City Developments Limited: a journey
in sustainable business development
Hwang Soo Chiat and Havovi Joshi
Hwang Soo Chiat is an
Associate Professor based
at the School of
Accountancy,
Singapore Management
University, Singapore.
Havovi Joshi is Head of the
Communications &
Dissemination Centre for
Management Practice,
Singapore Management
University, Singapore.
Companies with sustainability in their DNA are more resilient and make a better business model
for success and long term growth. In the mid-1990s, building sector was seen as “destroying
before constructing”, CDL as a pioneering developer was determined to change this perception
and committed to transforming our business strategy to one that “conserves as we construct” for
long term sustainability. From design, construction, procurement, maintenance and even user
engagement, the entire cycle has been aligned with environmental sustainability in mind – Kwek
Leng Joo, Managing Director, CDL[1].
It was January 2013, and Esther An, Head of Corporate Social Responsibility (CSR) and
General Manager (Corporate Affairs) of City Developments Limited (CDL), was busy in
meetings with the members of her CSR Committee, planning key strategies for CDL’s
proposed sustainability framework for the coming year. CDL was one of Singapore’s leading
international property and hotel conglomerates, involved in real estate development and
investment, hotel ownership and management, facilities management and the provision of
hospitality solutions. The group had developed over 22,000 luxurious and quality homes in
Singapore, catering to a wide range of market segments. In addition, its London-listed
subsidiary Millennium & Copthorne Hotels plc (M&C) owned and managed over 100 hotels
spanning 70 locations in 19 countries.
CDL was widely recognised as a champion of sustainable practices in Singapore. It was the
first company to be honoured with the President’s Social Service Award and President’s Award
for the Environment in 2007. It was also the only developer to be accorded the Built
Environment Leadership Platinum Award in 2009 and Green Mark Platinum Champion Award
in 2011 by the Building and Construction Authority (BCA), the governing authority for
Singapore’s built environment. CDL was the first Singaporean company to be listed on all three
of the world’s top sustainability benchmarks – FTSE4Good Index Series since 2002, Global
100 Most Sustainable Corporations in the World since 2010 and the Dow Jones Sustainability
Indexes since 2011. It was a founding member of Singapore Compact for CSR, and one of the
pioneer Singapore signatories of the United Nations Global Compact to lend support to the
advancement of responsible corporate citizenship in Singaporean industry.
How could CDL reinforce the culture of sustainability that it prided itself on? What could it do
to increase awareness of their sustainability vision in the stakeholders? How would they
influence stakeholders to adopt sustainability best practices? These were questions that An
hoped to find solutions for in the meetings with her CSR team.
CDL
CDL was founded in 1963, with the purpose of acquiring, developing and selling property.
The company went public in the same year, and its shares were listed on what was then
known as the Malayan Stock Exchange. In 1965, CDL completed its first housing project
in Johor Bahru, Malaysia, and also launched its first condominium, Clementi Park, in
© 2013, Hwang Soo Chiat &
Havovi Joshi
Disclaimer. This case is written
solely for educational purposes
and is not intended to represent
successful or unsuccessful
managerial decision making.
The author/s may have
disguised names; financial and
other recognizable information
to protect confidentiality.
DOI 10.1108/EEMCS-11-2013-0049 VOL. 3 NO. 8 2013, pp. 1-23, Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
http://dx.doi.org/10.1108/EEMC-11-2013-0049
Singapore. This was followed by the 1966 launch of its first high-rise residential development
in Singapore, City Towers. In 1972, the Hong Leong Group acquired a controlling interest in
CDL and embarked on strategic diversification into commercial and industrial
developments. CDL then acquired more investment and development properties such as
Tanglin Shopping Centre, Katong Shopping Centre, and Queensway Shopping Centre and
The Arcade. It thus emerged as a major property developer in Singapore. The company
soon after ventured into the hotel business.
The 1990s witnessed a period of rapid expansion and regionalisation. CDL’s hospitality arm,
M&C, which was the first Singaporean company to be listed on the London Stock Exchange,
expanded to become one of the largest hotel owners and operators in the world.
These milestones saw CDL embark on a substantial growth path, and in 2010, the group’s
profit before tax surpassed the S$1 billion (US$0.8 billion[2]) mark.
By end 2012, CDL had an extensive global network that included over 300 subsidiaries and
associated companies across more than 80 locations in 20 countries. Further, five
companies were listed on the stock exchanges in New Zealand, Hong Kong, London and
Philippines.
For the financial year ending 31 December 2012, CDL recorded revenue of US$2.72 billion
with profit after tax of US$699 million[2].
Sustainability in Singapore
An commented:
CSR is fast becoming a licence to operate in some areas. For example, in 2005 the ‘‘Green Mark’’
was launched. But in 2008, the basic certification level of Green Mark was made mandatory that
any new development must meet that standard.
In 2005, the BCA Green Mark Scheme was launched by the Singapore Government as an
initiative to drive Singapore’s construction industry towards more environment-friendly
buildings. It was intended to ‘‘promote sustainability in the built environment and raise
environmental awareness among developers, designers and builders when they started
project conceptualisation and design, as well as during construction’’ (Building and
Construction Authority, 2013).
Then in 2009, in another key development, the Singapore Government, in consultation with
its people, came out with a Sustainability Blueprint. It defined sustainable development for
Singapore as growing the city state in a way that (Singapore Government, 2013):
B Was efficient: develop with less resources and waste.
B Was clean: develop without polluting our environment.
B Was green: develop while preserving greenery, waterways and our natural heritage.
Listed companies were encouraged to adopt sustainability reporting, with the release of the
Singapore Exchange Policy Statement on Sustainability Reporting in June 2011, which
stated that:
(I)ssuers should assess and disclose the environmental and social aspects of their organisational
performance, in addition to the financial and governance aspects that are already part of the
customary and regulatory disclosure practiced.
In May 2012, the Monetary Authority of Singapore stated that sustainability should be
considered as part of corporate governance and directors ought to consider sustainability
issues, such as environmental and social factors, as part of their strategic formulation (refer
to Exhibit 1 for regulatory developments in Singapore).
However, Christie Lee, Manager, CSR, CDL commented, ‘‘The push to CSR is still not
that big in Singapore. In fact, many companies have little understanding of CSR and
sustainability.’’
PAGE 2jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013
CSR at CDL
This is CDL’s 50th anniversary. In 1999, our MD spearheaded the work improvement plan, which
involved all the CDL staff. The idea was that we must brainstorm within the organisation. We
talked about global warming then, and we recognised that energy, particularly increasing
electricity costs, was a key issue. At that time, there was no green mark or any real push from the
government. So it was our own initiative to cut down our carbon footprint. We were the pioneer
and the first to receive the Green Mark Gold award for existing buildings in 2005 – Anthony Goh,
Deputy General Manager, Property and Facilities Management.
The seeds for CDL’s endeavours in developing new benchmark for CSR excellence can be
traced to almost 50 years ago to the mid-1960s, based on its founder’s firm belief that the
success of the company should be shared with the community. However, it was years later,
around the mid-1990s, that the company’s CSR vision:
To be a leader in business and a champion of CSR,
along with its CSR Mission:
To be a responsible corporate citizen who believes in creating value for stakeholders, conducting
sustainable business practices (SBP), caring for the community and protecting the environment,
was integrated with its business and operations.
CSR was promoted after taking into account a broad range of stakeholder engagement from
several parties such as CDL’s investors, customers, employees, contractors, suppliers and
the community (refer to Exhibit 2 for the CSR philosophy). Soon after, the company also
began to develop and adopt international benchmark and standards for reporting, which led
to further awards and achievements (refer to Exhibit 3 for CDL’s sustainability rankings,
benchmarking and awards).
In 2005, CDL became a founding committee member of Singapore Compact for CSR, which
was (and continued to be) a national society promoting CSR among the business community
through awareness dialogue and workshops. In the same year, it also became one of the
founding Singapore signatories of the United Nations (UN) Global Compact to lend support
to the advancement of responsible corporate citizenship in Singapore.
By 2011, CDL had been selected as an index component in the Dow Jones Sustainability
Indexes (worldwide and in Asia Pacific), which were the first global indices to track the
financial performance of leading sustainability-driven companies worldwide. It thus was the
only Singapore property developer to be listed on both the Dow Jones Sustainability Indexes
and FTSE4Good Index Series. CDL was also the only Singapore company to be ranked
amongst the ‘‘Global 100 Most Sustainable Corporations in the World’’ for three consecutive
years (refer to Exhibit 4 for Global 100 methodology).
In 2012, CDL became one of the five founding members of the Council for
Sustainable Development (BCSD) in Singapore – which had been established as a
membership organisation comprising leading local businesses and the regional arms of
international companies, with the objective ‘‘to work with businesses locally to help foster
economic development in harmony with environmental preservation and social
development’’[3].
CDL’s CSR strategy
CDL had a well-developed and rejuvenating corporate strategy which was entrenched in the
triple bottom line (TBL) approach. This implied developing properties that were sustainable,
functional and financially marketable.
The three pronged approach was as follows:
1. developing quality and environmentally sustainable properties (refer to Exhibit 5);
2. managing properties in a cost efficient and energy efficient way (refer to Exhibit 6); and
VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 3
3. influencing stakeholders through outreach initiatives, working closely with government
agencies and non-governmental organisations (refer to Exhibit 7).
There were many reasons that CDL’s CSR strategy was successful. The company clearly
had a passion for CSR, which was far beyond legislative requirement. Allen Ang, Deputy
General Manager, Projects commented:
At the project departments, our role is to develop residential and commercial properties and hand
them over to our customers on time, within budget and in good quality. We define the
sustainability context ‘‘as conducting responsible business operations at a level over and above
the statutory and regulatory requirements’’. We are very mindful of the impact that our
development activities have on the environment. Globally, one third of greenhouse gases are
contributed by the building sector. Large amounts of energy and water are consumed, and
construction generates a lot of wastes, noise and dust. How do we mitigate this, and how do we
address the safety and health of the workers? We approach all these concerns and more with a
very integrated approach. From planning to design, and right through to procurement and
construction – our job is to ensure that as we build, the impact of our operations on the
environment, health and safety (or EHS), is mitigated.
We have very stringent ‘‘Green Procurement guidelines’’ that covers sustainable design and
construction. In the procurement of our contractors and consultants, they must be committed to
upholding high EHS standards. Our contractors must not have any fatalities as well for the past 1
year. Similarly, we have stringent requirements for the procurement of suppliers and materials:
materials with green label, ‘‘green’’ concrete, energy efficient air-conditioners, etc. that we use for
projects. These materials and equipment may be more expensive than the normal ones, however
we believe that besides mitigating the potential impact on the environment, the use of such
materials and equipment will also translate into tangible benefits for the end-users.
In the area of social impact on account of employees’ health and safety too, the company
clearly aspired to make a strong positive impact on its stakeholders.
A culture of leadership
At CDL, we recognise that we are living in an interdependent world. leadership will not be
sustained without stewardship in both social and environmental aspects. CSR is not a theory but an
important management approach to achieve good TBL, do good and do well at the same time for
long term sustainability. If applied strategically, practising CSR will certainly add value to the
business and achieve long term growth and sustainability. Currently, the uptake of CSR amongst
Singapore companies remains slow as many still see CSR as a cost. Based on our humble
experience at CDL, we see CSR as an investment and we have indeed reaped tremendous benefits
in both tangible and intangible ways. Most importantly, we are happy to say that while we operate to
meet the needs of the present, we are not compromising the ability of our future generations to meet
their needs – Esther An, Head of CSR and General Manager (Corporate Affairs), CDL.
Ang commented:
We were among the very first to adopt the ‘‘Green Mark’’ scheme. This stems from our top
management’s commitment and firm advocacy of EHS. They have clearly supported the
implementation of green design and features in our projects, agreeing to allocating 2-5%
construction costs of a new development for such features and innovations in our developments
[. . .]. We have a very open and supportive top management in terms of innovation and CSR. As a
market leader, we believe we must do things that others don’t do. This differentiates us. And what
others do, we must do better. That’s how we started this EHS journey and began driving
innovations in every of our developments, so as to be a leader in our field. Every project we want
at least one innovation that no one else has done. This is our personal KPI – that we should be a
leader in our field. An example of one such innovation is the implementation of a home energy
management system for one of our developments that helps the home owner monitor their overall
energy consumption and control their air-conditioner units individually through their I-pads.
Organisational structure as a key CSR enabler
In 2008, CDL formally established a framework listing CDL’s significant CSR issues and the
core stakeholders involved. In a significant CSR development, it established the CSR
Committee to better align its CSR initiatives with the company’s business strategy. The CSR
Committee comprised senior managers from the company, and reported directly to the
PAGE 4jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013
Managing Director Kwek Leng Joo. It was responsible for CDL’s CSR key performance
indicators (KPIs) and targets, and formulating and managing programmes to improve its
social and environmental performance in the areas of focus. These key CSR areas of focus
were the environment, employee relations, corporate governance and risk management,
stakeholder relations and community.
The culture is such that missing a KPI is not deemed a failure, but a case for providing
positive reinforcement.
Excellent reporting and communication standards
CDL was one of the few companies in Singapore that produced dedicated sustainability
reports. The report was externally validated by Ere-S, a consulting company that specialised
in business sustainability and provided services in the domains of sustainability reporting,
sustainability report assurance, stakeholder engagement and CSR training. CDL’s SR was
also GRI certified[4].
CDL’s sustainability report clearly measured its performance in terms of ‘‘achieving business
excellence while maintaining good social and environmental performance’’. The report
touched upon various dimensions in each of these three spheres – financial, environment
and social (refer to Exhibit 8 for an extract of CDL’s sustainability report 2012).
CDL also ensured that their contractors had in place a comprehensive sustainability
monitoring and reporting system. Every month contractors had to submit the EHS
performance of their respective worksites for monitoring purposes. CDL’s project managers
would monitor the EHS performance of their respective projects individually. At the
departmental level, various sub-committees headed by their project managers monitored and
championed the various aspects related to EHS, such as energy consumption and workplace
safety and occupational health.
CDL had also started carbon accounting[5], and were the fore-runner in the industry. Project
managers provided the collated EHS performance from worksites to CDL’s EHS manager.
At the corporate level, the EHS manager consolidated and monitored all CO2 data for
reporting purposes.
Interestingly, even while managing their database of reports, CDL was driven to ‘‘go green’’.
As Ms Foo Chui Mui (Assistant General Manager, Customer Relations) commented:
We have really cut down on the use of paper. Over the years, we have cut down our paper
consumption. For instance, only the final report is retained, and that too is kept at a shared drive to
maintain transparency while keeping everyone on the same page.
Training as a means to ensure adherence to CSR standards
When CDL started to embark on the sustainability journey, there was a general lack of
knowledge and acceptability of sustainability by the consultants, contractors and other
stakeholders. CDL had to source for information and build up its knowledge from the internet
and other sources. Workshops were then conducted with its stakeholders to obtain their
buy-in to go green by pitching the fact that they were also partners in the project.
CDL continued to conduct quarterly EHS training. Both internal and external experts were
invited to conduct talks on topics which included waste management, water and energy
conservation, and other related issues.
CDL also conducted monthly complex management meeting where experts were invited to
share their views, new innovative products, and other pertinent ideas. Further, Mabel Wong,
Senior Manager, Property and Facilities Management commented, ‘‘More than half of our
PFM managers in charge of operations are Green Mark managers’’.
CDL’s commitment to CSR
Multiple drivers for CSR continue to strengthen globally. Total assets managed under Carbon
Disclosure Project have grown dramatically from US$4.5 trillion in 2003 to US$78 trillion in March
VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 5
2012 with 235 companies responding in 2003 compared to 3,715 in 2011. The growing climate
change-related regulations make CSR not simply a ‘‘good to have’’ item but a licence to operate.
It is becoming more apparent that companies who have yet to embrace the significance of
sustainability issues have placed themselves in an increasingly vulnerable position, putting their
operations at risk, if they have limited expertise and contingency plans to manage the fast
emerging social, political and economic scenarios. In the face of a changing business
environment and mind-set, it is a matter of time before the turn of tide occurs – Kwek Leng Joo,
Managing Director, CDL (Kwek Leng, 2013).
CDL was clearly committed to maintaining and advocating commitment towards CSR. This
often went far beyond what competition did. In an interesting example of the same, Ang said:
We are probably the only developer in Singapore who conducts a bio-diversity impact study for
undeveloped sites with existing natural habitats and sites in close proximity to natural habitats,
before the site is being developed. At our ‘‘Rainforest Executive Condo’’, a biodiversity impact
study was conducted when the site was purchased in 2011. In the course of the site assessment,
a nest belonging to a pair of nesting white-bellied sea eagles was discovered on an existing tree.
We were advised that the tree where the nest was located should not be retained due to its poor
condition, so we called on experts from the Bird Park to advise us on the appropriate measures to
be taken. Eventually, we worked with the main contractor to re-sequence their construction and
work around the existing tree until the young offspring hatched and grew strong enough to be
able to fly off on their own.
The culture was such that a virtuous circle of sustainability appeared to have been
established, where each employee was pushing themselves and the other to achieve newer
heights. Wong commented:
We are all always aligning ourselves to the corporate mission, and personal KPIs are set for our
department far beyond what is required. We have to keep updating our KPIs annually [. . .] We all
walk the talk, all the way from top-down.
Balancing the costs with tangible benefits
To truly grow as a business, we need to develop the right balance between financial performance,
environmental stewardship and social engagement – CDL Sustainability Report, 2012 (CDL, 2013).
CDL perceived some very tangible benefits of its sustainability initiatives. For instance, there
was an estimated S$19.7 million (US$16 million[2]) in annual energy savings for 37 Green
Mark Awarded Buildings during the time period 2008-2011. Similarly, the buyers of
residential properties too typically enjoyed substantial energy and water savings. An
example was the ‘‘Oceanfront @ Sentosa Cove’’ which was the first private residential
development to be awarded the BCA Green Mark Platinum in 2007, demonstrating savings
of 30 per cent in energy and water. Similarly, it was found that residents could enjoy average
annual energy savings of up to SG$1,000 (US$ 813[2]) on account of energy efficient air-
conditioners in their apartments.
There were clearly distinct benefits of going green for the real estate sector[6]. To begin with,
the company expected average expected savings of 10 per cent in operating expenses and
17 per cent in energy consumption from the retrofitting, and commercial buildings could
increase their capital value by about 2 per cent. Second, the investment in achieving Green
Mark certification was not high, and the cost of the retrofit as a percentage of the current
market value of the property was about 0.5 per cent for retail and 1 per cent for offices.
Finally, the upfront cost of retrofitting energy inefficient buildings could be recovered within
seven years.
However, it was recognised that there was a clear cost associated with going green, which
has to be managed. Lenny Tan, Assistant Manager, Projects commented, ‘‘Construction
costs have risen steadily over the years. This is a challenge that we need to work around
while maintaining our philosophy and commitment towards sustainability’’.
Ang elaborated:
With the market getting more competitive, we have to strategize how to achieve cost
effectiveness for our green investment. One of the most effective strategies is to adopt passive
PAGE 6jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 3 NO. 8 2013
low energy architectural design. Buildings should be designed to minimise external heat gain and
maximise day-lighting and natural ventilation. This concept is always emphasised to our
architects as a first point of consideration. We influence and educate these architects to adopt our
philosophy.
Tan further added:
We have an EHS risk register that cuts across the design and construction phases. The individual
project manager prepares an EHS risk assessment at the start of every new project to assess the
impact of the development activities on the neighbours and other impacts related to safety,
energy efficiency, road traffic, etc. This is then handed over to the consultant to address and
mitigate the risks in their design. Any residual risk not addressed in the design is then highlighted
to the contractor to be properly addressed in their construction stage risk assessment. The
consultants and the contractors are also required to present their EHS risk assessments to the
project teams and our internal colleagues and explain their strategy to mitigate the EHS risks
identified.
The Singapore Government had commenced handing out a number of grants to promote
sustainability. However, as Goh commented:
We have ‘‘missed out’’ on some grants as we do (sustainability initiatives) before the grants are
available. We are doing it for the general good and we are way ahead of the pack. So this
becomes our KPI – to strive for further improvement each year.
Enabling competitive advantage – reputational
CDL believed that practising CSR had helped differentiate their branding and product,
particularly given the company’s long standing commitment and consistent approach
towards encouraging the same. An clarified:
We take a long term view in our CSR commitment and practices for sustainability – financial,
social and environmental. However, given the low level of green consumerism as at date, the
competitive advantage of a green product or green home or space were still limited. But with the
increased awareness of climate change, we are seeing some progress in the preference of green
products.
Catherine Loh, Deputy General Manager, Head, Corporate Secretarial Services stated that:
Being a high profile listed company, our reputation especially as a CSR advocate and pioneer is
at risk every day, whether arising from internal or external factors in connection with the
implementation of our strategies in our day-to-day operations. With the increase in the number of
our stakeholders, we are constantly aware that our risk management policies and practices have
to be continually reviewed and updated in a timely manner, to safeguard the interests of our
stakeholders, our assets and our reputation.
CSR at CDL: what next?
In 2010, in an effort to embrace a holistic approach to CSR and go beyond compliance
initiatives, CDL undertook a self-assessment of its CSR performance. This was based on the
principles of ISO 26000: guidance on social responsibility, which included accountability,
transparency, ethical behaviour, respect for stakeholder interests, respect for the rule of law,
respect for the international norms of behaviour and respect for human rights. The core
subjects listed by ISO 26000 were organisational governance, human rights, labour
practices, the environment, fair operating practices, consumer issues and community
involvement and development. Based on the above results, CDL incorporated a human
rights corporate statement, enhanced its employee engagement, whistle-blowing policy,
corporate governance and involvement in community development projects.
It was important to An that CSR at CDL had to set new benchmark in sustainable
development by doubling its efforts to meet stakeholders’ expectations, and achieve global
standards in sustainability through innovation, rigorous assessment and communication of
the outcomes (Kwek Leng, 2013). New programs had to be initiated to draw in a wider
audience, and the importance of CSR had to be advocated and disseminated to a wider
range of stakeholders.
VOL. 3 NO. 8 2013 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 7
Looking ahead, CDL remained firmly committed to CSR, and aspired to bring it to the next
level as the environment and marketplace evolved rapidly. An and the team were already
strategizing the right move to achieve the above.
Notes
1. Kwek Leng Joo, Managing Director, CDL, company presentation, January 15, 2013.
2. US$1¼S$1.23 as at January 18, 2013.
3. …
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