As the general perception goes, every company in the country has its own corporate social responsibility (CSR) initiative simply as a way to avail itself of tax breaks.
The last few years, however, have seen a big shift as conglomerates lead the way in taking CSR a notch higher—beyond just giving out a little out of their own corporate pockets to the needy but sustaining their operations in order to give out more.
Jose Teodoro K. Limcaoco, Ayala Corp.’s chief finance officer, said the term “sustainability” has become the new mantra of the industry in the last three years.
“It’s a buzzword that comes to the fore. It is to know who do we work for, and where we get responsibility from,” he said.
Limcaoco, a finance specialist who worked for BPI Family Bank, admitted his view is based on his position that a finance person should create on shareholder value and not on sustainability.
He said people should understand the difference between sustainability, philanthropy and CSR.
Distinctions
“Philanthropy is not more than sacrificing your wealth to help somebody else. It is basically helping someone improve [his] welfare coming a little from your pocket, a standard for many corporations. They [companies] take a little of their profits, take it out [and] give it [to] someone else to manage,” he said.
CSR, on the other hand, is merely “cool philanthropy,” Limcaoco said.
Marrying all three together, however, will result in shared value, also now a buzzword among corporations, to take their CSR efforts to the next level, he added.
“This is pooling everything we know about doing good for the environment, good for the society, good for economics and they live a credible comfortable, profitable, long-lasting business model,” Limcaoco said.
Expanded platform
The Aboitiz group, one of the country’s oldest conglomerates, has also integrated its efforts to promote a higher kind of CSR.
In September, the company held its Advancing Business and Communities Summit, which merged its annual reputation, sustainability and CSR forums.
“This is to create a more expanded platform for discussion surrounding our group purpose and brand promise, to drive change for a better world by advancing business and communities,” Erramon I. Aboitiz, the company president and chief executive officer, said.
“The summit provides a venue where we can share with our partners and stakeholders how the Aboitiz Group is championing sustainability not only through our CSR programs but more importantly, through our businesses—their products and services,” he said.
“Simply put, we agree that financial gains should translate into meaningful benefits for society, creating shared value in the long run. Sustainability is the singular thread that weaves through the fabric of our company’s history, which shows our constant pursuit for opportunities. We are always on the lookout for opportunities that not only help accelerate our country’s economic growth per se, but more importantly, become catalysts of positive change through our products and services,” he said.
The sustainability efforts of the companies are based on the United Nations Development Programme’s (UNDP) Sustainable Development Goals, a list of 17 items that it needs to attain and give funding through 2030.
Many of the local companies have already hewed sustainability into their operations, which benefit both the firms themselves and the community that they serve.
Direct link
Fast-food company Jollibee Foods Corp., for instance, has established a direct contact with farmers supplying the vegetables and spice requirements vital to its operations.
Through its foundation, the company was able to do away with the brokers and other intermediary markets to get its supply.
It then teaches farmers to increase their productivity and quality of their produce since they have to transact directly with Jollibee, the company, to sell their products.
Pilmico, the food group of Aboitiz, is doing the same.
“We anchor our efforts to educate our end users about hog raising on what we call our four-pillar diamond program, which consists of ensuring excellent nutrition and proper feeding, proper genetics and breeding, good farm management practices and complete health care,” said Tristan Aboitiz, Pilmico vice president and chief operations officer of animal feeds division.
“Without the proper implementation of even one of these four elements, it is difficult to create a practice that is successful and, more importantly, sustainable,” he said.
In the Caraga region, backyard hog raisers were discouraged from continuing to raise animals because they lacked access to most of the key elements that would enable them to create an enduring business, Tristan said.
“Upon recognizing this, our desire to advance our end-user business led us to address this problem head on. With the diamond program in mind, we teamed up with partners that could support Pilmico in our drive to create a sustainable business for the backyard farmers of Caraga,” he explained.
The swine repopulation project was implemented in 2014, with the objective to breed a set of the 450 sows to yield target 1,400 parent stock gilts. These gilts would become the mothers of the future backyard swine population of the region.
To date, it now has a 1,300-sow population and plans are in place to purchase an additional set of 500 breeders in order to benefit more farmers.
“The story does not end there. While, initially, our efforts were focused on equipping backyard raisers with the proper genetics, nutrition and farm management practices, we quickly realized that it was just the beginning of a bigger project that would help cement the sustainability of backyard pork production in Caraga,” Tristan said.
Taking off from his statement, the UNDP has criticized companies for giving out so little to make a dent on society in general.
But the two largest Philippine firms assert that they are going an extra mile to help attain the UN’s list of goals.
The Aboitiz group said it has allocated some P4.2 billion for its CSR activities over the past 10 years. The Ayala group, on the other hand, was among the first companies to track its sustainability efforts through a report that it is printing alongside with their annual report.
“Through our investments and operating activities, our businesses have funneled back to society billions in the form of taxes, royalties, payments to the government and suppliers, and benefits for our host communities,” Erramon Aboitiz said.
Why we do business
For Ayala, they are looking at their long-term survival as a corporation and rethink its strategy as an institution.
“We’re not doing a business to solve a problem. We’re finding problems to solve and build business that surrounds it: To build a sustainable business,” Limcaoco said.