DEAR STAKEHOLDERS,

Last year I wrote about our concerns regarding the impact of geopolitical rivalry on the environment, communities and global stability. In addition to competition for ever more scarce resources such as food and fuel, there is the additional risk of fragmentation and isolationist sovereignty. The risks to international cooperation have been heightened by the United Kingdom's (UK's) vote to leave the European Union (EU), and climate change could be one of the victims as we shift to a more volatile multipolar world where threats of resource security becomes a priority for most countries. In the fallout from BREXIT, Britain's new Prime Minister, Theresa May has already scrapped the Ministry for Climate Change, and there could be other casualties in fragmentation. Extreme weather could still play a part in driving local agendas to mitigate climate change risks, but protectionism and political crises could still pose a challenge for global cooperation on reducing carbon emissions.

This couldn't have come at a more stressful time for global climate change as temperatures peaked at a scorching 53.9ºC mid-2016 in Basra, Iraq; floods and droughts devastated livestock and crops worldwide; NO2 levels in Hong Kong and Seoul hit dangerous levels due to the higher use of polluting vehicle fuels such as diesel; and some Middle Eastern cities forecasted that they would run out of water before 2020.

On a more positive note, China and the United States (US) have both ratified the Paris Agreement. But this could be too little too late – it is now widely believed that we have moved from the Holocene geological age into the Anthropocene epoch – a period where human activity is the dominant influence on climate and the environment.

For these reasons and more, YTL continues to promote sustainable business practices amongst our businesses and stakeholders, and the environment remains a central pillar of our sustainability strategy. In this year's letter, I will attempt to look objectively at two issues that have repeatedly surfaced and continue to trouble me. The first one is waste, where high-level solutions are desperately needed. The second is renewable energy and in particular solar, where solutions are within our grasp and now establishing themselves as viable mainstream energy generation sources.

 

GIORDANO BRUNO, GALILEO & THE IMPORTANCE OF FREE THOUGHT

Giordano Bruno's promotion of cosmic pluralism and Copernicanism in the sixteenth century led to his reputation as a martyr for science, followed by his heresy conviction and death. Fortunately, it also marked the beginning of free thought and emerging sciences. Bruno was burned at the stake for heresy in 1600 in Rome, whilst one of his successors in emerging science, Galileo survived his suspected heresy conviction with a less painful house arrest. We need to rise above entrenched beliefs to accept that we live in a dynamic and fast-changing natural environment with viable solutions for climate change already visible or just over the horizon. Embracing new ideas and unorthodox processes is as important now as it was in the sixteenth century, and this continues to be a cornerstone of YTL’s sustainability strategy throughout the Group.

 

WILLFUL WASTE, WOEFUL WANT

A global issue that remains critical is the problem of waste. If worldwide food waste was aggregated, it would generate more greenhouse gases than the fourth largest country in the world. Whilst the US and Australia throw away more food than any other countries, the EU comes in a close third throwing away nearly 100 million tonnes of food every year, or a shocking 175kg per person.

Governments are now trying to intervene. In Italy and France, laws were passed introducing tax incentives and fines respectively. In Malaysia, seven states have introduced mandatory separation at source for all households and business establishments, and on the voluntary side around the globe, technology is making it easier to deal with waste where apps and websites are serving to link up waste food supply with demand. YTL has made waste use and treatment a strategic part of our business units since the 1990s when YTL Cement started using waste aggregates such as Pulverised Fly Ash (PFA) and Ground Granulated Blastfurnace Slag (GGBS) in blended cement products. This was followed by Wessex Water, a subsidiary of YTL Power International, using human sewage sludge to produce biogas for gas engines, fleet vehicles and for supply to the local gas grid.

After ramping up biogas generating capacity at Wessex Water's Avonmouth facility to 12MW, we then decided to aggregate these activities in a subsidiary of Wessex Water called GENeco to manage this process and also to collect food waste from retail, commercial and residential sources to produce additional biogas instead of letting methane from degraded organic waste flow into the atmosphere. Currently, we are mopping up around 47,000 tonnes of food waste annually and supplying additional gas for distribution to the local grid, and at the same time providing farmers with organic fertilisers, a by-product of the digestion process.

Our focus on waste did not stop here, as we extended our efforts to other properties where for example, used cooking oil is turned into biodiesel by a third party processing company. In some commercial properties, waste is segregated and recycled, although not all of the organic waste finds its way into digesters or composting mounds due to the lack of local infrastructure. Niseko, Japan is different however, with mature processes to separate and treat waste already well established and complied with. We segregate waste at our properties in Niseko Village into 17 different categories. For organic waste, composting processes like that found in Niseko are being put in place elsewhere, and we continue to divert waste away from landfills where possible. In Java, Indonesia we have also salvaged the waste PFA and bottom ash from our power plant. These are being used respectively for blended cement products and in the production of paving blocks, a result of our own R&D efforts in YTL Jawa Timur (YTLJT).


Nearly 30% of food from supermarkets, restaurants and homes ends up in landfills

  A portion of clinker is replaced with GGBS for DRAGON cement which significantly lowers embodied CO2 hence reducing the environmental impact

 

CONFRONTING MARINE DEBRIS

Another disturbing development is the amount of plastics in the oceans which has now reached an alarming level of close to an estimated six trillion pieces, equivalent to around 100 million tonnes. Around eight million tonnes of plastics are dumped into the oceans every year, and just five countries, namely the People's Republic China, Indonesia, Philippines, Thailand and Vietnam, are responsible for over 60% of it. Disturbingly, the Pacific Ocean is thought to have a mass of plastic waste the size of Europe caught in gyres or rotating ocean currents.

Around the time of writing this letter in mid-2016, in Hong Kong a so-called "glacier of trash" drifted around nearby islands and one particular patch could even be seen from space. In one week alone, various government departments in Hong Kong collected over 70 tonnes of waterborne rubbish, mostly carried down the Pearl River Delta from cities in Guangdong after heavy rains hit the region.

Worryingly, the ecosystem of the Coral Triangle is also under threat from pollution. It is home to almost 80% of all coral species, approximately 40% of coral reef fish species, and other important pelagic species such as whales, sharks, dolphins, rays, and tuna. Six of a total of seven known species of marine turtles can be found in the Coral Triangle. To add to this, almost 150 million people's livelihoods depend on the Coral Triangle, and it is estimated that the sum of the world's oceans are worth around USD24 trillion making them equivalent to the world’s seventh largest economy.

Of major concern to conservationists and environmentalists, marine inhabitants and birds now ingest trash mostly plastic) that humans throw into rivers and oceans, and we are collecting their carcases on our shores like we once collected sea shells at low tide. Every year, more than 100,000 turtles experience slow and painful deaths. It has also been reported in scientific journals that fish, like small children with sugary snacks, have developed an appetite for plastic particles. By poisoning the oceans and animals who have made it their home, we are at the same time poisoning ourselves by eating the toxins in ever greater quantities that we have previously disposed of irresponsibly through the food chain. This miracle material, plastic has now turned on its creator.

In response to the threat to turtles, we set up the Gaya Island Resort Marine Centre (GIRMC) in our Gaya Island Resort in Sabah to rescue turtles afflicted by ingesting plastic waste. However, dealing with the late stage symptoms is only part of the solution. We are currently looking at how to stem the causes of the waste at source, and we are working on a long-term programme in a multi-stakeholder grouping to engage with relevant parties in critical areas where marine debris is now resulting in a global environmental disaster. The majority of the trash and debris that covers beaches and floats in oceans comes from storm drains and sewers, as well as from shoreline and recreational activities such as picnicking and beachgoers. Abandoned or discarded fishing nets and gear are also a major problem because this can entangle, injure, maim, and drown marine wildlife as well as damage property. We will hopefully be able to report significant progress on this initiative in due course.


Marine debris
  GIRMC's Marine Biologist, Scott Mayback nursing an injured turtle

 

RENEWABLES & SOARING SOLAR


Wessex Water HQ in Bath with 250kW rooftop solar panels
 

 

G20 countries collectively produced 8% of their electricity from solar, wind and other renewable energy in 2015 up from 4.6% in 2010, and China remained the world's largest clean energy market, accounting for nearly a third of the USD330 billion invested in clean energy globally in 2015. Germany and the UK led the G20 countries in terms of energy from renewables in 2015 at 36% and 24% respectively, whereas the EU as a whole grew to 18%.

Solar prices continue to fall, and are now around 80% below equipment costs recorded in 2010. Aside from the impressive sunlight to electricity conversion efficiency of 34.5% set by researchers in the University of New South Wales, more mainstream improvements in efficiency were recorded at 24.1% achieved by SunPower which means that efficiency will continue to rise rapidly at the same time as unit costs fall. This could result in as much as an astounding 70% improvement over and above traditional solar panels which currently only reach between 15% to 18% efficiency.



In Chile, records were broken again as bids for the 120MW Atacama desert solar plant fell to 2.91 cents USD/kWh just months after a Dubai 800MW solar plant rolled in at an average cost of 2.99 cents USD/kWh – this was substantially below coal-fired power plant costs, and for Atacama was priced at almost half the cost of coal for the same bidding.

India set an astounding target of 175GW for renewables by 2022 up from 100GW set in 2014, and Obama continued his pledge to bring solar to low income homes, and also championed the Environmental Protection Agency’s Clean Energy Incentive Program (CEIP). Hawaii continued to lead the way in US solar penetration (with rates between 9% and 12%), despite the challenges faced by going off the grid in order to avoid some bottlenecks and higher costs.

In stark contrast to 2016 presidential hopeful Donald Trump, Hillary Clinton reiterated her belief in climate change and pledged to support the development of renewables. Whilst political characters seek to boost their green credentials, SunEdison Inc’s bankruptcy filing in 2016 and SunPower’s dismal 2016 results should not lead us to turn away from renewable energy goals or solar aspirations in particular – SunEdison’s aggressive acquisition binge drove its debt to unmanageable levels, and it was the largest US bankruptcy of the year with over USD16.1 billion in debt, whilst SunPower was hit by sharply lower margins.

China renewables continued to march ahead, and wind power capacity reached 140GW, and is further targeted to reach 250GW by 2020. In the meantime, China’s solar photovoltaic (PV) capacity rose by 22GW in the first half of 2016 to 65GW, and it is expected to hit 150GW by 2020. Year on year, China could exceed a 300% increase in installed solar PV in 2016 alone, making the 2020 goal highly achievable.

For the YTL Group, utility-scale solar PV started more recently due to the preceding high prices of equipment, and we embarked in earnest on solar installations in the Group in 2016. Wessex Water installed 250kW rooftop solar panels which supplies over 12% of the HQ’s energy requirements.

In Asia, as part of our rural renewable energy programme we have also constructed 70 smaller scale solar PV sites in Java, Indonesia where we provide renewable energy to communities to ensure the safe passage home and longer homework hours for the community and students respectively. Apart from solar but as part of the rural renewable energy programme, we have also built 314 biogas installations (using cow dung for the digesters) and 33 micro hydro units which provide a mixture of energy, cooking gas and lighting for off-grid communities. In 2016 we extended this initiative to Malaysia with our first micro hydro unit in Sabah which will deliver 25-30kW of energy for approximately 500 people in Kampung Iburu near Sipitang. We hope to scale this up under the "YTL GENESIS (GENerating Energy Sustainably in Society) – Let there be Light" programme.

On a more commercial scale, we are also currently looking at a number of additional sites on our hospitality, retail and industrial properties where solar PV is feasible both for building integrated and ground-mounted systems. These utility-scale projects are currently in nascent stages of development. However, I look forward to reporting on the progress of these installations in the 2017 Sustainability Report.


The United Nations' Sustainable Development Goals

 

CONCLUDING THOUGHTS

Whilst we will unlikely face heresy charges as did Bruno and Galileo as we look for answers to the two troubling problems of waste and sustainable energy, there is always the risk of failing to adequately balance stakeholder interests. Nevertheless, this is not going to dissuade us from continuing to search and implement proactively on all four pillars of our sustainability strategy. As part of this commitment, YTL Group has taken on the role of an official delivery partner in Malaysia of the United Nations' Sustainable Development Goals alongside global firms such as Google, Salesforce, The Huffington Post, etc. The Global Goals consist of 17 goals that aim to end poverty, fight inequality and injustice, and fix climate change among others by 2030, and our partnership underscores the Group's commitment to social progress and sustainable development.

I would like to thank our stakeholders for sharing the same vision and passion for a sustainable future, and for collectively working towards Building the Right Thing and Making a Good Future Happen.

May God continue to guide us in our journey.

TAN SRI DATO' (DR) FRANCIS YEOH SOCK PING
PSM, CBE, FICE, SIMP, DPMS, DPMP, JMN, JP

Managing Director
YTL Corporation Berhad

 
 
 
©2017 YTL Corporation Berhad (92647-H) | All rights reserved | Terms, Conditions and Disclaimers. | Privacy Policy.
Powered by YTL e-Solutions Bhd