Integrated Sustainability Report FY2021
About this Report
Ascendas Real Estate Investment Trust (Ascendas Reit or the Trust) is Singapore's first and largest listed business space and industrial Real Estate Investment Trust (REIT), and has presence in Singapore, Australia, the United Kingdom (UK) / Europe and the United States of America (USA). As at 31 December 2021, Ascendas Reit had a customer base of around 1,570 local and international companies across a wide range of industries.
Between 2013 and 2017, Ascendas Reit published five sustainability reports. In 2018, it improved its report by incorporating elements of the Integrated Reporting (IR) Framework of the International Integrated Reporting Council and renamed its report as 'Integrated Sustainability Report'. This is Ascendas Reit's fifth Integrated Sustainability Report. The report provides updates on its Environmental, Social, and Governance (ESG) performance.
INTERNATIONAL STANDARDS AND GUIDELINES
This report has been prepared in accordance with the Singapore Exchange Securities Trading Limited's (SGX-ST) Listing Manual Rules 711A and 711B, Global Reporting Initiative (GRI) Standards: Core option, and GRI's Construction & Real Estate Sector Supplement (CRESS). The GRI Standards have been selected as it is an internationally recognised reporting framework that covers a comprehensive range of sustainability disclosures that is relevant to Ascendas Reit's business. This report has also incorporated elements of the Integrated Reporting (IR) Framework of the International Integrated Reporting Council, and Sustainable Development Goals (SDGs) of the United Nations. This year, Ascendas Reit has begun taking steps to integrate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in its reporting.
REPORTING SCOPE AND PERIOD
Ascendas Reit, a CapitaLand Investment (CLI)-sponsored REIT, is managed by wholly owned subsidiaries of CapitaLand Investment Limited (the Sponsor), which include Ascendas Funds Management (S) Limited (the Manager) and Asset & Property Managers who are responsible for the Trust and oversee its daily property operations. The Sponsor is a leading global real estate investment manager with a strong Asia foothold and is the listed investment management business arm of the CapitaLand Group (CapitaLand).
Ascendas Reit does not have employees. References to employees in this report refer to employees of the Manager.
This report covers Ascendas Reit's portfolio for the financial period from 1 January 2021 to 31 December 2021, unless otherwise indicated. As at 31 December 2021, Ascendas Reit's portfolio comprises 220 properties (96 in Singapore, 34 in Australia, 49 in the UK / Europe and 41 in USA).
Taking guidance from the operational control approach1 as defined by the Greenhouse Gas (GHG) Protocol Corporate Standard, environmental performance of 94 properties under operational control have been covered in this report. As at 31 December 2021, about 43% of Ascendas Reit's portfolio was directly under the operational control of the Asset & Property Managers, in terms of Gross Floor Area (GFA).
The multi-segmented portfolio comprised 68% and 32% of multi-tenant and single-tenant properties by asset value respectively. Please refer to pages 62 to 107 of the Annual Report 2021 for the full list of Ascendas Reit's properties.
The Manager has not sought external independent assurance on this report specifically but its Sponsor seeks external assurance on its report, which includes Ascendas Reit's data.
The Manager welcomes all feedback as it enables continual improvement in the sustainability policies, processes, performance and reporting. Please direct your questions and feedback to firstname.lastname@example.org.
- Ascendas Reit's Manager and its Asset & Property Managers did not have operational control of 126 properties in its portfolio as at 31 December 2021 (this includes three properties (25 Ubi Road 4, 27 Ubi Road 4 and iQuest@IBP) which are under development); hence emissions associated with fuel combustion and purchased electricity are Scope 3. Five properties were divested within 2021, of which two were under the Manager and Asset & Property Manager's operational control up to the point of divestment.
Sustainability Highlights 2021
Board Statement & Board Message
At Ascendas Reit, sustainability is at the core of everything we do. We are committed to growing in a responsible manner, delivering long term economic value, and contributing to the environmental and social well-being of our communities. The environmental, social and governance (ESG) factors that are material to our business have been identified and reflected in the CapitaLand 2030 Sustainability Master Plan (2030 SMP), which was launched in 2020, and will be reviewed every two years.
The CapitaLand 2030 Sustainability Master Plan guides our efforts to build a resilient and resource efficient real estate portfolio, which enables thriving and future-adaptive communities, and accelerates sustainability innovation and collaboration. Ambitious ESG targets have been set, which include carbon emissions reduction targets validated by the Science Based Targets initiative (SBTi).
The Board of the Manager of Ascendas Reit (the Board) is responsible for overseeing Ascendas Reit's sustainability efforts, determining the material ESG factors and taking them into consideration in determining Ascendas Reit's strategic direction and priorities. The Board also oversees the management and monitoring of the material ESG factors and approves the executive compensation framework based on the principle of linking pay to performance. The Manager's business plans are translated to both quantitative and qualitative performance targets, including sustainable corporate practices.
Ascendas Reit's sustainability performance is ranked by globally recognised indices, including Solactive CarbonCare Asia Pacific Green REIT Index, the iEdge SG ESG Leaders and iEdge ESG Transparency Indexes. As an industry leader, Ascendas Reit will continue to raise our ambitions in adopting meaningful ESG practices and enhancing sustainability in the industrial real estate sector.
Creating Sustainable Value
The COVID-19 pandemic has posed unprecedented challenges to businesses and communities worldwide over the past two years. The introduction of COVID-19 vaccines has helped many nations in their fight against the disease and we have started to see economies recover and borders reopen to international travel.
Ascendas Reit's business remained resilient despite the challenges of the pandemic. We concentrate on the acquisition of good quality and accretive properties while managing capital prudently to create value for all Unitholders. We maintain a welldiversified portfolio in developed markets across different geographic locations and asset classes. Our portfolio of over 1,570 customers across more than 20 industries also reduces customer concentration risk and exposure to any one industry.
Sustainability is central to Ascendas Reit's business strategy. With the introduction of the 2030 SMP, a series of long-term targets have been established across the areas of energy and water usage, carbon emissions, and waste generation. To align with CapitaLand's objective, Ascendas Reit introduced a new long-term target this year - to achieve a minimum green rating for all its existing (owned and managed) properties worldwide by 2030. Green certifications for new acquisitions and developments2 would also have to meet the minimum green rating of Green Mark GoldPLUS in Singapore, while overseas properties would need to obtain certification by a green rating system administered by a national government ministry/agency or a Green Building Council recognised by the World Green Building Council (WGBC)3.
Commitment towards reducing environmental footprint
Building upon the success of the solar installations at six properties in Singapore, additional solar panels were installed at 37A Tampines Street 92, Singapore, in March 2021. This added a further 0.24 GWh of annual solar energy capacity to the existing 11.2 GWh. Ascendas Reit will commence the second phase of solar panel installations in Singapore in 2022.
Ascendas Reit continues to hold the largest number of Building and Construction Authority (BCA) Green Mark building certifications among S-REITs. Our global portfolio includes 49 green-certified properties. Of note, Ascendas Reit completed the development of Grab's Headquarters in Singapore in July 2021, and the property achieved a BCA Green Mark GoldPLUS certification.
- Refers to Ascendas Reit's owned and managed properties. If this is not achievable immediately, capital expenditure will be set aside to enhance the properties to attain green certificates in the future.
- Includes certifications for new building construction, core & shell, design and as-built etc.
Aside from minimising emissions from its properties, Ascendas Reit also encourages our community to reduce their carbon footprint. In 2021, 36 additional EV charging points were installed in Singapore, bringing the total to 76 charging points across 16 properties. Across our global portfolio, there were 227 EV charging points as at 31 December 2021 (31 December 2020: 138).
On the sustainable finance front, we continue to leverage on our Green Finance Framework to improve financial flexibility and resilience. In 2021, Ascendas Reit secured an additional S$811.4 million in green USD and AUD bank loans and entered into an inaugural S$203.0 million (US$150.0 million) green interest rate swap. As at 31 December 2021, Ascendas Reit has approximately S$1.2 billion (~20% of its total borrowings) worth of green financing instruments comprising green bond, green perpetual securities and green loans.
Customer engagement and community involvement
Ascendas Reit strives to foster a sense of community among employees, customers as well as the wider community. Digital outreach events organised by CapitaLand continues to be the main channel of customer engagement. An example is Tabao Thursday Series which features a series of online webinars and workshops covering a wide range of topics on health, wellness, interest groups and festivities. Campaigns were also held via your Workspace Community (yWC) which serves as platform to enable, promote and communicate with customers to build a more vibrant, tight-knit CapitaLand community.
Customers and their staff are provided with opportunities to volunteer alongside the Manager in signature events such as the #GivingAsOne campaign which aims to uplift lives of vulnerable groups through virtual workshops, as well as #LoveOurSeniors which involves packing and delivery of care packs, meals and bread to seniors. The Manager's employees also participated in Temasek Foundation's nationwide mask distribution initiative while the Manager made available Aperia Mall to be one of the venues for mask collection.
Upholding best practices in corporate governance
Good corporate governance is the cornerstone of every business. At Ascendas Reit, we seek to adopt best practices so as to maintain effective leadership, structure and overall culture within the organisation. In October 2021, the Board established a Nominating and Remuneration Committee and also constituted a fully independent Audit and Risk committee.
We were heartened to receive the Special Edition Corporate Excellence and Resilience Award (in the category of companies with market capitalisation of S$1 billion or more) at the Singapore Corporate Awards 2021. Ascendas Reit was also runner-up for the Singapore Corporate Governance Award at the Securities Investors Association (Singapore) (SIAS) Investors' Choice Awards 2021 under the REITs and Business Trusts Category.
For two consecutive years, GRESB rated Ascendas Reit an A and ranked us 1st amongst Singapore industrial REIT peers for Public Disclosure. This year, Ascendas Reit also moved up five spots from 8th position to be ranked 3rd on the Singapore Governance and Transparency Index 2021 (REITs and Business Trust Category). Our commitment towards transparency, disclosure and communications is reflected by our leading positions in these listings.
Sustainability During COVID-19
NAVIGATING COVID-19 WITH STAKEHOLDERS
Ascendas Reit is committed to upholding social responsibility and managing social risks and opportunities among its key stakeholder groups. The safety and well-being of its stakeholders is a key priority. Hence, immediate response and support were taken to address emerging issues through a series of precautionary measures that are summarised in the table below:
MANAGING SUSTAINABILITY AS A GROUP
In 2020, CapitaLand unveiled its 2030 Sustainability Master Plan (2030 SMP) to elevate its commitment towards global sustainability in the built environment. The 2030 SMP comprises three key pillars - Build portfolio resilience and resource efficiency, Enable thriving and future-adaptive communities, and Accelerate sustainability innovation and collaboration. CapitaLand drives sustainability efforts in the ESG pillars, enabling it to create a larger positive impact for the environment and society.
As a CLI-sponsored REIT, Ascendas Reit aligns its sustainability objectives and strategies with the Sponsor. It is committed to improving the economic and social well-being of its stakeholders through management of human capital, asset, portfolio operations and project development. Ascendas Reit also considers innovation as a key driver towards ensuring commercial viability without compromising the environment for future generations. The Manager works closely with the Asset & Property Managers in carrying out these strategies and relevant activities across its portfolio where possible.
CapitaLand has identified five pathways to achieve its sustainability objectives. Ascendas Reit is aligned with these objectives and will continually adapt its strategies as technologies evolve and new scientific data become available:
1. Integrate sustainability in CapitaLand's real estate life cycle
From the earliest stage of investment process, to design, procurement, construction, operations and redevelopment or divestment, sustainability targets will be embedded in policies, processes, best practices, and key performance indicators of its business operations.
2. Strengthen innovation and collaboration to drive sustainability
CapitaLand will continue to source globally for new ideas and technologies to meet its sustainability ambitions and work with like-minded partners to create shared values.
3. Leverage sustainability trends and data analytics
This allows CapitaLand to track critical performance and progress in water usage, waste management, energy consumption, carbon emission, and health and safety. These measurements along with social indicators are key to driving performance improvement across its operating properties and development projects.
4. Monitor and report progress to ensure transparency
As CapitaLand tracks its sustainability progress, it will continue to validate its sustainability performance by external assurance and align its Global Sustainability Report to international standards.
5. Increase engagement and communication with key stakeholders
It is key to build awareness among its employees, investors, customers and communities, and collectively affect transformational change to achieve CapitaLand's 2030 SMP targets.
Push Boundaries of Change
To push the boundaries of change, CapitaLand will transit to a low-carbon business that is aligned with climate science. In November 2020, it had its carbon emissions reduction targets approved by the SBTi for a 'well-below 2°C' scenario. The targets are in line with the goals of the Paris Agreement to keep global temperature rise well below 2°C in this century. CapitaLand is also developing a new metric, Return on Sustainability, in addition to the regular financial return to measure its ESG impact.
CapitaLand launched the inaugural CapitaLand Sustainability X Challenge (CSXC), the first sustainability focused innovation challenge by a Singapore headquartered real estate company that sources globally for emerging sustainability technologies and solutions in the built environment. The CSXC covers seven challenge statements that reflects the key themes and goals in CapitaLand's 2030 SMP.
CapitaLand aims to be a leader in sustainable finance and targets to secure S$6 billion through sustainable finance by 2030. Proceeds and interest rate savings from its efforts in sustainable finance can also be used to drive more sustainability initiatives and innovations within the CapitaLand.
As a testament to its sustainability commitment, Ascendas Reit has continued to increase its exposure to green-certified assets with the acquisition of the remaining 75% interest in Galaxis in Singapore and 1-5 Thomas Holt Drive in Australia, as well as the development of the Grab Headquarters in Singapore.
The solar installation at 37A Tampines Street 92 was completed in FY2021, increasing the renewable energy capacity of Ascendas Reit's combined solar farm. Further solar installations are being planned for. In addition, the common area facilities of four properties in Singapore and four co-location data centres in the UK / Europe are fully powered by renewable energy. This is part of Ascendas Reit's efforts to increase its usage of renewable energy and contribute towards a low carbon economy.
With regards to sustainable finance, Ascendas Reit has approximately S$1.2 billion worth of green financing instruments comprising green bond, green loans and green perpetual securities as of 31 December 2021.
Measured against global benchmarks
CapitaLand was one of the first companies in Singapore to voluntarily publish an annual Global Sustainability Report (GSR) and externally assure the entire report. Benchmarking against an international standard and framework that is externally validated helps CapitaLand to overcome the challenges in sustainability reporting that may arise from its portfolio of diverse asset types and geographical presence globally.
CapitaLand is also a signatory to the United Nations (UN) Global Compact and its Global Sustainability Report serves its Communication on Progress, which will be made available at www.unglobalcompact.org when published.
For its efforts, CLI is listed in the Global 100 Most Sustainable Corporations Index, Dow Jones Sustainability World Index and Asia-Pacific Index, Global Real Estate Sustainability Benchmark (Global Sector Leader, Diversified- Listed), FTSE4Good Index Series, MSCI Global Sustainability Indexes and The Sustainability Yearbook. CLI Global Sustainability Report 2021 will be published by 31 May 2022.
It will continue to be prepared in accordance with the Global Reporting Initiative Standards: Core option. CapitaLand will continue to apply the Guiding Principles of the International Integrated Reporting Framework and ISO 26000:2010 Guidance on Social Responsibility, and reference the UN Sustainable Development Goals (UN SDGs), and the Sustainability Accounting Standards Board (SASB). CapitaLand also plans to enhance its climate-related disclosure and implementation in line with the Taskforce for Climate-related Financial Disclosure (TCFD). It will continue to be externally assured to AA1000 Assurance Standard. The GSR will cover CapitaLand's global portfolio and staff, including its listed real estate investment trusts (REITs) and business trusts - CapitaLand Integrated Commercial Trust, Ascendas Real Estate Investment Trust, Ascott Residence Trust, CapitaLand China Trust, Ascendas India Trust and CapitaLand Malaysia Trust.
Ascendas Reit strives to emulate CapitaLand's achievements and leadership position in sustainability and will continue to pursue opportunities where it can make a positive and meaningful impact. Ascendas Reit is a constituent of several sustainability indices including the MSCI EAFE Choice ESG Screened Index, the Solactive ISS ESG Screened Paris Aligned Global Markets Index NTR, and the iEdge SG ESG Leaders Index. In FY2021, for the second year in a row, Ascendas Reit scored an 'A' for public disclosure in the GRESB survey, a global real estate sustainability benchmark.
Board, Top Management Support And Employee Involvement
STRATEGIC SUSTAINABILITY MANAGEMENT STRUCTURE
CapitaLand's sustainability management comes under the purview of its Sustainability Council.
The Sustainability Council comprises selected CLI Board's independent directors and members of the CapitaLand's senior management. It is supported by the CLI Sustainability Office and various work teams to drive continued progress and improvement in sustainability. The work teams comprise representatives from CapitaLand business units and corporate functions.
Each business unit has its own Environmental, Health and Safety (EHS) Committee to drive initiatives in countries where CapitaLand operates, with support from various departments. The CEO of the Manager is accountable for Ascendas Reit's EHS performance. The Board of the Manager is updated regularly on Ascendas Reit's sustainability matters.
Within the Manager, there is also a sustainability committee which comprises senior management team members led by the CEO to oversee sustainability directly at the Business Unit level. The Manager works closely with the Asset & Property Managers in carrying out strategies and relevant activities, abiding by CapitaLand's sustainability framework and policies.
Ascendas Reit is guided by CLI's materiality assessment process, which considers issues identified and assessed from the various engagement with stakeholders through a myriad of programmes and channels made available. The Risk and Control Self-Assessment exercise is a critical component through which the manager identifies, assesses and documents material risks and corresponding internal controls. These material risks include fraud and corruption, environmental (e.g. climate change), health and safety, and human capital risks which are ESG-relevant.
Guided by the 2030 SMP, CapitaLand elevated its commitment to global sustainability in the built environment. It has identified and reviewed material issues that were most relevant and significant to CapitaLand and its stakeholders. With the restructuring of CapitaLand into CLI and CapitaLand Development (CLD), the ESG material issues were prioritised based on the likelihood and potential impact of issues affecting business continuity of CLI. For external stakeholders, priority is given to issues important to the society and applicable to CLI.
The Manager has reviewed and adopted CLI's mapping of the material ESG issues under the 2030 SMP Sustainability pillars as shown below as they were deemed to be relevant to Ascendas Reit's business and operating context. For more information on stakeholder engagement, please refer to the Environmental and Manufactured Capital, Human Capital, and Social and Relationship Capital chapters of this report.
PRIORITISATION OF ESG MATERIAL ISSUES
Value Creation And Alignment To United Nations Sustainable Development Goals (UN SDGS)
Ascendas Reit remains committed to creating long-term and sustainable value for its stakeholders. It continues to leverage on the Six Capitals, aligned with that of CapitaLand's - Environmental, Manufactured, Human, Social and Relationship, Organisational and Financial. ESG material issues are grouped into these Six Capitals and mapped against eight UN SDGs that are most aligned with the CapitaLand Sustainability Master Plan 2030 targets, and where it can achieve the greatest positive impact.
ASCENDAS REIT'S VALUE-CREATING BUSINESS MODEL
Ascendas Reit draws on its available pool of funds to invest in properties, carry out asset enhancements and redevelop properties to optimise value for its Unitholders. In FY2021, it delivered a Distribution Per Unit (DPU) of 15.258 Singapore cents, 3.9% higher (15.438 cents before Performance Fee, 5.1% higher), than in FY2020.
For a more details on Ascendas Reit’s financial performance and management of financial capital, please refer to pages 33 to 57 of the Annual Report 2021.
- BREEAM, which stands for Building Research Environmental Assessment Method, is a widely used sustainability assessment method for buildings in areas of sustainable construction, operation, and design. BREEAM scores are categorised across six ratings: Unclassified; Pass; Good; Very Good; Excellent and Outstanding.
- BD+C: Building Design & Construction
Details of Green Financing Instruments and Use of Proceeds
Sustainability Highlights of Green Building Portfolio
9 properties were added to the Green Project Register in FY2021 with a total valuation of S$2.08 billion.
These properties were:
- -  Galaxis, Singapore
- -  1 Thomas Holt Drive, Sydney, Australia
- -  197-201 Coward Street, Sydney, Australia
- -  254 Wellington Road, Melbourne, Australia
- -  108 Wickham Street, Brisbane, Australia
- -  Unit 2, Wellesbourne Distribution Park, UK
- -  Unit 4, Wellesbourne Distribution Park, UK
- -  505 Brannan Street, San Francisco, USA
- -  510 Townsend Street, San Francisco, USA
To encourage the use of electric vehicles, Ascendas Reit has installed additional 16 EV charging points in
Singapore, across the following buildings in the Green Project Register:
- -  Galaxis
- -  The Alpha
- -  Techview
- -  Aperia
- 21 additional EV charging points were installed in 254 Wellington Road, Melbourne, Australia
ENVIRONMENTAL AND MANUFACTURED CAPITAL
Ascendas Reit is aligned with CapitaLand's commitment to minimise the environmental impact and contribute towards achieving the desired positive outcomes that will benefit its stakeholders and future generations.
The Manager strives to incorporate environment sustainability throughout all stages of any AEI, developments and redevelopments. Environmental-friendly features are implemented where appropriate across the properties to improve overall energy efficiency. Monitoring environmental impact is integral to its business operations, as the efficient use and management of environmental resources such as energy, water and waste contributes to the operational efficiency and long-term sustainability of Ascendas Reit.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
CLI had started to align its climate related disclosures with TCFD recommendations in the four key areas of governance, strategy, risk management and metric and targets since FY2017 and further declared its support for TCFD and its recommendations in FY2019.
Ascendas Reit has started taking steps to integrate the recommendations of the TCFD and will continue enhancing its implementation of TCFD recommendations and reporting.
- The CLEAN Future Act was introduced in House in March 2021. It sets a national climate target of net-zero GHG emissions by 2050 and creates requirements and incentives to reduce greenhouse gases through provisions impacting various sectors of the economy such as power, buildings, automotive, ports, manufacturing, oil and gas extraction, waste management and recycling.
MANAGING ASCENDAS REIT'S ENVIRONMENTAL FOOTPRINT
CapitaLand's EMS is a key tool in managing its environmental footprint across its entire portfolio. In Singapore, the Property Manager's EMS is expected to be fully integrated with CapitaLand's EMS by the end of FY2022, to form CapitaLand's EHSMS that is certified to the requirements of ISO 14001 and ISO 45001. Across the portfolio, the Property Managers have also adopted Singapore standards such as bizSAFE Partner, bizSAFE Star and other management systems such as SafeWork Australia National Standards and Model Codes of Practices in Australia. More information on safety-related management systems and practices are discussed under the Human Capital chapter.
Risk Management of Environmental Aspects and Impact
The EMS provides a systematic approach to manage Ascendas Reit's environmental impact and to continuously improve its environmental performance. A key element of the EMS is to identify and manage significant environmental aspects of its business operations that can potentially have a negative impact on the environment. The significance of each environmental aspect and its impact is assessed based on factors such as the likelihood of the occurrence, severity of the impact and control measures implemented.
Ascendas Reit strives to minimise negative impacts such as resource depletion, carbon emissions and waste generation. This is done by setting environmental targets that are linked to the remuneration for employee and the top management and implementing various measures to achieve them. The targets include green building certifications, carbon emissions reduction, renewable energy usage, and green financing.
CapitaLand Sustainable Building Guidelines
In accordance to CapitaLand's Sustainable Building Guidelines (SBG), Ascendas Reit has incorporated environmental considerations throughout all stages of its properties' life cycles. The SBG emphasises four main goals (reducing carbon footprint and energy consumption, enhancing water management, minimising waste generation, and promoting biodiversity) and offers a structured process where respective persons-in-charge are accountable. The SBG is regularly reviewed to ensure continuous improvement.
A key component of the SBG is the mandatory EHSIA which will be carried out before any acquisition or development. The EHSIA focuses on identifying any environmental threats or opportunities related to the project site and its surroundings, covering areas such as floods, biodiversity, air quality, noise, connectivity, heritage, and resources. During the feasibility study and due diligence stage, significant findings of the EHSIA and their cost implications (if any) are incorporated in the investment paper submitted for approval. There are no properties in Ascendas Reit's portfolio located within protected areas and no material biodiversity risk has been identified to date.
Wherever possible, Ascendas Reit strives to preserve the biodiversity of its sites and their surrounding areas. This is done by addressing any distinctive ecological features of the site, taking into consideration nature reserves on or near the site, protecting plant and animal species on the site and removing invasive plant species on or near the site. External consultants will be engaged to provide advice where appropriate.
Biodiversity initiatives are being implemented across Ascendas Reit's properties located in the UK and the USA. In Raleigh (USA), for instance, landscapers monitor and address the presence of invasive species. Landscaping work in Portland and San Diego (USA) primarily focuses on providing drought-resistant hardy plantings that are either naturally occurring or ecologically compatible. A biodiversity project will commence in Wellesbourne Distribution Park (UK) in March 2022; the results of the project will be disclosed in future reports.
Training and Awareness Programmes
To facilitate effective implementation of EHSMS, the Asset & Property Manager team is required to attend training and awareness programmes. In FY2021, the Property Manager team and contractors in Singapore achieved a 94% participation rate on EHS-related training. It is also mandatory for all new employees from the Asset & Property Manager team to go through the EHS policy and EHSMS.
Ascendas Reit’s efforts in addressing environmental issues extends to its stakeholders and the wider community. To drive greater awareness on sustainability, the Manager and Asset & Property Managers engage with customers, service providers and the authorities as partners to foster a strong culture of sustainability. CapitaLand organised its annual Earth Hour Campaign on 27 March 2021 which saw an 85% participation rate across the Singapore properties. At 1-5 Thomas Holt Drive, Australia, a Building Management Sustainability Committee has been established comprising key members from the third-party Property Manager and representatives from eight tenants within the property. This committee meets on a quarterly basis to discuss on the current sustainability initiatives.
The Building Management Sustainability Committee at 1-5 Thomas Holt Drive has rolled out a series of initiatives in FY2021 shown below.
Internal and External Audits
Ascendas Reit has in place an internal audit system to ensure the conformance and effective implementation of its EMS and Occupational Health & Safety (OHS) to ISO 14001 and ISO 45001 international standards respectively. Periodically, for Singapore properties, internal audits are conducted by CLI, while external audits are conducted by a third-party accredited certification body. All major non-conformities that were identified from the internal audit have been closed.
Green Building Rating and Benchmarks
Green building ratings and certifications help assure and demonstrate the quality of Ascendas Reit's portfolio. These ratings serve as an external validation that key environmental aspects have been considered in Ascendas Reit's development and operations. To date, Ascendas Reit has the largest number of BCA Green Mark Properties amongst Singapore REITs at 40 properties and its portfolio comprises 49 green certified properties in total8.
Ascendas Reit targets to achieve green building certifications for all its existing owned and managed properties by 2030 with each property achieving a minimum certification level by a green rating system administered by a national government ministry/ agency or a WGBC recognised Green Building Council. To date, 46.6% or 30.0% of Ascendas Reit's respective managed and total properties by GFA is green certified.
In Australia, 197-201 Coward Street and 108 Wickham Street have maintained their 5.0 Star and 5.5 Stars NABERS Energy Ratings9 respectively. On 13 January 2021, Ascendas Reit acquired a property, 1-5 Thomas Holt Drive, in Sydney, Australia which has attained the 5.5 Star (1 Thomas Holt Drive) and 4.5 Star (3 Thomas Holt Drive) NABERS Energy Rating respectively. 500 Green Road, a newly completed logistics property (practical completion achieved on 11 February 2022) located in Brisbane is expected to achieve a 5-Star Green Star Design & As Built rating and MQX4, a suburban office located in Sydney is targeted to achieve a 6 Star Green Star Design & As Built rating and 5.5 Stars NABERS Energy Rating when it is completed in 2022.
In light of the stricter regulations to raise the minimum energy efficiency standard in the UK, the Property Managers are taking steps to comply with the Energy Performance Certificate (EPC) rating requirements by 2030. Two buildings at Wellesbourne Distribution Park have attained BREEAM New Construction Excellent4 rating. Ascendas Reit's four co-location data centres in the UK and Europe presently hold ISO 50001 energy management accreditation.
In USA, properties in Portland and San Diego undergo an annual benchmark based on their ENERGY STAR Score10. In FY2021, five buildings across the portfolio have attained an Energy Star Rating, which means that they have attained a score of 75 or higher. In San Diego, 15445 Innovation Drive obtained a LEED Gold (Building Operations & Maintenance) certification.
- This includes non-Ascendas Reit managed properties.
- The NABERS (National Australian Built Environment Rating System) Energy Rating is a rating system which measures building performance against similar buildings. NABERS rating are measures on a scale of zero to six stars.
- The ENERGY STAR score is used to assess and benchmark building's energy performance against similar buildings in the USA on a scale of 0-100. A score of 75 or higher would mean the building is ENERGY STAR certified.
- Non-Ascendas Reit managed property.
- Temporary Occupation Permit (TOP) on 7 January 2022.
- O+M: Operations and Maintenance
Beyond providing environmentally sustainable properties and operating according to best practices, Ascendas Reit understands the important role that end-users of its buildings play. Therefore, the Manager seeks to collaborate with tenants to influence and support their sustainability goals. Ascendas Reit has started to implement green leases for its portfolio in Singapore. Green leases have been adopted by certain tenants in 51 (about 78.5%) of the properties under the Manager's operational control. Reviews are undertaken regularly to ascertain the suitability of green leases for the remaining buildings, with a long-term plan to implement it to more tenants across all buildings in the global portfolio.
The building sector has been identified as a major contributor to global energy use and carbon emissions. Ascendas Reit aims to reduce its environmental impact through monitoring of its carbon emissions, improving energy efficiency of its properties as well as deploying renewable energy and low-carbon intensive energy where possible.
With the successful transition to CapitaLand's cloudbased Environmental Tracking System (ETS), Ascendas Reit is now able to monitor energy and water consumption, carbon emissions and waste generation across Singapore properties via one main platform. The data would allow Property Managers to conduct analysis against set targets and past trends to better understand consumption patterns and identify potential areas to enhance efficiency of its properties.
While the COVID-19 situation remained uncertain during the year, higher occupancy rate and footfall have been observed as compared to FY2020. In Singapore, Australia and USA, borders are reopening for travellers, and tenants have begun to gradually return to offices as the countries eased their COVID-19 restrictions. Ascendas Reit will continue to monitor its usage closely and reassess its performance in following years for suitable comparison.
With the improvement of the COVID-19 situation coupled with the easing of restrictions, Ascendas Reit was able to implement several energy conservation initiatives across its portfolio during the year.
- The data centre portfolio was only acquired in March 2021 and thus the data disclosed is from March to December 2021. Full year data will be included in subsequent reports.
The total energy consumption in the Singapore operations rose slightly from 86.29 million kWh in the comparative period a year ago to 89.31 million kWh16 in FY2021. This difference is mainly due to the inclusion of consumption data from Galaxis17 since the completion of the acquisition of the remaining 75% interest in the property on 30 June 2021.
However, energy intensity in the Singapore portfolio improved from 46.43 kWh/sq m to 46.11 kWh/sq m in FY2021. Total carbon emissions (Scope 1 and 2) reduced by 3.38% to 33.44 kilotonnes CO2e while carbon emissions intensity decreased by 7.30% to 17.26 kg CO2e/sq m respectively.
The introduction of Singapore's Phase 2 heightened alert measures in FY2021, as well as general safe-distancing measures, resulted in lowered footfall across all Ascendas Reit's properties compared to pre-COVID-19 periods. This led to a drop in energy use due to reduced level of activities within the properties. As such, FY2021 performance would not be representative nor comparable against a normal operating year. Moving forward, Ascendas Reit will re-assess its performance and introduce like-for-like comparisons when the situation has stabilised.
About 8.22% (7.34 million kWh) of Ascendas Reit's total electricity use in Singapore was from renewable energy sources, which helped to mitigate about 2,995 tonnes of carbon emissions in the year.
- 2020 data published in ISR2020 was based on estimates whereas 2020 data in this report has been revised to reflect the actual consumption.
- This includes 5.90 million kWh of district cooling. District cooling has been an energy source for seven of Ascendas Reit’s Business and Science Park properties since FY2019, but was not previously included in the energy consumption. From FY2021 onwards, energy consumption and carbon emissions due to district cooling will be represented in the year-on-year energy and emissions graphs, as well as considered in the calculation of the intensities.
- Data from Galaxis is from July to December 2021 after the acquisition of the remaining 75% interest.
Energy consumption (which includes electricity, diesel and gas usage) in the Australian operations rose from 9.09 million kWh in FY2020 to 11.14 million kWh in FY2021. This is attributable to the addition of 1-5 Thomas Holt Drive (acquired in January 2021) and data availability at 254 Wellington Road in FY2021. In FY2021, there was an improvement in energy intensity 204.08 kWh/sq m to 114.35 kWh/ sq m, contributed by the acquisition of more energy efficient properties. 1 and 3 Thomas Holt Drive have attained a 5.5 Star and 4.5 Star NABERS Energy Rating respectively while 254 Wellington Road has a 5-Star Green Star Design & As-Built rating.
Total carbon emissions (Scope 1 and 2) increased from 7,121 tonnes in the comparative period a year ago to 8,252 tonnes CO2e in FY2021. However, carbon emissions intensity reduced from 159.92 kg CO2e/sq m to 84.69 kg CO2e/sq m in FY2021.
United Kingdom / Europe
A portfolio of 11 data centres in the UK / Europe were newly acquired in March 2021, of which four properties (three in UK and one in Amsterdam) are under Ascendas Reit's operational control.
All the energy consumed was from renewable sources. A total of 1.4618 million kWh was used in FY2021, with an energy intensity of 47.80 kWh/sq m. Total carbon emissions (Scope 1 and 2) were at 158 tonnes CO2e and a corresponding carbon emission intensity at 5.17 kg CO2e/sq m. A total of 185 tonnes CO2e were avoided in FY2021 as 100% of the premises is powered by renewable energy.
The number of properties across the portfolio in USA which were under operational control remained fairly stable across FY2020 and FY2021. However, energy consumption (which includes diesel and natural gas) was 25.46 million kWh in FY2021, a 5.13% decrease from FY2020. Energy intensity was recorded at 116.83 kWh/sq m, a 1.33% improvement from 118.41 kWh/ sq m in FY2020. The drop in energy consumption is mainly attributed to the lower footfall resulting in lower usage of EV charging stations in San Diego, installation of LED lights and optimisation of building operations across the portfolio which resulted in energy savings. Total carbon emissions (Scope 1 and 2) were at 7,688 tonnes CO2e and the corresponding carbon emission intensity was 35.28 kg CO2e/sq m, a 4.07% drop from the prior year.
- 100% renewable energy used for daily operations (with the exception of Croydon where natural gas is used to heat up common areas) and non-renewable energy (natural gas and diesel) is used for maintenance purposes and to power emergency back-up generators only. The fuel used has been incorporated into energy, GHG emissions and its respective intensities for completeness.
Most of Ascendas Reit's properties are located in water-stressed areas where growing pressures of climate change continue to pose greater threats to society. As such, Ascendas Reit adopts a strategic approach to water management and quality so as to enhance the efficiency, resilience and long-term value of its portfolio. The Manager is committed to reducing total water consumption, reusing and recycling water where possible as well as preventing water pollution. Over the years, numerous water-saving initiatives have been introduced to reduce overall water intensity with an aim to achieve cost savings as well.
All of Ascendas Reit's properties' water consumption is derived from municipal supplies and majority of its water usage goes to cooling towers, toilets, washing activities and landscaping. All wastewater is responsibly disposed of via municipal facilities.
The Asset & Property Managers conduct regular checks of water features and monitor water usage closely so that any fluctuations or anomalies can be identified and acted upon promptly. Across the portfolio in Australia and USA, the third-party facilities managers continue to actively engage with customers to raise awareness about water conservation and encourage implementation of water saving initiatives within their premises.
The table below summarises some of the initiatives implemented within Ascendas Reit's properties to ensure efficient operations and minimise water wastage.
A slight increase in water consumption in Singapore operations was recorded from 923 thousand m3 in FY2020 to 929 thousand m3 in FY2021. However, the water intensity has decreased from 0.51 m3/sq m to 0.48 m3/sq m mainly due to the larger GFA considered during the year with the completion of the acquisition of the remaining 75% interest in Galaxis on 30 June 2021.
Water consumption was recorded from 51.1 thousand m3 in FY2020 to 65.51 thousand m3 in FY2021. This is largely due to the inclusion of newly acquired asset 1-5 Thomas Holt Drive and data availability at 254 Wellington Road with tenants returning to their offices during the start of the year. Water intensity was recorded at 0.67 m3/sq m as compared to 1.15 m3/sq m in FY2020. This is attributable to the larger GFA considered in the calculation of the intensity as compared to FY2020.
United Kingdom / Europe
Water consumption was recorded 6.38 thousand m3 and water intensity at 0.21 m3/sq m.
Water consumption was recorded at 156 thousand m3 which was 1.37% decrease from FY2020. This is due to lower occupancy as most staff were still working remotely. Additionally, the use of drought resistant plants at San Diego helped to reduce watering frequency and upgrades were made to increase efficiency of irrigation system at Portland. Water intensity was recorded at 0.71 m3/sq m, compared to 0.70 m3/ sq m in the previous year.
- Water data for 15051 Ave of Science in San Diego is an estimate from previous years
Ascendas Reit aims to play its part by managing waste at its properties responsibly. As waste generated at its operational properties comes mostly from its customers, guests and the general public, Ascendas Reit engages its stakeholders through various means to reduce and recycle waste. Recycling bins are made available at its properties for its customers.
In Singapore, waste is sent to waste-to-energy incineration plants and to recycling facilities. In Australia, waste is disposed via three methods - recycling, composting and sent to landfills. Across the portfolio in the USA20 - with the exception of San Francisco, which also has a broad composting program - most of the waste is sent to landfills as well as recycling facilities while yard waste collected is recycled and sent to farms. Similarly in UK / Europe, waste is sent to landfills and recyclables are sent to facilities to be recycled or processed for further uses. Tenants in Europe's data centres manage their e-waste through licensed third-party waste disposal companies.
In collaboration with National Environment Agency (NEA), the “Say Yes to Waste Less” campaign on waste management was held for a third run in FY2021. From 27 September to 7 November 2021, a total of 70 Ascendas Reit properties participated where posters encouraging food waste reduction and to use less disposables were displayed across e-directories and notice boards.
In FY2021, a total of 14,638 tonnes of non-hazardous waste was collected across Singapore21, UK / Europe and USA, of which 4% was recyclable waste comprising of paper, plastic metals and other materials.
In Singapore, Ascendas Reit works with a waste disposal term contractor who operate a Materials Recovery Facility. They manage the usual recyclable products such as paper, plastics and metal. Landscape waste from buildings are sent for recycling by the landscape maintenance contractors for reuse as mulch. These waste materials will be treated before being sold off to manufacturers as recycled input materials. Ascendas Reit continues to explore pilot projects of food waste digestors and paper recycling stations to showcase sustainability efforts of the Group. More details of these initiatives will be shared in subsequent reports.
- Waste data from the USA is estimated based on the size and quantity of the waste bins and the frequency of pickup.
- This excludes waste data from 18 Woodlands Loop, 35 Tampines Street 92, and Cintech II as they are managed by the customers.
Paper Consumption Management in CapitaLand's Corporate Office
Since 2020, all corporate offices under CapitaLand have embarked on the following activities to reduce paper waste: implementing e-signatures, setting of paperless targets for corporate functions, digitalisation of documents, and deploying recycling bins (including secured bins) at the corporate office to encourage staff to recycle used paper.
Separately, the Manager actively promotes environmentally friendly practices such as: returning used photocopier toner cartridges to the vendor for recycling and using FSC certified paper (i.e., from sustainably managed forests, recycled and controlled sources) in its corporate offices. There is no printing of Ascendas Reit's Integrated Sustainability Report, which is available on its website at https://ir.ascendas-reit.com/sustainability_reports.html.
- Refers to Ascendas Reit's owned and managed properties.
Health, Safety And Security Protection
Safeguarding the health and safety of employees, asset and property managers, customers, contractors, suppliers and the communities within Ascendas Reit's properties remains a top priority. The Manager believes that the management of OHS is a key part of risk management and has the potential to enhance staff productivity, morale and overall well-being.
Ascendas Reit seeks to ensure the individual and collective well-being of its stakeholders by implementing all necessary measures on health, hygiene, safety and security at its properties. The approach to health and safety is guided by its OHSMS which is accredited to ISO 45001. It sets out a rigorous process of identifying and reviewing OHS hazards, assessing their risks, setting policies, ensuring accountability, developing action plans and engaging various stakeholders.
Top Management Commitment and Staff Involvement
CapitaLand champions OHS with commitment from the top management and staff participation through the OHSMS and stakeholder engagement activities. All staff assume personal responsibility towards OHS and are encouraged to raise any instances of OHS-related incidents which can include non-compliances and non-conformities to the respective Business Units (BUs). This incidents listing is available and updated within the CapitaLand intranet. The CEO of the Manager is accountable for the overall OHS performance.
Additionally, the Property Manager's Integrated Management System (IMS) includes provisions for the consultation and participation of workers, such as determining the mechanisms for worker involvement and providing time, training and resources. The IMS provides staff with an additional channel for reporting of OHS-related incidents.
Key Performance Indicators (KPIs) Tied to Remuneration
The Manager incorporates OHS KPIs which are linked to the remuneration of all its employees.
Internal and External audits
To ensure that the IMS is effectively implemented and maintained, internal and external audits are conducted periodically, and reviewed by CapitaLand's top management. Results of the analysis and evaluation will be considered as part of continual improvement.
Workplace Safety and Health (WSH) Initiative
The Manager puts in place several WSH initiatives to promote the right safety culture aimed at preventing or mitigating health and safety impacts. This year, Ascendas Reit completed the installation of fall prevention measures on unprotected edges for water tanks. For more details of other WSH initiatives in FY2021, please refer to Spotlight: WSH Initiatives in FY2021 on page 42.
CapitaLand seeks to provide a safe work environment conducive to staff well-being. Occupational health services promoting physical and mental health are available to employees; these include health screenings and talks, wellness programmes, as well as physical fitness classes. Please refer to the Employee Engagement section on pages 49 to 51 for more details on wellness-related activities.
CapitaLand contributes actively to the national efforts of fostering workplace health and safety, and is a member of the Workplace Safety and Health (Construction) committee in Singapore. The latter is responsible for workplace health and safety issues. Employees, customers and suppliers (e.g. security personnel, cleaning contractors) receive training on emergency response, while customers undergo periodic briefings and emergency evacuation drills to keep abreast of the response plan.
CapitaLand's EHS Policy and House Rules are shared with supply chain vendors to familiarise them with the safety requirements to adhere to while working in Ascendas Reit's properties. Should an activity contain OHS hazards that may affect any employee, customer or visitor to the buildings, a risk assessment will be submitted. Control measures will have to be implemented prior to commencement of the activity to minimise the risk or hazards.
Measures to mitigate risks of rising threats
Ascendas Reit stands prepared to face rising threats such as terrorism, fire incidents, cyber risks and pandemic flu outbreaks by putting in place appropriate measures and crisis management plans. These plans outline the prevention, detection, response and business recovery and resumption measures to minimise the impact of adverse business interruptions or unforeseen events on Ascendas Reit's operations. In FY2021, more than 17.8% of employees attended at least one OHS related training which covers workplace safety, emergency preparedness and response. All employees were also briefed on how to respond to OHS incidents at the workplace.
Amid changes in the pandemic outbreak, the Manager ensured regular review of its pandemic-related SOPs to maintain its relevance and applicability to Ascendas Reit's operations. This is done by closely aligning the SOPs with the latest regulations rolled out by the local health authority and respective agencies. Across the other countries, the third-party Property Managers have also followed suit and introduced relevant SOPs on pandemic management to handle situations such as when a COVID-positive case has been detected within its premises and ensuring regular disinfection onsite. With international borders opening towards the end of FY2021, CapitaLand's Human Resource (HR) department had also disseminated medical and travel advisories to all staff. Information on pandemic planning is also made readily available for all staff on the intranet.
FY2021 Occupational Health and Safety Targets and Performance
In FY2021, there were zero work-related fatalities, high-consequence injuries23 and occupational diseases recorded. However, there was one accident24, involving a staff from the Property Manager who suffered a sprained knee. This accident was reportable to the Singapore Ministry of Manpower (MOM). Thorough investigation was conducted to prevent recurrence and all necessary follow-up actions have been undertaken in line with the Manager's incident reporting and investigation guidelines and procedures. During the year, there were also seven near-miss events recorded where glass panels / doors were discovered to be shattered. Fortunately, there were no injuries. Since then, the Property Manager has barricaded the affected areas and rectifications have been made. In FY2021, the recordable work injury rate was at 8.025.
- A high-consequence injury is a work-related injury that results in a fatality or an injury from which the worker cannot, or does not, or is not expected to recover fully to pre-injury health status within 6 months.
- Accidents refer to all incidents, including those resulting in injuries and non-injury cases. Only one accident was required to be reported to the local authorities.
- Recordable work-related injury rate is calculated by number of recordable work-related injuries over the number of hours worked, per million man-hours worked.
- Includes accidents in Singapore and overseas properties.
COVID-19 Health and Safety Measures
With the emergence of the new variants and the resurgence of COVID-19 cases in FY2021, Ascendas Reit remained vigilant and maintained all the necessary health and safety measures within the properties to safeguard the well-being of the community. These include the hygiene measures and technological initiatives leveraged last year:
- Thorough disinfection of common areas
- Antimicrobial coating of high contact points
- Compliance with precautionary measures in accordance with the authorities’ guidelines, e.g. temperature screening for all customers and visitors27, travel/health declaration, sanitisers, intensify cleaning and disinfection
- In several AEIs throughout the USA, touchless faucets and soap dispensers were installed in common area bathrooms within multi-tenanted buildings in San Diego, Portland and Raleigh, to minimise contact with surfaces
Throughout FY2021, Ascendas Reit maintained close engagement with customers—regularly updating them on the latest safety, hygiene, and maintenance steps undertaken by the property managers via email. This provides the customers with peace of mind, reassuring them that common areas of the properties are safe and ready for them as they gradually return to their offices.
SUPPLY CHAIN MANAGEMENT
Screening for Sustainability Criteria
CapitaLand works closely with its contractors and suppliers who are committed to high quality environmental, health and safety standards. Contractors are only appointed upon meeting CapitaLand's stringent selection criteria.
The Manager adopts CapitaLand's Sustainable Supply Chain Code of Conduct to influence its supply chain to operate responsibly in the areas of anti-corruption, human rights, health and safety, as well as environmental management.
A copy of CapitaLand's EHS policy will be sent to all vendors which requires them to comply with local government and other legal requirements where applicable to the scope of services provided. The onus lies on vendors to ensure that their employees have received sufficient training or are briefed on EHS measures. In cases where activities rendered may affect the occupational health and safety of CapitaLand staff or visitors, vendors are required to submit a copy of their risk assessments. For contractors that carry out construction works, they are expected to adhere to requirements such as deploying personal protective equipment, reporting of safety incidents and proper disposal of debris and toxic waste.
Depending on the nature of their services, Property Management suppliers in Singapore are required to meet sustainability standards - e.g. ISO 9001, ISO 14001, bizSAFE Level 3 or the National Environment Agency Clean Mark Silver (for cleaning service providers), attain a minimum B grade licence issued by the Police Licensing and Regulatory Department (for security guards services), be registered with the NParks Centre for Urban Greenery and Ecology (for landscapers), and adopt Progressive Wage Model (for cleaning, security, landscaping and lift maintenance services).
Since the deployment of Zycus (an online Procure-to-Pay platform) in Ascendas Reit's Singapore operations, procurement activities are digitalised, allowing documents to be submitted virtually and approvals to be sought online. Apart from Zycus, the Manager also uses Yardi in its Singapore operations. Yardi is an end-to-end property management software platform combining financial and property management information in a single, centralised database. The Manager leverages on Yardi to monitor and track performance of suppliers, retrieve evaluation results of past, present and new suppliers, while at the same time, it provides suppliers with information on how they can improve on their services. In Singapore, surprise night inspections for security guards also allow the Manager to monitor suppliers' performance, which is subsequently reflected in the suppliers' performance rating.
In FY2021, all new suppliers that were appointed for Ascendas Reit's Singapore property management services were screened using social and environmental criteria via Zycus. During vendor registration, financial checks are performed based on general financial criteria for all suppliers. Tenders valued above S$200,000 will be shortlisted to undergo CapitaLand's Comprehensive Financial Check to ensure fiscal sustainability.
- Implemented up till 21 August 2021 when the Government announced that this measure is no longer mandatory.
- Refers to vendors appointed by the procurement team for Ascendas Reit’s Singapore property management services.
MANAGEMENT OF HUMAN CAPITAL
CapitaLand has an integrated human capital strategy to recruit, mould and motivate its workforce and the Manager is aligned with CapitaLand's approach and policies. Key performance indicators (KPI), both for the business and people development, ensure that performance goals are aligned with CapitaLand's business objectives. CapitaLand's staff, which includes employees of the Manager, are provided with appropriate development opportunities to help them flourish in their jobs and unlock their full potential.
Anti-Child Labour and Anti-Forced Labour
CapitaLand is committed to be a workplace of choice for its staff. It is a signatory of the United Nations Global Compact and is committed to the 10 principles in the areas of human rights, labour, environment and anti-corruption. It stands firmly against any form of coerced labour and discrimination, and adheres to international human rights principles including the Universal Declaration of Human Rights and the International Labour Organisation (ILO) Conventions.
Ascendas Reit is also aligned with CapitaLand and does not condone any form of coerced labour and discrimination in the workplace. In FY2021, there was no reported incident relating to discrimination, child labour or forced labour in Ascendas Reit, and the Manager had no employees below the age of 16.
Fairness and Diversity
CapitaLand embraces diversity and inclusivity regardless of gender, race, nationality and family status. The Manager believes that all employees can make strong contributions based on their diverse talent, expertise and experience. Ascendas Reit, as a CapitaLand-sponsored Reit, upholds this commitment and complies with the five key principles of fair employment as a signatory of the Employers Pledge with the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP).
The Manager identifies talent internally and externally to build bench strength as well as talent pipeline for leadership succession planning. It recruits talent through a network of local and overseas universities, and attracts young talent at an early stage through its graduate development programme. Apart from fresh graduates, the Manager also employs experienced and mid-career professionals and industry veterans.
In FY2021, 14 new hires29 joined the Manager (31%) while 11 employees left30 the Manager (24%).
- The 14 new hires comprised ten females (71%) and four males (29%). 43% of the new hires are below 30 years old and 57% between 30-50 years old. There were no new hires above 50 years old.
- The 11 turnovers comprised seven males (64%) and 4 females (36%). 9% of the turnovers are below 30 years old and 91% between 30-50 years old. There were no turnovers above 50 years old.
CapitaLand has a re-employment policy of extending employment to staff who have reached the mandatory retirement age but are still able and intend to continue contributing. There are programmes in place to facilitate the continued employability of employees such as pre-retirement planning for intended retirees, re-training for those intending to continue working after retiring, severance pay, job placement services, as well as training and counselling on transitioning to a non-working life. The Manager is also aligned with the policy and will support such programmes for employees who become eligible.
Respect for Freedom of Association
CapitaLand abides by the Industrial Relations Act that allows employees to be represented by trade unions for collective bargaining. This allows an avenue for employees to seek redress in cases of industrial disputes.
All employees sign employment contracts with clearly stated employment terms and conditions for employees to understand. This includes employment terms on salary and allowances, (statutory) contributions/ deductions, leave entitlements, insurance and medical benefits etc.
To ensure that the Manager remains competitive and able to attract and retain talent, external consultants are engaged to benchmark compensation packages against the relevant talent markets. Salaries are reviewed against the benchmarks, and the specific job scope and responsibilities of each employee are taken into consideration. Beyond base salaries, other components of the compensation packages encompass short-term cash bonuses and long-term equity-based reward plans. All regular full-time employees undergo an annual performance review where there is an open discussion on performance, areas for improvement, developmental needs and career plans.
The Manager rewards and motivates employees with a comprehensive and competitive compensation package and benefit programmes. Employees at managerial levels are also eligible to receive performance-based long-term share awards. The share awards will vest over three years subject to the achievement of pre-determined targets. The performance and remuneration of key management executives are based on both quantitative and qualitative targets within the balanced scorecard framework, including their efforts in building management bench strength and talent.
More than 55% of employees have been with the Manager for five years or longer. Exit interviews are also conducted with resigning staff as part of continuing efforts to improve retention policies and initiatives.
Positive Work Environment
CapitaLand recognises that a positive work environment is essential to attract, motivate and retain talent. Its total well-being programme promotes personal development, health and work-life harmony. Initiatives include a flexible medical and benefits plan, flexible work arrangements, staff engagement initiatives and subsidised rates for staff staying at Ascott's serviced residences and hotels. Part-time staff are entitled to the same benefits on a pro-rata basis. CapitaLand advocates a pay for-performance philosophy to drive ownership of collective goals, leading to a high-performance culture which creates long-term value for Unitholders. Its robust performance management system ensures that all staff receive regular performance and career development reviews.
The Manager supports such programmes and initiatives to foster employee well-being and promote individual ownership and accountability. Through the flexible work arrangement policy, employees may apply for flexible work hours, work from home or part-time work arrangements depending on their needs.
Employees are also entitled to parental leave. In FY2021, one employee went on maternity leave and one on paternity leave.
CapitaLand is committed to providing meaningful jobs for its staff, including employees of the Manager. This is in line with the revised Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment issued by the Singapore MOM together with its tripartite partners, Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC).
Employment contracts with clearly-stated terms and conditions are signed with all confirmed employees. In the event of termination or employee resignation, a minimum notice period of one month must be fulfilled, depending on the employee's job grade.
Profile of Employees
As at 31 December 2021, the Manager had a total employee strength of 45 full-time permanent employees in Singapore, comprising 18 males and 27 females.
Employee Charts for FY202131
- 51.5% of the employees who are manager level and above are women.
CapitaLand aims to provide a work environment that is safe and contributes to the well-being of its staff, including employees of the Manager. Since FY2020, CapitaLand has organised more online programmes to support staff to better manage stress. More than 40 programmes were organised in FY2021 with over 1,500 participants attending these virtual workout sessions and talks. Employees of the Manager were also invited to take part in these programmes.
The Manager recognises the importance of a highly engaged workforce in contributing to positive business outcomes and organisational excellence. Employee engagement is carried out through regular CapitaLand Staff Communication Sessions, townhalls organised by the Manager, and the CapitaLand intranet, which updates employees on the latest development, employment policies, benefits, corporate governance and ethics.
Recognition and performance activities such as branding slogan contest and long-service awards serve to recognise employee contribution and service. Under CapitaLand's robust performance management system, which the Manager also adopts, performance and career development reviews are conducted annually for all full-time employees, involving open discussions on the employee's performance, developmental needs, career plans and areas for improvement.
The Manager practises an open-door policy, allowing all employees to obtain a fair review and a prompt response to problems or concerns relating to any aspect of their employment. This includes harassment, grievance handling and whistle-blowing policies that are applicable to all employees. Employees can also raise their concerns to a higher level of management or to the HR department.
The Manager recognises that employee engagement is even more important as employees shift to remote ways of working. The following table provides the key highlights of employee engagement activities in FY2021.
Learning and Development
Appropriate training is provided to employees to improve their knowledge and expertise to contribute meaningfully and effectively to Ascendas Reit's performance. CapitaLand has an in-house training hub, CapitaLand Institute of Management and Business (CLIMB), which supports the training and development needs of staff, including employees of the Manager. Besides on-the-job exposure, there are many opportunities for job rotation, mentoring and coaching to allow employees to reach their full potential. These programmes include CapitaLand Onboarding Programme, Data Protection Training, Managing Fraud, Bribery and Corruption, among others.
In compliance with Monetary Authority of Singapore (MAS) regulations, Capital Markets Services (CMS) license holders also attend REIT Management courses on an ongoing basis organised by REIT Association of Singapore (REITAS), contributing to Continuing Professional Development (CPD) training hours. In FY2021, 98% of the Manager's employees attended at least one learning event, and the average number of training hours completed by each employee for the year was 22 hours.
Average Training Hours per Employee by Gender and by Seniority
SOCIAL AND RELATIONSHIP CAPITAL
The Manager and Asset & Property Managers engage with stakeholders all year round to understand their needs. Stakeholders are groups that Ascendas Reit significantly impacts and those with a vested interest in Ascendas Reit's operations. Key stakeholders include employees, regulators, existing and potential customers, suppliers and contractors, the investment community and the local community. The Manager and Asset & Property Managers use various engagement channels to gather, understand and respond effectively to these stakeholders' views and concerns
Ascendas Reit believes that corporate transparency and two-way communication inspire stakeholder confidence. Its investor relations (IR) policy, available on Ascendas Reit's website ir.ascendas-reit.com/ ir_policy.html, provides the framework to perform these practices effectively.
Its key objectives are firstly, to ensure stakeholders are equipped with accurate and timely information to make sound judgements about Ascendas Reit and secondly, to cultivate trust and confidence, through regular and clear communication with its stakeholders.
All material information is announced in a timely manner on SGXNet and on Ascendas Reit's corporate website, often with accompanying news releases, to ensure that management's perspectives and Ascendas Reit's corporate actions are easily understood. It keeps stakeholders abreast of the Ascendas Reit's news through print, broadcast and digital media, as well as email alerts to those who registered to be on the mailing list via its website. Ascendas Reit organises various investor engagement events, and participates in conferences throughout the year, with opportunities for the investment community and the media to interact with its senior management team and learn more about Ascendas Reit's business. More details can be found on the Investor Relations section on page 58 of the Annual Report 2021.
CapitaLand actively engages its staff (that comprises employees of the Manager) through various avenues, including regular staff communication sessions held by senior management, for the effective flow of information and to ensure an alignment of business goals and objectives across all levels of the workforce. Refer to the Human Capital section for further details on employee engagement activities in FY2021.
Existing and Potential Customers
Ascendas Reit conducts regular satisfaction surveys such as after-event surveys, transactional surveys pertaining to leases as well as the Voice of Customer survey. This year, an online survey has been rolled out to gather feedback from tenants at Singapore Science Park 2. Based on the feedback received and the effectiveness of this survey, this survey mode may be rolled out across selected properties in Singapore. All feedback gathered will be reviewed to improve service levels to customers continually.
Suppliers and Contractors
Ascendas Reit works closely with its contractors and suppliers who are committed to high quality EHS standards. All of Ascendas Reit's vendors are required to acknowledge and adhere to CapitaLand's Supply Chain Code of Conduct. For more information, please refer to the Supply Chain Management segment in the Human Capital chapter.
Wider Community (Government, local communities)
Ascendas Reit is committed to regulatory compliance. Procedures are in place to ensure that its activities and operations comply with existing regulatory requirements through regular monitoring, evaluation and auditing of the CapitaLand EHS management systems. Ascendas Reit also participates in stakeholder consultations organised by key government agencies to furnish feedback on proposed regulatory changes that may impact its business.
The table below showcases the key stakeholder group, their concerns as well as the response, engagement methods and frequency taken by Ascendas Reit.
The Manager is committed to delivering an exceptional customer experience while enriching lives and the communities it operates in. Ascendas Reit remains guided by its customer experience vision, which seeks to create value and experiences in response to its customers' evolving needs. It leverages its approach at activating its spaces, delivering service excellence and engaging with stakeholders through digital means where possible, which has become increasingly crucial as COVID-19 ushers in new work trends.
Ascendas Reit understands how social cohesion is more important than ever before. During the year, a series of community-building programmes and initiatives were developed and carried out in accordance with prevailing COVID-19 regulations.
Recent Community Development Investment And Value
Advocating Staff and Tenant Volunteerism
CapitaLand provides each employee with three days of Volunteer Service Leave (VSL) to encourage them to contribute back to the community. 82% of the Manager's employees volunteered in FY2021 and more than 480 hours were dedicated to community service, through the following initiatives.
The Manager is committed to executing policies and processes at the highest level of corporate governance and transparency, which is vital to the management and operational protocols of Ascendas Reit. This is founded on the belief that good governance is critical for building trust and confidence with stakeholders, which ultimately determines the success of the business. Ascendas Reit understands that good governance begins with the Board of Directors. The current Board comprises 62.5% independent directors. The current Board has one female member (12.5%). Guided by CLI's Core Values, Ascendas Reit builds and maintains a robust organisational culture that guides employees in making the right business decisions.
Fraud, Bribery and Corruption (FBC) Risk Management Framework
In line with its core values, the Manager is committed to doing business with integrity. This is reflected in its longstanding zero tolerance stance against fraud, bribery and corruption. Consistent with this commitment, various policies and guidelines are in place to guide all employees of the Manager to maintain the highest standards of integrity in their work and business dealings.
A whistle-blowing policy and other procedures are in place to provide the employees of the Manager and external parties who have dealings with the Group, with a well-defined, accessible and trusted channels to report suspected fraud, corruption, dishonest practices or other improprieties in the workplace, and for the independent investigation of any reported incidents and appropriate follow up action. The objective of the whistle-blowing policy is to encourage the reporting of such so that employees or external parties making any reports in good faith will be able to do so with the confidence that they will be treated fairly and, to the extent possible, be protected from reprisal.
Substantiated cases are reported quarterly to the Audit & Risk Committee. Actions taken can include the termination of staff's contract, and/or reporting to the appropriate external authorities. In FY2021, there were zero substantiated cases. The Manager is pleased to have achieved its perpetual targets (set in the table below) this year.
More details on Ascendas Reit's practices can be found from pages 110 to 145 of the Corporate Governance Report in the Annual Report 2021.
The Manager believes that strong risk culture, as well as people with the right attitude, values and knowledge, is critical for its long-term success. CapitaLand has several initiatives to ensure that all staff, including employees of the Manager, are well-informed about the core values and principles that shape the way the Group works and functions. New staff learn these core values and principles by attending the online New Staff Orientation and CapitaLand Immersion Programme (CIP). Existing staff learn about CapitaLand's mission and vision via e-learning where specific examples and applications of CapitaLand's core values in the workplace are shared. During the year, a new FBC e-learning was launched and rolled out to all staff, and 30 employees of the Manager (67%) participated in the training. More employees are expected to progressively complete the training in 2022.
Risk Management and Internal Controls
The Manager maintains an adequate and effective system of risk management and internal controls (including financial, operational, compliance and information technology (IT) controls) and adopts an Enterprise Risk Management (ERM) Framework which sets out the required environmental and organisational components for managing risks in an integrated and structured manner. The Board has overall responsibility for the governance of risk, including determining the risk strategy, risk appetite and risk limits, as well as the risk policies. The ARC assists the Board in carrying out the Board's responsibility of overseeing Ascendas Reit's risk management framework and policies for Ascendas Reit and ensuring that the Manager maintains a sound system of risk management and internal controls.
Annually, the Manager undertakes and performs a Risk and Control Self-Assessment (RCSA) exercise to identify, assess and document material risks which include ESG-relevant risks; along with their key controls and mitigating measures. Material risks and their associated controls are consolidated and reviewed by the Manager before they are presented to the ARC and the Board.
The Manager has implemented a Business Continuity Management (BCM) programme that puts in place the prevention, detection, response and, business recovery and resumption measures to minimise the impact of adverse business interruptions or unforeseen events on the Group's operations and also has in place a Business Continuity Plan (BCP). As part of the BCP, periodic desktop exercises and drills, simulating different scenarios, are carried out to stress-test the effectiveness of processes, procedures and escalation protocols. This holistic approach under the BCP serves to ensure organisational and staff preparedness and readiness to deal with adverse business disruptions such as acts of terrorism, cyberattacks, data breaches and epidemics. This approach aims to minimise financial loss to Ascendas Reit, allow the Manager to continue to function as the manager of Ascendas Reit and mitigate any negative effects that the disruptions could have on the Manager's reputation, operations and ability to remain in compliance with relevant laws and regulations.
The Manager regularly assesses its operations, such as procurement of goods and services and engagement with managing agents for risks related to corruption in all the countries where it operates in. Increasing levels of business digitalisation also exposes the Group to information technology (IT)- related threats. The outsourced IT team from CLI executes its cyber security strategy which set out the requirements in the management of IT risks through ongoing review against existing/evolving threat landscapes and institutes measures to minimise vulnerability exposure and manage threat vectors. Appropriate measures taken include implementing data protection measures, updating CLI IT Security Policy and Data Protection Framework to ensure relevancy, raising employees' IT security awareness through ongoing mandatory training to counter human intervention in the information security chain, and conducting annual IT disaster recovery exercise to ensure timely recoverability of businesscritical IT systems.
In FY2021, there were no cases of material noncompliance with applicable laws and regulations in the countries where Ascendas Reit operates in, a performance that the Manager aims to upkeep. For further details on the risk management process, please refer to pages 146 to 153 of the Enterprise Risk Management Report in the Annual Report 2021.
Appendix A: Environmental Data Quantification Methodology
This section explains the calculation boundaries, methodologies and assumptions used in the computation of Ascendas Reit's energy, greenhouse gas (GHG) emissions, water and waste.
Reporting Scope and Period
Ascendas Reit adopts the Operational Control Approach, as outlined in the GHG Protocol Corporate Standard, is used to determine organisational boundaries. This attributes accountability for 100% of the GHG emissions from operations over which the organisation has control. There were 4 properties within the Australia portfolio and 25 properties within the United States portfolio under Ascendas Reit's operational control.
Data for energy and GHG emissions from the following reporting periods have been included in the Integrated Sustainability Report 2021:
- 2021: 1 January 2021 to 31 December 2021
- 2020: 1 January 2020 to 31 December 2020
For new properties that were acquired in FY2021, consumption data was only included from the completion of its acquisition during the year. This includes Galaxis, Singapore, from July 2021 and UK/Europe data centre portfolio from March 2021. Logistics properties in Kansas City, USA, are not part of the reporting scope as Ascendas Reit does not have operational control over the portfolio.
For two Singapore properties which were divested during the reporting period, consumption data has only been included for the period during which the Ascendas Reit had operational control over those buildings. These Singapore properties are 11 Changi North Way and 1 Science Park Drive.
Energy Consumption Within the Organisation
Energy consumption is consumed from purchased and renewable electricity, as well as diesel and natural gas in Singapore, Australia, UK/Europe and USA. The total energy consumption is expressed in million kilowatt hours (kWh).
Energy and Carbon Intensity
Energy consumption and carbon emissions is calculated for the common areas (chillers, corridors, perimeter lightings and centralised building facilities under Ascendas Reit's direct control). Intensity metrics are calculated relative to effective Gross Floor Area (GFA), expressed as kWh/sq m. Effective GFA is calculated considering total GFA and occupancy rate. Effective GFA has been selected as the metric for intensity ratios as a large proportion of energy consumed is attributed to shared services such as the building's chiller system.
Scope 1 emissions are calculated from the consumption of natural gas and diesel expressed in tonnes of CO2e
Scope 2 emissions are calculated from the consumption of grid electricity in Singapore, Australia and USA expressed in tonnes of CO2e. There are no scope 2 emissions in UK/Europe as the four properties are 100% powered by renewable electricity.
Scope 1: Emission factors for direct energy consumption in Singapore were taken from the Intergovernmental Panel on Climate Change (IPCC) emission factor database (i.e. 74.1 tCO2e/TJ for diesel and 56.1 tCO2e/TJ for natural gas). Emission factors for Australia were published in the National Greenhouse Accounts Factors 2020 (51.4 kg CO2e/GJ for natural gas). Emission factors for Australia were published in the National Greenhouse Accounts Factors 2021 (51.4 kg CO2e/GJ for natural gas). 2021 Emission factors for the UK were published by the UK government's department of Business, Energy and Industrial Strategy, in January 2022. (2.02135 kg CO2e/m3) for natural gas and 2.70553 kg CO2/litre for diesel). Emission factors in the USA for natural gas (116.65 lbCO2e/BTU) for 2021 were published by the Energy Information Administration.
Scope 2: Emission factors for the calculation of electricity consumption were taken from the Singapore Energy Statistics 2021 published by the Energy Market Authority in Singapore (0.408 kg CO2e/kWh), the National Greenhouse Accounts Factors 2021 for New South Wales (0.79 kg CO2e/kWh), Victoria (0.96 kgCO2e/kWh) and Queensland (0.80 kg CO2e/kWh), the Emission Factors for calculation of electricity consumption in the UK is taken from the Greenhouse Gas Reporting: Conversion Factors 2021 published by the UK Government (0.212 kg CO2e/kWh), the Emission Factors for calculation of electricity consumption in the Amsterdam is taken from Efficiency and CO2 emissions from electricity production in the Netherlands, update 2020, published by the Statistics Netherlands (0.49 kg CO2e/kWh), the Emission Factors for Greenhouse Gas Inventories published by the USA Environmental Protection Agency (EPA) in March 2021 for Raleigh and San Diego (675.4 lb CO2e/MWh) and Portland (715.2 lb CO2e/MWh).
Sources of water withdrawn by Ascendas Reit properties include municipal water utilities across Singapore, Australia, UK/Europe and USA. In Singapore, NEWater, which is high-grade reclaimed water from treated used water supplied by Singapore's national water agency is also used across selected properties. Any wastewater is also discharged responsibly through municipal water utilities across all countries.
Water intensity ratio is calculated by the total volume of water consumed, relative to effective GFA, expressed as m3/sq m.
Only non-hazardous waste is disposed by Ascendas Reit. Third-party certified waste contractors are engaged across Singapore, Australia and USA. In Singapore, recyclables are sent to a recycling facility where Ascendas Reit has a term contract with. In Australia, waste is disposed via recycling, composting (for grease traps) and sent to landfills. In UK/Europe and USA, waste is disposed via recycling and sent to landfills.
Appendix B: : Environmental Data Breakdown by Region32
- Regarding GRI 303-3: Water withdrawal data coverage as a percentage of (a) total Manager controlled gross floor area and (b) floor area in regions with High or Extremely High Baseline Water Stress, by property. None of the regions Ascendas Reit operates in have been identified as High or Extremely high Baseline Water Stress currently. All water is provided through mains water supplies, none is directly withdrawn from water sources on site.
- Coverage area refers to Effective GFA, which takes into consideration total GFA and occupancy rate.
- Landlord area consumption is limited to Singapore only.
Appendix C: GRI Content Index
Appendix D: United Nations Global Compact
10 PRINCIPLES OF THE UN GLOBAL COMPACT
Appendix E: SGX List of Core ESG Metrics
Year Integrated Sustainability Report FY2021 9.04 MB PDF Integrated Sustainability Report FY2020 10.06 MB PDF Integrated Sustainability Report FY2019 7.98 MB PDF Integrated Sustainability Report FY18/19 11.10 MB PDF Integrated Sustainability Report FY17/18 7.27 MB PDF Sustainability Report FY16/17 0.80 MB PDF Sustainability Report FY15/16 0.57 MB PDF Sustainability Report FY14/15 0.08 MB PDF Sustainability Report FY13/14 0.12 MB PDF Sustainability Report FY12/13 0.25 MB PDF