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We can
state, quite categorically, that we are living in very
demanding times. Our planet is under stress. Our country
confronts serious challenges. Our communities are in
search of real solutions to age-old problems. We at
Ayala regard these unprecedented demands as a challenge
to our business and our ethics, pushing us to work
harder and smarter, and driving us to remain engaged in
a social-development agenda of our country.
The
“Ayala Social Initiatives” reflect our group’s emerging
vision of our engagement and contribution to the
social-development challenges of our current
environment.
A vision
does not come to us at Ayala like some bolt of lightning
out of the blue. Rather, it develops sporadically as our
usually preoccupied minds connect with some useful but
hard-earned lessons over many years.
The
Ayala Group’s commitment to social development is tied
to our history as an institution. Before it became
corporate social responsibility, it was described as
charity or philanthropy. For us, the philanthropic
instincts of our family have always been closely
associated with the corporate values of our businesses,
which still refer regularly to “commitment to national
development” and “concern for others.” As I have said in
the past, there is increasingly a growing social
contract between business and society.
The
democratic restoration after Edsa created an impetus and
an opportunity for a company like Ayala to reexamine its
contribution to nation-building. Our father, who was
then CEO, wanted Fernando and I to lead in that
corporate reexamination through the Ayala Foundation,
which, at the time, operated separately and
independently from the companies within our group.
At the
time, we felt that we had to integrate the Ayala
Foundation’s work more systematically with the
businesses of the Ayala Group’s operating units. The
staff of the foundation sat down with the CEOs of
various companies to determine common grounds and
interests. Many great ideas emerged.
One I
remember well was when
Ayala
Land
partnered with the foundation to develop an integrated
community development plan for the benefit of informal
settlers in Ayala properties or in properties we planned
to purchase or develop. The plan sought to reflect our
desire that affected families form new relocated
communities where they could create better lives for
themselves. Meeting such a desire demanded new ways of
doing business. It involved rigorous social preparation
with a holistic relocation package that included new
homes, skills training and microfinance, as well as
training of community leaders to form support groups
like homeowners’ associations, cooperatives, youth
groups and mothers’ circles. Affected families moved
into functioning communities where they had a chance at
finding a job or growing a business.
This
plan eventually became a best practice replicated by
other companies handling informal settlers in their
properties and studied by government agencies in charge
of relocation programs.
This
marked an important step in the Ayala Foundation’s new
direction of seeking win-win solutions to community
issues faced by our companies. It became a template for
many other similar engagements. And the approach became
a key insight into Ayala corporate social vision; the
idea of deep integration of corporate social
responsibility (CSR) into Ayala’s core businesses. It
was a first step in integrating CSR into our strategic
model rather than keeping it adjacent to strategy.
Raising
the bar of professionalism
However,
we recognized that many fundamental social problems
around us were some distance away from Ayala’s core
businesses. Allowing these problems to go unresolved
could spawn adverse consequences to our many
communities, which, in turn, would constrain the future
growth and stability of any business, including ours. We
realized that we must have our own analysis of
fundamental social problems and our own pro-active
corporate response to these problems. We zeroed in,
early on, on the quality of educational formation as a
fundamental problem, as well as a fundamental solution,
to creating a brighter Philippine future.
The
Ayala Foundation thus built a portfolio of flagship
programs dedicated to educational formation.
The LCF
community is familiar with our work in education, and I
will make a very brief survey of our education programs.
The first is Centex, which supports two laboratory
public-elementary schools in Tondo and Batangas, giving
very bright children from lower-income families a chance
at top-quality basic education. These schools have seen
some of their graduates enter such prestigious high
schools as Philippine Science High School, Manila
Science High School and a number of private schools. One
of our Batangas students recently won the National
Championship for Mathematics. Centex has shown that the
best and brightest children of the poor can compete in
academic achievement when provided with the right
conditions at the very earliest stage of their
education.
We also
support Gilas, an ambitious program to put computer
laboratories with Internet access in all 6,000 or so of
our country’s public high schools. Among various
education interventions, we decided that our best
strategic bet would be to give high-school students,
especially those in their fourth year, the basic
computer and Internet literacy skills that can land them
good jobs even if they are not able to go on to college.
By facilitating access to computers and the Internet in
public high schools, Gilas can help improve the quality
of our public education over the long term but also
immediately offer next year’s high-school graduates from
lower-income families a quick start at breaking out of
the cycle of poverty.
Gilas is
a robust social consortium among business leaders that
has built a strong public-private partnership with
national and local governments focused on achieving its
goals. As of the end of June 2007, Gilas members and
other like-minded institutions such as USAID and CICT
have succeeded in connecting 1,440 public high schools,
giving about 700,000 high-school students access to
global information through the Internet.
Last
week I read an e-mail from the principal of Itbayat
National Agricultural High School at the farthest island
municipality of Batanes extolling the blessings of
connectedness that Gilas made possible to its school’s
30 teachers and 414 students and to its town’s nearly
4,000 people. The principal’s e-mail said that in their
town only their school is Internet-connected; thus, she
says, that “today marks our access to the outside world
through our connection to the Internet.”
At the
apex of our education-formation portfolio is the Ayala
Young Leaders Program. During a corporate retreat we
held in the Blue Mountains of Australia nine years ago,
we were challenged to come up with just one, single,
most critical need of our country. We decided that,
above all, our country needed value-based leadership
with a sense of service. And the Ayala Young Leaders
Program was our way of fostering such leadership in the
coming generations.
This
program has since brought together about 650 young
leaders to annual congresses where they interact with
each other and with the best and most inspiring leaders
of our country. In these life-defining events, young and
dynamic student leaders clarify their personal values
and vision, recognize the key challenges they face in
their lives, and distill insights and discoveries that
empower them to make a difference in the world. Alumni
of Ayala Young Leaders Congresses continue to thrive
with their own activities through their own quarterly
magazine, Starfish, as well as through their 16 active
chapters around the country.
Beyond Ayala Foundation
While
Ayala companies support Centex, Gilas and Ayala Young
Leaders Congress, these programs are still primarily
Ayala Foundation activities. We realized that beyond the
excellent work of the foundation, our group’s corporate
social responsibility can gain more powerful impetus
when our corporations undertake their own CSR programs
with focused impact on their specific communities.
We made
CSR a strategic management feature of the Ayala Group.
We recognized CSR as important to strengthening our
reputation and brand equity; as critical to attracting,
motivating and retaining the best employees; as crucial
to accessing global investments and technology
partnerships; and altogether as an important pillar of
our group’s competitiveness in our emerging market
environment.
So we
moved our CSR programs into the mainstream of our
business operations. CEOs of our group discuss CSR at
the highest levels of management and every month, when
our corporate executives update each other on
developments in banking and finance, real estate,
telecommunications, utilities and the other business
concerns of the Ayala Group, the foundation likewise
reports on achievements and challenges in corporate
social responsibility.
It was
during these monthly meetings, as well as at the board
of trustees meetings of the Ayala Foundation, that we
realized the need for a framework to guide the strategic
selection of our investments in social development. We
formed a CSR committee with representatives from all our
companies. We did an inventory of our CSR programs,
including the resources deployed to these programs. And
we identified ways to maximize the impact of the
considerable resources we were devoting to these
programs.
Over a
year of analysis and deliberations preceded the
formulation of our “Ayala Social Initiatives.” The
result was a specific, overarching focus of our major
CSR programs in three areas of social development,
namely, education, entrepreneurship and the environment.
This is
more than just a mere regrouping of our CSR activities
into thematic areas. These three areas are the CSR
equivalent of the business sectors in which our group
invests. Each area represents a distinct community of
interests and aspirations with which the Ayala Group
seeks to build solidarity, find common cause and provide
solutions.
These
three—education, the environment and
entrepreneurship—now form the triangle of our intensive
practice of corporate social responsibility for the
Ayala Group at the group-wide scale, as well as at the
level of individual companies and business units. The
philosophy and reasons behind our Ayala Social
Initiatives are likewise cascaded down to all our
employees through internal road shows and through our
robust and active employee volunteerism.
We have
identified flagship programs that all companies in our
group support. In addition, each company can also
develop its own responses to the needs of specific
communities.
Let me
talk about some examples. The Ayala Group businesses are
rooted in viable and sustainable human settlements so
the environment is an unavoidable area of social
development for us. One of our programs is solid-waste
management, which seeks to deepen the practice of the
three R’s—reduce, reuse and recycle—on the road to the
ideal of zero waste. Another program involves reducing
our group’s carbon footprint as part of the global
effort to reduce global warming. Ayala Land is
consciously including environmental issues in its design
of future communities, seeking the expertise of NGOs
such as the World Wildlife Fund (WWF) in minimizing the
environmental impact of developments such as our Anvaya
Cove in Bataan. We do not always have to take the lead.
In many cases, we have worked in programs led by
respected partner-organizations such as WWF Philippines
on environmental issues, and Habitat for Humanity and
Gawad Kalinga for housing.
In
entrepreneurial development, each of our group companies
has provided distinct leadership.
The Bank
of the Philippine Islands has committed a P500-million
fund, and has already released more than half of this,
for lending to microfinance institutions. This effort is
not just a program of the BPI Foundation but a business
development along CSR lines being pursued by the bank
itself. BPI is building what we call a possible “sweet
spot,” where a good business can prosper while yielding
a social good, in this case enhancing our banking
business by broadening access to livelihood loans among
previously unbankable individuals.
Finding
and building sweet spots is an idea from “Doing Business
at the Bottom of the Pyramid,” which G.K. Prahalad first
wrote about. This approach strikes at the heart of the
challenge of CSR sustainability. It is also a practical
and proven response to what Bill Gates called “creative
capitalism”—to “stretch the reach of market forces so
that more people can make a profit, or at least make a
living, serving people who are suffering from the worst
inequities.”
This is
a focus of the Ayala Social Initiatives—finding and
building sweet spots where doing good business and
contributing to social development converge.
We have
found such sweet spots in the business of Globe Telecom,
as it radically expanded the market when it rapidly
lowered the costs of communications access through
mobile technology and empowered over 650,000 resellers
at the microlevel which generated over P40 billion a
year of revenues. We have also found such sweet spots in
the business of Manila Water, as it generated revenues
and profits by contributing to meeting one of the
country’s Millennium Development Goals, universal access
to safe water, in its service area by engaging
cooperatives at the barangay level. This engagement of
the community to fulfill their goals is part and parcel
of their strategic plans as a business.
Getting
here
The
Ayala Social Initiatives come from more than 20 years of
accumulated learning from practice on the ground, as
well as from benchmarking ourselves against global
standards.
To
further accelerate our learning, we are developing new
metrics to gauge the depth and breadth of our group’s
impact on individuals, communities and the nation as a
whole. Manila Water leads the way in this effort with
its Sustainable Development Report in 2005. The Ayala
Social Initiatives will become our group’s forum for
helping other companies learn from these outcome
measurements.
We teach
each other and learn from one another. Our companies and
our executives freely share their respective strengths
and expertise as part of our corporate culture of mutual
respect and openness to the ideas of others. Open
discussion and dialogue among our executives have
enabled our businesses to learn from our corporate
social engagements just as our social programs have
learned from working with the demands and opportunities
of our businesses.
This
integration of the business disciplines in our practice
of corporate social responsibility is absolutely
essential in ensuring that our programs are strategic
and maximize resources, while remaining sensitive to the
needs and sensibilities of those we wish to help.
Two big
lessons
Even as
we learned these first two core lessons—integration of
business and CSR, as well as a strategic focus on the
primary areas of desired impact—we also recognized that
there are other rays of light that complete the spectrum
of our corporate social vision.
For all
of us, the overwhelming scale of our country’s social
problems continues to be of primary importance. In the
face of such daunting challenges, I can only reiterate
what Bill Gates said in his speech at the commencement
exercises at Harvard this year: “Don’t let complexity
stop you. Be activists. Take on the big inequities. It
will be one of the great experiences of your lives.”
The
Ayala Social Initiatives seek to be equal to this call
of taking on the “big inequities” by internalizing two
additional big lessons.
The
first big lesson is the vital need for collaboration,
cooperation and alliance with a wide variety of other
organizations, corporations and individuals. To
successfully confront the magnitude of our problems, we
need to work better with each other.
The
Ayala Foundation realized long ago that our earnest
efforts will not make an impact if they remain small in
scope and limited in reach. Gilas already represents our
learning in this regard. Our goal this year is to
connect 1,000 additional schools, thereby reaching 2,000
schools and about a million high-school students by
year-end. This could never have been possible without
collaboration, cooperation and alliance.
The
other big lesson incorporated in the Ayala Social
Initiatives is the crucial role and importance of
continued dialogue with the government on the policies
and programs important to our CSR concerns. We at Ayala
Group see our involvement in the League of Corporate
Foundations, in the Philippine Business for Education,
in the Makati Business Club and in other organizations
that engage in dialogue with the government as an
important part of our CSR practice. No matter how large
or how effective we in the corporate sector can become
in our chosen fields of social development, we cannot
and should not seek to substitute for the government,
nor should we allow or encourage the government to
default on its duties to the communities and nation.
This dialogue need not be adversarial or confrontational
because the areas of our common agreement are vast,
while the segments of disagreement are often small.
Seeing
the world we seek
We
adopted the Ayala Social Initiatives not only as a guide
for our group’s actions and activities, but also as a
framework for our continued learning and articulation of
public policy interests in our dialogue with other
stakeholders, as well as with the government.
It is
our hope that through our programs on the ground that
can show impact and results, we can, at the same time,
become a respected and trusted voice on policy
directions in education, the environment and
entrepreneurship at national and local levels of
governance.
Pursuing
the Ayala Social Initiatives is not easy. Nothing truly
worthwhile is ever easy. Integrating CSR into the fabric
of sustainable business is even more exacting and
demanding than creating profitable businesses. And just
as we constantly review and revisit our business models
to ensure that they are equal to the challenges and
opportunities of the changing market, so, too, must we
continue to review and revisit our corporate social
vision to make sure it grapples with the harsh realities
of today while reaching out to a superior reality
tomorrow.
In the
Ayala Group, the practice of CSR is a serious
undertaking that requires the combined talent, interest
and passion of all our CEOs working together with our
management teams and our staff.
We
regard collaboration with groups like the League of
Corporate Foundations as essential to our growth and
development as individuals and as a corporate community.
We are always eager to learn from all of you—your own
visions, your programs, your experiences and insights,
your successes and gains—so that our own vision and
practice can be improved and enriched. Together, we can
teach and learn from each other as we work to jointly
shape the world we seek.
****
This article was based on Mr. Zobel de Ayala’s keynote
speech at the luncheon plenary for the League of
Corporate Foundations CSR Week on July 17. |
