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Monday, September 16, 2019
MANILA

Bunye: Ayala's sustainability blueprint

OVER many years now, the Ayala Group has been, in many ways, sensitive to issues relating to improving human lives and protecting the environment.

When the United Nations came up four years ago with the 2030 Agenda for Sustainable Development, the Ayala group institutionalized its own blueprint aligning itself to the global framework that is fast changing the face of capitalism.

Recall that the United Nations identified 17 Sustainable Development Goals (SDGs), "17 very interdependent goals which," according to Peter Bakker of World Business Council for Sustainable Development or WBCSD, "describe the future that we want."

The SDGs, as generally understood, "show the way to meet the needs of the present without compromising the ability of future generations to meet theirs."

The SDGs are:

1) No poverty

2) No hunger

3) Good health and well-being

4) Quality education

5) Gender equality

6) Clean water and sanitation

7) Affordable and clean energy

8) Decent work and economic growth

9) Industry innovation and infrastructure

10) Reduced inequality

11) Sustainable cities and communities

12) Responsible consumption and production

13) Climate action

14) Life below water

15) Life on land

16) Peace and justice and strong institutions

17) Partnerships to achieve the goal

Ayala Chair and CEO Jaime Augusto Zobel de Ayala (Jaza) explains the conglomerate's own initiative which dovetails with the UN SDGs.

"We designed our long term sustainability blueprint that laid out actionable and measurable targets as we address critical environment and development gaps that our country faces today."

Jaza identified three areas where Ayala believes its businesses (across real estate, banking, telecommunications, water, power, industrial technologies, infrastructure, healthcare, and education) can generate the most significant and lasting impact.

These are:

1) Marginalization

2) Large untapped potential for our human capital

3) Irresponsible growth leading to long-term environmental damage

"The Ayala Sustainability Blueprint will enable us to be more deliberate in monitoring and evaluating our sustainability targets and help us allocate resources to these initiatives," Jaza added.

Recently, Ayala was invited to join the Geneva-based World Business Council for Sustainable Development or WBCSD.

WBCSD is a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world.

Its member companies come from all business sectors and all major economies, representing a combined revenue of more than USD $8.5 trillion and with 19 million employees.

Ayala recently stepped up its efforts to cascade its sustainability blueprint and get all its business units and stakeholders all on the same page.

Last week, Ayala convened a milestone gathering -- its First Integrated Corporate Governance, Risk Management and Sustainability Summit.

TG Limcaoco, the Ayala group's CFO and Chief Sustainability officer (CSO), said the summit was specially designed for board directors, senior leaders, and employees across Ayala's various business units, as well as guests from its business partners, guests from government, civil society and the academe.

"We have to get them to buy in to what the Ayala group is trying to achieve," Limcaoco said.

Fernando Zobel de Ayala (FZA), president and COO, summarized the key messages to Ayala group executives and stakeholders:

* These interconnected disciplines - governance, sustainability and risk management - should now be part and parcel of the group's strategic planning, decision-making and investment processes.

* There is a strong correlation between sustainability and financial performance.

* A board's responsibility now goes beyond fiduciary duty and should encompass environmental, social and governance (ESG) considerations.

* The board must now be held accountable for its sustainability performance and not just financial returns.

* "Impact investing" has gained so much traction in recent years, driven by market dynamics such as technological disruption and customers rewarding sustainable practices.

* Going forward, creating a separate P&L for environmental metrics is something Ayala will look into.

* The new rule from the SEC mandating the submission of sustainability reports must be considered as another opportunity for listed companies, such as Ayala, to communicate their sustainability performance properly.

* ESG must not be just a buzzword. It must become a way of life.

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