ESG starts at the top, says Keppel’s CSO
Making sustainability part of management targets has facilitated decisions that create environmental, social and governance impact
IN 2022, the board of directors at asset manager Keppel formed a committee to focus on sustainability. That same year, the company also appointed Ho Tong Yen as its first chief sustainability officer (CSO).
That year marked the start of a major transformation for Keppel on the sustainability front. In the short time since Ho’s appointment, Keppel has made substantial progress and caught the eye of investors for its focus on green business.
The company also received an Impact Enterprise Excellence Award in the large enterprise category at the 2024 Sustainability Impact Awards jointly organised by The Business Times and UOB.
Ho attributes Keppel’s success to a conscious commitment that begins at the top. Sustainability is on the agenda at quarterly board meetings and monthly executive management meetings.
Environmental sustainability targets are also included in performance reviews for senior management at Keppel, affecting both annual remuneration and long-term incentives.
“In FY2023, environmental sustainability made up 7.5 per cent of the company’s performance scorecard,” says Ho.
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
Thanks to this emphasis from the top, Keppel has reduced its Scope 1 and 2 emissions by 69.5 per cent in 2023, from its 2020 baseline. Scope 1 emissions refer to greenhouse gas emissions that arise directly from the company’s activities, while Scope 2 emissions refer to those released at the power station for the generation of electricity that a company consumes.
Keppel also achieved a weighted average reduction in waste intensity of 41.9 per cent in 2022, compared with its 2019 baseline. This was significantly above the reduction target of 10 per cent by 2030 that it had set. Sustainability reporting also has external assurance to ensure data quality.
“We have more than halved our Scope 1 and 2 emissions compared with our 2020 base year, significantly reduced water withdrawal and waste generation, and also advanced in social and governance aspects such as health and safety, diversity, equity and inclusion, as well as sustainability governance and risk management,” notes Ho.
The company remains confident of achieving its net-zero target ahead of 2050.
Keppel also redefined its corporate purpose in 2023, to “creating solutions for a sustainable future”. Ho explains that this means running its businesses to meet carbon-emissions and other environmental targets, including providing green solutions such as renewable-energy importation, as well as low-carbon and decarbonisation initiatives.
As an example of how the company has translated this new purpose into action, Ho points to the decision to retrofit its flagship property Keppel Bay Tower.
Retrofitting – rather than demolishing and rebuilding – avoided almost 40,000 tonnes of carbon emissions, he notes. The new building yields about 2.2 million kilowatt-hours of energy savings a year, when compared with a regular office building of similar size.
Keppel Bay Tower was the first building in Singapore to be certified Green Mark Platinum (Zero Energy) by the Building and Construction Authority (BCA).
“Not only have these efforts enhanced Keppel Bay Tower’s environmental performance, but they have also increased the building’s net operating income by more than 30 per cent, reflecting the demand for high-quality green offices,” adds Ho.
Keppel collaborated with BCA to test-bed green technologies at the property. These comprised an intelligent building control system, smart lighting, a high-efficiency air distribution system, a cooling tower water management system and integrated sensor technology to optimise fresh air intake. Keppel Bay Tower was the first property in Singapore to have all five systems.
The building’s tenants have all signed green leases, which lay out, among other things, expectations regarding their electricity and water usage.
Ho adds that Keppel is looking into implementing green leases in other properties where it has control over property management and leasing.
“Keppel’s approach to sustainable urban renewal (SUR) integrates people, artificial intelligence-driven technology and processes to bolster the efficiency, sustainability performance and valuation of real estate assets,” he says.
SUR is also a big part of the company’s growing fee-based asset management business. In April, it announced a first close for the Keppel Sustainable Urban Renewal Fund (KSURF), bringing funds under management in Keppel’s SUR strategy to more than US$1.7 billion.
KSURF will invest in opportunities to create a new generation of high-quality, sustainable real estate assets across Singapore, South Korea, Japan, Australia and first-tier cities in China.
Another key environmental, social and governance (ESG) project that Keppel has undertaken is in importing renewable energy. In 2022, it secured a licence from the Energy Market Authority (EMA) to import hydropower from Lao People’s Democratic Republic via the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project.
Building on these efforts, Keppel has also received two conditional approvals from EMA to import renewable energy from Cambodia and Indonesia. The resulting 1.3 gigawatts (GW) of energy will be part of the 6 GW of low-carbon electricity that EMA is targeting to import by 2035.
“Keppel is currently working with partners to finalise the technical, commercial and regulatory aspects of the respective projects,” adds Ho.
Closer to home, Keppel’s decarbonisation efforts in the energy sector include developing the first hydrogen-ready, combined-cycle gas-turbine power plant in Singapore. The Keppel Sakra Cogeneration Plant is scheduled for completion by the first half of 2026.
The company is also developing solutions for zero or low-carbon ammonia power generation and bunker fuel.
Copyright SPH Media. All rights reserved.
