### Governance
###### Structure
**The CLI Board (the Board) considers sustainability**
**issues as part of its strategic formulation, confirms the**
**material ESG factors and oversees the management and**
**monitoring of the material ESG factors.**
The Board sets CLI's risk appetite, which determines the nature and extent
of material risks that CLI is willing to take to achieve its strategic and
business objectives. As part of the material risk issues being highlighted,
climate change has been identified as critical. The Board regularly reviews
climate change risks as part of the CLI Enterprise Risk Management (ERM)
Framework.
The Board is actively involved in discussions on climate-related initiatives.
It is updated at least once a year at the quarterly or ad hoc Board
meetings on relevant climate-related topics including the refreshing of
CLI's 2030 Sustainability Master Plan (SMP), green capital expenditure
plan and review to sustain green rating of the properties, performance
metrics such as carbon emissions performance and progress on the
carbon emissions reduction targets, as well as stakeholders' expectations,
on climate-related topics. Environmental incidents, which may include
climate-related damage or disruptions, are also reported to the Board.
As Environment, Health and Safety (EHS) factors are considered during
the impact assessment for asset investment evaluation process
and strategy, they are presented to the Board where relevant.
###### The CLI Strategy and Sustainability Committee (SSC), chaired by the Lead Independent Director, plays an active role in overseeing the Company's sustainability strategies and plans, and sets the tone at the top to ensure
the alignment of
CLI's activities with
its purpose and
stakeholders' interests.
CLI's groupwide sustainability management comes under the purview of a CLI Board Committee, the Strategy and
Sustainability Committee (SSC). The CLI Strategy and Sustainability Committee, chaired by its Lead Independent
Director, plays an active role in overseeing the Company's corporate and sustainability strategies and plans,
and sets the tone at the top to ensure alignment of CLI's activities with its purpose and stakeholders' interests.
The SSC is responsible for overseeing sustainability strategies and goals including providing guidance to
management on ESG matters and monitoring progress against CLI's sustainability targets. This covers all
sustainability issues – climate-related matters as well as social matters, including just transition.
Under CLI's executive compensation framework, the Group's business plans, including sustainable corporate
strategies, are translated to both quantitative and qualitative performance targets and cascaded throughout
the organisation. This would fall under the purview of a CLI Board committee – Executive Resource and
Compensation Committee (ERCC), which will recommend to the Board a general framework of remuneration for the
non-executive Directors and key management personnel of the Group, and the specific remuneration package for
each key management personnel. The Board, assisted by the Risk Committee, approves the Group's risk appetite
(risk tolerance) which determines the nature and extent of material risks the Group is willing to take to achieve
its strategic objectives. The Board also regularly reviews the Group's risk profile, material risks and mitigation
strategies, and ensures the adequacy and effectiveness of the risk management framework and policies.
This includes climate change risks.
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The SSC is supported by the Group Sustainability Office and various
work teams to drive continued progress and improvement in the areas
of ESG. This governance is cascaded through the Leadership Council
at senior management levels, to the various work teams that comprise
representatives from CLI's business units and corporate functions. The
CLI Leadership Council makes strategic resource allocation decisions
and meets on a regular basis. The CLI Leadership Council comprises the
Group Chief Executive Officer (CEO), CEOs of the business units and key
management officers of the corporate office. Please refer to the diagram
below for more details on CLI's Sustainability Management Structure.
CLI's Group CEO is responsible for the company's climate change-related
targets. A key objective of CLI's senior management is to transition CLI to a
low-carbon business that is aligned with climate science and to build a
resilient and resource-efficient portfolio. As part of these efforts, members
of CLI's senior management and relevant stakeholders will undergo
appropriate briefings and training to further build capacity with respect
to climate-related risk and opportunity management. The frequency
and content of these capacity-building training sessions will be regularly
reviewed to incorporate emerging issues relating to environmental risk
management.
###### A key objective of CLI's senior management is to transition CLI to a low-carbon business that is aligned with climate science
and to build a resilient and resource-efficient portfolio.
In this report, CLI leveraged the TCFD guidance on Climate Transition Plan (CTP)[10] to provide more specific details
on how it is aligning its business with climate transition. CTP is likely to become more relevant in relation to the
upcoming ISSB reporting requirements and external stakeholders. CLI has included relevant CTP elements in all
four TCFD pillar areas.
10 Pg 38. Task Force on Climate-related Financial Disclosures Guidance on Metrics, Targets, and Transition Plans.
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###### CLIMATE TRANSITION PLAN - GOVERNANCE
**Board's oversight of decarbonisation and climate transition plan**
CLI's decarbonisation plan was developed as part of its 2030 Sustainability Master Plan (SMP). This strategic segment
was developed under specific oversight and approval from the Board, who through the CLI SSC, which is a Board level
committee, provides oversight on climate-related matters. The Group CEO and the Leadership Council are the main
drivers of this initiative at the CLI level and they are responsible for the performance and the achievement of targets.
The CLI Board is updated at least once a year at the quarterly or ad hoc Board meetings on the progress in
implementing the CLI 2030 SMP. This would include progress on CLI's decarbonisation plan and any other
climate-related topics. In 2022, these discussions include the green capital expenditure plan which is required
to meet the CLI SMP and decarbonisation targets. These discussions demonstrate the inclusion of climate and
decarbonisation considerations when planning annual budgets on CLI level. Finally, for an all-rounded
management and tracking of this plan, performance against the decarbonisation targets as part of the wider
CLI SMP targets, as well as the Balanced Scorecard targets are reported and discussed with Management and
Board at least annually.
CLI has internally set sustainability and climate-specific performance metrics and targets which are linked to the
remuneration policies for members of senior management. An example is the Balanced Scorecard (BSC)
framework introduced in 2022 at the Group level, which includes both quantitative and qualitative targets relating
to climate change topics such as carbon emissions reduction. Similarly, since 2021, carbon emissions intensity
reduction was introduced as a performance measure in CLI's Performance Share Plan Awards which is generally
granted to members of senior management for their efforts to achieve these targets.
**CLI's mechanisms of gaining stakeholder feedback on its decarbonisation journey**
CLI has regular stakeholder engagement with respect to sustainability issues, as presented in our Global
Sustainability Report 2022. The Stakeholder Engagement section summarises the main stakeholders as
well as communications channels. Feedback on our decarbonisation plan is mainly received through the
following channels:
Regular analyst and investor meetings (including the 2023 CLI Sustainability non-deal roadshow)
Responses to sustainability surveys, and engaging ESG indices and data platforms
Participation in relevant focus groups and/or panel discussions including with regulators
Annual general meetings and half yearly financial results announcements
Media releases and interviews
Annual reports and Sustainability reports
Company website
**Board climate-specific skills and capacity building**
The CLI Board is continuously upskilling with respect to sustainability and climate-related issues. All CLI Board
members have undergone the prescribed SGX ESG training for 2023. Furthermore, new CLI Board members are briefed
on sustainability management at CLI. This onboarding process includes a briefing on the CLI decarbonisation plan,
which forms part of the CLI 2030 SMP.
In 2023, additional briefings were conducted to prepare CLI Board, members of the SSC and senior management
to better understand the climate scenario analysis, the choice of scenarios, the physical and transition risks
and opportunities, as well as the mitigation and adaptation measures. Other briefing topics included the
use of Renewable Energy Certificates (RECs) and carbon offsets in CLI's decarbonisation journey. CLI Board,
SSC and senior management reviewed and discussed the outcomes of the latest climate scenario analysis,
decarbonisation roadmap, and workplan. The regular upskilling activities for the Board and senior management
are also augmented with external advice from specialists in the area of sustainability and climate.
For more information on the Board's expertise and experience,
please refer to the matrix presented in page 115 of CLI Annual Report 2022.