Value through Performance
Consolidating for Value

Value through Performance

The Corporation works under the premise that the interests of business and society work within dynamic interaction with each other rather than independently or even at odds. This serves as the foundation to our performance delivery and forms the basis of our licence to operate. No clearer is this demonstrated than in providing world-class transport services for more than 2.4 million commuters daily.

Sunny Bay Station on the Disneyland Resort Line and the Ngong Ping 360 tourist attraction are living examples of our performance promise in project development. As dynamic and forward-looking concepts in design and eco-efficiency, they advance our strategy to deliver best practice while anticipating and exceeding expectations in our customer services. The processes under which these projects were developed closely engaged business partners, suppliers and contractors and the local communities with an emphasis on environmental impact and user-specific deliverables. Being tourist based, the projects challenged our traditional view of customer and stakeholder expectations, prompting more sophisticated engagement procedures and business-risk assessment processes. These projects were both pointed learning exercises in continual improvement and clear demonstrations of sustainable competitive advantage at work.

Overall, it has been a year of leveraging value in environmental performance. Most successful has been a series of small but widely adopted programmes undertaken across our managed properties that enhance customer services while bringing efficiency and cost savings in a combined strategy of lifecycle management and customer-support services. Initiatives increasingly involve managing our assets with the purpose of influencing personal habits without compromising service. We now regulate temperature controls for air and water use in the public spaces of most of our managed buildings, we have restructured the building management programmes for more efficient and centralised waste recycling and we raise the public's awareness and encourage their participation by launching various recycling campaigns at our managed properties. In managing our corporate-wide water resources, waste water now cleans roads, is used for irrigation and water features and provides the benefit of marked savings in fresh-water consumption.

Energy consumption continues to be the priority in our environmental performance, with well-established programmes in place to monitor and improve on a continuous basis. In 2006, through such initiatives, the Corporation reduced energy consumption by HKD1.2 million in rail operations. With the adoption of the Climate Change Policy, a stronger focus on optimisation and improvement processes will be made to address lowering greenhouse gas emissions and finding better efficiencies across all our businesses in electricity resource usage.

Consolidating for Value

Substantial improvements were made during the year in core business strategies and the policies and systems that drive them. The purpose is to consolidate practice and bring about the organisational awareness and drive ownership of related processes down to the front-line management level. The cross organisation buy-in to strategies provides a more robust corporate governance structure as well as future scalability of strategy.

The establishment of the Corporate Safety Committee in early 2006 consolidated the management of all health and safety issues under a formalised governance structure. The Committee oversees all seven business divisions supported by the existing Operations Safety Committee-Hong Kong and three newly established business-specific committees for the mainland China and international markets' growth, property and rail projects construction. The Committee, under the direct guidance of the Board of Directors, issues policy and establishes the procedures that enhance the existing health and safety systems and implement any new standards specific to growing business needs. This new structure provides the framework under which various corporate divisions and/or new activities can grow, supported by defined procedures when venturing into new projects, markets or businesses. This leads to the seamless transfer of consistent management in health and safety issues to the front-line of all activities.

Another substantial advancement in best practice is the reorganisation of the governance structure for the Sustainability & CSR Steering Committee under the direction of the committee chairman. Key changes include the revamping of reporting procedures, reviews and updates for key shareholders on business priority risks, the introduction of process for developing and implementing CSR initiatives and the procedure for consensus and agreement on key initiatives and their prioritisation.

These changes, introduced in late 2006, are expected to strengthen Committee decision making, impose a better focus on why and how initiatives are created and clearly define the lines of authority and ownership when implementing CSR strategy and programmes. It is also expected that a more focused impact and ensuing residual effects on stakeholders and society will be leveraged through the disciplined choice of initiatives, as well as better utilisation of our resources in the deployment of programmes.

In reference to other corporate-level initiatives for 2006 that advance the value chain, changes in human-resources management have been implemented through the Leadership Pipeline and the corporate-wide Climate Change Policy has been established to guide environmental management and eco-efficiencies.

All performance-driven initiatives, either institutional or project specific, arise from a business culture driven by sustainable competitive advantage. Our management processes of cost leadership and differentiation evolve best practice while the business strategy encompasses the corporate vision and lays the tracks for long-term sustainability. Under this umbrella of performance management, we build the foundations from which to scale operations when opportunity and new markets present themselves, and ensure that sustainability remains a guiding principle in our stewardship of MTR Corporation.