‘That some Philippine companies embark on their ESG journey despite the absence of shareholder pressure tells you that their management is serious about staying ahead of the curve and meeting international standards.’
YESTERDAY, JP Morgan (one of the world’s biggest banking and financial institutions) hosted one of its webinars on sustainable investing. One of its panelists was Martin Antonio G. Zamora, the 48-year-old president and CEO of Nickel Asia Corporation (NAC). Dennis, as he prefers to be called, had just recently assumed the CEO role from Gerard Brimo, who remains chairman of the board.
I was one of a handful of NAC associates who were engaged by Dennis in helping him prepare for the event. We were chosen because we also were the ones he had selected to discuss the company’s mission and vision and imagine how NAC would look like 50 years hence.
It was an enlightening opportunity for me.
ESG stands for Environment, Social and Governance, a new set of standards and metrics against which companies are being rated by investors and NGOs globally. It’s a big thing in Europe and in the United States where activist shareholders hold management to account for financial as well as non-financial performance of corporations. Here in Asia, ESG is just starting to get traction, but the level of consumer awareness and activism is still a far cry from what it is in the more developed economies, which also means that pressure on management to conform to ESG standards is weak, if there is any at all.
That some Philippine companies embark on their ESG journey despite the absence of shareholder pressure tells you that their management is serious about staying ahead of the curve and meeting international standards.
NAC, of course, is in mining, a controversial industry. The industry is governed by the Philippine Mining Act (which contains some of the most stringent regulatory standards in Asia, if not the world), and watched over by a very active community of NGOs, many of whom will be happiest if mining stops altogether in the country. Undeniably, the image of mining in the Philippines has been shaped in the main by the images of irresponsible operations and the deleterious consequences they have caused to their communities. And this negative image has become the biggest burden on responsible operations – as many a member of the Chamber of Mines will attest.
That’s why to find out that NAC, through its four operating mines alone, planted 500,000 trees, spent US$10 million on environmental protection programs and another US$6 million more on CSR programs was heartwarming for me as an employee. That not a single one of our staff throughout our organization had to take a pay cut or, worse, had to be let go because of the pandemic was another thing to be proud of. I am happy that we conduct regular rapid testing on our employees who report to work to our head office in Metro Manila. And I am proudest of the fact that NAC (in partnership with Sumitomo Metal Mining Philippines) is also funding the first molecular test lab (MTL) to be set up in Surigao City (opening at the end of this month) to address the needs of the CARAGA region at a time of the pandemic; no need to send lab samples to Davao or Cebu or even Manila and be subjected to long waiting times for results.
Companies are not charity organizations; they exist as legal entities to provide humanity a product or service, in a manner that earns good returns for their owners. But more and more companies with enlightened management are realizing that there is much more to their existence than a healthy bottom line and good dividends; there is a commitment to earn and maintain their social license to operate and holding yourself up to the most stringent of international standards.
Here’s what makes me think now: how do we drive the same enlightenment and passion for excellence into the public sector which runs on our hard earned tax monies?