CDL Integrated Sustainability Report 2023: Zero in on Positive Impact
CDL’s Integrated Sustainability Report 2023 is their sixteenth sustainability report since 2008. Themed “Zero in on Positive Impact”, the digital report communicates CDL’s progress towards their material ESG goals and targets, established under the CDL Future Value 2030 sustainability blueprint. External assurance is key to enhance data credibility and instill confidence in readers. CDL’s external assurance of their sustainability report started in 2009 and has continued to expand. ISR 2022 and ISR 2023’s external assurance has been further elevated in its scope against the GRI Standards, SASB Standards, as well as the TCFD and CDSB frameworks.
MSCI has tracked board gender diversity every year since 2009. The Women on Boards report highlights trends across markets and sectors for publicly listed companies. The annual review provides companies, researchers, and policymakers with an objective overview of the changing share of female representation at the board level as well as among CEO and CFO roles.
Key findings
Overall, the percentage of director seats held by women continued to increase in 2022, reaching 24.5% among constituents of the MSCI ACWI Index, up from 22.6% in the previous year. The percentage of index constituents with at least 30% female directors increased in 2022 to 38% compared with 33% a year ago.
After a noticeable slowdown in 2020, the rate of growth of women on boards rebounded in 2021 and continued to recover in 2022 in both developed markets (DM) and emerging markets (EM), with the exception of the U.S. While the overall percentage of director seats held by women among U.S.-domiciled constituents of the MSCI World Index continued to increase and passed 30% in 2022, the rate of increase has slowed for the last three years.
In 2022, health care surpassed other sectors both in terms of the total percentage of director positions held by women (27.3%) and the percentage of companies with at least 30% director seats held by women (45.4%).
The percentage of female CEOs increased to 5.8% (up from 5.3%) in 2022 among companies in the MSCI ACWI Index, while the percentage of CFO positions held by women increased to 16.9% (up from 15.8%) among the same peer set. The percentage of women CFOs was the highest among EM companies (19.9%).
Strengthening Value Through ESG: Survey of Global Property Professionals (CBRE)
A recent CBRE survey of more than 500 commercial real estate professionals worldwide revealed these key findings:
Focus on ESG Intensified in 2022: Nearly 70% of survey respondents reported a heightened focus on ESG strategies in 2022, mostly due to higher energy prices and government-imposed ESG disclosure requirements.
Reducing Energy Consumption a Priority: Three-quarters of all respondents say that reducing energy consumption and carbon emissions is the top ESG consideration most likely to impact property value.
Emphasis on Tenant/Employee Well-Being: More than 80% of respondents indicate that proximity to public transit (or lack thereof) impacts property value as easier commutes are associated with better employee well-being.
Why ESG Matters: A Guide for Occupiers (Knight Frank)
This report aims to engage occupiers in their ESG journey, allow landlords to better align and develop stronger partnerships with their tenants, and guide occupiers to maximise their green potential through their real estate.
The large-scale trends shaping the ESG investing world have become well recognized: climate change risk and the road to net zero, the growing existential threat of biodiversity loss, social inequalities, regulation and, lately, debate and controversy over greenwashing and what ESG should be.
Against a backdrop of a war in Europe, inflation, energy markets in turmoil, political uncertainty and an unending stream of climate-induced disasters, MSCI’s ESG and Climate Trends to Watch for 2023 report takes a closer look at how some of the major developments may shape the investment environment and impact the challenges and opportunities for companies.
At a time when many mature economies are reaching peak carbon, emissions in Asia Pacific remain on an upward trajectory as the region continues along a path of rapid urbanisation and economic growth.
Asia Pacific accounted for 53% of global carbon emissions in 2021, and has been responsible for more than 80% of global growth in carbon emissions over the past decade.
To improve transparency around the role that cites and the built environment play in carbon emission reduction, CBRE has developed the Asia Pacific Sustainable City Ranking, which measures current and future environmental resilience and its impact on commercial real estate across 28 cities in the region.
Cities are evaluated according to a range of environmental factors including greenhouse gas emission reduction, physical climate risk, water stress, air pollution, renewable energy use, green bond issuance, and green office building adoption.
Case Study of Mass Timber Construction – GDI Property Group (Australian REIT)
GDI Property Group (GDI), an Australian listed REIT headquartered in New South Wales, Australia, is currently constructing Perth’s first hybrid mass timber and steel frame office building. GDI will utilize a mix of cross laminated timber and steel to construct WS2, an 11 story, 9,500 square meter office building with the goal of creating a best-in-class, sustainably focused asset.
GDI underwent extensive research to understand both the environmental and economic impacts of developing what they’re calling Perth’s most environmentally friendly premium grade office building. Upon completion in late 2022, WS2 will boast a 5-star NABERS Energy Rating, a 5-star Greenstar Rating and will show a reduction of carbon by approximately 50% over the building’s lifespan vs. a similar al concrete/steel-based building and a reduction of 80% embodied carbon during the construction phase. This reduction will be captured through a combination of offsets, renewable energy systems within the building, and significantly lower embodied carbon during the construction phase. Ultimately, the goal is to achieve net zero operation, lowering scope one and two emissions, while achieving a better economic outcome as timber construction is “quicker and cheaper to build on a Total NLA Basis” according to the company in their 10 November presentation.
What Is Mass Timber Construction?
Mass timber, sometimes referred to as Cross Laminated Timber, consists of multiple layers of dried lumber stacked in alternating directions and bound together with structural adhesives and pressed to form a single panel. The panels are specifically engineered to meet the high strength ratings of load bearing walls, floors and roof trusses and are often produced on-site. The resulting mass timber panels are significantly lighter than both concrete and steel (on average 1/5th the weight of steel beams) while maintaining a stronger strength to weight ratio.
Current building codes for mass timber projects vary across different countries, but recent legislation in the United States and Canada has allowed for construction of mass timber buildings up to 18 stories tall. Other markets, such as parts of Europe and Australia, are seeing even more progressive mass timber building requirements with a new 40-story mass timber building in Sydney being designed and scheduled to start construction in 2023.
Building and Environmental Advantages of Mass Timber
Environmental Impact:
Mass timber decomposes at a natural rate when discarded as opposed to waste from concrete or steel.
One cubic meter of mass timber sequesters roughly one ton of CO2.
In a full lifecycle analysis of mass timber vs reinforced concrete on a mid-rise building, mass timber represented a 26% reduction in global warming potential.
Mass timber construction as an alternative to steel reduces CO2 emissions by 1.9 metric tons per cubic meter of wood product
Tensile Strength: Timber supports its own weight at a higher degree than both steel and concrete.
Electrical & Heat Resistance: Natural resistance to electrical conduction when dried to standard moisture levels. Strength and dimensions are not significantly affected by heat, providing stability to the finished building.
Sound Absorption: Acoustic properties make it ideal for minimizing echo in living or office spaces. Wood absorbs sound, rather than reflecting or amplifying it.
Economic Feasibility of WS2 and Mass Timber Construction
David Ockenden, GDI’s Head of Development, explains the similarly robust economic benefits of the mass timber build due to the expedited construction timeline and relatively light material. Namely, the tensile strength of mass timber allowed for a larger construction footprint than previously thought on the WS2 building:
“When we initially started looking at traditional concrete structures it [could] only be two stories, but timber, when we started exploring that we could build a lot more and reinvest in the precinct to upgrade it.”
The demand for sustainable assets is especially high in Perth, a city known for commodity extraction, where companies are often seeking ways to improve their ESG impacts. GDI is already seeing strong leasing interest from potential full-building, multi-floor and single-floor tenants, claiming overwhelming praise and popularity of the WS2 project. When fully completed, the WS2 building will be a flagship office space within GDI’s portfolio and will serve as the basis for continued mass timber development throughout Western Australia. As mentioned above and in their recent Managing Director’s update, GDI has identified other projects where they plan to use timber construction in their recent update and are exploring redevelopment opportunities at 1 Mill Street and the Wellington car park. Their presentation cites that development approvals have been lodged or are in the process of being lodged.
Benefits of Investing in Mass Timber Projects
At B&I Capital, an Asset Manager with offices in Zurich, Singapore and Austin focused on listed real estate investing, we strive to integrate Environmental, Social, and Governance criteria throughout our investment process and company operations. We believe mass timber construction projects, such as WS2, align directly with our aim to minimize environmental footprint by lowering scope one and two emissions as much as possible. Moreover, given timber construction permitted significant increase in net leasable area and has a quicker construction time, timber construction led to a better economic return. The strong reduction in carbon emissions due to their construction will lower their need to purchase green power or carbon credits to achieve net zero for WS2. Our investment in GDI follows our support of their drive to build environmentally friendly projects and belief of their viability as strong real estate investments. It is through our investments in companies like GDI we actively participate in the creation of a sustainable future.
5 Steps to Climate Positive Real Estate (Cushman & Wakefield)
Climate positive activities are aimed at not only achieving but surpassing net zero emission goals through eradicating additional carbon dioxide (CO2) and/or greenhouse gases (GHG) from the atmosphere. In short, it’s about saving more GHG emissions than your actions produce, in order to create an environmental benefit.
When developing a climate positive strategy, the first stage is to apply a carbon accounting framework. For instance, if a building product manufacturer wants to develop a climate neutral or positive product, they must determine the total carbon footprint of that product. The carbon footprint covers everything — from the energy needed to source the original material/s as well as to produce, supply, use and dispose of the product — to the emissions related to product original material/s sourcing as well as product production, usage and disposal.
Once the total carbon footprint is calculated, as well as what needs to be counteracted to become carbon neutral, then an additional measurement number, such as an extra 10% for example, can then be tagged on to estimate what is needed to go climate positive.
How enterprises actually achieve climate positivity can differ. Usually, however, they meet the requirements via a mixture of reducing carbon emissions, shifting to renewable energy, producing locally, investing into offsetting, and purchasing carbon credits.
Transforming Your Real Estate
Buildings can realize climate-positive results in a number of ways, and simply put, the steps to climate positive are the steps to net zero plus that extra mile, whatever takes the building to remove more greenhouse gas (GHG) than it is producing. The building’s strategy should include a mixture of the following steps:
Step 1 CHOOSE: the optimal building location, design, energy modelling, eco-friendly materials, renewable energy and intelligent energy management systems
Step 2 MAXIMISE: the structural efficiency, insulation and greenhouse gas reduction systems
Step 3 MINIMISE: the material and operational wastage and water usage
APREA ESG Guidebook for Real Assets in Asia Pacific
As the voice of sustainable investing in the Asia Pacific, APREA has developed the ESG Guidebook for Real Assets in Asia Pacific to raise awareness about ESG and guide our stakeholders in their journey to sustainability. We believe that capital allocated to real assets can play a meaningful role in the achievement of the sustainable development goals (SDGs), while leveraging growth opportunities in a manner that benefits all stakeholders.
We recognise that the ESG landscape continues to evolve, and this Guidebook lays out the basic foundation to integrate ESG and sustainability factors in how each of us conduct our businesses. Aside from providing a framework that can be used as a basis in establishing a systematic ESG approach, we have included practical ways to build and operationalise an ESG program with effective governance, as well as clear steps to engage and communicate with key stakeholders.
The Guidebook also features case studies among APREA members that illustrate various innovative approaches, that reflect their philosophy and investment styles, and thus, facilitating the exchange of best practices.
Next, Flex | Technology For The Next Generation Australian Office (essensys)
At a time when commercial occupancy rates across the country remain stubbornly low, the report delves into how Australian office worker expectations are changing in a digital-first, hybrid work environment and how this impacts their office attendance.
Next Flex | Technology for the next generation Australian office, which surveyed 1,000 office workers across the country, was launched by essensys, a leading global provider of software and technology for the commercial real estate industry, in partnership with Flexible Workspace Australia.
The report’s critical findings highlight a lack of adequate tech is a key factor in people deciding to work from home or an alternative third space, with more than four in five respondents (86%) reporting a disparity between the existing technology in their office and what they need to enable them to do their jobs efficiently.
