2017 SUSTAINABILITY REPORT Contents
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2017 SUSTAINABILITY REPORT Contents Leadership Message 3 Social Responsibility 73 About this Report 6 Community Engagement 74 Profile of MPIC 8 Community Investment 74 Economic Impacts and Performance 15 Disaster Response and Relief 81 ESG Reporting Methodology 83 PART 1: SUSTAINABILITY AT MPIC ESG Data Summary Table 89 Creating Value for Our Stakeholders 20 Governance for Sustainability 25 PART 2: SUSTAINABILITY HIGHLIGHTS OF OUR MAJOR OPERATING ESG Risk Management 31 COMPANIES Operational Efficiency 35 MERALCO 95 Energy and Emissions 36 GLOBAL BUSINESS POWER 97 Water and Effluents 43 MAYNILAD 99 Waste 46 METRO PACIFIC TOLLWAYS 101 Service Excellence 47 LIGHT RAIL MANILA CORPORATION 103 Increasing Access to Services 49 METRO PACIFIC HOSPITAL HOLDINGS 105 Commensurate Services 51 Annex: Integrated Management 107 Customer Experience 52 System Certifications Service Continuity 54 Annex: Corporate Websites of 110 our Major Operating Companies Engaged Workforce 57 and Safe Workplaces Annex: GRI Content Index 111 Head Office Profile of Employment 58 Annex: Independent Assurance 117 Statement MPIC Group Profile of Employment 61 Training and Development 67 Occupational Health and Safety 69 METRO PACIFIC INVESTMENTS CORPORATION LEADERSHIP MESSAGE Dear Readers, potable water supply and sewerage treatment, toll roads, healthcare, light rail, and logistics. These essential Metro Pacific Investments Corporation is committed to services contribute to the building blocks of society continuing to enhance transparency and accountability by helping to strengthen communities and promote of our activities in line with global trends and the their prosperity. We believe in empowering the people evolving expectations of our stakeholders. we serve to participate in and benefit from sustainable economic growth. We take pride in delivering high- A year ago, we published our first sustainability report quality, well-run and fairly-priced services. presenting the foundations of our management approaches to Environmental, Social and Governance How we do it (“ESG”) aspects of our business alongside relevant data to quantify our performance in these areas. The process In evaluating our investment prospects, MPIC seeks to of preparing that report and the feedback we received add value for customers and communities by improving on its content have been informative. the quality of infrastructure assets, enhancing the efficiency with which they are run, extending their As you read this report for 2017, we hope you will coverage to more people and working closely with appreciate the progress we are making towards regulators to achieve shared goals. realizing our ambition to develop a portfolio of well- run infrastructure assets delivering excellent service At the core of our strategy, we strive to create value for and good value to the public. In so doing, we aspire to our shareholders by ensuring long-term growth in value contribute to economic development of the Philippines of all parts of our portfolio. With life cycles of 25 years while uplifting the quality of life of the people we serve. or more, our infrastructure projects are by their very nature long-term. This means that our investments are What we do intended to survive many political and economic cycles, and in managing our assets we expect to experience MPIC is primarily focused on investing in infrastructure, various regulatory and funding challenges from time to initially in the Philippines and now also expanding time. into other ASEAN markets. Inadequate supply of infrastructure in the Philippines and other countries in South East Asia affords opportunities for considerable investment. Under well-regulated concession and “We believe in empowering franchise arrangements, these investments should the people we serve to provide fair returns to investors (such as ourselves) participate in and benefit in exchange for the risk involved and achievement of measurable improvements for the public good. from sustainable economic growth. “ Specifically, MPIC has invested in the development and operation of power generation and distribution, 3 2017 SUSTAINABILITY REPORT We recognize that disruptive technologies, environmental pressures and population growth are “Each of MPIC’s major changing the business landscape in many sectors of our investees is actively economy: enhancing their capacity to • In electricity distribution, this means serving serve the public.“ customers digitally, on-demand and at the touch of a finger through investment in smart meters, smart grid and smart cities. In order to recover the significant capital costs required • In power generation, the future entails increasing for development and maintenance of high-quality Renewable Energy (solar, wind, run-of-river, hydro and infrastructure, our franchise and concession agreements biomass) and battery storage as well as investing in provide for fair and transparent price increases. highly efficient and environmentally-responsive coal However, just as the physical infrastructure in which and gas-fired plants. we invest is underdeveloped, so, occasionally, are the political and economic institutions that support them. • In toll roads, we are expanding our network and In our water, toll roads and light rail businesses, for implementing digital payments and surveillance example, regulators are reluctant to approve various technologies so that our consumers can enjoy safer tariff adjustments and we are encountering challenges and more convenient journeys. to uphold the terms of our contracts. • In water treatment, we are utilizing new technologies As far as possible, we take a constructive approach in response to changing climatic conditions that are to these difficulties by working together with our contributing to making the quality of raw water more counterparties to find satisfactory resolutions and variable. not allowing setbacks to deter us from our corporate Mission, which is to be the leading Philippine • In hospitals, we are introducing up-to-date infrastructure investment firm. However, beyond medical treatments for our patients and migrating a certain point, this type of friction does inhibit to Electronic Medical Records and integrated our continued investment in certain projects and information management systems to monitor patient jurisdictions. As a consequence, MPIC’s focus is shifting flow and improve financial performance. to investments with shorter-term returns as well as opportunities in other ASEAN countries that may • In light rail, our comprehensive rehabilitation and provide more reliable regulation. modernization program for the existing LRT-1 includes station rehabilitation, complete track What comes next replacement and upgrading of signaling systems for smoother, more reliable journeys. We are also Each of MPIC’s major investees is actively enhancing extending the LRT-1 to improve public transportation their capacity to serve the public. Beyond mere provision for more commuters in the south of Manila. compliance with minimum service standards, our management approaches focus on improving operational efficiency, service excellence, safety and social responsibility through innovation. 4 METRO PACIFIC INVESTMENTS CORPORATION As we move forward, we recognize the importance of right mix of skills and experience to stay ahead of the cultivating depth and breadth of expertise throughout curve and anticipate new opportunities for growth. our organization, including in the composition of our board and senior leadership teams. As a diversified Finally, we thank you for your continued support. We conglomerate, our leaders must continue to offer the look forward to another successful year. MANUEL V. PANGILINAN JOSE MA. K. LIM DAVID J. NICOL Chairman President and Chief Executive Officer Chief Financial Officer 5 2017 SUSTAINABILITY REPORT ABOUT THIS REPORT Welcome to the second Sustainability Report for Please contact us at: Metro Pacific Investments Corporation (“MPIC”, “MPIC Group” or “the Company”), a publicly listed investment and management company with holdings in several METRO PACIFIC INVESTMENTS CORPORATION major investees including Manila Electric Company 10/F MGO Building (“MERALCO”), Global Business Power Corporation Legaspi cor. Dela Rosa Streets Makati City, 0721 (“GBP”), Metro Pacific Tollways Corporation (“MPTC”), Philippines Maynilad Water Services, Inc. (“MWSI” or “Maynilad”), +63 2 888 0888 http://www.mpic.com.ph/contact-us/ MetroPac Water Investments Corporation (“MWIC” or “Metropac Water”), Metro Pacific Hospital Holdings, Inc. (“MPHHI” or “Hospitals Group”), Light Rail Manila Corporation (“LRMC”) and MetroPac Movers, Inc. HOW TO READ THIS REPORT This report provides information about the Environmental, Social and Governance (“ESG” or This report is designed to be read in conjunction with “Sustainability”) impacts of the MPIC Parent Company Metro Pacific Investments Corporation 2017 Annual (“Head Office”) and its major operating companies Report (“MPIC 2017 Annual Report”) and various sources (see Scope of the Report) for the year ending of ESG information from our investees that are available December 31, 2017. It has been prepared in accordance on their respective websites. with the Global Reporting Initiative (“GRI”) Standards: Core option. For a list of relevant websites, please refer to the Annex on page 110. The founders of MPIC have been investing in the future of the Philippines for over 30 years. Although This report is comprised of two main sections: the concept of ‘sustainability’ is deeply