25 YEARS SERVING THE NATION SUSTAINABILITY REPORT 2017 COVER RATIONALE Malaysia Airports is proud to have served hundreds of millions of people who pass through our airports. As the custodian of major gateways into the country for the last two and a half decades, we are delighted to be the face of joyful Malaysia to all our visitors. We are also proud to continue flying the Malaysian flag high through our presence overseas. Our success to date is owing to the worthy efforts of our loyal employees, many of whom work quietly and tirelessly in the background. This year’s annual report is dedicated to the unsung heroes who have accorded us their unstinting service. OUR VISION TO BE THE GLOBAL LEADER IN CREATING AIRPORT CITIES OUR MISSION TOGETHER WE CREATE JOYFUL EXPERIENCES BY CONNECTING PEOPLE AND BUSINESSES TABLE OF CONTENTS Joint Address by Our Chairman & Practising Sensible Economics Community-Friendly Organisation Managing Director 3 Snapshot 2017 6 Financial Performance 27 Investing in Our Community 52 Governance to High Fliers Programme 52 About This Report 7 Strengthen Local Economy 28 Education Scholarship Reference and Guidelines 7 Runway to Success 2020 Programme 53 Scope and Boundary 7 (RtS2020) 29 Beyond Borders School Reporting Period 7 Sustainable Retailing 31 Adoption Programme 53 Supply Chain Sustainability 32 Celebrating Malaysian Culture 54 Standards and Certifications 9 Flood Mitigation Action 33 Community Environmental Project 54 Awards and Recognition 10 Supporting The Environmental Consciousness Humanitarian Cause 55 Our Sustainability Approach 11 Environment, Social Energy Consumption 35 and Governance (ESG) 11 Energy Saving Initiatives 36 Memorable Airport Experience Sustainability Policy 12 Minimising Carbon Emissions 37 Strategy and Roadmap 12 Green Building Recognition 38 Sustainable Development Goals 13 Water Consumption 38 Strengthening Airport Conserving Water 39 Service Quality 57 Sustainability Governance Promoting Recycling and Social Media and Going Online 59 Framework 14 Reducing Waste 39 Customer Affairs & Resolution Governance and Compliance 14 Excellence (CARE) 61 GRI Content Index 62 Creating An Inspiring Workplace Stakeholder Engagement 16 Independent Assurance Stakeholder Groups 16 Statement 67 Methods of Engagement 17 Health, Safety and Wellbeing 42 Employee Strength and Sustainability Matters 20 Workforce Diversity 44 Mapping Material Employee Retention Sustainability Matters 21 and Turnover 45 Employee Remuneration Airport Safety and Security 23 and Benefits 47 Aerodrome Certification 23 Employee Satisfaction 48 Runway Safety 23 Training and Skill Development 48 Safety and Security Exercises 24 Increasing Employment Other Airside Issues 24 Opportunities 49 [GRI 102-3,102-53] Should you have any queries or feedback on this report, kindly contact: The Sustainability Department Malaysia Airports Corporate Office, Persiaran Korporat KLIA, 64000 KLIA Sepang Selangor Email: [email protected] Tel: 03-8777 7000 Fax: 03-8777 7210 Sustainability Report 2017 JOINT ADDRESS BY OUR CHAIRMAN AND MANAGING DIRECTOR [GRI 102-14] DEAR VALUED STAKEHOLDERS, It gives us great pleasure to present Malaysia Airports’ Sustainability Report for the year 2017. While our vision to be a global leader in creating airport cities steers our plans and initiatives for development and expansion, we recognise the importance of growing in a sustainable and balanced manner. 3 Y.A.M. TAN SRI DATO’ SERI SYED ANWAR JAMALULLAIL DATUK MOHD BADLISHAM GHAZALI CHAIRMAN MANAGING DIRECTOR MALAYSIA AIRPORTS HOLDINGS BERHAD JOINT ADDRESS BY OUR CHAIRMAN AND MANAGING DIRECTOR 2017 marked the 25th anniversary of Malaysia Airports and in line with this, we embarked on several initiatives including campaigns and community programmes to strengthen our commitment towards economic, environmental and social sustainability. Through this sustainability report, we are able to present our aspirations, the challenges we face and our progress in moving towards sustainable development. Malaysia adopted the United Nations’ 2030 Agenda for Sustainable Development and its seventeen Sustainable Development Goals (SDG) in 2015, to propel the country towards sustainable development. Our efforts towards economic, environmental and social sustainability are aligned to those SDGs that best represent 4 the risks and opportunities embedded in our value chain. We believe these benchmarks motivate our organisation to strengthen its positive impact on the local economy, environment and community, in a manner that meets with international standards and the global aviation community. In 2017, having met the necessary targets, we received renewal at Our consistent high performance on international benchmarks Level 2 (Reduction) of the Airport Carbon Accreditation (ACA). We for corporate governance has led us to remain a constituent of achieved a 1.5% carbon reduction in 2017 towards our commitment th the FTSE4Good Bursa Malaysia Index for the 6 time running. of 9% carbon reduction by 2020. In the same year, we embarked We believe that good governance builds the foundation for an on our journey towards ACA’s Level 3 (Optimisation). Following effective, transparent and sustainable business. In 2017, we this, we have been engaging with our external stakeholders, such formalised a three-tiered governance structure, involving both top as the airlines, ground handlers and tenants, to create a platform management and employees at the executive and non-executive for knowledge sharing and coordination towards monitoring and level to effectively integrate sustainability across the organisation. reducing a wider scope of carbon emissions. Our target is to be Backed by a robust governance structure, we are confident that our certified for Airport Carbon Certification Level 3 (Optimisation) by all-round sustainability performance will continue to strengthen. the second quarter of 2018. In February 2017, the Environment Management Committee We were also recognised for our commitment and progress towards was established involving various subsidiaries and divisions to integrating environmental, economic and social sustainability integrate eight key environmental elements into our plan for practices into our operations. On the environmental front, KLIA was environmental sustainability. The eight elements are energy, awarded the ACI Asia-Pacific Green Airports Recognition in 2017. water, waste, carbon, wildlife, noise, land and water contamination For which, KLIA was the Platinum winner in the category for airports as well as air quality. Our Environment Strategy Roadmap with 25 million passengers per annum (mppa). Furthermore, klia2 2016-2020 completed its second year in 2017 which captures Terminal Building was awarded the Gold LEED Building Certification the main thrusts of our strategy in achieving environmental based on standards set by the U.S. Green Building Council. sustainability. Sustainability Report 2017 JOINT ADDRESS BY OUR CHAIRMAN AND MANAGING DIRECTOR Apart from our continuous contribution to CARE InfoCentre, new children play area To all our employees, customers and the environment, we are also committed at Anjung Tinjau, door-to-gate service for stakeholders, we thank you for your in providing a conducive environment for premium passengers, improvement of continued commitment to Malaysia our employees to grow and meet their parking facilities and the launch of online Airports and for the role you have played expectations by regularly engaging with campaigns and promotions to further in helping us build a strong name in the them. Our employees are our greatest improve the dining, waiting and shopping industry. asset and we constantly provide experience at KLIA Main Terminal and klia2. opportunities and incentives for them to Overall, these value-added initiatives have build their potential and bring out their enhanced the end-to-end experience at best. One of our efforts in 2017 was to KLIA Main Terminal and klia2; which has had Y.A.M. Tan Sri Dato’ Seri Syed Anwar improve systems that our employees use a positive impact not only for passengers, Jamalullail which was the introduction of the e-MAGE but for airlines and retailers as well. Chairman - an integrated system which centralises five different HR systems into one, thereby Having completed the second year of 5 making it more convenient and effective our five-year business plan - Runway to to use. Part of our mission to connect Success 2020 (RtS2020), we foresaw people to the business is to engage challenges in integrating the principles communities that require the support and of environmental consciousness and Datuk Mohd Badlisham Ghazali build their resilience. The SL1M programme sustainability in every phase of the KLIA Managing Director is a community - based programme that Aeropolis development especially in we actively participate in. In 2017, we ensuring the minimisation of possible recruited 541 unemployed graduates adverse impacts. However, we take this through this programme, which well challenge as an opportunity to strengthen exceeded our recruitment target of 440. our measures to guarantee sustainable It is worth noting that in 2017 Malaysia growth. Airports was ranked 29 in Malaysia’s 100 Leading Graduate Employers. 2017 was a good year for Malaysia Airports in terms of implementing strong initiatives for improvement, garnering public participation and meeting short and medium-term sustainability targets. On the social front, we introduced several campaigns and changes