Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Inclusivity
• Sustainability
• UN Sustainable Development Goals

Environmental Achievements

• Ayala Land plans to be carbon neutral by 2022
• AC Energy’s renewable energy assets avoided 196,224 tonnes of CO2e emissions
• Manila Water generates 1.3kWh of electricity per day from septage through its waste-to-energy facility
• Ayala companies planted 3,498 seedlings
• IMI diverted 98 percent of waste from landfill
• Globe diverted 9 percent of waste from landfill

Social Achievements

• BPI Direct BanKo provided P445.5 million of microfinance loans
• Ayala companies distributed P422.5 million in community investments
• FamilyDOC provided affordable primary care services to more than 65,000 unique patients
• Generika had 41.7 million sales transactions, 32.8 million of which were generic medicine sales
• Ayala Foundation and Globe provided ICT education facilities to 11 public schools
• APEC provides affordable quality secondary education to over 16,000 students
• BPI provided P156 billion worth of agribusiness loans
• Manila Water delivered 570 million cubic meters of water
• Ayala group provides equal opportunities and fosters non-discrimination in the workplace.

Governance Achievements

• Ayala’s Chairman and CEO was chosen as a 2017 SDG Pioneer
• Ayala sustained its partnership with the UN Global Compact Network Philippines
• Ayala’s Board of Directors provides active management oversight and engagement

Climate Goals & Targets

Environmental Challenges

• Rising inflation as a result of rising commodity prices
• Concerns around inflation as a result of rising commodity prices arising from higher global energy prices and a weaker peso.
• Economic inclusivity remains a challenge in the Philippines.
• Risks associated with political transitions, shifts in laws and regulations, and populist views.
• Disruption in many sectors and industries.
• Rising social tension globally.

Mitigation Strategies

• Expanding into new markets and customer segments, diversifying geographically, strengthening core markets, and entering new businesses.
• Expanding outside highly-regulated spaces
• Creating a Regulatory Council to collaborate, exchange insights, and be more proactive in tackling regulatory issues.
• Making disruptive innovation a guiding principle.
• Adapting offerings to cater to a broader base of the Filipino population.
• Institutionalizing platforms to reinforce innovation in corporate culture.

Supply Chain Management

Responsible Procurement

• Globe’s comprehensive accreditation process
• Ayala Land’s Vendors’ Code of Ethics
• IMI’s management assessments on potential suppliers
• Manila Water’s robust accreditation and pre-qualification processes

Climate-Related Risks & Opportunities

Physical Risks

• Climate change (i.e., higher temperature, rising sea levels, flooding, stronger typhoons)
• Vulnerability in the areas near the fault segments, particularly in West Valley Fault

Transition Risks

• Changes in regulatory policies and frameworks
• Market saturation
• ASEAN integration

Opportunities

• Development of energy-efficient products
• New business models and investments that address climate change issues
• Increased demand for products and services that address climate change

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC), Global Reporting Initiative (GRI Standards: Core option), UN Global Compact

Third-party Assurance: DNV GL

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)

Ayala's businesses contribute to these goals through various initiatives detailed in the report.

Sustainable Products & Innovation

• Generic medicines (Generika)
• Affordable primary care (FamilyDOC)
• E-pharmacy and health benefits management (MedGrocer)
• Green solutions for cell sites (Globe)
• Waste-to-energy facility (Manila Water)
• Energy-efficient lighting and air-conditioning (BPI, MCX, APEC Schools)
• Passive-cooling design in developments (Ayala Land)

Awards & Recognition

• Ayala Land: Most Socially Responsible Company of the Year
• BPI: Best Bank in the Philippines
• Manila Water: No. 1 Best Managed Utilities Companies in Asia
• Globe Telecom: Mobile Service Provider of the Year
• AC Energy: Fastest growing energy platform
• Ayala Corporation: 18th best employer in the world
• Generika: ASEAN Inclusive Business Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Poverty Alleviation
• Education
• Healthcare
• Water Security
• Responsible Growth
• Innovation
• Sustainable Development Goals

Environmental Achievements

• AC Energy generated 601GWh of renewable energy from its wind and solar power plants, avoiding 342,071 tonnes of carbon
• Ayala Land shifted 32 of its malls and offices to renewable energy and avoided 102,000 tonnes of carbon
• Manila Water saved 3.9 million kWh of electricity through its various energy efficiency initiatives
• Manila Water mounted solar panels in three used water treatment facilities, generating 177,000 kWh of electricity and avoiding 126 tonnes of carbon
• IMI and Globe diverted 98 percent and 12 percent of wastes from landfill, respectively
• Globe through Project 1 Phone hauled 288,243 kg of e-waste
• Ayala Land protects 52 IUCN red-list species in El Nido Resorts and Lio Estate
• Ayala Land maintained 560 hectares of carbon forest
• Manila Water planted 40,000 seedlings in 100 hectares of land in La Mesa Watershed and 500 seedlings in Nabaoy Watershed
• Ayala group companies planted 4,719 seedlings through Project Kasibulan

Social Achievements

• Ayala Foundation provided 324 jobs through sustainable livelihood programs
• Ayala companies distributed ₱792 million to support poverty alleviation and livelihood projects
• Generika had 28.4 million sales transactions of generic medicines
• FamilyDOC provided affordable primary care to 240,000 unique patients
• AIDE tapped 798 medical professionals and provided on-demand healthcare services to over 250,000 subscribers
• APEC Schools provided affordable quality education to 18,120 students
• BPI Direct BanKo provided microloans amounting to ₱3.3 billion to more than 40,000 self-employed micro-entrepreneurs
• Globe served 74.1 million customers
• GCash deployed Scan to Pay cashless payment systems to 45,000 retail establishments
• Ayala Land through BellaVita provided 17,890 units of affordable and socialized housing
• Ayala Land developed 300 hectares of green space
• Ayala Malls support 20 Point-to-Point (P2P) bus routes
• The Ayala group generated a total of 133,170 jobs

Governance Achievements

• Ayala garnered a higher than average score in the Global Child Forum’s Corporate Sector and Children’s Rights Benchmark
• Ayala remains a member of the UN Global Compact Network Philippines
• The Board ensures the integrity of this report and confirms that all disclosures on performance and impact on key material topics are fairly presented.
• Ayala engaged external parties, SyCip Gorres Velayo & Co. and DNV GL, to validate and assure financial and non-financial disclosures

Climate Goals & Targets

Environmental Challenges

• Higher global oil prices, food supply problems, the weaker peso, and the impact of the tax reform law put pressure on local prices
• Slower economic growth
• Rising inflation
• Trade tensions between the US and China
• Political uncertainties in Europe
• Supply chain disruptions
• Climate change
• Natural disasters
• Cybersecurity threats
• Competition
• Maintaining brand reputation
• Data privacy concerns
• Maintaining a balance between portfolio management strategy and business objectives
• Inability to anticipate changes in the political and regulatory landscapes

Mitigation Strategies

• Investing in a more resilient portfolio by investing in a combination of new industries undergoing disruption and expanding on strong franchises
• Investing unprecedented level of capital across the Ayala group
• Active portfolio management approach
• Digitalization strategy
• Developing alternative sourcing strategies
• Business continuity management system
• Strengthening business recovery plans
• Increasing employee awareness in disaster management
• Collaborating with government agencies
• Reviewing adequacy of insurance coverages
• Regularly rebalancing portfolio
• Cultivating market intelligence
• Strengthening Ayala’s gating process
• Strengthening relationships with potential partners and advisers
• Conducting brand health studies
• Being more active in social media
• Implementing a data privacy framework
• Conducting annual training for all employees on data privacy
• Updating antivirus software and performing vulnerability tests
• Regularly reviewing security measures employed by third parties
• Establishing a centralized security operations center
• Consolidating and centralizing insurance procurement
• Implementing a sustainability blueprint
• Engaging with government agencies and regulators
• Conducting policy dialogues and consultations
• Submitting required reports
• Providing regular briefings and updates
• Supporting legal lectures
• Updating company policies to align with relevant laws and regulations
• Implementing energy-saving initiatives
• Implementing water conservation practices
• Conducting biodiversity studies
• Implementing a Payment for Ecosystem Services (PES) scheme
• Purchasing electricity from renewable sources
• Implementing green solutions in cell sites
• Disbursing loans for sustainable energy projects

Supply Chain Management

Supplier Audits: IMI audited six suppliers in 2018; targeting nine in 2019.

Responsible Procurement

• Due diligence to ensure supply chain is free from forced labor and child labor
• Supplier accreditation process
• Inclusion of social and environmental factors in accreditation process
• Conflict minerals reporting requirements

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (typhoons, earthquakes)

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: GRI Standards, International Integrated Reporting Council (IIRC) Framework, UN Global Compact Principles, UN Sustainable Development Goals (SDGs)

Certifications: Null

Third-party Assurance: SyCip Gorres Velayo & Co. (financial); DNV GL (non-financial)

UN Sustainable Development Goals

• SDG 1: No Poverty
• SDG 3: Good Health and Well-being
• SDG 4: Quality Education
• SDG 6: Clean Water and Sanitation
• SDG 7: Affordable and Clean Energy
• SDG 8: Decent Work and Economic Growth
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 12: Responsible Consumption and Production
• SDG 13: Climate Action

Ayala Sustainability Blueprint outlines specific targets and accountabilities across the Ayala group in support of the achievement of the UN Sustainable Development Goals by 2030.

Sustainable Products & Innovation

• The Flats (co-living development)
• Green bonds
• Renewable energy projects
• Generic medicines
• Health technology solutions

Awards & Recognition

• Global Innovation Management Institute Level 2 Certification
• MAP Management Man of the Year 2018
• Institutional Investor awards for corporate governance, ESG, and investor relations
• ASEAN Corporate Governance Scorecard (ACGS) awards

Environmental Metrics

ESG Focus Areas

• Sustainability
• ESG Impact Management
• Creating Shared Value
• Net Zero

Environmental Achievements

• ACEN's full divestment of the coal-fired SLTEC via the world’s first Energy Transition Mechanism. Coal no longer features in ACEN’s energy mix.
• ACEN targeting 20GW in attributable renewable capacity by 2030

Social Achievements

• Digitalization initiatives across the group raised customer satisfaction scores considerably.
• AC Health will continue to build on its integrated healthcare ecosystem to provide Filipinos with quality, affordable and accessible healthcare.
• Opening of the first dedicated comprehensive cancer hospital in the Philippines

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Globe saw a 10% drop in core earnings, partly a result of increased depreciation expenses.
• ACEN’s net earnings were down 15%.
• IMI’s bolt-on acquisitions remained challenged.
• AC Motors’ 2-wheel business experienced losses because of supply chain issues.
• Elevated inflation and high interest rates will affect all our companies in terms of higher borrowing and operating costs and dampening demand.

Mitigation Strategies

• Globe used a portion of the ₱108 billion in proceeds from its stock rights offering and the sale of a number of its tower assets to de-lever its balance sheet.
• Rationalizing the portfolio so that each of the noncore business units has the potential to be the group’s next engine of growth.
• Maintaining a fortress balance sheet, with strong liquidity and leverage at a reasonable level.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• EV charging stations
• Gogoro 2-wheel EVs
• Kia EV6

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• Climate Change
• Corporate Governance
• Board Diversity

Environmental Achievements

• ACEN's renewables now account for 99% of its total generation portfolio.
• ACEN is committed to transitioning its generation portfolio to 100% renewable energy by 2025 and to become a Net Zero greenhouse gas emissions company by 2050.

Social Achievements

• BPI's digitalization initiatives have enabled it to serve more customers despite a smaller footprint.
• BPI is the first Philippine bank to have five branches certified as International Finance Corporation - Excellence in Design for Greater Efficiencies.

Governance Achievements

• Ayala Corporation's Board adopted a Board Diversity Policy and elected its first female director in 2020.
• The Board has two female directors, meeting its board diversity target.
• The Company rated above 75th percentile for all categories in its Board and Board Committee evaluation, in comparison to the market.

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic and geopolitical backdrop.
• Elevated interest rate environment.
• High cost of power due to net merchant buying at elevated WESM prices (for ACEN).
• Typhoon-related curtailment (for ACEN).
• Muted outlook of the business and its sector (for MT Technologies GmbH).
• Continuing challenges on the profitability of Entrego.

Mitigation Strategies

• Ayala continues to maintain a strong balance sheet with sufficient liquidity and low cost of debt.
• Ayala Land’s resilient property demand and heightened consumer activity fueled revenue expansion.
• Aggressive growth in the Philippines and Australia (for ACEN).
• Cost optimization initiatives (for MT Technologies GmbH).
• Integration of Entrego’s operations with AC Logistics.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Philippine Financial Reporting Standards (PFRSs)

Third-party Assurance: SyCip Gorres Velayo & Co.