Fostering CSR in the Philippines: Conference on Responsible Business

Fostering CSR in the Philippines: Conference on Responsible Business

JAIME AUGUSTO ZOBEL DE AYALA
Fostering CSR in the Philippines: Conference on Responsible Business
Session 1: The Role of Businesses in Achieving the Philippines' Goals for
Sustainable Development | Opening Statement
January 17, 2017

Good morning, and thank you for the kind invitation to be here today.

The past few years have seen questions raised around the role of business in inclusive growth and sustainable development. Brexit, the rise of populism, the election of unorthodox leaders around the world have all
been traced to a dissatisfaction with the status quo-with societies where progress has not benefited all, and lack of economic opportunity.

Businesses are now being asked to do more, to involve themselves more in combating developmental hurdles, and build a more all-encompassing relationship with society. Ignoring the challenges faced by both global and national communities today threatens our ability to create long-term value and jeopardizes both enterprises and the markets we serve.

On a personal note, the role of business in inclusive growth and society has always been in my thoughts. I remember completing my MBA and thinking that, while the knowledge I gained was valuable, it was not necessarily sufficient to help our country overcome the challenges it faced. In the Philippines, our need to address economic inclusivity and build on sustainable business practices remains of paramount importance. Allow
me to share with you some of our experience at the Ayala group.

The Ayala group has always aligned its business strategies with the country's development agenda. Throughout our history, we entered critical sectors in dire need of private sector participation. In recent years, we have become much more aware of integrating societal challenges into the core of our business strategy. We reinvented some of our business models and created new ones to broaden our positive impact on the
communities where we operate and the country at large. Through our businesses, we do our best to engage society in a deeper and more meaningful way.

Most of our businesses traditionally catered to the higher end of the market. In recent years, we have expanded our products and services to reach a wider segment of the population. Ayala Land now offers affordable housing for as low as P500,000, while Globe Telecom provides affordable subscription plans for mobile and internet. Meanwhile, BPI has also made it a point to create customized loan products and provide financial guidance to the micro- and small entrepreneur segment. In addition, Manila Water delivers water supply as well as sewerage and sanitation services to more than 6 million customers in the eastern part of Metro Manila. It as a flagship program called Tubig Para Sa Barangay, which is designed specifically for areas with clusters of low-income communities, including informal settlers.

Moreover, we entered the energy, infrastructure, health, education, and industrial technologies spaces. These are all sectors with critical gaps in quality and affordability, and are crucial in sustaining our country's growth and development. Through AC Energy and AC Infrastructure, we are helping build our country's much-needed physical infrastructure. Through AC Health and AC Education, we are able to provide affordable, quality services that supports human capital development.

Human capital development, particularly in skills training and education, is something we have identified to be absolutely necessary today, and it is an endeavor in which the private sector can contribute significantly. Businesses are in an excellent position to identify the disruptive impact on new technologies, as well as the new skills that will be necessary to adapt. We are already taking steps in this direction. Through APEC schools, AC Education uses a specially-designed curriculum to enhance the employability of students with skills needed in the job market. A number of other companies have their own initiatives to ensure the continued learning and development of their employees, keeping them up to industry standard-Globe University, IMI University, and Makati Development Corporation's partnership with TESDA to upskill its construction workforce.

These are only a few examples of how Ayala is responding to the call of the times-how we remain progressive contributors to the changes needed in the world, and how we are evolving to make sure that we do
our part in national development.

The United Nations Sustainable Development goals were instrumental as we made a deliberate shift in company strategy. We can all agree that the SDGs are the simplest, clearest articulation of the goals we all share: the eradication of poverty, and the flourishing of communities, industry, innovation, and the environment.

The SDGs provided our group with a framework through which we could shape our value creation process-clear outcomes by which we could frame our sustainability goals. Framing our value creation process along the SDGs allows us to align with global initiatives.

Given the diversity of the industries in which Ayala is present, our group of companies contributes to the SDGs in a wide variety of ways.

Social tensions around the world have put at the forefront of our considerations the paramount role that the private sector plays in providing decent livelihood and work. Apart from the millions in capital expenditures that Ayala invests into the domestic economy, the group also contributes to 'decent work and economic growth,' through the jobs it generates. The Ayala group provided employment opportunities to over 124,000 individuals in 2016. Moreover, as of November 2017, Ayala Land's construction arm, Makati Development Corporation, provided close to 70,000 jobs in the lower-income segment, particularly for skilled construction workers. MDC has also partnered with TESDA in response to the industry-wide shortage in skilled labor and provide employment opportunities for more individuals in the construction industry.

In terms of 'sustainable cities and communities,' Ayala Land has distinguished itself through its sustainable estates in the country that consider disaster resilience, connectivity, eco-efficiency, and economic development. For 'clean water and sanitation,' Manila Water delivers a clean, reliable supply of water, sewerage, and sanitation services to over six million customers.

To complement these efforts, Ayala adopted the Integrated Reporting framework. This allows us to hold ourselves to higher standards of transparency and accountability by discussing not only financial and operational highlights, but also our sustainability and inclusive development initiatives documented through the SDGs. The Ayala Corporation 2016 Integrated Report was the first Integrated Report published by a Filipino company.

Ensuring that our companies can contribute to societal growth, I believe, is both a moral and a practical imperative. This is not mere altruism; rather, it is a deliberate strategy. Businesses cannot survive in societies where
inequity thrives; in markets failing markets; and where the environment is socially and physically degraded. Tremendous value can be realized when we strive to build more inclusive businesses-not only can companies
harness innovation and creativity in going beyond traditional models, we also help to empower the markets that have sustained our businesses.

Thank you, and I look forward to a productive and meaningful discussion.

Download: JAZA - CSR Conference 2017 Opening Statement.pdf