Customers increasingly demand sustainable buildings to reduce their environmental impact as well as their energy bills. Shui On Land has committed to achieving LEED-ND certification for all its large-scale developments, the China Green Building Label for all new residential apartment development, and either of the above two for all new commercial developments. These commitments demonstrate awareness of key sustainability trends in the industry compared to the company’s regional peers as well as preparedness to capitalize on the related growth opportunities presented.
Trina Solar continues to be ranked as one of the leaders in the global ranking for environmental and social performance in the 2015 Solar Scorecard, an award system established by Silicon Valley Toxics Coalition (SVTC). As a developer of solar-power products, Trina Solar bases its business model on the optimization of energy use and reduction of greenhouse gas emissions. Furthermore, the company takes into account its products’ environmental impact during their design phase, and has also implemented an end-of-life programme.
Offshore operations have an elevated rate of safety incidents, which can lead to costly lawsuits, operational delays, and asset damage. China Oilfield Services Ltd. (COSL) has substantially reduced its injury rate in recent years, reducing its OSHA recordable incident rate by 57% in 2015 in comparison with its average over the past three years. The company transparently discloses information on detailed safety programmes, including safety audits for employees and contractors and emergency procedures.
Lenovo highlights product sustainability as a key differentiator for the company and focuses on improving product energy efficiency, materials, packaging and end-of-life management to match consumer preference. More than 90% of monitors, server and notebook platforms offered by Lenovo are Energy star certified. Lenovo uses post-consumer recycled content (PCC) in all of its PC products, and has set targets to increase the percentage of PCC usage for new generations of products. The company also reduces the amount of packaging material used and uses 100% recycled content for packaging certain products. The company has take-back programs and asset recovery services for its business customers, through which customer-returned equipment is recycled by suppliers and reused for manufacturing new products.
Swire Properties demonstrates its commitment to integrate sustainability across its value chain by setting social and environmental standards for its suppliers through its supplier code of conduct, and engaging with suppliers to encourage sustainable practices by showcasing high performance suppliers. The company systematically considers suppliers’ environmental performance during procurement and also engages with them to address non-compliance.
CLP discloses a strong land use and biodiversity programme to minimise its impacts on wetlands, wildlife habitats and cultural resources in Australia. The company also reports having initiatives such as having a fish management system, bird cataloguing and vegetation management at some of its power plants in China and India. These biodiversity issues are overlooked by CLP's board-level Sustainability Committee, that steers the company-wide biodiversity impact assessment guideline for the site-specific issue management.
Wipro acknowledges the implications of climate change and has identified various risks and opportunities that have the potential to have a material impact on its business in light of both regulatory developments and physical impacts of climate change. Its five year GHG mitigation strategy includes targets to reduce the energy intensity of its operations as well as implementation of mitigation programs including energy efficiency initiatives, renewable energy generation and procurement. Wipro commits to doubling its renewable energy procurement by 2020 with 20% of its operations in India being powered by renewable energy sources, a leading industry practice during FY2015.
Infosys’ data centres account for the bulk of the company’s electricity consumption. Acknowledging the importance of managing its energy use and related GHG emissions, the company has set a target to reduce its carbon footprint by 50% by FY2018 and is increasing its use of renewable energy to meet this goal, with more than 26% of its FY2016 electricity demand being met using renewable sources. Infosys has also been proactive in retrofitting older facilities in order to lower energy consumption and reports that such retrofits have a payback period of under three years and are expected to result in an energy optimization of nearly 30%.
Tech Mahindra has certain services such as SMART cities solutions, mobility, cloud based solutions, Micro Grid and Energy management services that help its customers manage their environmental and social impacts. These SMART Solutions are implemented in the areas such as Parking, Garbage and Building Energy Management and have the potential to cause up to 30% reduction in GHG emissions. With Indian government looking to create multiple smart cities across the country over the next decade, Tech Mahindra seems well placed to capitalize on opportunities arising from this regulatory push.
Unilever Indonesia is exposed to scrutiny regarding land use and biodiversity issues in its supply chains, especially with respect to the sourcing of wood pulp and palm oil, both of which are used for making personal care products. Unilever Indonesia pursues industry leading sustainable agriculture practices as part of a group-wide programme implemented by its parent company Unilever, which has set the goal to obtain 100% of its raw materials from sustainable sources by 2020.
The construction market is known as both highly polluting and energy intensive, two factors which have sparked an ever-growing wave of consumer awareness, forcing companies to develop innovative products that cause less harm to the environment. To mitigate such risks, the company started the Blended Cement Project which reduces the generation of GHG emissions by replacing clinker with additive materials in many of its products.
With its parent company, Vale, a supporter of the Extractive Industries Transparency Initiative (EITI), PT Vale Indonesia reports on the taxes and royalties it pays to the Indonesian government. In addition, the company has developed a strong whistleblower system demonstrating firm commitment to transparency and accountability.
Auto components companies are parts of a highly complex supply chain, which requires timely and effective interaction with suppliers to ensure product reliability, operational efficiency and manage environmental and social risks in the supply chain. Calsonic Kansei expects its suppliers to comply with its global code of conduct and monitors compliance with various CSR issues including human rights. Its green procurement guidelines recommended that suppliers should obtain ISO 14001 certification or develop equivalent environmental management systems. In order to identify and manage related risks, Calsonic Kansei has also started to conduct supplier surveys with an aim to increase the number of suppliers that are covered by such surveys.
Offering sustainable products creates not only a growth opportunity but also improves long-term operational efficiency and competitiveness, as it may lead to reduced production costs. Since 2003, NEC has aimed to qualify all new products for the internally developed Eco-Symbol (Star), which, among other things requires a 50% reduction in GHG emissions as compared to conventional products. NEC aims to reduce GHG emissions stemming from products by an average of 80% for all products by FY2017 (base year FY2005). NEC has also implemented initiatives for end-of-life product management by providing detailed product component information, and implementing easy-to-disassemble designs. In FY2015, it maintained a 98% recycle rate, which is in line with industry leaders.
When applying for approval for developments, INPEX gathers opinions from the local community, and reflects their feedback in its project plans. The company conducts information sessions for local communities in Japan, Australia and Indonesia, where some of its biggest projects take place. In 2013, INPEX Australia launched its first Reconciliation Action Plan (RAP), a public document that outlines its commitments to local Aboriginal and Torres strait Islanders (ATSI) people. Given the high impact nature of its operations, its strong community involvement programs would ensure that there are limited operational delays due to community protests.
As one of the largest financial service providers in Malaysia by asset value, Maybank demonstrates various initiatives to promote financial inclusion like Micro financing, support for small businesses and targeting the underbanked population. The company has established 8 microcredit hubs to support these activities. In FY2015, the company provided microcredit worth MYR 25.9 million (USD 6 million). It has a target to increase its exposure to MYR 50 million (USD 11.6 million) in FY2016.
Bursa Malaysia plays a significant role in promoting sustainable capital markets by providing listed companies and the public with sustainability disclosure related guidance. In 2014, Bursa Malaysia issued its first SRI index and the first global benchmarked ESG index in ASEAN region, demonstrating leading practices for other stock exchanges in the region.
Ayala recognizes the business imperative to reduce its energy use and GHG emissions given the high energy costs in Philippines and its climate change vulnerability. The company commits to improving its GHG performance, and targets an annual energy intensity reduction of three per cent and has energy efficiency initiatives such as efficient lighting, pumps and cooling systems installed at its projects.
As a water utility that has an exclusive right to provide water and wastewater services to the eastern side of Metro Manila, Manila Water demonstrates a strong ISO14001 certified Environmental Management System for most of its operations. This involves oversight of its facilities’ release of effluents back into water sources, which has the potential to negatively affect the aquatic ecosystems, as well as human health, as some of these are sources of drinking water.
EDC is one of the world’s top 5 geothermal energy generators, with 1,169 MW of geothermal capacity, accounting for 80% of its total capacity. Its other energy sources are wind (10%), hydro (9%) and solar power (1%). Thus, the company provides its customers with electricity from low carbon sources. The company’s strategy to exclusively pursue renewable energy leads to a lower carbon intensity than its peers and positions it well to capitalize on future growth opportunities.
As a property developer City Developments Limited (CDL) is exposed potential social and environmental risks related to its supply chain. However, the company demonstrates strong mechanisms to mitigate related risks in this area, which include social and environmental standards for all its suppliers and contractors, as well as screening and monitoring their performance according to its in-house 5 Star Assessment System. CDL’s efforts to manage supply chain risks include engaging with top management and supervisory staff of its contractors, in order to promote sharing of best practices. In addition, the company’s Green Procurement Guidelines for selection of vendors and suppliers indicate a preference for those with ISO 14001 and OHSAS 18001 certifications, an industry leading practice.
CapitaLand is a founding member of the Singapore Green Building Council, demonstrating an early awareness of what is now a major industry trend. Additionally, approximately 82% of CapitaLand’s existing buildings in Singapore and 33% of those outside the country have received green building certification. Moreover, the company commits to achieving Green Mark Gold Plus certification for all new projects in Singapore by 2020, and other green rating system certifications for those outside its domestic market by 2030.
Sembcorp’s global footprint and operations in areas like the Middle East expose it to corruption and fraud related risks both within its workforce and in relations with customers, suppliers and third parties. To mitigate these risks, the company has implemented a strong bribery and corruption policy and equally strong programmes to enforce it. Moreover, it has an adequate whistleblower system through which employees, customers, suppliers and other third parties can report cases of non-compliance.
As a member of the Tire Industry Project (TIP) group under the World Business Council for Sustainable Development, Hankook promotes research initiatives and has launched two eco-friendly tire lines: Kinergy Eco at the global level, and Enfren Eco in South Korea and Japan with the latter receiving the highest AAA mark in the labeling system for fuel efficient tires. These products can reduce rolling resistance and wind resistance to minimize energy use and noise emissions. Hankook has also prototyped and tested a non-pneumatic airless tire, which can increase the recyclability of materials used in production. With these initiatives, Hankook is well placed to capitalize on the growing global demand for ecofriendly tires.
Coway’s manufacturing operations are energy and carbon intensive. Thus, the use of renewable energy and implementation of energy efficient processes become essential preparatory steps to comply with strengthening environmental regulations and to reduce production costs. In line with industry leaders, Coway has committed to supporting the UN Framework Convention on Climate Change (agreed at the COP21 held in Paris in December 2015) by planning to reduce GHG emissions per unit by 50% by 2020 compared to 2010. This commitment is expected to be fulfilled, inter alia, via the use of photovoltaic generators at three of the company’s plants.
S‐Oil’s management committee, comprised of top management members, assists its CEO to make decisions on sustainability related issues including social, environmental and labour policies and programs. The company has also established an ethics committee that oversees management of ethical behaviour across the company and directly reports to the CEO. Such governance structures, involving high level executives, to identify and integrate sustainability into business practices signify strong management awareness of ESG risks and opportunities.
Lite-On's supply chain management focuses on issues such as workers' welfare, environmental protection, health and safety. The company has developed a set of supplier principles based on Electronic Industry Citizenship Coalition (EICC) Code of Conduct that demands its suppliers fulfill social responsibilities and also conducts periodic audits to ensure compliance. If a supplier is found to have significant or potential negative impacts on human rights and labor practices, the company, in the past, has disqualified them. These initiatives highlight the company’s ability to identify and managed related risks in its supply chain.
Consumers of technology are increasingly interested in acquiring eco-friendly products and services. Qisda requires its R&D staff members to incorporate "Life Cycle Thinking" at the early stages of product design and development by taking into consideration the environmental impact of its products thereby giving it an opportunity to improve the efficiency of its next generation of products. The company manufactures green products (projectors, monitors, scanners, lighting devices and others), which save energy and reduce material use.
United Microelectronics Corporation’s (UMC’s) production relies on minerals, some of which are sourced from developing countries thereby exposing it to public scrutiny for possible involvement in human rights violations related to extraction of these minerals. However, by conducting annual supplier assessments to ascertain that they do not use conflict minerals, UMC manages this risk well. Moreover, in line with industry best practices, since 2013, UMC has established an EICC committee to address issues in its supply chain pertaining to labour, health and safety, environment, and ethics. These initiatives underline the company’s commitment to sustainable sourcing of minerals, a material issue for the semiconductor foundry industry.
The market for bio-based chemicals has experienced strong growth rates over the last few years. The company derives a little over 3 % revenues from its green chemicals segment which include products such as polylactic acid bioplastic, light weight polyethylene plastic and biodiesel. Moreover, aligned with industry leaders, PTTGC has announced plans to invest about 40 billion baht (USD 1.1 billion) in R&D for biochemical products over the next five years.
Siam Cement acknowledges that it faces emerging risks associated with Thailand’s energy source depletion and its eventual dependence on energy imports, which would increase costs for the company. It also highlights the importance of improving its processes to increase energy efficiency and reduce GHG emissions in light of global commitment towards climate change mitigation post-COP-21. The company discloses a strong GHG emissions reduction programme, including a target of reducing GHG emissions per unit production by 10% by 2020 (baseline 2007). Around 11% of its energy demand is currently being met by renewable sources.
Thai Oil has in place a strong Bribery & Corruption policy and reports that in 2015, all new employees received anti-corruption trainings. In addition, the company encourages whistleblowing as a measure of managing these risks.