CEO Statement

Building on our sustainability vision to ‘Create Future Value’, we have strategically established a new blueprint – CDL Future Value 2030.

Dear Stakeholders,

2016 began with unprecedented momentum in global sustainable development. The landmark Paris Agreement was ratified by over 120 nations by the end of 2016. The United Nations (UN) Sustainable Development Goals (SDGs) also came into effect from January 2016, with global calls for governments, the private sector and civil society to take collective action towards these common goals.

2016 was the hottest year since modern record keeping began in 18801. Widespread flooding in the United States, Europe and Asia, resulted in over US$30 billion in economic losses2. This highlighted the need for immediate actions to mitigate climate change, which has in turn generated significant local and international regulatory activity.

Specifically, governments and the international investment community are increasingly holding corporations accountable for their carbon emissions. 2016 saw the growth of carbon pricing, particularly in Asia. In Singapore, the government announced in its Budget 2017 that a carbon tax targeting large direct emitters of Greenhouse Gases (GHG) will be implemented in 2019.

Businesses can no longer ignore the impact of climate change risks on their bottom line. The G20 Financial Stability Board (FSB)’s Task Force, led by Michael R. Bloomberg, released the Climate-related Financial Disclosure recommendations in December 2016. This echoed regulatory developments in Singapore, where the Singapore Exchange (SGX) launched the Sustainability Reporting Guide in June 2016, requiring listed companies to disclose Environmental, Social and Governance (ESG) performance on a ‘comply or explain’ basis from financial year 2017.

To attract socially responsible investors, SGX also joined the UN Sustainable Stock Exchanges initiative and launched the inaugural SGX Sustainability Indices, of which CDL was listed on its flagship Sustainability Leadership Index. The community of responsible investors is fast-expanding as evident in the US$60 trillion assets under management represented by over 1,500 signatories of the UN Principles for Responsible Investment (PRI), and the rapidly growing green bond market which saw a 92% increase in 20163 and is expected to continue growing.

These developments present opportunities for CDL to attract like-minded investors and raise capital for future green building initiatives to enhance our value creation for shareholders and stakeholders.

Introducing CDL Future Value 2030

As ESG integration becomes essential to a company’s long-term success and economic value, CDL has continued to enhance our sustainability strategy to future-proof our business.

Building on our sustainability vision to ‘Create Future Value’, we have strategically established a new blueprint – CDL Future Value 2030. It encapsulates our long-standing sustainability commitment and best practices of over 20 years, and sets out clear directions and targets to guide us towards 2030.

2030 will be a milestone year with world population expected to hit 8.5 billion, posing new challenges and opportunities for global sustainable development. It is also the target year for major global commitments including the Paris Agreement and UN SDGs. Specifically for the built industry, 2030 is the target year for the Net Zero Agenda by the World Green Building Council and for Singapore to green 80% of its buildings based on the Green Building Masterplan.

With this in mind, CDL Future Value 2030 contains well-defined goals and targets to address ESG issues that are material to our business, while contributing towards a sustainable future. The blueprint is fundamental to our integrated sustainability strategy which will continue to harness our six capitals – financial, organisational, natural, manufactured, human as well as social and relationship – to create tangible value for our business, stakeholders, community and the environment.

Financial Capital –
Building Future Value

Despite a challenging macro-environment, CDL remained resilient in 2016, posting a creditable profit of S$653.2 million and record revenue of S$3.9 billion. This was driven by strong residential sales in Singapore and China, and divestments including the sale and recapitalisation of Summervale Properties Pte. Ltd. that resulted in the establishment of our third Profit Participation Securities (PPS) platform.

Through PPS 3, we are on track to achieve our target of S$5 billion in funds under management (FUM). We successfully unlocked the value of our Nouvel 18 project for S$977.6 million and attracted a new pool of untapped high net worth investors in Singapore. The funds raised will allow CDL to further recycle capital for growth plans.

Our Green Mark properties certified by the Building and Construction Authority (BCA) were the subject of the three successful PPS platforms which achieved over S$3.5 billion in FUM. As we continue to expand geographically, our track record in eco-developments and corporate citizenship will help us to attract like-minded partners and investors, and gain foothold in markets where our sustainability leadership and reputation provide a competitive edge.

Organisational Capital –
Building a Resilient Organisation

Investors are holding boards increasingly accountable for governance standards and demanding greater transparency.

CDL is committed to upholding the highest standards of corporate governance. As a testament of our continued pursuit for governance excellence, our ranking on the Singapore Governance and Transparency Index rose from 24th in 2015 to 10th in 2016. CDL was also accorded the prestigious “Most Transparent Company Award 2016” in the Real Estate category at the Securities Investors Association (Singapore) (SIAS) Investors’ Choice Awards 2016, for our outstanding efforts in corporate disclosure and transparency standards.

In view of the heightened threats from global terrorism, cyber-attacks, and geopolitical and macroeconomic shifts, we enhanced our Enterprise Risk Management (ERM) framework to assess strategic risks and emerging threats beyond our immediate horizon, and proactively identify control measures to mitigate them.

In 2016, we also strengthened our crisis management and communication protocols in the event of terrorism. Members of our Senior Management team were trained on crisis management and emergency response through a simulation exercise to enhance preparedness.

On top of our comprehensive corporate policies and business code of conduct, we formalised a new policy on Anti-Money Laundering and Counter Financing Terrorism in 2016, and trained our employees to detect such criminal acts. This is in line with our belief in staying vigilant and supports the Monetary Authority of Singapore in safeguarding the nation from illicit money laundering by global criminal and terrorist organisations.

Moving forward, we will raise, by 2030, our carbon emissions intensity reduction target to 38%, from the previously pledged 25% (versus 2007 levels), by using the Sectoral Decarbonisation Approach.

Natural Capital –
Building a Sustainable Environment

With increased pressure on corporations to be accountable for their environmental footprint and rising costs of natural resources, maintaining a healthy natural capital is of utmost importance to sustain our growth.

For more than two decades, we have upheld our unwavering commitment to environmental management and resource efficiency. As the first private-sector property developer in Singapore to achieve the ISO 14001 Environmental Management System and ISO 50001 Energy Management System certifications in 2003 and 2014 respectively, we have continued our efforts to overcome inherent environmental challenges typically associated with property-related companies.

As early as 2011, we established carbon emission intensity reduction targets, and in 2015 we added a Climate Change Policy to our environmental and energy management systems. In 2016, CDL was the first property developer in Singapore to achieve the ISO 14064-1 verification for our GHG emissions disclosures.

Moving forward, we will raise, by 2030, our carbon emissions intensity reduction target to 38%, from the previously pledged 25% (versus 2007 levels), by using the Sectoral Decarbonisation Approach. Our commitment towards low-carbon operations supports Singapore’s national pledge to the Paris Agreement.

Additionally, we set a target for 35% of our building materials to be derived from recycled content, low-carbon sources, or certified by recognised environmental organisations. Our upcoming Singapore Sustainability Academy, for instance, is the first in Singapore to be built with Cross Laminated Timber and Glued Laminated Timber verified to be from sustainable sources.

To better understand the impact our developments have on the environment and to preserve Singapore’s biodiversity, CDL has voluntarily conducted Biodiversity Impact Assessments on new development sites since 2010. Furthermore, we took the initiative to conduct a more comprehensive study, similar in scope with the Environmental Impact Assessment, for our latest Forest Woods condominium. This led to the discovery of several rare species of plants that were transplanted to safe areas.

Manufactured Capital –
Building Green Infrastructure

Our firm commitment to quality and green spaces has differentiated our brand by strengthening our product and manufactured capital. This has created enhanced value for our business, customers and investors, and supported the economic development and well-being of the communities in which we operate.

Over the years, CDL’s green building efforts have also directly contributed to our bottom line. From 2012 to 2016, we achieved savings of more than S$16 million as a result of both energy-efficient retrofitting and other initiatives implemented for eight CDL-managed office buildings.

As a testament of our commitment to achieve at a minimum the BCA Green Mark GoldPLUS certification for all new developments – two tiers beyond the mandatory Green Mark certification level – 100% of office buildings owned and managed by CDL are rated Green Mark GoldPLUS and Platinum (the highest tier certification).

Beyond building infrastructure, we engage and empower our commercial tenants to adopt low-carbon practices, encouraging them to play a bigger role in the green building movement. At the end of 2016, more than 95% of existing tenants have pledged their commitment to the CDL Green Lease Partnership Programme by signing a Green Lease Memorandum of Understanding. In addition, more than 25% of the tenanted spaces in our commercial properties have been certified under the BCA Green Mark Scheme, including office interiors and retail outlets. Due to the commitment and efforts of our tenants and Green Lease ambassadors, CDL remains the only developer to have received the top-tier BCA Green Mark Pearl Prestige award for two consecutive years.

Recognising that innovations and collaborations are key to our business success in the low-carbon economy, CDL invested S$2.25 million to establish a research and development partnership with the National University of Singapore (NUS) School of Design and Environment. Through the NUS-CDL Smart Green Home and NUS-CDL Tropical Technologies Laboratory (T² Lab), CDL will continue to champion leading-edge innovations which can be test-bedded in our future developments to meet the lifestyle needs and climate challenges of tomorrow.

Human Capital –
Building our People

People are our greatest asset and their performance, safety and well-being are vital to CDL’s continued performance. We are committed to providing an inclusive, safe and healthy environment for our employees, as well as the workers at our construction sites and managed commercial properties, even where they are not under our direct hire.

In 2016, CDL took the lead in galvanising 24 of our key builders and consultants to sign a “Pledge Towards Zero Vision through Safe Design – Safe Practices – Safe Culture” at the 12th annual CDL 5-Star Environmental, Health and Safety (EHS) Awards. It marked the first time a developer in Singapore has rallied collective action along its supply chain to support the Construction Industry Workplace Safety and Health (WSH) Action Plans.

As a result of our health and safety initiatives and proactive engagement with our employees, contractors and their workers, we maintained zero fatalities and occupational diseases across CDL’s corporate office, construction sites and managed commercial properties in 2016.

Respecting and protecting human rights is vital for ensuring safe and fair working conditions for our employees and workers. In 2016, we enhanced our Human Rights Policy to address growing concerns and issues in this area. We also strive to ensure fair employment and labour practices, diversity and equal opportunity. To develop and nurture talent, we provide our employees with training opportunities and scholarships to upgrade their skills or further their education.

For the year under review, we carried out a company-wide strategic road mapping to introduce a Balanced Scorecard management system during 2017. The new system will measure and align cross-functional and individual employee performance to support our organisational and business objectives.

CDL also focusses on grooming youths to be environmentally conscious, as they form the next generation of homebuyers, employees and leaders. Given our leadership in green buildings and sustainability integration, we will have a competitive edge with the rise of green consumerism.

Social and Relationship Capital – Building our Communities

Our continuous engagement efforts have enhanced our relationships with stakeholders and helped to create wider economic value for the community and the environment. Considerable resources have also been invested in building strategic Public, Private and People (3P) sectors collaborations. In the long term, this strengthens CDL’s social licence to operate and our ability to create value.

Following the success of the inaugural EcoBank initiative in 2016, we partnered Eco-Business for a second time in January 2017. Themed “Be a Zero Waste Hero”, the initiative promotes responsible consumption and waste disposal, in support of the Sustainable Singapore Blueprint.

A three-week collection drive of pre-loved items at seven CDL-managed buildings received about 10,800kg of items, a 76% increase from 2016. This equates to 2,646 metric tonnes of carbon equivalent reduction to Singapore’s landfill. The initiative capped off with a charity bazaar which raised over S$35,000 for the Children’s Charities Association of Singapore.

CDL also focusses on grooming youths to be environmentally conscious, as they form the next generation of homebuyers, employees and leaders. Given our leadership in green buildings and sustainability integration, we believe that this will ultimately provide CDL a competitive edge with the rise of green consumerism. Through flagship youth programmes such as the CDL-Compact Singapore Young CSR Leaders Award, CDL E-Generation Challenge and My Tree House, as well as partnerships with education institutions, we reached out to and empowered over 120,000 youths and children during 2016.

Recognising that a healthy workplace can have a positive impact on the happiness and productivity of our tenants and occupants, CDL collaborated with the Health Promotion Board for the Workplace Well-being Partnership. Under this programme, we organised a series of weekly health-related activities in 2016, to promote a healthy work environment and active living among our office tenants.

Beyond customers and the community, we actively engage with existing shareholders and potential investors to communicate our business case for ESG integration. We seek to position CDL as the top investment choice among the responsible investment community by sharing our sustainability leadership at high-level investor conferences such as the CEO Roundtable at the UN PRI in Person Conference 2016 held in Singapore.

The Journey Ahead

Under our new CDL Future Value 2030 blueprint, we will actively track and review our sustainability performance against the ESG goals and targets established to support CDL’s growth while complementing the UN SDGs.

To address investors’ increasing expectation of ESG disclosure and performance, we have raised the bar for sustainability reporting by becoming the the first private developer in Singapore to adopt the new Global Reporting Initiative (GRI) Standards of Sustainability Reporting for our Integrated Sustainability Report 2017.

In addition, we have established a dedicated sustainability website ( to provide more regular and dynamic ESG reporting to shareholders, investors and partners, on top of the annual sustainability report.

In tandem with the blueprint, to remain competitive in today’s ever-evolving business and regulatory landscape and to future-proof our business, we will embark on scenario planning to identify risks and opportunities that emerging trends, such as carbon tax and circular economy, may present to our supply chain management. In light of the recently announced carbon tax in Singapore, we are also reviewing internal carbon pricing scenarios to prepare for the impending business impact.

Additionally, we continue to seek new revenue streams and financing through product innovation and business diversification.

Riding on the fast-growing demand for sustainable investment products and the Singapore government’s move to develop a green bond market, we recently launched our inaugural green bond – a first by a Singapore company. The two-year senior secured bond raised S$100 million at 1.98% fixed rate. Our maiden venture into green bond links CDL’s ESG initiatives with the capital markets and enable us to tap on like-minded investors, providing an alternative financing stream to advance our green building efforts.

We have made strategic investments to capitalise on industry disrupting opportunities such as the burgeoning sharing economy to stay ahead of the curve.

Following our investment in mamahome, one of China’s fastest growing online apartment rental platform with more than 150,000 apartment listings in over 20 Chinese cities in September 2016, we further announced our investment in China’s leading co-working space operator Distrii in January 2017. Distrii plans to expand in global gateway cities and will create one of the largest co-working facilities in Singapore. The co-working space, spanning over 60,000 square feet at CDL’s flagship Republic Plaza in the heart of the city’s Central Business District, is scheduled to open in 2018.

Collaborative partnerships will continue to be the key driver for our sustainable development efforts. In partnership with the Sustainable Energy Association of Singapore, we will open the landmark Singapore Sustainability Academy in June 2017. With the objective of promoting a low-carbon economy, resource efficiency and sustainable practices amongst businesses, youths and the community, the zero-energy academy will advance CDL’s advocacy and stakeholder engagement for sustainable development.

The partnerships, product innovations and enhanced ESG integration will supplement CDL’s resilient foundation laid more than 50 years ago. By combining the old and the new, we hope to create synergistic value to ensure financial success for our business, and a sustainable future for us all.

Sherman Kwek
Group Chief Executive Officer

1 According to independent analyses by National Aeronautics and Space Administration and the National Oceanic and Atmospheric Administration
2 Estimates from the Swiss Re Group using Sigma data
3 Climate Bond Initiative Green Bond Highlights 2016