Randall Antonio, SGV consulting principal
The annual corporate governance training of directors and officers of publicly listed companies (PLCs) associated with the Lopez Group was conducted online on November 16, with speakers from SGV & Co.
SGV partner Joseph Ian Canlas gave an overview of corporate governance showing an effective governance framework for building and protecting stakeholder value, while at the same time fulfilling long-term economic, moral, legal and social obligations. Such model requires accountability, transparency and fairness from the corporation, its agents and especially its board of directors, in addition to proactive monitoring in order to make timely adjustments to achieve the desired outcomes.
Sharing the updated definition of corporate governance, Canlas said its purpose is “to maximize the organization’s long-term success, creating sustainable value for its shareholders, stakeholders and the nation.”
SGV partner Katrina Francisco discussed “Internal Carbon Pricing” as a tool for reducing a company’s carbon footprint, citing examples across the globe. A carbon price is a cost applied to carbon pollution to encourage polluters to reduce the amount of greenhouse gas (GHG) they emit into the atmosphere.
“Currently, there are 72 combined national and subnational jurisdictions implementing carbon pricing mechanisms, covering 23% of global GHG emissions. A CDP (formerly the Carbon Disclosure Project) survey in 2022 found 3,600 companies that used an internal carbon price or planned to do so in the next two years. This number grew from just more than 100 in the early 2000s, meaning (the adoption of internal carbon pricing) has actually gone and progressed,” Francisco said.
Regulations intended to enhance ESG (environmental, social and governance) risk management procedures and reporting and stakeholder pressure have contributed to the momentum of the mechanism. “Internal carbon pricing is a way to be able to manage the risks towards climate change,” she said. However, there is no policy or law in the Philippines yet in relation to carbon pricing.
After presenting studies of internal carbon pricing as practiced by Microsoft, Royal Dutch Shell, BHP and Disney, Francisco said it is important for each organization to identify its objectives to determine the most suitable approach to internal carbon pricing.
Potential to revolutionize
SGV consulting principal Randall Antonio covered the topic “Artificial Intelligence and GenAI in the Industry.”
Referring to data analytics and AI, Antonio said “they do have the potential to revolutionize various industries, improve efficiency and address complex problems. In business, it can unlock unused capacities and unseen competencies which can have several positive effects contributing to the company’s growth, innovation and overall success.”
Analytics is a process to draw out meaningful and actionable insights from raw data. AI refers to the simulation of human intelligence in machines that are programmed to think and learn like humans. Among AI applications in daily life are spam filter for emails, Netflix movie recommendations based on the pattern of movies watched by a subscriber, routing of trips done by Google Maps, live captioning on streaming videos, and smart vacuum cleaners.
GenAI (Generative AI) such as ChatGPT is a class of techniques and models designed to generate new content or data that are similar but not the same as existing data. It produces content that is not explicitly programmed but rather learned from a large dataset. “These are classes of algorithms that produce new information, respond to you in a humanlike manner, respond to you in an intelligent manner and the prediction is that they would be more intelligent than humans in the near future,” Antonio said.
Benefiting from AI
GenAI is currently used to create images, generate stories and conversations and compose music, threatening content creators such as artists and authors. Antonio said 76% of Asia Pacific firms in 2022 allocated a portion of their budget for the integration of AI and GenAI in their operations, up from just 39% in 2021. Investments are going to development of AI applications in customer support, virtual assistants, content generation, language translation, education and e-learning, creative writing, information retrieval, mental health support, personalized recommendations, and gaming and entertainment.
He said traditional organizations have opportunities to benefit from AI in the areas of human resources and workforce management, operations and maintenance, marketing, product innovation and research and development, risk, legal and compliance. However, he said AI adoption and implementation will only succeed if it is linked to an organization’s overall purpose and strategy.
The continuing education of professional directors and officers of listed companies is required by the Securities and Exchange Commission. In attendance were delegates from ABS-CBN, ABS-CBN Holdings Corporation, First Gen Corporation, First Philippine Holdings Corporation, Lopez Holdings Corporation and Rockwell Land Corporation. Joining them were directors and officers of Energy Development Corporation and Lopez Inc. and some of its subsidiaries.
Katrina Francisco, SGV partner
Joseph Ian Canlas, SGV partner
(Story/Photos by:Carla Paras-Sison)