Singapore-based real estate investment manager CapitaLand Investment (CLI) announced the launch of its new “Return on Sustainability (RoS) framework,” aimed at quantifying the financial value of green capital expenditure. The new tool has been established at a time when expectations shift from climate pledges to demonstrable results.
Featured in CLI’s latest Global Sustainability Report, the framework has been developed using financial models from the asset manager’s selected commercial assets across Asia-Pacific.
It works by evaluating eight key variables that influence financial performance: green capital expenditure (capex), utility costs and savings, carbon cost reductions, rent premiums, leasing durations, interest rates savings, reduced insurance premiums, and enhanced asset valuations.
The firm said these evaluations will inform investment decision-making across asset enhancement initiatives, redevelopments and other projects, as well as providing a capital allocation compass for assessing return on investment (ROI) for sustainability initiatives.
Vinamra Srivastava, CLI’s Chief Sustainability and Sustainable Investments Officer, said:
“CLI’s RoS framework bridges environmental responsibility with financial accountability, ensuring sustainability decisions are grounded in environmental and commercial outcomes. This framework, using first-party data drawn from six existing assets owned and managed by CLI, answers questions such as ‘Does going green pay off?’ and ‘If so, by how much?’”
In best-case scenarios, CLI said the RoS framework was shown to estimate that green capex could uplift the Internal Rate of Return (IRR) for many assets and safeguard asset value against risks such as carbon taxes and rising insurance premiums.
In addition, the framework introduces a portfolio-wide breakeven model, which enables fund managers to also assess the feasibility of green capex investments through projected long-term savings.
CLI has applied an internal shadow carbon price since 2021 to help quantify climate-related risks and opportunities in new investments. The RoS metric now complements this work by offering a holistic view of both financial and environmental outcomes, redirecting capital toward lower-carbon projects and strengthening operational resilience.
Additional highlights from the asset manager’s sustainability report include a rise in renewable energy use to 7.3% across CLI’s portfolio, a 17% increase in green leases, and more than $4.3 billion raised in sustainable finance. Since 2019, CLI has reduced its energy consumption intensity by 11% and achieved significant green building certifications.
The company also reported that women now make up 30% of its board and 37% of senior management. CLI will continue refining its RoS framework while exploring new metrics to measure climate-related risks and long-term opportunities.
Lee Chee Koon, CLI’s Group CEO, said:
“As a responsible global real asset manager, CLI remains steadfast in integrating sustainability and ESG considerations across every stage of our fund and asset management life cycle. We continue prioritising solutions that balance environmental impact with financial feasibility while leveraging innovation and technology to accelerate our transition to a low-carbon future.”
