Within the Board of Directors is the Sustainability Committee, which Ayala Corporation created to uphold higher levels of governance. The committee reports to the board.
With an eye on inclusivity, the Committee is currently composed of one male and two female members, who are: Chairman - Cezar P. Consing; Member - Rizalina G. Mantaring; Member - Chua Sock Koong
Their primary responsibility is to oversee the sustainability direction, strategies, and programs across the group–ensuring that they are aligned to the company’s profitability while keeping the balance with governance and environmental and social initiatives.
In 2021, its maiden year, the Committee held two meetings. It aims to increase this number given the increase in ESG initiatives across the group.
Ayala Corporation is privileged to be a member of global organizations for sustainability.
Global Compact Network Philippines
We are a founding member of the Global Compact Network Philippines and more recently, Ayala Corporation has been elected as the Chairperson for 2022 and 2023.
World Business Council for Sustainable Development (WBCSD)
We are also the only Filipino corporation in WBCSD. The organization’s programs for business transformation helps us determine where we are in the journey towards integrating sustainability into our businesses and how we can lead the way for other organizations.
Business Commission to Tackle Inequality
To further promote Diversity and Equality, Ayala joined WBCSD’s Business Commission to Tackle Inequality (BCTI), where Ayala’s President and CEO, Fernando Zobel de Ayala, is a Commissioner. The commission aims to accelerate business action on the same level of climate and nature action.
CFO Network Membership
Ayala Corporation’s Chief Finance, Risk, and Sustainability Officer Mr. Alberto M. de Larrazabal has officially become a member of the WBCSD. The network composed of CFOs from companies around the globe aims to shape the financial dialogue, making it more inclusive and changing the system to put ESG at the core of businesses.
With the engagement of CFOs, it is expected that the transition to a financial system that is more sustainable could be reached faster. The group evaluates standardization, investor engagement, leadership, and integration.
Ayala at the Council for Inclusive Capitalism
The Vatican recently formed the Council for Inclusive Capitalism, an initiative that aims to help economies become more inclusive and purposeful. Chairman Jaime Augusto Zobel de Ayala became one of the Stewards at the council in February 2021.
The Vatican’s project and Ayala’s vision prove to be aligned in creating value that is relevant, innovative, and enduring. Inclusive Capitalism’s approach is geared towards equality of opportunity, equitable outcomes, fairness across generations, and fairness in society. It is a global movement of business and civil society leaders, including leaders of major faiths. The council believes that making capitalism inclusive, with its benefits more widely and equitably distributed, is both a moral and market imperative.
BOARD SUSTAINABILITY SELF-ASSESSMENT SURVEY RESULTS
The Sustainability Committee recommended that Ayala Corporation’s Board of Directors take the Board Sustainability Self-Assessment Survey developed by WBCSD, which they undertook in addition to their annual self-assessment survey.
The WBCSD categorizes sustainability self-assessment results into three general levels: starting the journey towards sustainability, progressing on this journey, and lastly, leading this journey. Overall, the board members assessed themselves to be progressing in the journey towards more embedded sustainability.
The survey questions are divided among the five pillars below:
Business Model and Purpose
The answers here suggest that the Board considers the impact of ESG matters on the business model and how they can be combined with the corporate purpose. They believe that the company as a whole sometimes exceeds expectations, and at other times meets them but does not take leadership.
For risk management, the Board view varies the formal embedding of ESG risks and opportunities to the company’s risk management process. The variation lies between ESG-related risks being fully embedded and sometimes considered. The Board likewise varies on the depth of involvement, ranging from board being informed, being consulted, actively participating, and being held accountable.
Engagement with Management
The Board likewise has varied experience in terms of discussing ESG-related risks and opportunities with management, from discussions at every board meeting to at least once a year. The Board also needs to agree on setting ESG-related objectives for management and on including ESG performance as a variable for executive pay and compensation.
Engagement with Stakeholders
In engaging stakeholders, some directors see the Board as directly engaged, while others say that the Board goes through management to engage, and some others say that the Board is informed through management’s engagement.
Some members believe that the Board plays an active role in ensuring the consistency of non-financial disclosures and actions, while others say that the Board does not play an active role and leaves it to the management. Only some Board members see the link between ESG and financial implications.
The survey revealed that the Board is at the progressing level, signifying that ESG is given relevance across the group. This is in terms of considering the business model and the risks and opportunities, overseeing management, and engaging with stakeholders. This overall result of the 2021 self-assessment revealed a willingness to take more steps forward.
For 2022, the next step will be for the Board of Directors to undergo a workshop that will help them progress further in terms of weaving sustainability more into the company’s overall governance and responsibilities. This can thus be used as a guide to decision making.