SINGAPORE – CapitaLand Investment Limited (CLI) has retained its position as a component stock on the Dow Jones Sustainability World Index (DJSI World) and Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific) after the indexes’ annual review, the real estate investment firm said on Dec 11.
This is CapitaLand’s 12th consecutive year on DJSI World and its 15th on DJSI Asia Pacific, and comes as more investors and lenders are demanding that public companies be more socially and environmentally responsible.
The announcement also follows a profit guidance on Dec 8, in which CLI said it expects fair value losses on its portfolio of investment properties in China, Australia, Europe, Britain and the United States that would result in a “significant” decrease in net profit for the financial year ended Dec 30.
In its third-quarter business update in November, CLI had identified dampening macroeconomic sentiment together with persistent interest rate hikes and geopolitical tensions as the challenges to its business, but said operating profit and cash flows remained stable.
In its Dec 11 announcement, CLI chief sustainability officer Vinamra Srivastava said the company intends to maintain its current standards in achieving its sustainability goals despite the macroeconomic and geopolitical challenges.
“Retail investors are increasingly focused on our environmental, social and governance (ESG) strategy and efforts, particularly when it has tangible impact on our bottom-line performance,” he said.
CLI’s continued inclusion in DJSI has enabled the company to qualify for sustainability-linked loans that are more attractively priced than traditional loans, he said.
For example, it will obtain interest rate savings from four sustainability-linked loans totalling $600 million that are pegged to its inclusion on DJSI.
Interest rates on some sustainability-linked loans will be reduced on a tiered basis that is contingent on CLI’s listing on either DJSI World or DJSI Asia Pacific.
As at Sept 30, CLI and its listed real estate investment trusts and other business trusts have partnered 20 financial institutions to secure a total of $15.6 billion in sustainable financing.
“The savings from our sustainable financing instruments tied to our ESG performance are redeployed towards our decarbonisation strategies,” Mr Srivastava said.
DJSI World and DJSI Asia Pacific comprise the top 10 per cent and top 20 per cent of the world’s largest companies, respectively, based on long-term economic, environmental and social criteria.
The indexes are float-adjusted market capitalisation weighted indexes that measure the performance of companies selected using ESG criteria.
As a result of 2023’s review, Chinese tech firm Tencent Holdings, tobacco firm Philip Morris International and software company ServiceNow were added to DJSI World, while three pharmaceutical companies – Novartis, AstraZeneca and Amgen – were dropped.
Besides CLI, two other Singapore companies – infrastructure firm Keppel Corporation and commodities trader Wilmar International – are on DJSI World.
Keppel and Wilmar – as well as ComfortDelGro and ST Engineering – are component stocks on DJSI Asia Pacific.
Shares of CLI fell on Dec 11 after its profit warning. The stock was trading down 3.2 per cent at $3 at the day’s close. It is down by 18.3 per cent to date in 2023.
