SOCIAL distribution-in-specie exercise in 2023, was able to gain a better understanding of CLAS. These interactions also enabled us to hear the views and concerns of our stakeholders, and continuously improve our disclosures and value proposition to investors. In 2023, CLAS continued to receive industry recognition for our efforts in investor engagement and corporate governance. Testament to our commitment in upholding high standards on the corporate governance front, CLAS was ranked first in the REITs and Business Trusts category of the Singapore Governance and Transparency Index 2023 for the third year running. Pre-Extraordinary General Meeting Dialogue with SIAS Members CLAS’ Extraordinary General Meeting held in October 2023 17 An extract of CapitaLand’s Supply Chain Code of Conduct is available on CLI’s website and the full policy is available on our Intranet. 18 Some examples of the ESG pillars include corruption, human rights (such as forced labour, child labour, human trafficking and discrimination), politically exposed parties, sanctions, safety and environmental regulation breaches. These pillars cover the suppliers and contractors’ own employees, women, children and local communities. SUPPLY CHAIN (MAIN CONTRACTORS, VENDORS, SUPPLIERS, CREDITORS) CLAS works closely with our contractors and suppliers that are committed to high EHS standards. The CapitaLand Procurement Policy and CapitaLand’s Supply Chain Code of Conduct17 form the basis for CLAS’ engagement with our supply chains to influence them to operate responsibly in the areas of anticorruption, child labour, forced labour, human rights, health and safety, as well as environmental management. Apart from close engagement, the Managers also ensure that the suppliers are duly paid to safeguard their creditors’ rights and interests. Supply Chain Management CLAS has a structured procurement process, and contracts are awarded after rigorous tender selection involving a balanced evaluation of financial and non-financial criteria including safety requirements. Contractors are appointed only upon meeting these stringent environmental, health and safety requirements. CLI’s in-house contractor management guidelines require all contractors to comply with local government and other legal requirements. Preference is given to ISO 14001 and ISO 45001 certified companies or equivalent. Ascott’s suppliers include suppliers of in-room amenities, furniture, fixtures and equipment, food and beverage, and outsourced service providers for housekeeping, security, maintenance and engineering. In 2023, Ascott’s suppliers acknowledged to abide by CapitaLand’s Supply Chain Code of Conduct as part of their new and renewed contracts2. Third-party ESG Due Diligence Screening on Critical Suppliers and Contractors CLI has identified critical suppliers and contractors as high-spend suppliers and contractors, nonsubstitutable suppliers and contractors, or critical business component suppliers and contractors such as term contractors providing facility maintenance and property management services, IT service providers, and contractors for construction works. There were more than 6,400 critical suppliers and contractors with active contracts with CLI (including CLAS) in 2023. To strengthen the ESG performance of its suppliers and contractors, CLI commenced a pilot screening of close to 500 critical suppliers and contractors in Singapore, China, and India on their ESG performance. The screening was conducted by a third-party ESG due diligence screening platform, using the suppliers’ and contractors’ publicly available information. The platform then scored the suppliers and contractors on each ESG pillar18 by using artificial intelligence (AI) to rate the suppliers and contractors’ risk and resilience. Post-AI screening, the platform provider’s in-house ESG specialists reviewed the ESG issues flagged. From the initial screening in 2022, 17 suppliers and contractors were rated as Leaders and five received below-average ESG scores. In 2023, CLI worked with the platform provider to deploy a series of ESG-related capability-building programmes to the five identified suppliers and contractors with below-average ESG scores, beginning with gap analysis and interviews with them. Once the gaps were identified, a tailored work plan was implemented to raise each supplier’s and contractor’s awareness and improve its ESG 55 CAPITALAND ASCOTT TRUST
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