Sheridan Beach Resort and Spa, first green hotel in Puerto Princesa, Palawan

Ayala's Climate Action

Our Risk Framework

Ayala considers climate change as a legitimate risk driver of its businesses. We have a group-wide enterprise risk management framework that enhances our risk management process and institutionalizes a focused and disciplined approach to managing the business risks we face.

A Chief Risk Officer (CRO) oversees the entire management function, and the Audit and Risk Committee provides more focused oversight. Every quarter, a report on the risk portfolio of the Ayala group of companies and the related risk mitigation efforts and initiatives are provided to the committee. Ayala’s internal auditors monitor the compliance with risk management policies to ensure that an effective control environment exists within the Ayala group.

We encourage autonomy in our subsidiaries and affiliates after providing them with a general direction to institutionalize enterprise risk management functions at their respective levels. We see risk management as a work in progress, and we continuously define the different risks posed to our businesses—especially risks associated with climate change—and refine our climate actions and various strategic responses.

Our climate actions focus on adaptation and mitigation measures, as well as resilience-building and disaster-preparedness programs. We push for information management and innovation when developing our business response through improved and better-informed systems and mechanisms, and cleaner and greener products and services.

Information and Product Innovation

Realizing the significance of information in addressing climate risk more proactively, Bank of the Philippine Islands partnered with World Wide Fund for Nature to generate socio- economic baseline data for selected cities that are most vulnerable to the effects of climate change. The project covers the cities of Cebu, Davao, Baguio, and Iloilo. Results will be shared with the sectors at risk so they can better prepare for climate change disasters. The data from the study will also give the cities a more comprehensive basis for the policies and actions they will craft to mitigate the effects of, and to adapt to, climate change.

BPI also has a financing window to assist businesses in implementing sustainable energy and energy efficiency projects.

Community Resilience and Disaster Preparedness

Our disaster management efforts focus on increasing the resilience of the most vulnerable sectors of society.

Ater the devastation wrought by Typhoon Ondoy (Ketsana), Ayala Foundation, Inc. (AFI), our corporate social responsibility arm, joined a consortium of 15 organizations called Our Lighthouse Alliance in 2009. The alliance implements a community-based disaster preparedness project called Building Noah’s Ark in Flood Prone Communities (Noah’s Ark). The project aims to find a safe spot in a high-risk area and develop it into an evacuation center where people will feel safe and secure; retrofit schools and other public places into suitable evacuation areas; and develop capacities of vulnerable communities to prepare for flooding. Ayala, through AFI, provided the PhP 1.8 million funding while Corporate Network for Disaster Response and Habitat for Humanity Philippines handled the project implementation.

In 2010, the project was piloted in Barangay Malanday in Marikina City, where 2,079 families were affected by Typhoon Ondoy. In partnership with the Malanday Barangay Council and Malanday Elementary School, Noah’s Ark began with a seminar-workshop on the reorganization of the Local Disaster Coordinating Council into a Local Disaster Risk Reduction and Management Committee. This was followed by risk-mapping activities to delineate areas of high, moderate, and low risk, and determine safe areas; and the contingency planning and institutionalization of a local, real-time Early Warning System on floods. The communication protocol, evacuation procedures, and the contingency plans were tested and improved after numerous simulation exercises and drills. Noah’s Ark also provided a community kitchen and toilet facilities at the evacuation site.

Barangay Guitnang Bayan 1 in San Mateo, Rizal was identified as the next Noah’s Ark Project site. Training activities will focus on risk mapping, the re- organization of Disaster Risk Reduction and Management Committees, and planning for evacuation drills at both the barangay and municipal levels.