We aim to deliver financial value and societal benefits by balancing the commercial objectives with the environment and social needs of our stakeholders
At KLCCP Stapled Group, our goal is to conduct our business activities in a socially and environmentally responsible manner. This includes maintaining high standards of conduct for maximising long term value creation, essentially in benefitting our stakeholders.
Our business strategy takes into perspective the risks and opportunities affecting the industry and organisation, while keeping abreast of evolving stakeholder expectations in the discipline of sustainability, such as climate change and social risks including human rights. We are focused in our efforts to address the material sustainable matters of KLCCP Stapled Group across our five priority areas – Corporate Governance, Environmental Stewardship, Security, Safety & Health, Our People and Reliable Partner.
Upholding transparency in our actions and disclosures to ensure the highest standards of governance, business ethics and integrity in our operations
Striving for improved environmental practices and operational sustainability
SECURITY, SAFETY AND HEALTH
Protecting our assets, operating reliably, effectively and efficiently across the Health, Safety and Environment (HSE) social spheres
Nurturing a diverse and talented workforce to drive business growth strategies
Strengthening financial position, business competitiveness and spurring socio-economic growth
Our business is centered on real estate development, investment and management. We focus on how we manage our operations, mitigate our risks and grow our business to create competitive advantage whilst leveraging on the changes in the external environment, creating long term growth and stakeholder value. This entails maximizing performance of our assets and investments, and managing expectations of our stakeholders, namely our employees, tenants, shoppers, guests, suppliers and contractors.
Our focus on sustainability is shaped by five priority areas reflecting the FTSE4Good themes and indicators for the construction and real estate sector and taking into consideration our unique business requirements, wider industry landscape while being mindful of stakeholder requirements.
OUR SUSTAINABILITY FRAMEWORK
In managing the risks and opportunities which supports the business strategies, goals and aspirations, we developed a Sustainability Framework which encapsulates our principles on sustainability and aligns to our five priority areas. We took into perspective our strategic and operational risk profile and opportunities presented by the changing business environment, particularly in the real estate and construction industry. Premised on the PETRONAS’ Corporate Sustainability Framework, we adapted it to our context and framed the KLCCP Stapled Group Corporate Sustainability Framework which embodies 8 focused areas, comprising Shareholder Value, Corporate Social Investment, Climate Change, Natural Resource Use, Health, Security, Safety & Environment, Workforce Development, Human Rights and Governance & Business Ethics.
KLCCP Stapled Group’s Sustainability Governance Structure was established to ensure Board’s oversight on the formulation and execution of sustainable strategies for the organisation. This involved the formation of KLCCP Stapled Group’s Sustainability Steering Committee (SSC) to ensure accountability, oversight and review in the identification and management of sustainability matters within the organization. The SSC has joint chairmanship comprising the Chief Financial Officer and Head of Health, Safety & Environment whilst members of the SSC comprise leaders of diverse areas of expertise covering all facets of KLCCP Stapled Group’s business operations. The SSC is supported by a working committee to ensure sustainability is considered and integrated throughout our business operations.
The Chief Executive Officer (CEO) is responsible for driving the implementation of sustainability strategy for KLCCP Stapled Group and reports the progress to the Boards of KLCCP and KLCC REIT. The Boards represent the highest authority and is ultimately accountable for managing sustainability matters in KLCCP Stapled Group. The governance structure facilitates regular reporting on sustainability matters to CEO with updates to the Boards.
MATERIAL SUSTAINABLE MATTERS
We identify our material sustainable matters by taking into account the potential risks in our business activities in light of the social and environment needs and the economic factors impacting the real estate industry. Our material areas are also identified based on inputs from both our internal and external stakeholders through observation and enquiries received. An internal materiality assessment is carried out annually to map out our sustainability matters.
Step 1 : Issue Identification
The materiality process
began by identifying which of the sustainability issues are
important to our external and internal stakeholders from a
combination of internal and external source documents and analysis
of megatrends relevant to the industry. We benchmarked against our
real estate and REIT players, both globally and locally to
identify the sustainability matters that are common to the real
estate and construction sector. As a constituent of FTSE4Good
Bursa Malaysia Index, our identification of material areas were
also based on the FTSE4Good themes and indicators for the real
estate and construction sector which we fall under. The
identification step was also aligned to the boundaries in which we
operate in and determined if the issues were within or outside our
direct operational control. The stakeholders considered for the
development of the list of sustainability issues were:
External: Suppliers and Service Providers, Customers and Consumers, Shareholders/Investors/Business Partners, Government/Local Authorities, Regulators, Community and Media
Step 2 : Prioritisation
Prioritisation is the
process of determining how important the identified topics are to
our stakeholders and to us. We translated the issues into
sustainability risks and opportunities to determine which are
material. Based on the identification process, we then engaged
with the SSC and narrowed down the list of relevant sustainability
issues for KLCCP Stapled Group based on the significant Economic,
Environmental and Social (EES) impact to the organisation and the
matters that substantively influence the decisions of
stakeholders. With that, we identified 12 material sustainable
matters for KLCCP Stapled Group.
Step 3: Materiality Assessment
To begin the Materiality
Assessment process, the SSC identified the internal departments to
solicit feedback on material issues from an internal business and
external stakeholder perspective. The participants included
representatives from the areas of Development and Leasing,
Facilities Management, HSE, Procurement, Legal, Corporate
Communications, Investor Relations and Business Development and
our retail and hotel operations. The participants were requested
to rank the importance of these 12 shorlisted material issues
based on the five priority areas and in accordance to the impact
on the external and internal stakeholders. Based on the degree of
impact of either high, medium or low, the scores were given a
weighting factor and were plotted on a materiality matrix using
the average internal and external score.
Step 4: Review and Feedback
The final materiality
matrix was presented to the SSC for review and feedback, and
subsequently presented to CEO and the Boards. It was agreed that
KLCCP Stapled Group would proceed with this list of sustainable
matters for the 2016 Sustainability Report.
Our material sustainable matters will be revisited and reassessed annually.
IDENTIFIED MATERIAL SUSTAINABLE MATTERS
MATERIAL SUSTAINABLE MATTERS
Returns to holders of Stapled Securities
Economic and Industry Growth
Current or expected impacts on communities and local economies
Scope 1 and 2 emissions (mtCO2-e)
Total energy consumed (kWh)
Use of renewable energy (kWh)
Energy reduction achieved as a result of conservation and efficiency initiatives
Total volume of water used (m3)
Total volume of hazardous waste generated (tonnes)
Total volume of hazardous waste disposed (tonnes)
Total waste intensity (kg per room) and waste diversion (%)
Product innovation to reduce impact (e.g. eco-friendly, less chemicals/toxic substances)
Assessment of new and existing suppliers to identify environmental impact
Community, Customer and Tenant Engagement
Total amount invested in the community (RM)
Supply Chain Management
Assessment of new and existing suppliers to identify potential negative social impact
Procurement spent on local supplies (%)
Security, Safety and Health Management
Security, Safety and Health
Number of workers undergoing safety and health training
Number of fatalities
Loss Time Injury Frequency (LTIF), Loss Time Injury Incidents (LTI), Loss of Primary Containment (LOPC)
HSE organisational chart and HSE committee
Skills and Capability Development
Number of employees sent for training
Average training hours per employee
Amount invested in learning and development programmes (RM)
Diversity and Inclusion
Number/percentage of employees by gender, age group, ethnicity
Human Rights and Labour Practices
Compliance to legislations on welfare and rights of employees, workers and service providers
Number of discrimination incidents
Number of child/forced labour incidents
Number of grievances on human rights issues
Corporate Governance and Business Ethics
Separate Non-Executive Chairman and CEO
Commitment to gender diversity on the board
Number of Directors
Number of Independent Directors on the board
Percentage of women on the board
Anti bribery/corruption commitment statement
Reference made to external standards to inform the risk management system and reporting transparency
Describes the risk management framework
Prepares for major Environmental, Social and Governance (ESG) catastrophic events and incidents
Note: Key indicators are with reference to Bursa Malaysia’s and FTSE4Good’s Sustainability Reporting Guidelines and benchmarked against industry’s best practices.
KLCCP Stapled Group recognizes stakeholder management as an important aspect to ensure transparency and accountability. Communication with stakeholders is imperative in understanding and managing their expectations and provide new perspectives in generating positive impact to the organisation. With expectations changing rapidly in the real estate industry, investors, community, regulators and other stakeholders are continuously seeking for greater levels of transparency with respect to the economic, environment and social issues. We continue to engage and manage our stakeholders’ needs and expectations, taking into consideration their viewpoints towards more tangible business value creation.
KLCCP Stapled Group has a diverse group of stakeholders comprising both internal and external stakeholders whom we have been engaging with through the various communication channels to identify and understand the issues that are most important to them.