Driving Performance through sustainability reporting

By Esther An, the Head of CSR & General Manager of Corporate Affairs, City Developments Limited.

The global business climate is evolving rapidly with a growing focus on sustainable business practices that extend beyond financial performance and compliance.

Investors are increasingly making their decisions based on a company’s Economic, Social and Governance (ESG) performance. For instance, according to a report by Vigeo, the European Socially Responsible Investing (SRI) mutual funds recorded strong growth in 2010, with the number of funds jumping 29% to 879 between 2009 and 2010 while the assets under its management achieved a 41% growth to €75 billion.

Carbon Disclosure Project (CDP) operates the only global climate change reporting system on behalf of 551 institutional investors with US$71 trillion in assets under its management in 2011.

Currently, over 3,000 organisations in 60 countries measure and disclose their greenhouse gas (GHG) emissions and climate change strategies through CDP to set reduction targets and make performance improvements. This denotes a tenfold increase in the number of disclosing companies compared to 2003 when CDP had only 235 respondents.

Beyond the mere introduction of sustainable practices within a business, the key to driving improved sustainability performance is through the implementation of a rigorous measurement and reporting framework.

A Characteristic History

As one of Singapore’s largest companies by market capitalisation, City Developments Limited (CDL) has established a framework to integrate sustainability into its business model, and taken the proactive approach in tracking, as well as disclosing its financial, environmental and social data.

Since 2008, CDL has been voluntarily publishing a dedicated Sustainability Report, and was the first Singapore company to have its sustainability report successfully checked by Global Reporting Initiative (GRI) – one of the world’s most widely used sustainability reporting frameworks.

Over the years, CDL’s reports have improved from the initial Level C in 2008 to Level B+ in 2009 and 2010, where its reports have also been externally verified by an independent professional body. CDL’s Sustainability Report 2011, the company’s fourth edition, continues to be successfully checked by GRI at Level B+, using the expanded and more stringent criteria of the GRI G3.1 Guidelines recently introduced in March this year.

Last year, CDL was the first Singapore company to externally assure its sustainability report is in accordance with the AA1000AS (2008) Assurance Standard. This not only enhanced the credibility of CDL’s sustainability performance, but also raised the bar for CSR reporting in Singapore. This year, the company continues with this practice. In addition, CDL’s reports also make reference to the United Nations (UN) Global Compact’s 10 Universal Principles.

Embracing the Changing Landscape

Following the launch of ISO 26000:2010 Guidance on social responsibility on 1 November 2010, CDL became the first Singapore corporation to address the international ISO 26000 framework in its latest sustainability report.

Entitled “Evolve”, the CDL Sustainability Report 2011 reflects CDL’s forward-looking ethos in embracing the global challenges and expectations posed by the ever-changing social and environmental landscape.

Although ISO 26000 is a voluntary standard and not a certification, CDL believes that the framework provides essential guidance on internationally accepted Corporate Social Responsibility (CSR) best practices. In its latest report, CDL shares how it is aligning its existing management systems with the ISO 26000 guidelines to enhance its CSR engagement. These include:

    • Internal training on ISO 26000 for CDL’s management and CSR committee members.

    • Structural enhancement to its CSR committee to address the seven core subjects of social responsibility.

    • Self and external assessment to review CDL’s compliance with the seven core subjects. The company’s strengths and gaps were identified in a performance matrix by an external consultant.

This alignment process will continue into 2011 and beyond. It will continue to apply the principles of ISO 26000 to the Singapore context and address issues that are material to its business.

Moving forward, CDL will continue to strive towards further improvements in its sustainability performance, while championing the push for sustainability reporting in Singapore amongst businesses.

CDL’s voluntary approach of subscribing to internationally accepted sustainability principles demonstrates its commitment in working towards greater transparency and disclosure through performance benchmarking.

Indeed, this is the responsible way forward for companies to achieve long-term sustainability and business excellence.