Globals Reporting Initiative G4 And Sustainability Reporting Standards By CapitaLand Limited

GRI Sustainability Reporting Standards

Discuss about the Globals Reporting Initiative G4 Sustainability.

The current report is based on evaluating CapitaLand Limited reporting standards as whether the company complies with the Global Reporting Initiative and IFRS 8 operating segments. The report would also evaluate CapitaLand Limited usefulness of reporting to its users. To commence with the corporate profit of CapitaLand Limited it is regarded the Asia’s as one of the chief real estate businesses. The company has headquarters and listings on the Singapore stock exchange.

CapitaLand Limited is the owners and the manager of international portfolio having worth as high as S$88 billion as on 31^st December 2017. The portfolio usually comprised of combined expansions, grocery shopping malls, homes, offices, serviced residence, investment in real estate trust and funds (CapitaLand, 2018). CapitaLand Limited has presence in as much as 150 metropolises in more than 30 nations. The company places emphasis on the Singapore and China as the essential markets with continuous expansion in the international marketplaces of Vietnam and Indonesia.

The company gains significant economic advantage through its base of assets and widespread network of marketplace. In combination with exclusive designs, growth and operating abilities, CapitaLand Limited creates and administers real estate products and services of higher quality. CapitaLand Limited is also regarded as one of the major investment venture managing business in Asia with a steady of five REITs which is registered in Malaysia and Singapore stock exchange.

Sustainability reporting refers to reports that are published by the organizations regarding the economic, environmental and social impact caused by the company on the daily activities (Ioannou & Serafeim, 2017). The sustainability reports provide the organizations with the standards and supremacy model which exhibits the association amid the organizations policy and obligation towards sustainable international economy.

The GRI Sustainability reporting standards assist the trades, governments and other administrations in understanding and communicating the effect of the trade on the serious issues of sustainability (Lewellyn & Logsdon, 2017). There are certain characteristic components of the GRI standards and the activities that makes them, this includes;

1. Multi-stakeholder input,
2. The records of custom and endorsement
3. Government references and activities
4. Independence
5. Shared development costs

The sustainability strategy of CapitaLand Limited is allied with the company’s doctrine of Building People and Building Communities. The company is evidently company towards enhancing the economic and communal welfare of its stakeholders by evolving its projects and administering its functional processes (CapitaLand, 2018). In the present age of evolving business landscape, CapitaLand Limited actively embraces innovations to make sure that commercial viability is followed without jeopardizing the future generation’s environment.

Commitment of Management and Staff Involvement

In compliance with the GRI Standards, CapitaLand Limited endorses a higher corporate governance standards and transparency to protect the interest of the shareholders. The company has placed adequate end actual business risk administration framework to improve the commercial flexibility and agility (Del Mar et al., 2015). The company has adopted proactive approach relating to environmental, well-being and security administration that integrates worldwide designs in its development. Furthermore, the company has adopted cohesive strategy of human capital that purposes to employee, grow and stimulate the workforces to generate progress for the organization.

The sustainability administration of the CapitaLand Limited falls under the purview of the company’s sustainability council that consists of the top management (Fassin, 2015). The company is maintained by the Sustainability Steering Committee that monitors two working groups to make sure that the company continues to advance and improve in the areas of ESG. The board of directors of CapitaLand Limited is regularly updated by the commission on materials related to sustainability risks and corporate misconduct events if any that originates.

CapitaLand Limited on regular occasion reviews the material issues that forms the significant part to the company and its stakeholders. This is usually prioritized depending upon the likelihood and probable effect on the issues that impacts the continuity of business and development (Lewellyn & Logsdon, 2016). CapitaLand Limited places emphasis on the external stakeholders to prioritize the issues that are important to the society (Lozano et al., 2016). CapitaLand Limited regularly reviews the material risks and corresponds with the internal control. This includes the below stated feedback procedures;

Environment:

1. Actively participating in the green building council
2. Regularly obtaining feedback from the government agencies

Social:

1. Regularly engaging in dialogue with the government agencies
2. Constant survey on employee engagement

Governance:

1. Regularly engaging with the securities investors association

CapitaLand Limited for effective flow of information regularly engages with its employees through numerous avenues and sessions. This helps in aligning with the business goals across all level of workforce (Ceulemans et al., 2015). The company proactively indulges with its suppliers and contractors on areas associated to work quality and commitment towards environmental health safety. CapitaLand Limited actively participates in the stakeholder consultations that is actively organized by the government agencies in order to furnish feedback relating to the proposed changes effecting the company’s business.

The company is committed towards workplace excellence for its personnel and has cohesive strategy of human capital to develop, employee and encourage personnel. The company promotes diversity in numerous aspects that includes different nationalities, cultures and languages (Junior et al., 2014). The company states that irrespective of the culture, age or gender and workers can create a noteworthy influence depending upon their skill and knowledge. The multi-stakeholder engagement provides the combination of expertise and diversities of experience in addressing the needs of the report makers and users.

Stakeholder Involvement

CapitaLand Limited sustainability strategy places key focus on the community development. This has resulted in generation of strong community capital and goodwill for the company in its social operations (Calabrese et al., 2016). CapitaLand Limited supports numerous stakeholder involvement that includes environmental sustainability, health and safety, social integration and lending support to the underprivileged children. The business obeys to the moral code and code of business conduct that is associated in dealing with issues namely the confidentiality and work place discipline.

Segmental reporting under IFRS 8 can be defined as reporting of the operating segments of the organizations in the revelations that accompany the financial statements (Cuccia, 2018). The objective of segmental reporting is to provide information to its investors and credits relating to the financial results and positions of the vital operating units of the organization that forms the basis of decision making.

The operating segments represents the component of CapitaLand Limited that indulges in commercial activities through which the company derive proceeds and sustain expenditure along with the revenues and expenditure that is associated with the transactions with any of the CapitaLand Limited other components (Leung & Verriest, 2015). The operating segments of CapitaLand Limited is reported in way that it is an agreement with the internal reporting given by the main operating segments.

The management of CapitaLand Limited administers the functioning outcomes for every business unit with the objective of decision making on resource allocations and valuation of performance (André et al., 2016). The performance of CapitaLand Limited is usually measured on the basis of the segment earnings before interest and taxation. CapitaLand Limited uses the EBIT as the tool for measuring the performance since the administration have confidence in such material forms the most appropriate in assessing the outcomes of the specific segments that are relative to the other companies operating in the industry.

Geographically, the CapitaLand Limited management assesses the business performance of business in Singapore, China, Other Asia, Europe and others. CapitaLand Limited presents the information on geographical segments based on the segmental revenues and EBIT that are related to the geographical location of the customers (CapitaLand, 2018). The non-current assets and the total assets are classified on the basis of the geographical locations of the assets.

The management of CapitaLand Limited regulates the operating segments depending upon the information that are reviewed and used by Executive management meeting for the purpose of tactical decision making and distribution of resources (Aleksanyan & Danbolt, 2015). For management purpose, CapitaLand Limited is organized into the premeditated business elements based on the company’s goods, facilities and geography. The company has four chief businesses which includes, CapitaLand Singapore, CapitaLand China, CapitaLand Mall Asia and The Ascott Ltd. The reportable operating segments of CapitaLand Limited includes

Understanding segmental reporting

The owners and the managers of commercial properties develops the residential properties for sale. In 2017, the company sold 407 residential units and generated total sales revenues of S$1.48 billion (CapitaLand, 2018). The segmental reporting states that CapitaLand Limited formed a joint project with Malaysian third party in order to create 500 units of the domestic homes. The company made an external revenue of S$1,176,924 with inter segment revenue standing S$13,535.

During the year 2017, CapitaLand Limited china continued its growth in China through the help of acquisition and integrated development strategies (CapitaLand, 2018). During 2017, CapitaLand China sold around 8,497 residential units with total external revenue of S$1,356,156 and inter segment revenue of S$21,000. The total revenue from the CapitaLand China segment stood S$1,356,177.

In the recently concluded financial year of 2017, CapitaLand retail network consisted of 103 shopping malls in Singapore, China, Japan and Malaysia. The malls of CapitaLand have constantly performed well in the core Singapore markets and have recorded a rise in the net property income (CapitaLand, 2018). The total external revenue of S$1,032,368 and inter segment revenue of S$1,338. The total revenue from the CapitaLand Mall Asia segment stood S$1,033,706.

The financial year of 2017 marked the record growth for the CapitaLand Vietnam as the company recorded the highest value of home sales (CapitaLand, 2018). CapitaLand Limited made the strategic inroads further than the residential markets and expanded its footprints in Vietnam with the acquisition of first prime commercial assets.

The Ascott Ltd possesses and administers the portfolio of quality serviced residences acorss 128 cities having presence in 32 nations. The segmental reporting of Ascott Ltd provides that the company recorded the strongest year of growth as it added more than 24,000 units into its portfolio (CapitaLand, 2018). The operational unit of Ascott Ltd made S$119 revenue per available unit. The total external revenue of S$998,286 and inter segment revenue of S$1,909. The total revenue from the Ascott Ltd segment stood S$1,000,195.

The above table represents that the entity wide disclosure required by the IFRS 8 for CapitaLand Limited is up to the extent that the concerned information is not disclosure anywhere else.

If the monetary information is considered to be valuable, then it should be appropriate and authentically presents what it purports to represents. The usefulness of the fiscal info is improved if it is similar, demonstrable and comprehensible. Similarly for CapitaLand Limited the financial information presented is useful to the users in making a differences in decision since the information presented by CapitaLand Limited has confirmatory value (Gotti, 2016). The financial reports of CapitaLand Limited presents economic phenomena in terms of words and numbers. It is useful to the users since the reports not only presents the relevant phenomena but also faithfully presents the phenomena that CapitaLand Limited purports to present.

The company provides a complete depictions of all the information relating to the assets by describing the nature of the assets along with the numerical depiction of all the assets (André et al., 2016). The information presented by CapitaLand Limited is useful in making comparative decision for the users in choosing between the alternatives. The financial information presented by CapitaLand Limited is useful to the users since it is comparable, verifiable and understandable and possess the elements of timeliness.

Conclusion:

On a conclusive note, it can be stated that CapitaLand Limited is one of the first businesses in Singapore that have willingly published the sustainability reports in accordance with the GRI guidelines. The sustainability report also comprises of the organization approach in assimilating the concept of sustainability into its policies, administration and functions.

CapitaLand Limited sustainability also reflects the social financial and environmental characteristics of the company’s operations and development. CapitaLand Limited continues to prepare the sustainability report by adhering with GRI standards and adheres with the IFRS 8 to report about the operating segments of its international portfolio.

References

Aleksanyan, M., & Danbolt, J. (2015). Segment reporting: Is IFRS 8 really better?. Accounting in Europe, 12(1), 37-60.

André, P., Filip, A., & Moldovan, R. (2016). Segment Disclosure Quantity and Quality under IFRS 8: Determinants and the Effect on Financial Analysts' Earnings Forecast Errors. The International Journal of Accounting, 51(4), 443-461.

Calabrese, A., Costa, R., Levialdi, N., & Menichini, T. (2016). A fuzzy analytic hierarchy process method to support materiality assessment in sustainability reporting. Journal of Cleaner Production, 121, 248-264.

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Ceulemans, K., Molderez, I., & Van Liedekerke, L. (2015). Sustainability reporting in higher education: a comprehensive review of the recent literature and paths for further research. Journal of Cleaner Production, 106, 127-143.

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Fassin, Y. (2015, July). The Status of CSR and Sustainability Reporting at Universities in Europe: a Survey. In Proceedings of the International Association for Business and Society (Vol. 26, pp. 179-191).

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Junior, R. M., Best, P. J., & Cotter, J. (2014). Sustainability reporting and assurance: A historical analysis on a world-wide phenomenon. Journal of Business Ethics, 120(1), 1-11.

Leung, E., & Verriest, A. (2015). The impact of IFRS 8 on geographical segment information. Journal of Business Finance & Accounting, 42(3-4), 273-309.

Lewellyn, P. G., & Logsdon, J. M. (2016, July). How Sustainability Reporting Is Maturing: A Preliminary Assessment of the Impact of GRI’s G4 Guidelines. In Proceedings of the International Association for Business and Society (Vol. 27, pp. 122-132).

Lewellyn, P. G., & Logsdon, J. M. (2017). Global Reporting Initiative G4 Sustainability Reporting Guidelines.

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Sustainability Reports | CapitaLand. (2018). Retrieved from https://www.capitaland.com/international/en/about-capitaland/sustainability/sustainability-reports.html