On 19 December 2022, Keppel Corporation was incorporated as a constituent on the Dow Jones Sustainability World Index (DJSI World) and the Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific) as part of the indices’ annual review. For this Singapore-listed company, it is an honour to be included in the index because “as part of Keppel’s Vision 2030, (they) have put sustainability at the core of the Company’s strategy”.
Keppel joins CapitaLand Investment and Wilmar International as the 3 companies from Singapore to be included in DJSI World, forming 0.2% of the index weight.
For Singaporean investors, this is a great step forward for our local companies to be recognised for their environmental, social and governance (ESG) efforts internationally.
What Is The Dow Jones Sustainability World Index (DJSI World)?
The Dow Jones Sustainability World Index (DJSI World) is an index that represents the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index based on long term ESG and economic criteria. It tracks the top global sustainability leaders as identified by S&P Global through the Corporate Sustainability Assessment (CSA), which is an integrated assessment of governance and economic, environmental and social criteria to select best-in-class companies with a strong focus on long-term shareholder value.
The DJSI Asia/Pacific Index focuses on the Asia-Pacific developed region and represents the top 20% of the 600 largest companies in the Asia-Pacific developed region in the SP Global Broad Market Index based on the same long-term environmental, social, governance and economic criteria as the DJSI World.
Aside from the DJSI World, Keppel has also achieved the highest triple-A rating on the MSCI ESG Leaders Indexes. Keppel is also a component of the FTSE4Good Index by the Financial Times Stock Exchange Group, the iEdge SG ESG Leaders Index, iEdge SG ESG Transparency Index, iEdge Singapore Low Carbon Indices by the Singapore Exchange, and the Euronext Vigeo World 120 by Euronext.
For investors, these indices are important benchmarks, especially if they want to incorporate ESG considerations into their portfolios.
Sustainability Is At The Core Of Keppel’s Strategy
Keppel is a company committed to sustainability. This bears out in Keppel’s Vision 2030 which charts how the company intends to run its business sustainably and make sustainability its business by providing solutions that contribute to sustainable urbanisation and combat climate change.
In line with Vision 2030, Keppel aims to simplify its business and sharpen the focus of our portfolio on sustainable urbanisation solutions. A part of this transformation is in the divestment of its Offshore & Marine (O&M) business. In April 2022, Keppel signed definitive agreements on the proposed combination of Keppel Offshore & Marine (Keppel O&M) and Sembcorp Marine, as well as the resolution of Keppel O&M’s legacy rigs.
Keppel is also a signatory to the United Nations Global Compact, committed to the 10 principles of the Global Compact and contributing to the achievement of the United Nations’ Sustainable Development Goals.
E: Keppel Aims To Achieve Net Zero By 2050
As part of Keppel’s Vision 2030, the company has committed to reduce their Scope 1 and Scope 2 carbon emissions by 50% from the 2020 levels by 2030 with the intention of achieving net zero by 2050.
One way is by improving the built environment which is a significant contributor to carbon emissions. Keppel is developing smart and sustainable offices of future, such as the Keppel Towers redevelopment. This won the BCA Green Mark Platinum (Super Low Energy) award in 2021 for its innovative and green features. Keppel Data Centres are also looking to using alternative zero-carbon energy solutions to power its data centres as well as developing energy-efficient float data centres that use seawater for cooling.
On top of carbon emissions reduction, they also aim to reduce water consumption intensity by 20% and waste intensity by 10% by 2030 from 2019 levels.
Keppel is also refocusing the company’s portfolio on sustainable urbanisation solutions and expanding their interest in renewables, clean energy and decarbonisation solutions with the commitment to grow their renewable energy portfolio to 7 GW by 2030.
Some of the new business pursuits and R&D efforts in these areas include the acquisition of majority stake in Cleantech Renewable Assets, a leading solar energy platform, exploring importing renewable energy to Singapore; developing electric vehicle charging infrastructure; securing Singapore’s first Energy-as-a-Service contract and studying the feasibility of developing an Asia-Pacific green ammonia supply chain.
In 2021, Keppel also launched the Keppel Marina East Desalination Plant (KMEDP), Singapore’s first large-scale, dual-mode desalination plant. This was named ‘Desalination Plant of the Year’ at the Global Water Awards 2021 and will contribute to Singapore’s water security amidst increasing rainfall uncertainty caused by climate change.
S: Keppel Invests In Social Impact Both Internally And Externally
For the social aspect of ESG, Keppel is committed to diversity, employee well-being, workplace health and safety and training development of its employees.
In 2021, Keppel achieved an Employee Engagement Score of 84%, 6% higher than Mercer’s Singapore average and 4% above Mercer’s global average. As part of the company’s succession planning, talent development and strategic workforce planning, an extensive talent mapping exercise was carried out and leadership renewal was announced for some business units. To foster a learning environment, they also introduced initiatives such as a Global Learning Festival to foster a positive learning culture, and an International Career Week to equip employees with skills to develop their careers. In 2021, the Group achieved an average of 20 hours of training per employee globally.
Keppel also won 18 awards at the Singapore Workplace Safety and Health Awards 2021, gaining recognition for their strong commitment to workplace health and safety. They achieved zero fatality in 2021 across their global operations and improvements to Total Recordable Injury Rate, Accident Frequency Rate and Accident Severity Rate.
Additionally, they aim to make a social impact by creating value and building vibrant and inclusive communities where they operate and support initiatives. In 2021, this included COVID-19-related assistance such as a $300,000 donation to Digital for Life fund to help connect seniors affected by the pandemic and a donation of 150 new laptops to MSF’s Community Link initiative to support home-based learning by students from lower income families.
Keppel has committed up to 1% of its net profit to support worthy causes. In 2021, the Group invested a total of $4.6 million in social investment spending, including $2.4 million disbursed through the Keppel Care Foundation, the Group’s philanthropic arm. Keppel staff also volunteered time and services on top of the financial support. In 2021, Keppel Volunteers contributed more than 12,000 hours of community work despite COVID-19 restrictions.
G: Responsible Business Is A Strategic Pillar
Keppel’s commitment to Corporate Governance received local recognition as they won the Singapore Corporate Governance Award 2021 (Big Cap) at the SIAS Investors’ Choice Awards 2021 and was awarded Apex Winner at the Singapore Apex Corporate Sustainability Awards 2021. Globally, Keppel maintains the highest AAA rating in the MSCI ESG ratings in 2021.
Keppel has zero tolerance for fraud, bribery, corruption and violation of laws and regulations. They have strengthened their compliance measures, including rolling out the ISO 37001 Anti-Bribery Management System across business units. The Singapore entities of Keppel Land and Keppel Data Centres, Keppel Infrastructure and the overseas entities of Keppel Land (China, Vietnam and Indonesia) have also received ISO 37001 certification.
Additionally, in recognition of the importance of the supply chain on the impact of ESG, Keppel also holds its suppliers to vigorous standards. 99.92% of the newly qualified suppliers are screened based on ESG criteria and are expected to sign and abide by Keppel’s Supplier Code of Conduct.
Keppel’s ESG efforts are not at the expense of its economic performance. In 2021, Keppel generated $9.49 billion of economic value for its stakeholders. In fact, it may be its ESG efforts that led to its outperformance in 2022, ending the year as one of the top performers on the STI.