Many Journeys, Common Destination

Transcription

1 Many Journeys, Common Destination Singapore Companies Strive Towards Sustainability Edited by Joachim Sim A joint project with

2 Foreword 1 Introduction The journey of a thousand miles begins with a single step. - Lao Tzu These words of wisdom from an ancient Chinese philosopher capture the intent of this sampler to provide the reader with a starting point on the subject of Sustainability. It also reflects the purpose of its associate publication Many Journeys, Common Destination, which was conceived to document the experiences of companies that have embraced social and environmental sustainability in their strategic business development. Sustainability is being championed by green activists and environmentalists who are advocating the conservation of our planet, business leaders who are practising responsible sourcing and production, academics who are teaching and researching the subject, civil society crying out for greater equity and dignity for disadvantaged communities, and government organisations calling for sustainable developments. In spite of the universal urgency and widespread publicity, there is an apparent lack of a common understanding of what need to be done by companies. The situation is complicated by companies concerns over the competing demands of profitability and doing good for the community and the environment on their limited resources. Still, some businesses have embedded sustainability goals in their operations and strategic developments with varying degrees of success. It is hoped that readers of the above-mentioned publication could gleam significant learning points from the experiences of the companies featured in it for a better understanding of the subject, and be encouraged to influence their own organisations in embarking on the sustainability journey. The book s compilation of small, medium and large enterprises from diverse sectors is intended to showcase the relevance and applicability of sustainability practices across organisations of different scales and business activities.

3 2 Many Journeys, Common Destination We like to present this sampler to business leaders who might be on the verge of embarking on their corporate sustainability (CS) journeys, and to encourage those who are progressing in their CS journeys to participate in our community learning.

4 Corporate Social Responsibility in Singapore 3 Corporate Social Responsibility in Singapore Past to the Future By Thomas Thomas, Executive Director, Singapore Compact for Corporate Social Responsibility Corporate social responsibility is not about how money is spent, it s about how money is made. This, in essence, is the mantra of corporations that are implementing corporate social responsibility (CSR) in their business, and serves as a good springboard for those keen to examine their CSR efforts for the first time. Tracing the global roots of corporate social responsibility Corporate social responsibility was a term first coined in 1953 by American economist and academic Howard Bowen in his book Social Responsibilities of the Businessman. He asked: What responsibilities to society can business people be reasonably expected to assume? Sixty years on, this is still a relevant question, even as business models continue to evolve. From the 1960s to the 1980s, CSR was very much a discussion confined to the academic world and not the boardrooms. However, the growth and development of multinational and transnational corporations from the late 1960s meant that corporations began to play a much more significant role in society at large, and their actions positive or negative have a much greater impact than ever before to communities across sovereign borders. The growth and development of multinational and transnational corporations in part gave rise to the anti-corporate activism and protests of the 1990s, most notable being the street protests in Seattle during the World Trade Organisation meeting in Images of smashed-up display windows and wrecked Starbucks cafes are forever etched in people s minds, and remain a symbol of anti-globalisation.

5 4 Many Journeys, Common Destination The violent street protests made the world sit up, and awakened corporations with the realisation that they do not operate in a vacuum, away from the realms of civil society and that their licence to operate come not just from the laws of the land where they operate. Simply put, their ability to conduct business is very much dependent on their adherence to legislation laid down by the governments of the countries they operate in. It is also dependent on the social licence to operate within society when they behave as good corporate citizens. Corporations responded to the civil society movements in the early 2000s in a variety of ways. Some carried out counter-marketing and publicity campaigns to halt the attacks on their brands. Others banded together in a show of corporate lobbying to governments and regulators. Yet others came together to develop voluntary codes of conduct, guidelines and frameworks. Out of the efforts to build new codes of conduct and practices came global initiatives in the form of the United Nations Global Compact (UNGC), the Global Reporting Initiative and the development of ISO social responsibility standards for CSR that cover fair labour practices, environmental sustainability and respect for human rights. Today, these standards are recognised as globally-established frameworks for corporations to adopt in transforming their business models and operations through CSR. Singapore s CSR journey Where does Singapore s development in CSR fit in this global picture? The short answer could be found in the past decade. A CSR forum organised with support from national and tripartite leaders of the government, labour and business communities launched the National Tripartite Initiative on CSR in May A year later, these efforts cumulated in the formation of Singapore Compact for Corporate Social Responsibility, a national society with the mission of providing impetus to the CSR movement in Singapore, founded by the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF). In the same year, the UNGC country focal point was officially launched in Singapore, bringing together signatories from 10 companies and the NTUC, SNEF and the Singapore National Co-operative Federation. These efforts in the early 2000s did not materialise out of the blue. Rather, Singapore s CSR journey found its beginning in the history of Singapore s

6 Corporate Social Responsibility in Singapore 5 The United Nations Global Compact Network was launched in Singapore in 2005 by Minister in the Prime Minister s Office Mr Lim Swee Say and the Assistant to UN Secretary-General Mr Andrew Toh. independence. Hence, it warrants us to take a step further back in history to understand this. The origins of the national compact for social responsibility that dominate social relations in Singapore to this day can be traced to the early years of industrialisation in the 1960s, following the nation s independence from UK. With Singapore lacking in natural resources, the government has from the outset been conscious of the need to attract foreign investors for its survival, while at the same time achieving sustainable growth and development. Hence, it has consistently put in place legislation and policies that seek to create a conducive environment for businesses and ultimately to create quality jobs to raise people s living standards and quality of life. Creating jobs while achieving sustainable development and growth would entail the need to set in place responsible labour practices that cover areas like freedom of association, employment relations, social dialogue, health and safety at work and human development to enhance employability. This is in line with CSR principles, which recognise the creation of good employment for workers with good working conditions. It is also widely acknowledged that since its inception, Singapore s tripartite approach involving the government, businesses and trade unions to

7 6 Many Journeys, Common Destination industrial relations has been one of its key competitive advantages. This is a successful example of stakeholders engagement and is a key factor in driving CSR. Singapore is in a unique position in this region because its government exercises leadership with the vision to engage key stakeholders on shared responsibility, to achieve sustainable economic, social and environmental development for mutual benefit. It is with this solid foundation that Singapore s efforts to propel the CSR agenda in the business community can expand. Singapore Compact for Corporate Social Responsibility was thus set up in 2005 to broaden the base for collaboration in CSR by forming a multistakeholder platform that can recognise the roles and contributions of all CSR stakeholders. The society works to develop coordinated and effective strategies to promote CSR and to enhance corporate practices through ongoing dialogues, training, collaboration and practical projects in Singapore. From the 100 members in 2005 including founding members NTUC and SNEF as well as some early CSR adopters in Singapore the society has more than 400 members today. Singapore s CSR movement has certainly grown from strength to strength. Since the formation of Singapore Compact, there were a number of government-led initiatives to promote greater social responsibility among Members of Singapore Compact for Corporate Social Responsibility include (from left): FoodXervices, which holds a warehouse sale of its food products at below cost on a Saturday each year and donates the proceeds to the needy; and Origin Exterminators, which uses an environmentally-friendly baiting system to eliminate termite colonies.

8 Corporate Social Responsibility in Singapore 7 corporations, including the Inter-Ministerial Committee on Sustainable Development to formulate a national strategy for Singapore s sustainable development in the context of emerging domestic and global challenges, skill-upgrading programmes to support the business sector in training their workers through the creation of clearer upgrading pathways for them, keep their skills relevant and enhance their access to learning and training, and the introduction of the Retirement and Re-employment Act in January 2012 mandating employers to offer re-employment to eligible employees up to the age of 65. This is to enable more people to continue working beyond the current statutory retirement age of 62. Going beyond philanthropy From a regulatory and policy perspective, Singapore has in place a favourable framework to move and develop CSR in the right direction. But indicators have shown that Singapore companies still lag in the adoption of CSR. A survey commissioned by the Ministry of Trade and Industry (MTI) for Singapore Compact in 2008 on 507 Singapore-based companies revealed a very low level of awareness of CSR. Forty percent said they were aware of the term CSR but understood it in the context of corporate philanthropy and volunteerism. Many companies in Singapore devote significant time and resources to giving back to the community by means of corporate philanthropy efforts and volunteerism. This has consistently been a tradition even in Singapore s founding years, when many schools, hospitals and efforts to help the needy were led by the early pioneers of our business community. However such contributions remain very much outside the core business activities of many corporations in Singapore. There is certainly room for Singapore companies to go further beyond this definition of CSR giving back through corporate philanthropy and volunteerism. By shifting its focus beyond the way profits are given away to the manner in which profits are made, companies here can tap specific strengths of their core business activities to more effectively respond to the needs of the community and the broader economic, social and environmental challenges. Over the last decade, the impact of global warming has become more apparent, with extreme weather events seen and felt around the world. It is little wonder then that environment sustainability has gained greater public attention. Companies are increasingly paying attention to the need for environmental sustainability in their business operations as

9 8 Many Journeys, Common Destination consumers become more aware of the need to care for the environment, and give premium to brands that promote environmental sustainability. Producing greener products, using environmental-friendly paper for packaging and promoting recycling efforts among staff is now the norm in many companies in Singapore, as it not only opens them to new markets and customers but can also provide cost savings through the reduction of wastage. The MTI survey also revealed a higher level of awareness of CSR among larger and foreign-owned companies, compared to local SMEs that made up 70% of the survey s respondents. Companies that abstained from CSR initiatives cited a lack of allocated budgets, time and know-how, and revealed their perception of CSR as being neither relevant to their business nor financially worthwhile. We have earlier examined how Singapore has set in place a sound regulatory and policy framework with which businesses operate. Businesses here are expected to meet the codes of practice and legislation concerning issues such as corporate governance, safety standards, pollution control and environmental health. This puts companies in a unique position as they would have already met stringent criteria in these areas in order to operate in Singapore. This also means that companies can afford to invest time and resources to take on a more important leadership role in regional and global business communities, by going beyond legislation and embedding CSR practices in their operations. Companies would be foolish to ignore the realities of the global, crossborder business climate today and the need for CSR to become part of their business models. Corporate governance and risk management are two major areas that remain largely untouched by CSR in Singapore s corporate landscape, as risk assessments and audit checks are still very much talked about in financial terms. However, given the complexity of issues faced by companies today, assessing risks only through financial figures may be simplifying the matter. A case in point: there are more than 670,000 migrant workers in Singapore in 2011, with many of them employed in the construction sector. There has been a litany of complaints from these migrant workers regarding unfair employment terms, poor pay, healthcare and living conditions, among others. Often, the Ministry of Manpower has to step in to mediate between companies and the workers in their disputes. However, such efforts did not prevent the first industrial action in 26 years from taking place in Singapore in December While there

10 Corporate Social Responsibility in Singapore 9 may be many factors contributing to the strike, it is plausible to believe that such a risk could have been mitigated if the company s management had considered the need to practise greater CSR in its labour relations. Into the future Member states of ASEAN have pledged to build an ASEAN Community in This would mean more exchanges and investments within the region, and CSR has been identified as a key pillar in the development of such a community. There is certainly a need for strong CSR pillar in order to make the ASEAN Community a reality in two years time, given that the region is still tackling the problem of air pollution resulting from the slash and burn cultivation method that is prevalent in some parts of the region. As one of ASEAN s established economies, Singapore and its business leaders can play a crucial leadership role in integrating corporate self-regulation into their business models by adopting and implementing CSR in its true essence. This is the next level in CSR that corporations in Singapore can aspire to. This development is again part of the global trend of new standards and frameworks to address the many social, environmental, ethical and economic challenges. Examples include the UN Business and Human Rights guidelines in 2011, the ISO standards on social responsibility (after five years of negotiations between different stakeholders), Global Reporting Initiative s latest version and formulation for Integrated Reporting. Singapore as a global city cannot but be part of these trends. The Singapore Exchange issued guidelines for sustainability reporting and has been encouraging listed companies to publish their sustainability reports since Exchanges around the world are also pushing for such reporting. Businesses will need to have responsible and sustainable business practices in place before they can report on them. In addition to these moves, we are also seeing a more vocal and active civil society. Businesses will be asked to give an account of their CSR and sustainability activities. They have to recognise these global, regional and national trends and to contribute to the building of inclusive and sustainable communities that are prosperous and peaceful. They have to work together with other stakeholders to do well and to do good.

11 10 Many Journeys, Common Destination The drive towards businesses being responsible and having to give an account of their actions is gaining pace rapidly. In Singapore and globally, sustainability reporting is becoming mainstream, requiring companies to articulate how they are conducting responsible business. This is in addition to society s expectations for corporate behaviour that contributes to the well-being of communities. Governments also expect businesses to meet these expectations and adopt sustainability practices. It all adds up to doing the right things that set the foundation for sustainable business growth. I look forward to our businesses heeding the trends and seizing the opportunity to lead in innovative responsible practices.

12 Aik Moh Paints & Chemicals Pte Ltd 11 1 Eliminating Chemical Waste for Business and Environmental Sustainability Aik Moh Paints & Chemicals Pte Ltd Due to the nature of our chemicals business, we know that we are at times part of the problem. We continue to work towards being part of the solution and take pride in the sustainable initiatives that we have. - Mr Tan Kah Moh, Chairman, Aik Moh Paints & Chemicals Aik Moh s vehicle transporting hazardous chemical.

13 12 Many Journeys, Common Destination Aik Moh does not waste its chemical waste. This policy has underpinned its corporate sustainability (CS) strategy. Instead, the company reuses or recycles it to maximise revenue (as in a dollar saved is a dollar earned). Since adopting CS practices in 1998, it has realised significant revenue growth by eliminating or minimising waste in its operations. It reuses chemical waste at its Tuas Street factory, consolidates customers purchases that are less than its minimum order quantities and recycles packaging containers. In addition, it maximises the utilisation of limited resources to reduce or eliminate wastage, and to minimise operating costs. To cope with its continued expansion, it bought its third Singapore chemical factory in Balancing its financial, social and environmental responsibilities has been a sustained and fruitful endeavour for the company. It has thus been able to attract and retain employees, customers, partners, suppliers and other stakeholders. How Aik Moh Paints & Chemicals started The company s Chairman Mr Tan Kah Moh and Managing Director Mr Jimmy Soh founded the company as a small paint shop in Although it has grown its business since and now deals with chemicals only, the cofounders have retained its original name to reflect how the business started. Where it is now The family-owned business now distributes chemicals and provides chemicalrelated services. Chemicals include alcohols, petrochemical solvents and thinners, while its main service is toll blending (third-party contract blending) of chemicals. Other services include repacking, drumming and logistic support. It is organised into seven business groups bulk trading, chemical distribution, toll blending, lab chemicals, freighting, technology innovation and agro-specialties. Nearly 100 people are currently employed in its Singapore, Jakarta, Batam, Manila and Penang operations. It opened a sales office in Malaysia in 2013 and a sales representative office in Myanmar in Its customers are spread across more than 20 countries in Southeast Asia, South Asia, Australia and New Zealand. Aik Moh Paints & Chemicals owes its success to, among other factors: Its infrastructure and manpower dedicated factories and people to handle chemicals;

14 Aik Moh Paints & Chemicals Pte Ltd 13 Its chemical licences it is certified to import, export, store and transport chemicals; and Its financial stability and reliability it has more than 30 years of experience in the business. Many of the products benefit the community and the environment. Those that are of particular importance to the company are green surfactants and solvent, and bioplastic applications. Among its chemical service, storage and distribution processes that are environmentally-friendly, the collection and recycling of packaging drums and the reusing of solvent waste in generalpurpose thinner production are more significant, as they save on resources, reduce costs and improve the bottom-line. The company prepared its 2012 sustainability report based on guidelines given by the Singapore Business Federation. Although it is not yet a member of the Singapore Compact for Corporate Social Responsibility (CSR), it plans to join the society in the near future. Where it is going Aik Moh plans to focus on the Southeast Asia market for the next five years. It intends to first concentrate on the growing industries in each country, and understand the competitive environment and political situation before deciding on which chemicals to market there. The company aims to be the preferred partner for its suppliers, customers, employees and the environment on a sustainable basis. It also wants to be a chemical company that invests in solutions for a sustainable future. Aik Moh s strategic development The two co-founders are driving the company s strategic development, with the assistance of the Chairman s son Mr Roy Tan. Mr Tan now leads Aik Moh s corporate sustainability (CS) efforts as part of its strategic development, with the co-founders guidance and allocation of resources. He is supported by the department managers in executing the CS plan. Aik Moh s exposure to CS could be traced back to its early years, when it started to work with chemical multinational corporations (MNCs) like Shell and Exxon, which placed great importance on sustainable development.

15 14 Many Journeys, Common Destination After learning about and benefiting from their CS practices, it was natural for Aik Moh to accept and adopt them. Over the years, many of the CS projects were initiated by the company s employees, who wanted to make Aik Moh different from its competitors. Today, the company has fully embraced CS as part of its business. For Mr Roy Tan, who is trying to sustain the company as a second-generation leader, CS fits in nicely with his ambitions. To him, it is not how fast or how big the company is becoming that is important. It is regenerating Aik Moh as a company where all staff enjoy working together for the future. While he is helping to build and grow the company s business, he also wants to take care of its employees, society at large and the environment. He likes to see that staff are happy to come to work each day and go home safely after a fulfilling day at work. Aik Moh aims to achieve sustainability in all aspects of its operations by integrating the economic, environmental, people and social dimensions, for sustained financial success and environmental protection as a responsible corporate citizen. It plans to realise these objectives by: Complying with the relevant regulations and codes of practice; Considering sustainability in all its business processes and decisions; Ensuring that all staff are fully aware of its sustainability policy and are committed to implementing and improving it; Reviewing and continually striving to improve its sustainability performance; and Ensuring that its employees work in a safe environment, investing in its people, helping them to develop their capabilities and providing equal career development opportunities. As an environmental policy, which is based on ISO 14001, the company acknowledges the environmental impact caused by its business operations, products and services, and strives to promote global environmental preservation and prevent pollution. Corporate sustainability initiatives Like many successful companies, Aik Moh started with corporate philanthropy. It donated to charity projects organised by MNCs that were its customers or suppliers. In 1998, it started collecting used drums from

16 Aik Moh Paints & Chemicals Pte Ltd 15 customers for reuse. When the authorities tightened chemical control through more stringent guidelines seven years ago, the company realised the need for CS as part of its business strategy. That was the time when Mr Roy Tan joined the family business. Operationalising Environmental Management System Establish framework for setting and reviewing environmental objectives to achieve continual improvement in the environmental performance of overall operations. Comply with applicable environmental laws and regulations, for Aik Moh s operations as well as the hazardous waste generated. Establish and maintain system, and audit the various aspects by means of a systematic documented verification process to ensure continuous improvement. Foster employees awareness of the importance of environmental, health and safety standards through training and other programmes. Prevent pollution through management of waste and emissions; improve efficiency of energy usage and conserve other natural resources. Improve in-process yield rates through effective use of materials and resources. As Aik Moh handles, stores and distributes hazardous chemicals, it has taken the necessary steps to ensure a safe workplace and the health and safety of its workers, suppliers and customers. Its environmental management system (EMS) has been certified to ISO 14001:2004 standards, while its risk and business continuity management (BCM) system is based on BCM SS540:2008. Its occupational health and safety system was certified at bizsafe Level 3 in All three systems are being audited annually

17 16 Many Journeys, Common Destination by accredited certification bodies. Daily toolbox meeting, safety briefing, risk assessment and site inspection by its health, safety and environment (HSE) and plant managers, and regular walkabouts by senior management help to ensure that safety standards are maintained at all times. Hazard reporting and suggestion schemes are also in place to encourage staff and subcontractors to alert the company to potential risks so that they could be addressed immediately. In addition, the company maintains regulatory licences required for handling chemicals from agencies like the Singapore Civil Defence Force, National Environment Agency and the Singapore Police Force. They cover transportation, storage, import, export and manufacturing of hazardous chemicals. It also integrates EMS into every aspect of its operations product and process innovation, planning, purchasing, manufacturing, distribution, customer support and R&D activities. As petrochemical products are harmful to people and the environment without their proper disposal, Aik Moh would educate its customers on the uses and properties of such chemicals. For example, methylene chloride is labelled as a potential occupational carcinogen with toxic effects on human beings. Such information is conveyed to potential customers before they purchase. Its staff would also recommend agriculture-based or green chemicals as alternatives whenever possible. Green chemicals are derived from agricultural sources, such as palm oil, coconut oil and soya beans. Another CS initiative is to reuse the chemical waste at the Tuas Street factory, so that it is not wasted. There, solvent chemicals used to flush or clean tanks and pipelines are collected, separated and analysed by a quality control team, before they are used to manufacture lower-grade thinner. The thinner is exported to developing countries like Sri Lanka and Cambodia. The toll-blending service was launched with the aim of reducing chemical waste. For example, the minimum order quantity for industrial chemicals is one drum (200 litres). Since some small manufacturers may need to use only a small quantity of the same chemical (before it expires), this often results in wastage and disposal cost. The toll-blending team groups such customers together, and supplies them their required volumes as a third-party toller who also consolidates, repacks and/or sells to other customers (who are buying the same chemical).

18 Aik Moh Paints & Chemicals Pte Ltd 17 Aik Moh distributes the chemicals in metallic and plastic drums, carboys and tanks, which account for 8% to 12% of the total product cost. To help its customers save on the packaging cost, the company buys used containers back from its customers for a fee, collects them, contracts third parties to clean them, and reuse them. Chemicals in reconditioned packaging are sold at a lower price. Due to the vast amount of chemicals that the company handles, treatment of its waste water is one of Aik Moh s key concerns. For its sustainable development to meet regulatory requirements, it had invested in a new and larger waste water treatment plant in 2010 to replace the existing one. Since then, it has spent over S$165,000 on equipment and maintenance, and more than S$95,000 on chemicals to treat the waste water. Aik Moh Paints & Chemicals extends the usefulness of its resources by not wasting its chemical waste. Besides managing waste more productively, the company also plans to reduce the utilisation of limited resources by: Increasing the capacity of equipment to handle bigger volume, and saving time and electricity for every kilogram of chemicals produced; Reducing waste generated by consolidating similar production work through a better production planning system, thus reducing chemical usage in the waste water treatment plant; and

19 18 Many Journeys, Common Destination Reducing waste water generated and electricity consumed per production volume by 5% per year for the next two years. Its new and third factory, which opened in July 2013, saves energy with the following features: High ceiling for natural ventilation; Natural lighting from outside the building; Waste water treatment plant; Scrubber system to suck fumes from warehouse and production area; Epoxy-coated floor to prevent any spilled chemicals from entering the soil; Contamination area; Load cell to control the charging-in of chemicals (by weight) to reduce their exposure to people; and Spray balls to wash the tanks to avoid exposing workers to the chemicals. The company is also considering motion-sensor lights for toilets and corridors, LED lights for general purpose and the use of NEWater for production at the new factory. Aik Moh measures the impact or benefits of its CS projects using a number of key performance indicators, including amount of waste generated, energy consumption and number of reused chemical containers. Overcoming initial challenges and obstacles Although Aik Moh had been successful in getting support from its employees who had understood the need to adopt CS practices and would work accordingly, educating them on CS and convincing them that it was something worthwhile took time, according to Mr Roy Tan. Teaching them the importance and benefits of CS was conducted through informal training, briefing sessions and leadership by example. The company s top management also highlighted some CS success stories at informal sessions to motivate the staff. Aik Moh s CS initiatives cover different areas. While some of them were straightforward in implementation, those requiring strong support and greater efforts were more challenging due to manpower constraints. Its

20 Aik Moh Paints & Chemicals Pte Ltd 19 management therefore needed to exercise patience, apply constant pressure, monitor the situation, explain the underlying reasons in a transparent manner, and hold open dialogue and regular staff dinner to carry out some of the initiatives. Both carrot and stick are being used effectively. For example, the cost savings realised from the production team s reduction in wastage were shared with the staff through monetary rewards. As a small- and medium-sized company, Aik Moh faces challenges in growing its business in an increasingly competitive environment. It sees the regular recruitment of new staff, who understand its CS practices and who would influence the older workers to adopt them, as important to its future survival. In the process, some of the older workers have left the company. Even with management s support in funding the CS programme to get projects off the ground, Mr Roy Tan had his moment of doubt that CS would work for his company. If the initial costs had been higher or if the adoption rate was lower, it would mean that the results would be below expectations. However, he managed to overcome the doubt through his determined efforts and perseverance in spite of various setbacks. When Aik Moh first introduced green chemicals to the market, there was slow acceptance due to differences in pricing and product efficiency, and regulatory requirements. However, through sustained efforts, it managed to sell 600 metric tons (MT) of green surfactants in 2011/12, compared with only 20 MT in 2004/05, due to growing awareness among its customers. Some of them wanted to use green surfactants as a marketing differentiator, while others were responding to the ban on the use of some of the traditional chemicals in the US and some European countries. Aik Moh s investment in bioplastic research has yielded some possible applications, such as slowing the release of fertiliser and making disposal plates and utensils. Although the technology is mature, the main obstacle is the cost of feedstock (palm oil, corn or tapioca). How business, community and environment benefit The introduction of green chemicals helped Aik Moh to expand its portfolio of products and to stay relevant to the market with better products. Since they are biodegradable and non-toxic, their disposal is easier and environmentally-friendly. As they come from renewable sources, the availability of green chemicals in future is also assured.

21 20 Many Journeys, Common Destination Reusing chemical waste at the Tuas Street factory has resulted in saving 24,000 kg of chemicals and US$2,400 in waste-disposal charges each year, while earning US$36,000 from their sale for the company. Its toll-blending service, which reduces wastage among customers who are buying small quantities of chemicals, also helps them to eliminate wastage and its disposal cost. It has been so successful production volume has grown from 200 MT per month in 2009 to an average of between 700 and 800 MT per month - that the company bought another factory in Singapore, and plans to expand it by 20% each year. Besides helping the company to improve on its profit margin, reusing waste has also reduced its carbon footprint on our planet. Reusing chemical packaging also saves costs for Aik Moh s customers and reduces the use of metal and plastic for making the containers, thereby helping to conserve the environment. Between 2007 and 2012, 4,136 plastic and 34,502 metallic drums were reused. These were equivalent to saving 41 MT of plastic and 621 MT of steel, and translated into S$150,000 of savings a year for the company in packaging costs. When biodegradable bioplastic developed by Aik Moh s R&D office is mixed with fertiliser, the release of fertiliser is slowed down. This reduces the wastage of fertiliser that is lost during a rainy day and saves on labour required to apply the fertiliser again. For Aik Moh, its sustainability journey has been marked with many memorable milestones. For Mr Roy Tan, he finds that the respect shown by customers, industry peers and suppliers for the company s CS practices and achievements to be particularly rewarding. Its employees are proud to work in the company, which is attracting more capable people to join it. He cited the public anger against companies responsible for the 2013 haze situation in Singapore, Malaysia and Indonesia as an example of how CS could be used as a competitive edge by businesses that practise it. Achievements in sustainability practice Among Aik Moh s many green achievements, its own Ampro brand of biodegradable adjuvant pesticide developed by its R&D team is particularly meaningful to the company. It was developed for agricultural use and is more suitable for the local climate. If there is one CS achievement that the co-founders are particularly proud of, it is the development of a common understanding and mutual support among

22 Aik Moh Paints & Chemicals Pte Ltd 21 the company s staff that allows the business to evolve in a more sustainable manner and helps it to become a more responsible corporate citizen. Aik Moh was recognised by the Singapore Business Federation for its CS efforts and achievements as a chemicals company with the Sustainable Business Award under the Singapore Sustainability Awards in Key learning points From Aik Moh s CS experience, Mr Roy Tan has learned that it does not matter if a company is small or if the steps it is taking are small. What matters is to start on the CS journey, and collectively the small steps can make a difference. In his view, if CS can cut across political borders, it may offer the only viable option to protect the environment. Through their collective or individual CS efforts, businesses could help to save the planet in a significant way. For the company, balancing profitability and doing good for the community and the environment is a cost. For example, in trying to protect the environment, Aik Moh may include the cost of treating waste as a separate item in its quotation to customers, who will need to decide if they wish to support its environmental sustainability efforts. For such efforts to have a significant impact, there needs to be greater economy of scale. From his experience in driving Aik Moh s CS efforts, Mr Roy Tan realised the importance of leading by example, patience and consistency of approach in ensuring that CS policies are clearly understood and practised by all staff. Over time, CS practices would synchronise with its policies, he noted. What s next? As Aik Moh s business expands, it becomes more complex to manage. However, the safety of its operations will continue to be top priority. The company is working towards achieving bizsafe Level 5 standard and ISO certification over the next two years. For environmental sustainability, its management is looking for ways to further reduce energy consumption through better factory design and planning. In the near future, Mr Roy Tan plans to introduce CS to the company s overseas offices, which currently comply with its corporate governance guidelines. For the community, he wants the company to do more beyond donation to charities. He revealed that Aik Moh is working on its social sustainability plan.

23 22 Many Journeys, Common Destination For the longer term, Aik Moh s R&D team in Penang is developing new technologies that could be commercialised as new products, such as biodegradable pesticide and bioplastic applications. These could create new market opportunities for the company. It also wants to develop new business models as part of its corporate sustainability efforts. It has invested in a startup that is working on cutting-edge technologies that could reduce energy consumption or treat waste at its factories. When the time comes, Mr Roy Chemical R&D work at Aik Moh s Penang Tan would have gained sufficient laboratory. exposure and experience to take Aik Moh on its sustainability journey to the next level as its next-generation leader. PHOTOS: AIK MOH PAINTS & CHEMICALS PTE LTD

24 DBS Group Holdings Ltd 23 2 One Step Ahead - Helping Social Enterprises to Help Communities in Asia DBS Group Holdings Ltd Championing social entrepreneurship across the region is the centrepiece of our corporate social responsibility efforts. Our commitment to the sector is one way that we contribute to society and is a force for good in the communities in which we operate. - Mr Piyush Gupta, CEO, DBS Group Holdings Ltd Beneficiaries of social enterprises supported by DBS participating in the first DBS Marina Bay Sailing session, which is a regular community engagement initiative of the bank.

25 24 Many Journeys, Common Destination As Singapore s largest bank with a regional presence, DBS is using its financial resources to help the community and the environment directly and indirectly through its various corporate social responsibility (CSR) initiatives. DBS CSR involvement has expanded to the rest of Asia. For example, its large network of ATMs and AXS stations in Singapore is facilitating public donations towards crisis relief efforts in the region. Its CSR practices have also evolved over the years, from spending its profit in helping underprivileged children to investing in a potentially profitable initiative to support social enterprises (SEs) that help communities in the region. Since 2008, more than 100 SEs have signed up for its DBS Social Enterprise Package the only one of its kind in Singapore and the bank s flagship CSR programme. The bank s CEO Mr Piyush Gupta had reminded his audience at a business conference of the real purpose of a business production of economic goods and services to benefit the community, which is particularly true for the banking industry. He cited the 2008 global financial crisis as an example of what would happen when business managers pursued profitmaking to the extreme. He believes DBS can achieve its profit optimisation goal while contributing to society. Promotion of social entrepreneurship is the current centrepiece of DBS corporate sustainability (CS) efforts, as it sees social enterprises filling a critical gap in the market by providing solutions to the region s disadvantaged people in areas such as education, disaster relief, health care, poverty alleviation and sanitation. The bank sees the potential for social entrepreneurship to create a transformative impact when it generates a positive multiplier effect on the community. To DBS, a loan is not just a loan, as it represents new opportunities for businesses and social enterprises to grow and expand, contributing to the growth of the economy and betterment of society. Banks have the power to transform lives and livelihoods in the community, noted Mr Gupta. The bank is among the first Singapore companies to go beyond sustainability reporting to integrated reporting. The Present for the Future theme of its 2012 annual report reflects its current spirit of enterprise and forward thinking.

26 DBS Group Holdings Ltd 25 How DBS started DBS began as a development-financing institution in 1968, during the industrialisation of Singapore. It evolved over the years and became a full commercial bank in the 1980s, before acquiring POSB, Singapore s longestablished savings bank, in Where it is now The bank has grown to become the largest bank in Southeast Asia, and serves the Asia market with its wealth management, small and mediumsized enterprise (SME) banking, transaction banking and treasury services. In October 2012, DBS moved its headquarters in Shenton Way to the new Marina Bay Financial Centre. It now has over 250 branches in 15 Asian countries, including China, with 18,000 employees of over 30 nationalities. DBS mission to add value to the lives of individuals and to help businesses grow has remained unchanged over the years. It now serves 5.3 million retail customers and 180,000 corporate customers in six countries. Its local subsidiary POSB Bank serves more than four million customers from all walks of life. Outside Singapore, the bank focuses on affluent individuals, SMEs and larger companies. Championing social entrepreneurship across the region is the centrepiece of DBS CSR efforts. Its enabling banking policies have encouraged more Asian social entrepreneurs to start their own businesses. CSR is one of the key performance indicators for DBS staff and is being measured qualitatively, such as the kinds of initiatives or projects completed. Its membership in the Singapore Compact for Corporate Social Responsibility underscores its commitment to the sustainability cause. However, unlike most other companies, DBS does not participate in sustainability reporting. It has instead embarked on integrated reporting based on International Integrated Reporting Council s pilot programme that serves to inform different stakeholders investors, customers, employees, regulators and society. Where it is going The Singapore bank envisions itself becoming the Asian bank of choice for a rising Asia and intends to help more social enterprises in Asia through its banking facilities and expertise. It considers customised/personalised financial solutions, innovative use of technology and banking products that facilitate the production of economic goods and services as critical success factors for its continued success.

27 26 Many Journeys, Common Destination DBS recognises society as a key stakeholder and that its social role goes beyond corporate citizenship and philanthropy, with a much broader social purpose. It believes in creating long-term economic value through the provision of responsible banking products and services to enhance the community where it operates. It is thus investing in programmes that address social needs. DBS strategic development DBS policy is to commit to corporate sustainability as part of its future business development. To realise its vision of becoming the Asian bank of choice, it will continue to develop its business through nine strategic priorities in three key areas that were identified in 2010: Geography: Entrench leadership position in Singapore; Reposition franchise in Hong Kong; Rebalance geographical mix of DBS business in China, South and Southeast Asia; Regional businesses: Build a leading SME banking business; Strengthen wealth proposition to better serve the rising number of affluent individuals; Build out Global Trade Services and Treasury & Markets crosssell businesses; Enablers: Place customers at the heart of the banking experience; Focus on management process, people and culture to achieve higher customer satisfaction and greater employee engagement; and Strengthen technology and infrastructure platforms to achieve more resilience. In the years ahead, it will also focus on other areas to ride on emerging megatrends, such as the growing demand for funds to finance infrastructural developments that needs to be met by both bank and debt financing. Corporate sustainability initiatives The banking group s CSR programmes dated back to its founding years were mostly philanthropy projects and participation in community activities, which it still does today. CSR initiatives are now being led by the respective country heads and coordinated by its CSR manager at the Singapore headquarters.

28 DBS Group Holdings Ltd 27 For Mr Gupta, it is a fallacy to think that the private sector only needs to make monetary donations to fulfill its social responsibility. He believes that it is about generating profits in a responsible manner, benefiting the larger community, and supporting sustainable growth of the real economy. As the people s bank in Singapore, DBS subsidiary POSB has been serving generations of its people since it started in 1877, including segments where it is making a loss. It is also involved in various community initiatives. Since 2009, it has partnered the Council for Third Age, a non-government organisation, in promoting active ageing in the country. One of their joint initiatives is the POSB Active Neighbours programme, which mobilises senior citizens to assist other elderly members of the community with banking transactions at POSB branches and use of self-service banking terminals across the island. In 2011, POSB launched a micro-business loan scheme, in collaboration with Singapore s Tote Board and a social enterprise SE Hub, to help customers start up or expand their micro-businesses. This initiative complements the government s efforts to help Singaporeans become more self-reliant. The following year, the bank co-organised the POSB PAssion Run for Kids with the People s Association that attracted 200 participating organisations and 8,000 runners, to raise S$1 million for the POSB PAssion Kids Fund that benefits underprivileged children. The work of social enterprises in coming up with financially-viable solutions to social issues resonates with DBS beginning as a development bank. Therefore, as part of its CSR efforts, the bank is championing social entrepreneurship across the region. To make a difference to social enterprises as its top CS priority, DBS has adopted a three-pronged framework: Holistic development of the sector that seeks to build an ecosystem to support them by partnering like-minded academic institutions, government bodies, industry associations, sector developers and the media to develop awareness and knowledge; Support for social enterprises through grants, loans and staff s sharing of commercial expertise in business planning and strategy development; and Integration of social enterprises into the bank s day-to-day business activities.

29 28 Many Journeys, Common Destination DBS partner academic institutions include Tata Institute of Social Sciences in India, Fudan University in China, Fujen Catholic University in Taiwan and Atma Jaya Catholic University in Indonesia. Social sector developers that collaborate with DBS include Non-Profit Incubator of China, Social Innovation Park and Social Enterprise Association of Singapore, Hong Kong Council of Social Service and AKSI UI in Indonesia. Seminars were jointly hosted for social entrepreneurs to promote public understanding of social enterprises and their challenges, and for their enterprises to share their knowledge and skills. In 2008, DBS introduced its special banking package for social enterprises, as it believed in supporting entrepreneurship with a social cause. It enhanced the package in 2012 to enable them to open deposit accounts with no minimum balance and apply for loans at preferential interest rates. Later that year, it launched a similar package for the first time in China. The bank planned to offer local variants in other markets such as Hong Kong, India, Indonesia and Taiwan in Since 2012, DBS has been using the services of social enterprises and sourcing products from them wherever possible. It has set aside a dedicated area called the Social Enterprise Exchange at its headquarters as a place for them to market their goods and services, and to share their social causes with DBS employees. The bank has a S$1 million fund that could be used as project grants for social enterprises that have the potential for high growth and social impact. The grants help them to expand their businesses and create more jobs. In Singapore, China and Taiwan, the grants are being used for projects that provide training or employment to disadvantaged groups such as migrant women, the blind, hearing-impaired or mentally-handicapped. DBS also provide process improvement expertise to help the social enterprises with their business expansion plans. In 2012, four social enterprises in Singapore were supported with project grants worth a total of S$340,000 (see facts box at page 50), with four in China and three in Taiwan. For example, DBS funded and supported Fuping Housekeeping School in China to develop its professional curriculum for baby nursing and to train 2,000 migrant women as household helpers. It provided Aurora of Taiwan with a grant to help them open and operate a restaurant that serves food prepared from fresh produce from organic farms run by aboriginal people that Aurora has helped. It also works with AKSI UI in Indonesia to provide training and coaching to social enterprises that benefit the visually-handicapped, impoverished

30 DBS Group Holdings Ltd 29 Social enterprises in Asia supported by DBS included (clockwise from top-left) Fuping Housekeeping School (China), Aurora (Taiwan), Bharat Calling (India) and Adrenalin Events & Education (Singapore).

31 30 Many Journeys, Common Destination children and ex-offenders, with 10 of them benefiting from the scheme in In India, the DBS-Tata Institute of Social Sciences (TISS) Social Entrepreneurship Programme launched in 2012 promotes the cause of social entrepreneurship through conferences, research, workshops and an incubation programme that provides seed funding and mentoring for 21 social enterprise start-ups. One of them is Bharat Calling, which received DBS funding to scale up its activities to help rural students aspiring for higher education. In September 2013, DBS partnered NUS Enterprise of the National University of Singapore to launch a new initiative to raise awareness and build a culture of social entrepreneurship in Asia. Called DBS-NUS Social Venture Challenge Asia, the regional start-up competition organised by NUS Enterprise as part of its Social Venture Week is open to members of the public. Besides sponsoring the initiative over the next three years with S$500,000, DBS will mentor the participating teams and help to market the competition to budding social entrepreneurs in Singapore and the region. DBS also sponsored and provided the venue for the Social Enterprise Association s Social Collab conference held in Singapore in October In 2008, DBS utilised its self-service banking channels (ATMs and AXS stations) to receive donations for relief efforts in the aftermath of the Sichuan earthquake in China and Cyclone Nargis in Myanmar. Within a month, the public donated about S$3.7 million to the Singapore Red Cross. The bank also donated S$440,000 that year to crisis relief efforts in both countries. In 2010, its ATMs and AXS stations enabled the Singapore public to make donations to earthquake victims in Padang, Indonesia and those affected by Typhoon Ketsana across the region. It also gave more than S$150,000 to Habitat for Humanity to help rebuild homes in Padang. In addition, DBS is engaging the community through various activities, such as the inaugural DBS Marina Regatta that attracted nearly 100 international and local dragon boat teams to the Marina Bay in This was Singapore s first international dragon boat race since 2000 and was held in conjunction with DBS Family Day and open to the public. In 2008, when DBS celebrated its 40 th anniversary, it challenged its staff to develop 40 community projects to be completed in 40 days that would help underprivileged children with their education. The bank supported each approved project with up to S$1,000 of funding and time out from work.

32 DBS Group Holdings Ltd 31 (For years, it has given its employees two days of paid leave to do voluntary work.) To the surprise of DBS management, the number of approved projects doubled to 80 and the initiative had to be renamed Project 80/40. For those that needed more than S$1,000 of seed funding, the staff simply sponsored the extra costs out of their own pockets to travel to Cambodia, East Timor, Philippines and other places to build libraries, spruce up schools and so on. In 2011, about 1,300 DBS staff in Singapore, Hong Kong, Indonesia, India and China volunteered for projects to help children in 11 countries. DBS also hires people with disabilities and elderly people as full-time or part-time employees. For example, it has a quadriplegic Singaporean (who is paralysed from the neck down) working full-time as an assistant vicepresident in the Group Strategic Marketing & Communications department. The banking group is also committed to conserving energy and resources, better waste management and recycling throughout its operations and supply chain. In 2012, it reduced its total energy consumption by zoning work areas according to different occupancy and air-conditioning and lighting usage, optimising air-conditioning usage by switching it on at specific times, and using energy-efficient light fittings at the branches and offices. That year, DBS recycled 307 tonnes of paper, eight tonnes of aluminium and nine tonnes of plastic. In its efforts to reduce printed materials and go paperless, the bank converted 16 million physical documents to electronic format when it moved to its new headquarters. It is also encouraging its Singapore customers to opt for electronic statements, with 1.2 million accounts participating in its estatement programme as of December DBS now distributes its annual report on compact disc to the large number of shareholders, and prints only a limited number of copies that are available on request. An online version can also be downloaded from its website. Overcoming initial challenges and obstacles In adopting CS practices (that include CSR), DBS had faced two key challenges management buy-in and employee engagement. To overcome the former, top-down staff briefings were held and the score card with CSR as a key performance indicator was used for staff s performance appraisal. For the latter, staff were given opportunities to interact with social enterprises that were showcased by the bank, among other steps taken.

33 32 Many Journeys, Common Destination Benefits for business, community and environment Although the bank does not formally measure the impact of its CSR programmes, it assesses them qualitatively. For example, its project grants for social enterprises have indirectly benefited the disadvantaged and the underprivileged. According to social enterprise A-Changin s Director Ms Josephine Ng, the DBS project grant it received in 2012 would help it to increase the number of staff from 30 to 50. Adrenalin Events & Education s Managing Director Mr Richardo Chua had found the grant helpful in sustaining its delivery of events with a social cause to its clients in Singapore and later across Asia, as it moved into its fifth year in business. Singapore Social Enterprises Benefit from DBS Project Grants These four social enterprises were selected by DBS Bank in 2012 for the sustainability of their business models, social impact and project innovation: A-Changin provides training and employment to women in need. It received a DBS project grant of S$100,000 to set up a second sewing lab and for as working capital. Adrenalin Events & Education is an event management company that employs youth-at-risk, ex-offenders, the hearing-impaired and wheelchair-bound individuals. It received a grant of S$100,000 to expand its audio, visual and effects department and to launch a new mechanisms unit. Aii is a candy-wrapping company that employs hearingimpaired staff. It used the grant of S$40,000 to set up an e-commerce website, purchase an in-house candy-wrapper printer and provide staff training. Bizlink Centre Singapore provides a range of employment services for disadvantaged people. The grant of S$100,000 it received from DBS was used to start a new bakery.

34 DBS Group Holdings Ltd 33 Customers of another grant recipient were able to receive their candies and gifts in a shorter time through its e-commerce website that was funded by the grant, according to Aii founder Ms Leona Leong. Bizlink Centre Singapore s CEO Mr Alvin Lim disclosed that the grant had made it possible to open new bakery and to create more job opportunities for disadvantaged people. Internally, the employee volunteers activities, such as Project 80/40, have enabled the bank to build its organisational culture, stretch its people, foster teamwork and benefit the community. Award-winning achievements in sustainability practice For its efforts in promoting the social enterprise sector, DBS was recognised with the Corporate Award by the Social Enterprise Association of Singapore in That year, the Social Innovation Park (SIP) also presented it with the Friends of SIP Award. Key learning points Mr Gupta noted that while modern technology has helped to transform the banking industry, the financial service sector is ultimately still a people-driven business. Thus its people would remain its key differentiator. The many creative ways in which DBS staff are helping communities in different parts of Asia exemplify the spirit of self-belief and strong culture of empowerment that need to pervade the entire organisation if it is to sustain its position as a leading bank of Asia. Mr Gupta also learnt that CSR has helped to galvanise the organisation with a common sense of mission. CSR could also unleash the creativity, energy and can-do spirit of its staff. Although banking hours could be notoriously long, that did not stop a team of bankers from staying back after work till past midnight to make handcrafted jewellery items for sale. Their collective effort raised S$16,000 to pay for books, jackets, educational aids and furniture for the Bann Huaypong village school in Thailand. CSR could also engender a simple stroke of ingenuity from among DBS staff. As its HR handbook was silent on whether the wearing of jeans was permitted on Fridays, a team exploited the situation to raise S$42,000 for a learning centre in Long Hoa, Vietnam. Employees who did not have meetings with clients on Fridays could donate S$10 to a fund and don their denims.

35 34 Many Journeys, Common Destination The bank has also learned that CSR initiatives could be led from the ground up, as demonstrated by the many Project 80/40 team leaders who worked in various departments at all staff levels. They realised that they did not have to be bound by official hierarchy to lead from the front. As Mr Gupta had observed, a strong sense of purpose, self-belief and fire in the belly is sometimes all it takes to make a difference. This was further demonstrated by the five Chinese staff from DBS Guangdong branch who walked nearly two hours to a school in Pintian, a mountainous village that was inaccessible after a snowstorm, to deliver food, clothes, books and gifts to 100 students. For a large organisation with regional presence, cross-country community projects are also possible. For example, DBS staff from Singapore and Hong Kong had skipped lunch on the same day and saved for a children s charity. By harnessing the collective can-do spirit of its people, the bank also learned that the outcome of an entire organisation pursuing a vision could be a powerful one. It gave credence to the idea that the whole is sometimes greater than the sum of its parts. Mr Gupta also noted that their collective CSR initiatives had fostered a sense of esprit de corps within the bank and broken down silos across departments and markets. A common vision, sometimes outside a formal work setting, could be the glue that brings and holds people together. He was also pleased to share that CSR has created an environment where ideas could spring forth and where our people were made to feel that their voices could be heard and their actions counted. Recalling the basketball court built by DBS staff volunteers in Tioman Malaysia, that were used by children and adults alike, Mr Gupta felt heartened to know that small steps could make a difference in other people s lives. What s next? The bank has also identified the development of social capital markets as important in promoting social entrepreneurship. It believes that Impact Investment Exchange, as Asia s first private-public platform, could provide a transparent marketplace for social entrepreneurs to access capital from investors. The bank sees its intermediary role in raising capital from such investors to provide seed capital to fund social enterprises growth in the region. PHOTOS: DBS GROUP HOLDINGS LTD

36 About Singapore Institute of Management (SIM) 35 About Singapore Institute of Management The Singapore Institute of Management (SIM Group) is the leading provider of higher education and professional training in Singapore, reputed for its dedication to lifelong learning and high standards and quality. Founded in 1964 under the initiation of Economic Development Board to support Singapore s economic development, we are today a diverse and vibrant organisation with a wide range of programmes and services. We are also a membership-based organisation with more than 44,000 individual and corporate members. Our extensive range of membership programmes, activities and resources provide an important nexus for students and members to network and learn.