Financial sustainability is not merely a financial metric for KLCCP Stapled Group; it is a strategic imperative that underpins our commitment to responsible and enduring business practices. By prioritising financial health, we ensure not only our survival but also the continuity of our sustainability efforts, translating aspirations into tangible results that benefit our company, stakeholders, and the world at large.

Our approach to supply chain management is more than just about operational efficiency; it is a commitment to sustainability that resonates throughout our business. 

Robust Procurement Management

Recognising our ability to shape suppliers’ practices, we have integrated clauses in all contracts with our contractors, consultants and suppliers, mandating adherence to our CoBE. The focus is on combatting corruption, upholding business ethics, and prioritising HSE practices along every step of our supply chain. Beyond compliance, we seek to instigate a ripple effect of change throughout our supply chain.

We anticipate that our sustainability standards will influence not only our direct relationships but also the broader business landscape. Mindful of our contribution to the local economy, we also prioritise local partners as far as possible.

Consolidated Procurement

Consolidated procurement not only streamlines the purchasing process but also optimises manhours and reduces paper consumption. Through centralisation, moreoever, redundant tasks associated with procurement are minimised, allowing employees to focus on more value-added activities.

Responsible Procurement

In 2023, MOKUL Hotel spent RM5.66 million on Responsible Procurement. This included continued efforts to eliminate single-use plastic since 2022 and achieving 100% responsible sourcing for agriculture commodities like coffee, cocoa, tea, vanilla, free-range chicken eggs, sugar, and paper products. MOKUL Hotel also ensured compliance with the WWF Endangered Seafood Guide in its menu and purchased 64% sustainably certified seafood (MSC, ASC, AIP). These initiatives underscore MOKUL Hotel’s commitment to sustainable and responsible business practices.

Supplier Audit Process

In the pursuit of maintaining Food Safety practices, MOKUL Hotel has implemented a systematic approach by conducting audits on their food suppliers. In 2023, a total of 30 vendors were assessed, of which 23 falling into the high-risk category and the remaining categorised as low risk. Notably, all audits revealed no non-compliances, affirming the adherence of these vendors to the specified standards.

Consequently, these suppliers have been retained within MOKUL Hotel’s supply chain. Additionally, 40% of MOKUL Hotel’s food vendors hold accreditation with either ISO 22000 or HACCP&MS:1480, subjecting them to audits only once every five years. In contrast, nonaccredited vendors undergo more frequent audits, with high-risk vendors audited annually and low-risk vendors audited biannually. This systematic evaluation underscores MOKUL Hotel’s commitment to ensuring the reliability and compliance of its supply chain partners in the realm of responsible procurement.

Being a multifaceted concept, sustainability is addressed not only through environmental initiatives but also by emphasising strong relationships with customers and tenants. By understanding their needs, KLCCP Stapled Group builds trust and collaboration, positioning ourselves as reliable partners in the communities we serve. This commitment not only fosters brand loyalty but also contributes to positive social impact, creating vibrant and inclusive communities. Our dedication to providing the best customer experience ensures satisfaction, reinforcing our position as a responsible corporate citizen and driving positive change in the business ecosystem.

Extensive Engagement

We believe in more than just transactional relationships – we actively engage with our customers and tenants throughout their journey with KLCCP Stapled Group. Via personalised interactions, open communication channels and community involvement, we seek to understand our customers’ and tenants’ evolving needs and preferences. 

Feedback Mechanisms

At KLCCP Stapled Group, we recognise that feedback is invaluable for continuous improvement, and continuously seek insights from our customers and tenants. We have implemented robust feedback mechanisms to capture their opinions, suggestions and concerns. This iterative feedback loop not only helps us refine our services but also demonstrates our commitment to transparency and responsiveness.

Customer Satisfaction

Our primary goal is to ensure the satisfaction of our customers and tenants. We measure success not just by transactions but by the positive impact we make on their lives and experiences. Through consistent and reliable services, transparent communication, and a proactive approach to problemsolving, we strive to exceed expectations. Customer satisfaction is a guiding principle that shapes our decisions and actions, reinforcing our dedication to building sustainable, long-lasting relationships.

In 2023, we maintained a score of between 85% and 96% in the Customer Satisfaction Survey rolled out across most segments in the Group, as shown in the Key Performance Indicators (KPIs) section below. Our retail segment, meanwhile, achieved an NPS score of 73, which compares very favourably against the industry benchmark of 43. We will work continually on feedback provided to us, both positive and negative, to improve our capabilities and provide the best customer experience in all our segments.

Corporate Social Responsibility (CSR) is crucial to sustainable operations as it encompasses a commitment to social impact and community well-being. Social impact initiatives, such as philanthropy and sustainable practices, address societal challenges and contribute to community betterment.

Community enrichment and well-being emphasise a company’s role in enhancing the communities it serves. Investments in local infrastructure, education and healthcare not only foster sustainable growth but also cultivate positive relationships with stakeholders, demonstrating a genuine commitment to community development.

KLCC Sustainable September, initiated in 2022 by KLCC Business Events Alliance (KLCCBEA), aims to promote sustainable practices within the KLCC Precinct. The choice of September as the designated month is strategic, aligning with various sustainability-related days such as International Charity Day (5 September), UNSDG Action Day Decade of Transformation (25 September) and International Day of Awareness of Food Loss and Waste (29 September).

In 2023, a larger collaboration was fostered, involving the broader KLCC Group in our collective efforts to reinforce our commitment to a sustainable future. A comprehensive month-long series of activities was organised to drive sustainable initiatives for the environment and community.

Key participants in this collaborative endeavour included KLCCP, KLCC Sports & Recreation Club, KLCCBEA (comprising KLCC Convention Centre, Mandarin Oriental Kuala Lumpur, Traders Hotel, Impiana KL Hotel and Suria KLCC), Double Tree Hilton Putrajaya and The Everly Putrajaya as well as external parties such as Pusat Darah Negara, AIA, Capital Oil, KLOTH Cares, MAEKO and Accordia.

The primary objective of this month-long initiative is to foster increased involvement of our staff and business partners in advancing KLCC Group’s sustainability agenda, focusing on the following key objectives:

We adopt a practical and measurable approach in addressing climate change and energy management, in line with market expectations. Our aim is to safeguard long-term portfolio value, mitigate environmental risks, and contribute to broader sustainability goals. Via proactive strategies, we enhance the durability of our assets and fulfil our role as a responsible corporate citizen, contributing to a more sustainable and resilient future. We seek to assure our stakeholders that we are committed to protecting the environment along with their long-term interests

Climate Action Strategies

Our climate action journey began years ago when we recognised the importance of reducing our carbon emissions in order to halt or at least mitigate climate change. We set yearly targets for emissions reduction in the 5-year Sustainability Roadmap rolled out in 2019 and, guided by meticulously crafted strategies that consider the intricacies and specific nature of our operations, has consistently endeavoured to meet all of these. In 2022, we further strengthened our decarbonisation and climate resilience efforts by stating our goal of achieving Net Zero Carbon Emissions by 2050.

Thanks to our collaboration with PETRONAS in establishing a GHG emissions forecasting tool, we are now strategically positioned to set carbon reduction targets for each specific operation. This facilitates the development of precise decarbonisation strategies tailored to the requirements of each operation.

Our decarbonisation strategy revolves around three main aspects: reduced energy consumption, use of energy-efficient equipment, and incorporation of renewable energy. Specific initiatives implemented at each operation will align with these key aspects, adjusted to suit the unique nature of their respective businesses.

Carbon Emissions Accounting and Reduction

All our strategies depend on having in place a transparent emissions database and accurate monitoring systems to indicate how much carbon we are emitting, and how successful our efforts are in reducing our emissions year to year.

Our emissions measurement is guided by the Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard. Adopting the standard’s organisational and operational boundaries approach, we developed our targets in the 5-year Sustainability Roadmap using 2015 as the base year.

KLCCP Stapled Group monitors emissions from all our assets and operating units, covering the following

In 2023, we managed to achieve substantial GHG emissions reductions in line with our 5-year Sustainability Roadmap targets for each of the following segments – Office and Car Parks, Hotels and Retail. This stems from the carbon reduction initiatives implemented by each Operating Unit (OPU) as described in the key initiatives section below.

Task Force on Climate-Related Financial Disclosures(TCFD) Reporting Framework

Continuing from the initial mapping of the sustainability management approach against the four pillars of TCFD recommendations in 2022, we brought in external experts in 2023 to pinpoint gaps in our sustainability framework, approach and disclosures compared to the recommendations.

This was crucial for the integration of TCFD recommendations into our sustainability reporting, covering all pillars including climate scenario analysis and risk assessments. It also allows the experts to share best global practices with KLCCP Stapled Group, enabling us to adopt these practices and strengthen our sustainability strategy.

The Group plans to disclose full alignment of our sustainability report with TCFD recommendations in 2024.

Energy Mangement

Energy management is essential for our Group as we navigate ever-changing market demands in Malaysia. Implementing energy-efficient practices not only leads to cost savings but also contributes to environmental conservation. By reducing our energy consumption through sustainable energy solutions, we actively lower our carbon footprint, aligning with global initiatives for a more sustainable future.

One of the efforts undertaken has been to acquire green building certification for the iconic PETRONAS Twin Towers and Menara 3 Petronas, with the former achieving a Gold GBI rating and the latter a GBI Silver. This translates into 58% of our gross floor area being certified green.

Our energy management strategy focuses on promoting responsible consumption within our operations and steering clear of unnecessary energy usage. This is achieved through administrative measures and technological upgrades, such as retrofitting facilities and equipment with low-energy alternatives. Our commitment is evident in the consistent reduction of building energy consumption and intensity from the base year of 2015. Although our energy consumption across all segments increased year on year in 2023, this was the result of significantly increased footfall and occupancy within our retail and hotel segments.

Recognising that renewable energy will be vital to reducing the Group and the country’s carbon emissions, we are focusing on increasing solar energy generation in our operations.

In our ongoing commitment to safeguard the environment, we address the critical aspects of water and waste management. Our focus lies in actively reducing consumption trends, recognising the pivotal role this plays in enhancing sustainability. Through strategic measures, we are making strides to minimise water usage and optimise waste management practices. This not only aligns with environmental responsibility but also underscores our dedication to being a positive force for sustainability in Malaysia.

Water Management

Water consumed in our office buildings, retail malls and hotel facilities comprises municipal water. We continually look for ways that the Group, including our stakeholders, can improve our water efficiency. This includes the installation of water-efficient systems and adoption of non-wasteful behaviours. Water consumption increased in 2023 compared to the previous year because of the increase in business activities, signified by the rise in footfall and occupancy rates. Nonetheless, our consumption was 16% less than our 2015 base year. We have also installed appropriate controls to ensure all our operations do not contribute to any form of water pollution.

Waste Management

Minimising GHG emissions associated with landfill operations is key to our waste management. By reducing unnecessary waste generation and diverting waste away from landfills, we actively contribute to a low-carbon environment.

Our waste management processes align with the Solid Waste and Public Cleansing Management Act 2007 and other relevant regulatory standards. Most of our nonhazardous waste originates from building operations and food establishments. Such waste is diverted from landfills through effective reduce, reuse, recycling and composting initiatives. In 2019, we introduced a Single Use Plastic (SUP) phase-out initiative, as well as a collaborative waste recycling and recovery programme for items such as paper, fabric and used cooking oil (UCO).

Our hazardous waste management adheres to the Environmental Quality (Scheduled Waste) Regulations 2005, and involves the proper disposal of items such as light bulbs and electronic waste.

Through responsible waste management, we aim to foster a sustainable environment that benefits both our business and the community.

Used Cooking Oil (UCO) Recovery Drive

This programme educates employees and tenants about the crucial role of UCO as a bio-feedstock for bio-refinery, highlighting its potential contribution to our sustainability agenda. Collaborative efforts between KLCCP, PETRONAS and Capital Oil led to a series of UCO collection events from July to December 2023. A total of 692.87 kg of UCO was collected from the recovery drive.

Fabric Recycling Drive

Fast fashion has become a popular trend, generating a significant amount of fabric waste. In our commitment to fostering a more sustainable nation, we are creating awareness as well as offering a means for our employees, tenants and the community to recycle their unwanted fabrics, diverting it from the landfill.

In collaboration with POS Malaysia, MISC and Lifeline Clothing (LLC) Malaysia, we have installed a fabric recycling bin in Menara Dayabumi, which is accessible to all stakeholders mentioned. This initiative aligns with the KLCCP Sustainability Framework, supporting UNSDG 11 – Sustainable Cities and Communities, and UNSDG 12 – Sustainable Consumption and Production.

Phasing Out Single Use Plastics (SUPs)

Collaborative Efforts with PETRONAS
3R Recycling Program as part of Phasing Out Single Use Plastics (SUPs)

KLCCUH worked with PETRONAS Trading Corporation Sdn Bhd (PETCO) at PETRONAS Twin Towers to eliminate the use of plastics and enforce collection and segregation of plastic waste for recycling.

Paper Recycling Drive

We collaborated with PETRONAS Downstream Business Excellence (DBE) in its effort to collect wastepaper at its office in PETRONAS Twin Towers.

Phase Out of SUPs in Sembang Petang

We shared insights on phasing out SUPs with stakeholders at “SUPs Sembang Petang” events organised by PETRONAS, led by the Executive Director of KLCCUH, Dato Ts. Izwan Hasli.

KPM Recycle Waste Campaign FY2023

The KPM Recycle Waste Campaign FY2023 reflects our acknowledgement of the importance of waste management in reducing operational costs and our environmental footprint, while enhancing our reputation and stakeholders’ trust. Throughout the yearlong campaign, various programmes were organised to foster greater environmental awareness among our staff.

Risk and Crisis Management

An effective and sound risk management system is important to achieve our business strategies and objectives, hence is integral to KLCCP Stapled Group’s business. We leverage the KLCC Group Enterprise Risk Management (ERM) Framework which sets out our risk policy, risk governance and structure, risk measurement, risk operations and system. The ERM Framework ensures the Group’s strategic and operational activities are within strategic mandates, risk appetites and corporate objectives.

KLCC Stapled Group is committed to providing a reasonable level of confidence that risks and their associated controls are adequately, effectively and safely managed through a comprehensive assurance programme.

To support the above, there is an established Risk Management Oversight Structure encompassing the Boards, Board Risk Committees (BRC), and the Risk Management Committee (RMC). This structure assigns responsibility for risk management whilst facilitating the assessment and communication of risk-related matters from the operational levels to the Boards. The KLCCP and KLCCRM Boards have developed the KLCC Resiliency Model which covers:

Enterprise Risk Management

The ERM Framework is a structured and holistic approach to identify, assess, treat and monitor risks thereby reduce the likelihood and impact of identified risks while enhancing the Group’s ability to achieve our strategic objectives. Aligned with the ISO31000 standard, the Framework manages risks in an integrated, systematic and consistent manner, anchoring on the key elements of Governance, Context Setting, Risk Assessment, Risk Treatment, Risk Monitoring & Review and Continual Improvement.

Governance
We deployed a centralised digital governance management platform called myGOVERNANCE.

Risk Management Process
We deployed a centralised digital governance management platform called myGOVERNANCE.

Continual Improvement
We deployed a centralised digital governance management platform called myGOVERNANCE.

Crisis Management

KLCCP Stapled Group has in place a comprehensive set of procedures to prepare the organisation to respond to and manage crises while protecting people, the environment as well as the Group’s assets and reputation.

The Crisis Management Plan (“CMP”) encompasses:

The CMP addresses emergency scenarios in HSE, Finance, Human Capital, Digital, Facility Management, and Legal & Regulatory. It is tested annually to ensure the readiness and effectiveness of the communication process and recovery action plan in responding to a crisis. Through the exercise, risk owners are made aware of their roles and prepared to respond in the event of an emergency/crisis.

Business Continuity Management

KLCC Stapled Group has established a Business Continuity Plan (BCP) as part of our Business Continuity Management (BCM) in response to incidents that affect our Information and Communications Technology (ICT), business supply chain, assets and people.

The BCP is designed to provide guidance in resuming key business functions in the event the CMP is unable to contain a crisis that has escalated into a prolonged disaster with catastrophic financial, operational and/or reputational impacts.

The BCP is reviewed annually by conducting Business Impact Analysis (BIA) for all divisions, departments, and OPUs in accordance with the BCM framework, following which the results are presented to the Risk Management Committee and Approving Authority. Through the BIA, critical business functions are identified, and the impact of their unavailability is ascertained. This helps in prioritising timelines for the resumption of activities and specifying the minimum resources requirements (e.g. people, equipment, assets, facilities, technology, vital records, interdependencies) to be allocated to recover and resume these functions following prolonged business disruption.

This year, a Call Tree Verification exercise was conducted to validate the phone numbers and contacts of relevant personnel and stakeholders. This was to ensure that Critical Business Function (CBF) staff are contactable to carry out their designated roles in the event of a crisis. As part of the exercise, CBF staff were also trained to respond promptly to the activation of a BCP.

Board Diversity and Capacity Building

A diverse Board is imperative to respond to the complexities and interconnectedness of challenges facing businesses today. To ensure a well-balanced mix of expertise and skillsets, we are committed to preserving diversity across backgrounds, age, gender and ethnicity on top of experience and perspectives. This diversity facilitates the Board in navigating the sustainability landscape encompassing environmental, social and governance dimensions. Inclusivity in decision-making enhances creativity, innovation and risk management, ultimately leading to more robust and sustainable business practices.

Our Board Diversity Policy, approved by KLCCP Board and is applicable to KLCCRM, reflects the government’s aspiration for women to represent at least 30% of boards of directors. We have been exceeding this minimum since 2020, with women currently making up 50% of our Boards. The policy is described in detail in the Corporate Governance Report for 2023.

The Board has also adopted a policy to limit the tenure of Independent Non-Executive Directors (INED) to nine years, as recommended by the Malaysian Code on Corporate Governance (MCCG). Currently, none of the INEDs on our Board exceed this ceiling.

Cognisant that effective sustainability leadership requires ongoing education, we provide targeted training for our Board members. On 5 December 2023, we organised two sessions on the topics of Conflicts of Interest and Sustainability, each taking up a half-day. The morning session focused on ethical governance, specifically on managing risks related to conflicts of interest; while the afternoon session centred on cultivating impactful leadership by equipping board members with the knowledge and tools needed to integrate sustainability principles into decision-making.

Integrity and Corruption Management

KLCCP Stapled Group’s continuous efforts to manage our integrity risk reflect a commitment to conducting business with integrity in support of the Group’s zero tolerance against all forms of bribery and corruption.

We recognise that bribery and corruption pose a constant threat to our operations, the risks varying across different landscapes including jurisdictions, business sectors, people and transactions. To manage these risks, we adhere to the KLCC Code of Conduct and Business Ethics (CoBE) which is based on the values of Loyalty, Integrity, Professionalism and Cohesiveness.

Top Leadership Commitment

KLCCP’s Policy Statement on Anti-bribery and Corruption was reviewed and endorsed by the CEO in November 2023. The policy states our commitment to complying with applicable laws and regulations, which include the KLCC CoBE and Antibribery and Corruption Manual. Consequence management will be applied on any employee who contravenes the CoBE. We also provide a channel for employees and the public to report any improper conduct observed within the KLCC Group of companies.

Anti-Bribery Management System

KLCCP and its subsidiaries, KPM and KLCCUH, are certified to ISO 37001:2016 ABMS standards. The recertification audit conducted by SIRIM in November this year showed that our systems and controls are adequate and effective in ensuring compliance with the standard.

We implement Adequate Procedures as per the T.R.U.S.T. Principles based on the Guidelines supported by the MACC Act 694, i.e. Top Leadership Commitment, Risk Assessment, Undertake Control Measures, Systematic Monitoring, Review and Enforcement, Training and Communication.

Our commitment to enhancing integrity is evident through regular ABMS awareness and refresher sessions provided to all employees. These sessions not only reinforce our stance against corruption but also ensure that everyone is wellversed in our anti-bribery policies, Corporate Liability under S17A, and our Whistleblowing mechanism.

As a result of our anti-bribery and corruption efforts, the Group has maintained a record of zero substantiated corruption cases for four consecutive years.

ABMS specific awareness and knowledge transfer

We curated training for specific target group to ensure effectiveness of the training.

ABMS Compliance Program

We established the ABMS Compliance Programme to ensure Adequate Procedures as per T.R.U.S.T Principles and an effective monitoring system (‘TRUST-T’ via Microsoft Power Automate and Power BI) are in place. ‘TRUST-T’ is a digital tool that tracks, monitors and automates reminders to entities to implement the ABMS T.R.U.S.T Action Plan according to planned dates. TRUST dashboards create insights on the Group’s overall ABMS implementation status.

We understand that our digital infrastructure is a vital asset that must be safeguarded against evolving cyber threats. To this end, we have implemented robust cybersecurity measures aimed at fortifying our systems and preventing unauthorised access. Regular assessments, updates and monitoring protocols are integral to our strategy of identifying and mitigating potential vulnerabilities, ensuring the ongoing integrity of our systems. Our efforts to safeguard our digital infrastructure led to the Group achieving zero Cyber Security incidents in 2023.

Education and Awareness

We prioritise the continuous education of our employees on Cyber Security through regular training. Each employee in KLCCP underwent 8.72 hours of dedicated learning, while Suria KLCC and MOKUL Hotel recorded, 3.68 and 0.5 hours per employee average respectively in 2023, ensuring a wellinformed and vigilant workforce.

Phishing Tests

To gauge employees’ awareness levels, we conduct phishing tests regularly. These simulations help to identify potential vulnerabilities and empower our teams to recognise and respond to phishing attempts effectively.

SWITCH Training

Our employees undergo specialised SWITCH training, equipping them with the latest knowledge and skills in Cyber Security. This training ensures that our workforce remains at the forefront of evolving cyber threats and mitigation strategies.

Enterprise Cyber Security Governance Framework

Our Cyber Security efforts are guided by the Enterprise Cyber Security Governance Framework. Comprising a comprehensive set of policies, procedures and controls, the framework presents a consistent and standardised approach to Cyber Security across the Group. The framework also prioritises the protection of sensitive information shared with external parties. Our Vendor Contract Agreements integrate Non- Disclosure Agreements (NDAs), reinforcing the commitment to data privacy and setting clear expectations for our partners and vendors.

Cyber Security Business Impact Assessment (CS-BIA)

As part of our proactive approach, we conduct regular Cyber Security Business Impact Assessment (CS-BIA) on applications used within the Group. Potential risks are, therefore, identified and addressed promptly, minimising the likelihood of security incidents.