Thursday, 5 November 2009

Ayala Corp. sets new take on CSR

Miguel R. Camus
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=18151:ayala-corp-sets-new-take-on-csr&catid=24:companies&Itemid=59

AYALA Corp., the country’s oldest conglomerate, launched on Wednesday a new initiative which its current stewards believe will secure the company’s place in the future.

Ayala Corp. officials released the company’s first corporate sustainability report, a new measure hinged on the philosophy that businesses can be profitable and responsible at the same time.

“We had CSR [corporate social responsibility] and other initiatives, but now it is becoming a more concrete engagement. We would like to think we are the first in the Philippines doing this and it is also starting globally as well,” said chairman and chief executive officer Jaime Augusto Zobel de Ayala during yesterday’s briefing.

“Just because you are a responsible business entity does not mean you are a disaster from a financial point of view,” he added.

The report covers indicators in the triple bottom line of economic, environmental and social performance using Global Reporting Initiative standards. Units included in the report are units Ayala Land Inc., Bank of the Philippine Islands, Globe Telecom, Manila Water Co. Inc., Integrated Microelectronics Inc., among others.

For his part, vice chairman, president and chief operating officer (COO) Fernando Zobel de Ayala said the sustainability report will widen the company’s standards beyond the profit and loss statement. He added the company is currently working on a way to replicate this measure into its various business units.

On November 10, Ayala Corp. will hold the first Sustainability Summit where about 250 Ayala business heads will gather on how to address urgent sustainability issues such as resource conservation, enabling communities, lowering carbon footprint in production, among others.  

Jaime said CSR activities were previously focused on external effects that the conglomerate did not spend enough time looking inward.

“So by writing reports and looking inwardly, every unit is now made responsible for its own behavior and they know other units are watching,” he said, noting that this method will accelerate the process of fostering a strong sense of social responsibility across its units.

“It’s the beginning of a process…and over a period of 5 or 10 years [we] will have that kind of transformation,” said the company chairman.

This alternative approach to business, however, may limit the future prospects of the firm, a fact not lost on its leaders.

The Ayala COO admitted that there are lengthy discussions on the issue of sustainability and how it affects the business direction of the group.

“You’d be surprised at the amount of debate that takes place as we are study a particular sector to find out what the implications are,” he said, adding this may limit the choices of the Ayala group in terms of businesses it plans to enter.

For his part, Jaime said there is a “98-percent chance that we won’t go into [a certain business] if it doesn’t feel philosophically right.”

“At the end of the day, what has served us well as a group is the reputation of the company and the brand. We need to constantly reinforce that…those will be the tough choices that we make,” noted Fernando.

Meanwhile, the demand for this type of responsible business standard is growing. Citing the company’s experiences, Fernando said employees applying in the firm put a lot of focus on the conglomerate’s social responsibility initiatives.

“Actually, more and more people are joining businesses where they can have an impact. Another one is customers who we know are demanding responsible behavior,” he said.

Overall, officials believe that as the firm maps its course, having a sustainable business may be the way to secure its relevance in the future.

“We feel this will make us a better company and a stronger competitor. The models that are not sustainable I believe are institutions that will not last,” said Jaime.

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