Extracted from ISCA Climate Disclosure Guide Volume 2 published by the Institute of Singapore Chartered Accountants

CapitaLand Investment Limited (CLI) is a leading global real estate investment manager with a strong Asia foothold. As at 31 December 2022, CLI had S$132 billion of real estate assets under management, S$88 billion of real estate funds under management held via six listed real estate investment trusts (REITs) and business trusts and more than 30 private vehicles across Asia Pacific, Europe and America. Its diversified real estate asset classes cover retail, office, lodging, business parks, industrial, logistics and data centres. Since 2019, it pledged its support for the TCFD Recommendations and voluntarily disclosed after 2017 its climate-related financial disclosures in the four key areas as recommended by TCFD.

Phased approach

As new climate models and platforms are continually updated or unveiled, CLI did not wait for the climate-related scenario analysis exercise to be completed before implementing the other TCFD Recommendations.

• CLI incorporated climate change risks and opportunities assessment as well as an internal carbon price (ICP) for its new investments into operational assets and development projects. All new investments undergo an Environmental, Health and Safety Impact Assessment (EHSIA) during due diligence to identify any environmental (including climate change) risks and opportunities related to the asset or project site and its surroundings. This assessment includes transition and physical risk and opportunity considerations, and the ICP further helped quantify climate-related risks and opportunities for its new investments. In the absence of available information, data proxies may be deployed. Significant negative findings from this impact assessment would require additional capital expenditure to be put in place for risk mitigation.
• CLI embedded climate-related performance metrics and targets linked to the remuneration policies for members of senior management, such as the Balanced Scorecard and as a performance measure in CLI’s Performance Share Plan Awards, granted to members of senior management.
• As part of its 2030 SMP, CLI established science-based carbon emissions reduction targets approved by Science Based Targets initiative (SBTi) to the well below 2°C scenario. In 2022, CLI elevated this target for Scope 1 and 2 emissions, which was approved by SBTi to be aligned to the 1.5°C scenario.

Ongoing iterative process involving multiple stakeholders

As a growth-focused company, facing evolving and escalating external stakeholder expectations and benchmarks, internal stakeholder engagement is key and iterative. 

CLI set sustainability and climate-related performance metrics and targets linked to the remuneration policies for members of senior management, which are cascaded group-wide. This meant active engagement with colleagues on the ground, who must budget for and implement the necessary initiatives to help CLI achieve the environmental targets. This includes the country teams, operations teams, asset and investment teams, as well as the teams from the REITs. With metrics pegged to remuneration, corporate teams such as the Group Rewards and Corporate Planning teams are regularly engaged to better craft the key performance indicators, monitor and update the management and respective board committees.

US President Harry S. Truman once said, “Imperfect action is better than perfect inaction.” This reflects the journey that CLI is on, in taking incremental steps to make consistent progress.