Championing a new age of sustainable, inclusive Philippine business

By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor

Many organizations around the world, including the United Nations and the World Economic Forum, urge countries and governments to never forget the lessons imparted by the coronavirus pandemic.

In the span of two years, the world was upended and it was only through the advancement of technology and the collaboration of the international community that stopped the virus from causing more damage than it already had.

Moving forward, calls to “Build Back Better” urged governments, legislators, policy makers, industry leaders, and the public to consider sustainability as a necessity in ensuring the recovery from the COVID-19 crisis to be durable and resilient.

“Unchecked, global environmental emergencies such as climate change and biodiversity loss could cause social and economic damages far larger than those caused by COVID-19. To avoid this, economic recovery packages should be designed to ‘build back better’,” the Organisation for Economic Co-operation and Development wrote in a report.

Corporations and major businesses, then, have a responsibility to do their part to steer the future in a direction that is inclusive, sustainable, and advantageous for everyone. Good governance is now essential.

This is the main driver behind the growing relevance of environmental, sustainability, and governance (ESG) standards, and why the Institute of Corporate Directors (ICD) hold its annual ASEAN Corporate Governance Scorecard (ACGS) Golden Arrow Awards.

The recently concluded awards program honors the best publicly traded firms in the Philippines in terms of corporate governance according to the ACGS, serving as models of the pinnacle of what a company should be in the post-pandemic world.

The ACGS evaluates how well businesses facilitate shareholders’ rights and equitable treatment, relate to their various stakeholders, ensure transparency and accountability through prompt disclosure of material information, and assess how effectively the board sets the company’s strategic direction, oversees management, and upholds the board’s accountability to the business and its shareholders.

The 184 questions on the scorecard are based on information that is readily accessible on the websites of the companies. It aspires to improve corporate governance norms and procedures throughout the nation and attract investors to well-governed publicly traded Philippine enterprises.

Companies that received at least 80 points in the ACGS Assessment are given the Golden Arrow. At this point, the business has demonstrated visible compliance with both the ACGS’s international best practices and the Philippine Code of Corporate Governance. There will be five performance levels in corporate governance awarded.

Winners

The businesses that received Golden Arrows this year are as follows:

Three businesses reached a score range of 120 to 130 points, and thus won the top five-arrow recognition. Ayala Land, Inc., China Banking Corp., and Globe Telecom, Inc. were recognized by the ICD as the cream of the crop in terms of how they implement ESG standards into their operations.

Following them in the 110 to 119 score range with the four-arrow recognition are Aboitiz Power Corp.; Ayala Corp.; Bank of the Philippine Islands; BDO Unibank, Inc.; Belle Corp.; First Gen Corp.; Manila Water Co., Inc.; Philippine National Bank; Rizal Commercial Banking Corp.; SM Investments Corp.; SM Prime Holdings, Inc.; and The Philippine Stock Exchange, Inc.

In the 100 to 109 score range with the three-arrow recognition are 2GO Group, Inc.; Aboitiz Equity Ventures, Inc.; AC Energy Corp.; APC Group, Inc.; AyalaLand Logistics Holdings Corp.; Cebu Holdings, Inc.; First Philippine Holdings Corp.; GT Capital Holdings, Inc.; Integrated Micro-Electronics, Inc.; LT Group, Inc.; Manila Electric Co. (Meralco); Metro Pacific Investments Corp.; Metropolitan Bank & Trust Company; Philex Mining Corp.; PLDT, Inc.; San Miguel Food and Beverage, Inc.; Security Bank Corp.; and Semirara Mining and Power Corp.

With the two-arrow recognition at 90 to 99 points are AREIT, Inc.; Cebu Air, Inc.; DMCI Holdings, Inc.; Eagle Cement Corp.; Far Eastern University, Inc.; Megawide Construction Corp.; Nickel Asia Corp.; Petron Corp.; Philippine Seven Corp.; Phinma Corp.; Premium Leisure Corp.; PXP Energy Corp.; Roxas Holdings, Inc.; Union Bank of the Philippines; Universal Robina Corp.; and Wilcon Depot, Inc.

Finally, winning a golden arrow recognition at 80 to 89 points are A Brown Company, Inc.; ABS-CBN Corp.; AllHome Corp.; Alliance Select Foods International, Inc.; Asia United Bank Corp.; Atlas Consolidated Mining and Development Corp.; Axelum Resources Corp.; Benguet Corp.; Cemex Holdings Philippines, Inc.; Century Pacific Food, Inc.; Concepcion Industrial Corp.; Converge Information and Communications Technology Solutions, Inc.; Cosco Capital, Inc.; Crown Asia Chemicals Corp.; and D&L Industries, Inc.

Also on this list are Discovery World Corp.; Euro-Med Laboratories Phil., Inc.; Filinvest Development Corp.; Filinvest Land, Inc.; House of Investments, Inc.; International Container Terminal Services, Inc.; Jollibee Foods Corp.; Lopez Holdings Corp.; Manila Bulletin Publishing Corp.; Megaworld Corp.; MerryMart Consumer Corp.; Philippine Bank of Communications; Philippine Business Bank; RFM Corp.; Robinsons Land Corp.; Robinsons Retail Holdings, Inc.; SBS Philippines Corp.; STI Education Systems Holdings, Inc.; Vista Land & Lifescapes, Inc.; Vivant Corp.; and Xurpas, Inc.

The ACGS is an initiative of the ASEAN Capital Markets Forum (ACMF) that started in collaboration with the Asian Development Bank in 2011. It is aimed at raising the corporate governance standards and practices among ASEAN publicly listed companies (PLCs), making well-governed ASEAN PLCs attractive to investors and promoting ASEAN as an investment asset class.

The Scorecard was benchmarked against international best practices that encourage PLCs to go beyond national legislative requirements.

ESG as a key to long-term prosperity

AboitizPower, one of the companies awarded four golden arrows, told BusinessWorld in an e-mail how they implement ESG standards into their long-term growth strategy.

“AboitizPower firmly believes that effective corporate governance is key to ensuring an organization’s long-term growth and sustainability,” Mickey Colayco, SVP Chief Legal and Compliance Officer at Aboitiz Equity Ventures, Inc., said.

“In the company, as it is with the entire Aboitiz Group, a robust corporate governance framework ensures that its purpose and strategies are well articulated, properly managed and implemented, in alignment with the overall strategic goals of the Aboitiz Group.”

In its mission of becoming the country’s “first Techglomerate,” AboitizPower reaffirmed its commitment of “Transforming Energy for a Better World” via decarbonization, digitalization and innovation, and growth beyond the core.

One of the biggest endeavors of the company towards this goal is its 10-year growth strategy of expanding its renewable energy capacities to 4,600 megawatts, or 50% of its generation portfolio, by 2030.

“Recently, the Group embarked on what we call the Great Transformation, an attempt to course correct at the level of the individual team member and at the organizational Aboitiz Group level,” Mr. Colayco said.

“Through these efforts, and in its aspiration to be truly sustainable, AboitizPower will become not just a profitable organization, but one that drives positive economic, social and environmental impact over the long term.”

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