Executive Chairman's
Letter to Stakeholders

THE PANDEMIC

Virologists, epidemiologists, and ecologists have warned for too long of the dangers of coronaviruses again jumping the species bridge from animals to humans. Pandemics and other high-impact events, such as earthquakes, volcanic eruptions, and massive solar flares are a fact of life. It is an abdication of our collective responsibility and a betrayal of our children’s future to move forward in the absence of preparation.

The pandemic has been a double-edged sword for the environment, on one hand temporarily reducing air borne pollution and improving air quality, but at the same time, resulting in reduced recycling activities with masks and gloves washing up on beaches across the world. The trickledown impact of the pandemic has yet to be seen in full and we need to prepare for further economic and social shocks as the devastation continues to ravage countries across the globe.

YTL Group’s combined donations and relief in cash and in-kind globally amounted to RM126 million, including contributions from YTL Foundation which provided free bandwidth and hardware to those hardest hit by the pandemic. YTL Foundation launched the Learn from Home Initiative with FrogAsia and YES 4G, and they facilitated this further by providing free mobile data and SIM cards to students in government schools in Malaysia, and free mobile devices to students from B40 families. We also donated RM1 million to the Government’s COVID-19 Fund in addition to donating mobile phones, Chromebooks and essential items to frontline health workers at Hospital Sungai Buloh.

YTL PowerSeraya supported partners by providing energy rebates through its energy retail arm Geneco SG. They have provided assistance to their community engagement partner, Comcrop who own and operate the largest rooftop urban farm in the city state.

Tan Sri Dato’ (Dr) Francis Yeoh presenting a cheque to Prime Minister Tan Sri Muhyiddin Yassin for the Malaysian Government’s COVID-19 Fund
Around one million samples of water are tested annually by Wessex Water’s scientists who have recently been working with the UK Environment Agency laboratories to detect the presence of COVID-19 RNA
Comcrop’s rooftop farm in Woodlands, supported during the pandemic by Geneco SG
An employee of YTL PowerSeraya working throughout the Circuit Breaker period in Singapore

Express Rail Link (ERL) and YTL Construction were also busy distributing reusable face masks, helping taxi drivers, and donating funds to needy families. YTL Power International also contributed RM500,000 to The Edge COVID-19 Equipment Fund.

To help tenants through the business disruption of the COVID-19 pandemic, total rental rebates of SGD32.2 million were provided to eligible tenants in Starhill Global REIT’s portfolio.

In the wake of the pandemic, most of us are reassessing our relationship with the natural environment and looking at the true measure of profit and growth. Despite the sharply reduced numbers in some of our hospitality and retail properties, we continued in earnest working towards our goal to eliminate single use plastics from our operations globally by 2025 through our SNAP (Say No to All Plastic) campaign. Since 2018 we have managed to save 1.92 million plastic bottles, and 252,000 plastic straws.

We also continued to move forward with other carbon mitigation initiatives across our energy-related business units. Our greenhouse gas emissions in these businesses are down 4% from 2015 levels. We also increased our use of waste as alternative fuels with energy use down 7%, and waste generated falling 23% over the same period.

During the COVID-19 pandemic, we ensured the full functioning of our various businesses providing essential services including wastewater treatment, water supply, rail services, cement, communications, and power generation in Malaysia, Singapore, Indonesia and the United Kingdom (UK).

Wessex Water was one of the few utility companies called upon by the UK Government in the national Government-led ‘wastewater surveillance’ project which is part of an advance warning system to detect new outbreaks of coronavirus. Samples are taken at a small number of water recycling centres, and these are then analysed by the UK Environment Agency laboratories to detect the presence of COVID-19 RNA.

PROTECTION OF THE ENVIRONMENT

Methane leaks from oil and gas fields are dangerous and they are akin to oil spills in the sky, and once again the melting of Siberian and other Arctic permafrost, which cover around 25% of the land mass of the northern hemisphere has dominated climate news this summer. NASA scientists have reported that peat fires may be continuing to smoulder underground during the harsh Arctic winters, otherwise known as “zombie fires”, ready to start up again in the spring. So far in 2020, Arctic fires have released 244 million tonnes of carbon dioxide (CO2) into the atmosphere, against 182 million tonnes in 2019, more than the total emissions released by Malaysia in a full year. Melting permafrost releases methane if it is not flared, but when it burns it releases dangerous substances such as carbon monoxide (CO), nitrogen oxides (NOx), volatile organic compounds and solid aerosol particles. It is commonly understood that methane has a global warming potential around 28 times that of CO2, but what is less known is that it is 80 times more potent than CO2 over its first two decades in the atmosphere.

YTL Group has taken methane mitigation seriously, and specifically in GENeco UK, a subsidiary of Wessex Water. The UK business unit has been converting both human waste and food waste into biomethane for energy, heating, transportation, and fertiliser for the past eleven years.

Wessex Water treats waste from over three million households, and collects around 48,000 tonnes of food waste (2/3 solids and 1⁄3 liquids), with 11,150,081 m3 of biomethane injected into the UK grid by Wessex Water, saving around 22,640 tonnes of carbon dioxide equivalent (tCO2e). Wessex Water also achieved additional emission reductions of 1,729 tonnes of CO2e from the export of power from their biogas combined heat and power units. In addition, around 6,000 tonnes of digestate with 28% of dry solids were produced, with almost 35% being used as fertiliser in nearby farms, reducing the use of nitrates and other harmful chemicals.

Human waste and food waste collected and processed at GENeco UK’s anaerobic digestion facility in Avonmouth, Bristol, UK
GENeco UK’s Bio-Bee vehicles both collect commercial food waste and run on biomethane from the same waste
Express Rail Link achieved a commendable milestone hitting their 100 millionth passenger

Our transportation arm, Express Rail Link which operates the KLIA Ekspres from the city to the airport, continues to take between four and five million cars off the road from KL Sentral to KLIA yearly, and has reduced around 140,000 tonnes of CO2e since 2014, equivalent to the emissions generated by around 10,000 Malaysian households annually.

Following the success of the waste heat recovery (WHR) unit in YTL Cement’s Dama Plant in China, YTL Cement extended the WHR initiative to their plant in Perak-Hanjoong Simen, the first in Malaysia, saving a significant amount of energy and energy-related emissions.

ELEVATION OF ENERGY POVERTY AND COMMUNITIES

 

In the last decade, global energy poverty has fallen from almost 1.5 billion people in 2009 to less than 1 billion in 2018. However, the Sustainable Development Goal target of universal access by 2030 will unlikely be met, with an estimated 500 million still predicted to lack access to energy by 2030.

The falling cost of solar and other renewable energy sources has helped the development of mini-grids for off-grid communities and had a positive impact on the health of communities and the environment by reducing the use of kerosene and diesel as fuel for cooking and energy respectively.

YTL Group, since 2012 has continued to extend the reach of the rural renewable energy programme in Indonesia and East Malaysia, with 817 units of biogas (680), micro hydro (39) and solar (98) positively impacting the lives of more than 7,000 people, and reducing emissions exceeding 53,000 tonnes of CO2e.

Through YTL Foundation and other business units, we have helped over 75,000 children in learning and education. YTL Group as a whole has spent RM16.5 million on local community investments benefitting over 112,000 people in need and those supported by charities.

A villager using biogas for cooking, from a dome installed by YTL Jawa Timur
YTL Jawa Timur provides access to clean water to communities located in remote areas
Villagers from Kampung Sion, Sarawak provided with solar energy units reducing their financial burden

BIODIVERSITY AND CONSERVATION

As with previous letters to stakeholders that I have penned, global biodiversity loss has consistently been a serious concern for YTL Group. However, as it intensifies with a sixth major extinction event resulting from human activity and climate change looming, the onus is on humans to try and prevent as many of them as possible. The loss of species can be stopped if there is a genuine will to do so. However, it requires collective action on a grand scale considering the extent and seriousness of the issue. We all need to act to support conservation and prevent extinctions.

YTL Cement and Malayan Cement Berhad have continued to invest in conservation and biodiversity initiatives. These include preserving endemic species of flora and fauna in the limestone reserve of Gunung Kanthan and other karst outcrops. The emphasis in production of manufactured sand, and the use of waste in alternative fuels, aggregates, and the generation of energy all support conservation efforts in our cement business.

An endemic species, the Kanthan Trapdoor Spider in Gunung Kanthan has been preserved
Charopa lafargei, a tiny but important endemic species of snail measuring just 2-3mm in diameter found in Gunung Kanthan has also been preserved

In Wessex Water’s region, we have focused on funding biodiversity conservation in waterways and in the surrounding air with an emphasis on beavers, birds, and other wildlife native to the areas.

Images of Wessex Water’s Biodiversity Action Plan (BAP) Partners Programme activities and animal sightings

Likewise, in and around the Paiton power plant area operated by YTL Jawa Timur, the health of marine ecosystems near the power plant outlet cooling canal and along the coast are monitored andreefs have been rehabilitated. We have planted 112,300 mangroves, 58,910 sea pines and 5,431 other mixed tree species. To promote healthy marine ecosystems near the plant, 1,968 reef blocks have been laid on the reef using mainly fly ash and bottom ash (FABA) waste from the power plant itself mixed with cement.

Mangroves planted at Randutatah Conservation Area improve local biodiversity and rehabilitate the natural environment
YTL Jawa Timur’s paving block production programme using FABA waste

For over ten years, YTL Hotels has been supporting the rehabilitation of coral reefs, turtle rescue and turtle egg hatching sites with a cumulative 55,548 eggs saved from human consumption and 40,600 hatchlings released into the wild. YTL Hotels has also supported Save Wild Tigers since 2014 and continues to help raise funds for antipoaching activities, advocacy and awareness. The most recent of many events supported by YTL Hotels was a photographic exhibition in the Raffles Hotel, Singapore in late 2019, with a selection of the original photo exhibits from the Royal Albert Hall London exhibition from the previous year, featuring almost 100 images of tigers in the wild by over 30 of the world’s leading professional wildlife photographers. This follows a major fundraising event in the past – the Save Wild Tigers Gala Dinner hosted by The Majestic Hotel Kuala Lumpur in 2014 which raised over RM1.7 million to fight poaching of wild tigers in Malaysia.

An adult turtle spotted on the beach at YTL Hotels’ Tanjong Jara Resort near the Visitor's Hut and the turtle hatchery
Annual Reef Check surveys are conducted by Reef Check Malaysia’s team to assess the health of the coral reefs and monitor the success rates of nubbins on the reef blocks

CONCLUSION

Apart from disease, we face three main existential threats which need to be dealt with collectively – climate change, inequality, and the use of natural resources. Whilst climate change may not be impacting all of us directly now, we need to thoroughly assess risks and prepare for change. For example, banks in the United States have already started evaluating mortgage applications based on climate change risks as data shows an extraordinary rise in coastal flooding, and the risks are intensifying. As such, YTL Group has been advocating and carrying out climate change action and mitigation measures for the last 30 years by building and progressing sustainably since our humble beginnings in 1955.

Our ability to impact climate change in the short term is limited as greenhouse gas emissions do not cause a sudden rise in global temperatures and neither does cutting them result in instantaneous cooling. However, air borne particulates, and NOx levels are critical, and we now know that air quality has a strong bearing on premature death, and immune response to infection by viruses. Similarly, air pollution and preterm birth are well linked, and it is not only industrial and transportation linked air pollution, but also from particles in wildfires and gas flaring.

The COVID-19 pandemic has also given rise to significant soul searching both in business and at home, and the issues of integrity and purpose in business have risen to the fore. As testament to our improving levels of disclosure and reporting, YTL Corporation Berhad has been part of the FTSE4Good Bursa Malaysia Index every year since 2017. We have prioritised ethical business with 100% of our employees in Malaysia completing the Anti-Bribery and Corruption training course, reflecting our commitment to zero tolerance for bribery and corruption. We have also dug into our conscience and the definition of our purpose which is echoed in the words of prominent Greek statesmen, Pericles (circa 450 BC), who said that “what you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others”. May God continue to guide us on our journey to Making a Good Future Happen.

Pericles (l. 495–429 BCE) – prominent Greek statesman, orator, and general during the Golden Age of Athens

TAN SRI DATO’ (DR) FRANCIS YEOH SOCK PING
PSM, KBE, CBE, FICE, SIMP, DPMS, DPMP, JMN, JP
Executive Chairman
YTL Corporation Berhad