Singapore real estate group CapitaLand Investment ( CLI ) in its latest sustainability report has provided insights into its sustainability successes over the past year, in addition to announcing the launch of its Return on Sustainability ( RoS ) framework.

The report, the company says, reaffirms its commitment to decarbonization – which aims for a balance between financial feasibility and achieving its sustainability targets – and its focus on low-carbon design, intensifying energy efficiency and expanding the use of renewable energy across its portfolio.

Highlights from the report, the company’s 16th, include:

•  Renewable energy usage across its global portfolio rose from 5.2% in 2023 to 7.3% in 2024, with contributions from 70 properties in 12 countries
• 17% growth in green leases for new assets and renewal of leases in Singapore and China
• Over S$4.3 billion ( US$3.36 billion ) raised in sustainable finance in FY2024 through CLI and its listed real estate investment and business trusts
• 30% women on the CLI board and 37% women in senior management.

Since 2019, CLI, the report adds, has achieved an 11% reduction in energy consumption intensity through asset enhancement initiatives despite a growing portfolio. As of 2024, 63% of its global portfolio has attained at least one green building certification. And notably, 51% of CLI’s properties were certified LEED Gold and above or equivalent in 2024.

RoS framework

CLI has introduced a new RoS framework, a data-driven tool that enables asset managers to quantitatively assess the financial benefits of green capital expenditure ( capex ). The framework, the company says, demonstrates how sustainability investments can deliver financial returns in addition to environmental impact. 

Developed using financial models from CLI’s selected commercial assets across Asia-Pacific, the framework evaluates eight key variables that influence financial performance: green capex, utility costs and savings, carbon cost reductions, rent premiums, leasing durations, interest rates savings, reduced insurance premiums, and enhanced asset valuations. 

By analysing how each variable impacts cash flows, the RoS framework, the company shares, provides a capital allocation compass for assessing return on investment from sustainability initiatives.

In best-case scenarios, the framework, the company adds, is shown to estimate that green capex could uplift the internal rate of return for many assets. Even under challenging market conditions, the framework shows how sustainability spending can safeguard asset value against risks, such as carbon taxes, leasing delays and rising insurance premiums. 

By quantifying risks and returns, the RoS framework supports more informed decisions around capital allocation, asset-level budgeting and cost-benefit analysis for asset enhancement initiatives, redevelopments and other scenarios that require financial justification.

Beyond the asset level, the RoS framework, the company adds, introduces a portfolio-wide break-even model, enabling fund managers to assess the feasibility of green capex investments through projected long-term savings – offering a practical tool for those with large portfolios that may find it impractical to modify and assess numerous individual financial models.

"As regulatory standards, investor expectations and climate resilience change rapidly, a structured approach to assess sustainable investments is essential,” says Vinamra Srivastava, CLI’s chief sustainability and sustainable investments officer. “CLI’s RoS framework bridges environmental responsibility with financial accountability, ensuring sustainability decisions are grounded in environmental and commercial outcomes.

“Drawing on learnings from external research, the RoS framework allows asset managers to objectively ascertain the financial benefits of green capital investments into their assets. The study shows that when implemented correctly, sustainability delivers clear, measurable returns.”