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As global markets navigate persistent volatility – driven by geopolitical uncertainty to the rising physical and transition risks brought about by climate change – sustainability is increasingly being evaluated through a more critical lens.

Beyond commitments, investors are looking for measurable outcomes, credible transition pathways, and consistent and transparent disclosures that demonstrate how sustainability is integrated into investment decisions and portfolio management.

The built environment accounts for a significant share of global emissions, so this shift is particularly pronounced in the real asset sector. For asset owners and managers, portfolio decarbonisation and environmental resilience is critical for long-term value preservation.

Against this backdrop, the question is how to execute at scale, while maintaining financial discipline and transparency.

Investors and regulators are also increasingly expecting disclosures to be aligned with global frameworks and internal targets that are supported by robust data, including climate-related financial disclosures under IFRS standards, and broader ESG reporting aligned with international benchmarks.

At CapitaLand Investment Limited (CLI), we see sustainability as a key driver of long-term value creation across our global real asset platform. Sustainability targets are embedded within performance frameworks and linked to management remuneration, ensuring alignment between strategy and execution across the organisation.

Translating strategy into measurable outcomes

CLI recently published its Global Sustainability Report 2025 – our 17^th edition – outlining our approach of embedding sustainability into the core of how we invest, operate and manage our platform.

Since 2019, we have achieved:

·       18.3% reduction in Scope 1 and 2 carbon emissions intensity

·       15.6% reduction in energy consumption intensity

·       22.4% reduction in water consumption intensity

·       44.1% reduction in waste intensity

These improvements point to CLI’s coordinated effort to address resource efficiency and emissions holistically across our global portfolio, which has been achieved within the context of ongoing portfolio growth. For CLI, a global real asset manager with a growing portfolio, the challenge is to not only reduce emissions within a static footprint or a single asset, but to effectively manage carbon intensity through operational discipline, data visibility and portfolio-level execution.

Scaling sustainability across a global platform

One of the primary challenges is the ability to replicate processes and policy across markets and asset classes.

Pilot projects and individual “green assets” are no longer sufficient. What matters is whether sustainability and innovation, and energy conservation measures such as consumption reduction and improvement in energy efficiency, as well as the adoption of renewable energy, can be embedded consistently across geographies, asset classes and operating platforms.      

In 2025, 66% of CLI’s global portfolio achieved green building certification, reflecting steady progress in improving asset-level performance. Notable highlights include 30 business park buildings in India certified LEED Platinum or IGBC Platinum; and 21 buildings in Singapore certified BCA Green Mark Platinum (including BCA Green Mark Super Low Energy for one logistics building, one office-retail building and one commercial building).

At the same time, we expanded renewable energy procurement (including rooftop deployment) across more than 130 properties globally, while increasing engagement with tenants to address downstream emissions through green leases and operational collaboration.

All stakeholders need to do their part, and coordination is required not just by asset managers, but across tenants, suppliers and capital partners. With Scope 3 emissions coming under greater scrutiny, this ecosystem approach has become even more critical.

Navigating a complex but necessary transition

The transition to a low-carbon built environment will not be linear. Stakeholder expectations will continue to evolve amidst market volatility, a global energy crisis, and worldwide uncertainty. Structural constraints, ranging from energy market dynamics to technological readiness, also continue to shape the pace of change.

Clarity of direction and consistency of execution is paramount. CLI’s 2030 Sustainability Master Plan (SMP 2030) provides a clear framework to guide this journey, with our science-based targets, validated against a 1.5°C trajectory, aiming to reduce absolute Scope 1 and 2 emissions by 46% by 2030, and achieving net zero emissions by 2050.

CLI adopts a structured carbon mitigation hierarchy that prioritises the avoidance and reduction of emissions through better design and energy efficiency, concurrently scaling renewable energy deployment and the deployment of high-quality carbon offsets as the last-mile option to address residual carbon.

This includes applying sustainable design principles early on to reduce resource consumption, deploying high-efficiency building systems and smart analytics to optimise asset performance, and expanding both onsite renewable generation and offsite green power procurement.

Achieving these goals will require a multi-pronged and balanced approach comprising a combination of levers deployed progressively across the asset life cycle, including combining innovation in construction techniques, operational improvements, renewable energy deployment, innovation and ecosystem partnerships across the value chain.

The growing link between sustainability and capital

Sustainability is increasingly shaping capital allocation decisions. Capital is flowing towards platforms that can demonstrate not just intent, but consistent execution.

In recent years, the rise of sustainable finance instruments has created a more direct linkage between environmental performance and funding conditions.

CLI continues to explore new ways to improve its financial flexibility and resilience through sustainable financing instruments, reinforcing its commitment to responsible growth. Sustainability-linked loans and bonds, green loans and bonds, and green perpetual securities are pegged to specific targets, including performance ratings on global ESG indices, minimum green building certification levels of the underlying portfolio, and specific targets for reduction in carbon, energy and water intensities as described in SMP 2030.

In 2025, CLI and its listed funds secured S$5.7 billion in sustainable finance, bringing cumulative sustainable financing to approximately S$26 billion since 2018. Reduced interest rates from sustainability-linked loans and bonds can be redeployed to support CLI’s decarbonisation initiatives, spurring better outcomes.

Sustainability that’s executed with discipline can strengthen financial resilience through broader access to capital pools, enhanced asset competitiveness and long-term value creation. For asset managers, this reinforces the importance of aligning sustainability and operational outcomes with financing structures and capital allocation.

The human capital challenge behind sustainable execution

Beyond technical or capital concerns, sustainability is also a human capital challenge.

At CLI, women comprise 36% of senior management, while 25% of the Board are female, reflecting our deliberate focus on leadership and board diversity. CLI invests significantly in workforce capability building, with staff completing approximately 240,000 training hours in 2025, alongside notable participation in ESG (96%), anti-corruption (93%) and cybersecurity (89%) training. Targets have also been set for sustainability-related training across the organisation.

Beyond representation metrics, CLI continues to strengthen internal platforms that support inclusion and professional development, including an employee-driven network that fosters mentorship and leadership development across markets. Launched in 2025, the CLI Women’s Network, which aligns with the company’s business priorities and ESG goals, fosters a supportive environment for professional growth, leadership and networking opportunities. One of the activities organised by the network was a panel discussion of CLI senior management on Women Leadership, and a fireside chat with CLI Board member Judy Hsu, who shared reflections on pivotal career moments, staying true to values, championing women, and making decisions that shape people, culture and impact. 

Sustaining momentum

As the global transition accelerates, sustainability is no longer an alternative or an adjunct to investment strategy. It is increasingly considered in the capital allocation process; used in identifying targets for acquisition or divestment; and in deciding how assets are managed to ensure that long-term value is created.

For asset managers like CLI, the priority now is to keep pace with this shift, but to deliver progress while staying grounded in outcomes that are credible and enduring.