CICT'S TASKFORCE FOR CLIMATE-RELATED FINANCIAL DISCLOSURE¹ (TCFD)

The Singapore Exchange mandate introduced in December 2021 requires all issuers to provide climate reporting that is aligned to the recommendations of TCFD in their sustainability reports from financial year 2024.

CICT is closely aligned to CLI’s reporting and is committed to continue to enhance disclosures of the TCFD recommendations. For more details, please refer to the TCFD section in this Sustainability Report.

STRATEGY

As a CLI-sponsored REIT, CICT’s identified ESG issues are aligned and adapted from CLI’s list. The selected ESG issues have been deemed material and applicable to CICT’s business and operations and will be guided by CLI and CICT’s regular review, assessment and feedback process of ESG topics moving forward.

Since 2016, climate change and emissions reduction are key ESG material issues identified as relevant and critical for CICT 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, CICT'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 or divestment.

Strategy to identify climate-related risks and opportunities – A Life Cycle Approach

All new investments into operational assets and development projects undergo the EHS Impact Assessment 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 risk and opportunity considerations. An internal shadow carbon price is also applied. Significant findings from the assessment would be incorporated in the investment paper submitted to CICTML Board for approval.

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Through the implementation of CLI’s 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.

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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.

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The CapitaLand 2030 SMP 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.

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As part of the 2030 SMP implementation, CICT 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.

CLI and its REITs, including CICT, commenced its climate scenario analysis in 2022 for its global portfolio to understand how the identified climate-related risks and opportunities could impact future operations. This analysis considers scenarios based on the latest global and scientific developments (scenarios from 1.5 ̊C to 3 ̊C for current to long-term time frames), to draw conclusions on the financially material physical and transition risks and validate its current strategy. CLI and the REITs will then review their mitigation and adaptation plans, and identify opportunities, in alignment with CapitaLand’s 2030 SMP. The SMP was designed to build resilience throughout CLI's operations and futureproof the real estate portfolio to guard against climate change risks and to avoid premature obsolescence and adopt available opportunities.

1. TCFD was created by the Financial Stability Board, an international body set up by the G20. It recommended a framework to give investors, lenders and underwriters greater clarity on how to future-proof a company and is an attempt to move climate-related issues into the mainstream of financial filings.
2. To operationalise its SBTi approved carbon emissions reduction target for scope 1 and 2 emissions, CLI is reviewing its carbon emissions intensity reduction targets and other environment targets, including changing reference to 2019 as the baseline year instead of 2008. The targets are being reviewed as part of the scheduled review of CapitaLand Group’s 2030 SMP in 2022 and will be published before end May 2023.

SCENARIO ANALYSIS ON FUTURE CLIMATE-RELATED RISKS AND OPPORTUNITIES

The climate scenario analysis for CLI's global portfolio considered the parameters listed below:

The analysis includes both quantitative and qualitative assessments. The quantitative assessments of potential financial impacts are being conducted based on available climate-related projections and assumptions under the abovementioned scenarios. Six physical risks, including fluvial flooding, coastal flooding, extreme heat, tropical cyclones, wildfires and extreme cold and one transition risk, shifts in carbon price, were assessed during the process. For other risk areas which are identified to be material, but difficult to quantify, such as changes in consumer and investor preferences, a qualitative assessment is conducted based on internal stakeholder consultation within CLI and CICT.

Potential impacts of climate-related risks and opportunities assessed across the portfolio are identified under different scenarios, as shown in Table 1 and 2. CICT faces more exposure to physical risks under the 3°C scenario in the long term, as minimal transition policies are expected to be in place while the development of low-carbon technology or related market changes may be slower. Under the 1.5°C and 2°C scenarios, the Trust faces higher levels of transition risks as more stringent climate-related policies are expected to be introduced and implemented. The insights on both quantitative and qualitative assessments of the risks identified provides a basis for the next steps in understanding the severity of risk impacts across time horizons.

As an ongoing process, CLI and CICT will review and update, if appropriate, the processes associated with risk management in order to account for the material environmental and climate-related risks identified.

BUILDING CLIMATE RESILIENCE

Committing to Net Zero by 2050 and Elevating CapitaLand’s Carbon Emissions Reduction Targets to 1.5°C Scenario

In 2022, CapitaLand Group elevated its scope 1 and 2 carbon emissions reduction targets which were validated by Science Based Targets initiative (SBTi) to be in line with a 1.5°C trajectory³, currently the most ambitious designation available through the SBTi process. This will translate to Net Zero in 2050.

Aligned with the Group’s elevated science-based target, CICT commits to reducing its absolute scope 1 and 2 emissions by 46% by 2030 from a 2019 base year and aims to achieve Net Zero by 2050, consistent with the effort required to limit global temperature increase to below 1.5°C.

To operationalise its SBTi approved carbon emissions reduction target for scope 1 and 2 emissions, CLI is reviewing its carbon intensity reduction targets and other environment targets, including changing reference to 2019 as the baseline year instead of 20084. CLI also aims to conduct a comprehensive review of its scope 3 emissions to better track and disclose its material scope 3 emissions, and is committed to developing scope 3 emission goals aligned to science-based targets.

Over the next decade, as part of CLI’s roadmap to Net Zero, CLI and CICT will prioritise the decarbonisation levers below, and in particular, continue to source globally for new ideas and technologies to achieve higher energy efficiency and intensify its renewable energy integration efforts.

Carbon Mitigation Hierarchy

DEVELOPING HIGH PERFORMANCE SUSTAINABLE ASSETS

CapitaLand Sustainable Building Guidelines (SBG)

The SBG is an in-house guide developed since 2007, to ensure environmental considerations and targets for low carbon transition, waste management and circular economy, water conservation and resilience, accessibility, health and safety, and supply chain management are embedded and incorporated in all stages of its properties’ life cycles. The real estate life cycle covers feasibility, investment, design, procurement, construction, operations, asset enhancements and redevelopments.

The SBG is regularly reviewed to ensure continuous improvement, with a focus on four key objectives of minimising carbon footprint and energy consumption, water management, reducing generation of waste and promoting biodiversity in the life cycles of its developments.

Environment Health and Safety Impact Assessment

A key component of the SBG is the mandatory EHSIA which is conducted during the feasibility stage of any potential acquisitions or investments in operational assets and development projects as part of due diligence.

This involves establishing the baseline environmental performance such as energy efficiency and comparing it against CapitaLand's 2030 SMP targets. The assessment also includes transition and physical risk and opportunity considerations, as well as the application of an internal carbon price. This assessment would guide the businesses to consider EHS risks and opportunities upfront and identify mitigation measures earlier.

The significant findings of the EHSIA and their cost implications are incorporated in the investment paper submitted to Board of Directors for approval. This also forms part of CLI’s proprietary new metric, Return on Sustainability, to quantify the risks and value-creation opportunities for each project.

Green building ratings help affirm the quality of CICT’s properties. They serve as an external validation that key environmental aspects have been considered in CICT’s project design, development and operations.

Aligned with CLI, CICT targets to green all its existing properties by 2030 with each property achieving a minimum certification level by a green rating system administered by a national government ministry/agency or World Green Building Council.

The minimum target certification for our new developments in Singapore is Building and Construction Authority (BCA) Green Mark Gold^PLUS. CICT is committed to actively renew and maintain our green certifications and achieve minimum BCA Green Mark certification for all properties.

CICT is committed to building safe, accessible, vibrant and quality real estate developments to enhance the lives of its stakeholders and communities around our properties.

Its social integration criteria, which are integrated in the CapitaLand Sustainable Building Guidelines (SBG) include:

Our social integration criteria, which factor universal design considerations include:

• Ensuring accessibility in the built environment to people of different age groups and varying mobility
• Enhancing connectivity to public transport, roads, amenities and between buildings
• Providing community spaces as public gathering points

In addition, Universal Design (UD) considerations ensure that public spaces in the properties are accessible to users of different age groups and varying abilities. These include:

• Seamless connectivity to the external surroundings, such as bus stops, adjacent buildings, streets and sidewalks
• Barrier-free access from accessible (handicapped) parking lots and family parking lots to lift lobbies
• Sheltered and barrier-free drop-off areas
• Accessible (handicapped) and family lots
• Designated pedestrian lanes in car parks
• Amenities such as accessible toilets, lifts and nursing rooms

Being incorporated in the SBG ensures that these criteria are considered from the start of the project development process for any major renovations and developments in Singapore. For its new projects in Singapore, a target has been set to achieve at least a UD Mark Gold certification as assessed by Singapore’s Building & Construction Authority (BCA). Overseas properties are to comply with local UD/barrier-free codes and guidelines, and are encouraged to adopt Singapore’s BCA UD Guide in the absence of local codes and guidelines when undergoing asset enhancement

CICT’s 21 properties in Singapore are largely aligned to the social integration criteria.

Portfolio Resilience and Resource Efficiency

The efficient use of environmental resources such as energy and water, responsible waste management and consideration of the surrounding community, contribute to the operational efficiency and long-term sustainability of CICT’s real estate portfolio.

CICT has been tracking its energy and water usage, waste generation and carbon emissions of its portfolio via CapitaLand’s Environmental Tracking System (ETS). The platform has been used to survey the various initiatives implemented at its properties globally including energy and water efficiency measures, biodiversity and habitat risks, as well as physical risks, including flood risk and water management.

Since migration to a cloud-based platform, the enhanced ETS has further improved data tracking and accuracies, expedited benchmarking on consumption patterns and helped identify opportunities for more operational efficiency improvements. It allows each property to conduct analysis against set targets and past trends to understand consumption patterns and identify areas for improvement.

The consolidated data is also analysed at the business units and group levels against reduction targets. This facilitates a better understanding of consumption patterns and identification of areas for eco-efficiency improvements for its portfolio. Regular desktop audits are conducted to ensure data completeness and accuracy. In 2021, the ETS was further enhanced to better track the performance of its properties against the 2030 Sustainability Master Plan (SMP) targets, and new indicators, e.g. green building certifications were included.

Targets

CICT is aligned with CapitaLand’s science-based targets set out in CapitaLand’s 2030 SMP as we transit to a low carbon business. CapitaLand’s carbon emissions intensity reduction target is computed from the approved science-based target to better track day-to-day operational efficiency. As part of the CapitaLand Group, CICT is committed to working towards the long-term and annual targets under CapitaLand’s 2030 SMP Framework¹.

Reporting Scope

As economies gradually emerge from COVID-19, the easing of safe management measures and resumption of travel have allowed business activities to improve steadily in 2022. In tandem, CICT is seeing consumption increases close to pre-COVID levels. CICT reports the consumption trend for the last four years: 2019², 2020³, 2021⁴ and 2022. Due to the effects of the pandemic, the 2020 and 2021 data are considered anomalies. Energy, carbon, water and waste data from 2019 to 2021 have been restated due to adjustments of the consumption data.

Taking guidance from the operational control as defined by the Greenhouse Gas (GHG) Protocol Corporate Standard⁵, the environmental performance of properties which are under operational control have been covered in this Sustainability Report. These comprise CICT’s 22 Singapore operating properties for reporting year 2022:

RETAIL: Bedok Mall, Bugis+, Bugis Junction, Bukit Panjang Plaza, CQ @ Clarke Quay, IMM Building, Junction 8, Lot One Shoppers' Mall, Tampines Mall, Westgate and JCube (divested on 10 March 2022)

OFFICE: Asia Square Tower 2, CapitaGreen, Capital Tower, CapitaSky (acquired 70.0% interest on 27 April 2022), Six Battery Road and 21 Collyer Quay

INTEGRATED DEVELOPMENT: CapitaSpring (45.0% interest), Funan, Raffles City Singapore, Plaza Singapura and The Atrium@Orchard

Scope 1 emissions refer to direct emissions from activities controlled by CICT. CICT’s Scope 1 data is derived from usage of diesel on an ad hoc basis.

Scope 2 emissions are indirect emissions associated with its consumption of purchased energy. CICT's Scope 2 data covered the purchased energy consumption relating to the operations for landlord-controlled areas.

Scope 3 emissions are indirect emissions from activities not controlled by CICT. Aligned with CLI, CICT aims to better track and disclose its other material Scope 3 emissions, such as tenant energy consumption and third-party managed assets in its portfolio. CICT's Scope 3 data included corporate air travel by the Board and employees, overseas assets managed by third parties as well as all purchased energy and diesel consumption for assets under development/ upgrading, if any.

The overseas assets, which are third-party managed, comprised 66 Goulburn Street, 100 Arthur Street, and 101-103 Miller Street and Greenwood Plaza in Sydney, Australia, which were acquired in 2022, and Gallileo and Main Airport Center in Frankfurt, Germany. Consumption data for energy, water and waste were reported, where available, as at the time of reporting.

Intensity data is based on landlord-controlled areas and excluded assets under stabilisation or assets that do not have the full year consumption data for the reporting year. We adopt stringent monitoring of the portfolio consumption and intensity to ensure that fluctuations are duly accounted for and issues are promptly addressed.

Carbon Emission

In 2022, CICT's Scope 1 and 2 emissions⁷ made up 66,904 tonnes CO₂e. This is a 6.7% increase from 2021 for Singapore operating properties. Carbon emissions intensity for the Singapore operating properties was 4.56 kgCO₂e/m², representing a 49.9% reduction compared to base year 2008.

Energy

6. This is computed mostly from purchased electricity consumption under scope 2, and some direct energy consumption under scope 1 as defined by the Greenhouse Gas (GHG) Protocol (operational control approach) and using individual country CO2 emission factors retrieved from the International Energy Agency (IEA) Statistics – CO2 emission factors from fuel combustion.
7. 2019 intensities included all Singapore operating properties except Funan which started operations in June 2019.
   2020 intensities included all Singapore operating properties except Funan which was on its first year of stabilisation, Bugis Village, as well as 21 Collyer Quay and CapitaSpring, as they were under construction/upgrading.
   2021 intensities included all Singapore operating properties except CapitaSpring and 21 Collyer Quay as they were under construction/upgrading.
   2022 intensities included all Singapore operating properties except CapitaSpring and 21 Collyer Quay which obtained Temporary Occupation Permit in 2021, as well as CapitaSky, which was acquired in 2022.

In 2022, CICT reported 185,389 MWh of energy consumption, including around 118 MWh of direct fuel consumption, for the landlord-controlled areas in the Singapore operating properties. The overall energy usage for landlord’s consumption was 6.8% higher year-on-year largely attributable to gradually improving business activities since the lifting of safe management measures and border restrictions. There were no major construction/ projects under development in 2022. Compared to base year 2008, CICT’s 2022 energy consumption intensity recorded a 31.3% reduction.

Tenants’ consumption was 227,162 MWh, inclusive of consumption from the hotel component at Raffles City Singapore. This excluded tenants’ consumption at Plaza Singapura as tenants were billed directly.

The overseas assets (excluding 101-103 Miller Street and Greenwood Plaza) reported a total energy consumption of about 11,523 MWh including district heating.

Renewable Energy

Solar panels installed at Bedok Mall, Bugis Junction and Asia Square Tower 2 have helped the properties to tap around 70,400 kWh of renewable energy in 2022.

Water

The main water source for CICT’s portfolio is from Public Utilities Board (PUB), Singapore’s national water agency. In 2022, CICT’s total water consumption (including recycled water) amounted to around 1,661,000 m³ from the Singapore operating properties. The 10.5% increase year-on-year was largely attributable to the increase in business activities compared to 2021. As a result, CICT’s 2022 water intensity for operating properties inched up to 0.114 m³/sqm, representing a 4.6% year-onyear increase and a 35.4% reduction compared to the base year 2008. To reduce water consumption, CICT is committed to the proper disposal of waste generated at our properties. We consolidated waste data for 22 Singapore operating properties in 2022. The collection and disposal of waste at these properties are being carried out by licensed contractors.

About 22,725 tonnes of non-recyclable waste and 2,096 tonnes of recyclable waste were collected in 2022. Recyclable waste is 8.4% of total waste collected, and comprised 2,000 tonnes of paper, 27.6 tonnes of plastic, 39.5 tonnes of metal, 8.5 tonnes of glass, 19.6 tonnes of electronic waste (e-waste) and 0.5 tonnes of other materials.

As waste generated at CICT's properties are mostly from its tenants, guests and the general public, we actively engage and encourage our stakeholders to reduce and recycle by placing recycling bins in our operational properties. For e-waste collection, CICT has also continued the partnership with Cimelia Resource Recovery at the Singapore office properties, and ALBA Group appointed by National Environment Agency (NEA) for the retail properties.

The overseas assets (excluding 101-103 Miller Street and Greenwood Plaza) recorded around 289.3 tonnes of waste in 2022.

Like-for-like Consumption Change on year-on-year basis

CICT reported a year-on-year increase in the like-for-like change in consumption across carbon emissions, energy and water for the 18 Singapore operating assets which excludes 21 Collyer Quay, CapitaSpring and CapitaSky. The increase across the like-for-like portfolio was largely due to a slight increase in business activities in 2022 compared to 2021.

Waste Management

CICT is committed to the proper disposal of waste generated at our properties. We consolidated waste data for 22 Singapore operating properties in 2022. The collection and disposal of waste at these properties are being carried out by licensed contractors.

About 22,725 tonnes of non-recyclable waste and 2,096 tonnes of recyclable waste were collected in 2022. Recyclable waste is 8.4% of total waste collected, and comprised 2,000 tonnes of paper, 27.6 tonnes of plastic, 39.5 tonnes of metal, 8.5 tonnes of glass, 19.6 tonnes of electronic waste (e-waste) and 0.5 tonnes of other materials.

As waste generated at CICT's properties are mostly from its tenants, guests and the general public, we actively engage and encourage our stakeholders to reduce and recycle by placing recycling bins in our operational properties. For e-waste collection, CICT has also continued the partnership with Cimelia Resource Recovery at the Singapore office properties, and ALBA Group appointed by National Environment Agency (NEA) for the retail properties.

The overseas assets (excluding 101-103 Miller Street and Greenwood Plaza) recorded around 289.3 tonnes of waste in 2022.

CONSERVATION MEASURES

Energy

Water

Waste