OVERVIEW AND FINANCIAL REVIEW MARKET REVIEW LEADERSHIP STRUCTURE PROPERTY PORTFOLIO SUSTAINABILITY & GOVERNANCE FINANCIAL STATEMENTS AND OTHER INFORMATION 101 CDL HOSPITALITY TRUSTS Annual Report 2023 Greenhouse Gas (GHG) Emissions (FY 2023) We account for our consolidated GHG emissions data according to the operational control approach methodology under the Greenhouse Gas Protocol Standard as it is best aligned with our ability to exercise influence over emissions-related activities within our control. CDLHT began tracking its Scope 1 and 2 GHG emissions fromFY 2022 which is the year that will serve as our emissions baseline for future comparison purposes. In particular, we view Scope 1 and 2 GHG emissions as important metrics for understanding CDLHT’s level of exposure to climate risk in terms of how they demonstrate a reliance on non-green sources of energy and products as the world undergoes a green transition. They also represent the emissions borne out of energy use, for which evidence has to be presented for our sustainability-linked loans. Our Scope 1 emissions are based on the usage of Diesel, Liquefied Petroleum Gas (LPG), and Natural Gas, and the majority of Scope 1 emissions come from fuel usage. Our Scope 2 emissions come from the use of purchased electricity. From FY 2023, CDLHT began disclosure of Scope 3 emissions in response to the growing demands and requirements from regulations, the market, and investors’ requests for transparency regarding value chain emissions. We view Scope 3 emissions as important to understanding CDLHT’s exposure to climate risk as it represents our level of interaction with downstream assets, suppliers, vendors, and other parties. We will explore setting Scope 3 targets after we have fully developed all material categories of our Scope 3 emissions inventory. Our Scope 3 emissions for FY 2023 cover the four categories of Fuel- and Energy-Related Activities not included in Scope 1 or Scope 2 (Category 3), Waste Generated in Operations (Category 5), Business Travel (Category 6), and Downstream Leased Assets (Category 13) under the GHG Protocol Standard’s Technical Guidance for Calculating Scope 3 Emissions, and have been accounted for under the same Standard. We intend to disclose on CDLHT’s other material Scope 3 categories in FY 2024 to fully understand our total carbon inventory. The breakdown of our Scope 1, 2, and 3 emissions are presented under the Emissions Reduction material topic of our Sustainability Report and summarised in the following table: Scope 1 emissions (tCO2e) 405 Scope 2 emissions (tCO2e) 721 Scope 3 emissions (tCO2e) 52,163 Total (tCO2e) 53,289 Further information on our emissions breakdown may be found below under our material ESG topic of “Emissions Reduction”. CDLHT is in the process of strengthening analysis on our emissions to better inform our stakeholders of our decarbonisation strategy, such as identifying the emission hotspots to best tackle the most carbon-intensive categories within our Scope 1, 2 and 3 emissions and meet our Net Zero target by year 2050. In FY 2024, CDLHT will explore setting targets according to the SBTi to ensure that our GHG emissions reduction goals and pathway are aligned with the Paris Agreement goals, demonstrating our commitment toward greening our business. Through target-setting under the SBTi, CDLHT will also explore deriving its short-, medium-, and longterm decarbonisation targets and use them to delineate our decarbonisation strategy.
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