Green Generation

The Edge Singapore, April 2, 2012

By Joan Ng

Ruth Yeoh is building YTL's next business pillar and driving home the sustainability message across its divisions.

Poised and elegant, Ruth Yeoh chats confidently about her efforts to make YTL a greener business. Looking at her, it's hard to imagine the 29-year-old quaking in her high-heeled shoes. But Yeoh says that's exactly how she felt in 2006, when she first went to the YTL board with the idea of publishing a sustainability report. "You join the company at a very young age and you're in a board room with all these people (who are much older than you). You can imagine how I felt," she says.

"I said we should have a story board that shows what we do, because we do so much. We collect the data but don't report it formally, so my intention was to start doing so. Thankfully, there was buy-in from the start. They knew that this had to be done."

Yeoh holds many official titles within the YTL group. She is director of investments at YTL Corp, the Malaysia-listed conglomerate with interests in utilities, cement, construction, property development, hotels and IT.

She is also executive director at YTL Singapore Pte Ltd, the company's Singapore property development arm. And she is director at YTL-SV Carbon Sdn Bhd, an in-house carbon credit and clean development mechanism consultancy.

But her primary role at YTL is leading the company's fledgling environmental division. "It's something that I've always wanted to do since I graduated and joined the company at 22. One thing I noticed when I joined was that we didn't actually have an environmental division, so I started one." Among her chief duties is writing the company's annual sustainability report. In its fifth year now, the report is a dedicated review of YTL's efforts in promoting arts and culture, supporting education and community development and protecting the environment.

Besides reporting on the company's progress, Yeoh also helps set targets for the group to achieve. For example, she has set targets for the group to reduce its emissions further.

She is also constantly on the lookout for suitable new green investments. YTL-SV Carbon is the first company that she has led YTL to acquire. Besides providing carbon consultancy service to YTL's various subsidiaries, it advises companies on how to be more clean and green and helps them apply for carbon credits. The company claims to be the No 1 carbon credit consultancy in Malaysia and third in Southeast Asia in terms of registered projects. Last year, it won an award for best carbon markets brokerage in Asia at the World Finance Carbon Market Awards.

Yeoh is also an investment committee member of the Asian Renewable Energy and Environment Fund and director of the Renewable Energy and Environment Fund, two funds that YTL has invested in. The funds invest in companies that innovate in clean technology and the renewable energy sector. "I was with a bank before I joined the family business and that taught me about clean technology and how to invest in renewable energy.

That was a good starting point to understand this growing area more," she says. Yeoh was previously with Credit Suisse in Singapore.

The green business isn't a significant one yet at YTL. For FY2011 ended June 30, YTL Corp, the primary listed entity, reported revenue of RM18.4 billion ($7.5 billion) and earnings of RM1 billion. The biggest business is the utilities business, which contributed 65% of pre-tax profits last year. Cement manufacturing and trading was the second largest, contributing 19.4%.

But Yeoh believes it's an aspect of business that cannot be ignored. "When you talk about capital, it's not just about economic capital. It's about natural capital as well. They go hand in hand. What my father likes to say is business is a wholly-owned subsidiary of the environment and not the other way around." She also believes the green business can be the next growth driver for the future. And she's doing all she can to drive it.

Business of Green

Yeoh may, in fact, have a point. According to research from Goldman Sachs, companies that are leaders in environment, social and good governance policy have 25% higher stock value than their less-sustainable competitors. Analysis by management consultants AT Keatney found out that in the recent market collapse of 2008, sustainability leaders continued to have the fastest-growing stock values and were well protected from value erosion. The market capitalisation of sustainable companies was an average US$650 million ($817 million) more than their less-sustainable competitors.

One of Yeoh's favourite examples of sustainability leading to success is Wessex Water, a company that YTL acquired in 2002 from a unit of failed energy trader Enron. Wessex Water treats water and wastewater for an area covering 10,000 sq km in the southwest of England. One of the major initiatives taken by the company is helping customers use less water. It gives away free WaterSave packs to customers on request. These packs contain a low-flow shower regulator, a "save flush" device for toilets and a leaflet to help customers audit their water use. Some 11, 000 packs were distributed in FY2011 and the company has surpassed its target of helping customers save one litre of water per property per day. Customers’ bills were 21 pounds ($42) or 5%, lower in the year than they would otherwise have been because of the savings that the company has made over the last five years.

"The best part about Wessex is that it is continuing to innovate," Yeoh says. Wessex Water's subsidiary, GENeco, has developed a VQ Beetle called the Bio-Bug that runs on biogas generated from the sewage treatment process. "We jokingly call it the dung beetle because it's powered by poo," says Yeoh. Waste from 70 homes in Bristol is enough to power the Bio-Bug for a year, based on an annual mileage of 10,000 miles. Wessex Water has also set a target to reduce its carbon footprint and be carbon-neutral by 2020.

The company is today recognised by the water industry regulator Ofwat as one of the most efficient water and sewerage companies in England and Wales. It is also among the most profitable and is an industry leader when it comes to customer satisfaction and environmental standards.

Improving Business Practices

But how do such sustainability policies gel with the YTL group's other businesses? After all, power generation and construction are considered highly polluting industries. According to figures from the World Resources Institute, A Washington-based environmental think tank, the generation of electricity and heat emits the most greenhouse gases, at 24.6%. The cement industry too generates a significant 3.8% of global emissions.

"That's all the more reason why you need to do it," Yeoh says. A Key emphasis at many of the company's power businesses is reducing usage of resources such as water and fuel. In East Java, Indonesia, the company has a stake in a 1, 220MW coal-fired power plant. The station has developed a plan for recycling all used plant water, which could reduce water usage at the plant by up to 1,050 cu m a day, or a 40% reduction.

The plan will also decrease wastewater discharge, from 730 to 450 cu m a day. Water is used in the plant for coal dust suppression systems, plant cleaning, ash lagoon maintenance and equipment cooling systems.

Under this plan, reducing water usage will result in chemical and electrical power savings equivalent to around US$75000 a year. The programme is progressing in stages and is expected to be completed sometime this year. Already, around 800 cu m a day, or 30%, of water consumption reduction has been achieved. The plant is also trying to minimise the consumption of fuel oil, used during the start-up and shutdown of the plant and for back-up firing in the event of a coal supply disturbance to the boiler.

The same principles for reducing emissions and waste apply across the entire YTL group - using less paper, power and water, and recycling resources. All 36 of the company's subsidiaries and properties now participate in the annual Earth Hour campaign, switching off their lights for 1 ˝ hours in March last year. YTL's cement plans are designed to return kiln dust, or airborne particles generated in the cement-making process, to the system, and all waste materials are recycled where possible. And since 1997, its plants have been switching out of iron ore and into copper slag in the production of blended cement in order to reduce carbon emissions.

YTL is also investing significant resources in education and community initiatives. PowerSeraya, the Singapore power company that YTL acquired, has sponsored an Energy Learning Hub at the Greenridge Secondary School in Singapore to raise awareness on energy issues. At the company's Spa Village Resort Tembok in Bali, food is prepared with local produce and indigenous herbs are used in spa treatments.

Yeoh's championing of the sustainability cause has led to the establishment of a sustainability committee that meets every six months to streamline and unify the group's sustainability policy across all business units. There are about 40 members in the committee representing the various business units of YTL.

However, Yeoh emphasises that corporate social responsibility (CSR) has been a fundamental value within YTL for a long time. Even when it was a fledgling construction firm, she says, the company was already moving in this direction. "It built bigger (low-cost housing) units than what was required by the governments and law at the time, which was very visionary. It built hospitals as well, as it was actually contributing to the nation's development at the time." Now, she is merely building on the foundations laid down by the generations before her, she says. "I definitely want to set the bar higher for the future generations."

A family affair

Yeoh is the eldest of five in her immediate family as well as in her generation of Yeohs. Her father, Francis Yeoh, is the eldest son of Yeoh Tiong Lay, founder of the YTL group. In her generation, Yeoh says, there are 27 cousins, and seven are currently employed within the family business. In her immediate family, her brother Jacob is deputy CEO at YTL Communications, which operates the YES 4G network. Another brother, Joseph, is a vice-president at YTL Hotels and Properties.

All members of the family are required to have two degrees before they can earn a place at the company. Yeoh has a degree in architectural studies from the University of Nottingham in the UK and an MSc from Cass Business School in London.

While she always knew she would end up joining the family business, Yeoh says her parents encouraged her to pursue an education in a field she was genuinely interested in. "I loved to sketch when I was little. I actually painted in my free time as well," Yeoh says. "We had a chat about it and they were very convinced that since I had this personal passion, I could pursue architecture as a discipline. I had an interest in sustainable design. And this is very applicable, I think, to the businesses that we have because we started out as a construction company. It's very close to my roots as well. In my generation and the generations before, we are all builders and civil engineers."

But her primary passion has always been the environment. “I think I have been an environmentalist since I was five," she says. She recalls visiting Pangkor Laut Resort, one of YTL's island-resort projects, in the early days of its development. Her parents were personally involved in the design of the resort, she says, while she helped to plant trees and plants within the resort. “My parents told me that in the years to come, the trees would be as big as me and would complement the rainforest in the future when they grew bigger."

Today, Pangkor Laut remains one of Yeoh's pet projects. She is helping to clean up its waters and to improve the state of the corals there. "My father used to see dolphins swimming by. And I've actually seen them myself when I was much younger. Dolphins only venture into waters that are very clean," she says. As part of the clean-up, YTL is funding coral nurseries where coral samples are planted. "Our naturalists from Pangkor Laut maintain corals. That part has become a safe snorkelling zone. That's never been done in Pangkor before."

New businesses

In some ways, YTL's growth reflects the needs of Malaysia - and the rest of the Southeast Asian region too - as it grew. In the mid- to late 20th century, as the country's population increased and the government tried to raise the standard of living, housing and power were two important requirements in the growth of the nation. YTL, Yeoh says, contributed to nation-building at the time.

As the region moved upscale in its lifestyle and aspirations, YTL's residential and commercial property developments reflected this change too. And its hotels and resorts have catered to this group of wealthier Asians.

Now, as the region matures further, more emphasis is being placed on climate change, environmental sustainability and CSR. And the timing of Yeoh's entry into YTL has been just right for establishing an environmental division.

However, she also points out that although the environment division is a new business for YTL, it is not the newest. "The newest is actually the YES 4G business. You can look at these as fourth-generation businesses." In late 2010, YTL put RM3.3billion into a mobile broadband business called YES 4G that is being marketed as the most affordable 4G mobile internet service in Malaysia. "What we are trying to do in Malaysia is make fast Internet access available to the masses, and that's doing a service to the community too."

Yeoh acknowledges that her environmental business is still a small one - certainly smaller than the communications business. "But it's a growing one. (YTL-SV Carbon) has 18 registered projects and more than 50 in the pipeline. And we're active not only in Malaysia but in Indonesia and Thailand as well." Meanwhile, she continues to labour over her sustainability reporting, with the aim of issuing a sustainability report that conforms to the guidelines of the universally accepted Global Reporting Initiative. And she is pushing for higher standards of sustainability and accountability within the company.

What kind of company will her generation pass on to the next? "I think it will be one that will have definitely established a responsibility legacy," she says. When she looks back to her first presentation to the YTL board back in 2006, Yeoh says the company has come quite a long way. But there is a lot more that she wants to do.

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