To the Management and Stakeholders of City Developments Limited (CDL)
SCOPE AND OBJECTIVES
CDL engaged Ere‐S Pte Ltd to provide independent assurance on its Sustainability Report 2012. The assurance engagement was executed in accordance with a Type 2 assurance of the AA1000 Assurance Standard (AA1000AS 2008), which consists of:| A. | Evaluating the sustainability systems and processes using the inclusivity, materiality and responsiveness criteria of the AA1000 AccountAbility Principles (AA1000APS 2008). |
| B. | Evaluating the reliability of the disclosed performance information and the relevant data collection processes. For this, we used the GRI G3.1 reporting principles. |
The assurance scope covers the operations of CDL in Singapore, including project development, property and facilities management for residential and commercial developments during the whole year of 2011. We assessed figures and statements on corporate social responsibility (CSR) initiatives, strategy, policies, procedures, key performance indicators, management systems and associated processes.
LEVEL OF ASSURANCE AND LIMITATIONS
We provided a moderate level of assurance with desktop review, management‐level data verification and evidence gathering from internal sources. We did not execute multi‐level research to determine materiality issues and stakeholders relevant to the Company. The verification did not include financial data, technical descriptions of buildings, equipment and production processes or other information not related to sustainability and already supported by existing documents, such as CDL’s annual report and third‐party certifications.Processes related to stakeholder engagement were assessed through the review of internal information provided by CDL’s data owners and external information publicly available.
RESPONSIBILITY AND INDEPENDENCE
The management of CDL was responsible for the preparation of the sustainability report and all statements and figures contained within it. This statement represents Ere‐S’ independent opinion and our responsibility was to execute the assurance engagement, prepare the assurance report and this assurance statement for the management of CDL alone and for no other purpose.Ere‐S was not involved in the development of the report and the disclosed management processes, neither have we been engaged by CDL for other projects. Ere‐S’ activities are independent of CDL and contain no financial interest in their business operation. Composed of assurance practitioners with expertise in CSR and sustainability reporting, our assurance team executed this engagement in accordance with Ere‐S’ assurance code of conduct, which can be found at http://www.ere-s.com/assurance-code-of-conduct/.
METHODOLOGY
We reviewed the drafts of the sustainability report to identify the elements to be audited. Statements and data sets were classified according to the relevant data owners and the type of evidence required for the verification process.We interviewed over 20 managers and data owners from the departments of Corporate Social Responsibility, Environmental Health & Safety, Projects, Properties & Facilities Management, Human Resource, Corporate Communications, Corporate Secretarial Services, Internal Audit, Marketing, Leasing, Customer Service, Administration and Branding & Strategic Marketing. Questions were asked regarding the identified statements and figures and the adherence of stakeholder engagement processes to AA1000 and GRI principles. Data collection and calculation methods were also evaluated and, where necessary, we requested the data source and other evidence to confirm the accuracy of the disclosed information. In addition to the internal documents provided as proof by the data owners, we looked at external sources such as press releases and web sites.
FINDINGS AND OBSERVATIONS
On the basis of our review and a moderate level of assurance, we are confident that the sustainability framework of CDL represents a reasonable application of the AA1000 AccountAbility Principles. In our opinion, the reported performance information also provides, within satisfactory limits, a reliable and fair representation of CDL’s sustainability profile and is supported by comprehensive and verifiable data and underlying management processes.EVALUATION OF THE ADHERENCE TO AA1000 ACCOUNTABILITY PRINCIPLES
Inclusivity ‐ How the organisation engages with stakeholders and enables their participation in identifying issues and finding solutions.Since the previous reporting period, progress in CDL’s stakeholder engagement processes can be seen particularly in the transformation of its HR management system initiated in 2011, which entailed an enhanced and independent employee engagement survey, improved employee development and appraisal processes and a new balanced scorecard approach.
Similarly, we have also found stronger collaboration with community partners and local NGOs. Projects with these groups benefit from established channels of interaction with a focus on specific topics, including environment and youth education. For these community programmes, stringent selection criteria are applied to ensure that the allocation of human and financial resources is optimised for a maximum impact on the targeted population groups.
For the other stakeholder groups, engagement processes have remained steady during 2011, with diverse interaction opportunities, communication platforms, such as the 5‐Star EHS seminars and EHS training sessions, as well as solid feedback and grievance channels.
Materiality ‐ How the organisation recognises issues that are relevant and significant to it and its stakeholders.
Following CDL’s integration of ISO 26000 guidelines, which was initiated in 2010, we have seen the definition of processes and policies reflecting the Group’s key material issues. The most significant evidence of the formalisation of such processes is the new corporate statement on human rights that CDL has incorporated during the reporting period and recently made available to all its stakeholders through the company website and other formal documents. Similarly, the coverage of the whistle‐blowing policy has been extended to the whole group, including its business partners, supply chain, clients and the public.
Material issues have also been taken into considerations at the highest levels, with new development processes for senior management, such as regular training sessions on corporate governance and sustainability‐related topics. Environment and stakeholder engagement are still key elements of CDL’s strategic risks register and we have seen evidence of the new CSR criteria integrated into the operational risks inventory for the Projects division.
Responsiveness ‐ How the organisation responds to stakeholder issues and feedback through decisions, actions, performance and communication.
We found CDL to be responsive to all key stakeholder groups, particularly investors, employees and customers. The action plan which has emerged from the employee engagement survey demonstrates a Group‐wide and comprehensive response to stakeholders’ concerns. All groups of stakeholders are also benefiting from improved communication channels, such as an enhanced website, providing more information on CDL’s management decisions and performance as well as multiple feedback alternatives.
EVALUATION OF THE DISCLOSED PERFORMANCE INFORMATION
From the work undertaken, we have found the CDL sustainability report to be in compliance with the GRI G3.1 reporting principles and we believe the disclosures reflect CDL’s economic, environmental, and social performance in the reporting period.Obtaining an A+ on the GRI application level for the first time, the sustainability report has reached a superior level of disclosure and completeness. We have noted major changes in the report structure, however, the report remains clear and performance data remains comparable with previous versions.
We are also confident that CDL’s sustainability report achieves a satisfactory level of accuracy, supported by evidence found for all identified elements. A small number of minor inconsistencies were detected during our verification work and we expressed recommendations for improvement. The reporting team followed the majority of our recommendations and the final version of the sustainability report was checked by us to confirm that all necessary corrective actions had been taken.
MOVING FORWARD
Looking ahead, we recommend further formalisation of defined material issues. For example, sustainability‐related policies and measurement processes can be further expanded through the different levels of the supply chain. In that regard, CDL’s policies on environmental, health and safety have been comprehensively implemented but progress can be made with processes beyond regulatory compliance in place to mitigate social and labour impacts in the supply chain.We commend the visible sustainability disclosure progress from Millennium & Copthorne Hotels plc, CDL’s subsidiary, which is also reflected in the arm’s annual report. Moving forward, we recommend sustained effort in sharing CDL’s management approaches related to sustainability reporting with the Group’s wholly‐owned subsidiaries. CDL sustainability report could benefit from similar performance disclosure from its other key subsidiaries.
The above findings and additional suggestions for improvement have been presented to the management of CDL in a more detailed assurance report.
