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City Developments Limited: a journeyin sustainable business developmentHwang Soo Chiat and Havovi JoshiHwang Soo Chiat is anAssociate Professor basedat the School ofAccountancy,Singapore ManagementUniversity, Singapore.Havovi Joshi is Head of theCommunications &Dissemination Centre forManagement Practice,Singapore ManagementUniversity, Singapore.Companies with sustainability in their DNA are more resilient and make a better business modelfor success and long term growth. In the mid-1990s, building sector was seen as “destroyingbefore constructing”, CDL as a pioneering developer was determined to change this perceptionand committed to transforming our business strategy to one that “conserves as we construct” forlong term sustainability. From design, construction, procurement, maintenance and even userengagement, the entire cycle has been aligned with environmental sustainability in mind – KwekLeng Joo, Managing Director, CDL[1].It was January 2013, and Esther An, Head of Corporate Social Responsibility (CSR) andGeneral Manager (Corporate Affairs) of City Developments Limited (CDL), was busy inmeetings with the members of her CSR Committee, planning key strategies for CDL’sproposed sustainability framework for the coming year. CDL was one of Singapore’s leadinginternational property and hotel conglomerates, involved in real estate development andinvestment, hotel ownership and management, facilities management and the provision ofhospitality solutions. The group had developed over 22,000 luxurious and quality homes inSingapore, catering to a wide range of market segments. In addition, its London-listedsubsidiary Millennium & Copthorne Hotels plc (M&C) owned and managed over 100 hotelsspanning 70 locations in 19 countries.CDL was widely recognised as a champion of sustainable practices in Singapore. It was thefirst company to be honoured with the President’s Social Service Award and President’s Awardfor the Environment in 2007. It was also the only developer to be accorded the BuiltEnvironment Leadership Platinum Award in 2009 and Green Mark Platinum Champion Awardin 2011 by the Building and Construction Authority (BCA), the governing authority forSingapore’s built environment. CDL was the first Singaporean company to be listed on all threeof the world’s top sustainability benchmarks – FTSE4Good Index Series since 2002, Global100 Most Sustainable Corporations in the World since 2010 and the Dow Jones SustainabilityIndexes since 2011. It was a founding member of Singapore Compact for CSR, and one of thepioneer Singapore signatories of the United Nations Global Compact to lend support to theadvancement of responsible corporate citizenship in Singaporean industry.How could CDL reinforce the culture of sustainability that it prided itself on? What could it doto increase awareness of their sustainability vision in the stakeholders? How would theyinfluence stakeholders to adopt sustainability best practices? These were questions that Anhoped to find solutions for in the meetings with her CSR team.CDLCDL was founded in 1963, with the purpose of acquiring, developing and selling property.The company went public in the same year, and its shares were listed on what was thenknown as the Malayan Stock Exchange. In 1965, CDL completed its first housing projectin Johor Bahru, Malaysia, and also launched its first condominium, Clementi Park, in© 2013, Hwang Soo Chiat &Havovi JoshiDisclaimer. This case is writtensolely for educational purposesand is not intended to representsuccessful or unsuccessfulmanagerial decision making.The author/s may havedisguised names; financial andother recognizable informationto protect confidentiality.DOI 10.1108/EEMCS-11-2013-0049 VOL. 3 NO. 8 2013, pp. 1-23, Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1Singapore. This was followed by the 1966 launch of its first high-rise residential developmentin Singapore, City Towers. In 1972, the Hong Leong Group acquired a controlling interest inCDL and embarked on strategic diversification into commercial and industrialdevelopments. CDL then acquired more investment and development properties such asTanglin Shopping Centre, Katong Shopping Centre, and Queensway Shopping Centre andThe Arcade. It thus emerged as a major property developer in Singapore. The companysoon after ventured into the hotel business.The 1990s witnessed a period of rapid expansion and regionalisation. CDL’s hospitality arm,M&C, which was the first Singaporean company to be listed on the London Stock Exchange,expanded to become one of the largest hotel owners and operators in the world.These milestones saw CDL embark on a substantial growth path, and in 2010, the group’sprofit before tax surpassed the S$1 billion (US$0.8 billion[2]) mark.By end 2012, CDL had an extensive global network that included over 300 subsidiaries andassociated companies across more than 80 locations in 20 countries. Further, fivecompanies were listed on the stock exchanges in New Zealand, Hong Kong, London andPhilippines.For the financial year ending 31 December 2012, CDL recorded revenue of US$2.72 billionwith profit after tax of US$699 million[2].Sustainability in SingaporeAn commented:CSR is fast becoming a licence to operate in some areas. For example, in 2005 the ‘‘Green Mark’’was launched. But in 2008, the basic certification level of Green Mark was made mandatory thatany new development must meet that standard.In 2005, the BCA Green Mark Scheme was launched by the Singapore Government as aninitiative to drive Singapore’s construction industry towards more environment-friendlybuildings. It was intended to ‘‘promote sustainability in the built environment and raiseenvironmental awareness among developers, designers and builders when they startedproject conceptualisation and design, as well as during construction’’ (Building andConstruction Authority, 2013).Then in 2009, in another key development, the Singapore Government, in consultation withits people, came out with a Sustainability Blueprint. It defined sustainable development forSingapore as growing the city state in a way that (Singapore Government, 2013):B Was efficient: develop with less resources and waste.B Was clean: develop without polluting our environment.B Was green: develop while preserving greenery, waterways and our natural heritage.Listed companies were encouraged to adopt sustainability reporting, with the release of theSingapore Exchange Policy Statement on Sustainability Reporting in June 2011, whichstated that:(I)ssuers should assess and disclose the environmental and social aspects of their organisationalperformance, in addition to the financial and governance aspects that are already part of thecustomary and regulatory disclosure practiced.In May 2012, the Monetary Authority of Singapore stated that sustainability should beconsidered as part of corporate governance and directors ought to consider sustainabilityissues, such as environmental and social factors, as part of their strategic formulation (referto Exhibit 1 for regulatory developments in Singapore).However, Christie Lee, Manager, CSR, CDL commented, ‘‘The push to CSR is still notthat big in Singapore. In fact, many companies have little understanding of CSR andsustainability.’’PAGE 2jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013CSR at CDLThis is CDL’s 50th anniversary. In 1999, our MD spearheaded the work improvement plan, whichinvolved all the CDL staff. The idea was that we must brainstorm within the organisation. Wetalked about global warming then, and we recognised that energy, particularly increasingelectricity costs, was a key issue. At that time, there was no green mark or any real push from thegovernment. So it was our own initiative to cut down our carbon footprint. We were the pioneerand the first to receive the Green Mark Gold award for existing buildings in 2005 – Anthony Goh,Deputy General Manager, Property and Facilities Management.The seeds for CDL’s endeavours in developing new benchmark for CSR excellence can betraced to almost 50 years ago to the mid-1960s, based on its founder’s firm belief that thesuccess of the company should be shared with the community. However, it was years later,around the mid-1990s, that the company’s CSR vision:To be a leader in business and a champion of CSR,along with its CSR Mission:To be a responsible corporate citizen who believes in creating value for stakeholders, conductingsustainable business practices (SBP), caring for the community and protecting the environment,was integrated with its business and operations.CSR was promoted after taking into account a broad range of stakeholder engagement fromseveral parties such as CDL’s investors, customers, employees, contractors, suppliers andthe community (refer to Exhibit 2 for the CSR philosophy). Soon after, the company alsobegan to develop and adopt international benchmark and standards for reporting, which ledto further awards and achievements (refer to Exhibit 3 for CDL’s sustainability rankings,benchmarking and awards).In 2005, CDL became a founding committee member of Singapore Compact for CSR, whichwas (and continued to be) a national society promoting CSR among the business communitythrough awareness dialogue and workshops. In the same year, it also became one of thefounding Singapore signatories of the United Nations (UN) Global Compact to lend supportto the advancement of responsible corporate citizenship in Singapore.By 2011, CDL had been selected as an index component in the Dow Jones SustainabilityIndexes (worldwide and in Asia Pacific), which were the first global indices to track thefinancial performance of leading sustainability-driven companies worldwide. It thus was theonly Singapore property developer to be listed on both the Dow Jones Sustainability Indexesand FTSE4Good Index Series. CDL was also the only Singapore company to be rankedamongst the ‘‘Global 100 Most Sustainable Corporations in the World’’ for three consecutiveyears (refer to Exhibit 4 for Global 100 methodology).In 2012, CDL became one of the five founding members of the Business Council forSustainable Development (BCSD) in Singapore – which had been established as amembership organisation comprising leading local businesses and the regional arms ofinternational companies, with the objective ‘‘to work with businesses locally to help fostereconomic development in harmony with environmental preservation and socialdevelopment’’[3].CDL’s CSR strategyCDL had a well-developed and rejuvenating corporate strategy which was entrenched in thetriple bottom line (TBL) approach. This implied developing properties that were sustainable,functional and financially marketable.The three pronged approach was as follows:1. developing quality and environmentally sustainable properties (refer to Exhibit 5);2. managing properties in a cost efficient and energy efficient way (refer to Exhibit 6); andVOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 33. influencing stakeholders through outreach initiatives, working closely with governmentagencies and non-governmental organisations (refer to Exhibit 7).There were many reasons that CDL’s CSR strategy was successful. The company clearlyhad a passion for CSR, which was far beyond legislative requirement. Allen Ang, DeputyGeneral Manager, Projects commented:At the project departments, our role is to develop residential and commercial properties and handthem over to our customers on time, within budget and in good quality. We define thesustainability context ‘‘as conducting responsible business operations at a level over and abovethe statutory and regulatory requirements’’. We are very mindful of the impact that ourdevelopment activities have on the environment. Globally, one third of greenhouse gases arecontributed by the building sector. Large amounts of energy and water are consumed, andconstruction generates a lot of wastes, noise and dust. How do we mitigate this, and how do weaddress the safety and health of the workers? We approach all these concerns and more with avery integrated approach. From planning to design, and right through to procurement andconstruction – our job is to ensure that as we build, the impact of our operations on theenvironment, health and safety (or EHS), is mitigated.We have very stringent ‘‘Green Procurement guidelines’’ that covers sustainable design andconstruction. In the procurement of our contractors and consultants, they must be committed toupholding high EHS standards. Our contractors must not have any fatalities as well for the past 1year. Similarly, we have stringent requirements for the procurement of suppliers and materials:materials with green label, ‘‘green’’ concrete, energy efficient air-conditioners, etc. that we use forprojects. These materials and equipment may be more expensive than the normal ones, howeverwe believe that besides mitigating the potential impact on the environment, the use of suchmaterials and equipment will also translate into tangible benefits for the end-users.In the area of social impact on account of employees’ health and safety too, the companyclearly aspired to make a strong positive impact on its stakeholders.A culture of leadershipAt CDL, we recognise that we are living in an interdependent world. Business leadership will not besustained without stewardship in both social and environmental aspects. CSR is not a theory but animportant management approach to achieve good TBL, do good and do well at the same time forlong term sustainability. If applied strategically, practising CSR will certainly add value to thebusiness and achieve long term growth and sustainability. Currently, the uptake of CSR amongstSingapore companies remains slow as many still see CSR as a cost. Based on our humbleexperience at CDL, we see CSR as an investment and we have indeed reaped tremendous benefitsin both tangible and intangible ways. Most importantly, we are happy to say that while we operate tomeet the needs of the present, we are not compromising the ability of our future generations to meettheir needs – Esther An, Head of CSR and General Manager (Corporate Affairs), CDL.Ang commented:We were among the very first to adopt the ‘‘Green Mark’’ scheme. This stems from our topmanagement’s commitment and firm advocacy of EHS. They have clearly supported theimplementation of green design and features in our projects, agreeing to allocating 2-5%construction costs of a new development for such features and innovations in our developments[. . .]. We have a very open and supportive top management in terms of innovation and CSR. As amarket leader, we believe we must do things that others don’t do. This differentiates us. And whatothers do, we must do better. That’s how we started this EHS journey and began drivinginnovations in every of our developments, so as to be a leader in our field. Every project we wantat least one innovation that no one else has done. This is our personal KPI – that we should be aleader in our field. An example of one such innovation is the implementation of a home energymanagement system for one of our developments that helps the home owner monitor their overallenergy consumption and control their air-conditioner units individually through their I-pads.Organisational structure as a key CSR enablerIn 2008, CDL formally established a framework listing CDL’s significant CSR issues and thecore stakeholders involved. In a significant CSR development, it established the CSRCommittee to better align its CSR initiatives with the company’s business strategy. The CSRCommittee comprised senior managers from the company, and reported directly to thePAGE 4jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013Managing Director Kwek Leng Joo. It was responsible for CDL’s CSR key performanceindicators (KPIs) and targets, and formulating and managing programmes to improve itssocial and environmental performance in the areas of focus. These key CSR areas of focuswere the environment, employee relations, corporate governance and risk management,stakeholder relations and community.The culture is such that missing a KPI is not deemed a failure, but a case for providingpositive reinforcement.Excellent reporting and communication standardsCDL was one of the few companies in Singapore that produced dedicated sustainabilityreports. The report was externally validated by Ere-S, a consulting company that specialisedin business sustainability and provided services in the domains of sustainability reporting,sustainability report assurance, stakeholder engagement and CSR training. CDL’s SR wasalso GRI certified[4].CDL’s sustainability report clearly measured its performance in terms of ‘‘achieving businessexcellence while maintaining good social and environmental performance’’. The reporttouched upon various dimensions in each of these three spheres – financial, environmentand social (refer to Exhibit 8 for an extract of CDL’s sustainability report 2012).CDL also ensured that their contractors had in place a comprehensive sustainabilitymonitoring and reporting system. Every month contractors had to submit the EHSperformance of their respective worksites for monitoring purposes. CDL’s project managerswould monitor the EHS performance of their respective projects individually. At thedepartmental level, various sub-committees headed by their project managers monitored andchampioned the various aspects related to EHS, such as energy consumption and workplacesafety and occupational health.CDL had also started carbon accounting[5], and were the fore-runner in the industry. Projectmanagers provided the collated EHS performance from worksites to CDL’s EHS manager.At the corporate level, the EHS manager consolidated and monitored all CO2 data forreporting purposes.Interestingly, even while managing their database of reports, CDL was driven to ‘‘go green’’.As Ms Foo Chui Mui (Assistant General Manager, Customer Relations) commented:We have really cut down on the use of paper. Over the years, we have cut down our paperconsumption. For instance, only the final report is retained, and that too is kept at a shared drive tomaintain transparency while keeping everyone on the same page.Training as a means to ensure adherence to CSR standardsWhen CDL started to embark on the sustainability journey, there was a general lack ofknowledge and acceptability of sustainability by the consultants, contractors and otherstakeholders. CDL had to source for information and build up its knowledge from the internetand other sources. Workshops were then conducted with its stakeholders to obtain theirbuy-in to go green by pitching the fact that they were also partners in the project.CDL continued to conduct quarterly EHS training. Both internal and external experts wereinvited to conduct talks on topics which included waste management, water and energyconservation, and other related issues.CDL also conducted monthly complex management meeting where experts were invited toshare their views, new innovative products, and other pertinent ideas. Further, Mabel Wong,Senior Manager, Property and Facilities Management commented, ‘‘More than half of ourPFM managers in charge of operations are Green Mark managers’’.CDL’s commitment to CSRMultiple drivers for CSR continue to strengthen globally. Total assets managed under CarbonDisclosure Project have grown dramatically from US$4.5 trillion in 2003 to US$78 trillion in MarchVOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 52012 with 235 companies responding in 2003 compared to 3,715 in 2011. The growing climatechange-related regulations make CSR not simply a ‘‘good to have’’ item but a licence to operate.It is becoming more apparent that companies who have yet to embrace the significance ofsustainability issues have placed themselves in an increasingly vulnerable position, putting theiroperations at risk, if they have limited expertise and contingency plans to manage the fastemerging social, political and economic scenarios. In the face of a changing businessenvironment and mind-set, it is a matter of time before the turn of tide occurs – Kwek Leng Joo,Managing Director, CDL (Kwek Leng, 2013).CDL was clearly committed to maintaining and advocating commitment towards CSR. Thisoften went far beyond what competition did. In an interesting example of the same, Ang said:We are probably the only developer in Singapore who conducts a bio-diversity impact study forundeveloped sites with existing natural habitats and sites in close proximity to natural habitats,before the site is being developed. At our ‘‘Rainforest Executive Condo’’, a biodiversity impactstudy was conducted when the site was purchased in 2011. In the course of the site assessment,a nest belonging to a pair of nesting white-bellied sea eagles was discovered on an existing tree.We were advised that the tree where the nest was located should not be retained due to its poorcondition, so we called on experts from the Bird Park to advise us on the appropriate measures tobe taken. Eventually, we worked with the main contractor to re-sequence their construction andwork around the existing tree until the young offspring hatched and grew strong enough to beable to fly off on their own.The culture was such that a virtuous circle of sustainability appeared to have beenestablished, where each employee was pushing themselves and the other to achieve newerheights. Wong commented:We are all always aligning ourselves to the corporate mission, and personal KPIs are set for ourdepartment far beyond what is required. We have to keep updating our KPIs annually [. . .] We allwalk the talk, all the way from top-down.Balancing the costs with tangible benefitsTo truly grow as a business, we need to develop the right balance between financial performance,environmental stewardship and social engagement – CDL Sustainability Report, 2012 (CDL, 2013).CDL perceived some very tangible benefits of its sustainability initiatives. For instance, therewas an estimated S$19.7 million (US$16 million[2]) in annual energy savings for 37 GreenMark Awarded Buildings during the time period 2008-2011. Similarly, the buyers ofresidential properties too typically enjoyed substantial energy and water savings. Anexample was the ‘‘Oceanfront @ Sentosa Cove’’ which was the first private residentialdevelopment to be awarded the BCA Green Mark Platinum in 2007, demonstrating savingsof 30 per cent in energy and water. Similarly, it was found that residents could enjoy averageannual energy savings of up to SG$1,000 (US$ 813[2]) on account of energy efficient airconditioners in their apartments.There were clearly distinct benefits of going green for the real estate sector[6]. To begin with,the company expected average expected savings of 10 per cent in operating expenses and17 per cent in energy consumption from the retrofitting, and commercial buildings couldincrease their capital value by about 2 per cent. Second, the investment in achieving GreenMark certification was not high, and the cost of the retrofit as a percentage of the currentmarket value of the property was about 0.5 per cent for retail and 1 per cent for offices.Finally, the upfront cost of retrofitting energy inefficient buildings could be recovered withinseven years.However, it was recognised that there was a clear cost associated with going green, whichhas to be managed. Lenny Tan, Assistant Manager, Projects commented, ‘‘Constructioncosts have risen steadily over the years. This is a challenge that we need to work aroundwhile maintaining our philosophy and commitment towards sustainability’’.Ang elaborated:With the market getting more competitive, we have to strategize how to achieve costeffectiveness for our green investment. One of the most effective strategies is to adopt passivePAGE 6jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013low energy architectural design. Buildings should be designed to minimise external heat gain andmaximise day-lighting and natural ventilation. This concept is always emphasised to ourarchitects as a first point of consideration. We influence and educate these architects to adopt ourphilosophy.Tan further added:We have an EHS risk register that cuts across the design and construction phases. The individualproject manager prepares an EHS risk assessment at the start of every new project to assess theimpact of the development activities on the neighbours and other impacts related to safety,energy efficiency, road traffic, etc. This is then handed over to the consultant to address andmitigate the risks in their design. Any residual risk not addressed in the design is then highlightedto the contractor to be properly addressed in their construction stage risk assessment. Theconsultants and the contractors are also required to present their EHS risk assessments to theproject teams and our internal colleagues and explain their strategy to mitigate the EHS risksidentified.The Singapore Government had commenced handing out a number of grants to promotesustainability. However, as Goh commented:We have ‘‘missed out’’ on some grants as we do (sustainability initiatives) before the grants areavailable. We are doing it for the general good and we are way ahead of the pack. So thisbecomes our KPI – to strive for further improvement each year.Enabling competitive advantage – reputationalCDL believed that practising CSR had helped differentiate their branding and product,particularly given the company’s long standing commitment and consistent approachtowards encouraging the same. An clarified:We take a long term view in our CSR commitment and practices for sustainability – financial,social and environmental. However, given the low level of green consumerism as at date, thecompetitive advantage of a green product or green home or space were still limited. But with theincreased awareness of climate change, we are seeing some progress in the preference of greenproducts.Catherine Loh, Deputy General Manager, Head, Corporate Secretarial Services stated that:Being a high profile listed company, our reputation especially as a CSR advocate and pioneer isat risk every day, whether arising from internal or external factors in connection with theimplementation of our strategies in our day-to-day operations. With the increase in the number ofour stakeholders, we are constantly aware that our risk management policies and practices haveto be continually reviewed and updated in a timely manner, to safeguard the interests of ourstakeholders, our assets and our reputation.CSR at CDL: what next?In 2010, in an effort to embrace a holistic approach to CSR and go beyond complianceinitiatives, CDL undertook a self-assessment of its CSR performance. This was based on theprinciples of ISO 26000: guidance on social responsibility, which included accountability,transparency, ethical behaviour, respect for stakeholder interests, respect for the rule of law,respect for the international norms of behaviour and respect for human rights. The coresubjects listed by ISO 26000 were organisational governance, human rights, labourpractices, the environment, fair operating practices, consumer issues and communityinvolvement and development. Based on the above results, CDL incorporated a humanrights corporate statement, enhanced its employee engagement, whistle-blowing policy,corporate governance and involvement in community development projects.It was important to An that CSR at CDL had to set new benchmark in sustainabledevelopment by doubling its efforts to meet stakeholders’ expectations, and achieve globalstandards in sustainability through innovation, rigorous assessment and communication ofthe outcomes (Kwek Leng, 2013). New programs had to be initiated to draw in a wideraudience, and the importance of CSR had to be advocated and disseminated to a widerrange of stakeholders.VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 7Looking ahead, CDL remained firmly committed to CSR, and aspired to bring it to the nextlevel as the environment and marketplace evolved rapidly. An and the team were alreadystrategizing the right move to achieve the above.Notes1. Kwek Leng Joo, Managing Director, CDL, company presentation, January 15, 2013.2. US$1¼S$1.23 as at January 18, 2013.3. wbcsd, Peter Bakker launches Business Council for Sustainable Development Singapore,November 6, 2012, available at: www.wbcsd.org/Pages/EDocument/EDocumentDetails.aspx?ID ¼ 15143&NoSearchContextKey ¼ true (accessed January 2013).4. For further details on the GRI sustainability reporting requirements, refer to: www.globalreporting.org/resourcelibrary/G3.1-Sustainability-Reporting-Guidelines.pdf5. Carbon accounting is a subset of sustainability accounting, emphasising the management andreporting of carbon emissions.6. Joint study by the Building and Construction Authority and the Department of Real Estate, NUS, incollaboration with the top six real estate consultancy firms, September 2011.Keywords:Corporate social responsibility,Sustainability,CSR,Business development,Asia,Singapore,Sustainable business practicesReferencesBuilding and Construction Authority (2013), ‘‘About BCA Green Mark Scheme’’, available at: http://www.bca.gov.sg/greenmark/green_mark_buildings.html (accessed March 2013).City Developments Ltd (2013), Sustainability Report 2012, available at: http://media.corporate-ir.net/media_files/IROL/60/60774/CDL_Sustainability_Report_2012_Final.pdf (accessed January 2013).Kwek Leng, J. (2013), CDL Sustainability Report 2012, Director’s presentation, available at: http://media.corporate-ir.net/media_files/IROL/60/60774/CDL_Sustainability_Report_2012_Final.pdf (accessed 18January 2013).Singapore Government (2013), ‘‘Sustainable Singapore’’, available at: http://app.mewr.gov.sg/web/contents/ContentsSSS.aspx?ContId¼1291 (accessed January 2013).Smith, J. (2013), ‘‘The world’s most sustainable companies’’, Forbes, 23 January, available at:http://www.forbes.com/sites/jacquelynsmith/2013/01/23/the-worlds-most-sustainable-companies/3/(accessed March 2013).Exhibit 1. Regulatory developments in SingaporeIn May 2012, the Monetary Authority of Singapore (MAS) released the ‘‘Code of CorporateGovernance’’. The following is an extract of the 16 principles listed therein:1. Every company should be headed by an effective board to lead and control the company.The board is collectively responsible for the long-term success of the company. Theboard works with management to achieve this objective and management remainsaccountable to the board.2. There should be a strong and independent element on the board, which is able toexercise objective judgement on corporate affairs independently, in particular, frommanagement and 10 per cent shareholders. No individual or small group of individualsshould be allowed to dominate the board’s decision making.3. There should be a clear division of responsibilities between the leadership of the boardand the executives responsible for managing the company’s business. No one individualshould represent a considerable concentration of power.4. There should be a formal and transparent process for the appointment andre-appointment of directors to the board.5. There should be a formal annual assessment of the effectiveness of the board as a wholeand its board committees and the contribution by each director to the effectiveness of theboard.PAGE 8jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 20136. In order to fulfil their responsibilities, directors should be provided with complete,adequate and timely information prior to board meetings and on an on-going basis soas to enable them to make informed decisions to discharge their duties andresponsibilities.7. There should be a formal and transparent procedure for developing policy on executiveremuneration and for fixing the remuneration packages of individual directors. No directorshould be involved in deciding his own remuneration.8. The level and structure of remuneration should be aligned with the long-term interest andrisk policies of the company, and should be appropriate to attract, retain and motivate:B the directors to provide good stewardship of the company; andB key management personnel to successfully manage the company.However, companies should avoid paying more than is necessary for this purpose.B Every company should provide clear disclosure of its remuneration policies, level and mixof remuneration, and the procedure for setting remuneration, in the company’s annualreport. It should provide disclosure in relation to its remuneration policies to enableinvestors to understand the link between remuneration paid to directors and keymanagement personnel, and performance.B The board should present a balanced and understandable assessment of the company’sperformance, position and prospects.B The board is responsible for the governance of risk. The board should ensure thatmanagement maintains a sound system of risk management and internal controls tosafeguard shareholders’ interests and the company’s assets, and should determine thenature and extent of the significant risks which the board is willing to take in achieving itsstrategic objectives.B The board should establish an Audit Committee (‘‘AC’’) with written terms of referencewhich clearly set out its authority and duties.B The company should establish an effective internal audit function that is adequatelyresourced and independent of the activities it audits.B Companies should treat all shareholders fairly and equitably, and should recognise,protect and facilitate the exercise of shareholders’ rights, and continually review andupdate such governance arrangements.B Companies should actively engage their shareholders and put in place an investorrelations policy to promote regular, effective and fair communication with shareholders.B Companies should encourage greater shareholder participation at general meetings ofshareholders, and allow shareholders the opportunity to communicate their views onvarious matters affecting the company.Source: Monetary Authority of Singapore, Code of Corporate Governance, May 2012, www.mas.gov.sg/regulations-and-financial-stability. . . 3May2012.ashx (accessed March 2013).Exhibit 2. The CSR philosophy – commitment to key stakeholdersCDL had articulated its CSR commitment to the following key stakeholders:B Our commitment to stakeholders. As a responsible corporation, it is our goal to betransparent and accountable to our stakeholders who have an interest in our operations.B Our customers. To offer quality and innovative products, unsurpassed service and valuefor money.B Our investors. To maintain profitability and achieve optimum returns for their investments.B Our employees. To maximise their potential and care for their personal well-being andcareer development.B Our contractors and suppliers. To select based on quality work and their ability tocomplement our commitment to environment, health and safety.B The community. To serve the community we operate in so as to create a better place forall, especially caring for the less fortunate, enhancing youth development, promoting thearts and conserving the environment.VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 9Source: CDL ‘‘CSR philosophy’’, January 2013, www.cdl.com.sg/app/cdl/social_responsibility/our_csr_philosophy.xml (accessed 11 January 2013).Exhibit 3. CDL’s 2012 sustainability rankings and benchmarkingExhibit 4. The 2013 Global 100 methodologyThe Global 100 was considered to be the most extensive data-driven corporatesustainability assessment in the world. It was an annual project launched in 2005 byCorporate Knights, a Toronto-based media company, with the annual Global 100 announcedeach year during the World Economic Forum in Davos.For the 2013 Global 100 selection for instance, the methodology used was to first consider allcompanies that had a market capitalization exceeding US$2 billion as of October 1, 2012.Then four screens were employed, based on the companies’ sustainability disclosurepractices, financial health, product category and financial sanctions. Companies thatpassed all four screens would constitute the 2013 Global 100 Shortlist. They would then getassessed on 12 key performance indicators (KPIs). The Global 100 would finally comprisethe highest ranking companies in the shortlist, subject to each industry group’s cap.In 2012, Unicore, the global materials technology group based in Belgium, was ranked themost sustainable company in the world.According to Doug Morrow, Vice President of Research at Corporate Knights, ‘‘Sustainabilityis recognizing that a corporation’s long-term interests are intellectually and financiallyTable EI2008 2009 2010 2011 2012Sustainability rankings and benchmarksAsian sustainability rating (%) 66 76 74 81 NACarbon disclosure project Participated since 2007, and disclosure to thepublic since 2009Dow Jones Sustainability Indexes Listed since 2011FTSE4Good Index Series Listed since 2002Global 100 Most Sustainable Corporations in theWorld (ranking)NA NA 81 100 62Singapore Quality Class Certified since 2009Sustainability commitments and certificationsAnti-corruption and compliance declaration Signatory since 2009Caring for climate statement Signatory since 2008Securities Investors Association Singapore –Corporate Governance Statement of SupportSignatory since 2010UN Global Compact Signatory since 2005ISO 9001 (15 CDL buildings) Signatory since 2007ISO 14001 Property Development and ProjectManagementSignatory since 2003ISO 14001 Corporate Management andOperationsSignatory since 2008OHS 18001 Property Development and ProjectManagementSignatory since 2008OHS 18001 Property Management Signatory since2011Sustainability reportingGlobal Reporting Initiative C B þ B þ B þ A þAA1000 Assurance Standard NA – Type 2 Type 2 Type 2ISO 26000: 2010 Guidance on SocialResponsibilityStrategic alignment since 2009Source: CDL, Sustainability Report 2012, www.cdl.com.sg/sustainabilityreport2012/impacts_srbac.html (accessed February 2013)PAGE 10jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013consistent with resource efficiency, proactive health and safety practices, and responsibleleadership’’ (Smith, 2013). Toby Heaps, Editor-in-Chief of Corporate Knights, added:Sustainability is when what is good for a company is also good for the planet, andvice-versa. It means creating more wealth than we destroy. It means that a company ison balance increasing our overall stock of wealth, grounded in human, produced,financial, natural, and social capital.Source: Global 100, www.global100.org/methodology/overview.html (accessed February 2013).Exhibit 5. The first of CDL’s three pronged CSR strategyDevelop: internalising ‘‘safe and green’’ corporate philosophyB Five-star EHS assessment to raise builder’s EH standards since 2001. Independentlyappraised and graded quarterly by independent auditors engaged by CDL.B Established an EHS policy in 2003, incorporating measures to mitigate impact throughCDL’s entire operations.B Investment of between 2 and 5 per cent of each project’s construction costs on greendesign elements.B Targets to achieve a minimum BCA Green Mark Gold Plus Rating for all newdevelopments.B Green procurement guidelines to influence our vendors and suppliers at the corporateoffice since 2008.Exhibit 6. The second of CDL’s three pronged CSR strategyManage: optimising water and energy efficiency1. Improve energy-efficiency:B Consumer buildings consume 30 per cent of total energy in Singapore.B Air-conditioning takes up 65 per cent within commercial buildings (other areas ofenergy consumption include lights 21 per cent, lift/escalator 9 per cent and others 5per cent).2. Regular energy audits in particular on aircon plants:B Preliminary site data and collection of data to understand the chiller plant performanceand building load profile.B Detailed audit.B Financial study for ROI.3. Regular training of operations and management staff on energy-efficiency, to be certifiedas Green Mark managers, Green Mark facility managers and certified energy managers.Exhibit 7. The third of CDL’s three pronged CSR strategyInfluence: awareness amongst stakeholders through measures as given belowB Contractors and suppliers: through EHS assessment systems, review and peer learningprograms, CDL EHS Assessment Award.B Tenants and business community: 1degree C Up campaign, recycling initiative.B Residential customers: T.O.P. Fairs.B Employees: Let’s Work Green! Campaign, Achieve ISO 14001 targets.B Community-at-large: CDL e-generation challenge, CDL-Singapore Compact Young CSRLeaders Award, Singapore Young Photographer Award.B Investors: sustainability reports, disclosure surveys and listings, e-mails, web site, etc.CDL also worked on engaging the community through some of the following measures:VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 11B Corporate and social partnership: since 2005, CDL played an active role in mentoringyouth, and supported six schools in Singapore.B BCA-CDL Green Sparks Competition: promoting innovation and raising awareness ofgreen business practices and solutions amongst students who will be future practitionersin the industry.B CDL-Singapore Compact Young CSR Leaders Award: promoting CSR amongst the youthto promote the ways in which organisations implement CSR into their daily operations.Exhibit 8. CDL’s reporting standardsData disclosure was aligned with the seven core areas of ISO 26000 (Figure E1).Exhibit 9. CDL’s Sustainability Report 2012 – summary of key financial,environment and social impact (in US$ million[2])Financial highlightsFigure E1Table EIIFinancial HighlightsYear ending31 December 2012Year ending31 December 2011Year ending31 December 2010Revenue 2,726.0 2,666.7 2,522.8Gross profit 1,350.4 1,441.5 1,343.9Profit from operations 747.9 916.3 804.9Net finance costs (32.5) (43.1) (26.8)Profit before tax 780.6 923.6 867.5Net income 699.4 782.1 703.3PAGE 12jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013Capital managementEnvironmental impactSocial impactFor a full copy of the report, refer to CDL Sustainability Report 2012, www.cdl.com.sg/sustainabilityreport2012/pdf/report.pdfSource: City Developments Ltd, Sustainability Report 2012, www.cdl.com.sg/sustainabilityreport2012/pdf/report.pdf (accessed April 2013).Corresponding authorHwang Soo Chiat can be contacted at: [email protected] EVYear ending 31 December2011Year ending 31 December2010Year ending 31 December2009Employee turnover rate (%) 14.4 13.7 10.7Total CSR and environment-related training(hours)3,287 3,694 .3,000Employee volunteerism participation rate(%)71 60 85Employee volunteerism participation rate(hours)2,838 2,894 5,524Accident frequency ratea 0.11 0.23 0.38Injury rateb 30 63 100Notes: aDefined as number of workplace accidents per million manhours worked at CDL worksites; bdefined as the number of fatal andnon-fatal workplace injuries per 100,000 persons employed at CDL worksitesTable EIIIYear ending31 December 2011Year ending31 December 2010Cash and cash equivalents (in US$ millions) 2,116 1,523Net borrowings (in US$ millions) 1,476 1,907Net gearing ratio (excludes fair value gainson investment properties as the Group’saccounting policy is to state its investmentproperties at cost less accumulateddepreciation and impairment losses)0.21 0.29Interest cover ratio (times) 21.8 21.3Table EIVYear ending 31 December2011Year ending 31 December2010Year ending 31 December2009Total energy used (k kWh) 66,230 71,708 61,496Total water used (m3) 682,519 764,643 603,558aConstruction waste generated at CDLworksites (kg/m2)24.50 46.50 61.70Total carbon emissions (tonnes CO2) 31,589 34,221 30,924Note: aThis figure included the water consumed at the CDL corporate office, which had not been tracked until 2011VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 13

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