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Making the business case to be sustainable
WHETHER it is developing green buildings or reporting its efforts to help save the environment, City Developments Limited (CDL) has been blazing trails in the area of sustainability long before it became fashionable among corporates to do so.
Driven by its ethos of "conserving as we construct", the company started integrating corporate social responsibility (CSR) and sustainability into its business as far back as 1995. This involved changing the way that the property group managed its business and operations as well as supply chain. The end goal was to strike a balance in its "triple bottom line" of financial, social and environmental performance.
Much of CDL's success in achieving its sustainability goals can be attributed to the leadership of Kwek Leng Joo, the group's late deputy chairman. His conviction that CDL had to not only do well financially, but also do well for the community and its environment has helped the company become a leading eco-developer.
For instance, CDL has over 80 Green Mark certified buildings and office interiors, the highest among Singapore developers. Among other innovations, it developed the first CarbonNeutral® development in Asia Pacific: 11 Tampines Concourse; Singapore's first eco-mall, City Square Mall; and first Tree House condominium, which achieved a Guinness World Record for the largest vertical garden in 2014.
Grant Kelley, CDL's chief executive officer, says: "I would say that sustainability is becoming mainstream in today's global business environment. In fact, there is a strong business case for sustainability. Integrating sustainability into our corporate vision and strategy has not only created long-term business value for CDL, but also for our investors and customers.
"For over two decades, our pursuit of sustainable development has built our leadership in environmental, social and corporate governance (ESG) performance, and created stronger brand equity and product differentiation. Our sustainability commitment has also given us a first-mover advantage as environmental regulations have been progressively mandated for the property sector."
He notes that research has shown that Exchange-Traded Funds (ETFs) tracking socially responsible investing (SRI) indices have outperformed those that track the parent indices over the past five years.
"CDL firmly believes that sustainability creates value for our investors and stakeholders. This has shaped a green corporate DNA across all levels of our operations at CDL - from design, construction, procurement, and maintenance to building user engagement."
The property developer adopts a three-pronged approach: designing and developing sustainable properties or green buildings, managing buildings in an energy and resource-efficient way, and engaging and influencing stakeholders to support its commitment to sustainability.
CDL uses sustainability reporting as a tool to measure and benchmark its sustainability performance, while enhancing corporate governance, transparency and stakeholder engagement, Mr Kelley notes. In 2015, it became the first property developer in Singapore to adopt an "Integrated Reporting" approach to its sustainability report. This is centred on six capitals - Financial, Manufactured, Organisational, Social and Relationship, Human, and Natural.
"This integrated reporting approach aims to present a holistic picture to CDL's investors and stakeholders on how the interrelation between CDL's business and sustainability performance leads to value creation over the short, medium and long-term," he says.
The Singapore Exchange announced earlier this year that it will be introducing sustainability reporting on a "comply or explain" basis for Singapore-listed companies from the financial year ending on, or after Dec 31, 2017.
Making a mark globally
Being ahead of the curve in adopting sustainable practices, CDL found achieving buy-in from internal and external stakeholders a challenge when it started down this road. As such, the developer had to devote much time and effort to communicate its goals and plan, and introduced several key channels to engage with its contractors and suppliers.
These included CDL's Environmental, Health and Safety (EHS) policy, the CDL 5-Star EHS Assessment System and Green Procurement Guidelines. Today, the company's contractors support its approach and extend the same good EHS practices to other developers. This has helped drive change in the entire built industry, explains Mr Kelley.
CDL's efforts have paid off in terms of global recognition, and the company is included in numerous sustainability indices globally. Significantly, it was recently ranked top among all listed real estate companies by Global 100 Most Sustainable Corporations in the World. This makes CDL the first and only Singapore company to be listed on the ranking for seven consecutive years.
Accolades aside, Mr Kelley believes that the greater impact of its sustainability initiatives has been to deliver a positive impact on business, the community and environment. (See sidebar).
Moving forward, the developer will continue to influence and engage all stakeholders in its value chain, from architects and builders to home buyers and tenants, working together to create solutions and adopt practices for a sustainable city.
Says Mr Kelley: "Innovation will be a key driver and we will continue to push boundaries in support of the national vision of becoming a cleaner, greener, smarter and more sustainable city. Our quality projects will be more
resource-friendly and will cater to a green and smart lifestyle, taking into account various aspects of energy, security, mobility and healthcare needs."