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SECTION TITLE
03
ABOUT THE COVER
BETTER
At Ayala, doing better for our companies and for our stakeholders has always been
crucial to the way we do business. We believe that pushing ourselves further—financially,
environmentally, and socially—allows us to become the kind of company we have always
envisioned ourselves to be: a company that does not rest on past achievements,
but continues to innovate and respond to the changing needs of its stakeholders.
A strong and sustainable business means going beyond simply doing well for ourselves.
It means making life better for all.
TABLE OF CONTENTS
ABOUT THE COVER........................................................................................2
ABOUT OUR REPORT.....................................................................................4
ABOUT AYALA................................................................................................6
JOINT MESSAGE FROM THE CHAIRMAN AND THE PRESIDENT........................8
ONE GROUP................................................................................................10
CREATING SHARED VALUE...........................................................................12
LISTENING AND ENGAGING.........................................................................18
CORPORATE GOVERNANCE.........................................................................22
ONE COMMUNITY.......................................................................................32
ONE TEAM..................................................................................................42
ONE PLANET...............................................................................................52
LEADING BY BEING BETTER........................................................................62
LOOKING FORWARD....................................................................................64
G3.1 CONTENT INDEX.................................................................................66
EXTERNAL ASSURANCE..............................................................................79
GRI APPLICATION LEVEL CHECK STATEMENT...............................................81
ACKNOWLEDGEMENT AND CONTACT DETAILS.............................................82
2012 SUSTAINABILITY REPORTS.................................................................84
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Ayala Triangle Gardens is an urban oasis in the middle of the
Philippines’ premier business district
ABOUT
OUR
REPORT
W
elcome to Ayala Corporation’s
2012 Conglomerate Sustainability
Report.
Transparency and accountability are integral
to the way we do business, and this belief
extends to our sustainability practices.
We began our yearly reporting from a
group perspective in 2008 to engage
our stakeholders by communicating our
sustainability commitments and obtaining
feedback on our performance. We do this so
we can do better year after year. (3.3)
ABOUT OUR REPORT
Reporting Period and Framework
This report covers the Ayala group’s
sustainability performance data from
January 1 to December 31, 2012. The
report has been prepared according to the
Global Reporting Initiative (GRI) Guidelines
based on a B+ Level. To comply with this
level’s requirements, we report on 71
indicators across the economic, social, and
environmental categories, an increase of 29
indicators from last year’s report. As part
of our standard reporting, we also referred
to the AA1000 AccountAbility Principles
Standard 2008 on inclusivity, materiality,
and responsiveness. In our effort to report
according to international best practices, we
implemented the following key sustainability
initiatives for the 2012 report:
••Commissioned TÜV Rheinland for external
assurance in addition to obtaining
verification from the GRI on the Application
Level. The GRI statement and assurance
report are found starting on page 79;
••Implemented a more systematic data
gathering and verification system;
••Conducted a formal stakeholder
engagement focused on sustainability
issues; and
••Began the transition to the newly
launched GRI version, with this report
containing Standard Disclosures from the
GRI Sustainability Reporting Guidelines
Version 4.
To assess our performance, we include 2011
data, where available. Comparing data allows
us to see how we can improve on our targets
and helps us manage the impacts of our
growth. (3.1, 3.5, 3.13)
Reporting Scope and Boundaries
The report includes highlights from Ayala
Corporation and its subsidiary companies and
covers Philippine operations only. Specifically,
••Ayala Corporation (Ayala) — covers our
operations as a holding company;
••Ayala Land, Inc. (Ayala Land) — covers
performance data of the parent company
and its subsidiaries namely Alveo Land
Corporation, Ayala Property Management
Corporation, Cebu Holdings, Inc., and
Makati Development Corporation;
••Bank of the Philippine Islands (BPI) —
includes the performance of the parent
company and its subsidiaries;
••Globe Telecom, Inc. (Globe) — covers the
head office and operations nationwide;
••Manila Water Company, Inc. (Manila
Water) — covers the East Zone operations
only;
••Ayala Automotive Holdings Corporation
(Ayala Auto) — includes 19 Ayala-owned
Honda and Isuzu dealerships;
••LiveIt Investments, Ltd. (LiveIt) — includes
the operations of LiveIt and its investee
companies namely Affinity Express,
Integreon, Stream Global Services, and
HRMall;
••Integrated Micro-Electronics, Inc. (IMI)
— covers its Philippine-based operations,
specifically its manufacturing site in Laguna
Technopark; and
••Ayala Foundation, Inc. (Ayala Foundation)
— covers the operations of the head office
and its activities nationwide.
Detailed discussions are in the sustainability
reports of each of these companies and may
be downloaded from their respective websites.
Reported financial economic performance
consolidates all Ayala subsidiaries and their
sub-subsidiaries. For the social performance,
only Ayala Land and LiveIt report on their
sub-subsidiaries’ data. For the environmental
performance, only Ayala Land reports on its
sub-subsidiaries’ data. We also included
highlights of AC Energy and AC Infrastructure
to give our readers a more comprehensive
picture of Ayala’s contributions to key
national development goals on infrastructure
development and energy security. (3.6, 3.7)
Moving forward, we aim to expand the
coverage of our future reports to include
operations outside the Philippines.
Reporting Feedback
We welcome your feedback on this report and
on Ayala’s sustainability performance. Please
contact us at sustainability@ayala.com.ph.
(3.4) ■
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Tower One and Exchange Plaza,
Ayala’s headquarters in Makati City
A
ABOUT
AYALA
yala Corporation is one of the oldest
and most respected business groups
in the Philippines. It has a diversified
business portfolio that includes real
estate development, banking and financial
services, telecommunications, water and
wastewater service infrastructure, electronics
manufacturing services, automotive
dealership, international real estate
investments, business process outsourcing,
transport infrastructure, and power. (2.2)
A public company listed in the Philippine Stock
Exchange (PSE:AC), Ayala ended 2012 with
a market capitalization of more than P300
billion, making it the second-largest listed
Philippine conglomerate. With headquarters in
the Makati Central Business District, Ayala has
established presence nationwide and employs
more than 42,000 people in its groupwide
operations. Its subsidiaries are members
and partners of various relevant industry
associations and these are identified in their
respective 2012 reports. (2.4, 2.8, 4.13, LA1)
A B O U T AYA L A
Ayala enhances its position of leadership in
key lines of business by leveraging its portfolio
of assets, brand equity, and competitive
advantages:
•• Ayala Land is the Philippines’ largest fully integrated
property developer and one of the most successful
developers of prime commercial spaces in the country.
•• BPI is one of the largest Philippine banks and has a
lead position in intermediation capacity, corporate and
consumer lending, remittances, and electronic banking.
•• Globe is a major provider of telecommunications services
in the Philippines, formed out of a partnership between
Ayala and Singapore Telecom.
•• Manila Water is the sole provider of water and
wastewater services in the East Zone of Metro Manila
and now has existing operations in other parts of the
Philippines and the Asian region.
•• IMI is a leading electronics manufacturing services
provider in the Asian region and has operations in Europe
and North America.
•• Ayala Auto is a leading vehicle dealership network of
both Honda and Isuzu brands in the Philippines. Recently,
it was appointed as the local distributor of Volkswagen
AG passenger vehicles.
•• LiveIt is the holding company for Ayala’s investments in
the business process outsourcing (BPO) sector.
•• AG Holdings, Ltd. is the holding company for the Ayala
group’s property investments in the United States and
Asia.
•• AC Energy Holdings, Ltd. and AC Infrastructure
Holdings Corporation are Ayala’s holding companies for
investments in the power and renewable energy sector
and in transport infrastructure projects, respectively.
•• Ayala Foundation is the social development arm of
Ayala with programs in education, youth leadership,
sustainable livelihood, and arts and culture.
Ayala’s Ownership Structure
Ayala's current principal shareholders are
Mermac, Inc. and Mitsubishi Corporation. As
of December 31, 2012, 70.19% of the total
outstanding shares of the company was held
by Philippine entities.
We continue to strive for sustainable growth.
Our subsidiaries are at the forefront of
our efforts: expanding into underserved
markets, contributing to community economic
development, and innovating solutions
that respond to the evolving needs of our
customers. (2.3, 2.6)
Awards and Recognitions of Ayala
Throughout the years, Ayala has been
consistently recognized for its efforts to
uphold sound and ethical business practices.
In 2012, it received awards and citations
from prestigious local and international
organizations and publications:
7
Institute of Corporate Directors
•• Platinum Plus Awardee, 7th Corporate Governance
Scorecard
FinanceAsia (Best Managed Companies Poll
– Philippines)
•• Ranked 1st – Best Managed Company
•• Ranked 1st – Best Corporate Governance
•• Ranked 1st – Best Corporate Social Responsibility
•• Ranked 2nd – Best Investor Relations
Alpha SouthEast Asia Magazine
•• Ranked 1st – Strongest Adherence to Corporate
Governance
•• Ranked 1st – Best Strategic Corporate Social
Responsibility
•• Ranked 1st – Best Annual Report
Philippine Dealing System Group
(7th PDS Awards Night)
•• Innovative Corporate Bond Issue of the Year –
P10-Billion Fixed-Rate Multiple-Put Bonds Due 2021
(The country’s first listed multiple-put bond issue)
WWF Philippines
•• 2012 Environmental Leadership Award
Our operating companies are also recognized
for their significant achievements in
numerous areas of their business, including
corporate governance, management, financial
performance, investor relations, business
innovation, product and service excellence,
people management, and environmental
sustainability programs. Their
specific awards can be found
in their sustainability and
annual reports. (2.10) ■
Equity ownership of Ayala
as of YE 2012
▼
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Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala
DEAR FELLOW STAKEHOLDERS:
JOINT
MESSAGE
FROM THE
CHAIRMAN
AND THE
PRESIDENT
Over the past few years we have reiterated our
overarching philosophy within our group companies
to align our business strategies and objectives with
national development goals. This is of strategic
importance to us because we believe businesses
simply cannot prosper in a deteriorating society, much
less in an environment that is constantly degraded.
As a group of companies operating across various
sectors of our economy, we realize the imperative to
create value not just for our businesses, but also for
the communities where we operate and the broader
environment that we impact.
This fundamental philosophy lies at the center of our
sustainability initiatives. It anchors our journey towards
establishing a holistic framework for measuring the
economic, social, and environmental dimensions of
our businesses. It is this framework that will ultimately
guide us in developing long-term sustainability
programs and practices that will be more deeply
embedded in our operations and our business models.
JOINT MESSAGE FROM THE CHAIRMAN AND THE PRESIDENT
Refining Our Groupwide Sustainability Policy
The Way Forward
Essential to the development of this framework is our
underlying policy towards sustainability. This year we took a
more vigorous review of our groupwide sustainability policy
across seven key components. These covered our current
operations, our products and services, the supply chain,
our human resource practices, our community involvement,
our overall management approach, and our approach to
expanding our businesses.
In the coming year, we look to make greater strides on our
sustainability initiatives. We aim to establish measurable
targets for each of our business units' environmental and
social performance, which should in turn complement
our financial targets and growth plans. The entire Ayala
group is also working on the integration of environmental
and societal risks as part of the existing Enterprise Risk
Management system to ensure that we manage broader
sustainability risks in our business processes. We also
aim to develop a unified strategy for improved internal
and external stakeholder participation and engagement
to ensure that we implement improvements in innovation,
learning, and sustainability performance.
As we refined our sustainability commitment in each of
these components, we identified several sustainability
focus areas.
On the environmental front, we are putting greater focus
on optimizing our energy and water consumption and
controlling our solid waste and greenhouse gas emissions.
We endeavor to move beyond mere regulatory compliance
towards global best practices and standards.
Our sustainability focus areas involving the social dimension
centers on taking more innovative approaches to increase
customer value and enhance customer experience, as
well as engaging communities and customers particularly
those with limited access to essential goods and services.
A vital component of this is ensuring the well-being of our
own employees as we strive to create an environment that
promotes their professional and personal growth.
Finally, as we align our sustainability efforts along these
social and environmental dimensions, we remain focused
on ensuring we achieve our financial targets as defined by
our business plans and strategies.
The disciplined review of our sustainability policy has
enabled us to measure the current trajectory of our
performance across the triple bottom line metrics. It
likewise set a baseline from which we can set more
specific and measurable targets and further improve on our
monitoring and reporting standards.
In order to further leverage on group synergies and widen
the reach and benefits of Ayala’s sustainability programs,
we will undertake initiatives that engage our supply chain in
developing sustainable solutions. At the holding company
level, we will provide impetus for our subsidiaries to create
more strategic community development initiatives that
mutually capitalize on our subsidiaries’ strengths and
expertise.
We are excited by the developments on our sustainability
initiatives and commitments, and look forward to the
achievements and opportunities that will come with
embedding sustainability further in our businesses.
The progress of these sustainability initiatives would
certainly not be possible without the collaborative efforts of
our Sustainability Council. We thank them for the leadership
and guidance they continue to provide the group. We also
thank our customers, suppliers, and business partners and
all our stakeholders across the group for their continued
engagement and support in achieving our common vision of
creating shared value. ■
Improvement in Reporting Standards
This year, we are encouraged to see the significant
improvement in reporting standards across all our business
units. At the conglomerate level, we increased our reported
indicators by 69%, from 42 to 71 indicators. This is also
the first time we are reporting an externally assured report
which was obtained from the TÜV Rheinland Group, a global
leader in independent testing and assessment services,
and a Global Reporting Initiative (GRI) Application Level
Checked report rated B+. This year as well, we have taken
the required initial steps to transition fully to the GRI
Version 4, the newest reporting guidelines.
Over time we aim to constantly improve our reporting
by increasing the number of performance indicators,
particularly when these are material to our companies.
Transparency is important to us and practicing this type
of reporting allows us to discuss our progress on our
sustainability goals with our stakeholders in a systematic
manner.
Fernando Zobel de Ayala
President and Chief Operating Officer
Jaime Augusto Zobel de Ayala
Chairman and Chief Executive Officer
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Clockwise from top left:
A Globe “tech coach” assists a customer; an LED engine
designed by IMI subsidiary PSi Technologies; a Stream
call center agent; Evoliving center in NUVALI; the
Honda emblem; a BPI Express Assist machine;
scholars of the Center of Excellence in
Public Elementary Education; Manila
Water meters; wind turbines in
Bangui, Ilocos Norte
ayala’s success is the result of trust
that has been built and nurtured over
time. Given the size, scale, and diversity
of our businesses, Ayala has the unique
position of being able to truly create
long-term value for a greater number of
stakeholders. Moving as one, we respond
better to the evolving demands of the
Filipino public and support national
development.
Ayala is guided by a vision of a
successful business that contributes
to the improvement of all aspects
of society. Integrating the goals of
economic advancement, environmental
responsibility, and social inclusivity, we
strengthen our legacy of leadership,
promote responsible business, and remain
committed to the Filipino people.
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Tubig Para sa Barangay (Water for the Community) improves
quality of life by providing access to potable, reliable, and
affordable water service
W
CREATING
SHARED
VALUE
e developed our Sustainability
Policy in 2008 to address growing
concerns for the environment,
human resource management,
supply chain, and social performance. In doing
so, we incorporate sustainability practices in
our operations and business strategies, and
improve them as we enter new and evolving
markets and growth areas.
In 2012, we reviewed our Sustainability Policy
to further improve its appropriateness and
relevance while ensuring business viability and
access to new markets. We also conducted
our Sustainability Summit to bring to fore
opportunities for the conglomerate to respond
to the economic, environmental, and social
development challenges of the country while
strengthening our operations.
Close to a hundred Ayala officers—including
members of the Sustainability Council and the
Management Committee—and representatives
from partners Mitsubishi Corporation and
C R E AT I N G S H A R E D VA L U E
Ayala has a legacy of
leadership that continues
to shape industries while
remaining relevant and
committed to the national
development agenda of
the country.
NorthWind Development Corporation attended
the event. Climate change adaptation and
risk mitigation were key topics given the
vulnerability of the country to climate-related
disasters and the need for local responses.
The best practices of a global brand were also
presented at the summit.
The Summit encouraged greater synergy within
the Ayala group of companies for better reach,
productivity, and impact. We are in the process
of developing sustainability performance
targets to discuss in detail next year’s report.
(4.8)
Enhancing Lives, Building a Nation
Our focus on sustainability drives our
subsidiaries to innovate and build their
successes on models that empower more and
more Filipinos, including traditionally unserved,
underserved, and marginalized markets and
communities.
Ayala Land continues to lead in sustainable
land use and development as it successfully
creates communities that stimulate economic
activity and catalyze inclusive growth. Its rich
history of building large-scale, master-planned,
mixed-use, and sustainable communities
allows it to develop land in a manner that
protects the environment and fosters social
cohesion.
In 2012, Ayala Land launched 67 projects
with a total value of P100 billion, a 17%
increase from 2011, and acquired more than
800 hectares of land in key areas such as
Taguig, Valenzuela, Alabang, Tarlac, Bulacan,
Pampanga, Cavite, and NUVALI. It continued
to increase income distributed to suppliers,
partners, employees, government, community
and stockholders by 23% from P39 billion in
2011 to P48 billion in 2012. In 2012, Ayala
Land published its first A+ Integrated Annual
and Sustainability Report and received the
Asian CSR Award in Environment and Value
Chain Management from the Asian Institute of
Management.
As one of the leading and oldest financial
institutions in the country, BPI continues to
contribute to the growth of the Philippine
economy, especially at the grassroots level.
Because it operates in an emerging market,
BPI considers greater financial inclusion an
integral part of its business strategy. Through
BPI-Globe BanKO, the bank granted 55 loans
worth P2.5 million to microfinance institutions
in 2012, and increased the BanKO cardholder
base to 280,000. BPI also supports and builds
local businesses through BPI Ka-Negosyo,
increasing its accredited franchisors to 61 in
2012 from 19 in 2011. Loans in the franchise
portfolio grew by 309%.
The bank’s partnership program with the
International Finance Corporation known as
the Sustainable Energy Finance Fund granted
loans worth P4.2 billion in 2012 and saved
645,774 tons of carbon emissions. BPI also
enhanced its services to overseas Filipinos
(OFs) through branch and representative
office openings in Milan and the United
Arab Emirates, partnerships in East Asia,
and an alliance with Remitly.com in North
America. This gives OFs more options to send
their hard-earned money to families in the
Philippines. The bank also reported P36 billion
in total economic contributions to society,
with 69% to suppliers, government, charitable
contributions, and employees’ salaries.
Backed by its commitment to competitiveness
in a dynamic, aggressive telecommunications
industry, Globe continues to invest in
technology that transforms the lives of its
35.5 million subscribers. The company
focuses on innovative solutions for a better
and faster mobile and data experience,
enhancing everyday communications that meet
diverse lifestyles and needs.
The launch of the Long Term Evolution
service, its Network Modernization and IT
Transformation Program, and the customizable
My SuperPlan were among the major efforts
to provide customers with better service
and value. It laid out an additional 12,000
kilometers of fiber optic cables nationwide to
boost current capacity, completed the changeout of close to 90% of cell sites all over the
country, and published its second B+ Annual
and Sustainability Report in 2012.
13
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Ayala’s Policy on Sustainability
We commit to creating shared value and improving the impact of our businesses
on society and the environment in the following ways: (4.8, 4.1-1)
In our operations, we are committed towards optimizing
energy and water consumption and controlling solid waste
and greenhouse gas (GHG) emissions. We integrate
environmental parameters into business operations
and establish green practices in the workplace and
facilities. As a step forward, we move beyond regulatory
compliance, applying best practices and adopting
global voluntary standards on environmental and social
responsibility.
In our products and services, we implement innovative
approaches to increase customer value and enhance
customer experience; empower more customers,
including those who do not have access to essential
goods and services; and improve the quality of life of
people, businesses, and communities. Our product
development will explicitly address environmental and
social factors and we will continuously look for ways to
design our products and services for lower environmental
impact.
In our supply chain, we will ensure that our suppliers
are aware of our Sustainability Policy. We will establish
social and environmental parameters in the accreditation
of our suppliers and will prefer suppliers that observe
sustainability practices. We will also use our buying
volume to aid community development by providing
opportunities to entrepreneurs and cooperatives.
In our human resources practices, we will continue
to put prime importance on our employees’ well-being.
We will ensure that our employees work in the safest
and healthiest environments and create a vibrant work
environment that encourages professional and personal
growth. We will actively promote sustainability initiatives
in the workforce to create a positive momentum for
sustainable business practices.
In our community involvement, we will provide,
with our best capacity, the resources needed to
promote quality education, vibrant micro-enterprises,
cultural rootedness, and a healthy environment for our
communities to foster economic advancement and
nation-building.
In our management approach, we will continue to
promote sustainability in our business operations by
improving our economic value while managing our impact
on the environment and society. We will practice good
governance and be responsive to stakeholders’ inputs
and expectations on sustainability. We will continuously
pursue opportunities to improve our operating efficiencies
and satisfy our shareholder requirements.
In our business viability, we will keep broadening our
presence in the local market while diligently exploring
new business opportunities. We will undertake valueenhancing initiatives by leveraging on synergies within the
Ayala group or through strategic partnerships to achieve
better margins, reduce costs, and increase efficiency.
We will continue to make value-accretive investments in
sectors critical to economic development.
We are committed to creating shared value.
Adopted by the Ayala Group Management Committee on
the 28th day of September 2012 at the Tower One,
Ayala Triangle, Ayala Avenue, Makati City, Philippines.
Above photos, left to right: An Amaia housing unit; BPI opens the country’s
first solar-powered branch; the North Rizal Water System Project;
a livelihood project in NUVALI; GNPower plant in Bataan
C R E AT I N G S H A R E D VA L U E
15
Ayala Foundation
commits to creating
communities where
people are productive,
creative, self reliant, and
proud to be Filipinos.
Globe aligned its Bridging Communities
program into five pillars and initiated programs
on good governance, social entrepreneurship,
environment conservation, education, and
volunteerism. Its employee-volunteers were
especially lauded by the Department of Social
Welfare and Development and Philippine
President Benigno Aquino III for their efforts
in relief operations during Typhoon Pablo in
Mindanao.
The country’s growing population places
greater demands on limited water sources and
highlights the need to manage the increasing
volume of wastewater. In 2012, Manila Water
extended its distribution network with a total
of 38,167 new water service connections.
It delivered 427.3 million cubic meters to its
customers, treated 77.39 million liters per day
of wastewater, and desludged 52,514 septic
tanks.
Emphasizing an inclusive and cooperative
approach to business, Manila Water uplifts
the lives of over 6.2 million Filipinos, 30%
of which are at the base of the pyramid. The
Tubig Para Sa Barangay program (TPSB) is a
sustainable model of water service delivery
for the urban poor. In 2012, a total of 9,776
new water service connections under TPSB
program were installed to benefit 15,578
families. This brought total water service
connections to 204,421 and total urban poor
residents beneficiaries to 1.7 million. The
complementary Lingap program helped nine
public institutions and 322 beneficiaries.
Manila Water expects its subsidiaries to also
embed sustainability into their operations. This
year, Boracay Island Water Company, Clark
Water Corporation, and Laguna AAAWater
Corporation launched their sustainability
reports and are developing their sustainability
frameworks. This is also the second year
of the company’s reporting according to
ISO26000 guidelines, an international
framework on integrating CSR into the
business. In 2012, the company grew its
economic contribution to the Philippines
with an increase of 48% in taxes, licenses,
and concession fees to the government to
P119.31 million and a 17% rise in wages and
benefits paid to employees to P1.36 billion,
while community contributions were up fivefold to P13.68 million.
As one of the top 30 electronic manufacturing
services providers in the world, IMI is
committed to providing high quality, innovative,
and sustainable solutions in the electronics
industry. Its performance continues to improve
despite uncertainties in the global economy
with products that are relevant, cost efficient,
and regulatory compliant. Operations strive
to minimize impact on the environment and
protect its employees and contractors. IMI
steps up its sustainability practice through
environment, health, and safety programs,
green manufacturing technologies, and clean
technology business ventures.
IMI’s presence in the Philippines, China,
Singapore, the United States, Mexico, Bulgaria,
and the Czech Republic enables the company
to respond to customer needs in regional and
international markets. As a member of the
United Nations Global Compact, IMI submitted
a Communications of Progress report in
November 2012 along with a re-commitment
letter to the United Nations Secretary General
▲
WWF Philippines CEO Lory Tan
speaks at Ayala’s Sustainability
Summit in 2012
16
2 012 S U S TA I N A B I L I T Y R E P O R T
▲
Ayala’s Board of Directors meets
with shareholders to discuss the
company’s performance in 2012
signed by its company president Arthur R. Tan.
It states that “IMI is committed to making the
Global Compact and its 10 principles part of
the strategy, culture, and day-to-day operations
of the company and engaging in collaborative
projects which advance the broader
development goals of the United Nations.”
IMI follows the guidance and requirements
stipulated by international standards such as
the Electronic Industry Citizenship Council,
ISO 26000, GRI, and the Social Accountability
8000 in its operations.
LiveIt supports the gains that the business
process outsourcing (BPO) sector contributes
to the national economy by investing in
innovative global BPO companies with the
potential for industry leadership. Its investee
companies—Stream, Integreon, Affinity
Express, and HR Mall—grew their revenues
within range of 2% to 49%, or US$9 to
US$860 million, in 2012. Through the Global
Services Management Institute Inc., it invests
in the education sector and helps enhance
employability of the Filipino workforce. It
provides high quality, affordable education and
addresses the growing demand for skilled and
highly qualified professionals.
Ayala Auto, collaborating with Isuzu and Honda,
continues to demonstrate the importance
of engaging customers through focused
programs that educate and empower motorists
and vehicle owners. Ayala Auto offers
technical support and training on preventive
maintenance and basic troubleshooting and its
education campaigns on road safety.
As the corporate social development arm of
Ayala, Ayala Foundation commits to creating
communities where people are productive,
creative, self reliant, and proud to be Filipinos.
Its program pillars are Education, Youth
Leadership, Sustainable Livelihood, and
Arts and Culture. In 2012, it integrated the
culture and arts division of Ayala Museum
with the Filipinas Heritage Library, and began
implementation of a three-year USAID-funded
project Strengthening the Capacity of Civil
Society Organizations in the Philippines, which
is designed to “strengthen local civil society
and private sector capacity to improve aid
effectiveness and sustainability.” It supported
The Entire Nations (TEN) Moves program
by serving as its secretariat and raising
P49.2 million to fund for the construction of
public elementary classrooms.
17
C R E AT I N G S H A R E D VA L U E
FINANCIAL HIGHLIGHTS (EC1)
Company
Net Income
2011
% Y-O-Y Net Income
2012
2011
2012
Revenues
% Y-O-Y Revenues
2011
2012
2011
2012
Ayala
9.4
10.6
(16)
13
107.5
125.1
10
16
Ayala Land
7.1
9
31
27
44.2
54.5
17
23
12.8
16.3
13
27
41.76
47.4
9
14
Globe
9.8
6.86
1
(30)
77.76
82.7
9
6
Manila Water
4.3
5.4
7
26
12
14.6
9
22
0.095
0.213
(68)
124
8.8
9.99
(23)
14
3.3
5.4
(31)
64
575.5
661.8
40
15
BPI
Ayala Auto
IMI
Values in billion pesos, except IMI in million US$
Company
LiveIt
Share of EBITDA
2011
23.5
2012
% Y-O-Y Share of EBITDA
2011
31.9
54
2012
36
Share of Revenues
2011
2012
317.7
343.3
% Y-O-Y Share of Revenues
2011
Values for LiveIt in million US$
Financial Highlights
In 2012, Ayala strengthened its core
businesses, enhanced the profitability
of international ventures, and made new
investments as a platform for continued
growth.
Ayala posted a consolidated net income of
P10.6 billion in 2012. The 13% growth over
2011 reflects the robust performance of the
Ayala group of companies and reinforces
Ayala’s aggressive growth agenda.
The Ayala group spent P149 billion in
capital expenditures, reflecting a 127%
annual increase over figures in 2011, and
is the highest capex on record. The group
took advantage of the opportunity to invest
aggressively in areas that are high value
and strategic over the long term. Majority
of its investments supported growth in its
real estate, telecommunications, and water
and wastewater businesses. At the holding
company level, Ayala continued to fine tune its
portfolio to maximize profit and actively pursue
value-creation opportunities.
Investments grew to P108.6 billion, in line
with initiatives in the power sector and the
increased stake in BPI from 33% to 44%. Ayala
is also focused on new growth platforms, with
a target US$1 billion in equity investments in
power and transport infrastructure businesses
over the next five years. It established a
pipeline of power platforms in conventional
and renewable technologies, and is exploring
opportunities in the road, rail, and airport
spaces. These investments have the potential
to generate group synergies and enhance the
value of the group’s businesses.
A full discussion of our financial performance
can be found in the Ayala Corporation 2012
Annual Report. ■
16
2012
8
18
2 012 S U S TA I N A B I L I T Y R E P O R T
Manila Water conducts “Lakbayan” tours with various stakeholders
to educate them on the processes involved in
water treatment and distribution
W
LISTENING
AND
ENGAGING
e have a responsive approach to
business. Our stakeholders are
our partners; thus, stakeholder
engagement and materiality
assessments are critical components of our
sustainability agenda.
Stakeholder Engagement
Ayala conducts regular engagements to
understand and address stakeholders' needs
and expectations. Insights gained from these
engagements shape the development and
provision of better products and services,
strengthen business strategy, enhance market
position, and improve performance.
In line with international best practices,
we commissioned a third-party, nonprofit
organization, Philippine Business for the
Environment (PBE), to perform a formal
stakeholder engagement on sustainability
issues. We used one-on-one interviews and
focus group discussions. We aim to continue
LISTENING AND ENGAGING
assurance process to ensure accuracy and
consistency.
Our stakeholders are
our partners in our
sustainability agenda;
thus, we constantly
listen to their feedback
and engage them in our
initiatives.
The group refers to and is guided by
international standards such as the World
Resources Institute and World Business
Council for Sustainable Development’s
Greenhouse Gas Protocol, the International
Energy Agency, the Philippines' Department of
Energy, and the Global Reporting Initiative in
the calculation of environmental performance
data. We are committed to implementing
best practices and international standards to
improve our reporting.
Stakeholder inputs were gathered mostly
through telephone interviews and focus group
discussions, and answers were carefully
recorded and analyzed.
Materiality Assessment
this engagement on a yearly basis as a
standard process to check on feedback and
comments from various stakeholders, and to
ensure inclusivity and responsiveness. This
year, we did not engage with suppliers through
this exercise but our subsidiaries have regular
engagements with them using other means.
For this report, we identified our stakeholder
groups to include:
••customers
••government
••employees
••shareholders
••benefactors
••local communities
••joint venture partners and suppliers
Their feedback is summarized in the table
on page 21. Detailed discussions of each
subsidiary’s stakeholder engagement plans
are available in the individual reports.
The Investor Relations Team engages
separately with our shareholders. For more
information, please refer to the Corporate
Governance section. (4.14, 4.15, 4.16, 4.17)
Data Collection and Analysis
Data disclosed by Ayala in this report were
collected and monitored by the relevant
managers and teams within the Ayala group
of companies led by the sustainability heads
of each company, using database forms and
spreadsheet questionnaires. Data sources
may come from actual counts, monitoring
programs, and utility bills where appropriate.
This data is pre-verified before the external
Materiality study plays a similarly significant
role in Ayala’s sustainability. It assists us in
developing our strategic roadmap, helps align
stakeholder expectations, and prioritizes those
concerns that are significant to the business.
In developing the 2012 report, we linked and
analyzed material aspects of our businesses
with the outcomes of our stakeholder
engagement. We defined material issues
as those that could substantially influence
the company’s ability to give added value,
potentially erode our reputation, and pose
risks if not addressed proactively. This
combined process revealed the top five
common priority areas among our diversified
businesses and stakeholder views:
••Environmental Responsibility,
••Product Quality,
••Economic Development,
••Community Development, and
••Overall Compliance with Labor, Health
and Safety, and Corporate Governance
standards.
These findings are consistent with our
Sustainability Focus Areas identified in our
2012 Sustainability Policy. We then aligned our
reporting and sustainability strategy with the
focus areas. ■
19
20
2 012 S U S TA I N A B I L I T Y R E P O R T
Materiality Assessment: Sustainability Focus Areas
LISTENING AND ENGAGING
21
Stakeholder Engagement
Sustainability
Priorities
Stakeholder Group
Interest Areas
•• Develop products for the bottom of the pyramid
•• Serve as a model of an environmentally responsible business,
CUSTOMERS
••
••
••
••
Stability of the company
Service quality and protection
Product safety
Employee welfare
specifically in solid waste management practices
•• Collaborate with local government units and assist in
environmental protection activities at the grassroots level
•• Develop infrastructure in far-flung communities
•• Implement more community development programs
•• Improve on communicating issues in community development to
keep the top-level management informed
Health and safety
Job creation/local employment
Environmental responsibility
Compliance with local and
national laws, standards, and
regulations
GOVERNMENT
••
••
••
••
EMPLOYEES
•• Job security
•• Professional advancement
•• Compliance with local and
BENEFACTORS
LOCAL
COMMUNITIES
JOINT VENTURE
PARTNERS
national laws, standards, and
regulations
••
••
••
••
Educational programs
Social impact measurement
More environmental programs
Compliance with local and
national laws, standards, and
regulations
•• Educational, livelihood, and
leadership development
programs
•• Poverty alleviation
•• Good corporate governance
•• Business responsiveness to
issues and incidents
concerning operations
•• Succession planning
•• Service quality
•• Influence supply chain by helping them address compliance issues
•• Collaborate with related industries for more impactful and more
responsive community programs, including educational campaigns
on environmental protection
•• Prioritize local hiring
•• Go beyond compliance especially where community development
is concerned
•• Engage more deeply with staff and the community on
environmental and social issues
•• Create and emphasize employee volunteer programs that are
sustainable and not one-time engagements
•• Remain compliant with laws and regulations
•• Benefactors provide Ayala the flexibility to choose programs to
implement in order to create the best impact to as many
beneficiaries as possible
•• Increase environmental programs
•• Improve performance metrics
•• Provide more capacity-building programs to the residents of our
partner communities
•• Explore creative and innovative ways to help the small producers
that we have trained to enter the mainstream market, in particular
by connecting them to the supply chain of our subsidiaries
•• Ayala has a strong environmental focus but, moving forward, the
company should transform this into environmental advocacy given
its size and capability to execute
22
2 012 S U S TA I N A B I L I T Y R E P O R T
AYALA’S BOARD OF DIRECTORS (Left to right):
Yoshio Amano, Antonio Jose U. Periquet,
Jaime Augusto Zobel de Ayala, Fernando Zobel de Ayala,
Xavier P. Loinaz, Ramon R. del Rosario, Jr., and Delfin L. Lazaro
A
CORPORATE
GOVERNANCE
s a responsible corporate citizen,
Ayala is committed to the principles
of risk management, integrity,
fairness, accountability, and
transparency. Good corporate governance is
fundamental to Ayala’s business approach, to
the creation of value for all our stakeholders,
and to our long-term growth.
Delivering on Our Commitments
Ayala’s governance framework is based on
the Philippine Corporate Code, the Securities
Regulation Code, the Revised Code of
Corporate Governance, and the requirements
of the Securities and Exchange Commission
(SEC). The Company fully complies with the
Code of Corporate Governance.
Independent reviewing bodies have
consistently recognized Ayala’s commitment
to good governance. In 2012, the Ayala group
garnered top citations in the 7th Corporate
Governance Scorecard Project of the Institute
C O R P O R AT E G O V E R N A N C E
Specific duties of the Board include:
••Setting the vision and overseeing the
implementation of the company’s strategic
objectives, risk management strategy, corporate
governance, and corporate values;
The Board of Directors
plays a key role in
integrating sustainability
into the governance
framework of the
company.
••Ensuring growth of the business in a sustainable
way and the creation of long-term value for all our
stakeholders;
••Exercising prudent leadership and upholding
the company’s integrity as it continues to make
progress toward its long-term business goals;
••Establishing mechanisms for performance
monitoring and evaluation;
••Establishing internal control mechanisms and
effective risk management as critical components
of the corporate governance strategy; and
of Corporate Directors in partnership with the
SEC and the Philippine Stock Exchange (PSE).
Ayala, together with Ayala Land and Manila
Water, received the Platinum Plus Award given
to companies who have been part of the Gold
Circle for four consecutive years. Over the
years, readership polls of regional publications
including FinanceAsia, Asiamoney, Euromoney,
and Corporate Governance Asia have ranked
corporate governance in Ayala and subsidiaries
as among the Philippines’ best.
Ayala executives were also recognized for their
leadership qualities and achievements. The
Asian Corporate Director Recognition Awards
recognized Jaime Augusto Zobel de Ayala as an
outstanding corporate director for promoting
high standards of business ethics while
meeting the expectations of our shareholders
in growing Ayala’s business. Aurelio Montinola
III received the Management Association of
the Philippines’ Management Man of the Year
2012, while Antonino Aquino was identified as
Best Executive by AsiaMoney.
Board of Directors
The Board of Directors serves a vital role in
corporate leadership and in establishing and
maintaining high standards of governance
for Ayala. They hold a position of trust and
represent the best interests of the company,
our shareholders, and other stakeholders.
••Ensuring compliance with all relevant laws,
regulations, and as far as possible best business
practices.
The nature of the Board’s responsibilities
requires that directors have a broad range
of competencies, experience, and skills. A
director must own at least one share of the
capital stock of the company, must have
attained a college degree or its equivalent,
or must have adequate understanding and
sufficient experience and competence in
managing a business.
The Board is composed of seven directors
elected by stockholders during the annual
meeting. A director serves on the Board for
one year, or until a successor is elected and
qualified according to the company’s By-Laws.
(4.10)
Ayala has three independent directors,
comprising 43% of the Board’s membership:
Ramon R. del Rosario, Jr., Xavier P. Loinaz, and
Antonio Jose U. Periquet. This exceeds the
SEC requirement of two independent directors,
or 20% of Board membership.
In order to fulfill their responsibilities, Board
members are given access to accurate,
relevant, and timely information. All papers
for Board meetings are provided to the Board
at least five business days in advance of the
meeting.
23
24
2 012 S U S TA I N A B I L I T Y R E P O R T
Ayala Corporation Board of Directors Profile
JAIME AUGUSTO ZOBEL DE AYALA
FERNANDO ZOBEL DE AYALA
Filipino, 53, director of Ayala Corporation since May 1987. He has been
the Chairman and CEO of Ayala Corporation since April 2006, and also
holds the following positions: Chairman of Globe Telecom, Inc., Bank of the
Philippine Islands, and Integrated Micro-Electronics, Inc.; Co-Chairman of
Ayala Foundation, Inc.; Vice Chairman of Ayala Land, Inc. and Manila Water
Company, Inc.; Co-Vice Chairman of Mermac, Inc.; Director of Alabang
Commercial Corporation, Ayala International Pte Ltd., and AC Energy Holdings,
Inc.; Chairman of Harvard Business School Asia-Pacific Advisory Board, and
Children’s Hour Philippines, Inc.; Vice Chairman of the Asia Business Council,
Makati Business Club, and Asia Society Philippine Foundation, Inc.; Member
of The Asia Society, Eisenhower Fellowships, Harvard University Asia Advisory
Committee, Harvard Business School Social Enterprises Initiative Advisory
Board, Harvard Global Advisory Council, Mitsubishi Corporation International
Advisory Committee, JP Morgan International Council, International Business
Council of the World Economic Forum, Asia Pacific Basin Economic Council,
Philippine Economic Society, World Wide Fund for Nature Philippine Advisory
Council, Pacific Basin Economic Council, and Toshiba International Advisory
Group; and Philippine Representative for APEC Business Advisory Council.
Filipino, 52, director of Ayala Corporation since May 1994. He has been the
President and Chief Operating Officer of Ayala Corporation since April 2006.
He is also: Chairman of Ayala Land, Inc., Manila Water Company, Inc., AC
International Finance Ltd., Ayala International Pte Ltd., Ayala DBS Holdings,
Inc., Alabang Commercial Corporation, AC Energy Holdings, Inc., and Hero
Foundation, Inc.; Co-Chairman of Ayala Foundation, Inc.; Co-Vice Chairman
of Mermac, Inc.; Director of Bank of The Philippine Islands, Globe Telecom,
Inc., Integrated Micro-Electronics, Inc., LiveIt Investments, Ltd., Asiacom
Philippines, Inc., AG Holdings Limited, Ayala International Holdings Limited,
AI North America, Inc., Vesta Property Holdings Inc., Honda Cars Philippines,
Inc., Isuzu Philippines Corporation, Pilipinas Shell Petroleum Corp., and Manila
Peninsula; Member of The Asia Society, World Economic Forum, INSEAD East
Asia Council, and World Presidents’ Organization; Chairman of Habitat for
Humanity’s Asia-Pacific Capital; Campaign Steering Committee; Vice Chairman
of Habitat for Humanity International; and Member of the Board of Trustees
of Caritas Manila, Pilipinas Shell Foundation, Kapit Bisig para sa Ilog Pasig
Advisory Board, and National Museum.
YOSHIO AMANO
DELFIN L. LAZARO
Japanese, 55, director of Ayala Corporation since April 2012. He is the General
Manager of Mitsubishi Corporation-Manila Branch; Chairman of International
Elevator & Equipment Inc., and MCPL (Philippines) Inc.; Director of Isuzu
Philippines Corporation, Imasen Philippines Manufacturing Corp., Kepco Ilijan
Corporation, UniCharm Philippines Inc., Trans World Agro-Products Corp.,
Philippine Resins Industries, Inc., PhilNewEnergy, Inc., Philippine Integrated
Energy, Inc., Japanese Chamber of Commerce & Industry of the Philippines
(JCCIPI), The Japanese Association Manila Inc., and Manila Japanese School.
Filipino, 66, has served as member of the Board of Ayala Corporation since
January 2007. He also holds the following positions: Chairman of Philwater
Holdings Company, Inc., Atlas Fertilizer & Chemicals, Inc., and AYC Holdings,
Inc.; Chairman and President of Purefoods International Ltd., and A.C.S.T.
Business Holdings Inc.; Director of Ayala Land, Inc., Globe Telecom, Inc.,
Integrated Micro-Electronics, Inc., Manila Water Company, Inc., Ayala DBS
Holdings, Inc., AC Energy Holdings, Inc., Ayala International Holdings,
Ltd., Bestfull Holdings Limited, AG Holdings, AI North America, Inc., Probe
Productions, Inc., and Empire Insurance Company.
RAMON R. DEL ROSARIO, JR.
XAVIER P. LOINAZ
Filipino, 68, independent director of Ayala Corporation since April 2010. He is
the President and Chief Executive Officer of Philippine Investment Management
(PHINMA), Inc.; President, Chief Executive Officer and Vice Chairman of
PHINMA Corp.; Chairman of Araullo University, University of Iloilo, University
of Pangasinan, Cagayan de Oro College, United Pulp and Paper Co., Inc.,
Microtel Inns and Suites (Pilipinas), Inc., Microtel Development Corp., TransAsia Oil & Energy Development Corporation, CIP II Power Corp., Fuld & Co.,
Inc., Fuld & Co (Philippines),Inc., PHINMA F&A Outsource Corp., and Toon City
Animation, Inc.; President of Atlas Holdings Corp.; Vice President of Trans-Asia
Oil & Energy Development Corporation, PHINMA Property Holdings Corp., and
PHINMA Foundation; Director of Holcim (Philippines), Inc., Trans-Asia Power
Generation Corp., Union Galvasteel Corp., and South Luzon Thermal Energy
Corp.
Filipino, 69, independent director of Ayala Corporation since April 2009. He is
an independent director of Bank of the Philippine Islands, BPI Family Savings
Bank, Inc., BPI Capital Corporation, BPI Direct Savings Bank, Inc., BPI/MS
Insurance Corporation, and Globe Telecom, Inc.; Chairman of XPL Manitou
Properties, Inc. and Alay Kapwa Kilusan Pangkalusugan; Vice Chairman of
XPL MTJL Properties, Inc.; Trustee of PETA, BPI Foundation, Inc., and E. Zobel
Foundation.
ANTONIO JOSE U. PERIQUET
Filipino, 51, independent director of Ayala Corporation since September 2010.
He is the Chairman of Pacific Main Holdings, Inc., Campden Hill Group, and
Regis Financial Advisers; Director of Strait Wine Company, Inc. and ABS-CBN
Holdings; Independent Director of BPI Capital Corporation, DMCI Holdings,
Inc., Philippine Seven Corp., Bank of the Philippine Islands, and BPI Family
Bank; and Trustee of Lyceum of the Philippines University.
BOARD OF DIRECTORS COMMITTEE MEMBERSHIP AND MEETINGS HELD
DIRECTOR
PERSONNEL AND
COMPENSATION
NOMINATION
FINANCE
CHAIRMAN
MEMBER
MEMBER
Fernando Zobel de Ayala
MEMBER
MEMBER
Yoshio Amano °°
MEMBER
Jaime Augusto Zobel de Ayala
EXECUTIVE
Ramon R. Del Rosario, Jr. °
MEMBER
CHAIRMAN
Delfin L. Lazaro
MEMBER
CHAIRMAN
MEMBER
MEMBER
CHAIRMAN
Xavier P. Loinaz °
CHAIRMAN
Antonio U. Periquet °
Number of meetings in 2012
AUDIT AND RISK
0
3
° Independent Director, °° Non-executive Director
Note: Six Board meetings, with average attendance of more than 90%, were held in 2012.
MEMBER
MEMBER
4
2
4
C O R P O R AT E G O V E R N A N C E
Board Committees
The Board has established committees to
provide support in the performance of its
function and to aid in good governance. While
we do not have specific committees on the
environment and society, all Board members
are actively engaged in the identification and
management of triple bottom line impacts
given the alignment of the company’s strategic
objectives to national development goals.
Executive Committee Chaired by Jaime
Augusto Zobel de Ayala, the Executive
Committee supports the Board of Directors
in the review and approval of resolutions that
drive business strategy and operations of the
company.
In accordance with the authority granted
by the Board, or during the absence of the
Board, the committee acts by majority vote
of all its members on specific matters within
the competence of the Board of Directors as
may from time to time be delegated to the
Executive Committee in accordance with the
corporation’s By-Laws, except with respect to:
i. approval of any action for which shareholders’
approval is also required;
ii.the filling of vacancies on the Board or in the
Executive Committee;
iii.the amendment or repeal of By-Laws or the
adoption of new By-Laws;
iv.the amendment or repeal of any resolution of the
Board of Directors which by its express terms is
not so amendable or repealable;
v.the distribution of cash dividends; and
vi.the exercise of powers delegated by the Board
exclusively to other committees, if any.
Nomination Committee Chaired by
independent director Ramon R. del Rosario, Jr.,
the Nomination Committee supports the
Board in the management of the process of
nominating individuals to the Board.
Members of the Nomination Committee are
responsible for ensuring that only qualified
directors are nominated for election during
the annual stockholders’ meeting. They are
in charge of selecting nominees for Board
positions, and must guarantee that they
choose a mix of competent individuals who
are able to exercise independent judgment
and add value to the Board in the exercise
of its functions. Because of the company’s
investments in strategic economic,
environmental, and social sustainability,
the Nomination Committee ensures that
nominated directors have the experience and
expertise that will allow them to provide direct
oversight on these major initiatives. (4.7, 4.10)
In 2012, the Nomination Committee was
tasked with evaluating the qualifications
of all persons nominated for positions in
the company requiring Board appointment
and approved the final list of nominees for
directors for election at the 2012 annual
stockholders’ meeting.
Personnel and Compensation Committee
Ramon R. del Rosario, Jr. also chairs the
Personnel and Compensation Committee,
which supports the Board in the determination
of executive compensation and remuneration.
This committee establishes formal and
transparent policies and procedures for
determining the salaries of officers and
directors and oversees the pay for senior
▲
25
The Board of Directors meets
regularly to decide on critical
issues concerning the company
26
2 012 S U S TA I N A B I L I T Y R E P O R T
The committee has primary responsibility
for making a recommendation on the
appointment, reappointment, and removal of
the independent auditors, and the appropriate
audit fees. It also recommends the
appointment and dismissal of the chief audit
executive to the Board. The committee ensures
the quality, integrity, and independence of the
audit process and, as such, maintains free
and open communications with the company’s
independent auditors, internal auditors, and
management.
In 2012, the committee recommended the
appointment of Sycip Gorres Velayo & Co.
(SGV) as Ayala’s independent auditor and
approved SGV’s audit fees. It reviewed and
approved the 2012 consolidated audited
financial statements as well as the 2012 SGV
and Internal Audit workplans.
Board Meetings
▲
Members of the Management
Committee oversee the
business performance of the
Ayala group
management and other key personnel. The
committee is also responsible for reviewing
and strengthening the policy provisions on
conflict of interest, and salaries and benefits.
(DMA-LA)
In 2012, the Committee approved the
performance bonus and merit increases
for the year, as well as the Executive Stock
Ownership Plan.
Finance Committee Delfin L. Lazaro chairs
the Finance Committee, which is responsible
for reviewing and evaluating the financial
affairs of the corporation from time to time.
The committee oversees the company’s
financial policy and strategy, including capital
structure, dividend policy, acquisitions, and
divestments, and makes the appropriate
recommendations to the Board of Directors.
The committee also has oversight
responsibility over the company’s Treasury
activities, and reviews and approves changes
in Treasury policies. It is responsible for
evaluating the financial affairs of the Company
on a regular basis and carrying out such other
duties as may be delegated to it by the Board
of Directors. (DMA-EC)
Audit and Risk Committee Chaired by
independent director Xavier P. Loinaz, the
Audit and Risk Committee assists the Board
in the oversight of the integrity of the financial
statements of the Company and the financial
reporting process, the effectiveness of internal
controls and risk management process, the
performance of the internal audit function and
the independent auditors, and the compliance
with legal and regulatory requirements.
Board meetings are held quarterly or more
frequently if circumstances or decisions
require. Six meetings were held in 2012
and the average attendance was more than
90%, the details of which are in the Annual
Report. Non-executive directors are Board
members who are not officers or consultants
of the company. The remuneration package
for non-executive directors includes a
retainer fee and per diem for every Board and
committee meeting attended: 1) retainer fee
of P1.2 million; 2) per diem of P200,000 for
each Board meeting attended; 3) per diem
of P100,000 per Audit and Risk Committee
meeting attended; and per diem of P50,000
for other committee meetings attended.
None of the non-executive directors has been
contracted and compensated by Ayala for
services other than those provided as director.
Directors holding executive or management
positions do not receive director’s fees. (4.5)
Management
Management is accountable to the Board of
Directors for the effective overall management
and all operations of the company.
Jaime Augusto Zobel de Ayala currently serves
as Chairman and Chief Executive Officer (CEO)
of the parent company. Fernando Zobel de
Ayala is the President and Chief Operating
Officer (COO). He also serves as Vice Chairman
of the Board. The roles of Chairman and CEO
and President and COO are complementary
and help ensure greater accountability and
balance of power. Both the Chairman/CEO and
the President/COO are executive directors
of the Company, and are members of the
Management Committee as well. Among the
checks and balances laid down to ensure that
the Board gets the benefit of independent
C O R P O R AT E G O V E R N A N C E
27
views are: (1) the powers and responsibilities
of the Chairman and of the CEO are specified
and separate in the By-laws; (2) only two of the
seven directors are executive directors and
the powers and responsibilities of directors
are clearly delineated from the powers and
responsibilities of management; and (3)
three of the seven directors are independent
directors. (4.2)
In addition to the various Board-level
committees, Ayala has put in place a
Management Committee to guide the
critical decision-making and key governance
processes of the company. The Management
Committee is composed of key executives
and responsible for monitoring business
performance and issues relevant to the longterm economic viability of the company and to
social and environmental sustainability.
Ayala’s senior executives are subject to a
performance-based compensation scheme.
An additional incentive to management is
The Management
Committee monitors
business performance not
only on economic but also
social and environmental
sustainability.
the stock option plan for officers covering 3%
of the company’s authorized capital stock,
as approved by the Board. The total annual
compensation includes basic pay and other
taxable income including guaranteed bonus,
performance-based incentive, and the exercise
of stock options. (4.5)
Living by Our Values
Through our corporate values of integrity,
long-term vision, empowering leadership,
and commitment to national development,
Ayala has earned its strong position of trust
among its stakeholders. The corporation has
adopted as basic operating principles the
primacy of the person, shared values, and the
empowerment of people. (DMA-HR)
Ayala adheres to a high level of moral conduct
and fair dealings with its shareholders,
customers, employees, and business partners.
Our Code of Ethical Behavior, which is in
accord with our policies on human resources
and embeds the core values we strive to
maintain, guides the way we work in all
aspects. All directors, officers, and employees
are mandated to abide by the company’s Code
of Conduct and business practices that are
aligned with the company’s principles, as set
forth in the Manual of Corporate Governance,
the Articles of Incorporation, and By-Laws. (4.6)
Our Manual on Corporate Governance also
includes a policy on Conflict of Interest as
part of Ayala’s commitment to transparency
and integrity. Transactions by and with the
company must be consistent with our values
and the interest of the Corporation. Ayala has
established a process for reviewing, approving,
and monitoring related-party transactions
to determine whether they are in the best
interests of the company, conducted at arms’
length, and at market rates. Actual or potential
conflict of interest on the part of directors is
fully disclosed. Directors do not participate in
the discussions and voting of matters under
consideration by the Board where there might
be an appearance of a conflict of interest.
A director who has a continuing conflict of
interest of a material nature should either
resign or, if the Board deems appropriate, be
removed from the Board.
Ayala has a policy on insider trading to
ensure compliance with disclosure rules and
government regulations. The policy covers
directors, key officers, consultants and
advisers, all other employees who are made
aware of undisclosed material information
from time to time until such information has
been publicly disclosed, and members of the
immediate families of key officers and covered
▲
Independent directors
Xavier P. Loinaz and
Ramon R. del Rosario, Jr. form
part of the Audit and Risk
Committee
28
2 012 S U S TA I N A B I L I T Y R E P O R T
Financial information and other required
documents filed with the SEC and the PSE are
made available for viewing on our website. (4.4)
Our Investor Relations and Corporate
Communications teams manage the different
information requirements of the investing
public whose voice and opinion may be heard
through meetings and inclusion of relevant,
legitimate topics in the agenda. Information is
shared regularly through periodic reports.
▲
The Ayala group is consistently
recognized for high standards
of corporate governance, social
responsibility, and management
persons. These individuals are prohibited
from the buying and selling of the Company’s
securities during trading blackout periods.
The company also has a strict Anti-Money
Laundering policy that complies with the
provisions of the Anti-Money Laundering Law.
Communicating with Our Stakeholders
We recognize, uphold, and protect the rights
of our stakeholders and ensure open and
transparent communications with them.
Board meetings are held on a quarterly
basis, or as often as may be necessary.
Our Corporate Secretary is responsible for
managing the flow of information to the Board
and ensures that the directors are apprised of
their duties.
Ayala provides multiple channels for
communicating with shareholders. Our primary
channels for shareholder communications are
the Ayala website (www.ayala.com.ph), PSE
announcements, annual reports, and annual
stockholders’ meetings. We ensure equitable
treatment of all our shareholders, including
minority shareholders. We provide our
shareholders with regular updates on the
group’s performance and make sure that they
are informed about the notice and agenda of
any meetings that are held. The annual
stockholders’ meeting provides a unique
opportunity for our stakeholders to participate
in the corporate governance process by
exercising their voting rights and interacting
with Ayala’s Management and the Board.
Our employees are our primary stakeholders
and the company and the Board welcome
their feedback and recommendations.
The company maintains an informal labor
management council, which is a regular venue
for engaging employees in such dialogue. Its
membership consists of union officers and
representatives, as well as representatives
from the human resource department. The
company has formed various work councils
to gather feedback from the employees and
get an equal representation from the group
of companies. The Chief Finance Officer
also serves as the Chief Risk Officer (CRO)
and Chief Sustainability Officer, testifying
to the integration of risk management with
sustainability in strategic planning. He is
supported by the Group Sustainability Program
Director and Group Risk Management Director,
the Ayala Group Sustainability Council, and the
Ayala Group ERM Council, reporting directly to
the Chairman of the Board of Directors and the
CEO. (4.4)
Managing Risks
Risk is inherent in our business; thus, the
effective management of risk is vital to the
strategic and sustained growth of the company
and the Ayala group.
The group adopts a formal risk management
process as an essential element of sound
corporate governance and an integral part of
good management practice. It is designed
primarily to have a structured and disciplined
approach of aligning strategy, processes,
people, technology, and knowledge with the
purpose of evaluating and managing the
uncertainties the conglomerate faces as it
creates value for all stakeholders. (4.11)
Institutionalized in 2002, the Company’s
integrated Enterprise Risk Management (ERM)
framework is primarily designed to be a key
enabler to the strategic and sustained growth
of the company and the Ayala group, and
to support the vision of conglomerate-wide
practice of risk management. ERM policies
C O R P O R AT E G O V E R N A N C E
and programs in place are in accordance
with internationally recognized standards and
frameworks. These are periodically reviewed
and improved to adapt to changes in the
business and operating environment, and be
responsive to emerging and changing risks.
Our CRO is the ultimate champion of
enterprise risk management of the group and
oversees the entire risk management function.
The Group Risk Management Unit provides
support to the CRO and is responsible for
overall continuity of the risk management
process and programs.
Ayala has adopted a six-step process to risk
management:
The Audit and Risk Committee provides
oversight to the risk management process in
compliance with the Audit and Risk Committee
Charter. The CRO and the Group Risk
Management Unit submit risk management
reports to the committee on a quarterly
basis, focusing on the implementation of risk
management strategies and action plans for
the identified top risks of the Ayala group,
any emerging risks, and developments in risk
management.
•• Identify risk drivers or sources
•• Measure the price of failure or possible value
creation opportunities
•• Formulate strategies to manage risks; present
these to the risk owners and other stakeholders
to obtain approval
•• Assess current capabilities to implement the risk
management strategies
•• Identify detailed action plans and resources
required; present the action plans to the risk
owners, the Management Committee, and the
Audit and Risk Committee for approval; carry out
planned activities
•• Monitor implementation of risk mitigation
strategies; update stakeholders on status of
implementation; evaluate the effectiveness of
strategies and improve if needed
The Board monitors the effectiveness of risk
management through the regular updates on
strategic and operational risks facing the
group from Management and reports from the
Audit and Risk Committee. The company’s
internal auditors monitor the compliance with
risk management policies to ensure that an
effective control environment exists within the
entire Ayala group.
29
30
2 012 S U S TA I N A B I L I T Y R E P O R T
focusing on adaptation as a key strategy
in its response to climate change. Detailed
discussions on the risk management initiatives
of our companies can be found in their
respective annual and sustainability reports.
(DMA-HR, DMA-LA, EC2)
Ayala's 2012 Risk Management
Approach
Risk management is a constantly evolving
process, and our companies are focused on
how best we can respond to new and changing
conditions. The practice of sustainability is
much the same way. In order to improve, we
acknowledge that we must keep learning.
▲
Ayala group internal auditors
meet annually for professional
development
The following are the criteria used in assessing
the effectiveness of the risk management
process:
i. Governance and Organization
ii. Risk Management Strategy
iii. Reporting and Communication
iv. Tools and Technology
v. Culture and Capability
Ayala’s executive leadership team and board
members play a vital role in maintaining
the success of our organization and guiding
the company to new levels of growth and
achievement. Risk discussions in new
business development, strategy execution,
and synergy initiatives take place at various
levels of the organization, including the Board
oversight and Management Committee levels.
The risk management process involves
carefully assessing our levels of risk exposure
in relation to our investment portfolio and
acquired businesses as part of our due
diligence. Our companies review organizational
structure, leadership, talent management, and
development programs to adapt to new needs,
business models, and strategies. Corporate
Strategy and Development and Strategic
Human Resources (HR) regularly discuss new
business development plans and collaborate
with the group HR Executive Committee in
order to strengthen Ayala’s pool of talent and
leadership. (4.11)
Our risk management approach is intended to
establish safeguards against issues that can
disrupt operations and to ensure strategic and
sustained growth. We have taken measures
to reduce operational risks, such as those
related to human rights and labor issues. Over
the past five years, our companies have also
experienced first-hand the impact of climate
change on our businesses and recognize that
we must be prepared for the risk of extreme
climate events. A climate-resilient business
is a sustainable business and Ayala will be
Last year, Ayala Land’s Internal Audit Division
hosted the annual Ayala Group Internal
Auditors’ Network (AGIAN) Conference. With
the theme “The Way Forward: Adding Value,
Driving Transformation,” 34 Internal Audit
professionals from 12 companies within the
Ayala group participated in the three-day
conference to discuss stakeholders’ increasing
expectations, changing risk landscapes, and
other developments, and how the Ayala Group
Internal Audit Organizations can respond in
order to meet various challenges. Delegates
to the conference discussed key trends in
the internal audit profession, as well as
the capacity building necessary to develop
strategic thinking, entrepreneurial mindset and
innovation, customer and people orientation,
and excellence in execution. Our companies
are also prioritizing ethics and business
integrity, implementing vendor audits, and
enhancing conflict of interest policies.
Constant communication from the Board and
senior management serve to reinforce and
nurture the risk management culture at Ayala
and will remain a key differentiator, adding
value to the group. ■
C O R P O R AT E G O V E R N A N C E
31
Risk Management Approach
RISK EXPOSURE
Strategic
RISK MANAGEMENT POLICY
►►We will use our risk
management capabilities to
maximize the value from our
assets, business portfolio and
other business opportunities,
and to encourage innovation
OBJECTIVE
►►Aid in leading sustainable
development and in the
management of economic,
environmental, and social
responsibility issues
►►Further enhance shareholder
value through greater
competitiveness and an
improved capacity to take risk
►►Pursue strategic growth
opportunities with greater
speed, skill, and confidence
►►Ayala operates in an everchanging environment and,
as a holding company, it must
(a) manage risks inherent
to its day-to-day operations
and (b) recognize the risks
that are inherent to the
companies in its portfolio
Operational
►►Everyone in the organization
needs to be involved in
active risk management
►►By embedding the risk
management process into
the day-to-day operations,
the Ayala group fosters a
culture of risk management
and enables sound
decision-making at all
levels of the organization
Governance
and Internal
Controls
►►Risk management is a
fundamental element
of effective corporate
governance and an integral
part of sound management
practice in Ayala.
►►Ensure the company operates
in a sustainable manner
►►Avert potential losses
or adverse impact
►►Balance risk and reward
►►Eliminate and/or minimize
operational loss
►►Optimize risk
management cost
►►Implement sound and
effective corporate
governance model and
internal control mechanisms
to achieve the goals
and objectives of the
Company and manage
the consequences of
any crisis situation
RISK ASSESSMENT, MONITORING,
AND MEASUREMENT
►►Structured and periodic
strategic planning process
and portfolio strategy review
►►Monitoring of achievement
of strategic targets
►►Continuous monitoring
of existing, as well as of
new and emerging risks
through the business
unit risk management
champions and the office
of the Chief Risk Officer
►►Business planning
and budgeting
►►Monitoring of actual
results versus objectives
►►Identified key risk indicators
and metrics to measure
the effectiveness of the
risk mitigation strategies
►►Annual risk assessment
and regular reporting to the
Audit & Risk Committee
►►Regular discussion at the
management and Board
committee meetings and
with the Board of Directors
►►Periodic review of governance
structures and policies,
and internal controls
RISK MANAGEMENT AND CONTROL
(STRUCTURES, PROCEDURES,
ACTIONS TAKEN)
►►Investment in processes
and technologies to
support the requirements
of new businesses
►►Rigorous portfolio
analytics and reviews
including resource
allocation and strategy
►►Portfolio and strategic
initiatives visibility and
discussions at various
governance committees
►►Development of formal
policies and processes
►►Regular review of
financial and operations
metrics and reporting
to senior management,
and management and
Board committees
►►Monthly and annual
portfolio analysis/review
►►Regular review and update of
policies to remain relevant
►►Compliance with the
mandates of the Company’s
Manual on Corporate
Governance to ensure the
presence of organizational
and procedural controls
supported by an effective
management information
system and risk management
reporting system
►►Compliance with laws
and regulations
►►Regular benchmarking with
industry best practices and
development of continuous
improvement program to
strengthen the Company’s
practices and policies
32
2 012 S U S TA I N A B I L I T Y R E P O R T
Clockwise from top left:
An eco-bag maker supported by Alay sa Komunidad;
students benefiting from Text2Teach; Iraya
Mangyan with handwoven baskets; Ayala
Young Leaders; teachers participate in
an Enabling Education Communities
workshop; schoolchildren drink
potable water provided by
Lingap Eskwela; a young
reader gains access
to OurLibrary
ayala works with society to create
shared value because business thrives in
communities that are healthy, productive,
and successful. We always operate as
a responsible corporate citizen and as a
good neighbor to ensure that no one is left
behind in the journey towards progress.
New products and services satisfy
the needs of a broader market, while
development projects seek to promote
equitable growth.
We are committed to making life better
for our customers and the communities in
our areas of operation, especially those
at the base of the pyramid. As a Filipino
company with a tradition of excellence in
business performance and a legacy of
nation building, Ayala is proud to serve our
country and our people.
34
▲
2 012 S U S TA I N A B I L I T Y R E P O R T
Nito baskets, trays,
and jars crafted by
the Iraya Mangyan
showcase their
heritage and artistry
A
s part of our triple bottom line approach,
Ayala aligns business success with
the goals of the country. The Ayala
group works with a broad spectrum of
communities, from the areas where we operate
to our program beneficiaries, suppliers, and
customers. (DMA-SO, SO10)
Given Ayala’s nationwide market presence, we
encourage our subsidiaries and affiliates to help
stimulate local economies through local sourcing
and job creation. They practice corporate social
responsibility and undertake social development
programs that are strategically aligned with their
respective business goals and focus on the
country’s priority issues of quality education,
livelihood and capacity building, micro-enterprises,
and a healthy environment. (EC6, EC7)
We work with local communities and leverage on
the talent and resources available. Where there
are indigenous groups in our areas of operation,
we respect their rights and help preserve and
promote their culture and heritage. Consultations
with the council of elders, local government,
and the community shape interventions that
are consistent with beliefs, norms, and actual
needs. We value relationships and harness
them in consortium building and privatepublic partnerships to support the country’s
development.
Transparency and accountability foster a strong
sense of trust in the Ayala brand and our way
of doing things. Ayala practices good corporate
citizenship and complies with all laws, regulations,
and standards. We protect human rights
throughout our activities and the privacy, health,
and safety of our customers and contractors. We
conduct ourselves with the utmost integrity and
uphold justice and fairness in our engagements
with our stakeholders.
Making Business Inclusive
Inclusivity is a priority in Ayala. We continue to
innovate products and services to meet the needs
of our diverse markets, particularly the largely
underserved bottom of the pyramid. (SO1, DMA-SO,
SO10)
In 2012, Manila Water received the prestigious
G20 Challenge on Inclusive Business Innovation
Award from the International Finance Corporation,
the investing arm of the World Bank. The company
was one of only 15 winners selected from
hundreds of nominees globally.
The G20 Challenge identifies, showcases, and
supports innovative business models that serve
low-income communities and have the potential
for replication across developing countries. When
Manila Water entered the market in 1997, it was
founded on the principles that access to safe
ONE COMMUNITY
Inclusivity is a priority at
Ayala. Beyond philanthropy,
we support innovative and
strategic projects to uplift
the life of the community.
drinking water and sanitation services are basic
human rights. Thus, its business model integrates
the needs of the marginalized communities within
its concession area.
Ayala Land’s BellaVita brand launched its Cavite
and Laguna projects in late 2012, catering to lowincome communities, specifically minimum-wage
earners. The company offers payment schemes to
address the financial realities of the mass market
so that quality housing is within their reach. The
BellaVita project includes an open-air retail space
called Fiesta Market to stimulate local enterprise
and formalize the retail activities of small informal
entrepreneurs.
Globe partnered with the Department of Social
Welfare and Development (DSWD) by introducing
financial literacy to the beneficiaries of the
Conditional Cash Transfer (CCT) program. The CCT
is a national social development strategy that
provides conditional cash grants to extremely poor
households to improve their health, nutrition, and
education. Using the Globe Bridging Communities
SIM card, BPI Globe BanKO allows beneficiaries
to open an account for an initial deposit of
P50. Savings in their mobile phone accounts
can be converted to prepaid load, offering CCT
beneficiaries additional income through retail
sales. In just nine months, 3,603 savings
accounts were opened by DSWD CCT beneficiaries
with an average increase of 79% in savings from
their initial deposit.
Facilitating Prosperity for All
Ayala’s community work goes beyond philanthropy.
We commit to supporting innovative and strategic
projects that help improve their standard of living
in partner communities. (SO1, DMA-SO, SO10)
Ayala Land’s Alay sa Komunidad, a long-term
community development program, collaborates
with members of the local community living in
or adjacent to its operations to ensure that the
development projects have a positive impact on
the neighboring communities. Its livelihood thrust
integrates the local communities into Ayala Land
35
▲
BPI Globe BanKO
harnesses
mobile technology
to bring financial
services to
unbanked Filipinos
36
2 012 S U S TA I N A B I L I T Y R E P O R T
For the Globe-CCT program, low-income families
ending their five-year participation received
sustainable livelihood opportunities from Globe
through a partnership with Microventures
Foundation, Inc. (MVF). The joint project offered
a 10-day capacity building program that covered
leadership and business skills formation to CCT
beneficiaries. The program helps them transition
to self reliance once the cash support from the
government ends. In particular, Globe and MVF
trained them how to successfully operate their
own neighborhood stores and provide them with
direct access to wholesale markets to make the
stores sustainable and profitable.
Kickstart Ventures Inc., a Globe subsidiary
launched in 2012, provides Filipino technology
startups the financial and training requirements to
gain market access. By the end of 2012, Kickstart
invested in 10 startups, becoming the most active
incubator in the country.
▲
Community partners
are given access
to market for their
products
supply chain whenever possible. It implements
a local hiring policy at the barangay level for its
various developments, providing employment in
the community. It brings skills experts to share
their knowledge and increase the employment
chances of members of the local area at an Ayala
Land development site and nearby industries. In
NUVALI, the target for hiring locally—particularly
from host barangays Sto. Domingo in Sta. Rosa
and Canlubang in Calamba, Laguna—increased
from 70% to 90% and this was achieved in 2012.
These communities have become a regular
supplier of NUVALI pavers and food services
for the construction group, paper weaving for
corporate gifts, food service for various events,
and manpower for employment and special
projects. Alay sa Komunidad won an Anvil Award of
Excellence for Community Programs in 2012. (EC7)
Cebu Holdings expanded the concept of its
volunteer program Agbayay sa Pag-asenso into
a broader community development program in
2012. It conducted a four-week livelihood training
series on product design and development with
its partner design agency RedApple Creatives, Inc.
The series covered important modules on color
theories and application, product research and
development, and product marketing. Targeting
the women of its partner community Barangay
Luz, the twice-weekly program helped develop
quality products from recyclables collected at the
Ayala Center Cebu and Cebu Business Park. At
the end of the training, the participants produced
candle holders encased in woven boxes made
out of used paper gathered from the company’s
offices, which were then used as corporate gifts.
Lessons from this exercise help shape similar
livelihood programs in 2013.
Globe’s My Fair Share program generated
P4.1 million worth of revenues for its community
producers last year. A partnership between Globe
and social enterprise Gifts & Graces tapped the
beneficiaries of Kaibhan Women’s Association,
an NGO based in Bulacan, to produce highquality eco-bags following fair trade principles.
The partnership integrates the NGO and its
beneficiaries into Globe’s value chain by providing
them access to market for their products.
Globe also launched the Kape’t Buhay Program in
partnership with Bote Central, Inc. Kape’t Buhay
provided farmers from 21 communities with a
community roasting business unit that improved
their capacity by allowing them to roast their
own beans. It organized seminars on business
skills development, planning, and bookkeeping to
help the farmers increase their earning potential
throughout the coffee chain production. At
present, the various coffee vending machines
located in Globe offices in Metro Manila use the
coffee beans from the Kape’t Buhay Program.
Ayala Foundation, supported by the Philippines–
Australia Community Assistance Program of
AusAID, enrolled 104 members of the IrayaMangyan indigenous community in various
skills-training courses offered by the Technical
Education and Skills Development Authority. In
addition, 29 out-of-school youth from the group
were enrolled in DepEd’s Alternative Learning
System.
BPI expanded its support to jeepney drivers as
part of a Department of Energy (DoE) program
called Pantawid Pasada. The DOE used BPI’s
ExpressLink real-time funds transfer system to
offer fuel subsidy via DoE pre-loaded prepaid
cards to 220,000 jeepney drivers in at least 50%
of the retail petrol stations nationwide. Banking
and Payments Asia, a leading regional journal
for retail banking and payments, recognized this
initiative with the Trailblazer Award in 2012.
ONE COMMUNITY
37
Investing in the Future
Ayala has always believed in the Filipino youth.
We help make Filipino students competitive by
providing access to effective teaching materials
and technology-enabled learning environments.
(SO1, SO10)
Ayala’s innovative and
strategic projects improve
the standard of living in
partner communities.
Globe turned over the Global Filipino School (GFS)
program to Bilar National High School in Bohol
last year. Globe’s GFS initiative transforms public
high schools into ICT centers of excellence. It
equips GFS model schools with wired and wireless
Internet connection and multimedia peripherals,
and houses them in an energy-efficient,
environment-friendly building. Complementing
GFS is Globe’s Global Filipino Teachers Program,
an intensive 54-hour, six-day training program for
teachers on the use of integrated communications
technology in classroom instruction and projectbased learning approaches. Both programs build
a community of education leaders who are trained
in mentoring, collaborative learning, effective
BPI Foundation continued to provide free
entrepreneurship sessions for promising business
owners to have access to free learning and
forge partnerships among them. Last year, the
foundation also expanded the reach of the Show
Me, Teach Me program for micro-, small-, and
medium-scale enterprises (MSMEs) to the six
key areas of Tuguegarao, San Fernando in La
Union, Bacolod City, Dipolog, General Santos, and
Zamboanga. It also partnered with Philippine Trade
Training Center and conducted two-day sessions
on topics such as “Starting and Maintaining a
Business,” “Finding the Right Market,” “Basic
Product Costing and Pricing,” and “Basic Business
Recording.” Participating MSMEs averaged
45 to 60 per city and included entrepreneurs
from various sectors, including persons with
disabilities, overseas Filipinos, senior citizens,
and the youth. This program received the citation
Special Award for Enterprise Development
Category in the 2nd Marketing Association of the
Philippines CSR Leadership Challenge 2011.
Manila Water integrates small- and mediumscale enterprises (SMEs) into its supply chain
by allotting a minimum of 20% of its budget that
can be contracted to them. The program also
allows for certain exemptions in its supplier
accreditation. Its complementary livelihood
and development program, Kabuhayan Para Sa
Barangay, awarded a total of P6.3 million to 10
cooperatives that are now part of the Manila
Water supply chain. While 90% of materials are
purchased locally, 80% of these are manufactured
abroad. However, to allow for better after-sales
support and generate business and employment
for the country, Manila Water requires its foreign
suppliers to partner with local companies or to set
up local representative offices.
leadership, and ICT tools for student assessment
and school management.
Participated in by Globe and Ayala Foundation,
Text2Teach, an innovative mobile teaching
program, started its fourth phase last year and
rolled out to public elementary schools across
the country. During the first three phases of the
program, Text2Teach-enabled schools reached
552, benefitting 40,000 students and 1,800
school heads, teachers, and Department of
Education (DepEd) officials. The fourth phase
targets 850 new schools between 2012 and
2014. A total of 187 newly developed education
videos and 455 lesson guides on Math, Science,
Community
cooperatives are
empowered to
become part of the
supply chain of Ayala
companies
▼
38
2 012 S U S TA I N A B I L I T Y R E P O R T
Handicapped Center Lourdes (HCL) with donations
of basic necessities and household items. HCL
takes care of children with multiple disabilities,
provides them with a family through a live-in staff,
and teaches them basic daily living activities such
as eating, bathing, and personal hygiene.
Building the Country’s Talent Pipeline
Ayala implemented projects that enhanced the
country’s talent pool and met the demands of
the Philippine industry, particularly the services
sector, with our “From Education to Employment”
platform. (SO1)
LiveIt’s Professional Employment Program (PEP)
works with a network of employers, including Ayala
subsidiaries, to give students a solid academic
foundation and increase their employability.
▲
LiveIt’s Professional
Employment
Program prepares
college students for
employability and
helps improve the
country’s talent pool
English, and Values Education for fifth- and
sixth-grade levels complemented the basic
DepEd curriculum. Teacher-training programs
and capacity building for local government and
DepEd officials complement the distribution
of the Text2Teach equipment and educational
materials. Text2Teach is the Philippine name
of the global BridgeIT program conceptualized
in 2002 by Nokia, Pearson, the United Nations
Development Programme, and the International
Youth Foundation.
Ayala Foundation provides community leadership
training for young Filipino leaders through
the Ayala Young Leaders Congress (AYLC) and
Leadership Communities (LeadCom) project. Both
programs empower this vital sector to serve
as catalysts of change in their communities.
In 2012, 80 student leaders from around the
country participated in the 14th year of the
AYLC. LeadCom implemented the program in the
following areas: Baguio/Benguet, Isabela, and
Albay in Luzon; Samar and Capiz in the Visayas;
and Bukidnon, Cagayan de Oro, Camiguin, and
Davao in Mindanao. In each of these areas, Ayala
Foundation built partnerships with at least five
schools and trained 80 to 100 youth leaders and
20 facilitators in a three-day servant-leadership
camp on how to develop and implement
community development projects. A total of 50
schools, 191 facilitators, and 712 student-leaders
benefitted from the program. A supplemental
two-day citizenship workshop also equipped
participants with the necessary knowledge
and skills for implementing and sustaining a
community project.
As part of Integreon’s Joy of Giving program, the
BPO company's associates in Manila visited the
Delivered four days per week at four hours per
day for one semester, PEP uses the constructivist
approach where students learn by doing.
Technology-enabled for scalability, PEP also has
student testing and counseling to ensure a good
job match. PEP graduates are equipped with the
essential service-sector skills such as excellent
conversational English, effective and efficient
business communication, solid computer literacy,
broadly applicable support skills, and industryspecific knowledge. They also receive training on
work values such as reliability, thoroughness, and
persistence. Success metrics of PEP graduates
include: 95% employment just 90 days after
graduation versus less than 65% for those who do
not complete the program. The average wage for
PEP graduates is 25% higher than the norm, and
over 15% of PEP graduates obtain supervisory or
specialist-level positions.
Affinity Express launched its On-the-Job Training
Program for the immediate employment of college
graduates. Six college senior students majoring in
Multimedia, Digital Arts, and Fine Arts participated
in the pilot program of 10 to 12 weeks. They
received training on creative and technical
competencies, and on process requirements such
as quality control and operations management,
from Affinity’s senior designers and functional
trainers.
Affinity Express also participated in the Business
Process Outsourcing Association of the Philippines
(BPA/P) Careers for Street Youth to help
disadvantaged young adults become productive
by providing them employment opportunities
through proper training, mentoring, and job
matching. Beginning with a rigorous selection and
interview process, the program provided selected
youths with two weeks of coaching and soft-skills
training including time management, teamwork,
and confidence. To date, there have been 27
BPA/P Careers graduates available for back
office operations or support staff positions like
clerks, receptionists, messengers, service crew,
ONE COMMUNITY
39
sales clerk, office assistants, and other related
competencies. Beneficiaries from Barangays
Singkamas and Bagong Silangan in Makati City
and Quezon City, respectively, also learned
résumé writing and job interviewing. About 90% of
the first batch of graduates is now employed and
the second batch of street-youth selection and
training has commenced.
Integreon’s Manila office partnered with Children’s
Hour in support of the BPA/P Careers for Street
Youth and donated P222,000 to support the
initiative.
Ayala Auto partnered with Don Bosco Technical
Institute, Laguna State Polytechnic University,
University of Makati, Partido State University,
and Technical Education and Skills Development
Authority (TESDA) Tacloban for an on-the-job
program that leads to the employment of their
students and graduates. In 2012, Honda Cars
Makati Inc. and Isuzu Automotive Dealership Inc.
hired a total of 75 students as OJTs followed
by the hiring of seven as regular associates/
technicians and contractual technician.
Ayala’s arts and culture
programs contribute to
a stronger, more cohesive
community of Filipinos.
Instilling Pride in the Filipino
Ayala contributes to a stronger, more cohesive
sense of community through initiatives that instill
pride in being Filipino.
Ayala Foundation’s Arts and Culture division,
consisting of the Ayala Museum and Filipinas
Heritage Library, develops programs that focus on
the country’s rich historical and cultural heritage.
Various exhibitions, educational programs, and
special events drew a total of 83,892 visitors, a
6% increase from 79,000 visitors in 2011. Apart
from the permanent exhibitions, the museum
presented programs that celebrated the artistic
achievements of Filipino artists and strengthened
its links with the international art community.
Among the special exhibitions hosted by the Ayala
Museum included “Fernando Zobel in the 1960s,”
“Ganito Kami Noon: Amorsolo Portraits of the
Filipino,” “Timeless: Swiss Landscapes by Manuel
Baldemor,” “Sharaku Interpreted by Japan’s
Contemporary Artists,” and “Conectados,” a
multimedia art exhibit featuring artists from Spain,
Mexico, and the Philippines. Also significant is the
inclusion of the “Dioramas of Philippine History” in
the Google Art Project, making the Ayala Museum
the first Filipino art institution to participate in the
global art project.
For its part, the Filipinas Heritage Library (FHL)
served more than 2,000 researchers and visitors
last year. It continued implementing its OurLibrary
program, which facilitates the development of
community libraries in neglected areas.
In 2012, FHL and its project partners
completed two community libraries and signed
two memoranda of agreement for additional
community libraries in Lucena City and Tayabas
City. The community library in Infanta, Quezon,
was completed with the help of BPI Foundation
and the local government unit. Together with
the National Book Development Board, FHL also
organized the Third Manila International Literary
Festival, attended by 245 participants and
featured lectures and panel discussions by some
of the world’s most respected writers, publishers,
editors, and literary agents.
In August 2012, BPI opened the BPI Museum
Zamboanga in Mindanao, a lifestyle museum
that showcases information and artifacts on the
culture and life ways of Zamboangueños from
the end of the Spanish colonial period up to the
beginning of the American period. Period pieces,
archival photographs, and commemorative
materials are available for public viewing,
depicting the gentility and elegance of Zamboanga
culture and society at that time. Similar to the BPI
Museum Cebu inaugurated in 2011, BPI Museum
▲
The multimedia
exhibit “Conectados”
brings art to public
spaces
40
▲
2 012 S U S TA I N A B I L I T Y R E P O R T
Filipinas Heritage
Library provides
access to a broad
range of Filipiniana
Zamboanga is located in a national historic
landmark. BPI Museum Cebu displays Philippine
historic and banking memorabilia that date back to
1861 and serves as a venue for Cebuano artists
to showcase their works.
adhere to these codes whenever we promote our
products and services. Our companies complied
with marketing standards and did not receive
any fines for breaching products and services
regulations in 2012. (PR3, PR4, PR5, PR6, PR7, PR8, PR9)
Connecting with Customers
Ayala Auto continued to monitor customer
feedback, receiving numerous commendations on
the performance of its personnel as they live up to
the company motto of “Customer Ko, Mahalaga!”
("My Customer is Important!"). Numerous
sustainability initiatives were also offered to
customers as part of its value-added service,
including seminars on defensive and eco-friendly
driving, preventive maintenance, basic troubleshooting, road safety, and fuel efficiency/saving
tips.
Customer care has always been part of the way
we do business. We respond to our customers
by providing high quality products and services
and implementing specific customer relations
programs to enhance our customers’ experience.
In the CEO Panel of the 2012 ICT Summit, held
under the theme “Transforming Together: One
Ayala,” customer knowledge and customer focus
through improved analytics were key messages.
(DMA-PR)
In general, we saw an increase in customer
satisfaction surveys for our subsidiaries. Keeping
our customers well informed and providing them
with accurate and timely data about our products
and services are crucial to customer satisfaction.
Our subsidiaries adhere to internal policies,
government and industry standards, and voluntary
codes regarding marketing, advertisements,
promotions, sponsorships, and advocacies,
which are discussed in the individual reports of
the subsidiaries. Training of employees, internal
checking mechanisms, licensure requirements,
and regulatory compliance all ensure that we
Globe implemented the First Contact Resolution
program in 2012 to monitor its response to
customers who contact the company within
seven days of logging their concern. This
program has led to reduced call volumes and
increased customer satisfaction levels. Results
show improvements by six to seven points in
its first six months, with postpaid subscribers
resolution increasing from 79% to 85%. Globe
also re-launched its Talk2Globe Hotline by providing
subscribers with the option to communicate in
their language of choice: English, Taglish, and
Visayan. This is in fulfillment of Globe’s objective
to respond to the customer need for easier and
ONE COMMUNITY
Providing high quality
products and services
enhances our customers’
experience.
better communication mechanisms, specifically in
their preferred language.
Manila Water launched a customer-centric
initiative in September 2012 with the read-and-bill
system, allowing the water bill to be issued to the
customer right after each meter reading.
Protecting Our Customers
We listen and respond to our customers’ concern
for their health, safety, and well being in their use
of our products and services.
Ayala Land makes sure that its development
projects are subjected to impact assessments
and that metrics cover people development
data. These are covered in government-issued
environmental clearance certificates. Similarly,
Cebu Holdings promotes and ensures customer
safety through environmental metrics, compliance,
and operational control measures throughout
its project development process. A detailed
discussion of Manila Water’s water life cycle
process, which covers all the stages from securing
raw water supply to the distribution of clean
potable water, is reported in the 2012 report of
the subsidiary. These companies did not receive
significant fines for non-compliance with laws,
regulations, and voluntary codes concerning the
provision and use of products and services. (PR1,
PR2) ■
41
42
2 012 S U S TA I N A B I L I T Y R E P O R T
Clockwise from top left:
Analysts at Manila Water’s world-class laboratory;
A Globe employee volunteers for relief
operations; BPI officers attend a
volunteer management workshop;
An Ayala Land architect visits an
Amaia site; an IMI engineer
checks equipment;
Ayala group athletes
proudly display
their medals
we believe that ayala’s greatest
strength lies in our people. Integrity,
responsibility, and accountability guide
the way our people work. They commit
to upholding our core values and share
the company’s vision of national growth
and development while supporting our
business objectives.
Working as a group, we build on the
unique strengths of our subsidiaries
and explore opportunities for synergy
because it is through shared goals and
commitments that we can achieve more
and do better.
44
▲
2 012 S U S TA I N A B I L I T Y R E P O R T
Ayala Olympics
encourages
camaraderie and
sportsmanship
among peers in the
conglomerate
B
ecause our people are critical to our
success, Ayala maintains an environment
that encourages innovation, high
productivity, and teamwork.
Ayala maximizes the potential of our employees
by providing them with training and resources
to develop their skills and an environment that
encourages personal growth. We identify, prepare,
and train future leaders to enable succession
planning and help secure our companies’ stability
and success. We uphold equal opportunity in
career development and base our remuneration
on performance and contribution to the growth
of our business. We practice non-discrimination
in terms of compensation and pay employees
above the standard entry-level wage defined by the
Department of Labor and Employment.
We maintain a workplace where our employees
are able to address and resolve their concerns,
protecting labor-management relations, and
upholding openness and fairness. Throughout the
Ayala group, we comply with all labor and human
rights laws, including health and safety standards,
and ensure that our employees abide by the
company’s Code of Ethical Behavior and Code of
Conduct in all their dealings. (4.8, DMA-LA, EC5, LA14)
Ayala's Strategic Human Resource Group serves
as the lead organization in policy direction. The
Ayala Group Human Resources (HR) Council,
composed of key HR decision makers and
policy makers, creates synergy among Ayala
companies to realize greater cost efficiencies and
develop innovative programs that add value to
the business. It also sets the strategic agenda
and direction to make HR development more
responsive and reflective of Ayala’s corporate
values. In 2012, the Ayala Group HR Summit
focused on roles and challenges facing HR
practice in light of the conglomerate’s rapid
market and geographic expansion and Ayala’s
entry into new industries. Attended by 300 Ayala
HR professionals, the event featured discussions
by international HR experts and Ayala group CEOs
on innovative people practices, effective employee
engagement, and skills and career development
opportunities.
Similarly, the Ayala group harnesses technology as
an effective means of creating and strengthening
the synergies among the subsidiaries. Last year's
ICT Summit emphasized the value of working
more cohesively given our targets of growth and
expansion. It also featured new ICT trends, best
practices among the subsidiaries, and networking
opportunities. More than 600 technology
specialists and business executives of the Ayala
companies and over 200 representatives from the
ONE TEAM
Our people are critical
to our success. Integrity,
responsibility, and
accountability guide
the way they work.
various technology sponsors attended the one-day
event.
Prioritizing Health and Safety
Throughout our subsidiaries, organizational
structures, policies, and programs that protect the
health and safety of our employees, contractors,
and community members are in place. Issues
on employee welfare and working conditions are
addressed at the joint management-and-labor
committees on health and safety and Collective
Bargaining Agreement discussions.
We implement strict work safety programs
especially in operations with high health and
safety risks, such as work with heavy machinery or
hazardous materials, and follow the requirements
of international standards of Occupational
Health and Safety Management System (OHSAS
18001). Some of the group’s subsidiaries like
Ayala Land’s property management arm Ayala
Property Management Corporation (APMC) and
construction subsidiary Makati Development
Corporation (MDC), Globe’s Valero Telepark, and
Manila Water are all OHSAS certified. They also
undergo periodic audits, multipartite monitoring,
and safety inspections to ensure compliance with
procedures, standards, and legal requirements.
Ayala mandates all regular employees to undergo
annual physical examinations and routine health
checkups. They receive timely information on
prevention of serious diseases so that they
are better informed and more proactive about
protecting their health and those of their family
members. Permanent employees are entitled to
competitive health and medical benefits, including
parental leaves. In 2012, the retention percentage
of all BPI, Cebu Holdings, and Manila Water
employees who availed of parental leaves was
100%. (LA8, LA15)
45
▲
Chief executives of
Ayala companies
meet annually with
the group’s HR
professionals to
discuss emerging
issues and trends
46
2 012 S U S TA I N A B I L I T Y R E P O R T
Workforce by Region (LA1)
Region
Ayala
As of December 31, 2012
Ayala Land
BPI
Manila
Water
Globe
Ayala Auto
LiveIt
IMI
Ayala
Foundation
Total
Luzon
89
1,355
10,939
4,857
1,278
903
11,151
4,520
104
35,196
Visayas
0
110
890
668
0
330
3,887
0
2
5,887
Mindanao
0
28
577
347
0
37
0
0
4
993
89
1,493
12,406
5,872
1,278
1,270
15,038
4,520
110
42,076
Total
Workforce by Employment Type (LA1)
Employment Type
Ayala
Senior Management
4
Middle Management
Rank and File
Total
Ayala Land
As of December 31, 2012
BPI
Globe
Manila
Water
365
95
Ayala Auto
50
171
46
374
4,437
2,911
940
78
39
1,069
7,798
2,596
243
1,158
89
1,493
12,406
5,872
1,278
1,270
15,038
In 2012, Ayala Land reached almost 50 million
safe man-hours, with 100% of its employees
represented in joint management-and-labor health
and safety committees. One of MDC’s important
construction projects last year, the United States
(U.S.) Embassy Manila New Office Annex Project
(MNOX), reached more than 10 million man-hours
without any record of Lost Time Accident
throughout its three-year construction period. The
project also adhered to the standards of the U.S.
State Department’s Bureau of Overseas Buildings
Operations, the U.S. Life and Safety Code, the
34
LiveIt
46
IMI
Ayala
Foundation
Total
104
8
877
1,264
387
23
10,460
13,728
4,029
79
30,739
4,520
110
42,076
American Disabilities Act, and the International
Building Code. Lessons on safety programs and
practices from the MNOX construction project
enhanced existing occupational health and safety
programs in all Ayala Land construction and
development sites. A Safety Officer ensures that
all field personnel receive proper orientation on
safety programs and implement them throughout
operations, including the mandatory use of
Personal Protective Equipment, safety glasses,
and dust masks. (LA6, LA7)
ONE TEAM
Cebu Holdings conducted its regular Work
Environment Measurement inspections and annual
evacuation drill in its existing properties and
projects. The earthquake drill involved, for the
first time, all establishments at the Cebu I.T. Park
and Cebu Business Park, with a total of 13,200
workers from 44 buildings and four construction
sites. Supported by the local government, Bureau
of Fire Protection, and rescue units such as
the Central Command of the Philippine Army,
Philippine National Units, City Traffic Operations
Management, Emergency Rescue Unit Foundation,
and Philippine Red Cross, the drill successfully
oriented the community on mass emergencysituation response. Cebu Business Park’s
security personnel underwent a special training
on emergency response and were tested during
the drill. A post-drill evaluation identified areas
of improvement such as physical endurance for
emergency rescue, the proper handling of victims,
and crowd control, among others.
Manila Water received the Safety Milestone Award
from the Department of Labor and Employment’s
(DOLE) Bureau of Working Conditions and the
Gawad Kaligtasan at Kalusugan from DOLE’s
Occupational Safety Health Center in 2012.
The awards recognized Manila Water’s excellent
record of occupational health and safety, optimum
productivity, and zero accidents at the workplace.
The company’s laboratory services also received
an award of distinction for best practices that
ensure safety in the workplace. Manila Water
reported zero injury, occupational disease, and
lost day rates, and a 0.03 absentee rate for 2012.
(LA7)
Globe reported a 5.04% employee incident
rate, mostly attributed to vehicle driving-related
incidents last year. There was no change in the
rate of accident per employee at 0.08%. (LA7)
IMI continued to implement its Integrated
Environment, Health, and Safety (EHS) Program.
In 2012, IMI Laguna Site 1 achieved more than
3.1 million safe man-hours, while the IMI Laguna
Site 2 achieved 10.2 million safe man-hours. (LA7)
Finally, members of our security personnel
continued to be trained on Ayala’s policies and
existing security procedures, including protecting
the rights of our employees, customers,
contractors, and communities.
In 2012, the Ayala Group Corporate Security
Council (AGCSC) conducted the annual Program
Exchange Training (PET) with the San Francisco
Police Department through the efforts of the
Philippine National Police (PNP) and the Philippine
Embassy in San Francisco. PET exposed the
AGCSC to the Field of Law Enforcement Expertise
of the San Francisco Police through seminar
workshops, exchange of ideas, and actual
discussions. These covered Bomb Identification
and Detection, Emergency and Disaster Response,
Cybercrimes, Fraud Identification and Prevention,
State of the Art Technology, and Forecasting
Social Development and Anticipation of Critical
Events.
Individual data on the human rights training of
our security forces are found in the subsidiaries’
reports. (HR8, LA6)
Preparing Our Future Leaders
Ayala and its subsidiaries have year-round
leadership training programs customized to
the needs of our businesses, which are further
47
▲
The Ayala group’s
security personnel
attend a training
program with
members of the
San Francisco Police
Department
48
2 012 S U S TA I N A B I L I T Y R E P O R T
Employee Turnover By Gender (LA2)
Company
2011
Ayala
Ayala Land
2012
2
7
6
9
104
78
144
99
BPI
447
753
440
812
Globe
331
331
302
268
Manila Water
61
34
461
86
202
126
156
134
Liveit
191
453
1,795
6,157
IMI
100
671
125
819
Ayala Auto
Ayala Foundation
TOTAL
3
14
2
4
1,441
2,467
3,431
8,388
Employee Turnover By Age Group (LA2)
Company
Ayala
2011
< 30
2012
30-50
50 <
< 30
30-50
50 <
0
2
7
3
6
6
91
91
0
112
124
7
BPI
723
304
173
709
347
196
Globe
273
377
12
225
330
15
54
21
20
57
204
286
Ayala Auto
189
137
2
182
106
2
LiveIt
435
193
16
7,232
712
8
IMI
421
347
3
437
504
3
2
13
2
3
3
0
2,188
1,485
235
8,960
2,336
523
Ayala Land
Manila Water
Ayala Foundation
Total
discussed in the individual reports. The following
are last year’s leadership training highlights. (LA11)
In 2012, BPI launched its BPI Leadership
Excellence Acceleration Program (BPI LEAP), a
scalable and innovative leadership program that
builds capabilities pivotal to business success.
In partnership with Harvard Business Publishing
(HBP), a wholly owned subsidiary of Harvard
University, BPI LEAP was the first HBP-delivered
large-scale executive development program over
the Internet. It taps Harvard Business School
thought leaders and professors in shaping the
expertise of its top executives in sustainability
and leadership. Using real-time interactive videoconferencing, the program connects multiple sites
and enables the participation of bank managers
outside Metro Manila. A total of 800 BPI leaders
have been part of the program since inception.
Now a benchmark in training and development,
BPI LEAP uses the leaders-teaching-leaders
model, with its executives facilitating follow-ups to
help participants apply their learning to challenges
faced by the bank.
In 2012, the People Management Association
of the Philippines (PMAP) awarded BPI LEAP with
the PMAP People Program of the Year for being
“relevant, unique, innovative, and cutting-edge.”
PMAP is the premier organization of people
managers in the country. (LA11)
Given BPI LEAP’s success, Ayala adopted it for
the conglomerate in 2010. The Ayala Leadership
Acceleration Program (Ayala-LEAP) covers
Strategic Visioning and Execution, Customer
Centricity, Innovation and Growth, and Leading
for Transformation and Engagement, which were
identified as key enablers of the conglomerate’s
strategic goals. Ayala conducts the program
across all subsidiaries using online group
collaboration, virtual seminars with Harvard
Business School faculty and experts, self-study,
and face-to-face classroom discussions. With
two additional cohorts in 2012, a total of 200
executives have completed Ayala-LEAP. Ayala also
launched the Emerging Ayala Leaders Program
(EAGLE) in 2012 to train 88 middle managers
from across the group. Ayala-LEAP and EAGLE
ONE TEAM
Employee Turnover By Region (LA2)
Company
Ayala
Ayala Land
BPI
As of December 31, 2012
Luzon
Visayas
Mindanao
14
0
1
230
13
0
1,135
67
50
Globe
516
33
21
Manila Water
547
0
0
Ayala Auto
LiveIt
IMI
Ayala Foundation
TOTAL
209
68
13
6,199
1,753
0
944
0
0
4
2
0
9,798
1,936
85
Total Percentage Of Employees Who Have Undergone Formal Performance Or Development Reviews (LA12)
Company
2011
2012
Ayala
100%
100%
Ayala Land
100%
100%
BPI
67%
53%
Globe
94%
92%
Manila Water
75%
75%
Ayala Auto
100%
100%
LiveIt
100%
100%
IMI
100%
100%
Ayala Foundation
100%
100%
participants develop projects that address burning
issues in their respective companies, propose
concrete and workable solutions to their CEOs,
and lead in their implementation.
iLeadGlobe is part of Globe’s Integrated Leadership
Development Program that includes a series
of training for all employee levels: Executive
Development Program for the next generation
of senior leaders, Fast Tracker Program for the
mid-career talents, and Young Leaders Program
for emerging talents. The company partnered with
the Asian Institute of Management (AIM) and the
Ateneo de Manila Center for Continuing Education
for the training of eligible employees interested
in developing their leadership and management
skills.
IMI consolidated its human resource development
programs when it institutionalized IMI University in
2012. It conducted 127 training programs, 67%
of which were facilitated by in-house experts. IMI
also re-launched the Technical Ladder Program
that aims to provide a career path for technical
and non-management personnel. The Technical
Ladder Program is one of two career development
paths that monitor professional growth.
Ayala companies continue to provide different
types of training to enhance the competencies and
capabilities of our employees.
Creating a Strong Corporate Culture
Creating a corporate culture that embodies our
values and fosters quality performance is crucial
to our business.
Globe continued its on-boarding program The
Globe Way Series to introduce and strengthen
the company’s corporate culture, core values,
and ideals, which resulted in increased levels
of employee satisfaction, promoting positive
customer interactions and business growth.
Similarly, its Culture Change Workshop for Leaders
helps participants understand Globe’s value
system and equips them with skills required for
change management, especially in the dynamic,
highly competitive telecommunications industry.
The workshop enables business group leaders
and managers to develop the best methods for
sharing and strengthening the Globe culture
among their team members within the context of
transformation. (DMA-HR, DMA-SO)
49
50
2 012 S U S TA I N A B I L I T Y R E P O R T
In 2012, BPI Foundation registered a total of
32 BPI BAYAN programs on social services,
education, livelihood, health, and the environment
nationwide and logged 16,000 volunteer hours. A
search for the Most Outstanding Volunteer Groups
rewards projects that excel in terms of relevance,
effectiveness, initiative, resourcefulness,
innovativeness, extent of employee participation,
and sustainability.
BPI BAYAN contributed to the high employee
engagement rating of 82%, a result higher than
the Global Financial Services norm in a survey
conducted by Towers Watson.
Globe’s i-Give program mobilizes employees to
serve as volunteers during relief operations,
raise funds for Globe’s Bridging Communities
projects, and serve as mentors to the youth,
teachers, micro-entrepreneurs, barangay leaders,
and non-government organizations. Using the
“volunteaming” concept, five Globe employees
from any office nationwide work on projects in
their preferred communities and receive funding
from Globe’s Bridging Communities CSR program.
Through Globe’s i-Give, employees grow more
aware of the issues of immediate communities
and respond to residents’ actual needs.
In 2012, 1,715 Globe employees or 30% of
the total workforce reached out to different
communities, logged 7,943 volunteer hours,
and raised P778,410 for various partner NGOs,
beneficiary communities, and advocacies. Last
December, Globe also launched i-Volunteer, an
online volunteer-matching facility that offers
volunteering opportunities outside Globe-initiated
programs on a nationwide scale. (DMA-SO)
Fostering Teamwork and Camaraderie
Supporting Employee Volunteerism
Ayala encourages employee volunteerism and
engagement for social development. (DMA-SO)
BPI’s Bayanihan para sa Inang Bayan (BPI
BAYAN) is a nationwide volunteer program that
provides employees with a venue to give back to
the community, build responsive development
programs, and enhance team work. They
undertake community scanning to determine the
most pressing needs in partner communities and
ensure the relevance of BPI BAYAN programs.
Employee volunteers document the baseline
information and measure program benefits against
the baseline data.
Given Ayala’s shared vision, we believe in the
importance of all employees seeing themselves as
members of one family. Last year, the group held
the 2012 Ayala Olympics, a quadrennial event with
285 athletes in 18 sporting events and attended
by almost 10,000 officials and employees from
the various subsidiaries. Manila Water emerged
as the overall champion, followed by BPI and Ayala
Land in second and third place, respectively. The
Ayala Olympics instills the important values of
healthy competition, teamwork, and excellence
among all employees in a friendly environment. ■
ONE TEAM
▲
Average Training Hours (LA10)
Company
2011 Average Hours (By Rank)
Rank And File
Ayala 1
Middle Mgt
2012 Average Hours (By Rank)
Senior Mgt
Rank And File
Middle Mgt
2012 Training Hours
Senior Mgt
Total Hours
Average Hours
2012 Ave. Hours by Gender
Male
Female
8.13
24.70
13.12
12.92
15.98
4.95
1,343.00
12.67
13.38
11.96
Ayala Land
24.00
27.00
34.00
24.95
20.84
9.92
35,080.16
23.56
23.99
23.13
BPI
65.00
91.00
226.00
46.36
51.74
55.30
600,552.00
48.42
47.76
48.81
Globe
27.00
43.00
23.00
106.50
37.60
4.40
387,524.80
66.00
69.89
62.15
1.02
11.42
22.35
10.91
50.34
25.45
38,958.50
44.37
58.88
29.86
21.00
16.00
24.00
27.40
20.30
20.00
33,917.80
26.81
31.00
19.30
409.08
229.70
588.46
6.63
2.01
11.24
Manila Water
Ayala Auto
LiveIt
IMI
1
51
—
—
—
137.38
18.25
14.00 1,909,596.00
6.00
13.00
10.00
4.87
22.21
11.43
29,948.00
Does not include consultants
Composition Of Governance Bodies And Breakdown Of Employees Per
Category According To Gender And Age Group (LA13)
% Male
% Female
% Under 30
% 30 to 50
% Over 50
Board of Directors
100
0
0
0
100
Management Committee
93
7
0
7
93
Ayala has 7 members on its Board of Directors, and 14 members in the Group Management Committee
Globe employees
are briefed on the
protection of Taal
Lake
52
2 012 S U S TA I N A B I L I T Y R E P O R T
Clockwise from top left:
A Globe cell site camouflaged as a palm tree; IMI
builds solar panel manufacturing capability;
biking enthusiasts raise funds for the
reforestation of the Cordillera;
El Nido Resorts meet sustainability
standards; eco-tourism thrives
in El Nido and Kan-irag
Nature Park; Centex
Batangas students
plant tree
saplings
we all share one planet, and
ayala recognizes that we share in
the responsibility of caring for it. Our
commitment to doing things better
extends to environmental performance.
Given our group’s size and reach, we
believe that the programs initiated by our
subsidiaries have a significant positive
impact on the environment in the areas
where we operate. More efficient and
judicious use of resources not only makes
business sense; it also helps ensure a
better environment for tomorrow.
54
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2 012 S U S TA I N A B I L I T Y R E P O R T
Anvaya Cove
provides a sanctuary
for the olive ridley
turtle, locally known
as the pawikan
T
he Ayala group commits to managing the
impacts of business on the environment
by monitoring resource use and
consumption and reducing emissions
and waste. Our companies continue to develop
environmental management strategies and comply
with all national laws and regulations relevant to
environmental protection, going beyond regulatory
compliance where possible and observing best
practices and global standards. Beyond our
operations, Ayala works in partnership with
various stakeholders, organizations—suppliers,
customers, government, and civil society—to
mainstream business practices that foster
broader environmental responsibility. (DMA-EN)
aspect in 2012, from P39 million to P78 million.
Ayala Land’s TDD strategy includes proper site
assessment and an approach to project design
that respects the environment’s natural features
and unique characteristics. These principles
and best practices are now being compiled in
Ayala Land’s Book of Standards in Sustainability
(BoSS). Managers from its construction, design,
and project development units spearhead the
development of the BoSS.
Championing environmental sustainability, Ayala
subsidiaries allot a percentage of their total
budget to managing their impacts and improving
their environmental performance, with the total
figure registering P4.3 billion from Ayala Land,
Cebu Holdings, Globe, and Manila Water. The
amount is broken down in the individual reports of
the four subsidiaries. (EN21, EN30)
As part of its Green Transformation initiative,
Globe overhauled many of its base transceiver
stations (BTS), replacing traditional cooling
equipment and, where possible, shifting to
renewable energy, such as solar energy. The
BTS sites are an essential component of Globe’s
business, enabling wireless communication
between the network and its subscribers. Globe
is also deploying a Facilities Management System
(FMS) to monitor its energy consumption and
the environmental conditions in its regional
operational centers. It planned to finish The Globe
Tower in Bonifacio Global City, Taguig in 2013 as a
LEED-standard building. The move will consolidate
several Globe office branches, which are located
across Metro Manila.
Ayala Land minimizes land and water resource
disturbance in its project planning. It has
strengthened its technical due diligence (TDD)
and significantly increased its investments in this
Manila Water is implementing an Integrated
Management System in 15 of its facilities. Manila
Water adopts international best practices, aligning
its facility management with ISO standards for
Environmental Stewardship Within Our
Operations
ONE PLANET
Ayala subsidiaries allot
a percentage of their
total budget—a total of
P4.3 billion in 2012—to
manage their impacts and
improve their environmental
performance.
quality management, environmental management
and occupational health and safety. Building
on this strong management foundation, Manila
Water aims to incorporate an Energy Management
System into its IMS, with the goal of achieving
ISO 50001 certification by 2013.
IMI minimizes exposure to hazardous waste
and other potential negative incidences with
its Integrated Environment, Health, and Safety
(EHS) Program. The company is fully compliant
with the Department of Environment and Natural
Resources’ Republic Act (RA) 6969 Toxic and
Hazardous Act and the RA 9003 Ecological Solid
Waste Management Act. In 2012, IMI Laguna
attained 97.8% recycling recovery of all wastes
generated because of its implementation of
the 3R (Reduce-Reuse-Recycle) program in the
disposal of its chemicals for manufacturing
processes, waste segregation, and waste
composting. IMI also turns over hazardous
recyclable wastes to accredited agencies such as
ABS-CBN Foundation’s Bantay Kalikasan.
For our group’s environmental performance, we
improved on direct energy and water consumption,
registering decreases despite business growth.
Subsidiaries make sure to identify in their
individual reports all water sources, whether
groundwater source or bodies of water, that
may be significantly affected by their business
operations because of the volume of withdrawal
as well as the volume and quality of discharges.
These water sources are monitored to ensure
against any negative impacts.
In terms of indirect energy use, there was an
increase, registering a rise in our greenhouse gas
emissions. These are mainly attributed to the
expansion of our operations in retail, construction,
and water distribution activities. (EN9)
We are committed to monitoring our use
of resources so that we can manage our
consumption relative to our growth and, where
possible, decrease them.
55
▲
The Globe Tower in
Bonifacio Global City
is built according to
LEED standards
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2 012 S U S TA I N A B I L I T Y R E P O R T
Direct Energy Consumption In Gigajoules (EN3)
Year
Ayala
Ayala Land
BPI
Globe
Manila Water
Ayala Auto
IMI
Total
2012
209.86
139,296.16
7,478.25
57,300.00
12,642.29
5,489.80
5,909.08
228,325.44
2011
54.06
132,986.79
4,231.07
56,900.00
64,150.81
6,469.14
1,081.19
265,873.06
Pertains to non-renewable primary sources; there were none for renewable primary sources
Direct Energy Consumption (Gigajoules) Per Earnings (Billion Peso EBIT)
Year
Total Ayala Group
(gigajoules)
Group EBIT
(billion pesos)
Total/EBIT
(gigajoules per billion pesos)
2012
228,325.44
23.20
9,841.61
2011
265,873.07
19.70
13,496.10
Indirect Energy Consumption In Million KWH (EN4)
Ayala Land
BPI
Globe
Manila Water
Ayala Auto
IMI
Ayala
Foundation
Year
Ayala
2012
0.386
434.90
62.37
316.67
92.81
4.37
40.71
1.93
954.146
2011
0.340
149.74
53.42
302.77
80.30
4.50
42.76
2.00
635.830
Total
Pertains to electricity consumed; there were none for other uses
Indirect Energy Consumption (Million KWH) Per Earnings (Billion Peso EBIT)
Year
Total Ayala Group
(million KWH)
Group EBIT
(billion pesos)
Total/EBIT
(million KWH per billion pesos)
2012
954.15
23.20
41.13
2011
635.83
19.70
32.28
Due to the intensity of their use of materials such
as cement, steel, and water in their businesses,
Ayala Land, Cebu Holdings, and Manila Water
annually keep track of the amount or volume of
their consumption and reports these figures in
their individual reports. While we reported an
increase in our wastes, around 50% were recycled
or reused. We also saw a rise in our carbon
reduction efforts even as our absolute emission
figures increased. (EN1)
Offering Environmentally Responsible
Products and Services
The Ayala group of companies is committed to
offering environmentally sustainable products
and services to our customers by developing new
technologies or adopting greener standards. (EN6)
Ayala, through Ayala Land’s property management
arm, APMC, implemented energy conservation
initiatives in Tower One and Exchange Plaza, where
its head office is located. In 2012, it undertook
a lighting upgrade project that involved the
replacement of 36-watt fluorescent lamps with 28watt eco-efficient TL5 light bulbs, which improved
the lighting level while saving 12,298 KWh or
P116,000 per month. It also installed motion
sensors and controllers in its escalators, which
saved 1,584 KWh every month or monthly savings
of P13,369. (EN18)
Aligned with Ayala Land’s commitment to green
buildings, four out of the 14 Leadership in
Energy and Environment Design (LEED) Certified
buildings in the country are Ayala Land-developed
or managed properties. The LEED Certification
serves as the U.S. Green Building Council’s
guarantee that the project complies with the
standards of the LEED rating system, and
demonstrates environmental stewardship and
social responsibility. As one of the early adopters
of green building standards in the Philippines,
the company is at the forefront of environmental
design and project execution.
One of the significant achievements of 2012 was
the completion of the US Embassy Manila’s New
Office Annex (MNOX) Project by MDC. The MNOX
Project is a compound that includes the Consular
Affairs Office (NOX-1), the NOX-2 Building for nonconsular operations, the NOX-3 Veteran Affairs
ONE PLANET
Clinic, the Marine Security Guards Quarters, as
well as a parking facility and utility building. The
MNOX Project complies with the LEED standards,
with NOX-1 achieving LEED Gold Certification and
NOX-3 obtaining LEED Green Certification. The
certification for NOX-2, which was completed in
2013, is still being reviewed.
Ayala Land’s new business hotel brand, Seda,
incorporates the company’s sustainable design
principles, such as energy saving features and the
use of environmentally responsible materials. The
hotel was launched in 2012 and has branches in
the cities of Taguig and Cagayan de Oro, and will
soon open in Davao.
BPI expanded the coverage of its Sustainable
Energy Financing (SEF) Program in 2012,
particularly to government institutions and
the academe. BPI signed a Memorandum of
Agreement with the Climate Change Commission,
the Department of Budget Management, the
Department of Energy, and the University of
the Philippines, to help government institutions
transition to energy-efficient buildings. It released
P4.2 billion worth of sustainable energy loans and
leases in 2012. Total outstanding loans as of the
end of last year reached P7.35 billion. These SEF
projects saved a total of 89,821 MWh per year of
energy, produced 630,742 MWh per year of clean
energy, and abated carbon emissions by 645,774
tons per year.
IMI launched its low-cost, high-performance light
emitting diode (LED) engine at the Electronica
2012 trade show in Germany. The LED engine is
designed specifically for the lighting requirements
of the automotive and industrial sectors. This
LED engine also meets the needs for low-cost
incandescent replacements and features twice the
current LED lifespan, without increasing the cost.
PSi, IMI’s subsidiary, designed the LED engine for
higher thermal conductivity and greater ability to
withstand higher thermo-mechanical stress.
IMI also partnered with the Renewable Energy
Test Center (RETC), a California-based provider
for photovoltaics (PV) and renewable energy
products in 2009. IMI Energy Solutions, a division
of IMI USA, was established in 2010 to develop
and manufacture solar panels and other related
57
▲
Endemic plants
flourish in Cebu’s
Kan-irag Nature Park
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2 012 S U S TA I N A B I L I T Y R E P O R T
Water abstraction by source from Manila Water is 419.69 (raw water) and 3.34 (ground water) in billion liters
GHG Emissions CO2 Equivalent (Tons) (EN16)
Year
Ayala
Ayala Land
BPI
Globe
Manila Water
Ayala Auto
IMI
Total
2012
247.42
246,632.88
28,080.50
172,185.00
57,307.00
2,978.12
20,155.06
527,585.98
2011
198.00
84,321.00
27,675.00
136,502.00
56,776.00
3,130.10
14,758.00
323,360.10
technologies. In 2012, IMI began working with
nine solar panel development companies.
Enriching Biodiversity
Aligned with our environmental commitments,
we make sure to maintain and enhance the
biodiversity of the areas where we operate. (DMAEN, EN11, EN12, EN13, EN14, EN15)
Given the nature of its business, Manila Water has
been helping protect La Mesa Watershed since
1999, and continues to expand its work in other
watershed areas, particularly Ipo and Marikina
Watersheds. Apart from being critical to sustaining
water supply, these watershed areas also have
significant biodiversity value. Manila Water works
with the watershed communities and a wide range
of external partners who help implement activities
focused on increasing forest cover and improving
species diversity. Increasing forest cover reduces
soil erosion and decreases surface runoff,
resulting in improved water quality and supply.
In 2012, Manila Water was actively involved in
the preparation of the Upper Marikina Watershed
Management Plan. The company took the lead
in formulating the Comprehensive Watershed
Management Plan, which was approved by
the Department of Environment and Natural
Resources and the Protected Area Management
Board of the Upper Marikina River Basin Protected
Landscape. In partnership with Fostering People’s
Education, Empowerment and Enterprise, Inc.
(FPE), Manila Water successfully rehabilitated a
500-hectare denuded area within the watershed.
By the end of 2012, Manila Water, FPE, and
five people’s organizations in the watershed
completed the reforestation of the last remaining
85 hectares. It also continued to implement
its Adopt-a-Watershed program with numerous
partners from the corporate sector, civil society,
and academe to plant 14.75 hectares or
approximately 5,900 native seedlings. To date, the
Adopt-a-Watershed program has reforested a total
of 149 hectares. Manila Water’s joint program with
Metropolitan Waterworks and Sewerage Services
and Maynilad Water to rehabilitate and protect
the Ipo Watershed helped reforest 560 hectares
from 2010 to 2011. This received the support of
ABS-CBN Foundation-Bantay Kalikasan and six
community-based groups within the watershed.
Ayala Land’s standard practice has been to
monitor its performance within or adjacent to
areas of high biodiversity of their developments,
such as Bataan, Palawan, Laguna, and Quezon
City. The company implements a policy of
minimal land disturbance, tree preservation, and
enhancing open spaces and preserving ecosystem
functions even if these areas have not been
ONE PLANET
Includes Scope 1 & 2 emissions. Data also includes Scope 3 emissions when available.
Production Of Waste (Tons) (EN22)
Year
Ayala Land
BPI
GLO
Ayala Auto
IMI
Total
Percentage sent
to landfill
2012
32,783.91
215.67
111.79
181.88
1,206.50
34,499.74
41
2011
24,617.00
296.00
114.31
9.61
561.90
25,598.42
41
Manila Water’s wastes are reported in cubic meters as biosolids. For 2012, they reported 18,243 cubic meters.
Climate change adaptation
at Ayala combines
biodiversity conservation,
watershed management,
and the use of ecosystemappropriate native species
for its developments.
declared protected areas. Last year, it adopted
a policy on using ecosystem-appropriate native
plants and trees in its project sites.
Cebu Holdings, in partnership with the Cebu
Uniting for Sustainable Water (CUSW), has
implemented a rapid assessment flora and fauna
study at the Kan-irag Nature Park since 2011.
The park is a 71-hectare area located within the
Central Cebu Protected Landscape. The flora
inventory indicates that the forest in Kan-irag
is regenerating. A total of 16 tree species were
found in the study site. Majority of these are
pioneer species that are typically found in a young
regenerating forest. Enrichment planting using
lowland endemic forest species will help increase
plant diversity in the area. Kan-irag Nature Park
is also host to endemic fauna. Various bird and
bat species are found, such as the black shama,
the Cebu flowerpecker, and the Cebu hawk owl.
The current study found 25 bird species within the
established transect area.
The Kan-irag inventory contains baseline
information against which Cebu Holdings will
compare future assessments and guide future
projects within Kan-irag Nature Park. The study
also serves as the basis for the reforestation plan
that aims to develop Kan-irag as a forest corridor
that will connect to larger forest areas in Cantipla
and Tabunan. As vegetation improves, there is
great hope that the number of species found
in the park will increase, making it a haven for
Cebu’s biodiversity.
Rising to the Challenge of Climate
Change
With climate change felt more evidently in the
Philippines, we develop new and innovative
responses that improve the resilience of our
business, communities, and the country. (EC2)
Manila Water was among the first companies to
formulate a policy response to climate change in
2007. In 2012, Manila Water revised its policy
to better align with the national government’s
climate change adaptation strategy. One of
the key adaptation initiatives is the climate
proofing of facilities, which involves incorporating
design principles specific to climate change
risks, particularly the risk of extreme storm and
flooding events. The Olandes Sewage Treatment
Plant (STP) was designed to adapt to the risk of
flooding, due to its proximity to the Marikina River.
Although the Olandes STP was inundated during
Typhoon Ondoy in 2009, the electro-mechanical
components were undamaged and remained
functional. Manila Water is developing new
guidelines to mainstream climate-proof design
principles in its facilities, ensuring that it is able to
guarantee reliable service at all times, especially
during natural disasters.
BPI partnered with World Wide Fund for Nature
(WWF) Philippines for the long-term, multi-
59
60
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2 012 S U S TA I N A B I L I T Y R E P O R T
Members of
Barangay Luz’s
garbage collection
team are trained
on the proper
management of
hazardous waste
city study “Business Risk Assessment and the
Management of Climate Change Impacts” to
assess the impact of climate change on business
in areas of high vulnerability. The study aims to
guide city planners and decision-makers when
developing strategies that help them cope with
and adapt to the impact of climate change. In
2012, BPI and WWF shared the results and
recommendations of the second phase of
the study, which focused on Cagayan de Oro,
Dagupan, Laoag, and Zamboanga. These cities
were selected based on the high incidence of
storms, floods, droughts, and other extreme
climate events in the past decade.
Working with Others on Environmental
Efforts
The environmental challenges we face as a society
require working with others. Our collaborative
efforts ensure that we maximize environmental
benefits from our initiatives. (EN18, EN26)
BPI engages its suppliers through its program on
greening the supply chain. Last year, BPI entered
into a Memorandum of Understanding with the
Green Philippines Islands of Sustainability (GPIoS),
signifying its commitment to cascading greater
environmental awareness to its partners in the
supply chain. Participating in GPIoS gives them
the opportunity to receive relevant training and
capacity building to implement more efficient and
environmentally responsible systems.
Manila Water is also a participant in GPIoS.
From an initial 13 companies, there are now
24 suppliers and contractors who are actively
engaged in the program. Manila Water also
provided other training opportunities to its supply
chain. Suppliers and contractors were trained
in hazardous waste management and cleaner
production.
Engaging with its customers, Globe expanded on
its Cellphone Takeback Program, which started in
2011. The 2012 program allowed more customers
to participate, gathering more mobile phones for
recycling and recovery. A total of 3,850 units of
old and defective cell phones were collected by
Globe’s partner recycler, TES-AMM Singapore,
saving 36 cubic meters of landfill space. (EN27)
To engage the private sector and support Cebu
City’s waste reduction strategy, particularly the
processing of biodegradable and recyclable
materials, Cebu Holdings partnered with Barangay
Luz in the North District of Cebu City in 2007 to
collect biodegradable wastes from CHI-managed
buildings and offices in Cebu Business Park.
Being a busy commercial area, Barangay Luz
was challenged by the urbanization and the
high volume of waste generated by the growing
population. The Barangay Luz partnership
ONE PLANET
Engaging the public through
awareness programs
enables the success of our
waste management efforts.
helped establish Tugkaran, a green space and
composting facility in the Cebu Business Park.
The composting facility processes collected
biodegradable waste from Ayala Center Cebu.
This partnership facilitates the implementation
of national laws on solid waste and promotes
livelihood and employment. The program is in
compliance with the Republic Act 9003 or the
Solid Waste Management Act of the Philippines.
(EN22)
Manila Water launched Toka Toka in 2012, an
innovative public awareness program on water
and wastewater. Toka Toka takes a different angle
on water education, being the first environmental
movement in the Philippines focused on used
water and its effect on rivers and waterways.
Water is everyone’s concern, therefore its main
message is that we all have a stake —“toka”— in
reviving the rivers. The program is part of Manila
Water’s extended environmental responsibility and
is aligned with the company’s strategy to educate
and engage the public on wastewater issues.
(EN21) ■
61
▲
Manila Water
officers and project
partners ride boats
in the Pasig River
to raise public
awareness of and
participation in the
river revival program
62
2 012 S U S TA I N A B I L I T Y R E P O R T
eadership drives Ayala’s sustainability
journey. Our pioneering companies and
leaders have advocated sustainability
and they serve as the group’s benchmark
in guiding our initiatives and practices.
At Ayala, we are constantly raising the bar on our
economic, social, and environmental efforts toward
a more sustainable future. In 2005, Manila Water
published its first sustainability report and
consequently pioneered the practice of sustainability
reporting in the Philippines. Ayala Land followed suit
and started the trend of sustainability reporting in
the real estate industry.
Groundbreaking sustainability initiatives for both
companies were led by Tony Aquino, former CEO
of Manila Water and current President and CEO of
Ayala Land. He has led efforts in embedding
sustainability in the company’s operations through
an understanding of its stakeholders, particularly the
underprivileged communities.
ANTONINO T. AQUINO
LEADING BY
BEING BETTER
When asked about his personal perspective on
sustainability, Tony Aquino emphasizes business
continuity and the common good. Quoting a textbook
definition of sustainability, he described it as “what
you do today must consider what the future will be;
you should not sacrifice the future for short-term
goals.” Apart from ensuring that a business can
continue moving forward, sustainability also means
responding to the needs of people. “We want to
make sure that everything we do will be something
good for all concerned: our shareholders, the
communities we serve, and the greater number of
Filipinos,” said Aquino.
The aim for both Manila Water and Ayala Land was
to find the perfect alignment among the three
sustainability goals - environmental, social, and
business objectives. This approach, according to
Aquino, not only makes it possible to do good for
others, but also leads to better business results.
For Manila Water, sustainable business began with
the basics. “You have to make sure that you give
24/7 water supply. The target is clear on social and
environmental goals—meeting the needs of people
and providing clean and affordable water,” Aquino
said. The business goals were eventually achieved
soon after, observes Aquino, “Once you improve the
LEADING BY BEING BETTER
lives of the people, achieving the business objective
becomes easier.”
Aquino recognizes that Ayala Land is probably best
known for its high-end residential and office projects
and shopping centers, nonetheless he points out
how the company is contributing to the growth and
development of the country through its wide range
of property developments. “Ayala Land implements
hundreds of projects every year. For instance, in a
construction project, we provide employment for
hundreds of people and are contributing to the
economic well-being of the country.” Ayala Land
ensures that its master-planned communities
provide a responsive integrated mix of products that
are relevant to the needs of their various users.
“Many of the business process outsourcing (BPOs)
companies are located within Ayala developments
because we are able to provide the environment that
they need.”
Beyond generating employment, Ayala Land also
recognizes that sustainability is about providing
people with spaces that uplift the spirit, and offer
Filipinos a sense of pride. Through high-quality
developments, it provides people the opportunity to
enjoy well-managed and well-designed spaces that
promote environmental responsibility and social
cohesion. “I think that it is important that we provide
these green spaces, especially now, when people
don’t have much access to public parks”, says Aquino.
Many companies have adopted a mindset that
supports the principle of sustainability. Aquino
believes that sustainability is a natural inclination.
“I believe that everybody wants to do good. We do
this because it’s the right thing to do.”
With Manila Water, it was about harnessing the
basic intention to deliver what would be beneficial to
more people, exploring opportunities, and evolving
along the way. With Ayala Land, it was about
ensuring that at every stage of the land development
cycle, economic, social, and environmental impacts
are considered and the best practices in
sustainability are applied. Today, with more and
more people talking about inclusive growth, Ayala
Land has already started developing products that
cater to a broader market segment considering
factors such as financing and livelihood, as part of
the development process. The company is also
63
"We want to make sure that
everything we do will be
something good for all
concerned:
our shareholders,
the communities we serve,
and the greater number
of Filipinos."
pursuing opportunities that will expand its presence
geographically to reach more people. It now has
developments in new key centers across the country
where it can push for sustainable growth.
For Aquino, the spirit of sustainability is in looking for
creative ways to respond not only to business
challenges but to social ones as well. “Sustainability
will take root better if the goals are intertwined—
environmental, social, and business goals. We
become weak if we focus only on one objective.”
Thus, he looks forward to fully integrating
sustainability into the business supply chain. Both
Ayala Land and Mania Water work with host
communities in the creation of livelihood programs
and integrates local enterprises to their supply chain.
Despite the highlights and achievements, Aquino
maintains that there is still much to learn as society
and technology continue to evolve. “Sustainability is
a work in progress,” he says. He believes much can
be learned from the customers themselves. “We are
moving towards understanding our customers
better. We need to engage them to appreciate life as
we Filipinos know it and while it continues to evolve.”
Manila Water and Ayala Land are examples of how
sustainability can translate to gains on a number of
levels. Their practices show that sustainability makes
good business sense. ■
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2 012 S U S TA I N A B I L I T Y R E P O R T
LOOKING
FORWARD
As the Ayala group transitions to
a more strategic sustainability
agenda, we continue to regard
our stakeholders as partners. Our
employees, suppliers, communities,
and customers inspire us to keep
innovating products, services, and
processes. We commit to more
frequent and focused engagements
with them so that we remain relevant
and responsive to their evolving
needs. This is also our way of helping
educate the general public and
getting them involved in the practice
of sustainability.
SECTION TITLE
We also commit to further
harness the scope and diversity
of our businesses to the country’s
advantage. We choose to work with
responsible partners and catalyze
sustainable performance throughout
our supply chains. In doing these,
we broaden markets and expand
the reach of our growth, create
widespread benefits, and contribute
to a more inclusive approach to
development.
We have moved forward in our
conglomerate sustainability reporting,
obtaining external assurance and
thus achieving a B+ Level with the
Global Reporting Initiative (GRI).
We have taken the required initial
steps to fully transition to GRI’s G4
Guidelines. We do this to understand
the impact of our businesses, guide
our strategies and operations, and
strengthen our resolve to be more
accountable, responsible, and better
corporate citizens. ■
65
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G3.1 Content Index
STANDARD DISCLOSURES PART I: Profile Disclosures
PROFILE
DISCLOSURE
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
1. STRATEGY AND ANALYSIS
1.1
Statement from the most senior decision-maker of the
organization.
FULLY
•• JOINT MESSAGE FROM THE CHAIRMAN
AND THE PRESIDENT, p. 8-9
•• JOINT MESSAGE FROM THE CHAIRMAN
AND THE PRESIDENT, p. 8-9
•• Enhancing Lives, Building a Nation,
p. 13-16
•• Managing Risks, p. 28-30
1.2
Description of key impacts, risks, and opportunities.
FULLY
•• ANTONINO T. AQUINO: LEADING BY
BEING BETTER, p. 62-63
•• LOOKING FORWARD, p. 64-65
•• Please also refer to the Ayala
Corporation Annual Report (AC AR)
which is available online at
www.ayala.com.ph/press_room_
annual_report.php, p. 10-17
2. ORGANIZATIONAL PROFILE
2.1
Name of the organization.
FULLY
•• ABOUT AYALA, p. 6
•• ABOUT AYALA, p. 6-7
2.2
Primary brands, products, and/or services.
FULLY
•• Enhancing Lives, Building a Nation,
p. 13-16
•• AC AR, p. 2-6
2.3
Operational structure of the organization, including main
divisions, operating companies, subsidiaries, and joint ventures.
FULLY
2.4
Location of organization’s headquarters.
FULLY
2.5
Number of countries where the organization operates, and
names of countries with either major operations or that are
specifically relevant to the sustainability issues covered in the
report.
FULLY
2.6
Nature of ownership and legal form.
FULLY
•• ABOUT AYALA, p.
•• Ayala’s Ownership Structure, p. 7
•• ABOUT AYALA, p. 6-7
•• CONTACT DETAILS, p. 83
•• ABOUT AYALA, p. 6-7
•• ABOUT AYALA, p. 7
•• Ayala’s Ownership Structure, p. 7
•• AC AR, p. 52
2.7
Markets served (including geographic breakdown, sectors
served, and types of customers/beneficiaries).
FULLY
•• ABOUT AYALA, p. 6-7
•• AC AR, p. 2-6
•• ABOUT AYALA, p. 6-7
2.8
Scale of the reporting organization.
FULLY
2.9
Significant changes during the reporting period regarding size,
structure, or ownership.
FULLY
Awards received in the reporting period.
FULLY
2.10
•• Financial Highlights, p. 17
•• The report includes 9 major subsidiaries
and sub-subsidiaries as indicated in
Reporting Scope and Boundaries, p. 5.
•• JOINT MESSAGE FROM THE CHAIRMAN
AND THE PRESIDENT, p. 8-9
•• AC AR, p. 18-25, 47
•• Awards and Recognitions of Ayala, p. 7
•• AC AR, p. 55
G R I G 3 .1 C O N T E N T I N D E X
67
G3.1 Content Index
STANDARD DISCLOSURES PART I: Profile Disclosures
PROFILE
DISCLOSURE
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
3. REPORT PARAMETERS
3.1
Reporting period (e.g., fiscal/calendar year) for information
provided.
FULLY
•• Reporting Period and Framework, p. 5
3.2
Date of most recent previous report (if any).
FULLY
•• The previous report was released in
2012 covering the period JanuaryDecember 2011.
3.3
Reporting cycle (annual, biennial, etc.)
FULLY
•• ABOUT OUR REPORT, p. 4
3.4
Contact point for questions regarding the report or its contents.
FULLY
•• Reporting Feedback, p. 5
3.5
Process for defining report content.
FULLY
3.6
Boundary of the report (e.g., countries, divisions, subsidiaries,
leased facilities, joint ventures, suppliers). See GRI Boundary
Protocol for further guidance.
FULLY
•• Reporting Scope and Boundaries, p. 5
3.7
State any specific limitations on the scope or boundary of the
report (see completeness principle for explanation of scope).
FULLY
•• Reporting Scope and Boundaries, p. 5
3.8
Basis for reporting on joint ventures, subsidiaries, leased
facilities, outsourced operations, and other entities that can
significantly affect comparability from period to period and/or
between organizations.
FULLY
3.9
Data measurement techniques and the bases of calculations,
including assumptions and techniques underlying estimations
applied to the compilation of the Indicators and other
information in the report. Explain any decisions not to apply, or
to substantially diverge from, the GRI Indicator Protocols.
FULLY
•• Data Collection and Analysis, p. 19
3.10
Explanation of the effect of any re-statements of information
provided in earlier reports, and the reasons for such restatement (e.g., mergers/acquisitions, change of base years/
periods, nature of business, measurement methods).
FULLY
•• There have been no major re-statements
of information. EN3 has been re-stated
in gigajoules from million liters in 2011
in order to align with the EN3 definition;
however there is no significant effect
from this re-statement.
3.11
Significant changes from previous reporting periods in the
scope, boundary, or measurement methods applied in the
report.
FULLY
•• Please refer to 3.10
3.12
Table identifying the location of the Standard Disclosures in the
report.
FULLY
•• G3.1 Content Index, p. 66-78
3.13
Policy and current practice with regard to seeking external
assurance for the report.
FULLY
•• Reporting Period and Framework, p. 5
•• Reporting Period and Framework, p. 5
•• Materiality Assessment, p. 19
•• Ayala’s Ownership Structure, p. 7
•• Reporting Scope and Boundaries, p. 5
4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENT
•• Board of Directors, p. 23-24
Governance structure of the organization, including committees
under the highest governance body responsible for specific
tasks, such as setting strategy or organizational oversight.
FULLY
4.2
Indicate whether the Chair of the highest governance body is
also an executive officer.
FULLY
4.3
For organizations that have a unitary board structure, state the
number and gender of members of the highest governance body
that are independent and/or non-executive members.
4.1
•• Board Committees, p. 25-26
•• AC AR, p. 48-50
•• Management, p. 26-27
•• Board of Directors , p. 23-24
FULLY
•• AC AR, p. 49
•• There are three independent directors,
all of whom are male.
68
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G3.1 Content Index
STANDARD DISCLOSURES PART I: Profile Disclosures
PROFILE
DISCLOSURE
DESCRIP TION
LE VEL OF
REPORTING
Mechanisms for shareholders and employees to provide
recommendations or direction to the highest governance body.
FULLY
4.5
Linkage between compensation for members of the highest
governance body, senior managers, and executives (including
departure arrangements), and the organization’s performance
(including social and environmental performance).
PARTIALLY
4.6
Processes in place for the highest governance body to ensure
conflicts of interest are avoided.
FULLY
4.7
Process for determining the composition, qualifications, and
expertise of the members of the highest governance body and
its committees, including any consideration of gender and other
indicators of diversity.
FULLY
4.8
Internally developed statements of mission or values, codes of
conduct, and principles relevant to economic, environmental,
and social performance and the status of their implementation.
FULLY
4.9
Procedures of the highest governance body for overseeing the
organization’s identification and management of economic,
environmental, and social performance, including relevant risks
and opportunities, and adherence or compliance with
internationally agreed standards, codes of conduct, and
principles.
FULLY
4.4
4.10
Processes for evaluating the highest governance body’s own
performance, particularly with respect to economic,
environmental, and social performance.
REPORT SECTION AND PAGE NUMBER
•• Communicating with Our Stakeholders,
p. 28
•• AC AR, p. 54
•• Board Meetings, p. 26
•• Management, p. 26-27
•• Living by Our Values, p. 27-28
•• AC AR, p. 48, 50, 52
•• Board of Directors, p. 23-24
•• Nomination Committee, p. 25
•• Ayala’s Policy on Sustainability, p. 14
•• Living by Our Values, p. 27-28
•• ONE TEAM, p. 44
•• AC AR, p. 44, 55
•• Finance Committee, p. 26
•• Management, p. 26-27
•• Managing Risks, p. 28-30
•• Board of Directors, p. 23
PARTIALLY
•• Board Committees, p. 25-26
•• Board Meetings, p. 26
•• Ayala’s Policy on Sustainability, p. 14
4.11
Explanation of whether and how the precautionary approach or
principle is addressed by the organization.
•• Management, p. 26-27
FULLY
•• Managing Risks, p. 28-30
•• Risk Management Approach, p. 31
•• AC AR, p. 50-51
4.12
Externally developed economic, environmental, and social
charters, principles, or other initiatives to which the organization
subscribes or endorses.
FULLY
•• Delivering on Our Commitments,
p. 22-23
•• AC AR, p. 55
•• ABOUT AYALA, p. 6-7
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
Memberships in associations (such as industry associations)
and/or national/international advocacy organizations in which
the organization: * Has positions in governance bodies; *
Participates in projects or committees; * Provides substantive
funding beyond routine membership dues; or * Views
membership as strategic.
FULLY
4.14
List of stakeholder groups engaged by the organization.
FULLY
•• Stakeholder Engagement, p. 18-19
4.15
Basis for identification and selection of stakeholders with whom
to engage.
FULLY
•• Stakeholder Engagement, p. 18-19
4.16
Approaches to stakeholder engagement, including frequency of
engagement by type and by stakeholder group.
FULLY
•• Stakeholder Engagement, p. 18-19
4.13
•• BPI Integrated Annual and Sustainability
Report (IASR), p. 8
•• Cebu Holdings IASR p. 117
•• The Ayala Corporation is a holding
company and does not participate in
industry associations.
G R I G 3 .1 C O N T E N T I N D E X
69
G3.1 Content Index
STANDARD DISCLOSURES PART I: Profile Disclosures
PROFILE
DISCLOSURE
4.17
DESCRIP TION
Key topics and concerns that have been raised through
stakeholder engagement, and how the organization has
responded to those key topics and concerns, including through
its reporting.
LE VEL OF
REPORTING
FULLY
REPORT SECTION AND PAGE NUMBER
•• Stakeholder Engagement, p. 18-21
STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs)
G3.1 DMAs
DMA EC
Aspects
DMA EN
Aspects
DMA LA
Aspects
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
Disclosure on Management Approach EC
Economic performance
FULLY
•• Ayala’s Policy on Sustainability, p. 14
Market presence
FULLY
•• Board Committees, p. 25-26
Indirect economic impacts
FULLY
•• Managing Risks, p. 28-30
•• ONE TEAM, p. 44
Disclosure on Management Approach EN
Materials
FULLY
Energy
FULLY
•• Ayala’s Policy on Sustainability, p. 14
Water
FULLY
•• ONE PLANET, p. 54
Biodiversity
FULLY
Emissions, effluents and waste
FULLY
•• Environmental Stewardship Within Our
Operations, p. 54-56
Products and services
FULLY
Compliance
FULLY
Overall
FULLY
•• Enriching Biodiversity, p. 58-59
•• Working with Others on Environmental
Efforts, p. 60-61
Disclosure on Management Approach LA
Employment
FULLY
•• Ayala’s Policy on Sustainability, p. 14
Labor/management relations
FULLY
•• Stakeholder Engagement, p. 21
Occupational health and safety
FULLY
•• Board Committees, p. 25-26
Training and education
FULLY
Diversity and equal opportunity
FULLY
Equal remuneration for women and men
FULLY
•• Managing Risks, p. 28-30
•• Communicating with Our Stakeholders,
p. 28
•• ONE TEAM, p. 44
•• Prioritizing Health and Safety, p. 45-47
•• Preparing Our Future Leaders, p. 47-49
DMA HR
Aspects
Disclosure on Management Approach HR
Investment and procurement practices
FULLY
Non-discrimination
FULLY
Freedom of association and collective bargaining
FULLY
•• Ayala’s Policy on Sustainability, p. 14
Child labor
FULLY
•• Living by Our Values, p. 27-28
Prevention of forced and compulsory labor
FULLY
Security practices
FULLY
Indigenous rights
FULLY
Assessment
FULLY
Remediation
FULLY
•• Managing Risks, p. 28-30
•• ONE COMMUNITY, p. 33-34
•• Creating a Strong Corporate Culture,
p. 49
70
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G3.1 Content Index
STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs)
G3.1 DMAs
DMA SO
Aspects
DMA PR
Aspects
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
Disclosure on Management Approach SO
Local communities
FULLY
•• Ayala’s Policy on Sustainability, p. 14
Corruption
FULLY
•• ONE COMMUNITY, p. 33-34
Anti-competitive behavior
FULLY
•• Creating a Strong Corporate Culture,
p. 49
Compliance
FULLY
•• Supporting Employee Volunteerism p. 50
Disclosure on Management Approach PR
Customer health and safety
FULLY
Product and service labeling
FULLY
Marketing communications
FULLY
Customer privacy
FULLY
Compliance
FULLY
•• Ayala’s Policy on Sustainability, p. 14
•• Managing Risks, p. 28-30
•• Connecting with Customers, p. 40-41
•• Protecting Our Customers, p. 41
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
ECONOMIC
ECONOMIC PERFORMANCE
EC1
EC2
•• Enhancing Lives, Building a Nation,
p. 13-16
Direct economic value generated and distributed, including
revenues, operating costs, employee compensation, donations
and other community investments, retained earnings, and
payments to capital providers and governments.
PARTIALLY
Financial implications and other risks and opportunities for the
organization’s activities due to climate change.
PARTIALLY
•• Financial Highlights, p. 17
•• AC AR, p. 8-9, 26, 28, 30, 32, 34, 36,
38
•• Managing Risks, p. 28-30
•• Rising to the Challenge of Climate
Change, p. 59-60
•• General Standard Employee Benefits,
p. 50
EC3
EC4
Coverage of the organization’s defined benefit plan obligations.
Significant financial assistance received from government.
PARTIALLY
FULLY
•• Subsidiaries within the Group offer
different types of benefit plans, some of
which include fully covered benefit plans
with contributions from the Company.
•• We participate in private-public
partnerships in the Philippines. However,
we are not a Philippine government
controlled or owned corporation and do
not receive assistance from such
arrangements.
MARKET PRESENCE
•• ONE TEAM, p. 44
EC5
Range of ratios of standard entry level wage by gender
compared to local minimum wage at significant locations of
operation.
PARTIALLY
EC6
Policy, practices, and proportion of spending on locally-based
suppliers at significant locations of operation.
PARTIALLY
•• General Standard Employee Benefits,
p. 50
•• ONE COMMUNITY, p. 34
•• Making Business Inclusive, p. 34-35
G R I G 3 .1 C O N T E N T I N D E X
71
G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
•• ONE COMMUNITY, p. 34
EC7
Procedures for local hiring and proportion of senior management
hired from the local community at significant locations of
operation.
•• Facilitating Prosperity for All, p. 35-37
PARTIALLY
•• AC AR, p. 57-60
•• All members of the Board and senior
management team are Filipinos, with the
exception of one member of the Board
who is of Japanese nationality.
INDIRECT ECONOMIC IMPACTS
EC8
EC9
Development and impact of infrastructure investments and
services provided primarily for public benefit through
commercial, in-kind, or pro bono engagement.
FULLY
Understanding and describing significant indirect economic
impacts, including the extent of impacts.
FULLY
•• Enhancing Lives, Building a Nation,
p. 13-16
•• Offering Environmentally Responsible
Products and Services, p. 56-58
•• LOOKING FORWARD, p. 64-65
•• AC AR, p. 10-17
ENVIRONMENTAL
MATERIALS
•• Environmental Stewardship Within Our
Operations, p. 54-56
EN1
Materials used by weight or volume.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 68
•• Cebu Holdings IASR, p. 81
•• Manila Water Sustainability Report (SR),
p. 52-53
ENERGY
EN3
Direct energy consumption by primary energy source.
PARTIALLY
•• Direct Energy Consumption in
Gigajoules, p. 56
EN4
Indirect energy consumption by primary source.
PARTIALLY
•• Indirect Energy Consumption in Million
KWH, p. 56
EN5
Energy saved due to conservation and efficiency improvements.
FULLY
•• Offering Environmentally Responsible
Products and Services, p. 56-58
EN6
Initiatives to provide energy-efficient or renewable energy based
products and services, and reductions in energy requirements
as a result of these initiatives.
PARTIALLY
•• Offering Environmentally Responsible
Products and Services, p. 56-58
EN7
Initiatives to reduce indirect energy consumption and reductions
achieved.
FULLY
•• Environmental Stewardship Within Our
Operations, p. 54-56
•• Offering Environmentally Responsible
Products and Services, p. 56-58
WATER
•• Water Consumption (million cu. meters),
p. 58.
EN8
Total water withdrawal by source.
FULLY
•• Except for Manila Water, water for all
operations was sourced from water
utilities.
72
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G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
•• Environmental Stewardship Within Our
Operations, p. 55
EN9
Water sources significantly affected by withdrawal of water.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 71
•• Cebu Holdings IASR, p. 84-85
•• Manila Water SR, p. 52-53
BIODIVERSITY
EN11
Location and size of land owned, leased, managed in, or
adjacent to, protected areas and areas of high biodiversity value
outside protected areas.
PARTIALLY
EN12
Description of significant impacts of activities, products, and
services on biodiversity in protected areas and areas of high
biodiversity value outside protected areas.
PARTIALLY
EN13
Habitats protected or restored.
PARTIALLY
EN14
Strategies, current actions, and future plans for managing
impacts on biodiversity.
PARTIALLY
EN15
Number of IUCN Red List species and national conservation list
species with habitats in areas affected by operations, by level of
extinction risk.
PARTIALLY
•• Enriching Biodiversity, p. 58-59
EMISSIONS, EFFLUENTS AND WASTE
EN16
Total direct and indirect greenhouse gas emissions by weight.
FULLY
•• GHG Emissions CO2 Equivalent (Tons),
p.58
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
EN17
Other relevant indirect greenhouse gas emissions by weight.
PARTIALLY
•• BPI IASR, p. 77
•• Cebu Holdings IASR, p. 93
•• Globe IASR, p. 103
•• Scope 3 emissions have been reported
where this data is available.
•• Environmental Stewardship Within Our
Operations, p. 54-56
EN18
Initiatives to reduce greenhouse gas emissions and reductions
achieved.
FULLY
•• Offering Environmentally Responsible
Products and Services, p. 56-58
•• Working with Others on Environmental
Efforts, p. 60-61
•• Reductions in GHG Emissions CO2
Equivalent (tons), p. 59
EN21
Total water discharge by quality and destination.
PARTIALLY
•• Environmental Stewardship Within Our
Operations, p. 54-56
•• Working with Others on Environmental
Efforts, p. 60-61
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 71
•• Cebu Holdings IASR, p. 89
•• Manila Water SR, p. 67
G R I G 3 .1 C O N T E N T I N D E X
73
G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
•• Environmental Stewardship Within Our
Operations, p. 54-56
•• Working with Others on Environmental
Efforts, p. 60-61
•• Production of Waste (Tons), p. 59
EN22
Total weight of waste by type and disposal method.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 72
•• Cebu Holdings IASR, p. 88
•• Manila Water SR, p. 52-53, 68-69
EN24
EN25
Weight of transported, imported, exported, or treated waste
deemed hazardous under the terms of the Basel Convention
Annex I, II, III, and VIII, and percentage of transported waste
shipped internationally.
PARTIALLY
Identity, size, protected status, and biodiversity value of water
bodies and related habitats significantly affected by the
reporting organization’s discharges of water and runoff.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Manila Water SR, p. 68-69
•• Enriching Biodiversity, p. 58-59
PRODUCTS AND SERVICES
•• Ayala’s Policy on Sustainability, p. 14
EN26
EN27
Initiatives to mitigate environmental impacts of products and
services, and extent of impact mitigation.
FULLY
•• Offering Environmentally Responsible
Products and Services, p. 56-57
•• Working with Others on Environmental
Efforts, p. 60-61
Percentage of products sold and their packaging materials that
are reclaimed by category.
PARTIALLY
•• Working with Others on Environmental
Efforts, p. 60
Monetary value of significant fines and total number of
non-monetary sanctions for non-compliance with environmental
laws and regulations.
FULLY
•• There were no significant fines in 2012;
however Honda Cars Pasig received
minor fines.
COMPLIANCE
EN28
OVERALL
•• Environmental Stewardship Within Our
Operations, p. 54-56
EN30
Total environmental protection expenditures and investments by
type.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 63
•• Cebu Holdings IASR, p. 60
•• Globe IASR, p. 104
•• Manila Water SR, p. 69
74
2 012 S U S TA I N A B I L I T Y R E P O R T
G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
SOCIAL: LABOR PRACTICES AND DECENT WORK
EMPLOYMENT
•• ABOUT AYALA, p. 6-7
LA1
Total workforce by employment type, employment contract, and
region, broken down by gender.
PARTIALLY
•• Workforce by Gender, p. 46
•• Workforce by Region, p. 46
•• Workforce by Employment Type, p. 46
LA2
LA3
Total number and rate of new employee hires and employee
turnover by age group, gender, and region.
Benefits provided to full-time employees that are not provided
to temporary or part-time employees, by major operations.
•• Employee Turnover by Gender, p. 48
PARTIALLY
•• Employee Turnover by Age Group, p. 48
•• Employee Turnover by Region, p. 49
FULLY
•• General Standard Employee Benefits,
p. 50
•• Prioritizing Health and Safety, p. 45-47
•• General Standard Employee Benefits,
p. 50
LA15
Return to work and retention rates after parental leave, by
gender.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• BPI IASR, p. 97
•• Cebu Holdings IASR, p. 106
•• Manila Water SR, p. 32-33
LABOR/MANAGEMENT RELATIONS
LA4
Percentage of employees covered by collective bargaining
agreements.
FULLY
•• Percentages of Employees Covered by
Collective Bargaining Agreements, p. 50
OCCUPATIONAL HEALTH AND SAFETY
•• Prioritizing Health and Safety, p. 45-47
LA6
Percentage of total workforce represented in formal joint
management-worker health and safety committees that help
monitor and advise on occupational health and safety
programs.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 82
•• Cebu Holdings IASR, p. 105
•• Globe IASR, p. 78
•• Manila Water SR, p. 38
•• Prioritizing Health and Safety p. 45-47
LA7
Rates of injury, occupational diseases, lost days, and
absenteeism, and number of work-related fatalities by region
and by gender.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR p. 82-84
•• BPI IASR, p. 98
•• Globe IASR, p. 78
•• Manila Water SR, p. 38-39
G R I G 3 .1 C O N T E N T I N D E X
75
G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
•• Prioritizing Health and Safety, p. 45-47
LA8
Education, training, counseling, prevention, and risk-control
programs in place to assist workforce members, their families,
or community members regarding serious diseases.
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
PARTIALLY
•• Ayala Land IASR, p. 83, 85
•• BPI IASR, p. 98
•• Cebu Holdings IASR, p. 105
•• IMI IASR, p. 32
•• Manila Water SR, p. 38-39
TRAINING AND EDUCATION
LA10
Average hours of training per year per employee by gender, and
by employee category.
FULLY
•• Average Training Hours, p. 51
•• Preparing Our Future Leaders, p. 47-49
LA11
Programs for skills management and lifelong learning that
support the continued employability of employees and assist
them in managing career endings.
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
PARTIALLY
•• Ayala Land IASR, p. 85
•• BPI IASR, p. 92
•• Globe IASR, p. 80
•• IMI IASR, p. 32
•• Manila Water SR, p. 33, 35-36
LA12
Percentage of employees receiving regular performance and
career development reviews, by gender.
FULLY
•• Total Percentage of Employees Who
Have Undergone Formal Performance Or
Development Reviews, p. 49
DIVERSITY AND EQUAL OPPORTUNITY
•• Please refer to LA1.
LA13
Composition of governance bodies and breakdown of
employees per employee category according to gender, age
group, minority group membership, and other indicators of
diversity.
FULLY
•• Composition of Governance Bodies And
Breakdown of Employee Per Category
According to Gender and Age Group,
p. 51
•• AC AR, p. 56-57
EQUAL REMUNERATION FOR WOMEN AND MEN
LA14
Ratio of basic salary and remuneration of women to men by
employee category, by significant locations of operation.
•• ONE TEAM, p. 44
FULLY
•• General Standard Employee Benefits,
p. 50
76
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G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
FULLY
•• There were no incidents of discrimination
reported in 2012.
FULLY
•• There were no significant risks for
freedom of association and collective
bargaining in 2012. We have policies to
protect freedom of association and
collective bargaining in accordance with
Philippine laws.
FULLY
•• There were no significant risks for child
labor identified in 2012. We have a strict
policy against child labor in accordance
with Philippine laws.
FULLY
•• There were no significant risks for forced
labor identified in 2012. We have a strict
policy against forced labor in
accordance with Philippine laws.
SOCIAL: HUMAN RIGHTS
NON-DISCRIMINATION
HR4
Total number of incidents of discrimination and corrective
actions taken.
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
HR5
Operations and significant suppliers identified in which the right
to exercise freedom of association and collective bargaining
may be violated or at significant risk, and actions taken to
support these rights.
CHILD LABOR
HR6
Operations and significant suppliers identified as having
significant risk for incidents of child labor, and measures taken
to contribute to the effective abolition of child labor.
PREVENTION OF FORCED AND COMPULSORY LABOR
HR7
Operations and significant suppliers identified as having
significant risk for incidents of forced or compulsory labor, and
measures to contribute to the elimination of all forms of forced
or compulsory labor.
SECURITY PRACTICES
•• Prioritizing Health and Safety, p. 47
HR8
Percentage of security personnel trained in the organization’s
policies or procedures concerning aspects of human rights that
are relevant to operations.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 82
•• BPI IASR, p. 99
•• Globe IASR, p. 78
•• Manila Water SR, p. 39
INDIGENOUS RIGHTS
HR9
Total number of incidents of violations involving rights of
indigenous people and actions taken.
FULLY
•• There were no incidents of violations
involving rights of indigenous people
reported in 2012.
ASSESSMENT
•• Please refer to 4.8
HR10
Percentage and total number of operations that have been
subject to human rights reviews and/or impact assessments.
PARTIALLY
Number of grievances related to human rights filed, addressed
and resolved through formal
grievance mechanisms.
FULLY
•• We did not conduct any formal human
rights reviews and impact assessments
in 2012, however we have policies to
protect and promote human rights.
REMEDIATION
HR11
•• There were no grievances related to
human rights filed, addressed, or
resolved in 2012.
G R I G 3 .1 C O N T E N T I N D E X
77
G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
SO1
Percentage of operations with implemented local community
engagement, impact assessments, and development programs.
FULLY
SO9
Operations with significant potential or actual negative impacts
on local communities.
FULLY
SO10
Prevention and mitigation measures implemented in operations
with significant potential or actual negative impacts on local
communities.
REPORT SECTION AND PAGE NUMBER
SOCIAL: SOCIETY
LOCAL COMMUNITIES
•• ONE COMMUNITY, p. 34
•• Making Business Inclusive, p. 34-35
•• Facilitating Prosperity for All, p. 35-37
•• Investing in the Future, p. 37-38
•• Building the Country’s Talent Pipeline,
p. 38-39
FULLY
•• All operations implement community
engagement, assessments, and
programs.
CORRUPTION
SO2
Percentage and total number of business units analyzed for
risks related to corruption.
PARTIALLY
SO3
Percentage of employees trained in organization’s anticorruption policies and procedures.
PARTIALLY
SO4
Actions taken in response to incidents of corruption.
•• Please refer to 4.8
•• No business units were analyzed for
risks related to corruption in 2012;
however we implement anti-corruption
policies in accordance with our Code of
Conduct.
FULLY
•• There were no reported incidents of
corruption during 2012.
Total number of legal actions for anti-competitive behavior,
anti-trust, and monopoly practices and their outcomes.
FULLY
•• There were no legal actions for
anti-competitive behavior, anti-trust,
and monopoly practices during 2012.
Monetary value of significant fines and total number of
non-monetary sanctions for non-compliance with laws and
regulations.
FULLY
•• There were no significant fines or
non-monetary sanctions during 2012.
ANTI-COMPETITIVE BEHAVIOR
SO7
COMPLIANCE
SO8
SOCIAL: PRODUCT RESPONSIBILITY
CUSTOMER HEALTH AND SAFETY
•• Protecting Our Customers, p. 41
PR1
Life cycle stages in which health and safety impacts of products
and services are assessed for improvement, and percentage of
significant products and services categories subject to such
procedures.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 75, 83
•• Cebu Holdings IASR, p. 111
•• Manila Water SR, p. 52
•• Protecting Our Customers, p. 41
PR2
Total number of incidents of non-compliance with regulations
and voluntary codes concerning health and safety impacts of
products and services during their life cycle, by type of
outcomes.
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 88
•• Globe IASR, p. 49
•• Manila Water SR, p. 42-44
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G3.1 Content Index
STANDARD DISCLOSURES PART III: Performance Indicators
PERFORMANCE
INDICATOR
DESCRIP TION
LE VEL OF
REPORTING
REPORT SECTION AND PAGE NUMBER
PRODUCT AND SERVICE LABELING
•• Connecting with Customers, p. 40-41
Type of product and service information required by procedures,
and percentage of significant products and services subject to
such information requirements.
PR3
PARTIALLY
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
•• Ayala Land IASR, p. 87
•• Cebu Holdings IASR, p. 111
•• Globe IASR, p. 49
•• Manila Water SR, p. 49
•• Connecting with Customers, p. 40-41
PR4
Total number of incidents of non-compliance with regulations
and voluntary codes concerning product and service information
and labeling, by type of outcomes.
FULLY
•• There were no incidents of noncompliance in 2012.
PR5
Practices related to customer satisfaction, including results of
surveys measuring customer satisfaction.
FULLY
•• Connecting with Customers, p. 40-41
MARKETING COMMUNICATIONS
•• Connecting with Customers, p. 40-41
Programs for adherence to laws, standards, and voluntary codes
related to marketing communications, including advertising,
promotion, and sponsorship.
PR6
•• Please refer to data reported by our
subsidiaries available at
www.ayala.com.ph/CSR_GRI.php
PARTIALLY
•• Ayala Land IASR, p. 87
•• Cebu Holdings IASR, p. 111
•• Globe IASR, p. 49
•• IMI IASR, p. 33
•• Manila Water SR, p. 49
Total number of incidents of non-compliance with regulations
and voluntary codes concerning marketing communications,
including advertising, promotion, and sponsorship by type of
outcomes.
PR7
•• Connecting with Customers, p. 40-41
FULLY
•• There were no incidents of noncompliance concerning marketing
communications in 2012.
CUSTOMER PRIVACY
•• Connecting with Customers, p. 40-41
Total number of substantiated complaints regarding breaches of
customer privacy and losses of customer data.
PR8
FULLY
•• There were no substantial complaints
regarding customer privacy and
customer data reported in 2012.
COMPLIANCE
Monetary value of significant fines for non-compliance with laws
and regulations concerning the provision and use of products
and services.
PR9
•• Connecting with Customers, p. 40-41
FULLY
•• There were no significant fines for
non-compliance of laws concerning use
of products and services received in
2012.
For cross references to subsidiaries, we refer to the 2012 Integrated Annual & Sustainability Report (IASR) or Sustainability Report (SR) of the particular subsidiary.
Fully reported
33
Partially reported
38
TOTAL
71
Change from 2011: 29 (69% increase)
EXTERNAL ASSURANCE
External Assurance
79
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External Assurance
G R I A P P L I C AT I O N L E V E L C H E C K S TAT E M E N T
GRI Application Level Check Statement
81
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ACKNOWLEDGEMENT
Project Managers
Consultants
Delfin C. Gonzalez, Jr.
Catherine Hufana-Ang
Drink Communications
Philippine Business for the Environment
SusDev Global Ltd.
Editorial Team
Corporate Communications
Corporate Strategy and Development
Concept, Design, and Layout
Medium3
2012 SUSTAINABILITY COUNCIL
Ayala Corporation
Bank of the Philippine Islands
John Eric T. Francia
Delfin C. Gonzalez, Jr.
John Philip S. Orbeta
Florendo Maranan
Diane Faith Figueroa
Catherine Hufana-Ang
Emily de Lara
Guillermo Luz
Norma Torres
Cebu Holdings, Inc.
Vera Alejandria
Noel Alicaya
Fraulein Quijada
AC Energy Holdings, Inc.
Globe Telecom, Inc.
Ronald Goseco
Princess Marie Tayag
Ma. Yolanda Crisanto
Carmela David
Kristel Or
Ayala Foundation, Inc.
Maria Lourdes Heras-de Leon
Nature Marie Calderon
Jin Paul De Guzman
Ayala Land, Inc.
Jorge Marco
Anna Maria Gonzales
Suzette Naval
Ayala Automotive Holdings Corporation
Jenara Rosanna Ong
Patricia Adrias
Integrated Micro-Electronics, Inc.
Frederick Blancas
Maribeth Gamao
Jerry Jaquilmo
Eleanor Misa
Nancy Talucod
LiveIt Investments, Ltd.
Fatima Agbayani
Manila Water Company, Inc.
Ferdinand Dela Cruz
Carla May Kim
Dianna Karenina Felisario
Photographs used in this report were submitted by the Ayala Sustainability Council
I TI L E
A C K N O W L E D G E M E N T A N D C O NSTEACCTTI ODNE T A
S
CONTACT DETAILS
Our key sustainability officers are:
Delfin C. Gonzalez, Jr.
Managing Director and Chief Finance Officer
Chief Sustainability Officer
Catherine Hufana-Ang
Head, Group Risk Management
Program Director for Sustainability
For general inquiries on the sustainability initiatives of the Ayala group,
you may email sustainability@ayala.com.ph.
Inquiries on specific sustainability projects may be directed to the following:
Ayala Corporation
Bank of the Philippine Islands
Corporate Strategy
34F Tower One, Ayala Triangle
Ayala Avenue, Makati City
(632) 908 3000
www.ayala.com.ph
Sustainability Office
16F BPI Building, 6768 Ayala Avenue
corner Paseo de Roxas, Makati City
(632) 845 5718
www.bpiexpressonline.com
Ayala Foundation, Inc.
Cebu Holdings, Inc.
10F BPI Building
6768 Ayala Avenue corner Paseo de Roxas
Makati City
(632) 752 1101
www.ayalafoundation.org
7F Cebu Holdings Center
Cebu Business Park, Cebu City
(6332) 231 5301
www.cebuholdings.com
Ayala Land, Inc.
Corporate Communications
30F Tower One, Ayala Triangle
Ayala Avenue, Makati City
(632) 908 3000
www.ayalaland.com.ph
Ayala Automotive Holdings Corporation
Honda Cars Makati, Inc.
Central Marketing Services
Magallanes Commercial Center, Makati City
(632) 902 9393
www.hondamakati.com.ph
Isuzu Automotive Dealership, Inc.
Central Marketing Services
Alabang-Zapote Road corner Acacia Avenue
Ayala Alabang, Muntinlupa City
(632) 807 1788
www.isuzuautodealer.com.ph
Globe Telecom, Inc.
Corporate Communications
26F The Globe Tower
32nd Street corner 7th Avenue
Bonifacio Global City, Taguig 1634
www.globe.com.ph
Integrated Micro-Electronics, Inc.
Strategic Planning and Marketing
103 Trade Avenue corner Technology Avenue
Laguna Technopark, Biñan, Laguna
(632) 756 6840 local 3631
www.global-imi.com
LiveIt Investments, Ltd.
33F Tower One, Ayala Triangle
Ayala Avenue, Makati City
(632) 908 3455
Manila Water Company, Inc.
Sustainable Development Department
Corporate Strategic Affairs Group
Basement, MWSS Administration Building
489 Katipunan Road, Balara, Quezon City
(632) 917 5900 local 1565
(632) 981 8121
www.manilawater.com
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2012 SUSTAINABILITY REPORTS
Our companies’ individual sustainability reports are available for download at www.ayala.com.ph and their respective websites
Ayala Land, Inc.
Cebu Holdings, Inc.
Bank of the Philippine Islands
2012 Integrated Annual and
Sustainability Report
A+
2012 Integrated Annual and
Sustainability Report
A Self-declared
2012 Integrated Annual and
Sustainability Report
B Self-declared
Globe Telecom, Inc.
Integrated Micro-Electronics, Inc.
2012 Integrated Annual and
Sustainability Report
B+
2012 Integrated Annual and
Sustainability Report
B Self-declared
Manila Water Company, Inc.
2012 Sustainability Report
A Self-declared
SECTION TITLE
The Ayala Corporation 2012 Sustainability Report is printed on Cocoon; 250 gsm for the cover
and 90 gsm for the inside pages.
Cocoon is an innovative range of extra white certified FSC® 100% recycled papers, and is produced 100%
ecologically using advanced technology — giving it the appearance and printing qualities of a paper made
from virgin fiber, but with far superior environmental credentials.
ArjoWiggins, the maker of Cocoon, is certified FSC® compliant, using only wood pulps from well-managed
forests to reduce impact on the environment.
85
AYALA CORPORATION
34F Tower One, Ayala Triangle,
Ayala Avenue, Makati City
1226 Philippines
www.ayala.com.ph