Environment, Social, and Governance (or ESG in short) reporting has not only been a focal point among SGX-listed businesses but also with investors, given the importance of slowing or reversing climate change.
In that regard, LHN Limited (SGX: 41O), a real estate investment trust (REIT), which specialises mainly in space optimisation among facilities management and energy businesses, has recently repositioned its ESG focus. Under its new strategy, LHN aims to align its efforts based on three pillars: (1) Protect Our Environment, (2) Create Positive Social Impacts for Our Employees, Stakeholders and Communities, and (3) Maintain Good Corporate Governance Practices.
Here are five things to understand about LHN Limited’s ESG efforts.
With the growing focus on sustainability in the property industry, how does LHN Group intend to adapt to this growing trend?
Buildings have traditionally been viewed as energy consumers within the energy system. However, with current technologies such as solar panels, smart energy management systems, and built-in energy storage facilities, we can transform buildings into energy prosumers. These buildings can consume and produce energy simultaneously, making it more self-sufficient and less reliant on fuel energy.
To ensure the sustainability of our offerings, we enhance the energy efficiency of properties we manage by adopting energy-saving technologies. For example, previously unused spaces such as rooftops have been deployed for photovoltaic (PV) systems like solar panels, while our car park areas have been equipped with electric vehicle (EV) chargers. We continuously improve our offerings and make them affordable for small and medium-sized enterprises who want to take part in this transition.
Retaining and grooming individuals is also critical to ensuring the sustainability of our business. We provide training and reskilling opportunities for current staff members who wish to expand their skills in the sustainability sector.
ESG relates to Environment, Social, and Governance. Which of these three pillars does the Group focus more on and why?
Our endeavours revolve around attaining a balance among the aspects of environment, humanity, and profitability. While each of these facets holds significance in our approach to sustainable business practices, we place a particular emphasis on the social pillar. This choice is rooted in the very essence of our business, which revolves around people and their well-being while living or working in the environment we manage.
With a wide diversification of portfolio, how does LHN Group ensure that it meets the regulatory requirements for ESG reporting?
Comprehensive ESG Framework Aligned with National Targets and Sustainable Development Goals (SDGs): We have developed an all-encompassing ESG framework that not only addresses regulatory mandates but also aligns with relevant national targets and SDGs. By identifying goals that resonate with each portfolio segment, the company can ensure its ESG efforts contribute to broader global sustainability objectives.
Expertise and Training: We provide quality training on sustainability-related topics (e.g. LowCarbonSG Programme conducted by UN Global Compact Network Singapore etc.) to relevant personnel within the organisation to ensure they are well-versed in ESG and timely informed about changing regulations.
Identifying Areas Where Sustainability Initiatives can be Applied: Our Sustainability Innovations Committee consists of Heads of Department and members of the Board of Directors, who, on a regular basis, exchange ideas and identify areas in daily operations where sustainability strategies can be effectively integrated.
Can you share about the Group’s sustainability approach and how it has integrated into the business operations?
At LHN Group, we champion sustainability’s pivotal role in safeguarding the viability of the environment, society, business, and individuals alike. Our endeavours focus on striking a balance between the elements of the environment, humanity, and profitability. Hence, instead of relying on one-off, short-term initiatives, we promote a long-term sustainability strategy that integrates sustainable practices into our daily operations. This approach yields a lasting, cumulative positive impact on our workforce, stakeholders, local community, and the environment.
Our sustainability approach is governed by a comprehensive ESG framework, with actions developed by dedicated committees. To amplify the impacts of our ESG initiatives, we establish long-term partnerships with social and environmental agencies/enterprises, fortified by the support and collaboration of our business associates.
We adhere to three overarching pillars: (i) Protect Our Environment; (ii) Create Positive Social Impacts for Our Employees, Stakeholders and Communities; and (iii) Maintain Good Corporate Governance Practices.
We categorise our material topics within these three pillars to allow for clear and coherent dissemination of information to our stakeholders.
What are the Group’s ESG achievements that are different from those of your competitors and which shareholders should understand and care about?
#A Our core business Space Optimisation is a business of recycling buildings.
Our space optimisation core business is a business model of recycling old and underutilised spaces and enhancing them to maximise the leasable areas. By doing so, we upgrade the building’s internal facilities and usability without tearing them down, reducing noise and air pollution. Such buildings are then transformed into productive environments such as vibrant co-living spaces or storage solutions, which are as efficient as new buildings.
This business model is a promising sustainable real estate solution.
We strive to establish long-term partnerships with social agencies/enterprises for more sustainable and meaningful Corporate Social Responsibility (CSR) initiatives.
#A Providing sustainable and reliable financial and manpower resources to support social agencies/enterprises
By partnering with social enterprises on a long-term basis, we provide them with a sustainable and reliable source of monetary support and manpower to help more beneficiaries. This extended collaboration also allows our staff to witness the positive impact of their contributions, fostering a strong bond with the agencies and beneficiaries. As a result, our staff are highly motivated to participate actively in our CSR initiatives.
#B Creating opportunities for beneficiaries to achieve financial independence and build a more inclusive society
Our objectives when planning CSR activities are to empower beneficiaries to be self-sustaining, independent, and able to contribute to society. As such, we engage their services or fund their vocational training courses, instead of carrying out one-off charity efforts. By using services provided by social enterprises, we create job opportunities for the beneficiaries to unleash their potential and achieve financial independence.
#C Engaging clients and business associates in our CSR initiatives:
We creatively incorporate philanthropy in corporate events to harness support from various stakeholders. By doing so, we can empower our tenants, who are small or one-man businesses, to embark on ESG journeys.
Food Donation Drive Campaign:
We dedicated our Annual Golf Day to raising funds for Food From The Heart (FFTH), a Singapore non-profit organisation that is devoted to alleviating hunger through efficient distribution of food. The event elicited an overwhelming response and support from our business associates. We not only exceeded our donation goal but also helped FFTH establish new connections with our business partners, who have joined forces to support them.
Mr. Kelvin Lim (right), LHN Limited’s Executive Chairman, Executive Director and group Managing Director, presented the donation amount raised from LHN Group Charity Golf Day to Robin C. Lee (left), Chief Executive Officer of Food From The Heart.
Fund-Raising for TOUCH Community at LHN Dinner and Dance:
We dedicated our Dinner & Dance to raise fund for the mentally disabled artists of TOUCH Community Services. Door gifts for guests at this event were made by these artists. By engaging services and purchasing products from TOUCH Community Services, we create opportunities for these artists to earn income from their talents and contribute to the society like everyone else.
At LHN Group Dinner & Dance 2023 event, Mr. Kelvin Lim shared about TOUCH Community Services and LHN Group’s fundraising campaign to support mentally disabled artists.
LHN Group’s corporate door gifts designed by artists of TOUCH Community Services.
LHN Group’s fundraising campaign for TOUCH Communities Services on giving.sg exceeded the company’s donation goal within one night.
#D Double win at Singapore Corporate Awards 2022.
LHN Limited won the Gold Award for Best Investor Relations in the Small-cap category, recognizing our commitment to corporate governance and transparency. Additionally, Ms. Yeo Swee Cheng, the Chief Financial Officer, received the Best Chief Financial Officer Award (Small-Cap) for her outstanding leadership in strategic financial planning.
Editor’s Note: Some answers for this article were extracted from the SGX 5 in 5 series published on 12 September 2023 and have been republished with permission. You can read more on the SGX website.