For a growing number of companies, sustainability is more than just a buzz word or a compliance burden. They recognize that it’s imperative for the long-term survival of humanity itself and that they have to take action.
It will definitely make a lot of difference if every company, big or small, commits to be a responsible steward of this planet and the resources it gives us, for the sake of the future generations.
In this email interview, SM Investments Corp. president and chief executive officer Frederic DyBuncio and SM consultant for investor relations and sustainability Timothy Daniels shared how the country’s most valuable conglomerate is addressing the sustainability imperative.
1. What is driving the initiatives of most companies to embrace sustainability? How about in the case of SM?
Dybuncio: For more than 60 years now, we have worked alongside our supply chain partners, communities and people in trying to create positive impact on and drive sustained growth for our stakeholders. In recent years, we have accelerated our efforts on sustainability focusing on climate action and creating greener options for our customers.
Daniels: Many corporations have long embraced social responsibility and there has been increased mandatory reporting for publicly-listed companies in recent years. There has also been a groundswell of expectations from investors, employees and customers to integrate sustainable practices into how business is done, especially environmental priorities. Leading companies also see sustainability as part of their long-term strategic thinking and how to assess their risks and opportunities.
In the case of SM, our founder, Henry Sy Sr., had always believed that social development and business growth go hand in hand. We also exerted efforts to bring together our peers in the private sector by hosting sustainability summits to create a more collaborative community to achieve the greater sustainable development agenda. This is still aligned to the original principles of our founder.
2. How can big companies, like SM, influence smaller companies in its ecosystem (partners, suppliers) to follow the sustainability agenda?
Dybuncio: We are continually finding ways to be more sustainable in the way we operate and we bring our partners with us. We are fortunate that SM started as a small business and grew alongside our partners. Since the beginning, we believed in building long-term relationships with our partners and have a symbiotic relationship with them in opportunities for growth.
Daniels: We have developed strong, trusting business relationships—learning, innovating and relearning things together. Since we’ve been on our own journey of integrating sustainability into how we do business, we have also been able to engage with our many partners along the way, helping them to take steps, too. We work with them to set standards on customer safety, environmental compliance and ethical practices, for example. In recent years, we have also engaged with them on how to adapt to digital platforms and new customer needs, as well as provided them with access to financing amid the effects of the pandemic.
For example, at Kultura, we work with a lot of suppliers which upcycle materials like Crafts for a Cause, or Malagos Chocolates, which promotes sustainable cocoa farming. So, we help these social enterprises enter mainstream market.
Moving forward, we want to work with our suppliers to create more products, services and even packaging that offer greater green choices that are affordable for our customers.
3. What are SM’s deliverables in the coming years as far as ESG (environmental, social and governance) measures are concerned?
Dybuncio: We are addressing both our climate adaptability by building the resilience of our cities and communities and climate mitigation by doing our share in reducing our emissions. Our property group has committed to increase the use of renewable energy to 50 percent by 2022.
We would like to make green products more accessible and affordable for our customers. This means starting with our supplier partners—working with them on how they can incorporate sustainability in the way they work and scaling sustainable choices through customer campaigns.
We continue to support our communities by providing access to basic services such as inclusive education, health care and farmers’ training for food security. This will help close the social inequality gap, especially to the most vulnerable members of our society.
4. How has COVID-19 affected the ESG agenda?
Dybuncio: Unlike COVID-19, climate change is more long-term and has more catastrophic effects. Corporations now have a better understanding of how ESG integration plays a practical role in a company’s long-term strategy, risk mitigation and identifying underlying opportunities.
Daniels: COVID-19 showed the kind of impact that global issues can have on both business and everyday life, and it made us all think about the other issues out there, not the least of which is the urgency of climate change. The pandemic illustrated how interconnected we all are and how business risks include ESG issues, which maybe weren’t considered quite as relevant before. Many companies are widening their thinking and idea of what their responsibilities are and looking at the scope of their risk mitigations. It also proved how effective we can be when we act collaboratively towards achieving our common goals.
We also see now the critical role of leadership in driving the sustainability agenda – from the board level, to management, permeating to every member of the organization. It should be inculcated in the very culture and awareness of the organization.
Lastly, we do not operate in silos within the organization and we cannot operate alone as a company. We are all interconnected. As such, the concept of shared value has become more real and tangible.
5. What other global best practices do you intend to adopt within the group?
Daniels: We want to benchmark all of our projects against the best in global practices and standards – whether consumer insights, opportunities from new technology, property developments, bank lending practices or other initiatives. The world is starting to accelerate in finding solutions to climate change in particular. We recently signed on as a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) global framework which directs us to best practices and to putting them into action.
We join more than 2,300 supporters in demonstrating a commitment to building a more resilient financial system and safeguarding against climate risk through better disclosures. The adoption of these recommendations helps for more effective climate-related disclosures. These could promote more informed investments and, in turn, enable stakeholders to better understand the financial system’s exposure to climate-related risks.
6. How are you training the next generation to follow the ESG agenda?
It starts with our people, who want to be more informed. So, we developed our own unique and comprehensive SM Sustainability School of short enjoyable online modules, based around best expert thinking in a very applied way. This gives our people easy access to getting certified and allows them to learn and incorporate sustainability practices, whatever their role may be in the company. It is available to our employees free of charge and is supported by multimedia and regular blogs, articles and even ‘how-to’ updates.
We also have the SM Green Movement, part of which focuses on promoting green living for our people through the sharing of ideas and encouraging our people to think about their own personal and work practices. We have a very active group of our own SM Green Ambassadors among our employees, who share ideas and serve as examples to others.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.