The Future of Business

The future of business
Sustainability. Development. Impact.

PwC MAP 2019 CEO Survey
133 CEOs 80%

expect to change their
33%
have formal plans to fully
127 survey respondents
8 face-to-face interviews* production/service model in transition their business to
the next three to five years having a circular business
* Two interviewees also answered model
to promote more sustainable
the survey, and two interviewees
are co-founders practices
A message from
the MAP President
Rizalina “Riza” G. Mantaring
President, Management Association of the Philippines (MAP)
With the theme “The Future of Business: With this year’s Conference, the MAP hopes to
Sustainability. Development. Impact.”, the drive important conversations in the Philippine
10 September 2019 MAP International CEO business community by introducing innovative and
Conference focuses on the playing ground for breakthrough ideas from leading global speakers.
competitiveness and sustainability in the future,
which is in the arena of doing good, not just looking
The MAP is, once again, grateful to work with the
good; in purpose, not just profits; in driving social
Isla Lipana & Co./PwC Philippines for the fifth of
change, not just shareholder value.
a series of annual CEO surveys in the Philippines
being conducted by the latter which are envisioned
The MAP Conference has become one of the to benchmark the changes in how CEOs think,
biggest business events in the country. Last year, react and innovate.
the Conference drew about 700 delegates and was
live-streamed to over 2,500 students and teachers
Many thanks to Isla Lipana & Co./PwC Philippines
nationwide as speakers from around the globe
for serving as our Knowledge Partner, once again,
tackled the theme “From Programs to Platforms:
for the 10 September 2019 MAP International CEO
Business in the Age of Disruptions.”
Conference.
The MAP International CEO Conference continues

We would also like to thank all MAP members
to serve as a premier venue for bringing together
and other executives from the Philippine business
business leaders from various fields to share insights
community who participated in the Survey.
and experiences, to establish stronger business and
social linkages, and to imbue business leaders with
the passion and know-how to remain competitive in The MAP Conference and the Survey results
a highly globalized environment. will hopefully provide insights and jumpstart
discussions that will help in expanding the arsenal
of strategies and options available for business
leaders to survive the Fourth Industrial Revolution.
A message from
the PwC Philippines
Chairman
Atty. Alexander B. Cabrera
Chairman and Senior Partner, Isla Lipana & Co./PwC Philippines
A profitable business is not necessarily good I’d like to thank the 127 CEOs who have shared
business if it does not lead to “good” growth, which their insights with us. I am also extremely grateful
is sustainable and empathetic. Climate change, to the eight CEOs who have shared how they are
environmental damage, income inequality, depleting integrating sustainability not only in their business,
resources, inefficient production, and apathy – these but also in their lives.
are some of the serious issues that we, as business
leaders, need to address.
We are once again honored to serve as the
Management Association of the Philippines’
This year, we asked our leaders to step back, and Knowledge Partner for its 17th International CEO
look at how they’re doing their business. Nowadays, Conference. This is our fifth CEO survey with the
profitability and sustainability are no longer mutually MAP, and we are grateful for the continued trust and
exclusive. opportunity.
It is comforting that the number of CEOs who use We hope that the stories in this report will inspire
sustainable practices in their companies is growing. business leaders to look beyond revenues and
While most are still using the traditional practices profits. Creating impact, touching lives, developing
related to energy use and recycling, a good number communities – these should not just be part of our
have plans of shifting to a circular business model. corporate responsibility activities. Sustainability
should be embedded in all of our business activities
and decisions.
While incorporating sustainability in one’s business is
not that easy, our CEOs agree that our country’s top
problems such as rapid urbanization, environmental
issues, and ecosystem degradation should push the
companies to adopt sustainable practices.
A Philippine
CEO Survey
Traditional business models use In line with the theme of the 17th to transition to a circular business
linear methods of production MAP CEO Conference, “The model. While most CEOs expect to
and consumption, which are Future of Business: Sustainability. adopt more sustainable practices,
unsustainable. According to the Development. Impact.”, we asked they are hindered by high transition
United Nations’ Sustainability the CEOs about their views on costs and inadequate technology.
Development Goals statistics, sustainability and the changes that
we will need almost three planets they need to make to address the
We hope that this report will
to provide the natural resources issues that we are facing. This year,
encourage the leaders from both
needed should the global we are also featuring the stories of
the private and public sectors to
population reach 9.6bn by 2050. leaders who integrate sustainability
work together in achieving our
In the past decade, the world lost in their business strategies and
sustainable development goals.
over 3m hectares of forest areas. decisions.
Climate change, poverty, lack of
access to education, environmental
According to the CEOs,
damage, and inefficient production
urbanization, environmental issues,
and consumption are some of the
and ecosystem degradation are
concerns that keep CEOs awake at
the top concerns in the Philippines
night.
that should drive the companies
iv The future of business: Sustainability. Development. Impact.

Contents
Notable CEO Pulse Sustainability CEO agenda

sustainability
projects in the
Philippines
From 1996’s Philippine The Philippines’ How the CEOs are Sustainability initiatives
Agenda 21 to 2019’s CEOs’ thoughts on the addressing the current should no longer be
Green Forest country’s economy sustainability-related treated as independent
issues side projects within
the companies –
sustainability should
be embedded in a
company’s DNA
1 2 5 24
Other data Research Acknowledgements

methodology
Other information The survey was

in the data conducted by
gathering for this PwC Philippines
report in collaboration
with MAP
26 28 30
PwC MAP 2019 CEO Survey v
Notable sustainability projects
in the Philippines
1990s 2000s 2010s

1996 Philippine Agenda 21 National 2007 Metro Pacific Investment Corp.’s 2011 The Philippines’ Poverty
Agenda for Sustainable Development for (MPIC) “Shore It Up” Environmental Environment Initiative addresses poverty
the 21st Century Program and environmental impact (2011-2012)
Phase 1 and (2013-2015) Phase 2
The goal of PA21 is to establish economic MPIC’s program is an initiative to develop
and governmental policies, and integrate collaboration efforts with municipalities in The initiative concentrates on poverty
sustainable development into the maintaining and protecting ecosystems in reduction and sustainable development.
governance framework of the Philippines. coastal areas. This is possible through proper and
sustainable management of natural
1997 Agriculture and Fisheries 2007 Pantawid Pamilyang Pilipino resources and integration of pro-poor
Modernization Act of 1997 Program (4Ps) aims to eradicate poverty agenda and environmental concerns into
development planning.
Such act implements processes that will The human development program is
modernize and increase the profitability of focusing on providing support related 2012 Aklan LGU passed Ordinance No.
the agriculture and fisheries sectors, and will to education and healthcare to the poor 386
also address the challenges of globalization. (especially the children aged 0-18) by giving
cash grants to its beneficiaries. Ordinance No. 386 controls the usage
1999 Clean Air Act of 1999 of plastics and eliminates the use of
2009 EDC starts their sustainability styrofoam/styropor in the entire province,
It outlines the government’s measures flagship program BINHI Greening Legacy including Boracay.
to reduce air pollution and incorporate
environmental protection into its Vast greening program BINHI captures United Nations Development Program
development plans. 3.96m tons of carbon dioxide each year and (UNDP) establishes Time Critical Debris
saves threatened native tree species and Management Project for Typhoon Pablo
Bantay Kalikasan denuded forests.
The project supports the integration
ABS-CBN Lingkod Kapamilya Foundation Passage of Philippine Cooperative Code of debris management into disaster
Inc. created Bantay Kalikasan (Nature of the Philippines preparedness measures, livelihood and
Watch) to serve as a catalyst in addressing skills development activities, as well as solid
the worsening state of the Philippine To collectively reduce poverty, the State waste management.
environment. incentivizes the creation of cooperatives
in the Philippines by providing a favorable 2014 Mitigation of Toxic and Hazardous
business environment. Waste Contamination in Urban Areas:
Supporting Inclusive Growth
Government agencies and communities

in certain urban areas in the Philippines
and Indonesia will be handed industrial
pollution-focused technical assistance.
vi The future of business: Sustainability. Development. Impact.

2015 Advanced sustainable consumption The Philippine Center for Environmental DENR supports Aklan’s Ordinance No.
and production Protection and Sustainable Development, 386
Inc. (PCEPSDI) starts the assessment phase
A PHP153.9m project that plans to reduce of transforming tourism value chains The ordinance penalizes the use of
greenhouse gas emission by promoting policy disposable plastic items by accommodation
frameworks, providing incentives for producing This NGO initiative will lessen the greenhouse businesses in Boracay and other parts of
more green goods, moving towards low- gas emissions and improve resource efficiency Aklan.
carbon economy through procurement policy, in key tourism sector value chains.
and moving towards low-carbon economy Solar Philippines’ “Solar para sa Bayan”
through specific standards. President Rodrigo Duterte signed the Tax Initiative
Reform for Acceleration and Inclusion Act
United Nations backs the new 15-year (TRAIN) into law The initiative will provide better access to
poverty and climate solutions electricity to all Filipinos, especially to areas
The law provides income tax cuts for majority poorly served, at a cheaper price by 2022.
Through a 17-point plan, sustainable of the Filipino taxpayers, and raises additional
development for the people and the planet for funds to help support the government’s Build, Boracay closure and redevelopment
2030 has been set by international leaders. Build, Build and social services programs.
Boracay was closed for six months for its
Launch of UNISDR Private Sector Alliance San Miguel Corporation (SMC) launches rehabilitation.
for Disaster Resilient Societies, ARISE “Water for All” project
2019 Globe launches GCash Forest
ARISE supports the implementation of the This project is targeted at reducing SMC’s
Sendai Framework for Disaster Risk Reduction water consumption in its business operations Through the GCash app, consumers
which was adopted in March, 2015, at a UN to contribute in lessening the domestic use of can use “green” points—earned from
World Conference in Sendai, Japan. water. environment-friendly practices—to plant
and grow a tree on selected Philippine
2016 Indigenous Peoples and Local Launch of the National Resilience Council forests.
Communities’ Conserved Areas and
Territories The NRC enables both the government SEC Memorandum Circular No. 4,
and the private sector to work together in series of 2019 (Sustainability Reporting
The Department of Environmental and Natural making the country resilient to disasters. Guidelines for Publicly Listed Companies)
Resources principally pushes conservation Specifically, it has focused on one of the seven
and protection of key biodiversity areas in the Global Targets of the Sendai Framework: To SEC sets a “comply or explain”
country by establishing conserved areas and substantially reduce the number of affected memorandum for publicly listed entities
territories. people globally from disasters by 2030. to submit an annual sustainability report
starting 2020.
2017 Ayala rolls out an aggressive 2018 The Department of Science and
greenhouse gas reduction plan Technology (DOST) reseachers invented a SEC adopts global ASEAN social bonds’
green starch-based plastic technology standards
Targeting a carbon neutral status by 2022,
the lifestyle conglomerate exerts efforts in Researchers at the Industrial Technology SEC Memorandum Circular No. 8 and
reducing its greenhouse gas emmissions. Development Institute (ITDI) developed the first No. 9 Series of 2019 guidelines are
biodegradable plastic material substitute in the expected to help sustainable company
Philippines. initiatives to lure global investors.
PwC MAP 2019 CEO Survey 1

CEO Pulse
The Philippines’ Real GDP Growth Rate (%)
6.9
P 6.7
6.2
6.1
5.6
5.5
2015 2016 2017 2018 1Q2019 2Q2019
Source: Bangko Sentral ng Pilipinas
The Philippines had a challenging first half because Q: What do you think is the likely PH GDP growth
of the delayed passage of the 2019 national budget, rate for 2019?
negative impact of El Niño on agriculture, and the
construction ban during the election period. Such Lower than 5% 6%
factors resulted in a GDP growth rate of 5.5% in
5% to 6% 49%
the second quarter of 2019, the lowest since the
5.0% growth rate in the first quarter of 2015. While Greater than 6% to 7% 43%
falling below the government’s target growth rate
of 6.0% to 7.0%, the Philippines remains ahead of Greater than 7% 2%
its neighbors such as Malaysia, Thailand, Korea,
Taiwan and Singapore. The Philippines’ growing Real GDP growth rates of selected Asian
consumption and services sector helped minimize countries
the negative impact of the delayed government 6.8%
Vietnam
spending, helping the country maintain a faster 7.1%
growth rate than the other Asian countries. China

6.4%
6.6%
5.8%
India 7.4%
With the challenges faced by the economy, 49% of
5.6%
our CEOs say that the full year 2019 GDP growth Philippines 6.2%
rate will just be between 5.0% to 6.0%. Forty-three 5.1%
Indonesia 5.2%
(43%) percent of the CEOs, however, still believe
4.5%
that we will hit the set target growth of 6.0% to Malaysia 4.7%
7.0%. To achieve this, the economy will need to 2.8%
Thailand
grow by 6.4% in the second half of the year. Possible 4.1%
initiatives to help accelerate growth in the remaining Korea 1.8%

2.7%
months include the spending catch-up, which the 1.7%
government is currently reviewing. Taiwan 2.6%
1.1%
Singapore 3.1%
1Q2019
Source: Bangko Sentral ng Pilipinas 2018
2 The future of business: Sustainability. Development. Impact.

Q: How confident are you that your organization’s revenue growth prospects over the next 12 months
would be better than that of your industry?
51% 37% 7%
not very
2%
not confident
3%
don’t know
somewhat confident very confident
confident at all
Similar to the responses in 2018, our CEOs believe

Q: What do you think will be the key growth
that infrastructure, domestic consumption, and
drivers of the Philippine economy in 2019?
business process outsourcing and services will drive
our country’s growth.
Infrastructure
Despite the slower economic growth, our CEOs
remain optimistic with 88% saying that they are
76%
confident with their organizations’ revenue growth Domestic
prospects over the next 12 months. The expected
reforms such as the Corporate Income Tax and
consumption
59%
Incentives Reform Act that will gradually lower the
corporate income tax rate from 30% to 20% over a BPO and services
ten-year period as well as the ongoing initiatives such
as the Build, Build, Build program continue to boost
sector
49%
optimism in the business community.
Remittances
We have been asking our CEOs about their growth

43%
prospects outside the Philippines. In spite of the
ongoing trade war between the United States and Investments
China, most of our CEOs have identified these
countries as the most important ones for their growth
30%
in the next 12 months. Such findings, however, Global and social
are different from the results of our 2017 and 2018
12%
trends
surveys, where our CEOs identified Singapore,
Indonesia, and Vietnam as the most relevant
countries. Geopolitical events
While trade tensions between the United States

8%
and China have been growing, the impact on Asia
is so far negligible. As confirmed by the Asian Others
Development Bank’s report The impact of the trade
war on the rest of Asia, the net effect of the trade war
8%
on the GDP growth rates of the Philippines, Malaysia,
2018 results
Q: Do you believe that the Philippine economic Q: How confident are you that your organization’s
growth in 2018 will exceed the average economic revenue growth prospects over the next 12 months
growth in ASEAN? would be better than that of your industry?
Top factors
BPO & 48%
54%
Domestic services Somewhat
70% sector Confident
consumption
49% Remittances
67% Infrastructure 41%
Very
Confident
Other factors
25% 20% 5%
Investments Global and Geopolitical
social trends events
Q: Which of the following countries do you Q: How concerned are you, if at all, about each
consider most important for your company’s of these potential economic, policy, social,
overall growth? environmental, and business threats to your
organization’s growth prospects?
20%
Vietnam 14% Cyber threats 28% 46%
21%
19%
Indonesia 16% Geopolitical uncertainty 31% 53%
22%
Malaysia 16%
Speed of technological 32% 40%
14%
change
Singapore 22%
26% Availability of key skills 35% 45%
Myanmar 11%
Thailand 11% Over-regulation 39% 43%
11%
China 43% Climate change &
39% 43%
environmental damage
11%
USA 36%
Increasing tax burden 43% 37%
2017 2018 2019
Extremely concerned Somewhat concerned
Singapore, and Thailand, will just be between 0.1

2015-2017 top five threats
and 0.2 percentage points. In fact, some experts say
that Asian countries may benefit from the trade war Question: How concerned are you about the following potential
because US imports will be redirected from China to economic, policy, social and environmental threats to your
other Asian countries. company’s growth policy,
Top 5 economic, prospects?
social and environmental threats
Inadequate
Increasing tax basic Geopolitical Over-
Terrorism* burden infrastructure* uncertainty regulation
The Philippines’ improving relations with China

have a positive impact on our CEOs’ responses.
The stronger ties between the two countries, driven 2017 89% 83% 82% 81% 77%
by both countries’ leaders, are helping facilitate
economic deals and business collaborations. Recent
2016 79% 78% 64%
collaborations include the partnership between China
Telecom and Udenna Corporation for the third telco
slot. 2015 87% 76% 68%
The CEOs’ confidence on their revenue prospects is Top 5 business threats

Readiness to Speed of
evident because only a few are extremely concerned Bribery and respond to technological Availability of
corruption crisis* Cyber threats changes key skills
with the identified threats. This year, the CEOs are
paying more attention to what’s happening to the
government as well as the environment.
2017 79% 78% 76% 75% 72%
Geopolitical uncertainty tops our list of CEOs’

2016 76% 71% 67% 66%
concerns because of the regular news about trade
conflicts and shifting alliances. The government’s
push for reforms and new policies, however, may 2015 75% 70% 70%
be worrying the CEOs because 82% identify over-

regulation as one of the top threats to their business. Base: All respondents: 2015=79; 2016=98; 2017=114
*New opportunities and threats included in 2017 survey
In our past surveys, CEOs were mostly concerned

with issues related to policies and terrorism. This
year, CEOs are acknowledging that climate change
and environmental damage are serious problems that
we need to face.

Sustainability
The United Nations reported that 8.6% of the 7.7bn
8.6%
world population were living in extreme poverty in
2018, which is significantly higher than the target rate
of 3.0%. Globally, around 785m people lack access to
basic drinking water service, and around 3.6bn people
of the world population
live in water-stressed areas. In 2017, the global material
consumption grew from 87bn tons in 2015 to 92.1bn still live in extreme poverty
tons in 2017. Unless consumption is controlled, the
global resource extraction may grow to 190bn tons by
2060.
12.9%
of the population are
undernourished

83%
Sustainability practices already adopted
83% 46%
Improved
Efficient/lessened
waste
are doing sustainable practices in use of energy
collection
their business. 71%
Recycling/reusing 34%
materials Product life
extension
The worsening poverty crisis, climate change, lack of access Income stratification in the Philippines (as a %
to quality education, and environmental damage are making of the Philippines’ total household income)
sustainability a major concern for both the private and public
sectors across the globe. To help address such issues, the 46%
United Nations established the 2030 agenda for sustainable
2018 47%
development in 2015. Together with its 193 member
states, the United Nations identified the 17 Sustainable 7%
Development Goals (SDGs) and 169 targets with the vision of
stimulating action to address the problems related to people, 47%
planet, prosperity, and peace. 2017 47%
7%
In the Philippines, 21% of the total population in early 2018
were living below the poverty line of US$1.90 per day. As 47%
reported by the Institute for Economics and Peace in June
2016 46%
2019, the Philippines is also among the countries facing the
highest risk of climate change hazards. According to the 7%
report, 47% of the Philippine population are living in areas
of high exposure to climate hazards such as floods and
droughts. The recent disasters have made sustainability 47%
and climate change an unavoidable topic in the business 2015 46%
community. 7%
In our survey, we asked the CEOs to share how they are

addressing the current sustainability-related issues. Eighty- 48%
three (83%) percent of the CEOs say that they are doing 2014 46%
sustainable practices in their businesses, and most identified 7%
efficient use of energy and recycling materials as part of
their practices. Nevertheless, only 44% are measuring and
reporting the financial impact of their sustainable practices. Richest 20% of the population
Cost reductions or savings remain the traditional way of
Middle 60% of the population
measuring the impact, as confirmed by 48% of the CEOs.
Poorest 20% of the population
Source: Fitch
Source: United Nations

Key facts
75%
of crop diversity has been lost
840m
people have no access to 5m
from farmers’ fields electricity worldwide children still die before their fifth birthday
each year
617m
youth worldwide lack basic
30%
of the global population lack
60%
of the global population
mathematics and literacy access to safely managed lack access to safely
skills drinking water services managed sanitation facilities
13%
of the global population
Basic infrastructure 3 planets
could be required should the
like roads, information and communication
still lack access to modern global population reach 9.6bn
technologies, sanitation, electrical power,
electricity by 2050 to provide the natural
and water remains scarce in many
resources needed to sustain
developing countries
current lifestyles
29%
of the global energy is being
1/3
of all food produced –
50%
increase in global emissions
consumed by households that equivalent to 1.3bn tons of carbon dioxide (CO2) since
contribute to worth around US$1 trillion 1990
– end up rotting in the bins
21% of consumers and retailers,
or spoiling due to poor
of CO2 emissions
transportation and harvesting
practices
3.3m
hectares of forest areas were
lost between 2010 and 2015.
Poor rural women depend on
common pool resources and
are especially affected by
their depletion.

44%
Q: How are you measuring the impact of your sustainable practices?
Using sustainability
20%
of the CEOs say that they are performance indicators (SPIs)
measuring and reporting the Cost reductions or savings 48%
financial impact of their sustainable
practices Using the environmental, social
14%
and governance (ESG) rating
ESG considerations for private

Shareholderequity firms
value creation 4%
Others 14%
What do we mean by ESG issues?
Environmental, social and governance (ESG) issues cover a broad agenda. Therefore, we break the issues down into
five categories: Environment, Workplace, Community, Marketplace and Governance. The ‘ESG wheel’ below shows
33%
examples of issues within each category. The relevance of the issues will depend on the specific situation, for example,
ESG issues
related to a portfolio company’s sector or geography.
• Waste management
• Talent attraction and
• Hazardous materials/pollution
retention
• Water use • Employee development
•
•
Energy use
Global warming/
•
•
Employee welfare
Equality and diversity
have formal plans to fully adopt a
emissions to air • Occupational health circular business model
• Resource use and safety
• Biodiversity
Governance 18% Yes, implementing | 15% Yes, not
• Land contamination
• Governance of sustainability
yet implemented
issues
• Board level responsibility
• Anti-bribery and corruption
• Business ethics/conduct
• Grievance procedures
• Community impact
• Responsible marketing • Local economic

development
• Responsible products
• Human rights
• Sustainability within the
supply chain • Community investment
Companies, however, must look beyond the The changing customer behavior, technological
immediate
We recommend that impact of sustainable
a wide range of activities – from practices ondevelopment
strategy and policy profits. to tools creation
breakthroughs,
and use, and and resource scarcity are among
More sophisticated
training are needed to appropriately andmanageglobal ESG companies nowadays
risks and opportunities. the main drivers of circular solutions. Nowadays,
use quantitative and qualitative information to customers demand for more environmentally
report environmental, social, and governance friendly and socially responsible products and
(ESG) performance and issues. ESG is a more services. Technological breakthroughs such as
Strategy Policy Procedures Tools Training Reporting Assurance
holistic approach because it doesn’t only look at tracking mechanisms, communications systems and
the environment – it covers issues such as labor operating models that weren’t previously available or
practices, talent management, product safety, and affordable are now becoming mainstream, allowing
security, ethics, and diversity. By establishing ESG for greater product monitoring and increased ability
factors and metrics, a company
2 | ESG considerations for private equity firms | PwC
will have a better to extend the product lifecycle. The declining
idea of the true impact of its sustainable investments resource materials are encouraging companies to
and practices. The ESG criteria may include energy find alternatives such as replacements for fossil-
use, waste, supplier relationships, and transparent based materials.
accounting reporting.
In our survey, the CEOs identified urbanization,
To further help address sustainability issues, environmental issues, and ecosystem degradation
companies started adopting circular solutions in their as the top concerns that should drive companies to
businesses. The circular economy seeks to keep transition to a circular business model. Surprisingly,
products and materials in use for as long as possible, however, only 18% of the CEOs have formal plans
minimizing the amount used, extending their lifespan, that are being implemented to transition their
and maximizing reuse and recycling of waste. businesses to a circular model.

Top concerns in the Philippines that should drive the companies to
transition to a circular business model
1 Urbanization 2 Environmental issues 3 Ecosystem degradation
4 Changing
behavior
consumer
5 Disruptions in the supply and prices of
raw materials
‘Going circular’ explained

Corporate Sustainability Lessons Learned
The circular economy is often depicted as a series of loops, each Going circular | Our 10 year journey
Corporate Sust
2
representing a different way of managing products that are no longer www.pwc.co.uk/goingcircular Going circ
required by their owners (because they are damaged, defective, or simply w
unwanted). The loops represent a hierarchy. The closer the loop is to the
center, the less waste and environmental pollution created and the more
economic value retained in the product or materials.
Chart 1
‘Going circular’ explained
1. Recycling
ach Recovering materials from end-of-life products for use as raw
The circular economy 1. Recycling
is oftenexcluding incineration
f materials in another process, to generate
depicted as alead
series Recovering materials from end-of-life products for use as raw
o energy. May to of loops, each
materials of the same quality, lower quality
representing materials in another process, excluding incineration to generate 2. Remanufacturing
rs (down-cycling)a different way of(upcycling). For organic matter,
or higher quality
managing products that or
areanaerobic
no energy. May lead to materials of the same quality, lower quality Disassembling products at the
may refer to composting digestion1.
longer required by their owners (down-cycling) or higher quality (upcycling). For organic matter, component level rather than into
). (because they are damaged, may refer to composting or anaerobic digestion1. separate materials, replacing
hy. co
defective, or simply unwanted). broken or outdated
out-dated parts to make
op is, The loops represent a hierarchy. a new product for sale or lease.
brok
ntal The closer to the centre the loop is, This avoids a new product having
a
e the less waste and environmental
to be manufactured.
Th
e pollution created and the more
economic value retained in the
product or materials.
3. Reuse
5. Redesign Selling or donating a product
Developing products that use in its original form, or with
5. Redesign
fewer materials or have a smaller little change, which avoids
Developing products that use
environmental footprint, that are a new product having to
fewer materials or have a smaller
designed to be more durable, or be manufactured. May also
environmental footprint, that are
to be offered as a service through include redistribution of
designed to be more durable, or
a leasing or take-back model. unwanted food.
to be offered as a service through
Also includes adaptations to make
a leasing or take-back model.
products easier to maintain, reuse,
Also includes adaptations to make
remanufacture or disassemble
products easier to maintain, reuse,
and recycle at end-of-life. Aims to
remanufacture or disassemble
tackle the most material impacts,
and recycle at end-of-life. Aims to
based on lifecycle analysis.
tackle the most material impacts,
based on lifecycle analysis.
4. Maintenance
Extending the life of a product with its first owner,
4. Maintenance
either via a repair or refurbishment service, or by
hereby waste Extending the life of a produ
making it easier for users to repair it themselves.
den waste, is either via a repair or refurbish
n be used as a 1. Anaerobic digestion is a process whereby waste This delays the purchase of a replacement product.
making it easier for users to
hich can be used organic matter, such as food or garden waste, is
converted into digestate (which can be used as a This delays the purchase of a
fertilizer
fertiliser on farmland) and biogas (which can be used
to generate clean energy).

“I saw that there was a magnificent
amount of money that could be
made in the for-profit sector. I
fantasized that these companies
would direct their profits towards
a social good. Of course, there
weren’t enough companies that
wanted to necessarily share
their profits in that way. I then
decided to come up with my own
version – a hybrid of a commercial
company that would devote 100%
of its profits to a social good,” she
shares.
To date, Hope in a Bottle sold 27m

products, and built 91 classrooms.
When asked why Nanette chose

water as a product, and education
as the direct impact, she answers:
Hope is tangible. “The choice of selling water to
benefit classrooms was a super
easy one. I wanted a message that
was simple that anybody could
Nanette Medved-Po understand. You can be a taipan
Chairwoman and President | Generation Hope or you could be the taipan’s driver,
and you would still be able to
understand the model. I thought
of the simplest product out there.
I chose bottled water because it’s
not subject to trends or taste. What
was the social good that I want to
benefit? To me it was a no-brainer;
The lack of classrooms and facilities as well as it was education because it gives
inadequate textbooks are among the problems you the greatest ripple effect for
faced by the Philippine education sector. As of every dollar invested. The reason
June 2018, the Department of Education (DepEd) why I further distilled that down to
estimates that the country needs over 85,000 classrooms is because I wanted
classrooms to support the increasing population the impact to be something easily
of students in public elementary and high schools understood. If you’ve made the
nationwide. To help the country’s education system, investment in classrooms today,
Nanette Medved-Po started Hope in a Bottle (Hope) somebody can come in tomorrow,
in 2012 to sell purified drinking water, and donate next week, next month, next year,
100% of the company’s profits through DepEd’s and still see that investment.”
Adopt-a-School program.
Hope realizes its vision through

its partnership with the DepEd.
“We work with the Department of
Education, and they give us a list
of the locations where they need
the classrooms the most. Our team
then vets those locations, and we
select where we build.”

To date, Hope has impacted the our plastic-neutral move, which
lives of almost 17,000 students we started in January 2018.
through the classrooms it has What we’ve done is we’ve added
built. Nanette shares some of an internal plastic tax to all the
their success stories: “A lot of the products that we sell. When we
stories we follow are the stories sell a bottle of water, we compute
of the communities as a whole. the amount of plastic in grams that
We tend to choose locations that we put out in the marketplace,
may not have a single classroom and we commit to our customers
structure at all or places with an that we will recover 100% of that
extreme shortage. They’re usually weight in plastic post-consumer,
communities that are suffering in and process it together with our
general, and a build allows them to co-processors,” Nanette says.
really have a tangible difference in Through processing, the collected
the way their children learn.” plastic items are converted to fuel
that may be used at facilities that
“What was the make cement, steel, and other
products. The company also
social good that I recently introduced Hope in a
Box, which comes in Tetra Prisma
want to benefit? Aseptic. Seventy-five percent
To me it was a (75%) of Tetra Pak cartons are
composed of paperboard, which is
no-brainer; it was fully recyclable.
education because
To impact more lives, Hope
it gives you the recently launched Hope in a
greatest ripple effect Coconut in partnership with Vita
Coco. “Vita Coco has launched
for every dollar the Hope in a Coconut line, and
invested.” that contributes about PHP5 per
pack into a fund that benefits
smallholder coconut farmers in
Mindanao.”
Balancing profitability and impact
has been key to Hope’s success.
Asked how the government can
“We are profitable because if
help social enterprises succeed like
we don’t have any profits, we
Hope, Nanette replies: “There are
can’t build our classrooms. Our
lots of unofficial tax collectors like
operations are actually split
Hope where 100% goes to projects
into two. We have the for-profit
that are actually supposed to be
entity, which runs our commercial
paid off by the government. The
operations, and has all the
government may want to review
discipline that you would expect
how they tax social enterprises
to find in a corporation. They then
because in many ways, we’re trying
then generate the profits that are
to help them solve the country’s
funneled to our non-profit, which
problems.”
spends the money to build the
classrooms.”
Aside from helping solve inequality

through education, Hope also has
sustainability initiatives for the
environment. “The biggest part
of our sustainability initiative is

“We had our first integrated summit
to finally break the ice, and say
that corporate governance, risk
management, and sustainability
cannot be discussed separately. This
means that we, in Ayala, believe that
we need to be living a very united life
of being able to integrate these three
very important disciplines.”
Incorporating sustainability in
projects is nothing new to AC
Infrastructure. “We’ve always been
very careful with the things that we
get ourselves involved in. In AC Infra,
we’ve always said that our endgame
is always the user, the commuter, or
the person at the end of the chain.
We always start with the pain points.
We look at the pain of travelling or
commuting in Metro Manila, and we
Sustainability, see how people suffer in a one-hour

wait to get on a train. We talk about
the inconsistencies in schedules that
innovation, and make people’s lives so challenging.
Some people wake up as early as
profitability should 2.30am because they can’t risk being

late for work. We told ourselves that
co-exist.
we need to provide a reliable and
consistent commuting service option
to the people because we’re affecting
their lives.”
Rene Almendras
President and CEO | AC Infrastructure Knowing how commuting or travelling
Holdings Corp. can be difficult in Metro Manila, AC
Infra through a consortium of seven
conglomerates has also submitted
an unsolicited proposal to transform
the Ninoy Aquino International Airport
(NAIA). The consortium consists of
As a 185-year-old organization in the Philippines, AC Infra, Aboitiz InfraCapital, Inc.,
the Ayala group has transformed its business Alliance Global Group Inc., AEDC,
by entering into new industries and regions Filinvest Development Corporation,
with innovation and sustainability as part of its JG Summit Holdings, Inc. and Metro
mission. Just recently, the Ayala Group had its Pacific Investments Corporation.
first Integrated Corporate Governance, Risk “We saw that the actual hot spot
Management and Sustainability Summit with is in NAIA itself – how the airport
the objective of incorporating sustainability in was designed and run, the need to
their growth strategies. Rene Almendras, AC upgrade the facilities, and the need
Infrastructure Holdings Corp. (AC Infra) CEO, shares to have better scheduling of aircraft,
how they are developing infrastructure projects etc. We are also proposing to build a
with efficiency, reliability, and sustainability as part railway system within the airport that
of their goals. connects to the LRT1 and subway
lines, and maybe even to the MRT.
This is so we won’t have 65m cars
going in and out of the airport.”
Other investments and initiatives to innovation, profitability, and
help improve the commuters’ lives sustainability. I think they’re all
include the improvements in LRT1. necessities. Profitability is no
“At peak hours in LRT1, the longest longer just a one-off today. Most
waiting time is eight minutes. How investors are looking for consistent
did we do that? We reduced the performance. They want to invest
train cycle time, we have 99% in something that is operationally
accuracy in schedules. Now, and financially sustainable. Is there
people’s lives can be scheduled a trade-off between sustainability
better. Achieving sustainability and innovation? I don’t think
goals is not just our focus. It’s so. Sustainability, innovation,
really trying our best to respond to and profitability are not mutually
the individual commuters’ need.” exclusive,” Rene shares.
“I think the biggest Aside from developing

pain point in Metro infrastructure projects, AC
Infra believes in investing in its
Manila is transport. communities. Initiatives that the
company has started include the
You don’t solve the partnership with the Muntinlupa
problem in bits and LGU to offset its carbon footprint,
the Live for the Rivers Movement
pieces. We need to Coalition where the company
put solutions that will provided livelihood programs
to the poor communities and
last for a long time.” engaged volunteers to clean up
the Estero de Tripa de Gallina, and
more. Asked how they measure
Asked how AC Infra ensures that all the impact of such projects, Rene
of their projects are environmentally answers: “In Ayala, we refer to
sensitive, Rene responds: “From the United Nations’ Sustainable
the very beginning, we will not do Development Goals. This means
anything that’s not good for the that we may do something that
environment. Our LRT1 trains, for may not have a direct revenue
instance, run on electricity. We’re impact on our business. It’s not
adhering to the highest standards just about profits, and it’s no longer
globally. We’re making sure that just CSR. We shouldn’t be looking
we don’t just throw used oil to at specific projects. Sustainability
the ground. The express toll road has to be part of the way we do
that we have enhances travel, and business.”
helps reduce fuel consumption.
More than that, we’re planting
With its commitment to help
trees. We’re making sure that
address the growing infrastructure
the surroundings are clean. Our
needs of the country, Rene bares
belief is the projects that we do
their plans: “I think the biggest pain
actually increase efficiency. If you
point in Metro Manila is transport.
were to measure distance per
You don’t solve the problem in
liter consumed, there’s a greater
bits and pieces. We need to put
enhanced productivity from all
solutions that will last for a long
transport vehicles because of the
time. The solutions have to be
way we do things.”
integrated. It’s a combination of
light rail and mass transport. It’s all
As part of a listed conglomerate, about having integrated solutions.
Rene says that profitability is If we can build NAIA and fix it, the
not only their main objective. “I impact will be great.”
don’t think you need to balance
“The country consumes about 4bn
kilos of fresh produce annually.
The total farm output here in the
Philippines is only around 3.3bn
kilos annually. We actually import
around 700m to 800m kilos each
year. The selection and quality
of produce that we’ve seen in
the supermarkets were lacking in
terms of quality when compared
with our other peers in Southeast
Asia. What we wanted to do was
improve that situation by applying
technology,” says Earl.
With the vision of helping provide

good quality agricultural products
to Filipinos, Earl and Derya
started growing high-value crops
such as dinosaur kale, roquette
arugula, cilantro, parsley, and
Farming can be Genovese basil inside 40-foot

shipping containers through
hydroponic farming, which are then
weather proof. sold through the supermarkets.
“There’s controlled temperature
and humidity. We even use special
lighting where we can control the
Earl Lim and Derya Tanghe spectrum or the number of hours
Co-Founders | NXTLVL Farms we provide light to the plants.
With technology, we are able to
create growing environments that
are optimal for the crops that we
want to grow. We were able to
Despite being an agricultural country, the improve the quality as well as the
Philippines remains a net importer of agricultural consistency while expanding the
products. In 2018, the Philippines had an capacity of what can be grown
agricultural trade deficit of US$7.3bn, 41% here in the country rather than
higher than the US$5.2bn deficit in 2017. Poor importing,” Earl further shares.
infrastructure, high transportation costs, lack of
access to market and financing, and backyard Derya says that they also want to
farming were among the reasons why the country’s help establish pricing consistency
agriculture sector had not been keeping up with in the market. “We’re focusing
population growth. Such factors as well as climate mostly on non-native plants. From-
change motivated co-founders Earl Lim and Derya farm-to-table produce generally
Tanghe to start NXTLVL Farms. touches more than 20 pairs of
hands before someone gets it on
their plate. For us, we really wanted
to focus on reducing the carbon
footprint or the food miles – the
amount of distance the food travels
from the farm to the actual table.
This allows us to really focus on
fresh produce, and make them

available to everybody year-round Through their indoor farms,
without surprising people with NXTLVL Farms also helps reduce
pricing inconsistencies.” the reliance on imports. “With the
imported produce, it’s oftentimes
three times the price of locally
“The typhoons grown produce. Having our farms
don’t bother us. placed in the city allows us to
compete against the importers
We’re able to create and traders in terms of pricing and
environments that availability,” says Earl.
the crops like. This When asked how the government

allows us not only to can help the farmers in the
Philippines, Derya answers: “I
control the yield, but think the number one for me is
also the quality and farm roads and logistics. In the
Philippines, the logistics costs are
the taste.” around 35% of the product cost.
In other countries, such costs are
just around 15%. You’ll see that
When compared to traditional our cost of production here is more
farming methods, the co-founders expensive because of the huge
say that hydroponics may have gap in logistics. What we would
more advantages. “Our indoor like to see are better roads to a lot
farms are not that susceptible of farms. What we hear from other
to weather. We have a lot more farmers is when a typhoon or storm
control over how we grow the hits the roads, the produce that
crops inside. The typhoons don’t they harvest can’t even be shipped
bother us. We’re able to create out to the city.”
environments that the crops like.
This allows us not only to control
With the company’s six containers,
the yield, but also the quality and
what’s next for NXTLVL Farms?
the taste. We’ve actually spent a lot
“We what we would like to do
of time fine-tuning the taste of the
is deliver our products directly
crops growing inside our farms. We
to the end consumers. This will
do this by controlling the humidity,
involve situating our farms less
lighting, and nutrients,” says Earl.
than 20 or 10 kilometers away
from the supermarkets to reduce
Asked if they are competing the food miles. What we want to
against traditional farmers, Derya ensure is when you order from us,
replies: “What we do is different. you’re getting something that’s
We try to grow items that are not always fresh without throwing
readily available in the Philippines. away anything. What we’d also
We don’t grow rice or cabbage. like to do is build more sites in
We grow mostly produce that the Philippines. We will spread
would not grow very well if just our sites across Metro Manila,
grown out in the open fields here and harder-to-reach places like
in the Philippines. We don’t want Siargao and Boracay. A lot of
to compete against the traditional produce in the Philippines come
farmers.” from Benguet, Baguio, and the
Cordilleras, which are really far. Our
vision is really to bring the farms
closer to the end consumers.”

The government has since made
headway into disaster risk resilience
and has recognized the private
sector as a major factor in reducing
disaster risks. Enter one of the
country’s largest integrated property
developers – SM Prime Holdings Inc.
(SMPHI), which had long advocated
resilience and sustainability.
Mr. Hans T. Sy, SMPHI Chairman of

the Executive Committee, shares the
story that inspired him to help lead
disaster-related initiatives both in
their company and in the Philippines:
“It all started in 1988 when we had
the fire in SM Makati. At that time,
I was already heading our group’s
construction team. That experience
made me realize that people should
not go through those kinds of things.
DRR requires PPP. We could have prevented it from

happening.”
Hans T. Sy Since then, Hans started looking

Co-Chairman | National Resilience Council at environment-related issues,
and incorporated solutions in their
businesses. “In 1995, I told our
board that the freon in our chillers is
unfriendly to the environment, and
we should change them. After so
many years of convincing the board,
we started to change our equipment
in year 2000. I realized then that
The Philippines’ location along the Ring of Fire the new equipment were also more
makes the country prone to natural disasters. The efficient, and we were even able
deadliest disasters in the past decade include to save on costs when the price of
Typhoon Bopha (Pablo) in 2012, Typhoon Haiyan power went up significantly. From
(Yolanda) in 2013, Typhoon Koppu (Lando) in 2015 then on, I made sure that I controlled
and Typhoon Mangkhut (Ompong) in 2018. To help the expenses really well. I also
create solutions to disaster risk reduction (DRR) started using the 10% contingency
challenges, the National Resilience Council (NRC) costs in our projects for DRR
was established in November 2017 as a science- initiatives.”
and technology-based public-private partnership
(PPP) pursuing a disaster- and climate-resilient
country. Mr. Hans T. Sy of the SM Group is the co- Especially through the SM
chairman of the NRC. Supermalls, Hans believes that
they should also communicate the
importance of DRR to the micro,
small and medium enterprises
(MSMEs). “It cannot be only what
is good for me or for our family. We
have about 25,000 SMEs with us.
If a disaster hits them and they get
cut off, we will be affected too. What
we found out about the MSMEs is
that their understanding of disaster-
related incidents is limited. When we “Through my role in ARISE, I tapped
asked them what will happen if there’s the United Nations to help me boost
a fire or an earthquake, and they the group. When they offered the
need to shut down, they don’t have co-chairman role in the NRC to me,
solid plans. That was why we started there was only one answer – and that
creating information and awareness was a yes.” With his commitment
campaigns. We have introduced the and passion to DRR, Hans leads
Data Storage Program and workshops the NRC together with Secretary
for Business Continuity Plans (BCP) Delfin Lorenzana of the Office of
with our tenants,” Hans shares. Civil Defense, the co-chairman
representing the government.
NRC’s current partners include
“DRR is the local government units (LGUs),
responsibility of both foundations, private corporations,
national government units, the
the government and the academe, civil society organizations,
private sector, and both and business organizations.
should work together.”
“I kept telling (members of) the
private sector that the issues
Hans’ DRR initiatives went beyond the related to DRR should not only be
SM Group and its tenants. In 2015, addressed by the government. DRR
Hans was elected board member of is the responsibility of both the
the UNISDR Private Sector Advisory government and the private sector,
Board. “I met Margaret Wahlstrom, and both should work together.” The
the head of the United Nations NRC recently launched the Adopt-
International Strategy for Disaster A-City campaign, an innovative
Reduction (UNISDR), at a dinner and city-specific partnership model that
she was listening to my experiences in will share private sector resources
DRR. I told her that I’ve been involved with LGUs and other partners. Other
in DRR since the 1990s. She then sent initiatives include the three-year
people to document the things that Resiliency Leadership Program
we were doing. She couldn’t believe that guides LGUs in their own
that we were active in DRR. She then resilience initiatives; the Resilience
formally invited me to be part of the Scorecard for LGUs, a guide to
private sector of UNISDR.” determine LGUs’ preparedness
and transformation towards
resiliency; and Climate and Disaster
In 2016, UNISDR launched ARISE
Risk Assessment Program for a
or the Private Sector Alliance for
more holistic approach on risk
Resilient Societies. Hans was the
assessments.
only Filipino member of the ARISE
Global board. UNISDR also invited
SM Prime to be the secretariat of the Despite his achievements within the
ARISE Philippines Local Network, SM Group and in the community,
which is composed of private Hans thinks that he still has a lot
companies that share the same to do. “I can’t say that I’ve already
objective of establishing innovative achieved everything. My friends were
disaster resilience practices. To asking me how much I can do to
date, the United Nations for Disaster save the world. I told them that I’m
Risk Reduction (UNDRR) formerly not saving the world. What I’m trying
known as UNISDR headed by Special to do is simple – I’m doing my part,
Representative of UN Secretary my share. If I can get everyone to do
General (SRSG) Mami Mizutori has the same, we’ll create more impact
invited Hans to share best practices of towards a resilient Philippines.”
the private sector in DRR in UN Global
Platforms.
Asked why Ruel decided to help
farmers, he answers: “Helping
farmers was more of a personal
decision. I myself came from a
family of farmers, and knowing the
struggles of farmers compelled
me to solve the problems that our
relatives also experienced.”
Ensuring that there are enough

farms to support as well as the
right number of investors are
among the main goals of Cropital.
“One thing that is critical for us to
do is to inform the investors what
farming is really like, and when
the cash flows are generated by
the farmers. The investors’ returns
as well as the repayment really
depend on the life of a farm. Our
role is to make sure that we’re
Crowdfunding makes transparent enough, and inform the

investors that there’s really a lot
of uncertainties in the agriculture
farms viable. sector. This is also the same reason
why farmers are having difficulties
accessing loans from financial
Ruel Amparo institutions. That’s the main point
CEO and Founder | Cropital of having Cropital – to connect the
farmers to the investors who are
willing to support them despite the
uncertainties.”
Since starting in 2016, Cropital

Forty-seven percent (47%) of the Philippines’ total has raised US$1m through its
land area of 30m hectares are agricultural. The platform, and has provided loans
country’s dependence on agricultural products to 800 farmers. Ruel shares some
as well as the jobs provided to over 10m people of the changes in the lives of their
make agriculture a significant player in the farmers: “Every time a farmer pays
Philippine economy. Given its role, the government off the loan, and applies for a new
has been strongly promoting and supporting one, we check the amount and
sustainable agriculture by introducing new the reasons for the renewal. One
technologies and methodologies to farmers. Lack of the interesting stories we heard
of access to capital, however, is one of the factors is a farmer renewed a loan for a
preventing farmers from achieving profitability lower amount. When we asked
and sustainability. To help bridge the gap, Ruel him why it was lower, he told us
Amparo established Cropital in 2016 to provide a that he actually saved during the
crowdfunding platform that connects investors previous harvest cycle. Some
to farmers. Through Cropital, investors provide of those who asked for higher
funding to the curated farms for a certain cycle. loans, on the other hand, told us
Upon harvest, and once the produce is sold, the that they needed bigger amounts
capital is returned to the investors together with because they were expanding by
their share in the profits. renting the adjacent farms. These

are some of the changes that we cycle because the rainy season
were able to see on the ground. doesn’t always start in June like
Other indirect impact include the it used to. The arable land also
neighbors getting jobs, the farmers’ becomes smaller in low areas that
children completing their studies, are vulnerable to flooding. When
and more.” Ruel also confirms this happens, the farmers can only
that the farmers became more plant once a year – during the dry
financially disciplined because of season.”
Cropital. “In a way, the farmers
are now more disciplined because
While Cropital has helped 800
they understand that they are liable
farmers, Ruel believes that there
not only to one person, but also to
are still thousands of farmers who
multiple lenders. They also feel that
need financing. “Our goal is to help
they need to be more responsible
3,000 farmers by July 2020. Right
because the lenders may call their
now, we’re only tapping individual
attention.”
lenders using our peer-to-peer
lending platform. For us to help
“That’s the main more farmers, we want to be able
to access the formal institutions
point of having such as banks who have the
Cropital – to connect capital to lend. That will really be a
big jump for the agriculture sector,”
the farmers to the Ruel says.
investors who are
willing to support
them despite
uncertainties.”
Ruel agrees that sustainable

agriculture should be promoted.
“We tell our farmers to use more
organic matter every other season
instead of the normal fertilizer. By
doing this, the nutrients in the soil
are rejuvenated, and they achieve
higher levels of field efficiency. We
also ask our farmers to use better
seeds. Instead of just selecting
the best seeds from their previous
harvest, we ask our farmers to use
certified or hybrid seeds to reach
the maximum yield potential.”
Ruel admits that climate change

can disrupt agriculture. “Weather
conditions impact farming in
several ways. In terms of the
calendar, famers are now being
advised to adjust the planting

“Our group has been involved
in energy for the longest time –
associated with our investment
in Meralco, and our entry back
to power generation. It all began
with the development of the gas
projects with Malampaya. The call
of the government at that time was
to respond to the power crisis,
what we did was to develop very
reliable and efficient gas-fired
power plants,” says Giles.
Through these plants, the

Group was able to tap the local
indigenous gas from Malampaya
while using low carbon solutions.
“Our plants were far less polluting
than coal. That really began our
journey to the low-carbon clean
energy space. As we progressed
Electricity can be and looked at the opportunities

to expand, that transition towards
renewable energy became very
powered by good. compelling for us. When you look
at our country, we actually don’t
have a lot of fossil fuel reserves.
Giles Puno Our ambition was to create energy
President and COO | First Philippine Holdings solutions that would tap the
indigenous sources of energy,”
Giles shares.
To continue its vision of providing

clean energy to the Philippines,
The Philippines periodically experiences power First Philippine Holdings, through
supply deficiencies, with the latest crisis in the first its subsidiary First Gen, acquired
half of 2019. While the country generated 99.8 TWh the 40% economic interest/
of power in 2018, the Department of Energy said 60% voting control in Energy
that an additional 44.8 GW of new power capacity Development Corporation (EDC)
will be needed by 2040 to support the increasing in 2007. “We said to ourselves,
active population. To help address the power issues geothermal is the perfect fit for us.
back in the 1990s, the government called the private When EDC was privatized, we bid
sector to respond, and the Lopez Group, through and won the controlling stake. EDC
First Philippine Holdings (FPH), was among those at that time, and even up to today,
who helped. Starting with their investment in Manila was the dominant geothermal
Electric Company (Meralco) in the 1960s, Giles player in the country. When you
Puno shares their journey to providing clean and compete against coal in particular,
renewable energy to the Filipinos. geothermal is a far superior offering
to our customers who are not
only concerned about their energy
needs, but also with using low-
carbon solutions like geothermal.”
At present, FPH has wind, solar,

hydro, geothermal, and natural

gas power plants across the initiatives and vision to its investors
Philippines. “We developed a 150- and other stakeholders. “We had
MW wind farm in Burgos then a to be very explicit about it. We had
7-MW solar farm in Burgos, and to explain to our shareholders that
a number of hydroelectric power we felt there are solutions that will
plants. In combination, we have enable us to do well and do good
around 3,500MW of capacity at the same time. The choices we
delivering about 20% of the energy make today actually make sense
requirements of the country.” because these choices also reduce
our exposure to potential stranded
costs in the future.”
When asked if they have invested
“We feel that climate change is a

“We have never concern for the country especially
made an investment because there is a realization that
ironically, the stakeholders who are
in coal. ...our most affected by climate change
customers are not are the lowest income households
in the country. We have to think
only concerned about our choices today.” While
FPH’s main business involves clean
about their energy energy, FPH also has the goal of
needs, but also helping provide good quality jobs
to Filipinos. Through FPH’s First
with using low- Philippine Industrial Park, the group
carbon solutions like and its locators have created over
60,000 jobs that benefit the seven
geothermal.” host barangays in Santo Tomas
and Tanauan of Batangas.
Despite having contributed

in coal, Giles answers: “We have
PHP131.52bn to the environment
never made an investment in coal.
and various stakeholders in 2018
Our geothermal assets suffered
through economic, social, and
quite dramatically during Yolanda.
environmental contributions,
You can say it was a one-off, but
Giles believes that they need
that one in a thousand event was
to do bigger things to help the
happening more with the strong
Philippines address issues such as
typhoons. We had to attribute it
climate change. “We continue to
to something that was different
push for more gas-fired plants; we
from what we were experiencing
are investing over US$1bn in the
in the past. That was climate
LNG import terminal to eventually
change. So in 2016, we made an
replace the Malampaya gas. What
official announcement that we will
keeps us awake at night is the fact
never invest in coal, and that we
that the Malampaya concession
will champion other sources of
will end sometime in 2024. We
cleaner and/or renewable sources
have to prepare for a world that
of electricity. We said to ourselves
goes beyond Malampaya. This
that climate change is going to
means that the current gas plants
be an important factor in all of our
that we have will need replacement
decisions,” Giles said.
fuel eventually. That will probably
come in the form of LNG. That’s
Known for its Powered by Good how we’re going to solve the
campaign, Giles shares how they upcoming challenge.”
communicated FPH’s sustainability

“Shell’s belief in sustainability
remains consistent. Even before
the word sustainability was
invented, we have been practicing
principles that are very similar to
what sustainability in its current
form is trying to espouse. Our
approach, however, has evolved
over time. In the earlier times,
sustainability was revolving around
the environment. Nowadays,
we have a more holistic view.
Sustainability now encompasses
equally important subjects such as
economic development, alleviation
of poverty, generating employment,
among others, says Cesar.
As part of a group with presence

in over 70 countries, Shell is well
aware of the impact of climate
A lower carbon future change. “We believe that climate

change is something that needs
to be addressed for the greater
is underway. good of the planet. The energy
transition to a lower-carbon future
is under way. With the nature of
Cesar Romero our business, we probably feel that
Chairman | Shell Companies in the Philippines dynamic more than most. We have
identified what our aspirations are,
which are very aligned with the
Paris Agreement. Right now, Shell
is looking at renewables, new fuels
and supplying electricity – because
The large and growing population as well as the that is what our customers will
rising disposable income in the Philippines have want, and we intend to stay with
been driving the oil and gas industry. For several our customers over the long term,”
years, consumption of refined products and shares Cesar.
ethanol had exceeded the total volume produced.
In 2018, for instance, consumption reached Having invested over US$900m in
473,500 barrels per day (b/d) while production research and development (R&D)
was just at 236,000 b/d. The growing demand for globally, Cesar shares the role of
fuel established the role of oil and gas companies sustainability in Shell’s R&D work.
in the Philippines. Having been in the country “We embed sustainability principles
for 105 years, Shell Philippines has been fueling in almost all of our projects. In
not only the Filipinos’ cars and plants, but the fact, we also incorporate a notional
economy and the communities as well. Cesar carbon tax in our activities to get
Romero, Shell Philippines’ chairman, shares how a feel of the carbon impact of
an energy and petrochemical group like Shell can a particular project. A lot of the
be at the forefront of sustainability initiatives in the results of our R&D work can be
Philippines and across the globe. found in the energy efficiency and
efficient production space. Our
more progressive and forward-
looking activities involve playing
a part in the renewable energy
space. We’ve partnered with a lot
of entities involved in solar, wind, itself. To be able to address the
and energy storage. Our most challenges, you need to address
cutting-edge initiative, however, them both in the demand and
is the carbon capture and storage supply sides. Quite often, the focus
project. Using our knowledge in is on sustainable production, but
upstream exploration wherein I hope that there will be an equal
we extract resources from the interest in sustainable consumption
ground – we do the reverse of of energy.”
it. We capture the CO2 that is
produced in industrial facilities,
Cesar says that they are looking
and we reinject them to restore
beyond energy when it comes
the CO2 in the rock formations
to achieving sustainability goals.
underground. We have a number
“One effort that we’re very proud
of facilities using this technology,
of is our Movement against
which we believe will be critical as
Malaria project wherein we
we progress to energy transition.”
we’ve significantly contributed in
reducing the number of deaths
from over 100 when we started
“Using our knowledge the program in early 2000 to just
in upstream four deaths in 2018. Only four
provinces in the Philippines have
exploration wherein yet to be declared malaria-free. We
we extract resources also have the Gas Mo, Bukas Ko
program, an educational program
from the ground – we that was initially offered to retail
station crew and eventually to the
do the reverse of it. dependents of workers in public
We capture the CO2 transport as well as contractors
of Shell.” Through its various
that is produced in programs implemented by its
industrial facilities, social development arm Pilipinas
Shell Foundation Inc., Shell
and we reinject them Philippines’ had a total distributed
economic value of PHP219.3bn
to restore the CO2 in and community investment of
the rock formations PHP31.0m in 2018, according to
Shell’s Sustainability report.
underground.”
As it celebrates its 105 years of
operation in the Philippines, Cesar
Asked how both the government
remains excited about the future.
and the private sector can help
“We’ve always believed that a good
promote sustainable energy in the
business is also good for society
Philippines, Cesar replies: “First of
and vice-versa. We have been here
all, I think one key issue that needs
for 105 years, and we hope to stay
to be dealt with is familiarity, use
for another 105 years. They key to
and leveraging technology. The
achieving this goal is to ensure that
solution to this will involve science.
our products and services go hand
Then you have the important role of
in hand with nation building.
collaboration. To be able to harness
all the technologies, all the sectors
should be collaborating with each
other. We’re not just talking about
the government and the private
sector, but even the consumer

CEO agenda
Eighty percent (80%) of the CEOs expect to change Q: Which of the following constraints are stopping
their production/service model in the next three to you from fully adopting sustainable business
five years to promote more sustainable practices. practices?
Most of these CEOs plan to increase efficiency in
product manufacture or use by consuming fewer
natural resources and materials. The CEOs are also 47% High transition costs
planning to use the product for different functions,
which can be done by participating in the sharing
economy. The sharing economy principles can help 43% Inadequate technology
businesses meet their needs with minimal footprints
while reducing the economic losses from waste.
41% Economic viability of sustainable practices
While majority of the CEOs fully support sustainable
business practices, they identified high transition
costs, inadequate technology, and economic viability 39% Existing organizational culture
as the main factors that are preventing them from
fully adopting sustainable practices. Admittedly,
transitioning to a circular model brings in costs
36% Upfront investment
related to management, research and development,
and infrastructure. Our business leaders, however,
should realize that the circular economy is a
30% Lack of talent
long-term strategy that helps address the serious
environmental and business risks that we are facing. 11% Others
While moving to a circular model requires upfront
investments and efforts, several businesses are
80%
already seeing the rewards of having such solution.
Immediate benefits may include reduced material
bills and increased customer interaction and loyalty.
Medium-to long-term benefits on other hand
include innovative product designs, stronger brand
reputation, and operational efficiencies.
of the CEOs expect change in their production/service
model in the next three to five years to promote more
sustainable practices
Disasters that resulted from human efforts should
also serve as a wake up call to all sectors. The recent Increase efficiency in product or use by
Amazon rainforest fires, for instance, were caused by 71% consuming fewer natural resources and
deforestation by farmers and loggers. Such tragedy
has a huge global impact because the Amazon
materials
rainforest provides 20% of the world’s oxygen and
53% Use the product for different functions
absorbs carbon, helping slow down global warming.
Its destruction will limit nature’s ability to capture
carbon. Repair and maintain a defective product so it
43%
can be used with its original function
Indeed, there is a need for our business leaders
to change the way they look at sustainability. Use discarded products or parts in a new
39%
Sustainability initiatives should no longer be treated product iwht a different function
as independent side projects within the companies
– sustainability should be embedded in a company’s 38% Process materials to obtain the same quality
DNA.

The circular economy is here to stay – The opportunities are there for business
it’s time for business to move away from to extract significant value from
a system that’s inherently built for resources that are currently being lost.
throughput. Some may perceive it as a Strategy design, transforming supply
short term trend, but whichever way you chains, adapting business practices,
look at it, there are serious macro issues exploring innovations in product design
and key business risks that the circular and revolutionising waste management
economy helps us to address. And while are just some of the ways that we’re
some quick wins may be possible, the working with business to take
circular economy represents a long term advantage of circular thinking.
commitment by business to adapt.
Thinking circular
Thinking circular
How circular is your business? Are there some quick wins that could help your
Can you identify areas where you’re already business make a start on becoming circular?
participating in the circular economy? How can you pilot the idea in your business?
Do you have a system for reverse When you look across your
logistics where products are operations and supply chain,
taken back into the business? where are the opportunities to
Have you designed your products reuse, refurbish, recycle,
so that there’s still value in taking repurpose etc. to rethink your
them back? model in a circular way?
Are they designed for easy

Questions
disassembly? for
business
What happens to your products

once your customers have Are your customers expecting
finished with them? you to offer your products in a
Is there a way to collect them at different way?
end of life or to intervene Are your competitors already
before they reach this stage? meeting this expectation?
How intensively are your products being used?

Is there spare capacity in the products that Where are you sourcing your materials?
you’ve sold or leased which you could help unlock? Are there cost savings available from
utilization of the assets you
What about the utilisation switching to renewables, re-used or
use yourself? refurbished sources?
6 | PwC

Other data
Profile of the 127 survey respondents
Age profile
1% 25%
18 to 24 years 45 to 54 years
9% 22%
25 to 34 years 55 to 64 years
21%
22% Age 65 or older
35 to 44 years
Size of business Industries

Industry % of total
Business process outsourcing 1%
14% Hospitality and leisure 1%
Professional
and business Transport and logistics 1%
Micro 9% services Agriculture, forestry, fisheries 2%
Small 14% Consumer and retail 2%
Medium 27% Infrastructure 2%
Large 50% 13% Manufacturing (consumer products) 3%

Financial Manufacturing (industrial products) 3%
Services
Healthcare, pharma, and life sciences 3%
Real estate and construction 3%
Food and beverage 4%
8% Media and entertainment 4%
Technology
Energy and utilities 5%
Retail and wholesale distribution 5%
Others 27%

Q: What do you think is the likely GDP growth rate of the Philippines in 2019?
(with breakdown by size of business)
49%
Large 27%
Medium 11%
Micro 5%
expect the PH GDP growth rate for
2019 to be between 5% to 6% Small 6%
Q: How confident are you that your organization’s revenue growth prospects
over the next 12 months would be better than that of your industry? (with
breakdown by size of business)
88%
of the total respondents are
Large
Medium
47%
21%
Micro 8%
confident with their revenue growth
prospects over the next 12 months Small 13%
Q: Are you using sustainable practices in your business? (with breakdown

by size of business)
83%
Large 51%
Medium 25%
Micro 10%
are doing sustainable practices in
their business Small 13%
Q: Do you have a formal plan to fully transition your business to having a

circular business model? (with breakdown by size of business)
33%
Large 48%
Medium 19%
Micro 7%
have formal plans of transitioning
to a circular business model Small 26%

Research methodology and
contacts
The survey was conducted by PwC Philippines, in collaboration with the
Management Association of the Philippines. 127 CEOs answered the
survey, and the respondents of the survey were primarily members of
the MAP. The survey methodology used was a mix of online and printed
questionnaires.
We also conducted face-to-face in-depth interviews with eight business

leaders to support the findings of the survey. Their interviews are featured
in this report, and more extensive extracts can be found on our website at
www.pwc.com/ph/ceosurvey.
The interviews and the survey responses were also spread across a range
of industries.
The results were tabulated and analyzed by PwC Philippines.
Notes:
• Not all figures add up to 100% due to rounding off percentages.
• The base for figures is 127 unless otherwise stated.
For further information on the survey, please contact:
Mary Jade T. Roxas-Divinagracia, CFA®, CVA

Managing Partner
Deals and Corporate Finance
+63 (2) 459 2060
jade.roxas@pwc.com

References
Asian Countries: Selected Economic Indicators. (2018). Retrieved from www.bsp.gov.ph
Philippine macroeconomic accounts. (2019). Retrieved from www.fitchconnect.com.
PwC. (2015). ESG Considerations for private equity firms. PwC.
PwC. (2017). Building partnerships in ASEAN: Reimagining the possible. PwC and the Management Association of
the Philippines.
PwC. (2017). Going circular: Our 10 year journey. PwC.
PwC. (2017). Spinning around: Taking control in a circular economy. PwC.
PwC. (2018). The future of possibilities: Business in the age of disruption. PwC and the Management Association
of the Philippines.
PwC. (2019). 22nd CEO Survey: CEOs’ curbed confidence spells caution. PwC.
UN Sustainable Development Goals. (2019). Retrieved from www.sustainabledevelopment.un.org
World Economic Forum. (2018). Circular economy in cities: Evolving the model for a sustainable urban future.
World Economic Forum.

Acknowledgments
Editorial and writing Design and layout
Mary Jade T. Roxas-Divinagracia, CFA®, CVA Dennis P. Bautista
Deals and Corporate Finance Managing Partner, Markets Director, PwC Philippines
PwC Philippines
Dennis B. Omnes
Rocky R. Saldajeno Deals and Corporate Finance Manager,
Markets Senior Manager, PwC Philippines PwC Philippines
Karen Patricia A. Rogacion Christian L. Gonzales

Deals and Corporate Finance Senior Manager, Markets Assistant Officer I, PwC Philippines
PwC Philippines
Arianna Mae H. Campeña
Deals and Corporate Finance Associate,
Editorial board PwC Philippines
Alexander B. Cabrera
Chairman and Senior Partner, PwC Philippines
Marc Thaddeus E. Bodo
Markets Associate, PwC Philippines
Rizalina G. Mantaring
President, Management Association of the
Philippines Research and data analysis
Arianna Mae H. Campeña
Ma. Jocelyn Escaño
Project management and face-to-face interviews Charissa Mae F. Magdael
Alexander B. Cabrera Lorenzo G. Cipres
Chairman and Senior Partner, PwC Philippines Deals and Corporate Finance Associates,
PwC Philippines
Karen Patricia A. Rogacion
Deals and Corporate Finance Senior Manager, Kari-Aünakin Svetpavla Chan
PwC Philippines Joshua Exequiel S. Cabrera
Dennis P. Bautista
Markets Director, PwC Philippines
Christian L. Gonzales
Markets Assistant Officer I, PwC Philippines
Jemuel Jed E. Jorge

Marc Thaddeus E. Bodo
Markets Associates, PwC Philippines

Project Support
John Paul A. Legarte
Deals and Corporate Finance Manager,
PwC Philippines
Edwin Padillo
Markets Manager, PwC Philippines
Weddy Anne R. Diamada

Maria Regina Ciel C. Quiambao
Deals and Corporate Finance Senior Associates,
PwC Philippines
Kaira Celina V. Ty
Lanz Quijano
Mel James Fernandez
Lawrence Philip Minor
Deals and Corporate Finance Associates,
PwC Philippines
Ma. Estrella B. Bibat

Management Executive Assistant, PwC Philippines
Arnold P. Salvador
Executive Director, Management Association of the
Philippines
Elizabeth B. Zulueta
Executive Assistant, Management Association of the
Philippines

Management Association
of the Philippines
With promoting management excellence for nation-building as its main
objective, the MAP is 68-year-old management organization whose over
1,000 members represent a cross-section of CEOs, COOs, and the other
top management practitioners from the largest local and multinational
companies operating in the Philippines. MAP also counts some top
management educators and government officials as its members.
Please view the MAP video via www.youtube.com/TheMAPph or visit

www.map.org.ph/ for more information on MAP.
About PwC
Isla Lipana & Co. is PwC in the Philippines.
We have provided professional services in the Philippines for 97 years. We

stick to the highest quality standards in delivering audit and assurance, tax
and advisory services within and outside the country.
Our diverse team of experienced professionals includes accountants,

tax advisers, lawyers, systems analysts, economists, human resources
professionals, project development managers, industrial engineers, and
investment advisors.
Our people are active in various professional, public and private sector
organizations and participate in public forums involving taxation,
investment incentives and advocacy issues. We make sure we keep up
with the latest developments so that we can give clients informed advice
on different issues that might affect their businesses.

www.pwc.com/ph/ceosurvey
© 2019 Isla Lipana & Co. All rights reserved.

At PwC, our purpose is to build trust in society and solve important
problems. We’re a network of firms in 158 countries with over 250,000
people who are committed to delivering quality in assurance, advisory and
tax services. Find out more and tell us what matters to you by visiting us at
www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms,
each of which is a separate legal entity. Please see www.pwc.com/
structure for further details.　

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The future of business

Sustainability. Development. Impact.

133 CEOs 80%

The MAP International CEO Conference continues

iv The future of business: Sustainability. Development. Impact.

Notable CEO Pulse Sustainability CEO agenda

Other data Research Acknowledgements

Other information The survey was

1990s 2000s 2010s

Government agencies and communities

vi The future of business: Sustainability. Development. Impact.

PwC MAP 2019 CEO Survey 1

The Philippines’ Real GDP Growth Rate (%)

2015 2016 2017 2018 1Q2019 2Q2019

Source: Bangko Sentral ng Pilipinas

growth rate than the other Asian countries. China

initiatives to help accelerate growth in the remaining Korea 1.8%

2 The future of business: Sustainability. Development. Impact.

Similar to the responses in 2018, our CEOs believe

We have been asking our CEOs about their growth

While trade tensions between the United States

Thailand 11% Over-regulation 39% 43%

Singapore, and Thailand, will just be between 0.1

The Philippines’ improving relations with China

The CEOs’ confidence on their revenue prospects is Top 5 business threats

Geopolitical uncertainty tops our list of CEOs’

be worrying the CEOs because 82% identify over-

In our past surveys, CEOs were mostly concerned

4 The future of business: Sustainability. Development. Impact.

PwC MAP 2019 CEO Survey 5

In our survey, we asked the CEOs to share how they are

Source: United Nations

6 The future of business: Sustainability. Development. Impact.

PwC MAP 2019 CEO Survey 7

ESG considerations for private

• Responsible marketing • Local economic

8 The future of business: Sustainability. Development. Impact.

1 Urbanization 2 Environmental issues 3 Ecosystem degradation

‘Going circular’ explained

PwC MAP 2019 CEO Survey 9

To date, Hope in a Bottle sold 27m

When asked why Nanette chose

Hope realizes its vision through

10 The future of business: Sustainability. Development. Impact.

Aside from helping solve inequality

PwC MAP 2019 CEO Survey 11

Sustainability, see how people suffer in a one-hour

profitability should 2.30am because they can’t risk being

“I think the biggest Aside from developing

With the vision of helping provide

Farming can be Genovese basil inside 40-foot

14 The future of business: Sustainability. Development. Impact.

the crops like. This When asked how the government

PwC MAP 2019 CEO Survey 15

Mr. Hans T. Sy, SMPHI Chairman of

DRR requires PPP. We could have prevented it from

Hans T. Sy Since then, Hans started looking

Ensuring that there are enough

Crowdfunding makes transparent enough, and inform the

Since starting in 2016, Cropital