Responsible Business Practices
Highlights
Best Managed Company (Bronze) Award
Golden Arrows
US$ 3.4 billion
For 190 years, Ayala has always conducted its businesses responsibly and with integrity. Officers and employees of the Ayala Group, as well as business partners and vendors, are held accountable for their actions and are expected to comply with company policies at all times.
A strong governance structure is in place to provide checks and balances across the organization.
Ayala seeks to generate greater economic
value for its stakeholders by building
businesses that address societal gaps such
as education, healthcare and mobility,
on the strength of an innovation-driven
business culture.
For 190 years, Ayala has demonstrated good corporate citizenship by not only ensuring profitability, but also by espousing sustainability principles. This is imperative as many shareholders look past financial reports; they also zero in on a company’s ESG strategy and performance.
Ayala’s brand is anchored on integrity, transparency and accountability at all levels in the organization and across the group of companies under it. This is made possible by having a strong governance system in place, coupled with the good working dynamics between the Board and the Management in shaping Ayala’s future.
Governance Highlights
2023 was a transformation year for Ayala as the company made a number of changes both at the Board and Management levels in response to business requirements and as part of the company’s succession plan. Some of these are as follows:
- Ms. Mercedita S. Nolledo resigned as a Director effective September 28, 2023.
- Mr. Fernando Zobel de Ayala was elected as a Director effective September 28, 2023.
- Mr. Jaime Z. Urquijo was appointed as Chief Sustainability and Risk Officer.
Mr. Solomon M. Hermosura continued to perform four roles in Ayala’s governance structure. As Corporate Secretary, he assisted in conducting Board meetings, helped prepare the meeting agenda and maintained Board minutes and records. As Chief Compliance Officer, he ensured compliance with all relevant laws, rules and regulations and worked closely with the Corporate Governance and Nomination Committee to ensure that Ayala adopts the best corporate governance practices. As Data Protection Officer, he guided the company in complying with the National Privacy Commission’s requirements and in staying current on international privacy practices. As Chief Legal Officer, he advised the Board, CEO and senior leadership team on potential legal risks, legal matters and protocols relating to their roles and the company’s operations.
Company Policies
GovernanceInformation Security
For Ayala, protecting the organization’s information and information assets from internal and external threats is imperative. Like any other company, Ayala has increasingly depended on Information Technology (IT) to obtain, use, store and process data and this has presented more risks related to information security such as data breaches and cyberattacks. Without an effective system in place, confidential company information such as trade secrets, management directives and business strategies are vulnerable to unauthorized access, theft and misuse.
For this reason, the company ensures and regularly checks the integrity of its IT infrastructure and enhances or reinforces the same in accordance with technical standards and industry practices. Physical security mechanisms are also used to protect the company’s network, servers, databases and other computer systems that contain sensitive information.
Moreover, Ayala established security policies, guidelines and procedures to mitigate risks and reduce any potential impact.
Recognizing that cyberattacks may also find their way to a company’s system through employees and their devices, Ayala implemented a password and biometric access restriction on computers that store confidential information and installed anti-spam, anti-virus, anti-malware and other intelligent tools to detect and quarantine malicious codes. In addition, employees are required to undergo an annual training on cybersecurity to avoid any incidents of mishandling, improper usage and unauthorized access or disclosure of confidential company information. Further updates and reminders on information security are regularly given to employees through various internal channels. These include deciphering a phishing attempt, creating strong passwords and securing workstation and equipment during non-work hours.
Innovation is key to Ayala’s organizational and economic growth strategy. The company understands that innovation is essential to stay afloat in today’s business landscape and to maintain its competitive advantage. Constant changes in market and industry trends, consumer behavior and other externalities necessitate companies like Ayala to keep on finding new and better ways of doing business.
Instead of looking at innovation as a
mere cross-functional project, Ayala
embeds it in its organizational culture
through leadership trainings and
company events such as the Spark:
Ayala Group Innovation Summit.
Employees are encouraged to look
beyond the status quo and find a gap or
pain point to address. They are reminded
that innovation does not always require
a groundbreaking idea; even a simple improvement in an internal process,
for instance, can result in increased
productivity or efficiency.
As a parent company, Ayala advocates
the same growth mindset across the
organization. For the Ayala Group,
the main objective is to make sure
that businesses are not disrupted.
The company influences its
business units to adopt initiatives that are:
➤ Future-ready, priming their
operations to adapt to global and
local developments such as new
technology;
➤ Agile, curious, and experimentational,
taking advantage of the opportunities
around them and being open and
quick to adjust to organizational
changes that they may bring; and
most importantly,
➤ Customer-centric, always looking at
solutions from an end-user point of
view to ensure that they are relevant
and useful.
Driving innovation also means
maximizing synergy as business units
and investee companies are urged
to leverage the Ayala ecosystem and
expertise, with the goal of developing
products and services that will address
specific customer needs. Through
the Ayala Innovation Council, the
group builds the capability of each
business unit to identify a customer
need or expectation and to build
a business model around it. Ayala
Corporation, as the parent company,
works with its investees in incubating
concepts and helps them strategize
and operationalize these to address
customers’ needs.
Sustainable Financing and Investment
Ayala fully supports the Philippine government’s goal of transitioning to a circular economy, which is necessary in light of the country’s increasing population, diminishing natural resources and vulnerability to the impacts of climate change. Key to this transition is prioritizing sustainable programs and activities that take into account economic, as well as social and environmental considerations.
As a leading conglomerate, Ayala hopes to create greater value whenever it allocates funds to start a new business or expand an existing one. It makes sure that the investment will allow Ayala to realize both its financial and sustainability objectives. Ayala’s investments in ACEN, AC Health and Manila Water, for example, were driven by its aspiration to not only grow its portfolio, but more importantly, to bridge gaps in the communities. The company understands that while building such businesses may not be profitable immediately, it is something that a responsible company needs to do to contribute to nation-building and help Filipino families thrive. Apart from targeting societal and environmental issues, Ayala hopes that its ESG-driven investments will help boost local and national economic growth and activity.
Over the past five years, the Ayala Group has raised ~US$3.4 billion from sustainable finance transactions in both private and public formats. Ayala will continue to develop its sustainable finance capabilities to diversify its funding sources from local and international facilities that will help fund green and social investments and initiatives.
Ayala Corporation, MUFG Bank and Sun Life Philippines signed a ₱5 billion credit facility to fund the company’s sustainability-linked projects. This transaction is the first of its kind for a conglomerate in the Philippines and demonstrates Ayala’s commitment to ESG and nation-building.
Supply Chain Sustainability
Ayala extends its sustainable and
responsible business practices
through its supply chain. The
company is currently developing a
policy that formalizes the inclusion of
sustainability-specific requirements
in the supplier accreditation process.
In the meantime, however, strict
requirements are already enforced.
For one, Ayala only works with
suppliers whose social and
environmental practices are aligned
with its sustainability standards and
commitment to the UN Sustainable
Development Goals. The company
seeks to obtain services, supplies and
equipment from reputable and quality
vendors, taking into consideration their
environmental impacts and ensuring
their compliance with human rights laws, particularly on child and forced
labor. This is a crucial requirement since
suppliers and business partners are
essentially an extension of the company
and as a pioneer in sustainability, Ayala
expects no less from them.
Ayala also supports its suppliers as
they go through their own sustainability
journey. The company offers trainings
and works with them in mapping out
their strategies to embed sustainability
in their operations and in their own
supply chain.
Moreover, the company influences
its business units to uphold social
and environmental sustainability in
their respective networks. Globe, for
example, has taken bold steps to
advocate supply chain sustainability.
