We commend the Bank of the Philippine Islands (BPI), Banco de Oro (BDO), and the China Banking Corporation (China Bank) for their sustainability initiatives, especially current contributions towards developing the country’s renewable energy sources. We specifically acknowledge the following related accomplishments by the aforementioned institutions with regards to achieving Goals 7 and 13 of the United Nations Sustainability Development Goals (SDGs), as listed in their respective latest sustainability reports:
- BDO reported that it has funded a total of 34 Sustainable Energy Finance (SEF) projects worth PHP36.9 billion, constituting 285 MW of hydropower, 129 MW of biomass energy, 93 MW of solar, and 62 MW of wind energy. In 2018, it financed seven SEF projects worth PHP8 billion. It has partnered with the International Finance Corporation (IFC) through investing in its USD140 million Green Bond, which aims to help private institutions address climate change through renewable energy and energy efficiency projects. Its corporate center in Ortigas was also the first high-rise office-commercial building in the Philippines to earn a certification on Leadership in Energy and Environmental Design by the US Green Building Council. Overall, its programs have generated environmental and social benefits, equivalent to 827513 tonnes of CO2 avoided annually, 177198 passenger vehicles off the road per years, and more than 21 million tree seedlings grown for the past 10 years.
- Living Laudato Sí Philippines intervention: I am Sr. Maria Vida Cordero, a Franciscan sister and I am here to speak for the members… of Living Laudato Sí group. I am very happy to note in your report that BDO is harnessing renewable sources of energy; but would like to see BDO in actively implementing the global Paris Agreement on climate change to reduce carbon emission, that is we do not want to see BDO investing in coal-fired plants and destructive mining. Your report also shows the Bank’s involvement in disaster responses and that should teach people lessons especially in the midst of climate change. We do not want that BDO finances… to be used to kill our planet. Banco de Oro and its affiliates can be catalysts of change to continue protecting our common home of the people, as Pope Francis’ encyclical Laudato Sí puts it. I would like to ask, because you are very good at innovation, in creativity, with regard to your involvement in this global Paris Agreement, what is the timeline? And since BDO is very good in finding ways, what are the ways forward?
- “I think as a bank, we have a lot of stakeholders; one of which is our stakeholders and our investors that are supportive of the Paris Agreement…. At the same time, weʼre torn between whatʼs good practice and whatʼs legal and necessary for our economy to grow. Thatʼs a balancing act we have to perform especially when we are one of the biggest banks in the country. I think we have to support the growth of the economy as well. what weʼve been trying to do is put a lot more emphasis or a lot more lending on those who support the Paris [Agreement] but admittedly the requirements of the local economy…, our shareholders…, of our other stakeholders still do not preclude us from lending to those that may be seen as against…the Paris [Agreement]. So we have to balance [those] two conflicting objectives. Hopefully, we would move more towards the global…initiatives as we mature as an organization.” — Nestor V. Tan, President & CEO (2019 Annual Stockholders Meeting)
- “I think as a bank, we have a lot of stakeholders; one of which is our stakeholders and our investors that are supportive of the Paris Agreement…. At the same time, weʼre torn between whatʼs good practice and whatʼs legal and necessary for our economy to grow. Thatʼs a balancing act we have to perform especially when we are one of the biggest banks in the country. I think we have to support the growth of the economy as well. what weʼve been trying to do is put a lot more emphasis or a lot more lending on those who support the Paris [Agreement] but admittedly the requirements of the local economy…, our shareholders…, of our other stakeholders still do not preclude us from lending to those that may be seen as against…the Paris [Agreement]. So we have to balance [those] two conflicting objectives. Hopefully, we would move more towards the global…initiatives as we mature as an organization.” — Nestor V. Tan, President & CEO (2019 Annual Stockholders Meeting)
- Living Laudato Sí Philippines intervention: I am Sr. Maria Vida Cordero, a Franciscan sister and I am here to speak for the members… of Living Laudato Sí group. I am very happy to note in your report that BDO is harnessing renewable sources of energy; but would like to see BDO in actively implementing the global Paris Agreement on climate change to reduce carbon emission, that is we do not want to see BDO investing in coal-fired plants and destructive mining. Your report also shows the Bank’s involvement in disaster responses and that should teach people lessons especially in the midst of climate change. We do not want that BDO finances… to be used to kill our planet. Banco de Oro and its affiliates can be catalysts of change to continue protecting our common home of the people, as Pope Francis’ encyclical Laudato Sí puts it. I would like to ask, because you are very good at innovation, in creativity, with regard to your involvement in this global Paris Agreement, what is the timeline? And since BDO is very good in finding ways, what are the ways forward?
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- China Bank, which is also under the SM Group, reported it has issued PHP7 billion of loans for energy access and has financed PHP7.2 billion for renewable energy development. It also inked a USD150 million Green Bond agreement with the IFC for financing projects including renewable energy, green buildings, energy efficiency, and water conservation initiatives to deal with climate change.
- Living Laudato Sí Philippines intervention: Mr. Chairperson, I am Bishop Gerardo Alminaza of the Diocese of San Carlos in Negros Occidental. Under my watch are 45 parishes, a College and not less than 10 Catholic Schools with around 700,000 Catholic faithful. We have Chinabank in San Carlos City and some of us are depositors and shareholders, including my brother bishops as corporation sole. I’m also chair and member of several NGO and School boards in WV but more than all these I also wish without being too assuming to represent the poor and those yet unborn who are most vulnerable to climate change and ecological crisis. I’m deeply impressed that Chinabank has a long banking tradition built on the foundation of trust, integrity, accountability, and transparency. I’m happy to note that you have financed P7.2 B worth of projects on Renewable energy. To address growing environmental concerns, you also inked a US$150 million Green Bond Agreement with International Finance Corporation(IFC) so you can finance projects to address climate change, including renewable energy, green buildings, energy efficiency, and water conservation initiatives. This is a welcome development because Experts say that we have only eleven years remaining to collectively act on climate change. That’s why I’m here to passionately appeal that we gradually divest from financing dirty industries, dirty sources of energy such as coal fired power plants which has been one of the biggest causes of global warming pollution since the industrial revolution. Both governors of Negros Occ & Or have decreed Negros to be coal-free and a model for RE but we are now under threat with the proposed CFPP in San Carlos City. I stand with Pope Francis in his clear stand for our common home expressed in his encyclical Laudato Si. Living Laudato Si in our lives is a challenge, indeed. It challenges us to live with integrity and seriously asks us to check where the money we deposit are invested. Dear shareholders present here, ours should be ethical and sustainable investment, and this is non-negotiable most especially in this period of ecological crisis. Mr. Chairperson, time is ticking- what is our timeline to leave finally dirty investments like coal? We cannot afford to contribute further to this ecological crisis which all of us have caused. Someone said, “True economic growth cannot be achieved if someone is left behind”…. BUT I say: “genuine sustainable economic growth cannot be achieved if the planet is left behind – we wil not all survive.”
- “I can assure you as you have heard from the other stakeholders where the focus has been. We will assure you we will try to balance everything to be sustainable and, at the same time, to see how we can maximize our income…. China Bank is also…with the SM Group wherein we’re a very sustainable company. The mall itself has been doing a lot of this renewable energy on the rooftops. As of today, they have 15 MVA (mega volt amp). Likewise, it has also been recycling water since 1992. So you can be assured if there is any way the bank can contribute to it, we will focus onto it.” — Chairman Hans T. Sy, China Banking Corp. (2019 Annual Stockholders Meeting)
- “I can assure you as you have heard from the other stakeholders where the focus has been. We will assure you we will try to balance everything to be sustainable and, at the same time, to see how we can maximize our income…. China Bank is also…with the SM Group wherein we’re a very sustainable company. The mall itself has been doing a lot of this renewable energy on the rooftops. As of today, they have 15 MVA (mega volt amp). Likewise, it has also been recycling water since 1992. So you can be assured if there is any way the bank can contribute to it, we will focus onto it.” — Chairman Hans T. Sy, China Banking Corp. (2019 Annual Stockholders Meeting)
- Living Laudato Sí Philippines intervention: Mr. Chairperson, I am Bishop Gerardo Alminaza of the Diocese of San Carlos in Negros Occidental. Under my watch are 45 parishes, a College and not less than 10 Catholic Schools with around 700,000 Catholic faithful. We have Chinabank in San Carlos City and some of us are depositors and shareholders, including my brother bishops as corporation sole. I’m also chair and member of several NGO and School boards in WV but more than all these I also wish without being too assuming to represent the poor and those yet unborn who are most vulnerable to climate change and ecological crisis. I’m deeply impressed that Chinabank has a long banking tradition built on the foundation of trust, integrity, accountability, and transparency. I’m happy to note that you have financed P7.2 B worth of projects on Renewable energy. To address growing environmental concerns, you also inked a US$150 million Green Bond Agreement with International Finance Corporation(IFC) so you can finance projects to address climate change, including renewable energy, green buildings, energy efficiency, and water conservation initiatives. This is a welcome development because Experts say that we have only eleven years remaining to collectively act on climate change. That’s why I’m here to passionately appeal that we gradually divest from financing dirty industries, dirty sources of energy such as coal fired power plants which has been one of the biggest causes of global warming pollution since the industrial revolution. Both governors of Negros Occ & Or have decreed Negros to be coal-free and a model for RE but we are now under threat with the proposed CFPP in San Carlos City. I stand with Pope Francis in his clear stand for our common home expressed in his encyclical Laudato Si. Living Laudato Si in our lives is a challenge, indeed. It challenges us to live with integrity and seriously asks us to check where the money we deposit are invested. Dear shareholders present here, ours should be ethical and sustainable investment, and this is non-negotiable most especially in this period of ecological crisis. Mr. Chairperson, time is ticking- what is our timeline to leave finally dirty investments like coal? We cannot afford to contribute further to this ecological crisis which all of us have caused. Someone said, “True economic growth cannot be achieved if someone is left behind”…. BUT I say: “genuine sustainable economic growth cannot be achieved if the planet is left behind – we wil not all survive.”
- BPI reported that as of 2018, it has provided PHP9.67 billion for SEF projects, with cumulative disbursements amounting to PHP52.7 billion. A total of PHP6.4 billion were disbursed for loans for climate-resilient pig and poultry housing facilities. It has partnered with the Philippine Green Building Initiative, an IFC affiliate, to promote climate resilience and help clients with compliance. Loans for green buildings increased by 191%, from PHP3.3 billion in 2017 to PHP9.6 billion in 2018. Its Structured Finance Division has disbursed PHP73.08 billion for hydro, geothermal, and wind energy projects, which have reduced an estimated 10.5 million tonnes of CO2-equivalent. In relation, BPI Century Tokyo Lease and Finance Corporation disbursed PHP87.31 million in loans for solar energy projects. BPI’s Energy and Climate Resilience Portfolio Cumulative Disbursements have increased to PHP217.44 billion, with 38% spent on renewable energy, 12% for energy efficiency, and 8% for climate resilience. A total of PHP3 trillion was insured for natural catastrophes, such as typhoons, earthquakes, floods.
- Living Laudato Sí Philippines intervention: Mr. Chairperson, I am Bishop Gerardo Alminaza of the Diocese of San Carlos in Negros Occidental. Under my watch are 45 parishes, a College and not less than 10 Catholic Schools with around 700,000 Catholic faithful. Many of our institutions are depositors and stakeholders of BPI, so do with my brother bishops who, some of them, under their titles, are shareholders of the bank. I’m also chair and member of several NGO and School boards in WV who are also depositors and stakeholders of BPI. But I also wish without being assuming to represent the poor and those yet unborn who’ll be adversely affected by the decisions you make. Experts say that we have only eleven years remaining to collectively act on climate change. Ironically, financial institutions, like BPI, seem not to take this seriously and still continue to venture and invest on dirty industries, dirty sources of energy such as coal-fired power plants which has been one of the biggest causes of global warming pollution since the industrial revolution. I stand with Pope Francis in his clear stand for our common home expressed in his encyclical Laudato Si. Living Laudato Si in our lives is a challenge, indeed. This year, my diocese is reviewing our bank transactions, that includes BPI. If we see that banks are not taking the basic tenets of sustainability, inconsistent to the teachings on the integrity of creation, especially contained in Laudato Si – since we cannot put our common home at risk and violate our integrity – we may have to recommend changing banks and encourage my brother bishops in CBCP to do the same. Dear shareholders present here, ours should be ethical and sustainable investment, and this is non-negotiable in this period of ecological crisis. Mr. Chairperson, time is ticking- what is our timeline to leave finally dirty investments like coal? We cannot afford to contribute further to this ecological crisis which all of us also caused.
- Rest assured that BPI and the rest of the Ayala Group are very committed to sustainable industries and building…. I do believe as you say…that we have a common responsibility of responding…in unison. However the process of balancing the energy needs of the country in transitioning to renewable energy is not something that can be done overnight. We can’t pull the plug out. and leave the industries hanging. It’s a complex process but we do understand the philosophy behind it…. Maybe I’ll…the floor to Mr. Consing who I believe has been making a great stride in building that component in the portfolio. — Fernando Zobel De Ayala, Chairman of Board of Directors (2019 Annual Stockholders Meeting)
- A few years ago, we recognized that we had to [balance] our energy portfolio. And so with every year, we have changed that balance between renewable and non-renewable energy. Today, I am happy to report that that balance in terms of availments is 50/50. Coming from a situation where it used to be 90/10 or almost 100% non-renewable energy. As my Chairman said, these kinds of changes have to be done over time. The most damaging and the most expensive energy is no energy(?). So we have to phase this in. We’re 50/50 today and we look at every renewable project very, very seriously. We look at every non-renewable project very, very seriously. And the hurdle we set for non-renewable projects is actually a lot higher than the hurdle we set for renewable projects. So the non-renewable projects that we have on our books, we believe, are amongst the best in the country. But, that being said, our annual report, which I hope you can get a copy of, shows in true detail what we’ve done on sustainability. In fact, as a bank we are probably one of the highest ESG scores in the country. We realize what we choose to do and, equally important, what we choose not to do will shape this country, so your sentiments are shared by our board and management. — Cezar P. Consing, Executive Director, President and Chief Executive Officer (2019 Annual Stockholders Meeting)
- Living Laudato Sí Philippines intervention: Mr. Chairperson, I am Bishop Gerardo Alminaza of the Diocese of San Carlos in Negros Occidental. Under my watch are 45 parishes, a College and not less than 10 Catholic Schools with around 700,000 Catholic faithful. Many of our institutions are depositors and stakeholders of BPI, so do with my brother bishops who, some of them, under their titles, are shareholders of the bank. I’m also chair and member of several NGO and School boards in WV who are also depositors and stakeholders of BPI. But I also wish without being assuming to represent the poor and those yet unborn who’ll be adversely affected by the decisions you make. Experts say that we have only eleven years remaining to collectively act on climate change. Ironically, financial institutions, like BPI, seem not to take this seriously and still continue to venture and invest on dirty industries, dirty sources of energy such as coal-fired power plants which has been one of the biggest causes of global warming pollution since the industrial revolution. I stand with Pope Francis in his clear stand for our common home expressed in his encyclical Laudato Si. Living Laudato Si in our lives is a challenge, indeed. This year, my diocese is reviewing our bank transactions, that includes BPI. If we see that banks are not taking the basic tenets of sustainability, inconsistent to the teachings on the integrity of creation, especially contained in Laudato Si – since we cannot put our common home at risk and violate our integrity – we may have to recommend changing banks and encourage my brother bishops in CBCP to do the same. Dear shareholders present here, ours should be ethical and sustainable investment, and this is non-negotiable in this period of ecological crisis. Mr. Chairperson, time is ticking- what is our timeline to leave finally dirty investments like coal? We cannot afford to contribute further to this ecological crisis which all of us also caused.
However, we call into question the extent of the commitment of these financial institutions for genuine climate action. We do recognize that for the sake of socioeconomic development, a transition from fossil fuels to renewable energy cannot happen in the span of less than a year. A just transition would need to consider the job security of thousands of employees and meeting the energy demand in affected communities and establishments.
Nonetheless, the role of fossil fuels, especially coal, on climate change and environmental degradation has been repeatedly proven by reports of reputable international agencies. The Intergovernmental Panel on Climate Change (IPCC) has warned our world that as early as 2030, climate change would become irreversible should we maintain a “business-as-usual” attitude, which is primarily caused by the burning of fossil fuels. By 2050, renewables must supply from around half to two-thirds of the world’s energy needs to prevent climate change from worsening further, a clear sign of the need to divest from fossil fuels.
Furthermore, the United Nations Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services identified overexploitation and climate change as two of the major causes for the global decline in natural ecosystems. It also found that fossil fuel subsidies have resulted in global costs of USD5 trillion, which includes externalities directly caused by related operations; around half of these costs are caused by coal.
In the local context, despite the passage of the Republic Act 9513 or the Renewable Energy Act of 2008, the share of renewables in the country’s installed generating capacity has decreased from 35% in 1997 to 32% in 2017. Furthermore, BDO, BPI, and China Bank are among those poised to continue financing the construction of more than 20 coal-fired power plants and expanding existing ones in the next few decades, including but not limited to the following:
- Calaca Power Plant, Batangas (for expansion)
- Dinginin Power Plant, Bataan
- Kauswagan Power Plant, Lanao del Norte
- Mariveles Power Plant, Bataan
- Masinloc Power Plant, Zambales (for expansion)
- Pagbilao Power Plant, Quezon
- Quezon Power Station, Mauban, Quezon (for expansion)
By financing the development of “dirty energy” facilities, these financial institutions are not only contributing to worsening climate change, but also adversely affecting millions of people through its numerous impacts. In addition, they also indirectly influence the deterioration of the health and well-being of nearby communities.
When it comes to solving the climate crisis, there is no middle ground. Only a full commitment from all sectors can facilitate the necessary societal transformation to avoid the devastating impacts associated with the changing climate. The scientists and other experts have already warned us that we are running out of time to save our world as we know it today and change it for the better.
As Pope Francis states in his second encyclical “Laudato Si: On Care for Our Common Home” (LS),
“is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations? Where profits alone count, there can be no thinking about the rhythms of nature, its phases of decay and regeneration, or the complexity of ecosystems which may be gravely upset by human intervention”. (LS 190)
No business, large or small, will truly be sustainable without implementing the appropriate immediate and long-term strategies for maintaining relationships with and the well-being of its various stakeholders and the management of its available resources, which are already in decline due to anthropogenic activities. No amount of profit is worth over the health of either natural ecosystems or current and future generations.
We again emphasize the need for corporations to become more ecologically and socially responsible in their ventures. To quote Pope Francis:
“interdependence obliges us to think of one world with a common plan. Yet the same ingenuity which has brought about enormous technological progress has so far proved incapable of finding effective ways of dealing with grave environmental and social problems worldwide. A global consensus is essential for confronting the deeper problems, which cannot be resolved by unilateral actions on the part of individual countries.” (LS 164)
Thus, we call on BPI, BDO, and China Bank, along with other financial institutions funding projects propagating the use of fossil fuels, especially coal, to fully disclose their commitments towards achieving the goals of the Paris Agreements, the UN Sustainable Development Goals, and other international and local policies that deal with climate change. The clients of these banks deserve to know where their money is being invested in and what the impacts of such investments are on a local, national, and (if applicable) international scale.
Furthermore, to respond to the challenge of slowing down global warming to below 1.5 degrees Celsius as early as 2030 or at the latest by the mid-21st century, we also call on these financial institutions to include a definitive timeline for its programs related to reducing greenhouse gas emissions. We stress the need for realizing the vast potential of the country’s renewable energy resources not only for energy security and self-sufficiency, but also for meeting our targets as agreed upon through national and local policies.
To know more about what you can do to protect our common home through your financial instutions, please e-mail campaigns@livinglaudatosi.ph or message us through Living Laudato Si Facebook page.
