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Responsible companies have the competitive advantage: Kwek Leng Joo

With green consumerism on the rise, there are opportunities for companies to make a meaningful impact on communities and the environment, says Singapore Compact president Kwek Leng Joo.

Back in the 1990s, when the term ‘corporate social responsibility’ was hardly uttered in Asia - a region obsessed with growth and where awareness of CSR only grew in recent years - Kwek Leng Joo, deputy chairman of Singapore-listed property developer City Developments Limited (CDL), was already practicing elements of it through the company’s operations.

Currently also the president of the Singapore Compact for CSR (the local chapter of the United Nations Global Compact), the CSR pioneer became known over the years within corporate circles for transforming CDL into one of the world’s leading sustainable businesses with the philosophy “conserve as we construct”. The developer is listed on three global sustainability benchmarks: the FTSE4Good Index, Global 100 Most Sustainable Corporates by Corporate Knights, and the Dow Jones Sustainability Index.

An avid nature lover and photography enthusiast who publishes annual calendars featuring photos of Singapore’s naturescape taken by himself, Kwek has advocated CSR and sustainability to the local business community and youth for decades.

Far from approaching CSR as an obligation - common among many Asian corporate honchos - Kwek views it as a competitive advantage. Recent evidence has emerged that prove that consumers prefer to buy products and services from responsible companies, he says, and this means companies that offer eco-products will have an advantage in this competitive consumer landscape.

As we look back on the year, what do you think were the biggest headlines that had a significant impact on business and sustainability?

Companies now face increased environmental responsibility and accountability due to increased regulation and public pressure through social media. The latter reaches the masses instantly, permanently and can be unforgiving, this is why engagement has become a buzzword in the corporate sphere and companies need to be proactive rather than reactive.

In October, Singapore Exchange said it will be mandating that all listed companies publish sustainability reports. This is timely and will have a significant impact. There 770 listed companies in Singapore, but only 27, or 3.5 per cent of them, produce sustainability reports, according to the Global Reporting Initiative (GRI) database. The new rule may position Singapore - a hub for many industries in Asia - as a steward for sustainability standards.

Consumers are also increasingly demanding that firms operate in a responsible manner. According to a 2014 survey by Nielsen, 55 per cent of global online consumers across 60 countries said they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact. With green consumerism on the rise, there are tremendous opportunities for companies to make a meaningful impact on communities and the environment as they grow their business.

What do you think are the key themes that will dominate the corporate agenda as we go into 2015?

With green consumerism on the rise, there are tremendous opportunities for companies to make a meaningful impact on communities and the environment as they grow their business.

Singapore, like many parts of the world, has seen increasing demands for accountability and transparency. I think sustainability reporting will increase significantly in 2015. To avoid being left behind, companies will need to start planning their sustainability efforts and reporting early. Over the years, CDL’s efforts in sustainability have enabled us to enjoy first-mover advantage. As a result, environment- related legislation in our industry have had little business impact on our operations. Sustainability reporting has led us to establish frameworks, systems and processes where we can manage, monitor, measure and improve on the materiality issues that affect our business and stakeholders.

Specifically for the building industry, there is also greater emphasis on collaboration. In Singapore, the government has launched a third green building masterplan to move beyond building structures and hardware to focus more on end-users. In October, we launched a Green Lease Partnership Programme to engage, encourage and enable tenants to play a more proactive role in Singapore’s sustainable development. For example, we jointly developed a new digital energy monitoring portal for tenants with Tuas Power that will give tenants near real time tracking of their energy consumption via any mobile device.

With collective effort among the business community, government and community at large, I believe sustainability among corporates will be pushed a notch higher.

What is your outlook on the progress of sustainable development specifically in Asia?

A survey conducted earlier in 2014 by McKinsey among 3,000 business executives worldwide showed that companies no longer question the importance of sustainability, though not all succeed in implementing it to reap full financial, social and environmental benefits. Another global survey by Nielsen in 2014 showed that the propensity to buy socially responsible brands is the strongest in Asia-Pacific at 64 per cent. These findings augur well for sustainability in this part of the world.

More companies are convinced that they have to embed sustainability into their business goals, mission and values. On the other hand, more consumers are increasingly showing a preference for green products. This clearly shows that companies that offer eco-products will have an advantage in this competitive consumer landscape.

What are your hopes for the coming year as we approach the December deadline for a global agreement on climate change in Paris?

Scientists have declared 2014 to be the hottest year on record. There is no standstill in global warming and the world urgently needs to mitigate climate change. The global conversation needs to shift beyond who should take more responsibility – developed or developing nations - to a sense of shared duty: what we are doing about it and how can we contribute and benefit.

Just like corporations, global economies need impetus. Perhaps an equitable ‘Sustainability Index’ using carbon per capita may be created as an instrument to measure economic success, instead of relying on just measuring GDP using dollars per capita.

Singapore is one of the most consumerist societies in the world but we are behind other Asian cities like Tokyo and Taipei when it comes to eco-habits such as recycling. While we have already made much progress, a lot more can be done through early education to shape mind-sets and behaviour.

With clean energy as a key economic growth area in Singapore, perhaps energy consumption data of buildings can be transparently published and compared between buildings and even apartments. In the long-term, my hope is for every home and workplace building to be carbon positive and climate neutral. This may not happen in my lifetime, but it is a vision that we can work towards.

What will you and your organisation be working on this year?

This year marks the 20th year of CDL’s sustainability commitment. Back in the 1980s and 1990s, the building and construction industry was widely perceived to be destroying the environment. It was very clear to us then that a paradigm shift was required and in 1995, we established our vision to ‘conserve as we construct’. Innovation has since been a key driver of our company philosophy and we continue to push boundaries and revolutionise how buildings can be constructed in a more sustainable way.

In 2015, CDL will be the first developer in Asia to adopt the game-changing advanced construction technology, Prefabricated Prefinished Volumetric Construction (PPVC), for a large scale residential development. This is likely to be the largest application of PPVC of its kind in the world. Compared to using conventional methods, we expect PPVC to increase productivity by more than 40 per cent, save some 55,000 man days, and enable the project to complete four months ahead of schedule. This may well revolutionise the way we build for the future.

This interview is part of the “15 on 15” series by Eco-Business where we interview 15 global and Asian leaders on their thoughts on the year ahead. Read all the interviews in the latest issue of the Eco-Business magazine here.

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