16 CAPITALAND CHINA TRUST SUSTAINABILITY MANAGEMENT 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. In FY 2023, the material ESG topics that were identified were approved by the CLI SSC. CREATING VALUE AND ALIGNMENT TO UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS (UN SDGS) CLCT’s material ESG issues and the value created, aligned to CLI 2030 SMP focus areas and commitments, are mapped to the six integrated reporting Capitals of the Value Reporting Foundation’s IR Framework – Environmental, Manufactured, Human, Social and Relationship, Organisational and Financial. This is further mapped against eight UN SDGs that are most aligned with CLI 2030 SMP focus areas, and where CLI and CLCT can achieve the greatest positive impact. For more details of the value creation strategy, please refer to pages 18 to 20. INVESTMENT STRATEGY As Singapore’s largest China-focused REIT with a diversified portfolio of retail, business park and logistics park assets across 12 tier one and leading cities, CLCT is well-positioned to capture China’s long term economic growth. We are committed to delivering long-term sustainable distributions to Unitholders. Our forward-looking portfolio reconstitution strategy is closely aligned with China’s long-term economic direction, which focuses on domestic consumption and innovation-driven growth. Our investment strategy is designed to Create, Unlock and Extract Value across our portfolio. Driven by disciplined portfolio reconstitution, proactive asset management, innovative asset enhancement, and underpinned by prudent capital and risk management, we continue our strong track record of enhancing sustainable value for our Unitholders. Strategic advantages and growth potential is further realised by leveraging on our Sponsor’s extensive pipeline of high-quality assets. Operational excellence is reinforced through CLI’s integrated real estate platform, strong local network, and professional property management capabilities. PRIORITISATION OF MATERIAL ESG ISSUES Critical Critical Critical • Climate change and carbon emissions reduction • Energy efficiency • Water management • Waste management • Biodiversity • Occupational health and safety • Human capital • Stakeholder engagementii • Products and servicesiii • Supply chain management • Diversity (Board and Staff) • Human rightsiv • Risk managementi • Business ethics Moderate and Emerging Moderate and Emerging Environment Social Governance i This includes consideration of compliance, economic performance and Cybersecurity. ii This includes green leases and tenant engagement on ESG matters. iii This includes products and services promoting customer health and safety, and green certified buildings. iv This relates to CLI’s zero tolerance stance towards child/forced labour.
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