CEOs vs the threat of the three planets

(Second of two parts)

The most resounding message of the recently concluded Management Association of the Philippines (MAP) CEO International Conference is that innovation should be subject to one important rule – it should be for the sake of sustainability.

What good is a packaging design if it’s still single-use plastic? What good is state-of-the-art production equipment if reusing or recycling issues are not addressed in the same factory? Where is the value of designing real estate development with artwork if global cities such as Hong Kong make their citizens live in shoeboxes?

Sustainability is about profitable business that does not choke or deplete our planet, and cares for the quality of life of all humans living in it. Each company, for sustainability’s sake, is now compelled to look beyond financial impact and should learn how to measure and manage their environmental and social impacts as well. If the exact science to that is still esoteric, then there is nothing stopping companies to do the obvious, or to do those that they understand.

Let’s learn again from some Philippine companies and their business leaders who are doing their part:

Nanette Medved Po - Generation Hope (HOPE)

Nanette is a social entrepreneur. Her enterprise works on a social issue – education – in particular, building classrooms. Perhaps her unique trait is that as a social entrepreneur, she aims for her business to be viable. But as an owner, she is completely altruistic, giving all of what would otherwise be dividends to this social cause. HOPE has been selling purified drinking water since 2012 and donates 100 percent of the company’s profits through the Department of Education’s Adopt-a-School program. To date, the program benefits almost 17,000 students in locations where classroom shortage is at its worst or where there are no classrooms at all.

Her initiative on sustainability is what she calls their “plastic-neutral” move. They compute the amount of plastic in grams in their products and recover 100 percent of that plastic in weight “post consumer,” then work on that with co-processors for conversion to fuel facilities that make cement and steel, for instance. Today, they sell Hope in a Box and Hope in a Coconut in recyclable paperboard packaging.

Ruel Amparo - Cropital

Uncertainty and investment are not exactly the best of partners. That is why farming, and farmer’s access to capital, are also at opposite ends. Ruel eases the uncertainty by curating or validating the farms and also making risks transparent. As one who comes from a family of farmers, he chose to help farmers access capital through crowdfunding – to improve and change their lives.

Upon harvest, capital is returned to investors, plus their share in the profits. This builds credibility and makes investors support farmers despite the difficulties. Ruel may have also unknowingly helped open the minds of banking institutions to lend to farmers without the most important C of credit: collateral.

Rene Almendras - AC Infrastructure Holding Corp.

The 185-year-old Ayala Group is one of the two organizations that spearhead sustainability reporting. Rene of AC Infra shares that “corporate governance, risk management and sustainability cannot be discussed separately” from growth strategies. His pain point of choice is transportation – in particular, convenient and effective mass transportation.

After reducing train cycle time and other improvements in the electricity-powered LRT1, Rene intimates that through a consortium, they next submitted a bid to transform the NAIA. Part of this proposal is to build a railway system in the airport that connects to the LRT1 and subway lines “so we won’t have 65 million cars going in and out of the airport.”

Cesar Romero - Shell Companies in the Philippines

Cesar feels that the Shell organization is one of the forerunners of sustainability practices. While the organization has previously been focusing on the environment, he reveals that their current approach is more holistic and even includes educational programs, generating livelihood and alleviating poverty in areas where they operate. They concern themselves even with specific health projects like the Movement against Malaria where they have helped reduce and avoid deaths from malaria so much so that only four provinces in the Philippines are yet to be declared malaria-free.

While they spend heavily on R&D initiatives to help the environment, it is worth mentioning that they recently chimed in on the technology of capturing CO2 in the air. “Using our knowledge of upstream exploration...we do the reverse of it. We capture CO2 produced in industrial facilities and reinject them in the rock formations underground.”

I believe that today, everyone should review their business models. The intangible values of environmental and societal capital are getting more and more tangible. Every bad thing that every business and every person does comes back to haunt and punish us all anyway.

While we rethink our business models, could it be not a five- or 10-year plan, but a cross-generational one? Instead of planning to leave enough resources behind for our children, can we plan to leave a healthier, more vibrant planet, and a much more inclusive society than the one we’ve lived in? Whatever the answer is, it is clear that sustainability is a leadership issue – of the self, and of the organizations we represent. How we lead today, is how the unborn generations will live or fight for existence in the future. Our purpose has just been pretty much redefined.

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Alexander Cabrera is the chairman of Integrity Initiative Inc., a non-profit organization that promotes common ethical and acceptable integrity standards. He is also the chairman and senior partner of Isla Lipana & Co./PwC Philippines. Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.