At OneStop ESG, we are launching our Thought Leadership Series to spotlight global sustainability leaders driving real change. In this first edition, we feature Esther An, Chief Sustainability Officer of City Developments Limited (CDL), who has been at the forefront of shaping Singapore’s green building movement for over three decades. She shares her perspective on why sustainability in real estate is not just about responsibility, it is a strategic business case for resilience, growth, and long-term value creation.

How does integrating sustainability into real estate projects influence CDL’s overall financial performance and market competitiveness?

The Built Environment accounts for 37% of energy- and process-related CO2 emissions; 34% of energy demand globally (UNEP, Nov 2022). The industry also consumes 50% of all extracted materials, 33% of water and 35% of generated waste (WorldGBC). Given the significant environmental footprint, real estate companies that can integrate sustainability into their business strategy and operations are able to sharpen their competitive edge and be more future-ready for change and challenges.

According to the World Economic Forum, more than US$44 trillion of economic value, which is over half of global GDP, depends moderately or highly on nature and its services. The message is clear: nature is not only valuable, but also financially material.

Since 1995, City Developments Limited (CDL) has been committed to enhancing our triple bottom line through integrating sustainability into our business for economic prosperity, social well-being and environmental stewardship. Guided by our corporate ethos, ‘Conserving as We Construct’, CDL has prioritised sustainable architectural design and construction practices for more than three decades, incorporating low-carbon and energy-efficient technologies in the way we design, build and manage our buildings.

By integrating sustainability at every stage, we proactively reduce long-term operational costs, mitigate environmental risks and future-proof our developments. Our firm commitment to innovation and adaptation to enhance our green buildings development and management has enabled us to meet evolving regulatory demands while aligning with the expectations of homebuyers, tenants, investors and other stakeholders.

In the era of climate emergency and nature loss, sustainability integration has a compelling business case on multiple fronts:

1. Financial Competitiveness: enhancing operational efficiency and ensuring long-term durability of our assets 

Nature-based biophilic design such as green roofs, vertical greenery, rain gardens, and forested public spaces deliver tangible operational benefits, including reducing urban heat, lowering energy consumption, mitigating flood risk and improving air quality. These initiatives also align with and contribute to national goals, particularly towards "A City in Nature" outlined in Singapore's Green Plan 2030. By integrating nature into urban environments, expanding green spaces, and enhancing biodiversity, we support the creation of a green, liveable, and sustainable home for all citizens. Our efforts in conservation, sustainable development, and community engagement resonate with the Green Plan's objectives, reinforcing our commitment to a nature-positive future.

These enhancements have driven down operating costs and carbon footprint, boosted tenant satisfaction, strengthened occupancy rates, and enhanced asset valuation and investment returns. Under our direct operational control, we have achieved a 25% reduction in Scope 1 and 2 emissions since 2016 and slashed Scope 3 embodied carbon in new developments by 38%, propelling us toward our goal of operational net-zero by 2030. As a result, our Green Mark-certified flagship assets such as Republic Plaza and City Square Mall benefit from stronger tenant retention, lower utility costs, and rental premiums, supported by our Green Lease Partnership Programme.

Our longstanding commitment to green buildings has also produced lasting value. We have completed 129 BCA Green Mark-certified projects since 2005. In 2024, CDL received five Green Mark Platinum Super Low Energy awards, and three residential developments earned BCA Whole Life Carbon, Maintainability and Health & Wellbeing Badges. From 2012 to 2024, our energy-saving initiatives have generated over S$44 million in cost savings.

2. Market Competitiveness: Boosting brand equity & stakeholder trust 

A strong brand is priceless for any company. Over the years, CDL has earned consistent recognition on 14 global ESG benchmarks. In 2024 alone, we ranked 39th on the Corporate Knights Global 100, maintained our position as the world’s most sustainable real estate company and remained the only Singapore company on the CDP A List with double ‘A’s for climate and water. We also received accolades such as the BT-UOB Impact Enterprise of the Year and Best Sustainability Reporting at the Singapore Corporate Awards 2024.

Our nature-based solutions projects such as the CDL Green Gallery at the Singapore Botanic Gardens, the CDL MicroForest and CDL EcoTrain enhance ecological restoration, public engagement, and educational outreach, earning positive media coverage and goodwill with policy makers and the community.

These initiatives reinforce CDL's reputation as a purpose-driven developer, drawing like-minded partners, quality tenants, and engaged community stakeholders. As ESG, social, and reputational performance become integral to financial outcomes, such stakeholder trust becomes a strategic corporate asset.

Ultimately, sustainability is a strategic imperative that has significantly raised CDL’s financial resilience, brand equity and market leadership. In a climate-disrupted world, sustainability is not just a competitive advantage. It is a license to operate and a foundation for sustainable growth.

Can you share examples of how CDL has successfully attracted green investment or favourable financing due to your sustainability initiatives?

Mobilizing capital is key to apply sustainability technologies and solutions. Since 2017, CDL has secured over S$9 billion in green and sustainability-linked financing. 

In 2024, CDL obtained a landmark S$400 million sustainability-linked loan from DBS Bank, the first of its kind to tie financial terms to nature and biodiversity performance indicators aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) framework. Guided by CDL’s ambitious TNFD-aligned targets, the facility has been used for general corporate funding and working capital purposes, which includes the redevelopment of CDL’s existing assets.

In 2023, CDL was also the first Singapore corporate to secure a £200 million (approximately S$338.2 million) OCBC 1.5 °C sustainability-linked loan, tied to carbon decarbonisation benchmarks aligned with SBTi targets.

CDL’s leadership in adopting TNFD-aligned disclosures has strengthened our credibility among investors and signalled our readiness to embrace the future of green finance.

What metrics or indicators does CDL track to directly connect ESG achievements with financial returns or property valuations?

1. Emissions tracking

What gets measured gets managed. As part of performance and emissions tracking under the CDL Future Value 2030 Sustainability Blueprint, in 2024, the Group attained a 25% reduction in Scope 1 and 2 operational carbon emissions for assets under direct management and operational control compared to 2016 levels, and a 38% reduction in Scope 3 embodied carbon in new developments against the same baseline.

We have also achieved Scope 3 investment intensity reductions of 52.1%.

Going forward, we are reviewing our SBTi targets to align with the latest developments.

CDL tracks the percentage of its portfolio certified under the BCA Green Mark scheme, including Platinum and Super Low Energy (SLE) tiers. These certifications are market-recognized indicators of energy efficiency and quality. Certified buildings are associated with rental premiums, stronger tenant retention, and reduced vacancy periods—all of which improve asset yields and valuation stability.

We have constructed 129 BCA Green Mark certified developments since the scheme’s launch in 2005. In 2024, CDL achieved five BCA Green Mark Platinum Super Low Energy (SLE) awards for our commercial properties (City House and Palais Renaissance) and residential developments (The Orie, Norwood Grand and Union Square Residences).

All three residential developments also received the BCA Whole Life Carbon Badge and Maintainability Badge, and The Orie earned an additional Health and Wellbeing Badge.

Our longstanding green building efforts have achieved over S$44 million in energy savings from energy-efficient retrofitting and initiatives in our locally managed buildings from 2012 to 2024.

2. Green Lease Partnership Programme

Tenants’ support is key to asset management in a sustainable manner. The programme is CDL’s key initiative that aligns landlord and tenant interests toward shared sustainability outcomes. This programme encourages tenants to adopt energy-efficient fit-outs and energy-saving operational practices, while providing them access to real-time resource monitoring via CDL’s digital building performance dashboards.

These tools enable tenants to track their own electricity and water usage, compare performance against benchmarks, and identify opportunities for operational savings.

This transparency fosters a collaborative approach to energy management and enhances environmental performance at the asset level.

Tenants participating in the Green Lease Partnership Programme often achieve better operational efficiency, leading to lower utility bills and reduced service charge outlays.

For CDL, this contributes to stronger tenant retention, lower vacancy rates, and longer lease tenures, which in turn stabilise rental income streams and bolster property valuations.

Buildings with engaged tenants also tend to perform better in green certification assessments, further enhancing their market appeal and financial resilience.

3. Mainstream disclosures

Effective disclosure of CDL’s sustainability strategy and performance is key to strengthening investor and financier confidence. In 2008, CDL became the first Singapore-listed company to publish a sustainability report and to-date, has published 18 sustainability reports.

Since 2014, CDL adopts a multi-stakeholder, double materiality assessment approach that identifies top ESG issues to set the focus of our sustainability report annually. Our report also aligns with internationally recognised frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and the Task Force on Nature-related Financial Disclosures (TNFD). These frameworks ensure consistency, comparability, and transparency in how CDL communicates its environmental and social impacts, governance practices, and climate-related risks.

By adopting such reporting standards, CDL provides investors and analysts with the data and confidence needed to link sustainability performance with long-term financial returns, risk management, and investment potential.

CDL’s sustainability leadership is recognised globally. We consistently perform strongly across 14 major ESG ratings, which act as annual report cards of our progress and support our efforts to attract capital for sustainable initiatives.

How does CDL/ real estate companies manage the balance between the initial costs of sustainable innovations and the long-term financial benefits?

Sustainability should not be seen as an expense, but as an investment in our future where every green choice and decision today safeguards long-term value. CDL manages the initial capital outlay for sustainable innovations and the long-term financial benefits by adopting a lifecycle approach, leveraging green financing tools, and pursuing operational cost efficiencies through design and technology.

CDL recognises that while green features may incur higher upfront costs, they yield long-term value through energy and water savings, better marketability, and improved tenant satisfaction. For example, energy-efficient systems, smart building technologies, and passive design features are integrated early in the project lifecycle to ensure that whole-life costs are optimised, not just immediate capital expenditure.

To further offset upfront costs, CDL actively taps into sustainable finance mechanisms such as green bonds and sustainability-linked loans. By tying financial instruments to environmental KPIs, such as carbon intensity, energy efficiency, and biodiversity assessments, CDL secures preferential interest rates when targets are achieved, reducing overall borrowing costs and improving return on investment.

As carbon pricing becomes more mainstream in supporting investment and procurement decisions for a 1.5°C future, Singapore’s carbon tax is set to rise to S$45/tCO2e in 2026 and 2027. In response, CDL completed an Internal Carbon Pricing (ICP) pilot study last year on Republic Plaza – our flagship commercial building in Singapore, assessing mitigation costs to estimate a current carbon price that would support Republic Plaza in reaching net-zero status. In 2025, CDL will continue to explore meaningful opportunities to test and validate the use of ICP to raise awareness of carbon costs and better integrate environmental impact into financial decision-making.

By embedding sustainability early, leveraging performance-linked green finance, and adopting forward-looking tools like carbon pricing, CDL balances upfront costs with long-term benefits because investing in sustainability delivers both tangible and intangible value to the organisation and beyond.

From your perspective, what trends or changes in investor behaviour have you observed around sustainability and ESG in the real estate sector in recent years? 

1. Investors are no longer viewing sustainability as a ‘nice-to-have’ - it is now a strategic lens for capital allocation.

The convergence of global standards such as the GRI, SASB, and TCFD also signals a broader shift towards greater transparency and accountability.

In real estate, investors are scrutinising both physical and transition risks more closely, favouring companies that have adopted science-based targets, robust climate mitigation and adaptation strategies, and credible nature-positive approaches.

At CDL, we believe this trend reinforces our early commitment to climate leadership and validates our long-standing investments in sustainability innovation.

2. Regulators, insurers, and financial institutions are also embedding sustainability criteria into their risk models and investment strategies.

These developments mean that companies with credible sustainable development track records are increasingly able to access green and sustainability-linked financing on favourable terms.

With global ESG assets expected to surpass US$40 trillion by 2030, representing over 25% of total assets under management, sustainability performance is now deeply intertwined with capital access and financial competitiveness.

To meet evolving investor expectations, we have aligned our disclosures with international reporting standards including TCFD, TNFD, SASB and GRI. Our science-based net zero targets, biodiversity-linked loans, and integration of climate-related risks into our materiality assessments reflect our proactive stance.

We also conduct annual materiality assessments to guide our strategic response and maintain transparency with all stakeholders. We further engage our leadership through the Hong Leong and CDL Group Sustainability Forum, held annually since 2014, which keeps our Board and senior management aligned with global sustainability trends and best practices. In parallel, our Singapore Sustainability Academy (SSA) serves as a national platform for capacity building and knowledge sharing. As of 31 December 2024, the SSA has hosted over 1,200 programmes and events, reaching more than 43,100 attendees.

3. Finally, investors are paying more attention to innovation and real-world outcomes.

Our partnerships with Institutes of Higher Learning to advance embodied carbon reduction, EV fleet electrification, carbon capture, and Building-Integrated Photovoltaics (BIPV) signal our ongoing commitment to sustainable development at scale.

Collectively, these trends demonstrate that investor behaviour is shifting rapidly from assessing ESG as compliance, to evaluating it as a measure of resilience, leadership, and long-term value. CDL remains well-positioned to lead in this evolving landscape.

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