IT is no longer just about making money. The new name of the game is doing business in a way that looks after the welfare of the people, protects the planet and produces decent profits?all at the same time.
Thus said brothers Jaime Augusto and Fernando Zobel de Ayala who, together, man the helm of the country?s largest and oldest conglomerate, Ayala Corp.
Speaking to the media in a press briefing last week, both men unveiled the new sustainable development thrust of the group which?it is hoped?will become the new mantra of all Ayala firms that will carry them into the next century.
According to the elder Jaime Augusto, known popularly by his initials JAZA, businesses around the world have received ?a bad rap over the years? with the public?s trust in them being eroded by various scandals and stories about corporate greed.
Amid this backdrop, he pointed out his belief that businesses can be a productive force for change through the use of sustainable development initiatives.
?But unless we move toward a more progressive agenda in the way we do business, then trust will continue to fall,? JAZA said. ?So [sustainable development] is our way of charting a progressive path.?
A new way forward
Yet, even for Ayala Corp.?generally acknowledged to be the most progressive industrial house in the country when it comes to doing business ?with a conscience??it was not always this way.
Almost every year, during the annual stockholders? meeting of the Ayala Corp. holding firm, JAZA would repeat one of the group?s philosophies, which is that the various firms under the group have to be either the number one in their market or, at the very least, a strong number two (admittedly, something that has been harder and harder to achieve in recent years with the advent of aggressive business rivals in almost all of the group?s markets).
For the longest time, Ayala executives were known as quota-meeting machines who were almost single-minded in meeting income targets of their respective firms?a philosophy that has allowed the conglomerate to stay at the top of the corporate heap amid a rapidly changing Philippine business landscape.
According to JAZA, however, the group that was founded 175 years ago will now have to modify its ?tried and tested? corporate formula in order to survive and thrive for the next century or so.
Because of recent developments and the growing awareness that people worldwide are living in an unsustainable way (one Earth consuming the equivalent of 1.4 Earths, pointed out Ayala senior managing director Jaime Ayala), the Zobel brothers believe it is time to take business practices a step further.
?Business is no longer just about profit and loss,? JAZA said. ?It?s an engine for growth, but there?s a whole new responsibility that comes with it.?
?If you look at our training?and we all went to school [to train as] managers and politicians?it?s always been about growth,? he pointed out. ?If you listen to the head of any country, they?re always promising growth. If you listen to any corporate leader, it?s about growth.?
?Yet look at what?s happening: We have a growth agenda, yet limited resources, and more tension globally for those limited resources,? JAZA added.
Beyond governance
According to the younger Fernando, the initial response of the business world to the need for a more conscientious way of going business was to implement corporate governance standards?a set of rules by which companies pledged to behave by certain moral and ethical norms.
Having been successfully adopted by many Philippine corporations (although admittedly still severely lacking in many others), the community is now moving toward the next stage.
?Businesses are now going way beyond governance and talking about what their footprint is in society, [to be accountable for] the implications or impact of their actions as businesses,? said Fernando, who is president and COO of Ayala Corp.
?For a very long time, businesses? sole focus has been profitability and growth,? he noted. ?I think what you?re starting to see is a more balanced approach.?
For the Ayala group, this means pursuing more aggressively the so-called ?triple bottom line? of making good in terms of its impact on profit, people and the planet?an altogether new measure of corporate success.
This year, six companies of the group?Ayala Corp., Ayala Land Inc., Cebu Holdings, Bank of the Philippine Islands, Globe Telecom and Manila Water Co.?published reports using the global reporting initiative (GRI) reporting guidelines.
This marks the first time that a local conglomerate has published this kind of report focusing on indicators like economic performance, indirect economic impact, energy consumption, water use, emissions and waste, products and services, employment practices, education and training and product responsibility.
Sustainability summit
The results of this report will be highlighted during the Ayala group?s ?Sustainability Summit? for its senior officials that will be held tomorrow at the Manila Peninsula Hotel in Makati City?an event meant to provide direction and additional impetus for its companies to make significant adjustments to their strategies, business models, products and operations.
?The sustainability report is widening the framework so that on the economic front, we?re saying it?s not just about profits,? JAZA said. ?It?s also about employment statistics; it?s about the taxes we pay, the capital expenditures and investments we?re making.?
?[It is also about] the social impact, how we?re affecting communities and finally there?s environmental impact,? he said. ?We?re taking this new way of looking at the business engagement and it deserves its own report.?
Make no mistake, however. This does not mean that Ayala executives will no longer fight toe to toe with their corporate rivals for dominance in the local and international business scenes.
According to the Zobel brothers, this simply means that, in addition to worrying about producing healthy profits, they will now have to worry about society and the environment as well.
Talk about pressure.
