The Ayala Way: Mixing sustainability and business


    “Bottom line, looking at all our targets, we believe that our partnership with the UN Global Compact and our recent membership to the World Business Council for Sustainable Development will help us align ourselves more formally to this changing, progressive global agenda”

    When Jaime August Zobel de Ayala, Ayala Corp., chairman, spoke at last year’s United Nations Global Compact Network Philippines (UN GCNP) and Global Reporting Initiative (GRI) Regional Sustainability Summit held in Manila, he summarized the Ayala Group’s sustainability principle into 1) access and inclusivity, 2) productivity and competitiveness, and 3) responsible growth and innovation.

    Calling it the “Ayala Sustainability Blueprint,” this sustainability framework which is also designed to support the UN Sustainable Development Goals (SDG) by 2030, aligns the group’s various businesses to be opportunities to create shared value, with businesses playing “an indispensable role in helping address some of the most pressing social and economic development challenges,” as he puts it.

    As such, it prioritizes the areas of economic, environmental, and social aspects of the business ecology.

    “By integrating societal engagement into our corporate strategies, we believe we can play a role in alleviating some of the development challenges our country faces today. It has become clear to us that businesses cannot operate in a vacuum, linked only to communities through the investments they make, and the products and services they generate,” he said.

    As a strategy, the Ayala group intends to address marginalization, large untapped potential in human capital, and irresponsible growth leading to long-term environmental damage as the three critical challenges to focus on.

    For access and inclusivity, Zobel said businesses play an indispensable role in addressing the “continuing challenge of closing income gaps and ensuring broad based development.”

    “We all know how the Philippines is entering a positive demographic growth pattern that has the potential to create a productive workforce over the next decade. However, we need to equip this young population with the relevant skills to prepare them for the disruptive changes in the employment requirements of the future. It is disheartening to see that the lack of sufficient access to affordable quality education has led to high dropout rates and quality issues across all educational levels in the country — an opportunity for positive engagement, and a chance to contribute to our country’s human capital development,” he said.

    As such the group is currently into the education business through its joint-venture with the Yuchengco Group’s iPeople Inc., while also putting up various branches of its health-related business under AC Health and expanding the latter’s portfolio — FamilyDOC and Generika to name a few.

    In order to generate productivity and competitiveness, meanwhile the Ayala group is currently into the infrastructure business, working in line with the government’s various agenda like its infrastructure push to stimulate productivity.

    “Unit AC Infra continues to help augment the increasing infrastructure capacity requirements,” Zobel said.

    In crown jewel Ayala Land Inc., the group has put up 29 mixed-use estates around spanning 57 growth centers around the country, all sustainably and functionally designed to providing a better quality of life as well as economic progress within and around the area through employment opportunities and entrepreneurial activities.

    “These estates feature Ayala Land’s different product lines—from residential, shopping centers, offices, as well as hotels and resorts.

    Moreover, our investments in hotels and resorts is contributing to the development of tourism as a growth engine for the country,” Zobel said.

    In the telecom center, unit Globe Telecom has been a moving force in digital revolution, changing the way Filipinos connect and altering their consumer preferences continuously investing and upgrading its network while ramping up its digital content offerings, and even make financial services more accessible across a broader demographic.

    In 2018, the Ayala Group it set up its logistics and fulfillment solutions platform Entrego to capture the strong growth of e-commerce in the Philippines. Entrego is expanding its presence nationwide with its 64 hubs covering 95 percent of the country, serving clients in various industries such as e-commerce, fintech, telco, and financial services.

    Bank of the Philippine Islands meanwhile continues in its digital transformation to address financial inclusion in unserved and underserved segments of the population, particularly the micro, small, and medium enterprises and the lower-income consumer segments of the community.

    “With increased efficiencies and lower cost, digitalization will make financial inclusion for more sustainable. In addition, BPI continues to ramp up its microfinance arm, BPI Direct BanKo,” Zobel said.

    Since Direct BanKo’s inception BanKo has disbursed loans at least P4 billion to nearly 56,000 entrepreneurs.

    At the same time, Zobel said that as the Ayala Gruop’s commitment to responsible growth and innovation, the company has committed to achieving a low carbon and climate resilient environment.

    The group’s power unit AC Energy has redesigned its strategy to focus on renewable energy, ramping up investments in solar, wind, and geothermal energies.

    In 2018, AC Energy generated *2,800 gigawatt hours of attributable energy, *48 percent of which came from renewable sources.

    AC Energy aims to hit 5 gigawatts of capacity across various technologies by 2025, with renewables contributing at least 50 percent of total energy output. It also raised $410 million in green bond last year, a first in Southeast Asia, to fund renewable energy projects.

    “AC Industrials also continues to assemble a portfolio of global businesses in disruptive technologies in rapidly-transforming industries across the manufacturing and automotive sectors,” Zobel said.

    At the same time, unit Ayala Land is also in the middle of achieving carbon neutrality by 2022 in all its commercial properties. As of last year, about 62 percent of its emissions is offset by its 560-hectare carbon forest and an increased reliance on renewable energy sources.

    Zobel said meanwhile the group is also looking at initiatives to protect the Tamaraws and the Philippine bird called the Luzon Bleeding Heart, both of which are considered critically endangered species.

    “Bottom line, looking at all our targets, we believe that our partnership with the UN Global Compact and our recent membership to the World Business Council for Sustainable Development will help us align ourselves more formally to this changing, progressive global agenda,” Zobel said.

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