Esther An tells us how establishing a CSR-centric corporate vision and mission was the first and probably easiest step for CDL
Ethical Corporation: What’s your current role and responsibilities?
Esther An: As CDL’s Chief Sustainability Officer, I’m pleased to have started the sustainability journey for the company from the onset. Establishing a CSR-centric corporate vision and mission was the first step and probably the easiest step. The challenge was to realise the vision by mapping out and implementing strategies to effectively integrate sustainability into every aspect of the business and to build a strong culture amongst stakeholders. As a pioneer in this field, part of my commitment is also to advocate thought leadership and best practices in CSR as well as sustainability and integrated reporting.
EC: What are the big issues to watch in 2016?
Esther An: In 2016, climate change will definitely be the issue to watch out for, given the recent COP21 Paris Agreement. As governments around the world step up on their efforts to reduce carbon emissions, businesses will inevitably be affected. In fact, climate actions, low carbon operations, sustainability practices and reporting are increasingly expected of businesses.
At the UN Sustainable Development Summit in September 2015, countries adopted the UN’s Sustainable Development Goals (SDG). Goal 17 is to revitalise the global partnership for sustainable development, and it would be interesting to see over the next few years how businesses align with the SDGs, and how collaborations between governments, the private sector and civil society can help to forge a successful sustainable development agenda.
Sustainability reporting is likely to become a norm in most countries with more stock exchanges making it mandatory. The Singapore Exchange’s (SGX) announced in January its proposed guidelines, elaborating its plan to adopt the “comply or explain” approach for sustainability reporting for all listed companies from 2017. This will make sustainability reporting not just a “good-to-have”, but a license to operate for Singapore-listed firms soon.
Lastly, companies are also facing mounting pressure from investors to address sustainability issues. Research has shown that global sustainable investment assets have expanded dramatically in recent years, rising from US$13.3 trillion at the outset of 2012 to reach a total of US$21.4 trillion at the start of 2014.1 Given the rapid rise of sustainability reporting globally, my take is that SRI investments will continue to grow significantly in the years ahead. Sustainability will become mainstream and companies will have to commit to embracing sustainability into their businesses and operations.
EC: In your role as chief sustainability officer what are your priorities for 2016?
Esther An: Studies show that companies with solid ESG practices achieve better operational performance and lower their cost of capital. My top priority is to ensure the continued integration of sustainability in all business aspects so as to achieve stronger branding and product differentiation in 2016. Our quality projects will be more resource-friendly and will cater to a smart and eco-friendly lifestyle, taking into account various aspects of energy, security, mobility and healthcare needs.
We will continue to step up on our environmental stewardship efforts in 2016. Last year, we took our commitment to environmental best practices one step further by formalising and publishing a Climate Change Policy. In addition to the carbon intensity reduction targets established in 2011, we further introduced electricity and water intensity targets in 2015 – to reduce 22% by 2020 and 25% by 2030 from baseline year 2007, across CDL’s core business.
In light of Singapore’s submission of its Intended Nationally Determined Contribution ahead of COP21, we have been reviewing our greenhouse gas emission targets with a view to raise the targets that were first established in 2008.
One of the plans in the pipeline for 2016 is to implement Environmental Impact Assessment for our upcoming developments in Singapore – a step beyond compliance and ahead of the other private developers in Singapore.
Even though it has been two decades since we started our sustainability journey, there is still much more to do. As the sustainability lead in CDL, I will have to engage all internal stakeholders to build upon our past ethos of “Conserving as we Construct” to “Create Future Value” for our business and stakeholders, as well as maintain industry leadership in innovation, product quality, service standards, profitability and sustainability.
EC: CDL has been ranked the Top Real Estate Company and Top 10 Corporations in the Global 100 Most Sustainable Corporations in the World in 2016. This is a big achievement – congratulations! How will this guide CDL’s strategy going forward?
Esther An: We are truly honoured to be ranked the Top Real Estate Company and amongst Top 10 Corporations in the prestigious Global 100 Most Sustainable Corporations in the World in 2016. This recognition reflects our strong commitment to sustainability. In line with our ethos of ‘Conserving as we Construct’, we have been committed to adopting a holistic lifecycle approach towards sustainable development.
At the operational level, we will continue to apply a threepronged strategy: (1) designing and developing sustainable properties or green buildings, (2) managing buildings in an energy and resource-efficient way, and (3) engaging and influencing stakeholders to support our commitment to sustainability.
By pioneering visionary practices, championing groundbreaking innovations and setting new sustainability benchmarks, CDL has been recognised as a leading eco-developer. As we look towards the inherent social and environmental challenges in the future, more can – and must – still be done. For CDL, we will continue to build on our two-decade commitment to green building innovation, with a greater focus on creating future value for our stakeholders through our sustainable properties.’
EC: Where do sustainability and CR activities sit at the company and what departments they are integrated the most?
Esther An: After embracing CSR in our business for over two decades, I would say that the company has a very strong DNA in sustainability, cutting across all departments and all levels of the operation. We have a dedicated Sustainability Department which engages all key operational areas including the Environment, Employee Relations, Corporate Governance (CG) and Risk Management, Stakeholder Relations and Community which are material to our business.
These areas are defined based on global standards such as the UNGC’s ten principles, ISO26000 Guidance on Social Responsibility, Global Reporting Initiative (GRI G4) guidelines and Integrated Reporting Framework developed by International Integrated Reporting Council.
In addition, since 2008, we have in place a company-wide CSR committee which is responsible for mapping out CSR strategies and measuring key performance. This committee cuts across all corporate and operational units. It initiates, drives and monitors various aspects of our CSR practices, ensuring that these are integrated into our business operations and complement corporate objectives. Above this committee, at the Board level, is a CSR & Corporate Governance committee that assumes an advisory role for the company’s CSR strategy.
Since 1995, the CSR/sustainability function and company-wide CSR committee comes under the direct supervision of the top management, formerly our late Deputy Chairman and currently under our Chief Executive Officer. This demonstrates CDL’s continued leadership commitment to sustainable practices and our strategic approach to integrating sustainability in all aspects of our business and operations.
EC: From research with our community we’ve been told sustainability as a source of competitive advantage is the biggest opportunity in the next 5 years – would you agree with this and what CDL does in this space?
Esther An: Our commitment to embrace our ESG responsibilities for more than 20 years has accorded us local and global recognition as a leader in sustainability. It has enhanced CDL’s international presence in the sustainability arena and helped place CDL and Singapore on the global sustainability map. More importantly, sustainability has delivered a positive impact for our business, the community and our environment.
Moving forward, we see unlimited possibilities to create greater value for our business and the wider community, building on our green building expertise and harnessing our capitals. We will continue to influence and engage all stakeholders in the value chain, from architects and builders to home buyers and tenants, working together to create solutions and adopt practices for a sustainable, climate-resilient cityscape.
Innovation will remain a key driver in our pursuit of sustainable development. It has given us a first-mover advantage and as a result created a strong brand and product differentiation for CDL.
With a commitment towards sustainability and environmental stewardship that extends beyond compliance, we have placed ourselves in a good position to seize opportunities that arise from the increasing regulatory changes. Since 2011, we have set a minimum target for all our new developments to be certified Green Mark GoldPlus by the Building and Construction Authority (BCA) in Singapore, two levels above the mandatory Green Mark certification requirement. To date, we have amassed a portfolio comprising over 80 Green Mark certified buildings and office interiors – the most amongst developers in Singapore. This will complement BCA’s target of greening at least 80% of Singapore’s building stock by 2030.
The same can be said of CDL’s sustainability strategy. We first started reporting on our CSR efforts in our 2004 Annual Report, and in 2008, we were the first in Singapore to publish a Global Reporting Initiative-checked Social and Environment Report. In 2015, we became the first property developer in Singapore to adopt the Integrated Reporting approach for our Sustainability Report. Based on the International Integrated Reporting Council’s (IIRC) Framework, this approach provides for a more meaningful and all-rounded corporate reporting, connecting Environmental, Social and Governance (ESG) and financial performance. These efforts are way ahead of SGX’s plan to adopt a “comply or explain” approach towards sustainability reporting, which will be implemented in 2017.
Beyond staying ahead of regulations, we believe that our sustainable, green products will give us an edge over our competitors. Studies around the world show a pattern of green buildings being able to more easily attract tenants and to command higher rents and sale prices.2 From our experience, we have seen that our green buildings enjoy increased marketability, especially amongst the MNCs, as investors and occupants become more knowledgeable about and concerned with the environmental and social impacts of the built environment.
In addition, research has also shown that millennials are most responsive to sustainability actions, with many of them even willing to pay extra for sustainable products.3 While we have yet to see this trend take place in the real estate sector in Singapore, we are hopeful that our green features will enable us to command a premium in future.
EC: How is CDL engaging its customers to behave more responsibly?
Esther An: At CDL, we understand that the key to a sustainable city does not lie on green infrastructure alone. If Singapore wants to become a truly eco-city, there has to be a collective mindset and behaviour.
In building value into our portfolio, we take an end-to-end approach. Apart from developing dynamic green buildings and managing them sustainably, as one of Singapore’s largest landlords, we actively engage our building users to achieve greater environmental sustainability.
Since September 2014, we have progressively implemented the CDL Green Lease Partnership programme to encourage and enable our commercial tenants to proactively monitor and reduce energy usage so as to lower their carbon footprint. To date, more than 90% of our existing tenants have signed the CDL Green Lease Memorandum of Understanding, pledging their commitment to monitor, manage and reduce energy consumption.
Through various initiatives under the programme, our tenants have greater empowerment to drive energy improvements through behavioural change, green infrastructure and best procurement practices. Apart from the Green Lease Partnership programme, we have also been in partnership with the Singapore Environment Council since 2002 on Singapore’s first major office greening programme, Project: Eco-Office, which has extended its outreach to not just CDL’s tenants but also across Singapore and the region.
To engage our homebuyers, we have also been conducting our “Let’s Live Green!” outreach for over a decade. Though specially-customised Green Living Kits distributed at our Temporary Occupation Permit (TOP) parties, we encourage homebuyers to make green lifestyle choices and to adopt eco-friendly habits. Homebuyers also enjoy a host of activities at the Welcome Party, including talks and exhibitions on environmental conservation.
EC: Do you face a lot of scepticism in this space, and who from the most?
Esther An: Currently, there is still much room for greater awareness and appreciation of the benefits of green buildings amongst home buyers and office workers in Singapore.
However, studies show that green consumerism is on the rise globally in particular amongst the younger consumers. I am hopeful that this will change the consumption preference in the coming years. Let me cite an example – in the past, people hardly bought organic products. But as people become more aware of the health benefits of organic goods, we increasingly see more people purchasing such items, and even paying a high premium for them. This will in turn create higher demand. I must say that we faced a lot more scepticism two decades ago. Many people wondered why we were willing to invest in green features and adopt sustainable methods and materials in our developments. Many contractors and consultants were not forthcoming in adopting green with us. But fast forward to today as more stringent regulations kick in coupled with the heightened awareness of climate change and green consumption on the rise, many industry players have started embracing responsible and sustainability practices in their businesses in recent years.
EC: Is CDL engaging in any of the United Nations Sustainable Development Goals?
Esther An: We are currently reviewing our material issues to align with the relevant SDGs. But the fact is that many of the SDGs are not unfamiliar to CDL. For example, Goal 11, which is to “make cities inclusive, safe, resilient and sustainable”, is already embedded in CDL’s DNA. As a responsible eco-developer, we recognise that our role goes beyond creating eco-friendly physical spaces and developments. It is also about inspiring eco-lifestyles. Our green commitment is applied across our entire operations – from design, construction, procurement, maintenance and building user engagement.
As part of CDL’s ethos to ‘Conserve as we Construct’, we have been investing 2% to 5% of a new development’s construction costs on green design and innovation for over a decade.
These include first-of-its-kind eco-developments and industry-changing methods that minimise negative environmental impact, conserve precious resources, and encourage sustainable habits for a greener, better future.
EC: What do you see as being the biggest challenge in working towards this goal?
Esther An: For many business owners, sustainability is about dollars and cents. The building sector is of no exception, cost and maintaining profitability have always been key issues. Very often, upfront investments are needed for green developments.
Innovative building methods such as PPVC and alternative energy features like solar and photovoltaic panels do incur additional cost. Hence, not many developers are willing to take on extensive green features in their developments. In land-scarce Singapore, land cost is high. Coupled with high construction and labor cost, margins have becoming thinner, making it harder for developers to invest in green innovations in a big way.
Another challenge is achieving the buy-in of stakeholders in the supply chain to achieve high Environment, Health and Safety (EHS) standards that are beyond compliance. This is why, at the operational level, we have and will continue to adopt proactive approach in engaging stakeholders to support our EHS commitment.
Lastly, it is impossible for a single company or sector to achieve this goal. To make cities cleaner, greener, smarter and more sustainable, it will require government regulations and support, cross-sector collaborations and ground-up initiatives from the public.
EC: COP21 agreement – a success or did you wish for more?
Esther An: The COP21 agreement was certainly an unprecedented accomplishment, with 195 nations coming to a historic agreement to combat climate change and unleash actions and investment towards a low carbon, resilient and sustainable future. However, it remains to be seen how effective the implementation of the agreement will be at both international and national levels.
EC: A government to watch on sustainability?
Esther An: One government to watch would definitely be Canada’s recently elected government, led by Prime Minister Justin Trudeau. It is clear that climate change is very much on the agenda of the Canadian government, with the Prime Minister renaming the environment ministry to include climate change. The government is also big on diversity, with a ministerial team that for the first time in the country’s history is equally balanced between men and women. The Ontario government has also recently announced its investment of nearly CAD$100 million into projects that will reduce greenhouse gas emissions, increase energy efficiency as well as support clean tech innovation and jobs.
Another government to watch on sustainability would definitely be Singapore. Two of the country’s major challenges are urban density and an ageing population. We are the world’s third most densely populated nation, and by 2030, the number of elderly is expected to triple from 300,000 to 900,000. In the coming years, these factors will increasingly add pressure to healthcare, transportation and environmental sustainability — including energy, food and water. This is why the Singapore government is pushing towards becoming the world’s first smart nation, “one that will improve the quality of life for individuals and business opportunities for enterprises,” according to the Infocomm Development Authority of Singapore.
In support of the UN’s sustainable development agenda, the Singapore government also launched a new programme where it will work with partners on sustainable development. Under this programme, Singapore will work with partners to provide technical assistance and capacity building to developing countries in the areas of leadership and governance, sustainable cities, and water and sanitation solutions.
The bottom line is, Singapore wants to become not just a smart nation, but also an eco-friendly city with a “zero waste” culture and a flourishing green economy by 2030. I am excited to see how we as a nation will come together to achieve these goals over the next decade.
EC: And finally, what are you most looking forward to at next Responsible Business Summit Asia?
Esther An: I am looking forward to learning more best practices and business cases from the delegates and the expert speakers from other parts of the world, as well as exchanging ideas and experiences with my fellow panellists for the session on “Enhancing Brand Reputation through Strong Sustainability and CSR Values”.Leadership series Esther An CSR climate change sustainability Environment corporate governance greenhouse gas emissions
May 2016, Singapore
Leverage value chain opportunities and minimise supplier risks to ensure business longevity