EDC's DMA: Tools and Strategy in Sustainability Reporting

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Energy Development Corporation, a renewable energy company in the Philippines and operator of the world's largest vertically integrated geothermal project discusses best practice in sustainability reporting at the 2nd National Conference on Sustainability and Reporting held on Nov. 29, 2012 at the University of Asia and the Pacific.

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  • EDC was created in 1976 as a result of the oil crisis. When the oil exporting countries refused to sell oil to the country which was 95% dependent on oil in the 1970”s, the govt signed a geothermal bilateral aid program with NZ which paved the way for RE in the country
  • Today, EDC is a vertically integrated RE owning both steamfields and power plants with projects across the major islands of the country. We have a capacity of 1,130 MW of geothermal and 132 MW of hydropower.One MW can light up 20,000 rural homes
  • In summary, EDC has contributed to the development of the country then and now. EDC is a pure RE power for 36 yrs providing clean power. It has substantial contributions in terms of avoided oil import of 114 M barrels of oil saving $ 5.8B, has provided P 1.6B of social projects to its host communities in 5 projects since 1987 and paid its taxes of P34.5B since 1983. Geothermal also emits lower harmful gases and avoids 5.3M tons of C for every yr of operation compared to coal.
  • Geothermal being site specific, EDC’s projects are located in forest areas that are often in key biodiversity areas of the country
  • Being in a fragile forest environment, the protection of the natural resources base is critical for geothermal recharge and other services for other stakeholders in the area. Geothermal comes from water collected by forest which find its way to the geo reservoir 3km below the ground which is heated by magma and harnessed in the plant. Waste water is reinjected back to the reservoir. EDC’s value chain links the 6 aspects of business operation from developing the natural resource to the application of geothermal technology, utilizing expert human capital to engaging stakeholder groups –the suppliers, customers and community partners.
  • EDC processes follow nature’s cycle . EDC adopts cutting edge technologies to make the plant operation efficient for the optimum use of natural resource base and reinjects its wastewaters. EDC reforested close to 8 thousand hectares and 7.5M trees for future recharge to geothermal. The improved forest cover in turn improve the envtl quality of the site for the communities. The stakeholders are engaged to cooperate and sustain the business operation. Thus, the EDC is harmonizing technology, Thus, the business is able to harmonize technology, people and environment.
  • With a nature focused business model, EDC has evolved as a truly responsible company. The evolution of EDC’ sustainability program started in 1978 when EDC created the first envt group in the country a yr after the envi law was issued in 1977. By 1981 it undertook EIA of its projects and installed envi mgt measures. In 1983, it took over the management of the forests and gave liveihood to forest dwellers via agro forests or social forestry. In 1987 it hired a Comrel Officer to coordinate with communities. By 2005 we revitalized Comrel and created a CSR Team and by 2009 we started addressing global issue of Climate change due to local effects to EDC assets and its host communities
  • EDC started its Comrel program in October 1987. When we were privatized in 2007, it shifted into a an integrated and strategic approach. When we were govt we focused on industrial peace but now we are also concerned about employee lifelong wellness. When we were govt we focused on contribution to the country. Now we added company reputation. Before we allocate and expend the budget but now we are keen on effective financial management. If before there were dole out projects, now our focus is on sustainabiity mechanisms. We also have a more focused stakeholderss.
  • As a GOCC it resolved that as govt it should be the first one to abide the laws. Now as a publicly listed company, it complies with 250 laws and ordinances for CG, energy, envt, health, safety, tax, social laws while adhering to international conventions signed by the country on 5 sectors. Its Board adopted IFC safeguards a year before privatization . As a result of all these regulatory requirements, EDC strengthened its accountability measures.
  • Sustainability reporting, or in EDC’s case, integrated reporting is viewed as a process rather than an output. EDC's impetus was more of aligning financial performance indicators with other equally important performance areas in environmental and social performance. By aligning them, we gain a clear and focused understabding of how to improve our performance. On the part of the stakeholder, the report increases their understanding of company operations, its management strategy, its prospects and even its risks.
  • The main question to start the activity is to understand what we want to communicate and to whom. The relevant message is the intersection or common ground on what you want to say and what stakeholders want to hear
  • What usually happens is companies propose initiatives to be sustainable---savings and efficiency in water use, energy, waste recycilng etc.
  • When we perceive we are sustainable
  • Then they report to the stakeholders
  • When in fact it should be the other way around
  • FIRST, GET TO KNOW WHAT STAKEHOLDERS WANT TO CHANGE ABOUT YOUR COMPANY PERFORMANCE
  • Identify the process to bring about the change and bring it to the corporate strategy and embed in the culture
  • The resolution of the stakeholder expectation can benefit both the company and the stakeholders
  • Therefore the stakeholders are the starting point
  • What is the story behind the process of coming out of the report
  • EDC’s integrated sustainability reporting is a process that heavily involves stakeholder consultations and appropriate communication guided by the materiaiity principles and mgt prescribed approach
  • The glossy report is just a product of a tedious process undertaken from the employees up to the Management and the Board. For EDC, the value is not in the report or product but in the preparation: a) the selection of the metrics (GRI or EUSS?), b) scrutiny of business impacts and risks (identifying the risks and aligning the risk measures, BC program and the BSC of each employee), c) the resulting insights and subsequent adjustment of the operation and even strategy as needed. We gain a clear and focused understanding of how we can improve our performance
  • In conclusion,
  • Involvement of stakeholders to get the answers was learned by EDC early on. In 1990 well before GRI was adopted, our Mt. Apo experience taught us about social acceptability.
  • By directly talking to the 90 tribal leaders of Mindanao, we developed common ideas that were relevant to both EDC and tribes:
  • To secure consent from the deities, a ritual was performed
  • To seal the agreement, contracts were signed
  • Multisectoral agreement paved the way for the permission to operate the Mindanao geothermal power projects
  • We first identify our stakeholders and regularly update our stakeholder map. This is the “knowing part of the process”. After an inclusiveness workshop was conducted, from the universe of stakeholders, we identified 31 priority groups. We categorized them into 6 major classes…..Name
  • Stakeholders are identified based on location, condition, function interests and impacts of the company. There are three clusters-primary, secondary and tertiary. The primary are those who may be directly impacted by our operation and therefore will need continuous nurturing of relationships. Secondary are those which have proximal relation which may have some emerging concerns and tertiary is where engagement is based on mutual need. Cite examples
  • We have mapped out a reach of 44 primary partner bgys across our 5 project sites
  • We do an impact assessment of our impacts across the business value chain in terms of our business component vs, the envt components land water people. We also look at how local, national and glpbal issues influence us and how we can help address them
  • The measures for the identified impacts are then reflected in the project design and in the report. Here are snap shots of the measures
  • From our lessons from the Mt. Apo Project, we conduct regular stakeholder consultations to look for other concerns and issues that have not been scientifically assessed in the matrix of material topics. This is the engaging part. We conduct info drives, FGD, public hearings and our Com Partner are assigned a number of the 244 associations to sustain engagement
  • We listen to the stakeholders by conducting every other year a third party social survey, an innovation to the consultation process. We measure how our company, project and people are accepted.
  • They tell us which modules work and which do not
  • We assess which are relevant to our stakeholders
  • These issues are considered material by our stakeholders in 2011. The matrix shows the level of concern on the y axis and the impact of the concern on EDC. Low category are envtl quality,job opportunities and liveihood as these are all taken cared of by EDC. Next in criticality are power rates, employment in EDC, infra and sefety. The most critical to our stakeholders are growth, climate change,work force development and partnerships
  • The second environmental safeguard to protect the forest and avoid hazards is the reforestation of denuded areas. From 1989-2008, we have planted 7,623 hectares and 7.5M trees.By 2009 we upgraded our reforestation under a BINHI Program. If before we were planting 3oo hectares/yr this time we will plant 1000 has/yr for 10 yrs from 2009-2019. This time onlyIndigenous trees and not only for geothermal recharge but also for storage of carbon to avoid global warming and climate change but also for preserving local biodiversity. The BINHI has4 modules: 1) Tree for life where we plant in between critical forests to close the gap for corridors for wildlife, 2) Tree for Food where we plant agroforests and plantations for thelivelihood of forest dwellers, 3) Tree for the Future where we rescue rare tree species and plant them as future mother trees and 4) Tree for Leisure where good forest areas areConverted to ecotourism sites
  • Climate change is upon us. In the past 7 years our 5 geo projects were affected by 8 typhoons. Because EDC will need to protect its projects from extreme weather events that cause landslides and floods, EDC extends the sameprotection to its host communities
  • As another measure, we organized 25 barangay emergency response teams so they can be the first responders while waiting for the disaster councils
  • We also did the disaster training for the schools (click again)
  • Using various watershed factors like land, slope, forestt…the vulnerable areas are identified. Here is the sample modelling for Bacman showing the ladnslide prone and flood prone areas
  • Once we have the data and the measures, there is need for alignment with the organization to ensure execution
  • Stakeholder focused activities provide on grounded info to the Mgt and Board. These are translated to strategic directions by the BOD. which then dictates the sustainability approach by Mgt. Corp strategic obj are then aligned to the BSC of each staff. EDC’s integrated reporting process becomes more pragmatic, long term and focused on achieving business success on multiple levels. Read.., Corp Sust Excellence Obj are resilient business, excellent processes, exemplary envi performance and strong communitympartnerships
  • In 2010, EDC strebngthened its integrated sustainability strategy by articulating them through policies and mgt discussions on its approach to sustainability -Read
  • EDC’S INTEGRATED SUSTAINABILITY REPORTS HAVE HAD DMAs ON ITS IMPACTS ON THE ECONOMY, ENVIRONMENT AND SOCIETY – BOARD PROMULGATED KEY POLICY STATEMENTS TO ADDRESS MAJOR IMPACTS-on approach to eco growth, sustainable envtl responsibility and sustainable social development
  • These were physically translated to policies
  • In writing our story, instead of abstract numbers ,we use the storytelling method so that people can relate to them and validate them from real people.
  • Like traditional forms of financial accounting, a Sustainability Report itself does not indicate that a company is more responsible. Rather, it provides a clearer understanding and disclosure of actions and measures, and ties it to a firm's various bottom lines. Captain Simon Bennett, General Manager of Sustainable Development at Swire Pacific Offshore Operations, has also cautioned against assuming that reporting itself brings direct financial value. Its value, rather, is in its ability to provide a clear picture for continued self-assessment and improvement.
  • THIS WAS OUR 2011 REPORT. This report describes our commitments to operational, environmental and social responsibilities, which are at the core of our company’s history, culture and business strategy
  • THIS WAS OUR 2011 REPORT. This report describes our commitments to operational, environmental and social responsibilities, which are at the core of our company’s history, culture and business strategy
  • Our Approach to report writing—balanced reporting, use of quality data, comprehensive DMA and relevance to the stakeholders.
  • The statements from Mgt not only report accomplishments but highlight and address issues and challenges. Commitments are made on record and measured the following year. We don’t want investors to need to read in between the lines and do additional research to know there are problems. Examples of candid declarations and resolve are ___
  •   We also adopt wildlife as an action 
  • Interestingly, this process of engaging stakeholders has provided an avenue to tell the sustainability story of EDC – from its dramatic creation during the 70s oil crisis to how it successfully paved the way for renewable energy to become a viable power source in the Philippines. By applying the storytelling technique in writing the integrated report, EDC is creating a two-way communication medium with its stakeholders while establishing its pioneering efforts in environmental management and CSR, which were only told in low-key tones before.
  • We tell the story of the communities’ success like Fedbach from a cashless society ….
  • And the partnerships for livleihood like Keitech
  • We advocate and communicate outside the Sustainability report like these
  • EDC's DMA: Tools and Strategy in Sustainability Reporting

    1. 1. TOOLS & BEST PRACTICESThe Importance of Materiality Testing & DMA in Sustainability Reporting Agnes C. de Jesus SVP for Environment & External Relations and Compliance Officer
    2. 2. PRESENTATION OUTLINE  COMPANY PROFILE  Nature of Business  Communicating with Stakeholders  Path to Sustainability  THE PROCESS BEHIND THE STORY  Stakeholder Mapping  Materiality  Management Approach  WRITING THE REPORT  Storytelling Technique  Multi-level Communication
    3. 3. ABOUT US Origin and history | Nature of business | The path to sustainability
    4. 4. EDC WAS BORN OUT OF THE 1970’S OIL CRISIS PAVING THEWAY FOR THE COUNTRY’S SHIFT TO RENEWABLE ENERGY 1970s Leyte, 4
    5. 5. TODAY, EDC IS A VERTICALLY INTEGRATED RENEWABLE ENERGYCOMPANY WITH OPERATIONS LOCATED ACROSS THE COUNTRY INTEGRATED STEAMFIELD LUZON STEAMFIELD (EDC) AND AND POWER PLANT FGHPC (60%) POWER PLANT (EDC SUBSIDIARY) 120 MW Pantabangan 12.5MW Masiway Leyte Manila Bacman 125MW Upper Mahiao 232.5MW Malitbog 110MW Bacman I 180MW Mahanagdong 20MW Bacman II 50MW Optimization Leyte Northern Negros VISAYAS 112.5MW Tongonan I 49MW Northern Negros (Impaired in July 2011) Southern Negros Mindanao 112.5MW Palinpinon I 52MW Mindanao I 80MW Palinpinon II 54MW Mindanao II MINDANAO 1,130 MW geothermal 132 MW hydro 5
    6. 6. THEN & NOW, EDC„S RENEWABLE ENERGY PROJECTS SUPPORTTHE ECONOMIC & ENVIRONMENTAL GOALS OF THE PHILIPPINES EDC is Purely Renewable • 65% of the Philippines’ installed geothermal power capacity • 14% of the Philippines’ total power generation Substantial Country Contribution • Displaced 114M barrels of oil import (P240 B savings) • Social projects of P 2 B since 1987 • Paid P 34.5B taxes and fees to the government since 1983 Lower Carbon Emissions Avoids 5.2 M tons of C/yr of operation to mitigate climate change Between 85-92% lower than in grids where EDC operates: • Visayas Grid: 0.21 CO2 ton/MWh vs. EDC Visayas: 0.03 CO2 ton/MWh • Mindanao Grid: 0.28 CO2 ton/MWh vs. EDC Mindanao: 0.02 CO2 ton/MWh
    7. 7. BEING SITE SPECIFIC, GEOTHERMAL & HYDRO PROJECTS ARE LOCATEDIN VERY REMOTE AND FORESTED AREAS – 5 SITES ARE IN 8 KEYBIODIVERSITY AREAS OF THE COUNTRY 7
    8. 8. EDC’S VALUE CHAIN LINKS THE 6 VITAL ASPECTS OF THE BUSINESS‟OPERATION – FROM DEVELOPING THE NATURAL RESOURCE BASE TOENGAGING STAKEHOLDER GROUPS Water Table Geothermal Reservoir Magma
    9. 9. EDC PROCESSES FOLLOW THE REGENERATIVE CYCLE OF GEOTHERMALRESOURCE THEREBY HARMONIZING TECHNOLOGY, PEOPLE AND NATURE Renewable energy technology Wet steam utilization, zero discharge system, fluid collection & recycling system, efficient power plantsComprehensive environmental management Waste management, watershed, biodiversity, Stakeholder Engagement climate change action Customers, Investors, Regulatory BodiesComprehensive Environmental Management Program Fluid Collection & Recycling System 5.2 M tons sequestered CO2 1,130MW 84,839 hectares Steamfields land protected Power Plants 7,623 hectares reforested in 2011 Stakeholder Engagement Employee development, CSR for 18,000 households
    10. 10. EDC HAS EVOLVED INTO A RESPONSIBLE ENERGY COMPANY – FROM THE 1970’S WHEN IT STARTED FOCUSING ON ENVIRONMENTAL MONITORING TO THE PRESENT WHERE IT ADOPTS THE INTEGRATED SUSTAINABILITY APPROACHPhilippine‟s evolution Charity / Dawning of Community Corporate Integrative Donations NGOs Relations Citizenship CSR Environment Environmental Environmental Best-in-classEDC‟s path Monitoring Management Management operating systems Watershed Mgt/ Watershed Mgt/ Envi/Watershed/ Social Forestry Social Forestry Social Forestry (1983) Community CSR/Community Expanded Relations Partnerships ComRel (1987) (2005) Climate Change Action 10 (2009)
    11. 11. AFTER ITS PRIVATIZATION IN 2007, EDC SHIFTED ITS PARADIGM TOWARDS A MORE STRATEGIC APPROACH AS IT PREPARES TO COMPETE IN THE GLOBAL ENERGY MARKETEDC was acquired by the Lopez Group through First Gen Corporation in November 2007 Government Corporation Outlook Lopez Company OutlookIndustrial peace Industrial peace + Employee lifelong wellness Company reputation & contribution to theContribution to the country country • Recover & Re-allocate• Sunk cost (Effective resource management)• Allocate & spend budget • Strategic (Low input, high impact)Dole-out Sustainable (financial & program sustainability) Geothermal block & focused on primaryEntire geothermal reservation partner communities 11
    12. 12. WITH ITS COMPLIANCE TO 250 LAWS/ORDINANCES ANDADHERENCE TO MAJOR INTERNATIONAL CONVENTIONS,EDC HAS STRENGTHENED ITS ACCOUNTABILITY MEASURESCORPORATION ENERGY LAWS ENVIRONMENT HEALTH & LAWS LAWS SAFETY LAWS - POWER REFORM - POLLUTION - ENERGY HSE- SECURITIES & EXCHANGE - RENEWABLE - FORESTRY - HEALTH CODE ENERGY- PHIL. STOCK - WATER - OCCUPATIONAL EXCHANGE - ENERGY SAFETY & BENEFITS CODE HEALTH- CORP. GOV . - GRID CODE INTERNATIONAL TAX LAWS SOCIAL LAWS CONVENTIONS - Atmosphere - LOCAL - INDIGENOUS - Biodiversity GOVT.CODE PEOPLES - LGU BENEFITS - Chemicals - REVENUE - AGRARIAN - Land CODE REFORM - Culture - RELOCATION IFC-WORLD BANK - LABOR - Environmental and Social Safeguards
    13. 13. Stakeholder communication strategy
    14. 14. Sustainability Management is a key word in the corporate strategy of the 21st century
    15. 15. Whom & what to communicate?
    16. 16. WHAT USUALLY HAPPENS: COMPANIES PROPOSE INITIATIVES TO BECOME SUSTAINABLE
    17. 17. WHAT USUALLY HAPPENS: THEN THEY SHARE THE INFORMATION TO THEIR STAKEHOLDERS
    18. 18. WHEN IN FACT IT SHOULD BE CONDUCTED THEOTHER WAY AROUND
    19. 19. FIRST, GET TO KNOW WHAT STAKEHOLDERS WANT TOCHANGE ABOUT YOUR COMPANY PERFORMANCE
    20. 20. BRING THAT CHANGE PROCESS INTO THE CORPORATESTRATEGY AND CULTURE
    21. 21. WHICH WILL LEAD TO DIFFERENT RESOLUTIONS THATCAN BENEFIT BOTH THE COMPANY & ITS STAKEHOLDERS
    22. 22. THEREFORE, INVOLVING THE STAKEHOLDERS IS THESTARTING POINT
    23. 23. the storY BEHIND THE PROCESS Stakeholder Mapping | Materiality Principle | Management Approach
    24. 24. EDC’S INTEGRATED SUSTAINABILITY REPORTING IS A RIGOROUSPROCESS THAT HEAVILY INVOLVES STAKEHOLDER CONSULTATIONS &MANAGEMENT STRATEGY SUSTAINABILITY REPORTING = STAKEHOLDER ENGAGEMENT + STRATEGIC COMMUNICATIONS Materiality Principle & Management Approach
    25. 25. THE GLOSSY COPY IS MERELY THE OUTPUT OF AN EXTENSIVEUNDERLYING EFFORT THAT PRECEDES IT The predominant value lies in the preparation: • The selection of metrics (the use of GRI EUSS for instance) • The analysis of the business impacts and risks (aligning with balanced score card, risk management and business continuity) • The gained insights to understand and improve performance (evaluation & feedback from previous report)
    26. 26. Mount Apo: Precursor of Stakeholder Engagement, 1988-1992 27
    27. 27. STAKEHOLDERS ARE CONSULTED BEFORE PROJECT CONSTRUCTION STAKEHOLDER PARTICIPANTS 6 Senate CommitteesLEGISLATURE 3 House CommitteesEXECUTIVE 10 Government Agencies Region XIRDC Region XII 9 LGUsLGU (1 Province, 1 City ,3 Towns, 4 Barangays) 5 Protestant SectsRELIGIOUS 1 Catholic DioceseACADEME 14 (Manila-Davao-Cotabato)NGOs 15 (International-Manila-Davao-Cotabato)BUSINESS 2 RegionsTOTAL: 67
    28. 28. OUR MOUNT APO PROJECT EXPERIENCE IN 1990 SERVED AS ACATALYST – IT TAUGHT US ABOUT THE SOCIAL ACCEPTABILITY PROCESS(GRI DID NOT EXIST YET THEN)  Being an ancestral domain, consent of the indigenous people (IP) was secured in November 1990 and a ritual was performed in April 1992 prior to project operation and IPRA of 1997  That the geothermal project can coexist with the IPs in Mount Apo based on the common goal of protecting the forest for the water-based project and ancestral domain of the IPs  That IPs have the right to benefit from the geothermal project (Mount Apo Tribal Welfare Trust Fund in 1997 upon operation)
    29. 29. MANY CONSULTATIONS WERE HELD – A TRIBAL RITUAL WASEVEN PERFORMED FOR IP CONSENT Pamaas Ritual (April 10, 1992)
    30. 30. EDC SIGNED A MOA WITH LGUS, IPS AND NGOS FOR THEPROTECTION OF MOUNT APO AND BENEFITS TO IPS IN 1993The Mount Apo Foundation, Inc.was formed with IPs in the Boardof Trustees
    31. 31. THE RICH EXPERIENCE WE HAD IN THE PRE-SUSTAINABILITY REPORTING YEARSPROVIDES US WITH A WEALTH OF INSIGHTS ON STAKEHOLDER ENGAGEMENT &MATERIALITY TESTING, BOTH CRITICAL TO OUR REPORTING PROCESS TODAY Multisectoral agreement paved the way for the permission to operate the Mindanao geothermal power projects BY 1990 WE NEEDED TO BE STAKEHOLDER-RESPONSIVE EVEN BEFORE WE ADOPTED GRI 32
    32. 32. WE IDENTIFY OUR STAKEHOLDERS AND REGULARLY UPDATE THESTAKEHOLDER MAP – THE “KNOWING” PART OF THE PROCESS Employee Council (Non-organized employees) Expanded Labor-Management Council Social Acceptability Surveys Host 24/7 interaction through site CSR units Town Hall meetings Employees Communities Public Consultations Surveys Occupational Health and Safety Committees Performance discussionsFrom this universe of stakeholders, we were able to identify 31 priority groups after the stakeholder inclusiveness workshop using the GRI EUSS Framework with Direct contact sales Stockholders’ Meeting Marketing Analyst and Investors’ roadshows Shareholders Customers Briefings Customer Annual Reports satisfaction survey Disclosures Compliance with requirements Direct contacts Working groups Vendor orientations Policy advocacy/government relations Business Accreditation Networking industry associations Public Partners Sector Suppliers/ Contractors 33
    33. 33. STAKEHOLDERS ARE IDENTIFIED BASED ON LOCATION, CONDITION , FUNCTION, AND/OR INTERESTS, MAY AFFECT OR BE AFFECTED BY COMPANY OPERATIONS PRIMARY SECONDARY TERTIARY/PERIODIC-------------------------------------------- --------------------------------------------- ---------------------------------------------Those stakeholders whose activities Those stakeholders not primary but Those stakeholders with whom activemay impact on or be impacted on by have proximal relation/ no direct link contact is not necessary. Attentionthe project operation and thus need to immediate company operations. will be determined by mutual need,continuous nurturing of relationship; Their activities may however indicate enhancing of ties with primary/whose continuous support is emerging directions or concerns secondary stakeholders for resolutionnecessary for the unhampered which the company may need to be of issues.operation of the company. alert on and attend to in a strategic manner.INDIVIDUAL HOUSEHOLDS: INDIVIDUAL HOUSEHOLDS INDIVIDUAL HOUSEHOLDS1) 1st Layer Community (Host Barangay, 1) 2nd Layer Community 1) Targeted Community (with special Along Access to Project Sites, Primary (adjoining barangay, host interest to the company) Impact Areas) municipality/city, secondary impact ORGANIZED GROUPSAGENCIES AND ORGANIZATIONS: areas) 1) Host Province1) Government Agencies (DENR, DOH, DOLE, ORGANIZED GROUPS 2) Non-Government Organization PAMB) 1) Other Government Agencies not in the 3) Academe2) Media (local and national) Primary List3) Utilities (Water Districts, Electric 4) Other Industries not in the Primary and 2) Senate and House of Representatives Secondary List Cooperatives)4) BOT Contractor 5) Church and other Religious Groups5) NPC6) Contractors 34
    34. 34. FOR INSTANCE, WE MAPPED OUT AND PRIORITIZED 44 PRIMARYPARTNER COMMUNITIES ACROSS FIVE (5) SITES LEYTE SO. NEGROS BACON-MANITO 16 Villages 17,680 10 Villages 10 Villages (5,011 HH) HOUSEHOLDS (2,537 HH) (4,059 HH) MT. APO NO. NEGROS 2 Villages 7 Villages (3,118 HH) (2,955 HH)
    35. 35. WE DO A COMPREHENSIVE ASSESSMENT OF OUR IMPACTS ACROSS THEBUSINESS VALUE CHAIN AS KEY TAKEAWAY FROM OUR MOUNT APOEXPERIENCE – THIS IS THE “MONITORING” PART OF THE PROCESS Determining key issues and impactsPart I. EDC Business Footprint Profile Part II. Local Issues Part III. National IssuesBusiness Component Level of Impact: Part IV. Global Issues - Raw materials (25%) Environment - Process (15%) -Land a. Poverty (overpopulation, - Product (10%) -Water unemployment, access to - Waste (25%) - Air basic social services) or MDG - Operational Env’t. (25%) Community b. Climate ChangeSpecific CSR/sustainability initiatives are prioritized based on 1)Total weighted score; 2) Businesscomponents affecting the environment & people; and 3) Product/customer type
    36. 36. THE ASSESSMENT REVEALS OUR POTENTIAL IMPACTS ON LAND, WATER AND COMMUNITY, HENCE EFFORTS TO PRESERVE THE ENVIRONMENT AND HELP COMMUNITIES ARE TO BE REFLECTED IN THE REPORT Snapshots of our impactEarthworks are Wastes are fully During well EDC reinjects Project sites arebenched to contained testing, water wastewaters reforested forcorrect slope during drilling and air samples back to its origin recharge of theand replanted via lined ponds are collected to for renewability geothermal profile potential reservoir wastes
    37. 37. STAKEHOLDER CONSULTATIONS ARE CONDUCTED TO LOOK INTO OTHERCONCERNS AND ISSUES THAT WILL BE ADDED TO THE MATRIX OFMATERIAL TOPICS – THIS IS THE “ENGAGING” PART OF THE PROCESS Regular and Sustained Engagement Public HearingsConsultation and Focus Group DiscussionsInformation A comprehensive social engagement Drive process made possible our groundbreaking initiatives Note: EDC‟s technical working group has completed consultations in the 5 geothermal sites and 1 at the head office – a total of 300 stakeholders were consulted for this year‟s round of reporting
    38. 38. WE LISTEN TO THE VOICE OF THE PEOPLE IN OUR COMMUNITIES:WE CONDUCT SOCIAL SURVEYS, AN INNOVATION TO THECONSULTATION PROCESS 2010 SA: Appreciation for & Willingness to Support EDC and CSR Project 100% 90% 80% = Acceptable Performance 80% 70% 60% 0-54% LOW 50% 55-89% MEDIUM 56-100% HIGH 40% 30% 20% 10% 0% BGPF LGPF MGPF NNGPF SNGPF % Appreciation for & Willingness to support EDC % Appreciation for CSR Project 40
    39. 39. KNOWING WHAT THE STAKEHOLDERS‟ CONCERNS ARE MAKES USMORE RESPONSIVE TO THEIR NEEDS 91% 100% 82% 90% 72% 80% 66% 65% 61% 58% 70% 60% 50% 40% 30% 20% 10% 0% EDUCATION (91%) & HEALTH (82%) ARE THE MOST APPRECIATED CSR PROJECTS. 41
    40. 40. Material to Stakeholders 42
    41. 41. THESE TOPICS WERE IDENTIFIED AS MATERIAL IN THE 2011 REPORT •Viability of new projects/business expansion •Action on climate change •Human capital (workforce) developmentLevel of Concern to Stakeholder •Partnerships for provision of education, livelihood and health services •Affordable electricity •Business and employment opportunities for local residents •Local infrastructure development •Enforcing of safety practices for employees and contractors •Maintaining good water and air quality •More job opportunities for women and the vulnerable •Livelihood for minority people •Environmental literacy among employees and host communities
    42. 42. DENUDED AREAS ARE REFORESTED TO CONTRIBUTE TO ECOSYSTEM SERVICES FOR COMMUNITIES AND EDC YR. 1989-2008 8,000,000 AREA : 7,623 HAS. 7,000,000 NO. of TREES : 7.5M 6,000,000 5,000,000 Rehab habitat Livelihood for fragmentation forest dwellers 4,000,000 for wildlife corridor 3,000,000 2,000,000 Tree for Tree for 1,000,000 Life Food 0BINHI PROGRAM (2009-present) : 1,000 has. /yr. Develop Conserving genome & forusing indigenous and rare species for: ecotourism future mother sites trees - geothermal recharge Tree for Tree for - carbon storage for climate change Leisure the Future - restoring local biodiversity 44
    43. 43. EDC IS STARTING TO MEASURE ITS CARBON FOOT PRINT ACROSSTHE OPERATION AS REFERENCE TO REDUCE EMISSION ANDENERGY SAVINGS Energy Efficiency efforts in 2009- 2010 Pipe Insulation Emissions Testing In-house Thermographic Inspection Services 6.2 GWh 5.4 GWh Electrical Testing 4.2 GWh 4.8 GWh of Rigs Office savings Source: ERDD 2011
    44. 44. AS EDC PROTECTS ITS GEOTHERMAL PROJECTS FROM EXTREMEWEATHER EVENTS, THE MEASURES ALSO COVER THE INTEGRITYOF COMMUNITIES AND THEIR LIVELIHOOD Ondoy (2009) Caloy (2006) Frank (2008 Pantabangan (132 MW) Caloy (2006) Bacman Project (130MW) MIlenyo (2006) Reming (2006) Dante (2009) Helen (2008) Sendong (2011) Negros Project (192 MW) Leyte Project (700MW) Canlas Flashfloods (2006) Caloy (2006) MIlenyo (2006) Frank (2008) Mt. Apo Project (106 MW) 4 6
    45. 45. SINCE 2005, EDC HAS ORGANIZED 25 BARANGAY EMERGENCYRESPONSE TEAMS TO ADDRESS DISASTERS The teams have received varying levels of training by EDC’s in-house Emergency Response Team, PNRC, PDRRMC and other partners on the following topics: -Swimming 25 Teams formed as of 2011: -First aid; basic life support -Rescue (terrain, water, accident) BGPF: 9 teams @ 10 pax/team -Landslides LGPF: 5 teams @15 pax/team SNGP: 3 teams @10 pax/team -Fire NNGP: 1 team @ 21 pax -Earthquake MGPF: 7 teams @ 60 pax/teamFire Drill -Epidemics dengue
    46. 46. ... WHILE SCHOOL DISASTER TRAININGS WERE STARTED 2011
    47. 47. USING FOREST BIOPHYSICAL FACTORS, THE ALERT SYSTEM WILLINDICATE VULNERABLE AREAS TO LANDSLIDES AND FLOODS(BACMAN MODEL) LANDSLIDES FLOODS
    48. 48. Alignment 50
    49. 49. STAKEHOLDER-FOCUSED ACTIVITIES PROVIDE GROUNDED INFORMATION TO THEBOARD AND MANAGEMENT; IN TURN A STRATEGIC DIRECTION INFLUENCES THEOVERALL SUSTAINABILITY APPROACH – THE “ALIGNING” PART OF THE PROCESSThe DMA captures the spiritand the intent of thesustainability reportingprogram
    50. 50. IN 2010, EDC STRENGTHENED ITS INTEGRATED SUSTAINABILITY STRATEGY BYARTICULATING THROUGH POLICIES AND MANAGEMENT DISCUSSION OF ITSAPPROACH TO SUSTAINABILITY “The company‟s long-standing policy is to ensure that the company‟s progress is in pace with environmental and host communities‟ prosperity. We consider our relationship with our stakeholders not only crucial to our economic growth but, more importantly, we value their insights on how best to responsibly improve on our service, efficiency, productivity, and innovation”
    51. 51. EDC’S INTEGRATED SUSTAINABILITY REPORTS HAVE DMAs ON ITS IMPACTS ON THE ECONOMY, ENVIRONMENT AND SOCIETY – BOARD PROMULGATED KEY POLICY STATEMENTS TO ADDRESS MAJOR IMPACTSApproach to Sustainable Approach to Approach to Sustainable SocialEconomic Growth Sustainable Development Environmental ResponsibilityEconomic Performance Materials Corporate GovernanceMarket Presence Energy & Water CommunityInvestment & Procurement Practices Biodiversity Government, Industry & the MarketIndirect Economic Impacts Emissions, Effluents & Wastes Training & EducationAvailability, Reliability & System Efficiency Products & Services Occupational, Health & SafetyResearch and Development Compliance Labor-Management Relations Transport Diversity & Equal Opportunity Environmental Expenditures Indigenous People’s Right Freedom from Forced & Compulsory Labor Customer Health, Safety & Privacy Marketing Communications & Product Labeling Service
    52. 52. Writing the report The Power of Storytelling | Multi-communication Platform
    53. 53. A SUSTAINABILITY REPORT ITSELF DOES NOTINDICATE THAT A COMPANY IS MORERESPONSIBLEWHAT IT DOES PROVIDE IS A CLEARERUNDERSTANDING AND DISCLOSURE OF ACTIONSAND MEASURES, AND TIES IT TO VARIOUSBOTTOM LINES
    54. 54. THE 2011 REPORT DESCRIBES OUR COMMITMENTS TOOPERATIONAL, ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES, ALLCORE TO OUR COMPANY‟S HISTORY, CULTURE AND BUSINESSSTRATEGY 82 key performance indicators
    55. 55. RESOURCES AND INFORMATION AVAILABLE AT EDC SUSTAINABILITYWEBPAGE AND ALSO IN SIMPLIFIED VERSION (ENGLISH-TAGALOG) www.energy.com.ph/sustainability
    56. 56. APPROACH : BALANCED REPORTING, QUALITY DATA, COMPREHENSIVE DMA, AND RELEVANCE TO STAKEHOLDERS
    57. 57. Statements from top managementBalancedReported on accomplishmentsAddressed issues and challenges (rarely seen in most reports) “The challenges of changing mindsets & transitioning a company from government ownership to the private sector can never be misjudged”. “Even our ability to drill wells efficiently and effectively, despite considerable advances in the last four years, is an area we must continue to improve and drive towards an even higher bar of excellence”. “…a privatized EDC has to grab the issue by its horns and address it once and for all. Let me assure you, our shareholders, that these major missteps are a thing of the past given the governance that we have today. “Yet another setback was conceding “…the underperforming 49MW Northern Negros that the rehabilitation of our Bacman plant would not meet the aggressive Geothermal Power Plant (NNGP), contributed to internal target we set for ourselves to driving our income down by 86 percent”. run by year’s end”.
    58. 58. WE HAVE SELECTED AND ADOPTED ENDANGERED SPECIES ASINDICATORS TO MONITOR THE HEALTH OF OUR FORESTS Wildlife Species IUCN Red DAO 2004 -15 Flying Foxes ListGolden CrownedFlying fox Endangered Endangered(Bicol/Negros)Large Flying Fox Near Other threatened(Bicol) Threatened species Phil Brown DeerPhilippine Warty Pig Phil Eagle Vulnerable Vulnerable(Negros)Philippine Brown Vulnerable VulnerableDeer (Negros)Philippine Eagle Critically Critically(No. Cotabato/Leyte) endangered endangeredPhilippine Eagle Owl Vulnerable Vulnerable(Bicol) Phil Eagle Owl Phil Warty Pig
    59. 59. REPORTS, NUMBERS & RATIONAL ARGUMENTS MAY BEFORGOTTEN, BUT STORIES STAND THE TEST OF TIME Romula Regala, EDC‟s first woman community leader and Bayaning Pilipino Awardee Nelson Tula and his Mount Apo Story
    60. 60. The Federation of Bac-Man Host Communities(FEDBACH) was created to improvecoordination among community organizations for EDC project contracts  EDC brokered the accreditation of FEDBACH with the Land Bank  2011: Land Bank approved P10-million loan, allowing FEDBAHC to join in large- scale contracts  FEDBAHC is now a professionally run organization  2009 Net Income: P4.49 million. 2010 Net Income: P8.43 million  Today, runs its own welfare programs: livelihoods, scholarship, medical mission, etc.
    61. 61. THE SCHOOL FOR EXCELLENCE PROGRAM IS A MULTIPARTITE EFFORT • READING PROGRAM • PERSONAL CONTRIBUTIONS• ADMIN PERSONNEL (Clerk, Utility Aide, Watchman) • INFRASTRUCTURE (Instructional & non-instructional) • TEACHERS TRAINING • SALARY OF TEACHERS • FEEDING OF STUDENTS• TEACHERS SKILLS • EXTRA-CURRICULAR ENHANCEMENT• PERSONNEL • PERSONNEL / SALARY (Teachers assistants) (Teachers G1-6, Principal)• FEEDING PROGRAM • TELEVISION & SATELLITE • TEACHERS TRAINING (planning/ cooking/ DISK (Regular) distribution) • PARENT INTERVENTION PROGRAM
    62. 62. … AND FULLY FURNISHED CLASS ROOMS AND LABORATORIESTONGONAN, ORMOC CITY TONGONAN, KANANGA KC TV Equipment in the speech lab Students in the classroom Knowledge Channel Library Sat Disk Library reference materials Students at the Library Science Laboratory Speech Laboratory Feeding Center Faculty Office Knowledge Channel Sat Disk Biological models & microscope
    63. 63. EDUCATION PROJECTS HAVE RAISED SCHOLASTIC PERFORMANCE LEVELS & INSTRUCTIONAL STANDARDS450 9.0 398 8.5400 8.0 372 373350 349 356 329 7.0 4.9% decrease in300 259 321 330 338 343 347 6.0 DROP-OUT 300250 5.0 RATE200 4.0 196 3.3150 57% increase 3.0 3.2 2.9100 2.4 2.0 50 in 1.4 1.3 1.0 0.97 0 ENROLMENT 0.0 0.3 0.7 0.4 0.1 0.0 0.29 SY 2004- SY 2005- SY 2006- SY 2007- SY 2008- SY 2009- SY 2010- SY 2004- SY 2005- SY 2006- SY 2007- SY 2008- SY 2009- SY 2010- 05* 06 07 08 09 10 11 05* 06 07 08 09 10 11 Tongonan, Ormoc Tongonan, Kananga Tongonan, Ormoc Tongonan, Kananga102.0 102.0 100.0 100.0 100.0 100.0 100.0 100100.0 99.3 100 98.6 99.1 99 98.0 98.5 98.5 99.4 97.0 98.0 98.2 98.0 96.0 96.3 97.0 97.0 95 94.0 96.0 96.1 96.0 93.0 93.3 92.0 94.0 90.0 88.8 92.0 92.0 7.4% increase 88.0 88.6 9% increase in 86.0 90.0 in 84.0 RETENTION 88.0 ATTENDANC 82.0 RATE E SY 2004- SY 2005- SY 2006- SY 2007- SY 2008- SY 2009- SY 2010- SY 2004- SY 2005- SY 2006- SY 2007- SY 2008- SY 2009- SY 2010- 05* 06 07 08 09 10 11 05* 06 07 08 09 10 11 Tongonan, Ormoc Tongonan, Kananga Tongonan, Ormoc Tongonan, Kananga
    64. 64. THERE WAS A MARKED INCREASE IN NATIONAL ACHIEVEMENT TEST100 100.0 92.42 93 90 90.0 82.3 85.5 85.5 83.33 83 85.0 83.7 85.4 83.3 80 80.3 80.2 80.0 81 74.4 78.8 81.1 70 79.3 70.0 71.5 68.4 66.5 66.7 60 60.3 60.0 57.4 50.0 53.8 50 40 40.0 30 32.4 15% increase 30.0 29% increase 20 in NAT 3 20.0 in NAT 6 10 10.0 0 0.0 SY 2004- SY 2005- SY 2006- SY 2007- SY 2008- SY 2009- SY 2010- SY 2004- SY 2005- SY 2006- SY 2007- SY 2008- SY 2009- SY 2010- 05* 06 07 08 09 10 11 05* 06 07 08 09 10 11 Tongonan, Ormoc Tongonan, Kananga Many awards & recognitions were garnered by both schools 85 36 Regional High performer (2005-06); 1st Regional/division Awardee for MPS 90.1 & 93.44 Regional/Division/District Awardee for in Math & Hekasi (Gr6); 30% increase Division Awardee for MPS 92% in English (2007) Grammar, 91% in English Reading, 96% in Science in Grade 3
    65. 65. WE COMPLEMENT COMMUNITY INITIATIVES AND GOVT.SERVICES TO ADDRESS DEVELOPMENT GAPS– LIVELIHOOD EDUCATION: Kananga-EDC Institute of Technology (KEITECH) Alternative Learning Education:  Multi skilled workers (5 certifications)  Values formation and discipline  Employment guidance Results:  Consistent 100% passing rate  Employment assistance desk (97%)
    66. 66. “Two graduates we hired from KEITECH are very successful and brought some good feedback both fromour Principal and their co-workers onboard their assigned vessel MV Queen Elizabeth. In fact, theywere nominated as "White Star Service" awardees due to exceptional quality work, discipline anddedication to their assigned tasks. We have not received such kind of special recognition on any of ournew hires onboard Cunard ships. We are proud of their accomplishments and we thought we have toshare this with you, your students, members of faculty and the officers behind KEITECH.Congratulations to your Team and for the job well done!” 69
    67. 67. EDC EDUCATES THE PUBLIC THROUGH ENVIRONMENTALPUBLICATIONS AND EVENTS 70
    68. 68. “RAFFLESIA OF THE PHILIPPINES “ IS THE FIRST BOOK TO PRESENTTHE LATEST INFORMATION ON THE LOCAL SPECIES OF THE LARGESTSINGLE FLOWER ON THE PLANET
    69. 69. THE SUSTAINABILITY OF EDC’S OPERATION WAS AFFIRMED WHENIFC SELECTED EDC FOR THE CLIENT LEADERSHIP AWARD IN 2011 BESTING200 PORTFOLIO COMPANIES AND 80 COUNTRIES And our sustainability story continues…  UNDP National Steering Committee on Biodiversity Mainstreaming for Communities (2010-present)  FC-MIT Sloan Sustainability Case Study (Jan. 2012)  PBE Advisory Council on its shift to Sustainability Theme (May 2012)  WB-ADB-JICA-AusAid Study on Asian Best Practices on Sustainability (Oct. 2012)  ILO Green Business Asia on Sustainability (Nov. 2012)
    70. 70. Thank you! Agnes C. de Jesus Senior VP for Environment & External Relations and Compliance OfficerMateriality & DMATools and Best Practices in Sustainability Reporting

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