City Developments, Sembcorp Industries and CapitaLand top sustainability class

Real estate and hotel group City Developments tops the table in The Edge Singapore’s Billion Dollar Club sustainability category, which measures a company’s commitment to strong environmental, social and governance principles. Marine and energy conglomerate Sembcorp Industries is in second place, followed by property group CapitaLand.

Last year, CDL had its carbon reduction targets validated by the United Nations-backed Science Based Targets initiative. The group has reduced carbon emission intensity by 32% since 2007. In addition, CDL says it is increasing its carbon emission reduction target from 38% to 59% by 2030 compared with 2007 levels in Singapore. The company has also reduced its water and energy intensity by 32% and 27% respectively since 2007. CDL has saved $24 million from energy-efficient retrofitting and initiatives implemented for eight commercial buildings between 2012 and 2018.

The group is committed to building green infrastructure. It puts aside 2% to 5% of the construction cost for green design and sustainable features. It has voluntarily conducted a Biodiversity Impact Assessment for all construction sites since 2010. It makes recommendations for environmental mitigation when necessary.

Its sustainability efforts have helped CDL secure a three-year green loan of $400 million from DBS Bank, and a two- year green loan of $ 100 million from The Hongkong and Shanghai Banking Corp. CDL also issued a green bond in 2017, which raised $100 million.

For the three months ended June, net profit fell 26.4% y-o-y to $162.4 million and revenue was down 37.5% to $850.4 million. This was due largely to the timing of profit recognition for its property development arm. For the full year ended December 2018, CDL achieved record revenue of more than $4 billion and net profit rose 6.7% y-o-y to $557.3 million, led by its property development division.

Sembcorp commits to cutting emissions

Runner-up Sembcorp Industries has incorporated sustainability criteria into every level of its company, including the board of directors. It is part of the Dow Jones Sustainability Asia Pacific Index and SGX Sustainability Leaders Index.

From 2016 to 2018, Sembcorp’s direct carbon dioxide emissions increased from 15.1 million tonnes to 23.6 million tonnes, owing mainly to its business in India, where it operates a coal-fired power plant. But the group has also raised its renewable energy generation from 1,720MW to 2,589MW during the three-year period. It wants to double its renewable energy generation capacity by 2022 from its 2017 level of 2,182MW. For starters, it has partnered with CapitaLand to install 21,240 rooftop solar panels at six CapitaLand properties by year-end that will generate more than 10,000MWh of energy each year. Sembcorp says it is committed to reducing its GHG emission intensity by 22% from 2017 levels of 0.54 tonne of CO2 equivalent per MWh.

In 2Q ended June, revenue fell 29% y-o-y to $2.37 billion but earnings rose 20% to $98 million, owing to the significant drop in cost of sales. For the full year ended December 2018, revenue rose 30% to $11.7 billion but earnings slipped 9% to $347 million, owing mainly to losses in the marine business.

CapitaLand to reduce carbon footprint

Meanwhile, CapitaLand has secured its first sustainability-linked loan worth $300 million from DBS Bank. The group’s project with Sembcorp will also help it reduce its carbon footprint by 4.3 million kg of carbon emission a year. CapitaLand aims to generate 20% of its energy consumption from renewables for its portfolio by 2025.

The property group also has long-term plans to reduce carbon emission intensity by 30% by 2030 from 2008 levels. It will reduce energy intensity by 25% by 2030 from the same baseline.

Last year, CapitaLand achieved a 29.8% reduction in carbon emission intensity from 2008 levels. It also reduced energy intensity by 17.6% from its operational properties over the same period. This has helped the company achieve more than $ 170 million in utilities cost avoidance since 2009.

In 2Q ended June, CapitaLand’s revenue slipped 19.3% y-o-y to $1.1 billion amid lower residential sales in Singapore and lower handover from residential projects held by subsidiaries in China. The fall in revenue was partially offset by a steeper decrease in cost of sales. Earnings fell 4.2% to $579.8 million.

For the full year ended December 2018, revenue rose 21.3% y-o-y to $5.6 billion and earnings increased 12.3% to $1.8 billion. The group recorded higher contributions from newly acquired properties in Singapore, China, Germany and the US, as well as higher handover of units from residential projects in China and Vietnam.