diverse portfolio comprises residences, offices, hotels, serviced apartments, student accommodation, retail malls and integrated developments.
The company’s website is www.cdl.com.sg
About ESG Brew: the Sustainability Blend
ESG Brew is a regular column by SGX Research in collaboration with Beansprout (https://growbeansprout.com), a MAS-licensed investment advisory platform, that features sustainability leaders of companies listed on SGX. These interviews are profiles of individuals who drive the sustainability agenda and initiatives within these corporations.
