CDL Hospitality Trusts - Sustainability Report 2022

SUSTAINABILITY REPORT CLIMATE RESILIENCE AND ENVIRONMENTAL STEWARDSHIP CDLHT acknowledges the importance of addressing climate change and its affiliated risks to ensure alignment to best practice within the industry. For example, in March 2022, the Singapore Hotel Association and Singapore Tourism Board announced the launch of the Hotel Sustainability Roadmap, which included key focus areas in water conservation, waste management, recycling and the circular economy, sustainable procurement and energy conservation. As a key player in the hospitality industry, we are committed to reducing the environmental impact of our operations, whilst also nurturing and creating positive change in the industry. We endeavour to conserve natural resources, including energy and water, as well as to reduce carbon emissions and waste generation across our portfolio of properties. Climate Action And Resilience Climate change poses both physical and transition risks to CDLHT’s assets and operations around the world, making our commitment to climate action a vital factor to our business strategies and engagement with stakeholders to ensure the sustainability and resilience of our business. Our hotel operations traverse multiple continents and hence it is critical for us to take stock of regional factors, from changing energy costs in the world’s transition to a lowcarbon economy to the risks of flooding or natural disasters. Our Approach The TCFD framework recommends a set of disclosures to companies on pertinent climate-related aspects. CDLHT has utilised the framework as guidance on how we approach climate resilience. Climate Action And Resilience First TCFD disclosure in FY 2022, two years ahead of SGX requirements Emissions Reduction Reporting Scope 1 and Scope 2 emissions from FY 2022 Water 33% reduction in overall water consumption since FY 2019 Waste Target to remove or partially remove single-use plastics from 50% of our hotel portfolio by 2023 Energy Target to reduce energy consumption by 7% by 2026 In FY 2022, we disclosed in alignment with the TCFD recommendations for the first time, reporting on CDLHT’s financially material climate-related aspects. In particular, the Strategy and Resilience pillars of disclosure outlines our key policies and actions towards ensuring a climateresilient portfolio. We intend to continue strengthening our capabilities and experience in this arena and will report on our progress in future years. Climate-related Risk Management Climate-related risks may be viewed as either physical risks or transition risks. Physical risks include chronic risks that occur over a longer period of time, such as rising sea levels, as well as acute risks that refer to hazards such as wildfires, heat waves or floods. Transition risks encompass increased costs of carbon-intensive energy sources due to rising carbon tax, or increased compliance costs due to the need for green certification of buildings. Notably, some of these risks may be viewed as opportunities to position CDLHT positively and gain a competitive edge via an effective climate strategy. We are beginning on our journey of formalising our climate risk management policies and systems, and strive to minimise our exposure to material climate risks through the integration and analysis into investment policy or consideration of a divestment strategy. For further details, please refer to our Risk Management disclosures under our TCFD Report above. Scenario Analysis By conducting a scenario analysis against different global decarbonisation pathways, we are better informed of the sufficiency of the actions we take with regards to CDLHT’s climate resilience. Our scenarios are science-based and informed by the Network for Greening the Financial System (“NGFS”). For further details, please refer to our Strategy disclosures under our TCFD Report above. Emissions Reduction The hospitality industry remains a significant contributor to global GHG emissions. Research by the Sustainable Hospitality Alliance in 2022 showed that the hotel sector accounts for around 1%of global carbon emissions, with this amount expected to increase over time. CDLHT recognises the significant risks posed to business operations as a result of a changing climate. We are committed to our emission reduction journey to ensure the sustainability of our business and to play our part in mitigating climate change. Our Approach In line with the Singapore Hotel Sustainability Roadmap’s targets, CDLHT began tracking and reporting on its Scope 1 and 2 GHG emissions in FY 2022. In FY 2023, we will gain a more complete picture of our emissions baseline as we explore the methodology of estimating our Scope 3 emissions and use it to inform our emission reduction strategy by targeting the carbon hotspots within our value chain. 108 SUSTAINABILITY REPORT ANNUAL REPORT 2022