BGS CASE 2 CDL Case PDF

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ͳSingapore Compact CSR Case Study:City Developments Limited (CDL)1IntroductionCDL is a publicly listed international property and hotel conglomerate. Its business includes real estate development and investment, hotel ownership and management, as well as the provision of hospitality solutions. Headq...

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Singapore Compact CSR Case Study: City Developments Limited (CDL)1 Introduction CDL is a publicly listed international property and hotel conglomerate. Its business includes real estate development and investment, hotel ownership and management, as well as the provision of hospitality solutions. Headquartered in Singapore, CDL is one of the biggest landlords in Singapore with over 4 million sq. ft. of office, industrial, retail and residential space and employs over 300 people in Singapore. Since its establishment in 1963, CDL has developed itself globally, with presence in over 20 countries with 5 listed companies on stock exchanges in Auckland, Hong Kong, London, Manila and Singapore. It also owns other subsidiaries including the London Millennium & Copthorne Hotels plc (“M&C”), an international hotel group which owns and operates over 110 hotels in 18 countries, and the Hong Kong-listed City e-Solutions Limited, which provides technology solutions for the global hospitality industry. Today, CDL’s properties are synonymous with prestige, good value, outstanding quality, eco-friendliness and a choice investment. The table below shows a summary of CDL’s financials over the last three years.

Vision, Mission and Core Values CDL’s vision is to maintain industry leadership in innovation, product quality, service standards, profitability, and corporate social responsibility. CDL has a separate mission for each of its key stakeholders, as presented below:

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From the mission statements, it is evident that CDL is highly-sensitive to the needs of the various stakeholders. There is heavy emphasis on caring for its customers, investors, employees, the environment, as well as for the community. This is one strong sign that CSR has been integrated into the daily business practices of CDL. Since the 1990s, CSR has been an integral part of CDL’s vision and mission. CDL’s emphasis on CSR is also evident in its core values. CDL’s five core values are: competency, committed, creative, cooperative and caring. CSR Vision and Mission In line with CDL’s vision to “maintain industry leadership in … corporate social responsibility”, CDL’s CSR vision is to be a leader in business and a champion of CSR. The stakeholder-focused CSR mission statement is to be a responsible corporate citizen who believes in creating value for stakeholders, conducting sustainable business practices, caring for the community and protecting the environment. Over the years, CDL has translated its core values into actionable CSR initiatives. For example, CDL relies on its many years of experience (competency) to spawn innovative solutions (creative). CDL is also vested for the long run (committed) towards the success of its CSR programme. CDL also takes special care to engage its stakeholders in its CSR efforts (cooperative) and to ensure that their interests are protected (caring).

The CSR Journey CDL’s CSR journey started as early as in the 1960s, when its parent company, the Hong Leong Group, was started by CDL’s late founder Mr Kwek Hong Png. Mr Kwek had always believed in sharing the success of the company with the community, and practised philanthropy generously. Also, sustainability and long-term impact on its stakeholders were valued by CDL as early as in the 1990s. Therefore, elements of CSR had always been present in CDL. Inculcating CSR into CDL in the 1990s was a natural step towards achieving the objectives of formalising its practices, as well as claiming legitimacy for them. As early as in the mid-1990s, CDL had already been ahead of the rest of the industry by conceptualising the first ever eco-friendly condominium. The Savannah CondoPark was later launched for sale in November 2002, with the first solar panels to be installed in a condominium in Singapore. The cost of the panels was even absorbed by CDL. Years ago, CDL intuitively recognised the business case for CSR, and set about to inculcate CSR into its business practices. CDL’s CSR initiatives allowed it to build sustainable relationships with its internal and external stakeholders. All these helped to increase CDL’s legitimacy with the international

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investment community.

The CSR Programme CDL’s CSR programme is managed by a special committee that reports to the managing director via the head of CSR, who is a member of the corporate communications department. Corporate communications was described as the key co-ordinating department, with every other department/division in charge of the CSR practices within their scope of responsibility. Some of the larger divisions also have their own CSR committees. As the different segments of CDL have different natures of operation and activities, they each have their own set of significant environmental aspects, objectives, targets and programmes. CDL uses the ISO 14000, Global Reporting Initiative G3 Guideline, Code of Conduct, Industry Standard, and Global Compact to structure its CSR programme. CDL also established the Environmental, Health and Safety (“EHS”) Policy, and the Environmental Management System (“EMS”) in 2003. CDL’s past and ongoing CSR programme can be dichotomised into the following categories: corporate governance and risk management, stakeholder engagement, environmental sustainability, human rights/labour practices, and community- related programmes. The following paragraph lists the key activities from each category, and the following paragraphs provide details on a few of the key activities. The main activities under the corporate and risk management category includes adopting an internal Code of Business Conduct and Ethics, Whistle-Blowing Policy, and formalised Risk Management Framework. Under the stakeholder engagement category, CDL seeks to be transparent and accountable to their stakeholders, including their customers, investors, employees, contractors, suppliers and the community at large. The main initiative under the environmental sustainability category is the establishment of the EHS Policy and EMS programme. The main activities under the labour policies/ human rights category includes that of adopting fair employment practices like non-discrimination, cultivating talent, and building a pro-family culture by promoting work-health and work-life harmony. Those under the community-related programmes category include caring for the less fortunate, enhancing youth development (both through employee volunteerism), promoting the arts and conserving the environment. In 1999, CDL established the City Sunshine Club as a platform to encourage staff volunteerism in caring for the less privileged. CDL’s EHS Policy and EMS The Environmental, Health and Safety (“EHS”)Policy is directed at fostering a green culture at CDL and sets the strategic direction for all departments to ensure effective EHS management. The Environmental Management System (“EMS”) was established to ensure the effective implementation and sustainability of the EHS Policy, so as to minimise CDL’s impact on the environment. Under the EMS, CDL assesses its environmental impact, sets targets, and draws up its eco-directed programmes. Performance is then assessed, action taken and improvements to the systems made continually. It is an integral part of CDL’s overall management system. The EMS was integrated into CDL’s business processes, with the head of each department within CDL responsible for the operational management of the EMS. One major feature of the EMS is the EMS audit programme, which has auditors (both internal and external) conducting audits at least once a year. Internal audits are carried out to ascertain whether the EMS has complied with ISO 14001 standards, and identify areas of improvement. CDL also engages accredited certification bodies to conduct external audits. After the initial certification, audits are conducted once annually to verify that the EMS continues to be maintained, implemented, and improved upon. In addition, CDL’s Property & Facilities Management Division has implemented an Integrated Management System to ensure a safe and green environment for its tenants, and enhance environmental management standards. This is in order to manage its properties in an environmentally sustainable manner and to ensure the quality of the services rendered. As part of this system, water and energy usage are closely monitored and improved upon.

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Customers CDL continues to be the leading Singaporean property developer in environmental sustainability. All of its newer developments feature eco-friendly attributes such as pneumatic waste disposal systems, multiple recycling corners, green landscape features, energy-saving light fittings and air-conditioning systems. These features come at a cost. CDL currently invests between 2–5% of the construction cost of each project in green design and features. Customers in turn get to enjoy cost savings on their utilities, and a potential increase in the value of their property. In addition to green features, CDL also places emphasis on creating an environment that is community-friendly. It has a set of guidelines on Universal Design that is shared with its architects, designers, contractors, etc.. Some of these features include ramps, the reduction of stairs, alternative access, and wide passageways to enhance the accessibility for Singapore’s growing greying population and the physically-challenged. CDL was also the first private property developer to launch an eco-home initiative in 2004 to encourage homebuyers to practice environmentally-friendly habits in their homes. Homebuyers were invited to a TOP fair where their keys were handed over. At the fair, a host of activities including talks and exhibitions were organised to encourage residents to practise the 3Rs: recycle, reduce and reuse. A Green Living Kit which provided tips on how to “live green” was also given to the residents. These TOP Fairs have been organised for all of CDL’s residential projects ever since then. CDL also launched Project Eco-Office in 2002 to encourage its corporate tenants to adopt eco-friendly habits at their workplace. An Eco-Office Kit providing tips on how to practise green-working practices were handed out free of charge. The programme was also expanded to include an online EcoOffice Audit launched in 2003, where companies could determine how “green” they were, and apply for a formal office audit to be conducted by an independent auditor. Companies that met the relevant standards were awarded the Green Office Label Certification. Thus far, 17 corporations have been certified, with the number growing steadily. Suppliers CDL took the lead in influencing their suppliers to adopt safe and environmentally-friendly designs, plans and programmes. This includes the architects, designers, surveyors, engineers and contractors. CDL organised regular seminars to educate the suppliers on CSR, as well as the merits of CSR. At these seminars, CDL invited external guests to speak, communicating clear standards by which they are evaluated, as well as giving out awards at these seminars along with token cash benefits if they met those standards. Further, CDL made it clear that their environmental health and safety track records were key deciding factors in the decision process to reengage the suppliers for future projects. In line with CDL’s EHS, a 5-Star EHS Assessment System was established in 2001 for all CDL construction sites, where all contractors had to undergo quarterly EHS inspections and audits conducted by an independent auditor. The audit process has been refined through the years to include areas such as energy, water, waste management, safety, noise and public health. In 2006, monetary rewards were offered to the contractors to improve on the level of their eco-friendliness. Also, at the quarterly briefing for contractors, CDL shared the on-site environmental health and safety performance of all the contractors in a bid to encourage healthy competition and peer learning. Employees In order to cultivate a strong “green” corporate culture, training programmes have been organised for employees to learn about resource conservation and pollution prevention, as well as to educate employees on the importance of adhering to CDL’s corporate EHS Policy. In 2007, 1,193 hours were given to CSR and environmental-related training. This includes participation in the UN Global Business Summit for Environment (B4E) Conference, NVPC and CSR Conference 2007, BCA Green Mark Seminar on Eco-buildings Conference 2007, etc.. The employees have also been provided with multiple channels of communication through which they share their programmes, good practices, commitments and environmental performance, as well as to solicit feedback and suggestions for improvement. In addition, CDL is committed to creating a positive workplace where employees are fairly rewarded. In a sign of commitment to this cause, CDL signed the Employees Pledge for Fair Employment with The Tripartite Alliance for Fair Employment Practices in 2008. In order to create a fair workplace, CDL adheres to strict recruitment guidelines, extends benefits to non-managerial, executive and confidential staff even though they are not required by law to do so, and offers competitive

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remuneration packages which are performance-driven. CDL also continues to retain employees above the age of 62, even granting them full remuneration when CDL can legally reduce their wages by up to 10%. CDL also practices a strict non-discriminatory policy when it comes to age, gender, ethnicity and nationality. For instance, 11 of the 20 heads of departments are females as stated in the Social and Environmental Report. CDL is also committed to the work-life harmony and health of their employees. CDL has a dedicated work-life committee, which plans and executes family-friendly and health-related programmes. CDL also has schemes to enable employees who fall critically ill to extend their leave beyond what is allowed by law, and still continue to be entitled to partial or full pay. Flexi-work arrangements are also available for employees who need it. CDL is also very supportive of its employees’ National Service (“NS”) commitments, always ensuring that their employees who have to fulfil their NS duties are granted leave. They also implemented a dollar-for-dollar matching scheme for the Singapore Armed Forces monetary award, which is given out based on employees’ achievements in the physical fitness test. Community CDL has a strong tradition of giving back to the community. Their community efforts have evolved to extend beyond philanthropy to include other focus areas which are in line with their business and strategic goals. CDL has four focus areas in its community-related programmes, and each was selected carefully to complement their business model: the youth, arts, environment, and the needy. The youth were selected as a focus area because they represent future success as they will become key stakeholders in the future as potential employees, customers, shareholders, etc.. Arts was selected because CDL wishes to promote a lifestyle that complements its property developments, as well as to reinforce CDL’s premium brand image. Selecting the environment was cited to be a natural choice because of the nature of CDL’s business. Lastly, choosing to focus on the needy was in part continuing the tradition started by its founder, and also because in the Asian context, helping the needy is one of the key avenues of attaining legitimacy in the marketplace. Now, CDL carefully selects the community programmes it embarks on based on its pre-existing resources, strengths and experience, in order to be impactful in its community pursuits. One of CDL’s major community efforts is that of its employee volunteer programmes, where employees and their families are encouraged to participate in voluntary work. In 2007, 70% of CDL’s employees volunteered a total of 2,242 man-hours. This includes programmes targeted at the disadvantaged elderly and youth-at-risk, donation drives, disaster relief efforts, etc.

In line with CDL’s focus on eco-consciousness, CDL is heavily involved in green programmes targeted at different stakeholders. Examples include supporting NEA’s Clean and Green Singapore campaign, presenting a Green Living Exhibition, sponsoring the NEA Corporate Environmental Outreach Run 2007, and participating in the NEA Corporate and School Partnership programme where CDL provides financial support and know-how in helping students conceptualise and implement environmental projects (CDL has since adopted six schools). CDL also supports the China Exploration and Research Society, a society that conducts research and undertakes nature and culture conservation projects in remote regions of China. Further, CDL has been contributing to youth development in the form of donations to various educational institutions, and also through employee volunteerism at various educational institutions. In addition, CDL has helped promote the arts in Singapore by initiating a national-level CDL Sculpture Award in 2003 and the Singapore Young Photographer Award in 2006.

Results and Measurement CDL’s approach to CSR involves not just its initiatives and programmes, but also the need to deliver tangible results and products. CDL has in place a system to measure its success of its CSR initiatives. It sets clear objectives and goals before embarking on the initiatives, and assesses if its goals and objectives have been met, and continually refines the methods of collecting the data (ie environmental and social statistics). CDL’s CSR programme has led to measurable benefits to the company, both

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internally and externally. General CDL is the only Singapore developer to have been listed on the London fTSE4Good Social Responsibility Index since 2002, a global benchmark for socially responsible investments. In order to stay listed, CDL has to respond to a long list of questions every year. CDL received the Excellence Award for its outstanding CSR programs by the Institute of Public Relations of Singapore in 2008, and the CSR Recognition Award by Singapore Compact in 2007. CDL was also conferred the “Best in Class” status by Storebrand’s Socially Responsible Investments for CDL’s CSR programmes in 2005. Eco Results and Awards CDL’s initiatives to help its tenants go green have paid dividends. The energy and water usage in 17 of CDL’s commercial and industrial buildings have reduced significantly from 2005 to 2007, whilst their tenant participation rate in the programme to make efficient use of paper increased from 68% in 2005 to 81% in 2007. As such, the volume of paper recycled increased substantially. Accordingly, CDL was accorded the Watermark Award 2007 by the Public Utilities Board for their contribution towards Singapore’s water sustainability. In the same year, CDL was bestowed the pinnacle President’s Award for the Environment. CDL was presented with the Singapore Green Plan 2012 Award by the Ministry of Environment and Water Resources for leading the industry in good environmental practices. CDL was also awarded the prestigious Singapore Environmental Achievement Award by SEC. In 2007, CDL was the first private developer to receive the BCA Green Mark Platinum Award, the highest recognition given to exemplary green projects in Singapore. Twenty-six other CDL projects have been awarded a BCA Green Mark Award of some kind, the most of any single developer in Singapore. Also in 2007, CDL attained ISO 9001:2000 and ISO 14001:2004 for 14 of their investment buildings. In 2008, CDL became the only developer to be accorded the inaugural BCA Green Mark Champion Award. More recently in 2009, CDL was the first recipient of the BCA Built Environment Leadership Award (Platinum). Health and Safety With regards to health and safety, CDL was the only property developer in Singapore...