STRATEGIC MANAGEMENT OF MATERIAL ESG ISSUES

DYNAMIC APPROACH TO MATERIALITY ASSESSMENT

Anchored on a multi-stakeholder approach, the Group’s 2023 materiality assessment provides an inside-out and outside-in perspective of our financial and ESG impacts on our stakeholders and business. The latest addition of the ISSB Standards into our reporting framework has included financial materiality as a priority consideration. This is a continuation of our double materiality approach, in assessing sustainability-related risks and opportunities in a holistic manner.

Learning from the unprecedented disruptions caused by the COVID-19 pandemic, we adopted a more dynamic approach on the assessment of key ESG issues from 2020 to 2023, addressing the fast-changing landscape and supply chain issues¹. The exercise determined the actual and potential impacts of these issues on the Company’s long-term value creation, and conversely, our impact on them. This year, we have updated our materiality assessment to align qualitatively with the ISSB’s IFRS S1 and S2. Endorsed by MAS, SGX RegCo and ACRA, the IFRS Standards require companies to assess the ESG issues that are considered material to the company, taking into account both financial and non-financial information, including the impact of climate-related risks and opportunities. To incorporate and understand financial materiality, the Company’s ExCo, selected senior management representatives and key executives from key subsidiaries assessed the potential financial impact of each ESG matter. Online surveys were circulated to key stakeholder groups, including the BSC. More than 377 responses were received. Interviews with selected management staff of the Group’s headquarters and key subsidiaries, investors, regulators, industry and sustainability experts, tenants and suppliers, provided insights into how the Group can manage and strategically address our ESG issues. The preliminary material issues were validated by the Company’s ExCo, senior management and key executives from business units and approved by the BSC thereafter.

2023 Material ESG Issues

Our findings revealed that environmental issues remained a key concern for stakeholders. With the urgency of the global energy transition², “Energy Efficiency and Adoption of Renewables” rose to become the top materiality issue in 2023, followed by “Climate Resilience and Adaptation” and “Innovation”. Innovation continues to remain a high priority and an important driver in achieving CDL’s net-zero commitments.

With greater focus on Scope 3 emissions and future mandatory reporting for Scope 3 emissions under the ISSB Standards, “Responsible Supply Chain” has increased in significance. This is aligned with the increased focus on the environmental performance of our Group’s hotel arm, M&C. Moving forward, there will be greater synergies between CDL’s and M&C’s efforts to improve M&C’s sustainable hotel operations to align with CDL’s net-zero goals.

Highly critical material issues	Critical material issues	Moderate material issues
Energy Efficiency and Adoption of Renewables Climate Resilience and Adaptation Innovation Cyber-readiness, Security and Data Privacy Occupational Health, Safety and Well-being	Responsible Supply Chain Future-ready Workforce and Talent Retention & Attraction Product/Service Quality and Responsibility Green and Healthy Buildings Stakeholder Impact and Partnerships	Ethical and Transparent Business Water Management Human Rights and Labour Conditions Waste Management and Circularity Sustainable Finance Diversity, Equity and Inclusion Economic Contribution to Society Biodiversity Conservation

Ranking increased significantly from the previous year’s materiality study

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The Group’s Material ESG Issues	Stakeholders Impacted	GRI Standards Disclosures	Addressed in this Report
1. Energy Efficiency and Adoption of Renewables	Customers, builders and suppliers, government and regulators, investors and analysts, community, academics and industry experts, and media	Energy CRES: Building energy intensity	Standing on the Side of Nature – Impact on Planet
2. Climate Resilience and Adaptation	Customers, builders and suppliers, government and regulators, investors and analysts, lenders, academics and industry experts, community, and media	Emissions CRES: Building greenhouse gas emissions intensity	Standing on the Side of Nature – Impact on Planet
3. Innovation	All stakeholders across our value chain	Construction and Real Estate sector (CRES): Sustainability certification, rating, and labelling	Standing on the Side of Nature – Impact on Planet
4. Cyber-readiness, Security and Data Privacy	Customers, employees, government and regulators, investors and analysts, and media	Customer privacy	Thriving with Nature – Impact on Profit
5. Occupational Health, Safety and Well-being	All stakeholders across our value chain	Occupational health and safety	Growing with Nature – Impact on People
6. Responsible Supply Chain	Builders and suppliers, community, government and regulators, investors and analysts, academics and industry experts and media	Materials Supplier environmental assessment Supplier social assessment	Standing on the Side of Nature – Impact on Planet
7. Future-ready Workforce and Talent Retention & Attraction	Employees, government and regulators, and investors and analysts	Training and education	Growing with Nature – Impact on People
8. Product/Service Quality and Responsibility	Customers, builders and suppliers, government and regulators, investors, community, academics and industry experts, and media	Marketing and labelling Customer health and safety CRES: Sustainability certification, rating and labelling	Growing with Nature – Impact on People
9. Green and Healthy Buildings	Customers, builders and suppliers, government and regulators, investors and analysts, community, academics and industry experts, and media	Customer health and safety	Growing with Nature – Impact on People
10. Stakeholder Impact and Partnerships	All stakeholders across our value chain	Direct economic impacts	Growing with Nature – Impact on People
11. Ethical and Transparent Business	All stakeholders across our value chain	Anti-corruption Anti-competitive behaviour	Thriving with Nature – Impact on Profit
12. Water Management	Customers, builders and suppliers, government and regulators, investors and analysts, community, academics and industry experts, and media	Water and Effluents CRES: Building water intensity	Standing on the Side of Nature – Impact on Planet
13. Human Rights and Labour Conditions	All stakeholders across our value chain	Employment Forced or compulsory labour Labour/management relations Non-discrimination	Growing with Nature – Impact on People
14. Waste Management and Circularity	Customers, builders and suppliers, government and regulators, investors and analysts, community, academics and industry experts, and media	Waste	Standing on the Side of Nature – Impact on Planet
15. Sustainable Finance	Lenders, government and regulators, and academics and industry experts	There is currently no relevant GRI topic disclosure	Thriving with Nature – Impact on Profit
16. Diversity, Equity and Inclusion	Employees, investors and analysts, academics and industry experts	Diversity and equal opportunity	Growing with Nature – Impact on People
17. Economic Contribution to Society	All stakeholders across our value chain	Economic performance Market presence Indirect economic impacts Employment	Thriving with Nature – Impact on Profit Growing with Nature – Impact on People
18. Biodiversity Conservation	Builders and suppliers, investors and analysts, lenders, media, government and regulators, academics and industry experts, community	Biodiversity	Standing on the Side of Nature – Impact on Planet

1	We will be validating our list of material ESG issues with the latest GRI Sector Standard for our industry when it is published by GRI
2	Fostering Effective Energy Transition Insight Report, World Economic Forum, June 2023

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