SUSTAINABILITY REPORT 2023 67 APPENDIX TCFD RECOMMENDATIONS Strategy As a CLI-sponsored REIT, CLCT’s identified ESG issues are aligned and adapted from CLI’s list. The selected ESG issues have been deemed to be material and applicable to CLCT’s business and operations and will be guided by CLI and CLCT’s regular review, assessment and feedback process in relation to ESG topics moving forward. Since 2016, climate change and emissions reduction are some of the key ESG material issues identified as relevant and critical for CLCT and CLI. Climate change risk has been identified as a key risk as part of the ERM Framework and includes both physical and transition risks. Physical risks are a result of climate change and can be acute or chronic in climate patterns, such as rising sea levels, violent storms, long intense heat waves, flash floods and freshwater depletion. Transition risks result from a transition to a lower-carbon economy, which could entail potentially more stringent regulations and increased expectations from customers and stakeholders. In line with CLI, the REIT’s strategy to identify and address climate-related risks and opportunities spans all areas of its real estate life cycle, from the earliest stage of the investment process to design procurement, construction, operations and redevelopment or divestment. ▶ All new investments into operational assets and development projects undergo the EHS Impact Assessment (EHSIA) during due diligence to identify any environmental (including climate change) risks and opportunities related to the asset/project site and its surroundings. The assessment covers performance metrics such as energy efficiency, as well as transition and physical risks and opportunities considerations. Significant findings from the assessment would be incorporated in the investment paper submitted to CLCT’s Board for approval. ▶ Through the implementation of the CLI Sustainable Building Guidelines (SBG), the aim is to identify and address the risks and opportunities of climate change right from the design stage. The local context of each project will be studied in detail, and appropriate measures will be taken into consideration with regards to adaptation of climate change. SBG also sets guidelines for buildings to be more energy efficient, e.g. setting green rating targets, specifying minimum equipment efficiency, and requiring the use of onsite renewable energy whenever possible. ▶ At the operational asset level, the CLI Environmental, Health and Safety Management System (EHSMS), which is audited by a third-party accredited certification body to ISO 14001 standard, serves to monitor transition risks relating to climate regulations via EHS legal registers updates and regular stakeholder engagements. Operational issues pertaining to climate change, energy and water are also identified and managed through the EHSMS to strengthen the climate resilience of the Trust’s portfolio. ▶ The CLI 2030 Sustainability Master Plan further outlines the targets and pathways for transition to a low-carbon business that is aligned with climate science. Energy use and carbon reduction targets, as well as green certification targets are set for its operational assets. Initiatives are put in place to improve the environmental performance, resilience and durability of its assets through system upgrades, system optimization, effective maintenance and changes to user behaviour. The continued achievement of high green building ratings as well as energy and water efficiency measures put in place to achieve the reduction targets would help to mitigate the impact of changing weather conditions. ▶ CLI’s decarbonisation planned activities are also integrated throughout all stages of a project via CLI’s SBGs, from feasibility, design, procurement, construction, operations to redevelopment. CLI supports low-carbon investments and factors climate-related costs and opportunities into its evaluation of new investments or capital expenditure (CAPEX) through the incorporation of CLI internal carbon price implemented since 2021. ▶ As part of CLCT’s value chain engagement and low carbon initiatives, CLCT strives to obtain LEED certifications for the assets in its portfolio. As of end 2023, 36% of CLCT’s portfolio is LEED Gold certified (by gross floor area and excluding carpark space). CLCT also implemented green leasing for CLCT properties that are managed by CLI. As part of the 2030 SMP implementation, CLCT generally considers short-term to medium-term time frames to be until 2030, and long-term beyond 2030 in relation to the identification of climate-related risks and opportunities.
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