Sustainability

Sustainability Approach

Board Statement

Sustainability Commitment

CapitaLand China Trust commits to CLI 2030 SMP goals and targets.

Note: Enable & Steward targets are intended to reflect the organisation-wide goals set by CLI on a group basis, and are intended to be implemented subject to and taking into account (i) fair & equitable employment practices and principles under applicable laws and market practice and (ii) the business and operational needs of the company and the organisation, as applicable.
⁸ Using 2019 as the base year
⁹ This refers to gross greenhouse gas emissions. For more information on greenhouse gases covered by this target, please refer to the GHG Emissions Data Methodology.
¹⁰ Employee engagement score of at least 80% (with at least 85% participation).

Sustainability Governance

Responsible Business Conduct

CLCT is committed to promoting respect for human rights and proactively addressing human rights issues that may affect the REIT’s activities, in accordance with CLI’s policies and commitments. These policy commitments are endorsed by the boards and management of both CLI and CLCTML, and are integrated into CLCT’s operations and business relationships.

CLCT adopts CLI’s Social Charter to uphold human dignity and self-respect. This charter applies to our workforce and supply chain, covering human rights, child labour, forced labour, human trafficking, code of conduct, diversity and inclusion, and promoting a healthy work-life balance.

Additional human rights commitments, such as grievance procedures, anti-harassment policies, and remedial measures, are implemented across various levels of the organisation.

Strategic Sustainability Management Structure
Board, Top Management and Employee Commitment

Strategic Sustainability Management Structure

Board, Top Management and Staff Commitment and Involvement

Role of Sponsor’s Board, Management and Employees

The Sponsor’s (CLI) Board recognises the importance of sustainability as a business imperative and ensures that sustainability considerations are factored into CLI’s strategy development. This enables CLI to remain competitive and resilient in an increasingly challenging business environment.

The CLI Board is kept informed on a regular basis through its Executive and Sustainability Committee (ESC)¹¹ on CLI Group’s sustainability management performance, key material issues¹² identified by stakeholders, and the planned follow-up measures. The CLI Board is updated by the Risk Committee and Audit Committee at least once a year.

The CLI Board discusses matters relating to sustainability risks and relevant performance metrics, which include CLI Group’s progress on achieving the carbon emissions reduction targets, green building certification, human capital development, stakeholders’ expectations on climate change, social impact and/or other matters. The CLI Board is also informed of any incidents relating to workplace safety, business malpractice, and environmental impact, which may include climate-related damage or disruptions.

CLI Group’s Chairman also chairs the ESC which is a Board Committee. This committee is responsible for overseeing CLI Group’s sustainability strategies, including providing guidance to management and monitoring progress against achieving the goals of CLI Group’s sustainability initiatives.

The CLI Group’s sustainability targets¹² are reviewed and approved by the ESC and Board. The ESC is scheduled to meet on a quarterly basis. The ESC’s responsibilities¹² are set out in the Board committees’ role descriptions in CLI’s Corporate Governance Report. For more information, please refer to the CLI’s AR 2024 on Board Committees.

The CLI Leadership Council makes strategic resource allocation decisions and meets on a regular basis. The CLI Leadership Council comprises the CLI Group Chief Executive Officer (CEO), the CEOs of the various business units, and key management executives of the corporate office.

The sustainability work teams comprise representatives from CLI’s business units and corporate functions. Each business unit has its own Environmental, Health, and Safety (EHS) Committee to drive initiatives in the countries where it operates, with support from various departments.

Role of CLCTML Board, Management and Employees

CLCT has established a Sustainability Management Committee (SMC), chaired by the CEO of the REIT Manager, to focus on sustainability and climate-related matters. The SMC, comprising senior management, oversees sustainability objectives and strategies and provides regular updates to the Board of Directors on the value and mission statements, goals, strategies overviews, policies and progress related to sustainable development.

The SMC is supported by CLCT’s Sustainability Working Committee (SWC), which comprises key members from various business functions, to implement sustainability-related initiatives across CLCT’s operations in line with CLI’s sustainability framework and policies. CLCT’s sustainability governance aligns with the Sponsor’s sustainability management. CLCT is represented at the CLI Senior Leadership Council by the CEO of the REIT Manager of CLCT who provides guidance on sustainability strategies and goals for CLCT.

The content of this report, including material ESG topics, is reviewed and approved by the CLCTML Board of Directors, which also discusses and reviews sustainability policies and strategies during its meetings.

CLCT’s SWC collaborates closely with CLI’s EHS Committee to implement sustainability-related initiatives across its operations. In addition to environmental initiatives, CLI also champions Occupational Health and Safety (OHS) with commitment from the top management and employee participation through an integrated EHS Management System as well as stakeholder engagement activities. CLCTML’s CEO is accountable for the EHS performance of CLCT. Employees are encouraged to be forthcoming in reporting both environmental-related issues and OHS-related incidents, including non-compliances and non-conformities.

Key Performance Indicators (KPIs) Tied to Remuneration

The remuneration for all employees in the REIT Manager, including top management, is linked to CLCT’s environmental targets through KPIs. CLCT aims to minimise environmental impacts by setting targets for green building ratings, carbon emissions, energy, water, and waste reduction.

Beyond environmental KPIs, CLCT also integrates OHS KPIs with the remuneration of all CLCT employees, including its top management. These targets are tied to the remuneration of top management and employees.

Further information on this can be accessed in the Environmental and Social chapter of this Report.

¹¹ The Executive Committee and the Strategy and Sustainability Committee merged with effect from 1 January 2025, to form the Executive and Sustainability Committee.
¹² This includes those related to climate-related risks and opportunities.

Materiality Assessment

Stakeholder Engagement

CLCT proactively engages its stakeholders to better address their needs, build social and relationship capital, and create shared values for the long-term. CLCT identifies its stakeholders as individuals, organisations, and communities that are directly or indirectly impacted by its operations. Its stakeholders include employees, investors, tenants, shoppers, contractors, vendors, governments and NGOs. Through the various engagement channels, CLCT seeks to understand its stakeholders’ views, to effectively communicate with them and address their concerns.

Material ESG Topics

CLCT is guided by CLI’s materiality assessment process, which identifies and prioritises the management of material ESG issues that are most relevant and significant to CLCT and its stakeholders, taking into consideration their relevance or impact to the business, strategy, financial planning, business model and key stakeholders. It adopts a double materiality approach, considering issues which are material from either the impact perspective or financial perspective¹³ or both.

Potentially material ESG issues arising from activities across CLI and CLCT’s value chain (including potential risks and opportunities in the immediate and longer term) are primarily identified via ongoing engagement with CLI’s business units and external stakeholders, and reviews of sources including investor questionnaires, as well as ESG surveys, sustainability benchmarks and frameworks such as S&P Global’s Corporate Sustainability Assessment, GRESB and standards such as SASB.

In addition, CLI and CLCT have a regular review, assessment and feedback process in relation to ESG topics. Identified material issues are reported in its corporate risk register through the annual group-wide Risk and Control Self-Assessment (RCSA) exercise, which identifies, assesses and documents material risks and the corresponding internal controls to manage those risks. These material risks include fraud and corruption, environmental (e.g. climate change), health and safety, and human capital risks which are ESG-relevant. Identified material ESG issues are then prioritised based on the likelihood and potential impact of issues affecting the business continuity of CLI and CLCT. For external stakeholders, priority is given to issues important to the community and applicable to CLI and CLCT. For FY 2024, the material ESG topics that were identified were approved by the CLI ESC.

PRIORITISATION OF MATERIAL ESG ISSUES

Creating Value and Alignment to United Nations Sustainable Development Goals (UN SDGS)

CLCT’s material ESG issues and the value created, aligned to CLI’s 2030 SMP focus areas and commitments, are mapped to the six integrated reporting Capitals of the Value Reporting Foundation’s Integrated Reporting Framework - Environmental, Manufactured, Human, Social and Relationship, Organisational and Financial. This is further mapped against eight UN SDGs that are most aligned with CLI’s 2030 SMP focus areas, and where CLI and CLCT can achieve the greatest positive impact. The mapping of the six Capitals and eight UN SDGs can be found on the 2030 Targets and 2024 Performance table on pages 14, 24, 37 and 38 of this Report.

¹³ To identify ESG issues which are potentially financially material, CLI takes reference from the SASB Standards for Real Estate and Real Estate Services, which identify sustainability factors that are material to short, medium, and long-term enterprise value for the industry.

Sustainable Financing

CLCT is steadfast in our commitment to integrating environmental objectives with our financing strategies. In alignment with this vision, we have established a Sustainability-Linked Finance Framework that draws upon the Sustainability Linked Bond Principles by the International Capital Market Association (2023) as well as the Sustainability Linked Loan Principles by the Loan Market Association (2023). This framework is applicable to CLCT’s sustainability-linked instruments, encompassing both Sustainability-Linked Bonds and Loans.

For more details, please refer to the Sustainability-Linked Finance Framework and Second-Party Opinion here:

Sustainability-Linked Finance Framework

Second-Party Opinion

ABOUT USSustainability

Sustainability Approach & Governance

Materiality Assessment

Integrated Sustainability Reports

Sustainable Financing

Sustainability Approach

Sustainability Governance

Strategic Sustainability Management Structure

Board, Top Management and Staff Commitment and Involvement

Materiality Assessment

Sustainable Financing