Federico R. LopezSome months ago, a change occurred that sharp-eyed readers might have spotted in the pages of LopezLink: the adoption of the term “CS,” for corporate sustainability, in lieu of CSR or corporate social responsibility.
The CS business philosophy has been around for nine years globally and three years in Asia Pacific, specifically in Singapore and Japan. In the Philippines, companies started to seriously utilize CS as a guiding principle only in the past two years, with First Philippine Holdings Corporation (FPH) among its leading lights.
“When CS was approved by the top management of FPH in May 2014, chairman Federico R. Lopez (FRL) rightly said that it’s not a new philosophy for us because it’s already in the DNA of the Lopez Group,” says De Jesus, who went on to head the FPH CS group after installing the sustainable development mechanisms at Energy Development Corporation (EDC) since the 1990s.
The CS that FPH aims to adopt is the “mandatedattention to environmental stewardship, stakeholder engagement, governance and business ethics.” This is the same focus that global companies practice.
“Our business model revolves around sustainable development which promotes the coexistence of nature, business and people,” she says.
Setting the pace
On its second year of operation in 1980, EDC had put together an “environmental impact assessment (EIA) group to set the pace in environmental compliance for the energy sector.”
“EDC was the first to submit an EIA in the country for its Tongonan and Palinpinon geothermal projects to the National Environmental Protection Council in 1980. They didn’t know what to do with it. In 1977, the government issued the Environmental Code but EIA had not been institutionalized in the country yet,” says De Jesus. Despite this, EDC used the EIA, which projected the impact of its operations, to guide it in minimizing the adverse effects of its projects around the country.
The company followed a simple formula: “If there’s a projected impact, how do you prevent the impact? If you can’t prevent, how do you mitigate it? If you can’t mitigate or prevent it, how do you compensate, how do you replace it?” “It’s the principle of the International Union for Conservation of Nature now, but back then we followed it simply because it was the logical route to take,” De Jesus recalls.
By 1984, EDC then moved on to law enforcement and protecting the forest—which it saw as protecting the country’s patrimony—and to agroforestry and providing alternative sources of livelihood to forest dwellers and loggers, realizing that the state of the forest often depends on the dwellers.
EDC began formally practicing CSR, or “community relations,” in the late 1980s. In practice, this meant that a community relations officer went around the host communities to iron out whatever problems were brought before him, with help from EDC’s engineers; in doing so, the latter realized that they were in fact helping their own communities and families, De Jesus says.
In 2004, EDC pushed for an expanded and more structured CSR program, resulting in “HELEn” (Health, Education, Livelihood and Environment) after a survey of the communities’ needs.
By the time EDC became part of the Lopez Group in 2007, the effects of climate change were beginning to make themselves felt, as evidenced by the landslides and asset damages that befell various EDC sites due to cyclones.
With the go-ahead of FRL and EDC president Ricky Tantoco, EDC included climate change measures in its watershed function in 2009. The chairman was also one of the CEOs that spearheaded the climate change movement called the Philippine Imperative for Climate Change.
“From climate change we looked into other megatrends, which is how we came to adopt the business philosophy of corporate sustainability,” De Jesus explains.
At the energy audit seminar sponsored by the Department of Energy and CSG for EDCDream team
With the new business approach in place, De Jesus went about gathering her CS dream team. She zeroed in onmanagement graduate Alexa Cancio, for her familiarity with business principles, and Mylene Claudio who brought her know-how in managing natural resources and communities.
“I want my staff to expand from their own specific niches and specialization so that the conglomerate can acquire the broad spectrum of knowledge and capacities,” she notes of the twentysomething duo.
Youth was another requirement, not only to capture the perspective of young employees, but also to ensure continuity and groom them to become the next generation of leaders in their field in the company.
Beyond adding value to FPH, the three-person CS group aims to ensure that as the company progresses, its environment and host community also develop with it.
“We are a small team because we look at ourselves as part of a bigger team. Our role is to guide and serve as resource persons to build the sustainability capacity in all subsidiaries. Our team therefore extends to the people of other subsidiaries,” De Jesus notes.
Cancio is currently working on a capacity-building series on corporate sustainability for First Philippine Industrial Park (FPIP) and First Gen and on the embedding program with EDC HR called “No ImpactWeek.”
“It’s essentially about engaging the staff to promote alow-impact lifestyle in relation to the environment,” she says of the weeklong event to be rolled out at EDC later this month. “For example, one day we will be focusing on water consumption, how you can find ways to reduce your impact on water. It’s always about making the employees think of how they’re impacting the environment even with their small decisions outside of the company.”
Claudio, a recruit from the Climate Change Commission who used to work for a renewable energy company, is collaborating with EDC on a climate resiliency plan with Bacman as the pilot site.
Attendees gather for a class photo“We’re also developing a community-based resiliency scorecard which we are piloting in two Leyte barangays affected by typhoon Yolanda. These are critical areas because geographically they’re prone to landslides and other natural disasters and the impacts of climate change; the scorecard is their first step towards resiliency. The role of EDC is to facilitate, help them come up with a technical working group and institutionalize the process,” Claudio says.
According to De Jesus, the team is networking with theCSR, HR and PR councils led by Lopez Group Foundation Inc. for a unified embedding program on sustainability.
In addition to these, the CS group is also screening internal champions of sustainable practices within FPH like EDC in addition to tapping global experts to gain best CS practices. These practices are being cross fertilized across the conglomerate. For example, many of EDC’s successful practices have been shared by the team and internal champions with Pantabangan, First Gen and FPIP. They are also being asked to assist by ABSCBN.
Asked why CS is a must in today’s setting, De Jesus emphasizes: “We need to be conscious of the issues and megatrends happening around us. We have to be proactive to help mitigate the risks and capture the opportunities of global trends like climate change, food security, water scarcity, urbanization, rise of the middle class—all of these will affect business and governments in the next 20 years. We need to prepare our company and communities to be resilient and to operate in the face of these threats.”
CSG with global experts during the Leyte Geothermal Business Unit site visit
Participants from the Leyte Geothermal Business Unit host communities, local government units and government agencies
Orienting global business metrics experts on geothermal operation at the LGBU
The CSG welcomes workshop participants
Agnes de Jesus with Energy Development Corp. president Ricky Tantoco (center) and IFC senior officer Val Bagatsing in 2011 receiving the IFC Global Client Award for EDC’s exemplary performance in implementing triple bottom line strategy, besting 80 countries and 200 companies