IFC client leads the way on sustainability reporting in the Philippines
Sustainability reporting guidance and advice from IFC helps Manila Water Company publish the first sustainability report produced by a domestic firm in the Philippines, plowing the way for a successful IPO and numerous awards from business associations in the Philippines.
Manila Water Company was awarded a concession to supply water and wastewater services to the eastern half of Manila in 1997, as part of a program to privatize the city's water utility services. At the time of concession, only 26% of households in the concession zone had access to 24-hour water supply. By 2004, that figure had risen to 89%. Perhaps most impressively though, the company has taken a forward-looking and responsible approach to handling the issue of informal urban settlements. Through its Water for the Community program, Manila Water has managed to connect 800,000 previously unserved residents of informal settlements to water services - at rates 7 times less than what residents previously paid to street vendors for bottled water.
Privatized utilities are of course not without critics and detractors who question the propriety of profiting from life's basic needs. In an effort to inform the debate and share successes resulting from private investment in Manila's water and wastewater challenges, Manila Water sought IFC assistance in preparing its first Sustainability Report in late 2004. An IFC team led by the Social Responsibility program (formerly the Corporate Citizenship Facility) worked closely with Manila Water over roughly 4 months to first establish performance indicators to drive reporting, and then to actually frame and draft the report.
As a result, Manila Water published a 43-page report covering all aspects of its performance in environment, social, and corporate governance areas, and offering numerous examples of the benefits to all Manila residents resulting from the company's capital expenditures for the period 1997-2004. The report was published weeks before the company's highly successful IPO, and management credits the report with having generated much positive recognition among the investment community. The company received an Anvil Award of Merit from the Public Relations Society of the Philippines on February 17, 2006, as well as a later award from the Management Association of the Philippines, in recognition of the report's awareness raising with regard to corporate social responsibility.
These awards have been instrumental in assuring Manila Water's management that sustainability is a positive for the business. "The company is inspired to continue its sustainable development programs and the report has served as a model for other companies to emulate," reports Glorina de Castro, Head of the company's Treasury Department. In point of fact, Manila Water's parent company, the Ayala Corporation, is encouraging each of its subsidiary companies to commit to sustainability reporting. Ms. de Castro goes on to say "On behalf of our management, we wish to express our deepest appreciation for the support and advice that we got from IFC during the preparation of the report."
The Social Responsibility program, has since established a Corporate Social Responsibility (CSR) Strategy and Communications program area to service demand for similar services from other IFC clients. Pipeline projects for the program area include 1) strategic advice on CSR principles and policies to a Corporate Advisory Services client in the U.A.E.; 2) sustainability reporting guidance and support to oil and gas client in Colombia; 3) sustainability strategy and reporting advisory to a regional electronics manufactory company in Asia Pacific.