Risk Management: Key to a Sustainable Business

In this episode, a seasoned sustainability professional from Link Asset Management Limited will share his passion in ESG and his sustainability career journey. Dr. Calvin Lee Kwan, Head of Sustainability and Risk Governance at LINK REIT, he has been overseeing LINK REIT’s ESG performance along with risk management comprehensively.

Calvin started with focusing on environmental initiatives like minimising energy and wastewater, and has expanded his work to the asset side of maintaining social licence to operate, and more recently the governance side, which involves the transparency of ESG reporting. He believes that sustainability is closely tied with risk. While sustainability is about the long-term spectrum, governance is putting policies and procedures for companies towards a sustainable pathway, with risk management being put into day to day operations and demonstrating whether the company is on track towards the direction.

Calvin looks at sustainability covering 4 aspects - environmental, social, governance and profitability. “Businesses need to make money and have to do it sustainably,” said Calvin, which is also the World Economic Forum’s approach towards sustainability currently. Business is not just about the company, but it also concerns the internal and external stakeholders. The work of a single organisation, or government could not really create an ideal solution for sustainability, but all organisations shall look at sustainability from an ecosystem perspective through communication and collaboration both internally and externally.

“The communication is made through coffee and wine,” said Calvin. By building interpersonal relationships with employees and finding what are material issues to them, sustainability could be explained in a way that concerns them or makes them understand. Similarly to business partners, companies shall take time to understand what they think and care about.

Calvin reports directly to the Chief Strategy Officer and Chief Financial Officer, and he aspires to help other departments to meet their KPIs and develop long term strategy, as well as answering their questions about energy, wastewater, stakeholder engagement, and investors’ questions. Over the past two to three years, investors are questioning whether Link has factored in climate resilience into business. Recently, TCFD has gained more traction with the financial sector and investors, hence investors are also interested in knowing how climate change affects Link’s portfolio.

By learning from investors through their questions as well as from peer real estate companies, it would allow companies to better understand what material and emerging topics stakeholders are interested in nowadays, such as net zero strategy and TCFD reporting.

Calvin has shared about the risk management approach of Link and mentions the importance of collaborating and communicating with different departments to determine their material risks, identify mitigation strategies, and assign risk ownerships in an effective manner. He believes that risk could be an enabler to do better and resilient business.