Monthly Archives: February 2012

Communicating Sustainability: Philippine company reporters and the Australia GRI Sustainability Conference

Sustainable development is a term that was popularized in 1987 after the publication of Our Common Future by the World Commission on Economic Development (WCED). Together with globalisation, the sustainable development agenda has become intricately linked into all human activities, challenging the notion that environmental and social integrity are not compatible with economic prosperity. The challenge is felt more in the business sector where firms have been urged to adopt the tenets of good social and environmental practices while pursuing profit-seeking activities. One interesting result of this challenge is the burgeoning utilisation of corporate reporting, particularly sustainability reporting, as a communication strategy aimed at engaging multiple stakeholders vis-à-vis business performance in the wider social context.

It was John Elkington who first coined the term triple bottom line reporting to promulgate the so-called three-pronged business strategy. Triple bottom line is an explicit scorecard describing the firm’s financial, environmental and social performance. It was the large multinational corporations that started practicing triple bottom line reporting, producing feel-good reports as they began to align the three sustainability principles with their internal and external activities. In what seemed to be an alignment of business and the sustainable development agenda, corporations began committing to a new paradigm of measuring corporate performance. The way that non-financial information is disclosed has changed considerably, and with it, the propensity to publicise such reports on a regular basis.

This new paradigm has prompted the evolution of annual corporate reports from the traditional reporting of financial statements to the more humanised accounts of its philanthropic and altruistic initiatives.  As consumer activism grew, the clamor for a more truthful disclosure reverberated even louder, challenging corporations to go beyond lip service and disclose realistic information about the social and environmental impacts of their activities. In response to this pressure, firms have become creative and innovative by employing a more stakeholder-oriented approach in their reporting. Upon researching in the Corporate Registry, the biggest website to host corporate reports, one could see a variety of titles and formats like corporate social responsibility (CSR) report, corporate citizenship report, corporate environmental reports (CER) and integrated sustainability report. The latter has become a catchall term that subsumed CSR, citizenship and environmental stakeholder and environmental performance reporting.

The Global Reporting Initiative (GRI), the Amsterdam-based propagator of the widely used sustainability reporting framework defines sustainability reporting as:

“…the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development.”

Today, these reports are not only mere recitation of a firm’s performance in terms of profit gains and revenue streams. They have become indispensable tools to convey what was achieved not only in terms of economic contribution but also in terms of what are currently being undertaken to demonstrate that product development and service delivery are executed with due regard for the well-being of the consumer and the physical environment where the firms operate. In some instances, the report has been used as a platform to promulgate the firm’s long-term strategies for business viability. For instance, energy giants Shell and Chevron have been using both their sustainability and corporate social responsibility reports, respectively to inform shareholders and stakeholders alike about strategic long-term goals and the platforms that will be used to achieve them (Royal Dutch Shell, 2010; Chevron, 2010). General Electric (GE) has found effective use of its website to broadcast its Imagination at Work sustainability initiatives. GE has an extensive cache of information in its website with specific details on its sustainable technology applications. Whatever title or medium firms use, the underlying reasons go back to the sustainable development agenda, which is most often translated by business firms as corporate social responsibility.

In the Philippines, the first GRI-based sustainability report was published in 2005 (Manila Water Corporation Sustainability Report, 2005). Since then only 13 other local companies have started producing similar reports. These reports were self-declared and have not undergone GRI check or third-party validation. In 2011 only two reporters, Energy Development Corporation and Petron Corporation, obtained the ‘GRI +’ application level, which means that these companies were reviewed by a third-party assurance. The other reporters chose to publish their reports at self-declared application level. This means that they meet the minimum requirements of using the GRI framework but did not subject their performance report to external review.

GRI-based sustainability reporting is a phenomenon that is obviously a normative practice among large corporations. But what has been said about the local companies? Do they also practice sustainability reporting? What are the driving forces that influence them to report? If so, what is the corporate story being communicated and who dictates this storytelling strategy?  Is their report comparable to those of multinational corporations’? Most importantly, how does an organisation make sense out of the external pressures and what particular action is it going to take to address the challenge of sustainability reporting? What strategic role would corporate communications assume, if any?

In July 2011, two local energy companies released their respective sustainability reports. It is interesting to know that these companies were former subsidiaries of the same mother company. It is even more interesting to observe the so-called sustainability paths that each one took after both were privatised. One remained in the oil refinery business while the other pursued renewable energy.

For the past 3 months, I have been involved in the third reporting cycle of EDC and those months were full of new learnings – from getting fresh perspectives on sustainability reporting to interacting with stakeholders and subject matter experts.

In about two months from now, a new report comes out from EDC. Petron is also aiming to release its sustainability report by then. The Ayala Group is also publishing their reports spearheaded by Manila Water, Ayala Land and Cebu Holdings. However, unlike Petron and EDC, they opt to self-declare their performance. The other two companies have been getting third-party assurance for their non-financial performance. Although sustainability reporting is not that robust in the country, we can already see that those that practice have a deeper appreciation of triple bottomline reporting and how this is impacting not only on their profitability but also on their long-term competitive advantage. For EDC, it has been integrating its reports sending the message to both shareholders and stakeholders that environmental and social acceptability are embededd in its business model. Today, its top exectives sign a compact, commiting their sectors to a set of  greening goals which aim to make its processes move up to higher levels of excellence, community partnerships at more meaningful context, environmental leadership sustained and the overall business resilient to economic shocks.

In a related development, the first ever Sustainability Conference in the Asia-Pacific region will be happening in Australia from 26-28 March.

That’s it for now folks. The first quarter of 2012 looks promising from a sustainability point of view. Watch out for updates from the Petron and EDC.



BINHI: Looking at the Green Movement in a New Perspective

Geothermal power shows that energy development can be more biodiversity-friendly. Energy Development Corporation is demonstrating how…

On top of Mt. Apo, the highest point in the Philippines. The vast stretch of land cradles one of the successfule reforestation projects in the country. (Photo by Albert Labrador for EDC)

When the first Spanish fleet arrived on the shores of the Philippines, the entire archipelago was covered in 28.5 million hectares of primary forests or about 95 percent of the entire land area. Had the crew of Ferdinand Magellan, the first circumnavigator of the world, managed to pierce through the army of Lapu-Lapu in 1521, he would still have to penetrate the dense coppice of Homonhon. Thicker forestlands most probably greeted the frigates of Miguel Lopez de Legazpi when they landed on the islands of Cebu and Samar. Indeed, the Spanish empire settled in an unexploited land where the rainforest matched that of Brazil, a colony then of its rival, Portugal.

Maybe Miguel Lopez de Legazpi and the Spanish colonizers did not feel obliged to plant new trees for every hectare of forestland that they cleared. Yet when the Spanish rule ended at the turn of the century, the country still had 21 million hectares of forests. It was only in the post-war years when the country‟s forests started vanishing at an alarming rate. According to the Philippine Forest Management Bureau (FMB), the Philippines has now only 7 million hectares of forest lands left – less than a million in old-growth forests. This is a meager 23% compared to the densely foliaged land discovered by the conquistadores 500 years ago.

So what have we done to reverse this trend? The fight against environmental destruction is now being waged all over the world, thanks to Al Gore and the global warming buzz. Yet this has also spawned the “fight climate change” bandwagon everyone wants to be a part of – from Hollywood actors, business tycoons, and politicians to environmentalist bloggers. Had Magellan lived today, he might have made expeditions in the name of environmental protection and his chronicler, Pigafetta, would have written profusely about it in his blog. But the good thing about all these discordant voices is that they do not only make us see the ugly effects but also help us accept that climate change is a stark reality and that we are largely responsible for it. But really, how do we address the problem?

A Holistic Approach

The word binhi is the Filipino term for seed source. This “seed of thought” has become the eponymic title of a country-wide reforestation program of Energy Development Corporation, the operator of the world’s biggest geothermal wet steam field.

Binhi as a program goes back to the basic tenet of reforestation – nurturing of mother tree species so seedlings can be propagated. It has been observed that fast-growing species like Mahogany and Gemelina have sprouted everywhere as a result of the massive tree-planting program of the government in the 90s. The knee-jerk reaction then was to immediately plant trees to overtake the deforestation rate and fast-growing trees provided the ready solution. Looking back with the gift of hindsight, we now see that we have overlooked a simple fact: the prime endangered endemic trees were left out in the reforestation race.   Among the trees that need conservation, which among them are critically endangered? How many are considered prime (with high economic value) and endemic or can only be found in the Philippines? And that’s how the consensus to proliferate indigenous high-valued tree stocks was arrived at.

Binhi goes beyond than just digging a hole in the ground and sticking seedlings into them. Binhi rethinks the whole idea of reforestation. Yes, the program will still do a lot of tree planting. But what kind of trees would Binhi proliferate and how? What new values would Binhi create for trees? When we see a tree, we see mostly its environmental purposes – carbon sink, forest cover, sanctuary for wildlife and watershed. Yes, those are the natural functions of trees. But in this day and age, maybe it can now be argued that trees should also provide for man’s modern needs? Quite paradoxical isn‟t it? And Binhi is seeking a new and enlightened way of looking at forest protection and preservation. As Patrick Geddes, the great urban planner, said, “By leaves we live and man must find the most appropriate mode of coexistence with trees.”  Therefore, Binhi follows a four-pronged strategy:  Tree for Life (biodiversity bridging research), Tree for Food (alternative livelihood derived from sustained yield schemes), Tree for Leisure (recreational benefits of trees) and Tree for the Future (the flagship module targeting the setting up of urban forests of prime, endangered and indigenous trees).

The Greening Legacy

Aside from being threatened, these species are not prolific seed producers – they do not produce at rates similar to the fertility rate of Filipinos. It takes 20-30 years for them to fully mature, bear flowers and produce seeds. Even if public schools shifted to planting molaves and yakals, there would not be enough seedlings left to bring back their pre-war numbers, at least not in the next five generations or so.

When EDC was scouring for seeds of tindalo (Afzelia rhomboidea), a tree with superior attributes and timber quality similar to that of narra, the national tree, they found it thriving in the most unexpected place – in a public plaza, at the heart of a city. As it turned out, that tindalo tree was the seedling that former Pres. Manuel L. Quezon planted in the 1938 during the chartering of Bacolod City. It is clear that these threatened trees have better chances of surviving when cultivated in public parks than when left in the wild where they will be eventually logged because no one will be there to guard them. One of Binhi’s goals is to make schools and local governments become seed producers of these trees because they can provide all the pampering and protection that they need.

The tindalo tree thriving in a public plaza in Bacolod City

It became very symbolic to have launched Binhi in the Quezon Memorial Park where the tindalo seedlings that came from the progeny of the Quezon tindalo tree in Bacolod were planted in a homecoming fashion. The tindalo seed has become the icon of the Binhi initiative. It possesses the sturdy traits of prime Philippine trees and historical value of its own. The tindalo icon aims to deliver the message that it is important not just to plant any tree but specially those that are most valuable to the Filipinos’ sustainable development and national identity.

We live in a modern age when the lament is that everything has been done before. Binhi is another way of re-thinking the solution to the rapid decline of our environment. Here in the Philippines, Binhi will show that there is a new, innovative and more audacious way of providing a truly Filipino solution to the environmental crisis. Ultimately, Binhi seeks to empower the Filipino people so they may take it upon themselves to regenerate these tree species that would have otherwise been lost to us forever.

Perhaps the true test of Binhi as a program will be the waiting time for these trees to repopulate the land. The tindalos, yakals, molaves and other similar trees that we plant today will fully mature after my generation has passed this earth. We may not see the full re-greening of our streets but the seeds that we plant today and the seed of thought that we teach our kids will lay down the foundation. The birth of a thousand forests starts with one acorn, as they say. Who knows, our forests might return to the way they were when Ferdinand Magellan first set foot on the Philippine shores. Maybe by that time, tindalo and the rest of its sister species will come back lining up the streets named after them.