2020 INTEGRATED REPORT ENABLING SUSTAINABLE RECOVERY To help the economy rise from the effects of the pandemic, AC Energy remained focused on its renewables growth strategy. Our 2020 investments in the Philippines created more than 3,000 jobs within our host communities, and continue to be vital pieces towards reigniting the economy and creating economic activity. We believe that moving to a low-carbon economy will produce jobs and further prevent human harm. The World Bank estimates that transitioning to low-carbon, resilient economies could create 65 million new jobs by 2030*. We will continue to collaborate with partners that can help us drive progress towards our sustainable energy transition. *Worldbank.org, Human capital and climate action: Outcomes Photo: Concrete pouring of the massive wind turbine foundation that deliver for people and planet, May 12, 2020 1 AC ENERGY CORPORATION 2020 INTEGRATED REPORT Enabling Sustainable Recovery 2 ABOUT THE REPORT Table of Contents About the Report 4 About the Report Approach Rto eporting Management Review This is the second Integrated Report of AC Energy The contents of the Report have been reviewed 5 Protect, Serve, Pivot: Ayala Group's Corporation (PSE: ACEN), formerly AC Energy by the senior executives of AC Energy Corporation, Philippines.R The eport outlines AC Energy including the President and Chief Executive Officer, Response to the Pandemic Corporation’s value-building strategy towards Chief Finance Officer, the Head of Legal and its stakeholders, measuring its impact on the Regulatory and the Vice President and Head of 9 AC Energy in 2020 economy, society and the environment, while Corporate Communications and Sustainability. managing risks and leveraging on opportunities 13 Message from the Chairman and the President in i ts external and internal environments. External Assurance 17 Sustainable Transformation To establish quality and materiality of the Reporting Principle and Period Covered information contained herein, AC Energy has 21 Geographic Presence The Report is prepared in accordance with the engaged DNV as an independent third-party Key Guiding Principles and Content Elements of external verifier to assure and review the non- the Integrated Reporting <IR> framework as financial disclosures made in the report. 23 How We Create Value defined by the International Integrated Reporting Council (IIRC), and discloses AC Energy’s The conducted assessment used VeriSustain 25 Our Sustainability Focus Areas performance as against its Key Performance Protocol, which is aligned with the ISAE3000 Indicators (KPIs). The Report also references the and AA1000AS standards and the GRI 45 Governance and Leadership Team Sustainability Accounting Standards Board (SASB) Standards framework. This covered procedures and Global Reporting Initiative (GRI). and supporting documents governing materiality, 75 Annexes stakeholder engagement as well as performance The information in this Report covered the period and management approach for economic, January 1, 2020 to December 31, 2020. environmental and social aspects of the business. Results and recommendations made in the external verification will be tackled by both Forward-looking Statements senior management and board members of AC AC Energy Corporation discloses forward-looking Energy for continuous improvement of our data statements and illustrations in the Report to aid collection, control and reporting practices. current and potential investors and stakeholders understand the AC Energy Corporation management’s assessment of the company’s future Feedback plans, financial outlook and overall prospects. We welcome inquiries and feedback on this report. Please email Forward-looking information are dependent on [email protected]. certain assumptions based on what the company knows and expects as of the current period. These statements are subject to certain risk factors and uncertainties, some of which may be beyond the company’s control and may differ materially from those implied. Photo: North Luzon Renewables Wind Farm in Pagudpud, Ilocos Norte 3 AC ENERGY CORPORATION 2020 INTEGRATED REPORT Enabling Sustainable Recovery 4 INTRODUCTION 2020 HIGHLIGHTS MESSAGE CREATING VALUE GOVERNANCE ANNEXES 5 AC ENERGY CORPORATION 2020 INTEGRATED REPORT Enabling Sustainable Recovery 6 7 AC ENERGY CORPORATION 2020 INTEGRATED REPORT Enabling Sustainable Recovery 8 INTRODUCTION 2020 HIGHLIGHTS MESSAGE CREATING VALUE GOVERNANCE ANNEXES AC ENERGY CORPORATION IN 2020 AC Energy CORPORATION in 2020 We aspire to be the largest listed renewables platform in Southeast Asia, with a goal of reaching 5GW of renewables capacity by 2025. Net Income Shareholders' Equity % Renewables Share Increase ₱3.75B ₱21.35B 1,034 MW 65x 30% 47% 416 MW 491 MW 15% Revenue Market Capitalization 62 MW 543 MW ₱20.44B ₱110.48B 354 MW 27% 7x 2018 2020 Thermal RE RE Share % The Philippines remains to be AC Energy’s core 29% market, and the company reinforces its strong Our 120 MW GigaSol Alaminos solar commitment to invest in much needed energy projects in the country as it takes strides to expand farm features a pioneering Sustainability and diversify its generation portfolio, and significantly increase its renewables capacity. Hub and is surrounded by Ayala Land’s 71% Carbon Forest. Under Construction Operating Photo: 120 MW GigaSol Alaminos in Laguna 9 AC ENERGY CORPORATION 2020 INTEGRATED REPORT Enabling Sustainable Recovery 10 INTRODUCTION 2020 HIGHLIGHTS MESSAGE CREATING VALUE GOVERNANCE ANNEXES 2020 HIGHLIGHTS Renewables Share 2020 47% Highlights MTC02e Emissions avoided 349,437 Protecting the Turtles In the coastal town of Bangui, species of endangered marine turtles have been observed laying eggs and nesting along the shoreline of the Birds of the Conservation Estate bay. Through awareness In Ilocos Norte, residents have campaigns and continuous discovered the value of protecting coordination with the locals, nature, and have become stewards the danger of poaching and of AC Energy’s Conservation Estate. smuggling of the eggs have The forests witness an increase in significantly decreased, biodiversity as AC Energy and its with the residents acting as wind farms, North Luzon Renewables guardians of the endangered and NorthWind, with the help of the species, becoming partners locals, create an ecologically diverse of AC Energy in turtle landscape. The forest is now home conservation. to 117 species of birds, 33 of which are endemic, and four are classified as vulnerable. Piloting circular approach in construction sites AC E nergy integrated a circular approach in its renewable energy developments. In Alaminos and Palauig, a total of 8, 645 kg of plastic waste from solar panel packaging have been recycled into eco bricks to be used as construction materials for solar plant facilities. Capacity Building With various training workshops to Land protected and restored build their skills, local residents learn sustainable farming techniques Our sustainability strategy is embedded such as contour hedgerow and 910 hectares watershed systems at AC Energy’s in our corporate strategy and aligned with model farm in Ilocos Norte. They Sustainability Investments are also taught how to produce the UN Sustainable Development Goals. mushrooms, ginger, ube, and other root crops, fruits and vegetables. Today, there are close to 2,000 fruit ₱151.51M trees of cacao, coffee, calamansi from 2018 to 2020 and cashew flourishing in the farm. 11 AC ENERGY CORPORATION 2020 INTEGRATED REPORT Enabling Sustainable Recovery 12 INTRODUCTION 2020 HIGHLIGHTS MESSAGE CREATING VALUE GOVERNANCE ANNEXES MESSAGE FROM THE CHAIRMANMESSAGE FROM AND THETHE PRESIDENTCHAIRMAN Message from the Chairman and the President Dear Fellow Shareholders, After more than a year, the COVID-19 pandemic Green-led recovery remains as the most challenging crisis we have all Amidst plans to revive our economy, we believe faced in recent times in terms of its unprecedented that we have a once-in-a-lifetime opportunity to impact to human life as well as our healthcare and “build back better” towards a more sustainable, economic system. Amidst the continuing challenges, resilient, and inclusive future as we steadily we recognize the tremendous sacrifice and service move the post-COVID world. Sustainable of our many healthcare and economic frontliners. recovery is now seen as perhaps our We deeply appreciate all that you continue to do for the country. best and only way forward to achieve our environmental goals to mitigate Strong Bayanihan spirit climate change, to create jobs, build On behalf of the entire Ayala Group, we give our economic resilience, and ultimately, sincere thanks to the entire AC Energy team for improve the well-being of people. We its unwavering commitment to go the extra mile are delighted that AC Energy has made to ensure stable and reliable access to power for our communities, especially during these times. significant progress along these fronts We extend our deepest gratitude to our various and continues to be recognized as a energy frontliners, some of whom have had to key contributor to sustainable growth stay at our powerplants and away from their and development. families for several months in order to provide power for commerce, industry and everyone For the past year, AC Energy Corporation or ACEN, working and schooling from home. remained focused on its renewables growth strategy through continuous renewable energy investments. We also thank our colleagues at AC Energy for Despite the difficult