Esther An, chief sustainability officer at City Developments Limited (CDL) tells Environmental Finance about the company's journey in pushing the boundaries of what can be achieved through sustainability reporting and the various challenges they met along the way.

Environmental Finance: CDL was the first Singapore-based company to publish a sustainability report in 2008. Why do you think you were that far ahead of the field?

Esther An: We did not have a crystal ball to foresee that sustainability reporting would become mainstream. It was a natural progression for us to review how we could track our performance and continue to improve, a decade after we established our corporate ethos and commitment to "Conserving as We Construct" in 1995.

Europe has been ahead of Asia in sustainability practices and sustainable finance. I was introduced to the Global Reporting Initiative (GRI) standard and sustainability reporting in 2007. At that time, reporting was not a common practice in Asia, but we were convinced that what gets measured, gets managed. So that's when we decided to publish our first sustainability report in 2008, which became the first sustainability report published by a Singapore company. We look at reporting like an annual medical check-up. Without measuring, you wouldn't know whether you are healthy, or not.

The reporting standards landscape was much simpler than it is today, where there are hundreds of disclosure frameworks, ratings and standards.

EF: Do you feel these different standards work well and complement each other, or are we reaching a point of over saturation of standards?

EA: There are more than 600 environmental, social and governance (ESG) standards and frameworks, data providers, and ratings and rankings, provided by a mix of established credit ratings, agencies and data vendors, along with niche providers. With little consistency across ESG ratings and providers, and a lack of established industry norms relating to disclosure, measurement, transparency and data quality, it has become increasingly confusing for corporate reporters, investors and analysts. No one company can adhere to every standard and framework.

CDL is glad to have developed our own two-pillar sustainability reporting framework since 2023. It embraces both GRI Standards, which we started using in 2008, and the International Sustainability Standards Board (ISSB) standards, released in June 2023. We aim to harmonise the different key reporting standards and benchmarks, to effectively articulate the financial "value" and "impact" on the planet and people our business creates.

CDL is glad to see that our framework is in line with the latest developments and collaboration between standard setters. Over the last two years, we have seen positive developments towards global harmonisation of reporting standards. Citing the announcement made by ISSB in June 2024, it sets the stage for interoperability of ISSB with GRI, Carbon Disclosure Project (CDP), Transition Planning Taskforce (TPT), GHG Protocol and Taskforce on Nature-related Financial Disclosures (TNFD). With loss of nature now recognised as a global risk, I am glad to see the inclusion of TNFD, which was only officially launched in September 2023.

EF: There's a strong focus on nature in your latest sustainability report. Do you feel this is often an overlooked area of sustainability reporting? Are we seeing that begin to change now?

EA: CDL started looking at environmental conservation in 1995, considering our impact on biodiversity and greenery in a land-scarce island like Singapore, on top of pollution, and health and safety of our workers.

But nature and biodiversity encompass vast and intricate systems that are difficult to quantify and measure, compared to more straightforward environmental issues like energy consumption and carbon emissions.

TNFD gives clear guidance on the approach and methods for corporates to crystalise and measure their impact on nature. There are more than 100 tools that companies can use to evaluate and assess the impact of their operations on the natural environment. It offers the LEAP approach to help companies locate their impact on nature, Evaluate it and Assess the risks and opportunities when Producing the report.

EF: Besides standards, there are three aspects you focus your sustainability reporting on: materiality, impact and value. Why are these so crucial to you?

EA: Conducting a materiality study is important to identify and declutter ESG issues and zoom in on some 18 issues which are most material to the business by our stakeholders. These are ranked by our stakeholders, regulators and investors, and validated by CDL's board and management. In 2017, CDL's top material issue was innovation which was unexpected. This reflected that our stakeholders, particularly investors, take a longer-term view. It was a clear signal that transformation using innovation and technology will drive change in greening the built environment.

Companies cannot manage without measuring the impact they generate. Only by measuring impact can one identify gaps for improvement. Articulating value is crucial for listed companies in their sustainability reporting. Listed companies have a duty to create and return value to our investors. ESG performance is closely linked to financial performance. If a company cannot connect the two, its ESG strategy or performance will not work.

EF: Do you see yourself as a sustainability leader within the construction sector, in Singapore, and in the wider Asia-Pacific (APAC) region?

EA: CDL is honoured to be regarded as a forerunner in sustainability and sustainability reporting, an advocate for best practices and a champion for doing good and doing well. We are humbled to show a reporting framework that can help companies capture the value and impact of their ESG performance in an organised manner.

The framework was developed based on what we have learnt from our successes and failures in our 17-year reporting journey.

To CDL, a leader is someone who takes bold steps to ventures into less explored territories. It also comes with the responsibility to set the direction and benchmarks for best practices that will help contribute to a more sustainable future for all.

To find out more about City Developments Limited, click here.