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Our top five priority stakeholder groups have remained constant in recent years, being customers, staff, shareholders and investment communities, business partners and supply chain, and the community. Each has specific influences on our continued viability as a sustainable organisation, and in response, we have a diverse range of engagement activities that address the individual group's interests and perceptions.
Customers
A series of ongoing initiatives drive services delivery for customers that are focused on performance and value. These include principally, "Service from the Heart", "art in mtr", safety and health protection programmes and the continuous upgrades to the network, rail stations, managed properties and shopping malls. Discussions of these programmes and other initiatives are found in the 2006 and 2007 Sustainability Reports.
Of material interest in the 2007 year was managing and communicating the impact of the merger on our customers and passengers. Five parameters, representing the public's interest for the rail merger, were tabled in 2004 by Government and conditional to merger success. In communicating those points relevant to our customers, the Corporation undertook a series of awareness-raising campaigns during the year that covered the salient issues of discounted fares and seamless network travel in context of our value for money perception. Feedback indicates a sustained high ranking in this area post-merger.
In 2008, we are leveraging this window of positive value perception with the campaign to bolster our reputation and build equity under our new brand. "The ride to great living" repositions the Corporation in terms of services aspirations and destination promise, be it our rail services, shopping centres and managed properties or the communities we develop in conjunction with real estate developers.
Staff
The S&CSR Steering Committee is tasked with the development and monitoring of programmes that guide and communicate sustainable development practices amongst staff. Programmes follow three areas of initiatives – community investment, employment and social affairs and, sustainability and environment. Numerous initiatives were undertaken during the year involving staff participation, principally volunteering (86 programmes with over 1,800 staff contributing) and climate change programmes (focused on reduction of electricity and the recycling of waste materials). The further programmes to foster the year's chosen theme of building capability, however, did not achieve the desired traction due to pre-merger activities and pressure on staff time. The average training days on the whole decreased during the year dropping from an average of 6.6 to 6.4 days per staff.
With the merger integration including the drive for synergy now in progress, concerted efforts are in motion at all departmental levels to enhance staff competencies and build cohesion. Prioritised are the technical and management skills for systems integration and the building of a single corporate cultural. These direct efforts are supplemented by the ongoing campaign of director-led briefings, divisional meetings and newsletters about the merger progress.
Of significant impact to future staff communications is the increased number of unions (six) representing staff interests as a result of the rail merger. From the initial consultation in regard to frontline job guarantees prior to the merger, we acknowledge that a more active approach is needed to our traditional trust-based management style to build stronger relationships and communication more effectively with the increase in representative bodies. We continue to explore that best way forward to gain the mutual trust and openness that are essential to proactive human capital management.
Shareholder and Investment Community
As recognition of sustainability moves into the broader corporate financial and investment decision processes, our reporting to shareholders and the investment community includes relevant non-financial information that brings sustainability into the decision equation. Our investor relations team includes our sustainability reports in road shows and in meetings around the globe. We make the report available to all interested parties and actively engage opinion leaders in one to one meetings on our SEE performance. As well, we maintain our membership with the DJSI, FTSE4Good and Ethibel indices to allow for objective comparability and guidance to the industry peers and to the financial community.
In 2007, MTR Corporation was recognised as a Sustainability Leader within the global "travel and tourism" industry sector, with its winning of the Silver Class Award from Sustainable Asset Management (SAM). In cooperation with Dow Jones Indexes and STOXX Limited, the SAM Group publishes and licenses the Dow Jones Sustainability World Indices (DJSI), a series of global sustainability benchmarks that track the performance of companies that are industry leaders in sustainable development.
During the year, a comprehensive campaign in regard to the merger was orchestrated for investors to be fully informed of the impact the merger would have on their vested interests. On a timely basis, all investors were distributed extensive documentation and information updates addressing the complete structure of the rail merger and related property purchases. All major issues and objections raised by both shareholders and the community were treated including the rationale behind the decisions taken by MTR Corporation in regard to the five parameters set by Government. This included the controversial adoption of the Fare Adjustment Mechanism (FAM) which caps the ability of MTR Corporation to raise fares on a commercial basis. The campaign was successful. Over 80% of the independent shareholders eligible voted in favour of the merger.
The HKSAR Government is the majority shareholder of MTR Corporation Limited and the regulator of Hong Kong's public transport industry, which presented potential conflict of interests for the merger. The decision was taken when engaging and negotiating with Government to deal directly with the relevant departments through our Executive Directorate and to form the Independent Committee which tasked with the review of the terms of the merger and to advise independent shareholders as to reasonableness and fairness of the terms. The Corporation has a policy not to pay or hire outside lobby groups on its behalf. Further information on the conduct of Government in the merger is available in the 2007 Annual Report.
Business Partners and Supply Chain
Engaging with our business partners and supply chain put us back into a learning position during the year. Our partnering programme took pause in that with lessons learned from the extended closure and subsequent management reorganisation of the NP360 Cable Car, we undertook to revamp how we engage partners on projects. We now directly employ professionals in areas where we have no previous expertise in projects that lay outside our core rail business, such as the cable car operations. This facilitates better partner communication on risk management decisions and enhances the ability to develop and apply the Corporation's own rigorous performance standards on non-rail projects.
The Procurement Department completed its survey undertaken with suppliers on managing the needed human resources to support our operations in mainland China and international markets. In a bid to influence upstream impacts, the purpose is to extend procurement practices to include environmental and labour issues as part of the tender pre-qualification processes. The results of this survey are helping us establish the framework to guide supply chain partners towards better practices rather than eliminate them from qualification for contracts.
As a builder and operator of a globally recognised mass transit system, we are a working advocate of rail as a component to the global solution for sustainable transport. MTR Corporation currently chairs the Sustainable Development Commission of the International Association of Public Transport (UITP). Under the UITP Charter on Sustainable Development, the Commission issued the Climate Change Policy in late 2006 and is in progress to establish a set of industry-specific economic, social and environmental reporting indicators. Consultations across the 27 divisions of the UITP continue with expectations of the overall sector reporting standards established by the end of 2008.
The Corporation has been an active member of the CoMET Group for over 12 years. This is a voluntary affiliation of 11 major international metro operators, selected members of which annually undertake a benchmarking exercise for the purpose of gauging best performance in areas such as service reliability, cost effectiveness, staff efficiency and safety. The 2007 benchmarking exercise has again confirmed our performance excellence within the group. We rank on average amongst the best performing of participating metros, reaffirming our consistent performance and services excellence amongst our peers and to the communities we serve.
In Hong Kong we actively participate in a number of community activities that endorse society's common objective of quality living. As a signatory to the Hong Kong CSR Charter and the Clean Air Charter and, with the guidance of the six sustainability drivers, we are committed to the international principles of social and environmental stewardship, ethical behaviour, the community's inclusion in our business decisions and engaging our stakeholders to achieve the common social agenda.
In future rail development planning, the West Island Line (WIL) pioneers our efforts for community inclusion and rail strategy communication. The inclusion process for this line, which solicited input at the early stages of planning from the local communities affected by a particular rail project, establishes the framework and an internal model for community engagement when planning and designing new rail lines. Stakeholder input has already brought critical improvements in station placement, added pedestrian friendly links to the immediate vicinity, incorporated heritage preservation and improved design features within stations.