The woman at the eye of the storm of Asia’s climate risk

Esther An is chief sustainability officer at Singapore-based City Developments Ltd
Esther An is chief sustainability officer at Singapore-based City Developments Ltd

April 20 - Jakarta is sinking by around 12 centimetres every year. Singapore is heating up at double the global average. Manila is facing a spike in deadly typhoons. And Bangkok is on track to be under water by the middle of the century.

The report from the Intergovernmental Panel on Climate Change, released in February, leaves little doubt as to what is going on. With extensive coastlines, low-lying territories and many small island states, Southeast Asia is in the eye of the climate change storm.

Nowhere will the world’s changing weather patterns be felt more greatly than in the region’s cities, home to around half of its 680 million citizens. “Significant” increases in economic losses due to flooding, coupled with reduced access to freshwater and food due to extreme temperatures, are just some of the possible shocks coming down the line.

In recent years, as the realities of climate change begin to bite, the region’s national governments and city authorities have begun to act. The private sector is also mobilising, albeit more slowly.

One figure in the private sector who has not been slow to grasp the risk posed by climate change is Esther An, chief sustainability officer at Singapore-based City Developments Limited (CDL). In 2018 she earned the United Nations Global Compact’s accolade of SDG pioneer for pushing the property developer to adopt greener building methods over the past 20 years, and for helping her company use its base in Singapore to set global benchmarks for green construction and sustainability.

“As developers and building owners, we are really facing a lot of threats that (mean) we have to look at how to future-proof our business and our assets to be more resilient,” she says in an interview.

Tourists shield themselves with umbrellas on a hot day at the Merlion Park in Singapore June 21, 2017. REUTERS/Edgar Su - RC13A198C240

With operations in 29 countries, CDL owns a portfolio of commercial and residential assets worth around $23.7 billion. If the predictions of climatologists prove even close to correct, its liabilities to natural disasters could be sky-high.

She cites recent figures from the global reinsurer Swiss Re, which put insured losses from natural disasters at $105 billion in 2021, the fourth highest since 1970.

Nor are insurers blind to the fact, notes An: “Trust me, all these insurance agents already know. You give them your location and they have the heat map there in front of them … you can’t play down your risk.”

Even so, CDL has done more than most to show it has climate management firmly in its sights. An’s list of mitigation and adaptation measures include annual materiality assessments since 2014 and regular climate change scenario studies since 2018.

In 2020, CDL also completed a major climate risks analysis focused on its 100 largest suppliers and on the top five raw materials on its procurement list (cement and steel, two so-called “hard-to-abate” carbon pollutants rank third and fourth, respectively).

Plants and trees feature highly in CDL’s climate strategy, which seeks a balance between mitigation and adaptation. With the urban heat island effect a massive issue in the region’s humid and cramped cities, roof gardens and other “biophilic design” offer localised cooling as well as carbon storage and air purification.

A resident wades through a flooded street in Nonthaburi province, on the outskirts of Bangkok, Thailand, November 13, 2021. REUTERS/Chalinee Thirasupa - RC2LTQ97FFYO

Among the more eye-catching examples is the Tree House in Singapore, a 24-storey condominium with a world-record holding “vertical garden”. The 2,289-metre planted wall absorbs carbon dioxide, while also cooling the building and immediate area, resulting in energy savings of up to 30%.

Meanwhile, in the redevelopment of the antiquated Fuji Xeros tower block in downtown Singapore, CDL can lay claim to the first “platinum” rating under the city state’s Green Mark sustainable building standard. The ultra-low energy, mixed-use construction is equipped with low-emissivity glass, sunshades, facade greenery and extensive solar panels, among other eco features.

CDL has also made a strong play around the advantages that digitisation can bring. Among its 600 subsidiaries and associated companies, for instance, is the facilities management subsidiary CBM, which has developed an artificial intelligence (AI) enabled software system (digiHUB) for identifying and integrating energy efficiency opportunities.

“AI is helping us simulate how we orientate a building to maximise wind flows and ventilation, for example, which can help reduce heat gain by 20%, right from the drawing board,” An states.

CDL’s efforts in green construction have won it a slew of plaudits over the years, including inclusion in CDP’s prestigious A List, an AAA rating from MSCI ESG Research, and, most recently, the fifth spot in the Corporate Knights’ Global 100 index (up from 40th last year).

Even so, An is far from complacent. The development of sustainable materials is “still in its infancy”, she concedes.

And while Singapore’s Green Plan promises major investments in clean energy storage and renewable imports, as well as a five-fold increase in solar energy by the end of 2030, An says finding the space for wind, hydro or even solar power facilities in the region’s congested cities is difficult.

Close cooperation with the state and power providers is the only realistic macro solution to a greening of the electricity grid which properties need.

“No matter what we do, Singapore is renewable-energy challenged. That’s why we need to look at something very creative,” says An.

She cites the city state’s recent unveiling of a 60 megawatt (MW) floating solar plant located on a reservoir in western Singapore. The move follows successful, state-sponsored experiments in underground district cooling.

A host of similar innovations will be needed – whether from the private or public sectors, or both together – if the city state is to achieve its stated goal of making all certified green buildings 80% more energy efficient (on a 2005 baseline) by the end of the decade.

General view of one of the world's largest floating solar panel farms in Singapore, July 13, 2021, in this still image taken from video. Video taken on July 13, 2021. REUTERS/Chen Lin

It's not just technological challenges that stand in the way of greener real estate in Southeast Asia. Demand is also weak. Ask a tenant their priorities for a property and the answer is invariably the same, says An: location, pricing and facilities management.

That said, a shift is occurring, she says: “When we first started almost 20 years ago with green building features, it was never a consideration. But in the last 10 years, it is actually creeping up.”

The COVID-19 pandemic has given further impetus to demand for green building design. Less because of the carbon benefits, An admits, and more because of concerns over air purity and ventilation.

Financing is another major hurdle. An is enthusiastic about the growing interest now being shown in climate finance, noting in particular the launch of a regionally specific taxonomy for sustainable finance.

Nevertheless, many municipalities and businesses remain “reluctant” to integrate green infrastructure into their capital projects. Why so? Fears over higher costs and a general lack of awareness of the ancillary benefits of greener cities, she suggests.

In that context, CDL’s ability to raise $3 billion in sustainable finance over the last five years looks impressive. The largest bulk is in green loans ($1.72 billion), although the real estate developer also has a $100m green bond under its belt, a first for a Singapore-based company.

"The science is clear about climate threats," An concludes. “The art of engaging stakeholders, and changing mindsets and behaviours is probably the most challenging.”

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.

Oliver Balch is an independent journalist and writer, specialising on business’s role in society. He has been a regular contributor to The Ethical Corporation since 2004. He also writes for a range of UK and international media. Oliver holds a PhD in Anthropology / Latin American Studies from Cambridge University.