AUTHENTIC AND MEANINGFUL IMPACT
THROUGH SHARED VALUE AND SUSTAINABILITY
Over the last few years, antiestablishment movements around the world have grown. Populations have gradually distrusted institutions for their failure to create a more equitable society. While governments usually bear the brunt of these sentiments, the private sector has also come under intense scrutiny.
I believe that today and as we move forward, businesses can no longer afford to insulate itself from its immediate community. The private sector’s contributions to society should move beyond just mere job generation, payment of taxes, and perhaps even the usual corporate social responsibility activities. To remain relevant and trusted by stakeholders, businesses should be more active players in the progressive development of the markets that they serve.
I began to reflect on and seriously think about these ideas when I left business school in the 1980s. I have since met several thought leaders who expressed these ideas cohesively. These include Harvard professors Kash Rangan and Micheal Chu, who have written extensively about the meaningful impact that businesses create at the base of the pyramid. My former professor, Michael Porter, also developed the idea of “creating shared value,” born from his realization that businesses cannot continue operating in a vacuum.
The “shared value” model suggests that corporate longevity and success is intrinsically linked to and mutually dependent on the welfare of a company’s host community. For companies to remain relevant, its policies and operating practices should not only increase its competitiveness, but also advance the economic and social conditions of the community where it does business.
I have since followed and participated in shared value conversations, which has steadily built a global following. A few years ago, we at Ayala embraced this philosophy of integrating our business objectives with addressing the needs of the many people that we touch daily. At its core is a commitment to sustainability, viewed in a more holistic light — that is, sustainability not only
as it relates to the environment, but also, to how this thinking can create social and economic value. We concretize this by aligning our operations and metrics towards authentic contributions to the 17 United Nations Sustainable Development Goals (UN SDG).
New and inclusive business models and advanced technologies help us in achieving this mission. We believe that these allow enterprises to become more ethical, scalable and capable of continuous reinvestment. Enterprises can thus generate a bigger impact to its host communities through this positive and productive use of capital. We at Ayala experience this firsthand.
For example, Globe’s Mynt and BPI BanKo, our primary channels for inclusive financial services, aware that 66 percent of Filipinos are unbanked and 34 percent have no physical access to banks. Through mobile technology and alternative credit scoring, 77,000 clients benefited from Mynt’s microloans, ensuring that those who lack proper documentation will not be fully cutoff from the financial system. Similarly, BPI BanKo uses mobile and complements this with traditional facilities to provide credit to entrepreneurs. To date, P4 billion have been disbursed to 60,000 entrepreneurs through BPI BanKo’s 200 branches nationwide.
In health care, 43 percent of low- to middle-income Filipinos have not seen a doctor in more than a year, with six out of 10 Filipinos dying from illness without seeing a medical professional. Our response is FamilyDOC, a 3-in-1 generics pharmacy, diagnostics and laboratory facility for primary care. Located in some of the densest communities in and around Metro Manila, FamilyDOC’s 54 clinics have served 240,000 unique patients since 2016. Meanwhile, Generika Drugstore provides affordable medicine options that are cheaper by up to 85 percent compared to branded equivalents.
On education and employment, it is disheartening that 3.6 million Filipinos are out-of-school youth. For those that graduate, an employability assessment firm found that 65 percent of college graduates lacked the necessary skills for work. Our recent partnership with the Yuchengco group allows us to reach 60,000 students through Mapua University, Malayan Colleges Laguna and Mindanao, National Teachers College, University of Nueva Caceres, and APEC Schools. In some of these universities and in other partner schools, we co-designed curricula with employer-partners, resulting in 90 percent of graduates under this program being employed within 90 days, and with 20 percent higher starting salaries.
These instances are just three examples of how we concretize our commitment to shared value and sustainability in a holistic perspective. These efforts are part of a larger, Ayala-wide roadmap towards authentic impact through the SDGs.
During our annual stockholders meeting this year, we presented our group-wide Sustainability Blueprint. Through this initiative, we commit that by 2030, all our companies will have made significant and meaningful contributions to our country’s most pressing issues on social and economic inclusivity, innovation and infrastructure development, and climate resiliency. Whereas previously, we only reported our SDG contributions, we now have set targets and identified champions for SDGs that are aligned with our businesses.
However, beyond this roadmap, we recognize that addressing society’s most pervasive challenges require a broad coalition of likeminded organizations. Thus, last June, Ayala joined the World Business Council for Sustainable Development, a global network of 200 companies, representing a combined revenue of $8.5 trillion and 19 million employees. We are delighted to be part of this group, and are excited to work with our peers, such as Mitsubishi Corporation, Singapore’s DBS, the Tata Group, Unilever, and Microsoft, among others, to alleviate societal challenges through sustainable business.
To close, current global challenges have questioned the fundamental role of the private sector as it operates in the world. Society demands a reimagining of a company’s relationship with its stakeholders, beyond the traditional ways of doing business. We need a more imaginative and meaningful form of capitalism — one that inspires us to see potential in challenges; to transform our businesses towards efficient yet meaningful operations; and ultimately improve the lives of our stakeholders. I believe that embracing shared value and sustainability as corporate philosophies and as broad operating principles hold the key as we build a peaceful and prosperous future within our time.
Jaime Augusto Zobel de Ayala is the chairman and CEO of Ayala Corporation, one of the largest business groups in the Philippines, with interests in real estate, banking, telecommunications, water, power, industrial technologies, infrastructure, health care and education.