Directors and officers of Lopez Group listed companies listen to DITO CME’s Donald LimFor the second year in a row, the annual corporate governance training of directors and officers of publicly listed companies (PLCs) associated with the Lopez Group was conducted online on Oct. 29, with speakers from SGV & Co. and the Institute of Corporate Directors (ICD).

Katrina Francisco, senior director at the Climate Change and Sustainability Services division of SGV’s Assurance Practice, discussed the recommendations of the “Task Force on Climate-Related Financial Disclosures (TCFD),” released in 2017 and which have been adopted as a global framework to assess and report on climate risks. She stressed the “growing accountability on company directors to exercise duty of care and diligence on climate-related risks.”

The Financial Stability Board established the TCFD to develop recommendations for more effective climate-related disclosures that could promote more informed investment, credit and insurance underwriting decisions and, in turn, enable stakeholders to understand better the concentrations of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.

‘Integrate climate risks’

“Directors must integrate climate risks and opportunities into their governance roles to discharge their duties… Directors who understand climate-related risks and their implications will be better-positioned to effectively evaluate the company’s risk profile, respond to growing demands from investors and help protect both the company and themselves against potential legal action,” Francisco said.

TCFD recommendations are structured around four thematic areas that represent core elements of how organizations operate: governance, strategy, risk management, and metrics and targets. These thematic areas are intended to interlink and inform each other.

Francisco recommends that climate-related risks and opportunities and their financial impact be integrated in each company’s overall risk management process. Such process should then cover physical risks, transitional risks and opportunities, as applicable to the organization. The sustainability report template of the Securities and Exchange Commission (SEC) already incorporates TCFD recommendations in the framework recommended to PLCs.

Donald Lim, chief operating officer of DITO CME and chief innovation officer of Udenna Corporation, talked about the “Culture of Innovation and Technology,” breaking down innovation beyond its “why” and tackling its “who, what, where and when.”

Lockdown trends

Lim, a former chief digital officer of ABS-CBN Corporation, walked through trends that emerged out of the pandemic lockdown in the last two years.

“While COVID has compromised the physical functions of its victims, it also compromised the well-being of everyone else. Majority of those at home experienced anxiety, stress, depression which affected their sleep schedules and level of productivity each day. Even the content they consumed was linked to somehow better their current well-being. Online platforms such as TikTok and Netflix were a form of escaping life on ECQ (enhanced community quarantine),” he observed.

He added: “On a more positive note, Filipinos looked to learning new skills during this time. Some believed they now had free time to explore their passions and enhance the skills they already had. From panic-buying, Filipinos were now more mindful of how these actions affected other people. Not only did they share their procedures at home as a means of encouraging other to stay safe and healthy, but they also took time to cook and donate food to front liners and other less fortunate people.”

Phases of digital era

Lim recommends analyzing the digital readiness or maturity of one’s organization according to the four phases of the digital era: the internet era or fundamental phase where the digital is culture is mandated and customer communication is mostly one-way; the social era or tactical phase where digital culture is adaptive and customer communication is two-way; the collaborative era or integrated phase where digital culture is collaborative and the customer leads communications; and the autonomous era or optimized phase where digital culture is synergistic and the organization is able to carry contextual conversations with customers.

Each phase will signal the kind of investments, campaigns and revenue expectations from digital that a company can envision and strategize for.

The continuing education of professional directors and officers of listed companies is required by the SEC. In attendance were delegates from ABS-CBN, ABS-CBN Holdings Corporation, First Gen Corporation, First Philippine Holdings Corporation, Lopez Holdings Corporation and Rockwell Land Corporation. Also attending as observers were directors and officers of Energy Development Corporation, Lopez Inc. and some of its subsidiaries. (Story/Photos by: Carla Paras-Sison)