ROUNDTABLE PANELLISTS

• Jeffrey Sim, group CEO, SBS Transit

• Ho Tong Yen, chief sustainability officer, Keppel Corporation

• Yong Yean Chau, CEO and executive director, Parkway Life Reit

Moderator: Francis Kan

There has been an intense focus on sustainability and environmental, social and governance (ESG) topics by businesses in recent years. How have you progressed on your sustainability journey? 

Jeffrey Sim: SBS Transit is committed to moving people in a safe and reliable way; importantly, we do this in a sustainable manner. We are focused on minimising our impact on the environment; ensuring road, commuter and workplace safety; enhancing the well-being of our people and the community; as well as keeping up the robustness of our governance system and protecting our assets. 

Our commitment to safeguarding the interests of our stakeholders for sustainable growth comes under the governance of a dedicated sustainability committee at the board level that was set up in April 2021. The board considers ESG issues as part of our strategy formulation with targets used to set objectives, drive behaviours, measure performance and determine remuneration. 

Ho Tong Yen: Over the past few years, Keppel has further enhanced our governance and management of sustainability. In 2022, we established a board sustainability and safety committee to provide even greater focus on sustainability. In the same year, we also appointed a chief sustainability officer and created a dedicated sustainability department to manage different aspects of the company’s sustainability efforts. To embed sustainability throughout the company and ensure accountability, sustainability targets have also been included in the performance appraisal of senior management across the company, including both annual remuneration and long-term incentives.

Yong Yean Chau: In 2017, we issued our maiden sustainability report that addresses our approach to sustainability and how we practise it through the operations of Parkway Life Reit and the manager, as well as how we work with the tenants and operators in this area. Starting with five material factors, we have over the years constantly been reviewing the relevant ESG matters to determine the sustainability factors that are most material to us. We are currently keeping close tabs on nine material factors, including environmental factors. To this end, we have set a target of net-zero carbon emissions by 2050, and have been actively engaging our stakeholders in reducing our carbon footprint through capex emissions-reduction initiatives. 

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How have you managed the balance between profitability and sustainability to foster long-term growth? 

Sim: We view sustainability and profitability as sharing mutual goals by integrating sustainable practices into our business strategies. For instance, we invest in the regular training and development of our people with targets set on training hours. We believe that having a competent workforce enables us to provide a better customer experience, which encourages people to use public transportation. This, in turn, reduces carbon emissions. It’s a win-win situation.

In environmental stewardship, we set business targets focused on resource efficiency. This translates to reducing emissions, which means a cleaner environment and a lower energy bill. Notably, we have invested in solar panels at some of our depots, which have reduced both operational costs and carbon emissions. 

Ho: We do not see sustainability and profitability as being conflicting goals. We are committed to running our business sustainably across all aspects of ESG, which is key to building long-term resilience. We also provide solutions that contribute to sustainable development and climate action, such as renewables, decarbonisation and environmental solutions. For example, in July this year, we held the ground-breaking ceremony for Singapore’s first hydrogen-ready power plant on Jurong Island. Last year, Keppel also commenced renewable energy imports into Singapore under the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project. We are also contributing to greening the built environment with our sustainable urban renewal solutions. 

Yong: We believe that sustainability and profitability are not mutually exclusive, and we have managed to strike a balance between the two to foster long-term growth. The incorporation of sustainability considerations and practices across our portfolio will not only enhance the performance of Parkway Life Reit, but also create value for our stakeholders in the long run. 

What is your view on the role of regulation in promoting sustainability within the business sector, and what are the implications for your business? 

Sim: At SBS Transit, we are cognisant of the impact of our operations on the environment. In the past when we had to purchase our own buses, the vehicles that we used had to comply with emissions standards according to regulatory requirements. We introduced Euro 5-compliant engines in the 2010s, which have enabled the industry today to transit to hybrid and electric buses at a faster pace.

Regulations aside, we actively support the government’s push to promote public transportation, which will effectively reduce carbon emissions. This is because land transport is the third-largest source of emissions in Singapore. Hence, we work hard at improving our service standards and in delivering reliable bus and train services to attract more to switch from private to public transport.  

Ho: Regulations are important to bring about changes in corporate behaviour. But regulations only define the common baseline, and I believe that companies which can run faster should try to do so. That is the approach we have taken with sustainability at Keppel. For example, we track and disclose all relevant categories of Scope 3 emissions, and also subject our sustainability report to external assurance, even though these are not regulatory requirements in Singapore. We have also set ambitious targets to both increase our utilisation of renewable energy and grow our portfolio of renewable energy assets. 

Yong: Regulations are shifting to actively encourage enterprises to adopt solutions that promote efficiency, inclusivity, and responsibility. We view this as a positive step forward. We believe regulations can help companies focus on the necessary steps that they must take to expedite their commitment towards achieving greater sustainability in their businesses. 

What collaborations and partnerships have you forged in realising your sustainability goals, and how have these benefited your company? 

Sim: We recognise the value of collaborations in enabling us to achieve our sustainability goals at a faster pace. We have signed numerous memoranda of understanding (MOUs) which bring together diverse expertise and perspectives, fostering innovation, and consequently, leading to the development of more sustainable products, processes and services. For example, under one of our partnerships, we gained access to expertise in the use of artificial intelligence to optimise energy usage at our premises. This has helped to reduce carbon emissions and energy consumption. We also expect suppliers and vendors to adhere to sustainable practices, where ESG forms part of our tender evaluation criteria.

Ho: Keppel has forged many strong partnerships with governments, industry leaders, research institutions and other organisations to explore green solutions, such as hydrogen and green ammonia production and renewable energy systems. 

Last year, Keppel also signed an MOU with the National Environment Agency for a joint study on the feasibility of carbon capture at Singapore’s waste-to-energy plants. We have ongoing collaborations with the Garden City Fund to support environmental conservation in Singapore and the OneMillionTrees movement, among others. These partnerships resonate with both our external and internal stakeholders, and I believe they also contribute to enhancing employee engagement and satisfaction, as employees see the company walking the talk and contributing to Keppel’s purpose of “Creating a Sustainable Future”.

Yong: Parkway Life Reit’s portfolio of assets largely consists of long-term lease arrangements. Therefore, day-to-day operations and maintenance fall under the responsibility of and are performed by tenants and operators. Though the Reit does not have direct control, we make continuous efforts to engage tenants with the aim of encouraging efficient use of electricity and water and promoting best practices in these areas. Notably, we are partnering the sponsor to jointly conduct major refurbishment and upgrading works at the Mount Elizabeth Hospital. This expansive project will take three years to complete, and along with this, the hospital will attain Green Mark Platinum certification, a validation of our commitment towards sustainability.

In Japan, we collaborate closely with our Japan-based asset managers to explore asset enhancement initiatives at our nursing homes there. Some of our past enhancement initiatives have included the installation of energy-efficient equipment at various properties, as well as refurbishment works to maintain the competitiveness of some of the older properties. We believe these efforts will help us reach our goal of achieving net-zero carbon emissions by 2050.

Looking ahead, how do you plan to advance on your ESG journey in the coming years? 

Sim: Our ESG journey is a never-ending one and we will continue to do even more. This includes continued investments in technology, as well as fostering greater collaborations to propel our ESG efforts. For instance, it is now possible to employ artificial intelligence to monitor the condition of equipment. This facilitates predictive maintenance, which helps optimise resource deployment, eliminate unnecessary waste and improve response time.   

To promote a more inclusive society, we are committed to hiring more people with disabilities into our workforce, while also focusing on enabling passengers with disabilities to travel safely and independently on our public transport network. In environmental stewardship, we will continue to support and work closely with the Land Transport Authority as it transits to an entirely green fleet of public buses by 2040. This includes participating in new bus trials and offering feedback for consideration as it procures more green buses for fleet replacement.  

Ho: Sustainability is a journey, not a destination, and we would need to keep pushing the boundaries. There is no one fixed road map that applies to all parties, because companies operate in different environments and face diverse challenges and constraints. We will continue to closely monitor the evolving international standards and best practices, engage and collaborate with our stakeholders, and constantly strive to improve our sustainability performance, one step at a time.

Yong: As an ongoing strategy, we will continue to monitor and manage potential ESG risks and opportunities as we progress on our sustainability journey. By doing so, we will ensure that our material ESG factors remain relevant to our operations and stakeholders. We will also continue to regularly review our performance measures and targets to ensure that our sustainability initiatives remain relevant to our mission, vision and values, and aligned to wider national and international sustainability goals. We firmly believe our ESG efforts will not only enhance our corporate performance, but also create a positive ripple effect on the supply chain and lasting value for our stakeholders.