Sustainability at Aboitiz

Over the years, sustainability has been our ubiquitous term in covering our environmental management, labor practices, social responsibility, and fair and ethical governance in our business ventures.

 

We have translated sustainability into our brand promise of advancing business and communities. As we grow the business, our stakeholders grow with us. In Aboitiz, we define sustainable development as inclusive growth that looks into the dimensions of ESG:

Economic

We aim to continually enhance shareholder value by being true to ethical business practices, sticking to our core competencies and executing well-defined strategies. We will continue to explore opportunities while managing our operations prudently, utilizing our resources wisely to ensure long-term financial growth and profitability.

AEV recorded a consolidated net income (NIAT) of Php 22.0 billion in 2019,

1% lower than the Php 22.2 billion in the same period of the previous year.

 

AEV’s consolidated EBITDA finished at Php 60.2 billion, 1% lower than than the previous year.

 

From 14.9% in 2018, AEV measured a 13% in ROE in 2019.

 

The total shareholder return continues in an upward trend from 1% in 5 years to a projected 22% in 10 years

 

Innovation

 

Aboitiz’s digital transformation journey identified key digital strategic objectives to grow the business reinventing our business models while looking for opportunities to improve our revenue streams; embedding emerging and relevant technologies, data and analytics to improve operational efficiencies and decision-making process; creating an agile workplace to improve collaboration and productivity of our A-People; and, equipping our team members with the right tools to continuously deliver value to our stakeholders.

 

Digital Milestones of Strategic Business Units:

 

 

  • AEV: Digital DNA Program and  Innovation Week (Building a Digital Mindset)

 

We introduced the Digital DNA program to better equip team members with modern tools and progressive practices. The program, which consists of three brainstorming and ideation workshops encourages team members to generate ideas in optimizing business processes and technology.

Innovation Week gathered all Aboitiz business units to showcase outstanding digital projects and to foster collaboration on improving various initiatives. Key subject matter experts from different industries were invited to share their experiences and learnings

 

  • AboitizPower: Inyovation Program

 

Forging the Aboitiz Group’s value of Innovation and AboitizPower’s Owner Mindset, the Inyovation program encouraged team members to initiate developments in their processes to improve productivity and efficiency; increase customer satisfaction; enhance a current process, system, or service; reduce costs; or contribute to sustainability. 

 

  • Pilmico: AHA-gile Innovation Program

 

Pilmico’s Business Process Team and HR partners brainstormed to launch Innovation 2.0, a campaign that makes improvements to the process, system, and management structure while planning for the necessary cascade activities to promote innovation across the Food Group.

 

  • UnionBank: Innovating on Customer Experience

 

In 2017, the Bank invested in designing and developing the UnionBank Online platform to bring about a seamless and delightful banking experience. Using agile principles, a minimum viable product of the app was launched with key features such as self-service sign-up, viewing of all accounts and transactions, fund transfer to UnionBank and other local bank accounts, and bills payment. In the years that followed, UnionBank continued to enhance the platform’s functionalities by adding CX-driven features like digital account opening, online check deposit and unit investment trust fund account viewing while ensuring the stability and security of the app. The latest iterations enabled customers to accomplish banking transactions without the need to visit branches. 

 

The Aboitiz Group continuously finds better ways of doing business, experimenting and reinventing where possible. In the true spirit of innovation, we commit to address the rapidly changing business environment and to position the Group in this disruptive landscape.

Environment

The Aboitiz Group is conscious of resources, ensures that they can be replenished for future generations, and minimizes competition on the resources available in the communities where we operate.

 

A-PARK Program

 

The A-Park program is part of the Group’s carbon management program that commits to plan ng 9 million trees by 2020. The Group is nearing its target; having planted 7,462,469 trees in 2019. On top of that, the Group’s partnership with Ramon Aboitiz Foundation Inc. (RAFI) planted 11,670,747 trees. This is our contribution to mitigate climate change.

 

 

Resource Efficiency and Waste Management

 

Our Race to Reduce (R2R) programs have paved the way for addressing concerns related to biodiversity, resource efficiency, and waste management.

 

Team member-driven programs such as the Aboitiz No Impact Challenge promotes lifestyle changes that reduce carbon emission and water consumption in daily routines. Environmental management and improvements in operational eco-efficiencies, on the other hand, are managed by our strategic business units through their respective environmental units.

 

For the year 2019, our energy and water consumption are the following:

 

 

Ecosystem-based Biodiversity Management

 

Led by its different strategic business units, the Aboitiz group initiated programs to manage our impact on Life on Water (SDG 14) and Life on Land (SDG 15).

Initial environmental impact assessments for business projects lead to the management of different ora and fauna species in different ecosystems adjacent to where our business units operate.

 

Coastal Ecosystems

The Aboitiz Cleanergy Park is an eight-hectare ecological preserve located in Davao City that is home to the critically endangered Hawksbill turtle (Eretmochelys imbricata), endemic and migratory birds, and marine species. It has been assigned by the Department of Environment and Natural Resources (DENR) as the Pawikan Rescue Center of Davao City.

By the end of 2019, Cleanergy Park recorded the following: 

 

 

The Pawikan Conservation in Calubcub, Batangas founded 42 nests, released 4,811 Pawikan hatchlings, and rescued 6 Pawikans.

 

To provide potential nesting and breeding habitats of various marine and land species, business units near coastal areas advocated to revive biodiversity and mangrove reforestation. 13,992 mangroves were planted by the end of 2019.

 

AboitizLand Seafront, our real estate development along the coast of San Juan, Batangas launched a multi-sectoral program approach in partnership with UP Institute of Environmental Sciences and Meteorology for managing the protection of the pawikan species such as Olive Ridley (Lepidochelys olivacea) and Hawksbill turtle (Eretmochelys imbricata).

 

Wetlands and Rivers

 

The ongoing rehabilitation of Boracay’s Wetland #4 into Balabag Wetland Park — a joint project of DENR and Aboitiz — has completed a number of improvements at its interim phase. These include:

 

 

The Balabag Wetland Park is a three-year project that will convert the one-hectare lagoon into a linear urban park. Among its key features are a plaza and a boardwalk lined with trees and plants endemic to Boracay to help rebuild the area’s biodiversity.

 

In 2019, Aboitiz and the DENR signed on for #WOWSanJuanRiver or the San Juan River (Manila Bay) Rehabilitation Project. The main objective is to restore the entire stretch of this 11-kilometer Pasig River tributary back to life. This involves pollution control through clean-up, rehabilitation, conservation, and preservation. Its success will rely on solid collaborative efforts from multi-sectoral stakeholders in its development and implementation.

 

 

Climate Related Actions

 

The Community-Based Disaster Risk Reduction and Management program is a customized approach that promotes localized decision-making and implementation to reduce vulnerabilities and promote zero casualties in disaster situations.

Through the Cooperative Business Continuity Plan, micro, small and medium enterprises (MSMEs) conduct business continuity planning (BCP) to strengthen community enterprise and to reduce their vulnerability to the impacts of unforeseen events, including major emergencies and disasters.

We partnered with the Climate Change Commission in conducting trainings on Local Climate Change Action Planning to increase capacities of local municipalities. Communities are taught to be climate-resilient, identifying risks and vulnerabilities and developing long- term strategies to reduce risk and future losses on livelihood, human settlements, and resources.

 

Social

The Aboitiz Group implements sound labor practices in the workforce and operates responsibly in the communities where we are present. This is answering the basic premise that no business shall succeed in failing communities.

 

Talent Management

 

Anticipating business disruptions, building organization capability, and the future workforce to support enterprise long-term strategy, and mitigating talent management risk, are just some of the realities we all are facing today.

 

In the Aboitiz Group, building human capital is one of our four strategic pillars. For us, this means being able to support the execution of the Group’s strategies through people. We invest in resources and implement relevant programs that are focused on attracting, optimizing, and retaining the right talent. We also deliver an engaging talent experience through a seamless end-to-end HR service delivery.

 

At the foundation of everything that we do, we create an environment and build a culture centered on our core values of integrity, teamwork, innovation, and responsibility.

 

 

 

 

Occupational Health and Safety

 

The Aboitiz Group believes in managing risks well in order to pursue growth. Strict standards and risk management systems are in place to ensure that our workplace and operations are safe, compliant with regulatory requirements, and are for the best interests of our team members’ wellbeing.

 

Results of 2019 Occupational Health and Safety Monitoring:

 

 

Human Rights Statement

 

Aboitiz Equity Ventures (AEV) supports the Ten Principles of the United Nations Global Compact on human rights, labor, environment, and anti-corruption. We expressed our intent to make the UN Global Compact and its principles part of the strategy, culture and day-to-day operations of our company, and to engage in collaborative projects which advance the broader development goals of the United Nations, particularly the Sustainable Development Goals.

 

Dialogue and value creation for stakeholders

 

Guided by our value of integrity, we generate trust and sustain good relationships as we engage in meaningful value creation with our internal and external stakeholders – forging cooperation, partnerships, and common aspirations of a better future.

 

Our stakeholder engagement process keeps up with the times by maximizing the many communication avenues available today and sharing the best practices internally. Team members that work in customer and community-facing functions undergo training to fully embody the principles and processes of stakeholder relationship management (SRM) and communication.

 

 

 

Governance

The Aboitiz Group’s corporate governance framework is rooted in its core values of integrity, teamwork, innovation and responsibility, which have been institutionalized in the respective Manuals, Code of Ethics, and key company policies and protocols. 

 

At the helm of the Group’s corporate governance framework are the Boards of Directors who perform the crucial role of articulating and assessing each company’s purpose, vision and mission, and strategies to carry out its objectives. In line with best practices, the Boards of Directors are responsible for establishing and monitoring the Group’s commitment to the principles embodied in environment, social and governance matters (ESG).

 

 

ESCG Governance

 

Our leadership commitment to continuously improve ensures the board oversight of the Environmental, Social and Corporate Governance (ESCG) committee. Our transition towards a sustainable future needs to redefine our leadership functions and responsibilities to strengthen the company’s strategy, work plans, and performance targets.

 

 

The Group’s Sustainability Report outlines the coordinated efforts of the sustainability stewards and ESG principles in the business units to improve and enhance the Group’s performance on team member engagement and development, corporate social responsibility, customer focus, disaster resilience, carbon emissions reduction, resource efficiency, renewable energy, waste management, financial growth, and financial returns.

 

Meanwhile, the Group’s Consolidated Annual and Sustainability Report sets out its values and governance model and demonstrates the link between the Group’s strategy and its commitment to a sustainable global economy.  Through the consolidated report, Aboitiz is able to measure, understand, and communicate its economic, environmental, social and governance performance.

 

Code of Ethics and Business Conduct

 

The Code of Ethics and Business Conduct (Code) sets out how the executive management, team leaders, and team members can achieve and maintain ethical standards in the Group’s day to day operations and summarize the Group’s fundamental policies and directives.

 

Since the approval of the Amended Code, directors, officers, team leaders, and team members review and affirm their personal commitment to the Code by signing the Personal Commitment Form on an annual basis.

 

To view the Code of Ethics and Business Conduct of Aboitiz Equity Ventures, click here.

 

Rights of Shareholders

 

The rights of shareholders are of paramount importance in the AEV By-laws, Codes of Ethics, and Manuals.  The goal is to ensure the protection of shareholder interests and concerns through the free exercise of shareholder rights.  Among the rights of these shareholders, regardless of the number of shares they own, are to receive notices of and to attend shareholders’ meetings; to participate and vote on the basis of the one-share, one-vote policy; nominate and elect Board members (including via cumulative voting); inspect corporate books and records; vote in person or in absentia through a proxy; receive dividends, and ratify corporate action.

 

The Aboitiz Group believes that the rights and interests of minority shareholders are aligned to those of the controlling shareholders, not only in terms of returns on their investments but also in the sustainability of the Group’s businesses.  AEV ensures timely disclosure to shareholders regarding their respective businesses, and that shareholders receive dividends in accordance with established dividend policies.

 

The entire Rights of Shareholders can be read here.

 

Risk & Strategy

 

The Aboitiz Group is committed to balancing economic growth and environmental stewardship in the conduct of its business and as part of its pursuit to create long-term shared value. 

 

In a testament to this commitment, AEV has signed on as the first Philippine company to support the Task Force on Climate-Related Financial Disclosures (TCFD) in 2019. AEV joins more than 930 international supporter organizations with a combined market capitalization of USD11 trillion that commit to developing voluntary and consistent climate-related financial risk disclosures.

 

The company shall embark on enhancing our transparency on the following:

  1. Governance on Climate-Related Risks and Opportunities
  2. Actual and potential impacts of climate-related risks and opportunities on the organization’s business strategy and financial planning based on materiality
  3. Organizational processes to identify, manage and assess risk
  4. Targets and Metrics used to assess and manage relevant climate-related risks and opportunities based on materiality

 

The Group Risk Management has the crucial four-pronged role of developing risk management policies, procedures, guidelines, and structures; implementing processes for assessing, treating, monitoring, and reporting risk; providing value-adding information for strategic decision-making; and instilling risk culture within the Group. 

 

The Aboitiz Group’s 2020-2022 Risk Roadmap aspires to sustain Level 4 Risk Management Maturity that builds upon advances in digital transformation and data-driven decision-making in order to achieve enterprise resilience. Risk Maturity Level 4 would involve a clear understanding of key risks to the organization and the consistent execution of activities to address these risks.

 

 

The AEV Risk Management Team supports the Group’s sustainability efforts by ensuring that we have an Enterprise Risk Management program that will help us manage sustainability issues and create shared value for our communities.     

 

Audit

 

The Aboitiz brand promise of advancing business and communities embodies the Group’s approach to sustainability—to look beyond profitability and towards standards that assess benefit, efficiency, and success in achieving stakeholder expectations.

 

The Group’s Internal Audit has adopted combined assurance and the Three Lines of Defense approach implemented across the Aboitiz Group. Combined assurance is defined by the Institute of Internal Auditors as the integration and alignment of assurance processes. This allows our senior management, internal audit, and supervisory committees to get a comprehensive and holistic view of the effectiveness of our organization’s governance, risks, and controls. The information enables us to set priorities and take any necessary actions.