Home Featured Real estate group CapitaLand to triple sustainable finance portfolio to SGD 6 billion by 2030
Real estate group CapitaLand to triple sustainable finance portfolio to SGD 6 billion by 2030

Real estate group CapitaLand to triple sustainable finance portfolio to SGD 6 billion by 2030

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Over the next decade, one of Asia’s largest diversified real estate groups CapitaLand aims to spur ESG initiatives within the company. By 2030, the company intends to secure SGD 6 billion through sustainable finance such as sustainability-linked loans, green loans and green bonds. This is triple the SGD 2 billion it has raised to date through sustainable finance. The Group and its real estate investment trusts have raised over SGD 3.3 billion through sustainable finance thus far.

Sustainability Master Plan

The Group has unveiled its first Sustainability Master Plan that articulates sustainability targets, strategies and plans for the next decade till 2030. The Master Plan focuses on three key themes to drive sustainability efforts in the environment, social and governance (ESG) pillars, enabling the Group to create a larger positive impact for the environment and society:

1. Build portfolio resilience and resource efficiency
2. Enable thriving and future-adaptive communities
3. Accelerate sustainability innovation and collaboration

Lee Chee Koon, CapitaLand’s Group Chief Executive Officer said: “Sustainability is at the core of what we do. It is embedded into every stage of our real estate life cycle, from investment to development and operations. CapitaLand’s Sustainability Master Plan will be our strategic blueprint, focusing on areas where we can create the greatest positive impact and pursue profitable business growth in a responsible manner. The Master Plan will guide us to galvanise efforts across our global network of properties, enabling us to make a bigger contribution to the environment and the communities where we operate and position us as a progressive employer of choice.”

“As a leading sustainable real estate company, we have set ambitious sustainability goals that build on our company’s successes in the past 20 years, to innovate and amplify the impact of our sustainability efforts in the next 10 years. We will review our Master Plan every two years to ensure that we remain on track as the Group continues to grow and evolve. Investors and governments are increasingly incorporating ESG considerations in their investment and policy decisions. Our continued excellence in ESG will enable us to remain at the forefront of these evolving demands while building resilience and future-proofing our organisation. As a responsible real estate company, we seek to deliver long-term economic value to our stakeholders, while continuing to contribute to the environmental and social well-being of our communities,” added Mr Lee.

Lynette Leong, Chief Sustainability Officer, CapitaLand Group said: “To accelerate our sustainability efforts to meet our 2030 goals, we will also deepen our partnerships with financial institutions to triple our quantum of sustainable finance and further dovetail our sustainability performance to reap greater financial benefits. We will also implement our green lease programme globally, work with our customers to lower their resource consumption levels and drive better energy efficiencies together. Through the different approaches, we aim to amplify sustainability outcomes and measure the impacts by our new ‘Return on Sustainability’ metric.”

What is CapitaLand’s 2030 Sustainability Master Plan?

It focuses on three themes to drive the Group’s sustainability efforts under the ESG pillars, which are anchored by the company’s governance and sustainable financial performance. As the company grows in a responsible manner, it can generate six capitals: Manufactured Capital, Environmental Capital, Human Capital, Social & Relationship Capital, Financial Capital and Organisational Capital.

The multiple capitals approach provides a fuller picture of the ways the Group creates value for multiple stakeholders. The company will develop a new metric, ‘Return on Sustainability’, to quantify its sustainability outcomes and continue to benchmark its performance against global standards and indices to track its progress. This metric will incorporate factors such as operational efficiencies achieved, utilities cost avoidance and interest rate savings from its sustainability-linked loans.

Theme 1: Build portfolio resilience and resource efficiency

The company has set ambitious carbon reduction targets which include a 78% reduction in carbon emissions intensity by 2030. The new target is more than double the 29.4% reduction it achieved in 2019. They also seek to reduce energy consumption intensity at operating properties by 35% and increase the proportion of total electricity consumption from renewable sources by 35% by 2030. In 2019, the company reduced its energy consumption intensity by 19.2%, and about 2% of the Group’s total electricity consumption was from renewable sources.

There are other environment-related targets in the Sustainability Master Plan. This includes a higher 45% reduction of water consumption intensity for its operating properties. New targets include achieving a 25% recycling rate at operating properties and to divert 75% of its construction waste away from the landfill. These targets add to CapitaLand’s existing target to green its entire global portfolio by 2030.

Theme 2: Enable thriving and future-adaptive communities

The Sustainability Master Plan will see the company fostering a diverse and dynamic workforce and a talent pool which will enable the company to achieve its next phase of growth.

The company will continue to adopt a zero-tolerance policy on practices that compromise on the safety and well-being of its customers and staff at all properties, whether operational or under construction. Lastly, it will positively influence its supply chain and strengthen working relationships with its customers to effect a positive impact on their sustainability performance.

Green lease programme

The Group will implement its green lease programme to all tenants across asset classes and geographies by 2030. The green lease programme encourages tenants to implement environment-friendly features in their premises and embrace more sustainable practices. Through a green fit-out guide and closer tenant engagement, the green lease programme focuses on areas such as energy and water conservation, proper waste management, indoor environmental quality, green purchasing and good maintenance practices. It will help to improve the overall well-being of both tenants and their customers while also achieving cost savings from reduced utilities consumption.

The implementation of the green lease programme is part of the Group’s focus to work collaboratively with its customers to support their changing expectations and needs. Through the evolution of its products and services, they remain committed to strengthening customer relationships and attaining consistently high levels of customer satisfaction.

Theme 3: Accelerate sustainability innovation and collaboration

The company aims to lead the industry in best practices to ensure sustainable operational excellence across its global portfolio. In addition to fostering deeper collaborations with its partners to drive its sustainability goals, the company will also leverage technology and innovation to raise productivity, elevate service quality and improve the well-being and safety of its customers.

Some of the current sustainability-linked loans which are tied to its sustainability performance have resulted in interest rates savings. As the company further raises such sustainable finance tools, some of the interest rate savings will be used to pilot suitable sustainable innovation projects that are impactful and scalable to meet its sustainability goals.

What is CapitaLand Sustainability X Challenge?

The inaugural ‘CapitaLand Sustainability X Challenge’ will source for innovations on a global scale to meet its sustainability targets aligned with business needs as set out in the Sustainability Master Plan.

The Group will issue challenge statements focused on three key areas:

(i) low carbon transition;
(ii) water conservation and resilience; and
(iii) waste management and the circular economy.

The challenge statements are developed by the various business units within the Group, reflecting actual business or operational needs, and the Group’s aspirational goals set out in the Sustainability Master Plan.

In November 2020, a global call for participation will be issued. The challenge will be open to all enterprises to present their innovative sustainability solutions. The ‘CapitaLand Sustainability x Challenge’ will be open for submissions from 2 November 2020 to February 2021. Shortlisted submissions will be unveiled in April 2021 and two winners will be announced in May 2021.

Two awards, ‘Most Impactful Award’ and ‘Most Innovative Award’, will be up for grabs. In addition to the impact and depth of innovation, the winners’ submissions will also be assessed based on their potential for scale. The winners will be selected by a panel of judges made up of the senior management team as well as external experts. All participants will have a chance to trial their innovative solutions at the company, while the two winners will also each receive up to S$50,000 in project funding.

Smart Urban Co-Innovation Lab (SmartLab)

Suitable companies can also leverage CapitaLand’s new Smart Urban Co-Innovation Lab (SmartLab) in Singapore. In partnership with Infocomm Media Development Authority and Enterprise Singapore, SmartLab serves as a co-innovation platform for the built environment industry to test ideas and pilot innovation solutions for commercialisation, with government funding available for eligible projects.
The company will review and recalibrate its 2030 targets every two years in line with shifts in the global landscape.

What are CapitaLand’s top sustainability achievements?

1. Utilities cost avoidance of S$208 million: The Group has achieved utilities cost avoidance of S$208 million in 2019 since 2009. In 2019, the Group’s energy and water consumption intensities were reduced by 19.2% and 22.4% respectively.
2. 97% green portfolio in Singapore: As of 31 December 2019, 97% of the Group’s existing offices, malls, integrated developments and serviced residences in Singapore (by m2) have achieved a green rating. To date, CapitaLand has received over 130 Building & Construction Authority of Singapore (BCA) Green Mark Awards in Singapore, Australia, China, Malaysia and Vietnam. The company was awarded the Green Mark Platinum Champion in 2020. Globally, 58% of its portfolio (by m2) have achieved a green rating.
3. Secured over S$3.3 billion through sustainable finance: The Group and its real estate investment trusts have secured over S$3.3 billion through sustainable finance, a mix of sustainability-linked loans, green loans and green bonds. This includes a S$500 million sustainability-linked bilateral loan from United Overseas Bank, the largest sustainability-linked bilateral loan in Singapore’s real estate sector.
4. Strengthened use of renewable energy to power corporate offices with 100% renewable energy: The company’s corporate offices in Singapore will achieve carbon neutrality by end of 2020. Three of its corporate offices will be 100% powered by renewable energy by end 2020 through Renewable Energy Certificates (REC) from the clean energy generated atop the Group’s six industrial properties.

As such, the company will further reduce over 700 tonnes of greenhouse gas emissions each year, equivalent to greenhouse gas emissions generated annually from 400 four-room Housing & Development Board (HDB) flats’ electricity consumption. A fourth corporate office at Ascott Centre for Excellence, the global hospitality training centre of their lodging business, has been 100% powered by renewable energy since 2018 by purchasing electricity generated from renewable sources.

Over 21,000 solar panels have been installed atop its six industrial properties held under Ascendas Real Estate Investment Trust (Ascendas Reit) in Singapore. It is the largest combined rooftop solar facility in Singapore by a real estate company. These solar farms can collectively generate around 10,292 megawatt hours of energy annually, equivalent to powering about 2,300 four-room HDB flats each year. To date, the Group has 16 properties in Singapore, China, Belgium, India and four business parks in India that are fully or partially powered by renewable energy.

5. Listed consecutively on internationally renowned sustainability indices: The firm has been listed on the Dow Jones Sustainability World Index (DJSI World) for eight consecutive years, cementing the company’s reputation as a leader in sustainability in real estate. It is also listed on the Dow Sustainability Asia Pacific Index (DSJI Asia Pacific) for the 11th year, making it the first and longest-standing company in

Singapore to be listed consecutively on the DJSI Asia Pacific.

The company is ranked 63rd in the Global 100 Most Sustainable Corporations in the World 2020. This is its eighth inclusion in the rankings. It also emerged as the top real estate company in Singapore and Southeast Asia in ‘The Sustainability Yearbook’ 2020 rankings by S&P Global, in cooperation with RobecoSAM. Ranked amongst the top 10 real estate companies in the world, it has been listed in ‘The Sustainability Yearbook’ for over a decade.

CapitaLand is also listed as a constituent in the FTSE4Good Index Series. It has been included in the index for seven consecutive years since 2014. It is also recognised as a global leader in Global Real Estate Sustainability Benchmark (GRESB). It came in first place across four categories in GRESB 2019. Internationally, it was the leader in the Global ‘Diversified – Listed’ category. It is the only company in Singapore/Asia to achieve this accolade twice. In the region, it was the leader in the Asia-Pacific ‘Diversified’, Asia ‘Diversified’ and Asia ‘Diversified – Listed’ categories.

Source: thecsrjournal
Anand Gupta Editor - EQ Int'l Media Network
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