CRCI Coursework Assignment 201101

UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF BUSINESS AND FINANCE

BACHELOR OF COMMERCE (HONS) ACCOUNTING JANUARY 2011 TRIMESTER YEAR 3 TRIMESTER 3 CORPORATE REPORTING AND CURRENT ISSUE COURSEWORK ASSIGNMENT Tutor: Puan Che Siti Lazrina binti MD Lazim Submitted by: Tutorial Group No.: Tutorial 4 Friday April 8, 2011 2pm Group Members:

Name 1. Chan Yi Hui 2.Chan Zuo-Yang 3. Lee Hui Thing 4. Lim Yng Xing 5. Tan Huey Theng 6. Wong Lixuan

Student ID No. 08ABB04717 08ABB04556 08ABB04561 08ABB06578 08ABB04423 08ABB04905

Marks

Total: 5589 words

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Assignment Mark Sheet Part Questions a) Based on relevant literature, identify and discuss five (5) possible environmental and social issues facing the industry within which the organization is operating. b) Identify four (4) stakeholders of the organization and critically discuss the importance of its Environmental & Social Report / Sustainability Report to its stakeholders. c) Discuss thoroughly on the efforts, projects and programs that has been undertaken by the company towards sustainable development and evaluate how the project that have been identified attempts to address the environmental and social issues highlighted in part (a). d) Based on the 2006 & 2008 reporting, (i) Analyse the quality of the reports Individually Comparison (ii)Suggest ways on how the organization can improve the report. References cited (on source materials, footnotes and bibliography) as well as the overall presentation of the assignment report. Total Marks /15 marks

/16 marks

/ 25 marks

/ 8 marks / 7 marks /15 marks

/ 4 marks

/90 marks

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Content
Introduction -------------------------------------------------------- Page 1 Question (a) ---------------------------------------------------------Page 1- 7 Question (b) ---------------------------------------------------------Page 7- 9 Question (c) ---------------------------------------------------------Page 10-16 Question (d)(i) ------------------------------------------------------Page 16-18 Question (d)(ii) -----------------------------------------------------Page 18-20

Appendix ------------------------------------------------------------Page i - vii Reference ------------------------------------------------------------Page viii - x

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Brief Introduction SP Setia Bhd is a public listed construction company focusing on property development, construction & infrastructure, and wood base manufacturing & trading. The slogan of S P Setia is:

Question (a) Global Warming The issue of global warming has gain wider attention by the construction practitioners worldwide. It is caused by carbon dioxide emission from burning of fossil fuels for the purpose of electricity generation especially in the construction industry. Construction of buildings is contributing to the emission of waste gases, due to the utilization of energy, lighting, and air conditional. For the production of bricks and concrete energy as well as demolishment and rebuilding, intensive activities cause energy use results in carbon dioxide production. There is challenge of improving energy efficiency while yielding a return on investment simultaneously. Nowadays, the norm worldwide is moving towards green technologies such as energy-efficient buildings. Setia Eco Park developed the countrys first energy-efficient homes powered by the Building Integrated PhotoVoltaic (BIPV) solar technology1 and also Setia City in Setia Alam which is designed under Malaysian Green Building Index (GBI) and the US-LEED certification.2 Over the years, S P Setia attempted to develop sustainable and low-carbon provision of housing as the effort of fighting global
1

BIPV- Solar technology which is generating electricity from rooftop solar panels for household consumption, while excess energy will be sold to the National Electricity Grid..
2

GBI is a rating tool that provides an opportunity for developers to design and construct green, sustainable buildings that can provide energy saving systems, renewable energy and water savings. The US-LEED aims to reduce waste, conserve energy and water, healthierr for occupants, and reduce harmful greenhouse gas emissions.

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warming. Referring to Figure 1, the temperature in Kuala Lumpur during the year 2006 is high. Global warming issue has been increasingly concerned by the Government, companies as well as public. Therefore during year 2006-2009, the temperature was reducing due to peoples awareness. And in the year 2010, the temperature increased and causes flood in the southern area.

Figure 1 GISS Surface Temperature Analysis

Source: National Aeronautics and Space Administration (2011). GISS Surface Temperature Analysis . Retrieved March 23, 2011

Pollution Construction industry are involved in activities such as land clearing, demolition, burning and usage of toxic materials that lead to air pollution. Chemicals that are widely used on construction sites are also one of the factors that contribute to air pollution. It also generates high levels of dust. These chemicals may cause water pollution and harm human health. Construction wastes such as nails, rubble, bricks, and concrete which may harmful to the environment. Construction sites produce a lot of noise, mainly from vehicles, heavy equipment and machinery. The public is looking forward that companies implement appropriate steps to deal with this issue of pollution. The government has also enforced environmental regulations such as

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Environmental Quality Regulations which has been regulated since 1977. Over the years, the landscape team of Setia Eco Park recycled the materials from the land clearing process. The sprawling Setia Pearl Island project site was quiet, devoid of the usual roar of bulldozers, trucks and excavators. The construction work plan of Setia EcoLakes has been designed specifically to minimize pollution and protect natural habitats and ecosystems. However, with the massive industrial development of recent years, and an increase in urbanization and vehicle use, air and water pollution are of growing concern. The changes in pollution, especially air and water, are illustrated in Figure 2 to 4 Find in Appendix. According to Figure 1 and 2, the figures show that the air quality status in west coast peninsular Malaysia has improved from year 2006 to 2009. However, based on Figure 3, it shows that although there was a slight decrease in the number of polluted rivers, rivers that was rated as clean in year 2005 were slightly polluted in 2006. This indicates that companies either in construction industry or other relevant industries will still need to continue their effort extensively on reducing water pollution.

Figure 2: Air Quality Status, West Coast Peninsular Malaysia, 2006

Source: Department of Environment. (2006). Malaysia Environment Quality Report 2006.

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Figure 3: Air Quality Status, West Coast Peninsular Malaysia, 2009

Source: Department of Environment. (2009). Malaysia Environment Quality Report 2009.

Figure 4: River Water Quality Trend

Source: Sharifuddin, S. S. (2010). Progress of water environmental governance/management and future challenges in Malaysia.

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Environmental degradation Environmental degradation is the deterioration of the environment through depletion of resources such as air, water and soil where it causes destruction to ecosystems and wildlife extinction (Johnson et. al., 1997). This issue is especially important for construction industry, which plays a significant role in developing countries economic and involve in logging and expansion of land. Ecological destruction is determined to have produced toxins, carbon, and waste whose maintenance management is neglected. Destruction of agricultural land and forests is a contributing factor to the green house effect because of the increase of CO2, and thus the whole community will suffer. SP Setia Bhd is also involved in wood base manufacturing & trading which may cause habitat destruction due to wood extraction and deforestation. However, SP Setia has developed and adopted the gold standard for green buildings.3. Prior to land clearing, the flora and fauna in the project site were migrated to a nursery to preserve the native bio-diversity in the project site. Malaysia's deforestation rate is accelerating faster than that of any other tropical country in the world, according to data from the United Nations. However, the deforestation rate in Malaysia has slowed down in the recent years because Malaysia is actively involved in reforestation projects.

Health and Safety It is defined that occupational health and safety (OSH) is a cross-disciplinary area concerned with protecting the safety, health and welfare of people engaged in
3

Green buildings are designed to reduce the impact of the built environment on human health and the natural environment by efficiently using energy, water and other resources; protecting occupants' health; and reducing waste, pollution and environmental degradation

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work or employment (Stellman, 1998). Employees working in construction may be exposed to electrical hazards, lifting and health problems caused by noice, dust and fumes. These companies are increasingly required to ensure their employees health and safety by providing programmes relating to issues such as industrial hygiene, engineering safety, occupational medicine, etc. Managements responsibility towards employees health and safety increases because human resources could contribute to a companys success. In addition, the public and media are paying close attention to safety issues when accidents occurred in workplace. Thus, this can affect the reputation of the company. SP Setia encouraged employees to participate crane and lifting gear training to enhance safety. It also set up Setia Learning Academy for training and first-aid training to provide the basic skills to help others in times of need, especially in workplace. This is very commendable as it reflects greater awareness among employees regarding occupational safety and health. However, companies tend to often ignore workplace safety and take accidents for granted (Occupational Health and Safety, 2010). Hence companies are under pressure to comply with OSH legislations such as OSH Act 1994 and to voluntarily provide programmes to increase employees concern in OSH.

Community Development Community development is an occupation or a way of working communities for the purpose of building communities based on justice, equality and mutual respect (Community Development Exchange, 2009). It is also to meet needs of a countrys citizens in a way that promotes good civic design, convenience, health, safety, efficiency and economy (Greeley, 2011). Community development is increasingly becoming important for various companies. Companies were only focused on achieving their goal of profit maximization in previous years 4 . This creates a challenge for companies to be socially responsible as well as to satisfy shareholders. S
4

It has been very vital nowadays for companies to have their goals beyond the objective of maximizing profits to include responsibilities and accountabilities towards the environment and society. Hence, companies are under pressure to be socially responsible due to the expectations of their shareholders. For social aspect, companies are to remove unacceptable disparity of conditions and infrastructure that affect peoples quality of life and to help solve community problems. Shareholders who are not satisfied tend to divest.

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P Setia Foundations is to help community in the areas of education, general welfare and medical needs. Setia Adoption Programme is to give needy children equal access to good basic education to chart a better future. S P Setia is well-known for the meticulous planning and vast expanse of greens which provide a healthy living environment for the community. Current awareness on community development is important since year 2006 and increased in the period of 2009-2010 due to the financial crisis in 2007 and companies are increasing their level of commitment towards community development in order to retain customers and investors confidence and trust.

Question (b) The three key economic centres of Malaysia are Klang Valley, Johor Bahru and Penang. The four major stakeholders of organization are shareholders, employees, corporate clients and community. The main stakeholder is shareholders who decide whether to invest or not to invest in the company. The source of capital of S P Setia is from the shareholders. They rely on the annual report to obtain decision making information. They are not only looking into the profit statement, but also non-financial statement - Sustainability report. Since S P Setia is mainly in construction industry, it needs capital from shareholders to undertake that housing projects which are adopting environment friendly concept. Therefore, shareholders are to look into the initiative and ethics regarding the issue faced. In the aspects of environment, the Setia group focuses on 3Rs- Reduce, Reuse, and Recycle. It believes that it is responsible to protect the planet from climate change and other environmental threat. For Setia Eco Park Project, it developed energy-efficient homes powered by the Building Integrated PhotoVoltaic (BIPV) solar technology and houses which is designed under Green Building Index (Annual report, 2009). Setia honoured the World Environment Day by shutting down its construction site for a day (annual report, 2008). Recycling campaign is another way to create the awareness of environmental preservation among its residents and the community. They organised recycling campaign among households (annual report, 2007) as well as Newspaper Recycling Campaign for

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schools in Klang Valley (annual report, 2009). All these will improve S P Setias reputation. A good reputation company will give confidence to their shareholders as it helps to maintain or even increase the company share price. In today business world, shareholder wealth maximization is still the main objective of company. Secondly, Setia always believe that the company is also responsible to the community and social welfare. The information disclosed by S P Setia is also important for the society to make decision as well as giving a good impression to the society. They would like to know whether their welfare is being protected. This group of society may become Setias future clients. Here is the information which might help them. The S P Setia Foundation is a charity trust to provide aid to underprivileged individuals and charitable bodies (annual report, 2007). S P Setia Foundation has contributed to education, welfare and healthcare while focusing on education and the Setia Adoption Programme which is to fund the educational needs of underprivileged students nationwide (annual report, 2006). Moreover, the Foundation collaborated with the nations Feel Good Channel ntv7 to bring out some of the daily issues faced by vernacular schools and their need for funding (annual report, 2009). The project is called Project Sunshine. The Foundations major fundraising activity is the annual charity dinner. It also provided financial assistance to the flood victim who destroyed many homes and public buildings in Johor Bahru at the end of 2006 (annual report, 2007). Thirdly, Setia recognized the employees as the companys asset. Setia understands the importance of talented, committed and capable employees. As a job seeker, one may first look into the report to make sure that the company treated employees well before he or she apply the job. One has to make sure there is no negative issue of employment in the company such as abuse of employees or work overtime without pay. Besides that, as a future employee, one has to ensure good reputation of the company, to assure timely salary pay in the future. Most importantly, employee would like to know whether the company is the place to build up their own career, further improve themselves and to be a professional to fulfil their dreams. Thus, for all these purposely, employee needs to analyze the sustainability report for decision making. The information that might help them is stated here. Annual dinner is one of the events that gather all the employees and different themes are set for

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every year to let the employees have fun during the event (annual report, 2009). Setia shows the appreciation to the employees contribution and hard work. It will definitely motivate to employees to work harder and increase their job satisfaction. Setia tried to develop their people and facilitate learning and sharing of knowledge among employees to improve and strengthen their skills and knowledge. Setia focuses on employees training and succession planning. They have launched Setia Leadership Development Programme to identify and groom future leaders of the company. Working in team helps to gather ideas from different perspective and employees can performs effectively and efficiently. Therefore, the S P Setia Foundation Volunteers Club to promote the practice of voluntarism amongst the employees (annual report, 2009). The volunteers are required to work in teams to make home visits to families receiving aid under the Setia Adoption Programme, visit orphanages and homes to help clean up, and read to the blind. Lastly, Setia recognized it clients as the major stakeholders. A client might want to know about the projects that are undertaken by the company previously and whether projects are done without harming the environment and society. A good impression is given if the company like S P Setia is going on environmental friendly concept. A good impression means good reputation of the company. Clients would also like to know about employees welfare. For example, cases of Nike Indonesia, abuse of employees causes boycott of the consumers towards the brand. Thus, clients may look into larger areas of the sustainability reporting. It covers all initiatives that mentioned above. In addition to that, S P Setia introduced the attractive 5/95 Home Loan Package. Purchasers are required to only pay a 5% down payment and nothing else during construction. With 95% financing provided by the banks to eligible borrowers and all-time low interest rates, communities can own a Setia dream home (annual report, 2009). These strategies could attract more clients interest to purchase the Setia Homes.

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Question (c) The major projects which are undertaken by S P Setia from the year 2006 are: Setia Eco Park and Setia Alam. There are also many initiatives undertaken by Setia towards sustainability. All these effort, projects and initiatives are proven to be success by referring to The Star newspaper as well as those pictures published to the public (Find in Appendix). Setia Eco Park is a remarkable showcase of an eco sanctuary that harmonizes the built space with the natural environment. It works towards sustainable development by undertaken efforts: The flora and fauna in the project site were migrated to a nursery prior to land clearing to protect them, and recycle the materials from the land clearing process. Setias landscape team has demonstrated their resourcefulness by landscaping the lake bank with boulders and created ideal habitat for natural organism. NKVE-Setia Alam Link is built to ensure residents convenience and to help relieve congestion in Klang town by dispersing traffic. Developed the countrys first energy-efficient homes powered by the Building Integrated PhotoVoltaic (BIPV) solar technology where one can generate his own electricity from sunlight in an environment friendly manner. (Refer to question(a)) Introduced the attractive 5/95 Home Loan Package where purchasers are required to only pay a 5% down payment coupled with 95% financing provided by the banks to eligible borrowers and all-time low interest rates

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Setia Alam located in a township which located at the Industrial-free zone. It works towards sustainable development by undertaken efforts: Adopted MASMA (Manual Saliran Mesra Alam Malaysia) requirement for Setia Alam housing project and designed the house under GBI and the US-LEED certification to combat with global warming.5 It provides facilities Village green which is included village green houses playgrounds, tadika and Pusat Rukun Tetangga for Neighbourhood Watch. During the World Environment Day, UTARs Associate Professor under the Department of Construction Management gave a talk on Tackling the Waste Challenge Conversion of Waste into Resource to a packed audience. Collaborated with MBSB to introduce an exclusive 100% financing for Setia Alams low and medium cost homes to ensure that the lower income group could also benefit from the attractive financial packages available in the market The new police beat has a built-up to help deter crime and safeguard residents welfare and enhancing the overall value of the township.

Issue: From the above, this project can be related to the issue of global warming, pollution, environment degradation, and community development. S P Setia attempted to
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MASMA requirement- huge dangerous concrete drains will be replaced with wide gentle sloping and meandering earth drains and ponds which will be landscaped for recreational purpose. It also follows the green street concept like other Setia projects.

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develop sustainable and low-carbon provision of housing and office-space as the effort of fighting global warming and consequently climate change. It combines mans skill and natures artistry to create a harmonious and sustainable environment. The development is also featured specially created tropical landscape with a diversity of flora and fauna in order to prevent green house effect. Besides that, S P Setia creates healthy, harmonious, fully integrated environments to nurture a vibrant and caring community spirit, and tried to fulfill the needs of the community and enhance their safety and convenience as well as helped them through financial loan package to lighten their burden. Activities that benefit the environment as well as the community are established to fulfill their social responsibilities. With plenty of amenities, residents can live, learn, work, play in the same township in a low cost.

Others activities and programmes: Year 2006 Over the years, Corporate Social Responsibility activities of S P Setia Bhd are mostly undertaken by the charity trust, S P Setia Foundation.

Education: Under its Setia Adoption Programme (SAP), they held activities: Donations to the schools which are in need of financial assistance and furniture. Its aim is to support the poor community school and student in need, especially those which are in rural areas. Sponsored library system software to ensure students are learning in a comfortable environment which can motivate them to study better. Donation of 10 units of software-ready computers and a colour printer to Beautiful Gate Foundation (Kampar, Perak) to provide a more pleasant learning environment for the disabled students in line with the aim & purpose of the Organization. Donation of RM20,000 grant to Montfort Boys Town to enhance the welfare of underprivileged youths in the country and train the students from unfortunate

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homes to be independent. 6

Issue: The issue concern is community development, where it is important to giving funds for the poor schools and student to have better comfortable study environment. They also giving more concern on those communities who are physically disable by donating computer software to make them more adapt to the learning environment. It meets the needs of communities by giving more convenience

Community Donation a set of special equipment worth RM49,000 which transcribe regular text to Braille to Penang-based St Nicholas Home which provides training to the blind. With the ability to translate books into Braille, it will make knowledge more accessible to the blind to improve their future employability. Donation of RM100,000 to help flood victims repair their homes following the recent floods in several southern states. Rise a total of RM1 million to Setia Badminton Academy to promote badminton in the country. 7 S P Setia Foundation Charity Dinner 2006 successfully raised a sum of RM5.8 million. Some 60% of S P Setia Foundations annual budget is spent on educational causes while the balance is channeled to other medical and general welfare causes in answering the plight of needy Malaysians.

Issue: The issue concern is community development. It is essential to be socially responsible to the society at large and play a role as a caring corporate citizen. With the aim of caring for the society, Setia is socially responsible to the communities who in need of financial assistance due to the attack of disaster or physical disable person who need special tools to assist them carry out daily activities.
6

Monfort Boys Town is a training vocational center that provides training to less-academically-inclined students from unfortunate homes to ensure that they are equipped with useful skills and good discipline that will enhance their employability in the job market.
7

S P Setia Foundations five-year funding programme for the Setia Badminton Association has seen the training center grow into one of the most prominent in the country that is steadily producing a string of champions at the various school, district and state level tournaments.

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Year 2009 Education Sponsored a total of RM1.25 million to UTAR to establish an academic Chair to be allotted over the next five years to fund research and development in environmental engineering and green technology. Sponsored 41,000 copies of the newspaper to be distributed to 10 semi-urban schools for the duration of one year. Donated financial assistance to poor rural schools. Collaborated with ntv7 for Project Sunshine and allocated RM200,000 to highlight some of the daily issues faced by vernacular schools in particular, and their need for funding and aim to help primary schools get financial aid from the public. Donated a new van to the Blessed Peniel Prayer House (BPPH) to transport underprivileged children from their homes to attend free classes of BPPH.

Issue: The issue related is community development. As mentioned, Setia Foundation is providing funding and donations to many schools which are in needs of financial assistance and serve better education life. Besides that, it also provide fund to research and development of organization to promote the green environment in Malaysia. It aims to make a positive difference to all our communities.

Community Under Setia Alam Community Project, more than 80 families were selected to receive sundry necessities once every month, where it aims to lighten the hardship faced by low income families living nearby. Pledged a sum of RM600,000 annually to lower the burden of kidney patients in low income families by subsidizing part of their treatment cost. Donated a dialysis machine worth RM44,000 to MAA-Medicare Kidney Charity Fund and RM200,000 to provide free erythropoietin (e-poeitin) injections for poor patients as these injections will increase the haemoglobin level of those haemodialysis patients who have anaemia. Visit to the Malaysian Association for the Blind (MAB) to help sending out

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brochures to donors, arranged the books in the library, read out loud to the low vision and vision impaired members, and typed books for conversion into talking books. During the World Health Day, Setia Eco Park organised a Community Health Talk which was collaborated with medical and health care professionals from Pantai Hospital to promote healthy lifestyles amongst the residents. Collaborated with the Malaysian Kennel Association to organize the 278th & 279th MKA All Breeds Championship Show for show dogs to provide dog owners with the opportunity to get-together and share their knowledge on dogs breeding, training, as well as protection knowledge.

Issue: The issue concerned is community development. This is more concerned for the communities as a whole. The foundation was organizing a string of events to spread the joy and love as well as to extend the passion and care. All these have proven the commitment of S P Setia in corporate responsibility as well as true spirit of teamwork and sportsmanship in the race. Another issue concerned is employees welfare. It demonstrated the genuine commitment make employees gain extra benefit and happiness from those activities by working together to foster community ties.

Environment Collaborated with Jabatan Perhutanan Negeri Selangor, WWF-Malaysia and Malaysian Nature Society to launch Green Legacy: The Bukit Cherakah Expedition and work closely together to conduct research on the flora and fauna and to create awareness among the community. Efforts in the Housing Projects as mentioned.

Issue: The issues concerned are pollution, global warming and environment degradation which is being concern by the people in the recent year. To mitigate the impact of activities have on the climate, they reduced carbon footprint as well as increasing awareness of the importance of environment to the citizens. The campaign would not only instill good habit of recycling and replanting amongst the staff but also contribute positively to the welfare of people. SP Setia was responsible and

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taking into account environmental concerns. S P Setia create green havens that are in perfect harmony with nature to enhance the quality of life. The conferment of numerous landscaping awards over the years is testament of our firm commitment towards responsible environmental management.

Question (d)(i) Both sustainability report 2006 and 2009 of S P Setia Bhd can be found in the separate sections in the annual report under the title of Corporate Social Responsibility as well as in the corporate website. The sustainability report is prepared in an organized way in four pages.

Sustainability Report 2006 Firstly, it makes a brief introduction about the S P Setia Foundation and Setia Adoption Programme. And then, it listed down the contribution of S P Setia Foundation towards sustainability from different aspect like education, general welfare, medical, and sports in point form. However, it doesnt mention about the benefit or consequences that communities may get from the CSR activities. It contains environment management reporting under the sub title of the sustainability report. However, it mainly discuss about the targets and achievement and slightly about environment performance. The sustainability reporting is slightly tied towards the business strategy of S P Setia. Since the issues of global warming and pollution are just started to aware by society, Setia tried to disclose its environmental friendly as a basic attempt to attract communities interest on its housing projects.

Sustainability Report 2009 It is first introduced about the policy statement of SP Setia towards the sustainability. Next, it showed the initiatives undertaken by SP Setia during the year 2009. For each initiative, it provided benefits as the description in a short paragraph. Furthermore, there are more pictures can be seen in the sustainability report 2009

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compared to the previous year 2006. It makes clear and understanding for the users of the annual report. It does not clearly explain about the environmental management. However, we can find the environmental management strategy in the different section of annual report which is under Review of operation (Page 26). The environmental management strategy is stated under each of the projects it undertaken during the year 2009. The sustainability reporting is tied towards the business strategy of S P Setia. The disclosure of CSR activities builds trust and promotes transparency as well as solicits feedback on their performance from a growing number of stakeholders and shareholders. While the shareholders are having more confidence to invest in S P Setia, there will be more capital available. To survive in this competitive industry, S P Setia realizes that it needs to spend more capital for the projects in order to earn profit in the long term. For our information, there are a huge amount of cost for the development of projects such as cost of adopting MASMA, and cost of BIPV solar technology. And, the stakeholders may be interested in this company and paying more capital since it is ethical towards the world. This is actually a cash flow cycle.

Compare: The structure of sustainability report is different for both years. For the year 2006, it is organized in point form, and slightly stated about the environment performance and achievement. This shows that S P Setia was not focus on sustainability activities. For the year 2009, it is organized in short paragraphs. CSR activities are reported attached with pictures. It looked more tidy and easy to understand, and the users of annual report may gain for information about the company. Environment management is stated in another part of annual report. S P Setia was making use of sustainability activities to gain attention of society. During the year 2006, S P Setia is not much disclosing CSR activities in terms of environmental, since the awareness of the communities towards environmental is low. S P Setia does not using CSR activities which it involved to position itself for the future. As mentioned, the sustainability report is just listed down the CSR activities without in details. During the year 2009, the disclosure of S P Setia regarding the sustainability activities is better than year 2006. The activities and efforts are more

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disclosed in the annual report. It also explained the impacts of the activities which might gain by the society. This is more encouraged, because it shows that the company is working towards the benefit of the society rather than for its own. It tries to use CSR activities which it involved to position itself for the future of the company by enhancing societys confidence and trust. During the year 2006, there are many construction companies existed in this country, for example, YTL corp, Hup Seng, Ho Hup Construction Company Bhd, and Timeless Element Sdn Bhd. There is no differentiation among them including S P Setia because the CSR activities and efforts it undertaken are less and not much disclosed, although their revenues are not much difference among each others. In year 2009, the global financial crisis brought consumer sentiment to an all time low. S P Setia had think of new ways to reignite consumer interest to make it stand out from competitors in the industry. With the high CSR effort and activities it involved for the society, there is more disclosure. Nowadays, S P Setia is the one of the top companies in construction industry.

Question (d)(ii) The sustainability report of S P Setia can be improved further. The report should be issued as the hard copy stand alone environmental or sustainability performance report. The stand-alone reports were issuing better quality reports on their social performance. We recommend S P Setia to use Global Reporting Initiative (GRI) as the sustainability reporting guidelines. It is to standardize the dimensions of sustainability reporting, which are environmental, economic and social. It is widely internationally as a generally accepted reporting framework and can ensure the report quality: balance, comparability, accuracy, timeliness, reliability, and clarity (Global Reporting Initiative, 2006). According to GRI, a sustainability report refers to a single, consolidated disclosure that provides a reasonable and balanced presentation of performance over a fixed time period. There is no minimum length for a report using the GRI Framework as long as the organization has properly applied the Guidelines and Framework documents it has chosen to use (Global Reporting Initiative, 2006).

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There are three indicators as below, each of them is recommended to be disclosed its goals and performance, policy, training and awareness, monitoring and follow-up as well as others addition information like key strategies, successes, and shortcomings. Environmental Indicators cover performance related to inputs (e.g., material, energy, water) and outputs (e.g., emissions, effluents, waste). In addition, they cover performance related to biodiversity, environmental compliance, and other relevant information (Global Reporting Initiative, 2006). Society Performance Indicators focus attention on the impacts on the communities by the company, and disclosing how the risks are managed and mediated. The disclosure should include information about community, corruption, public policy, anti-competitive behavior and compliance. (Global Reporting Initiative, 2006) The economic dimension of sustainability concerns the organizations impacts on the economic conditions of its stakeholders and on economic systems at local, national, and global levels. The Economic Indicators illustrate the flow of capital among different stakeholders and main economic impacts of the organization throughout society (Global Reporting Initiative, 2006). The disclosure should be discussed from the aspects of economic performance, market presence, and indirect economic impacts. SP Setia can use GRI reporting to help measure and benchmark performance, and encourage employees to contribute better performance. GRI can help to enhance the comparability of the reporting. The sustainability report of S P Setia is difficult to be compared for previous years, because the structure and reporting are different each year. Up to the year 2009, S P Setia only covered part of the guidelines recommended by GRI. GRI never force the companies to comply its guidelines. However, companies are asked to clearly indicate how they have used the guidelines. With time and practice, S P Setia is encouraged to move gradually towards more comprehensive reporting built on the content of the GRI framework. With the adoption of GRI, it provides information of interest to stakeholders who are particularly important to S P Setia.

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Since that S P Setia is more focus on environmental activities, it should follow the accreditation ISO 14000 family which is concerned with environmental management. In other words, S P Setia should minimize harmful effects on the environment caused by its activities, and achieve continual improvement of its environmental performance. Independent verification by an accredited body greatly enhances this public disclosure, by providing confidence and assurance to stakeholders. On the other hand, the information disclosed in the report should be timeliness. We found that there are some information disclosed in the year 2006 reporting are outdated and therefore an unused data. For example, some activities disclosed in the report are not undertaken in the year of reporting. The information need to be further updated to enhance effective decision making of stakeholders and shareholders. The reported information should be sufficiently accurate and detailed for stakeholders to assess the reporting organizations performance. We found that some of the information disclosed in the previous years is inaccurate. For instance, the amount of funds donated to the poor students in rural areas is inaccurate as compared to the figure which is recorded in news of The Star newspaper. The qualitative statements in the report should be attached with any available evidence. This could affect the decision making of shareholders and stakeholders. Lastly, we also found that S P Setias reporting is lack of clarity and reliability. Effort made by S P Setia is not disclosed clearly regarding its impact to the society and environment. It does not contain information that is required by the stakeholders, because it doesnt being disclosed in details. Some information is ambiguous and is not supported by relevant evidence. The report should contain the level of information required by stakeholders, but avoids excessive and unnecessary detail. Information should be presented in a manner that is comprehensible to stakeholders to have more understanding of the organization and its activities. Graphics and consolidated data tables can make the information in the report accessible and understandable. Disclosures about performance that are not substantiated by evidence should not appear in the report unless provides unambiguous explanations.

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Appendix

Setia Adoption Programme, which has adopted 2300 students of all races from 119 primary schools, is the core activity of the Setia Foundation. It helps primary student in education, from equipping them for the new school year to paying their school and tuition fees.

Donation of computers to Beautiful Gate http://thestar.com.my/news/story.asp?file =/2006/3/10/central/13588150&sec=ce ntral

Donation of grant to Montfort Boys http://thestar.com.my/metro/story.asp?fil e=/2009/12/18/central/5307879&sec=c entral Annual Excellence Awards Night http://thestar.com.my/metro/story.asp?fil e=/2008/3/22/southneast/20722302

Donation of school bags http://www.highbeam.com/doc/1P186183354.html

Sponsored cost of refurbishment to Yayasan Latihan Insan Istimewa Ipoh, Perak http://www.mind.org.my/news/abandone d-boy-staff039s-darling?theme=Lite

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NKVE-Setia Alam Link http://thestar.com.my/news/story.asp?file =/2006/6/16/central/14553086&sec=cen tral Donated equipment to Penang-based St Nicholas Home http://thestar.com.my/metro/story.asp?fil e=/2007/7/10/central/18244476&sec=c entral

Sponsor RM1.25m to UTAR http://thestar.com.my/metro/story.asp?fil e=/2009/6/9/central/4062300&sec=centr al Donation to Setia Badminton Academy http://thestar.com.my/metro/story.asp?fil e=/2009/6/22/central/4070160&sec=cent ral

Environmental preservation through education Setia Foundation Charity Dinner 2006 http://findarticles.com/p/newsarticles/new-straitstimes/mi_8016/is_20060702/sp-setiadinner-raises-rm58m/ai_n44328282/ Setia Alam Community Project http://thestar.com.my/metro/story.asp?fil e=/2010/11/16/central/7428647&sec=ce ntral

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Project Sunshine http://mstar.com.my/cerita.asp?sec=mst ar_hiburan&file=/2010/8/28/mstar_hib uran/20100827094203

Donation of a new van to the Blessed Peniel Prayer House (BPPH) http://thestar.com.my/metro/story.asp?fil e=/2009/7/10/central/4258960&sec=cent ral

Donation to kidney patients in low income families http://thestar.com.my/news/story.asp?file =/2009/3/19/focus/3507453&sec=focus

Sponsor of newspaper to semi-urban schools

Donation of a dialysis machine to MAAMedicare Kidney Charity Fund http://thestar.com.my/metro/story.asp?fil e=/2009/4/29/central/3782922&sec=ce ntral

Community Day & beach cleaning activity http://emrcjohor.blogspot.com/2009/12/s etia-indah-community-day.html

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Introduce of the 5/95 Home Loan Package http://biz.thestar.com.my/news/story.asp ?file=/2009/1/20/business/3062212&sec =business

SetiaBecamex JSC project in Vietnam http://www.iproperty.com.my/news/770/S -P-Setia-officially-opens-EcoLakesShow-Gallery-in-Ho-Chi-Minh-City

278th & 279th MKA All Breeds Championship Show http://thestar.com.my/metro/story.asp?fil e=/2009/7/17/central/4306955&sec=ce ntral

Sponsored 2 teams to Edge Bursa Malaysia Kuala Lumpur Rat Race 2009 http://www.klse.com.my/website/bm/me dia_centre/110809_ratrace.html

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CRCI Coursework Assignment 201101

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References Building Green for Environmental Sustainability (2008). Retrieved March 25, 2011, from http://www.prnewswire.com/news-releases/building-green-forenvironmental-sustainability-93047979.html Computer Handover Ceremony (2006). Retrieved March 23, 2011, from http://bgfnews.blogspot.com/2006/10/computer-handover-ceremony.html Construction Industry Development Board Malaysia. (2008). Compilation of environmental acts, laws and regulations related to construction industry. Retrieved March 20, 2011, from http://www.cidb.gov.my/v6/files/Comp_Envi_Acts.pdf Corporate social responsibility. (2011). Retrieved March 24, 2011, from http://www.referenceforbusiness.com/management/Comp-De/CorporateSocial-Responsibility.html Department of Environment, Malaysia. (2006). Malaysia environmental quality report 2006. Retrieved March 29, 2011, from http://www.doe.gov.my/ dmdocuments/publications/ eqr%2005%20n%2006%20%20pdf/EQR%202006.pdf Department of Environment, Malaysia. (2009). Malaysia environmental quality report 2009. Retrieved March 29, 2011, from http://www.doe.gov.my/files/u1/Chap-1.pdf Development in respect for environment 2011. Retrieved March 24, 2011, from http://www.saigonmoney.com/2010/01/07/development-in-respect-forenvironment/ Environmental Impact. (2011). Retrieved March 20, 2011, from http://www.naturalbuilding.co.uk/environmental_impact.html Environmental problems in Malaysia(2007). Retrieved March 23, 2011, from http://wwf.panda.org/who_we_are/wwf_offices/malaysia/environmental_probl ems_malaysia/ Foundation donates dialysis machine (2009). Retrieved March 23, 2011, from http://thestar.com.my/metro/story.asp?file=/2009/4/29/central/3782922&sec=c entral Giannarakis, G., & Theotokas, I. (2011). The effect of financial crisis in corporate social responsibility performance. International Journal of Marketing Studies, 3(1). Glac, K. (2010). The influence of shareholders on corporate social responsibility. Retrieved March 20, 2011, from http://www.cebcglobal.org/uploaded_files/Glac_paper_on_ Social_Investment_FINAL.pdf

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Global Reporting Initiative. (2006). Sustainability Reporting Guidelines. Retrieved March 25, 2011, from http://www.globalreporting.org/NR/rdonlyres/A1FB5501-B0DE-4B69-A90027DD8A4C2839/0/G3_GuidelinesENG.pdf Global warming. (n.d.). Retrieved March 20, 2011, http://www.comarchitect.org/WebHelp/2_1_global_warming.htm from

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International Labour Organization. (2000). Part II: Health and safety issues. Retrieved March 20, 2011, from http://www.ilo.org/public/english/region/eurpro/budapest/social/safety _cd/summa/part_2.htm International Labour Organization. (n.d.). Introduction to occupational health and safety. Retrieved March 24, 2011, from http://actrav.itcilo.org/actravenglish/telearn/osh/intro/introduc.htm Ismail, M. (2009). Corporate social responsibility and its role in community development: An international perspective. Retrieved March 24, 2011, from http://www.sosyalarastirmalar.com/cilt2/sayi9pdf/ismail_maimunah.pdf Johnson, D. L., Ambrose, S. H., Bassett, T. J., Bowen, M. L., Crummey, D. E., Isaacson, J. S., Johnson, D. N., Lamb, P., Saul, M., & Winter-Nelson, A. E. (1997). Meanings of environmental terms. Journal of Environmental Quality, 26, 581-589. National Aeronautics and Space Administration (2011). GISS Surface Temperature Analysis . Retrieved March 23, 2011, from http://data.giss.nasa.gov/cgibin/gistemp/gistemp_station.py?id=505486470002 & data_set=1&num_neighbors=1 Occupational health & safety. (2011). Workers rate safety most important workplace issue. Retrieved March 24, 2011, from

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http://ohsonline.com/articles/2010/09/14/10-workers-rate-safety-mostimportant-workplace-issue.aspx Pollution From Construction (2010). Retrieved March 24, 2011, http://www.sustainablebuild.co.uk/PollutionFromConstruction.html Quality Management. (2011). Retrieved March http://www.misronet.com/quality_management.htm S P 20, 2011, from

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Sharifuddin, S. S. (2010). Progress of water environmental governance/management and future challenges in Malaysia. Retrieved March 29, 2011, from http://www.wepa-db.net/pdf/1103annual/10.pdf Stellman, J. M. (1998). Encyclopaedia of occupational health and safety. Retrieved March 24, 2011, from http://books.google.com.my/books?id=vW6rXFvm4sQC&pg=PT464&lpg =PT464&dq=international+labour+organisation+organisational+health+definit ion&source=bl&ots=MHDZEgz_ja&sig=_vZumPf_QjkcIfvbCqJFUEorwXI& hl=en&ei=bAOITeq1FsjxrQep4uHBDg&sa=X&oi=book_result&ct=result&re snum=10&ved=0CF8Q6AEwCQ#v=onepage&q&f=false

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Sustainable development and the construction industry. (n.d.). Retrieved March 24, 2011, from http:/www.greenstone.org/greenstone3/nzdl;jsessionid=89823ECF82977C1B0 CD244D646637179?a=d&d=HASH010c7fe3bce119eab2fe3275.3&c=cdl&sib =1&dt=&ec=&et=&p.a=b&p.s=ClassifierBrowse&p.sa= What is community development?. (2011). Retrieved March 24, 2011, from http://www.cdx.org.uk/community-development/what-communitydevelopment