KIPCO Sustainability Report 2022
Commitment to ESG Excellence
Our purpose to contribute to the prosperity of the community has remained steadfast since our inception 48 years ago. To achieve this, we are leveraging our ESG Strategy by implementing adaptive governance practices, by prioritizing our employees, and by embracing environmental and social responsibility.
To report on our ESG endeavours, we have prepared our Sustainability Report to reflect on our dedication towards upholding the fundamentals of environmental, society and governance. Our Sustainability Report highlights our Strategic ESG Approach, followed by our collaborative culture and environmental outlook.
Section 1: Strategic ESG Approach
We are furthering our ESG agenda through our ESG Strategy, reflecting our responsiveness to investor feedback and expectations, and acknowledging the need to integrate ESG considerations within our operations. We are dedicated to meeting our stakeholders’ expectations, to utilizing ESG principles to drive responsible business practices, and to creating long-term value for our subsidiaries and stakeholders.
Creating value for our subsidiaries and stakeholders guides our ESG commitments and sets the baseline for our ESG monitoring and evaluation. These are integral to our ESG Strategy, which aims to build our position by embedding a sustainability foundation that ensures positive impacts across the three ESG pillars of environment, social and governance.
Section 2: Collaborative Culture
In line with our ESG ambitions, we take care of our employees who are the driving force behind our success, and we recognize their significance in achieving our business objectives. In efforts to attract and retain top talent, we focus on providing internships, on delivering training programs, on protecting human rights, on promoting diversity and inclusivity, on offering attractive compensation and incentive strategies, among a range of aspects.
Namely, our efforts in employee attraction and retention have resulted in a 18.6% increase in full-time employees this year, representing 13 diverse nationalities within our workforce. As a demonstration of our commitment to Kuwaitization, we continue to exceed the minimum requirement at a Kuwaitization rate of 27%. (40% in managerial positions). Additionally, we pride ourselves in being a company that empowers women, with a 10% women representation rate in managerial positions.
Section 3: Environmental Outlook
As we boost diversity and inclusion within our workforce, we contribute to the country’s climate change mitigation goals. We recognize the Kuwait’s net-zero commitment in the oil sector by 2050 and in all other sectors by 2060. We, therefore, seek to contribute by continuously assessing and reducing our own emissions. In our report, we have elaborated on our greenhouse gas (GHG) emissions in terms of the scopes 1, 2, and 3, covering both direct and indirect emissions.
We have underscored that we have reduced our scope 1 emissions by 36% and scope 1 emissions intensity by 46%. Our scope 2 emissions and emissions intensity have reduced by 26% and 37.51% respectively.
Further, we have saved 720 kg of paper and reduced emissions by 0.003 mtCO2e in the process. Digitization has played a significant role in reducing our paper use. We have estimated specific paper reduction values for selected key digitization tools implemented during 2022. Accordingly, a total of 45 paper reams and 10-15 ledger books, which are physical records used for keeping track of financial transactions, were saved. This was in addition to a total of KD 990 in cost savings. In total, KD 29,000 was invested in the selected digitization tools.
We employ digitization and technology in driving sustainable growth and enhancing our operations. Our digitization efforts have encompassed social considerations such as, but not limited to, digital communication, privacy, and security, as well as the implementation of hardware and software systems that support emerging business requirements.
Section 4: Responsible Community Engagement
While we address our emerging business requirements, we also believe that community engagement is fundamental to our operations. We create a positive impact on our stakeholders through social initiatives and actively support programs focused on education, youth development, and women empowerment.
In 2022, we allocated a total of KD 132,422 as community sponsorships. Community events include but are not limited to “The Future Creatives Mentorship Program”, “Generation Alpha Season 3”, and “GA3 Athletes”.
Our community sponsorships are advanced by supporting the local economy and fostering community development by engaging with local suppliers, which constitute 68% of our total suppliers.
Section 5: Adaptive Governance
Besides our suppliers, we deal with a myriad of stakeholders including but not limited to our customers, employees, investors, and shareholders. We believe that Governance is key to generating value for all our stakeholders and mitigating risks. Our well-defined organizational structure ensures seamless collaboration, governance and risk management across our subsidiaries. We prioritize professional conduct and maintain high standards of integrity to enhance investor trust in our company’s financial stability. We adhere to a comprehensive Code of Ethics and Professional Conduct, combat corruption, and encourage stakeholder whistleblowing.
Having realized the importance of combatting corruption for our sustainability and integrity at KIPCO, certain policies and controls are in place to mitigate risks related to corruption. These policies are applicable for all departments, and are reviewed periodically, as, and when needed. Our efforts have resulted in reporting zero cases of corruption and no instances of non-compliance with laws and regulations and financial penalties.
Section 6: Responsible Economic Impact
We couple compliance with laws with securing robust and responsible economic impacts for our stakeholders. We achieve competitive, risk-adjusted, ESG-compliant, and sustainable returns on our investments. As a holding company, our report discloses how we invest and divest based on attractive prices and return on investment (ROI). We commit to supporting ESG principles in our existing businesses whenever feasible. Moreover, while pursuing new business opportunities, our focus and goals are on ESG-compliant ventures. KIPCO’s Investment Department assumes a pivotal role in managing the portfolio companies.
To enhance transparency and foster continuous improvement, a set of Key Performance Indicators (KPIs) is tracked at the portfolio company level along with allocating assets towards clean technology such as the Alternative Energy Projects Co. (AEPCo). KIPCO participates in the renewable energy sector through its investment in AEPCo. Our range of efforts, activities, and initiatives have increased our net profits by 44% to KD 25.2 million and has resulted in delivering KD 590.5 million Shareholder’s Equity.
We encourage you to download our report for further details and to provide us with any feedback or inputs you may have.
For information and inquiries about sustainability, please contact: esg@kipco.com