First Philippine Holdings Corporation (FPH) presents the group’s financial and non-financial performance to our internal and external stakeholders with our 2024 Integrated Report (IR). In 2024, the world breached the 1.5C limit temporarily for the greater period of the year. The worsening climate condition compels us to communicate how we stayed focused on progressing on the FPH mission of decarbonization and regeneration of planet and people, while fulfilling our obligation to the country of contributing to energy security and in delivering other services. 

We understand that fundamental to our mission is our recognition of the connectivity of natural, social, and economic systems and how the climate-nature nexus will continue to affect our business operations and the communities in our areas of influence. We took these perspectives for a holistic execution of our mission, our selection of the sustainability frameworks, the identification of material topic indicators, and the overall content of the report on environmental, social and governance (ESG) matters.

Scope and Boundary Criteria

This report covers business operations from January 1 to December 31, 2024 of five FPH business segments: power generation, manufacturing and energy solutions, construction and energy services, real estate development, and healthcare services. We discussed how their business results were delivered by our six capitals (financial, manufactured, human, intellectual, natural, and social and relationship) and the cautious management of operations guided by the FPH mission, the prescribed core content of the IFRS (governance, strategy and business model, risk management, and metrics and targets) and how we create value for the business and other stakeholders. The whole process was further informed by our material topics and influenced by the external factors screened during the reporting period.

The boundary of the disclosures specific to the subsidiaries and corresponding business units (BUs) is shown in Annex 1. FPH has oversight of the subsidiaries, though the subsidiaries are in charge of their own operations and the day-to-day work. FPH plays an advisory role in ensuring our subsidiaries’ work is in alignment with the FPH governance structure. Energy Development Corporation (EDC) has an additional qualification in its operational control approach. It receives additional guidance from its investors, which have representatives in the EDC Operations Committee. Further references on the definition of “operational control” are included in the legend of Annex 1. The annex also discloses BUs that are out of the coverage of the report, with the following criteria:

a. BUs that did not operate during the reporting period;
b. BUs in operation but whose data management methodologies are not yet aligned with FPH sustainability protocols; and
c. BUs whose sustainability data are already part of the records gathered by the FPH head office.

The data and disclosures were collected, consolidated and analyzed by the FPH Corporate Sustainability Group in collaboration with the Technical Working Groups of the participating subsidiaries. Finally, the information was reviewed by Management and approved by the FPH Board guided by its Corporate Governance Committee. The certification by Management and the Board is found on page 11 of the report.

Sources of Guidance

This report was prepared in accordance with the International Integrated Reporting <IR> Framework of the Value Reporting Foundation. This framework was complemented by our reference to the International Financial Reporting Standards (IFRS) S1 which covers the General Requirements for the Disclosure of Sustainability-related Financial Disclosures.

The financial section of the report was prepared in compliance with the Philippine Financial Reporting Standards (PFRS) while the non-financial section was guided by Memo Circular No.4 of 2019 of the Philippine Securities and Exchange Commission (SEC).

We referenced our analysis of the material indicators on the following standards based on our need for a double materiality analysis due to the nature of our mission. For

▸ Task Force on Climate-related Financial Disclosures (TCFD);
▸ Climate-related disclosures from IFRS S2; and
▸ Task Force on Nature-related Financial Disclosures (TFND)

Another important reference for financial impact is the prescriptions of the Sustainability Accounting Standards Board (SASB). The Group has undergone training for these standards by the University of Asia and the Pacific – Center for Social Responsibility (UA&P – CSR) and we shall study the full industry specific standards in 2025 to prepare for the SEC adoption of IFRS in the next two years.

For impact materiality, we were guided by:

▸ Global Reporting Initiative (GRI) Standards;
▸ UN Guiding Principles on Business and Human Rights (UNGP);
▸ UN Sustainable Development Goals (UN SDGs), and
▸ UN Conference on Trade and Development – International Standards of Accounting and Reporting Guidance on Core Indicators for SDG (UNCTAD-ISAR).

Even as the IFRS sustainability standards are not yet mandatory in the Philippines, considering them prepares us for the new sustainability rules of the SEC which plans to adopt the IFRS prescriptions. The index of the relevant ESG standards and frameworks is presented in Annex 7 on pages 283-299 of the report.

Scoping of Material Topics

The FPH mission aspires to contribute to a healthy planet where everyone can thrive. Therefore, we continue to adopt the “double materiality” approach. This approach assesses the influence of the environment and people on the business (financial materiality) and the effects of business on the planet and people along the value chain (impact materiality). Our material topics were determined by the UA&P–CSR, an academic institution and independent third party. Topics were inventoried through a method that uses industry benchmarking and consultation with our internal and external stakeholders, among others. Details on the materiality assessment and its results can be found on page 74.

Our materiality analysis is done every three years, with the next assessment scheduled in 2025. All information disclosed is either in qualitative or quantitative terms. For this reporting period, the existing list of material topics screened by UA&P — CSR was reviewed and updated based on our weekly monitoring of local and global developments in the sustainability landscape from articles, participation in relevant forums, engagement with government agencies, and the developments in local legislature.

Report Content and How to Read the Report

To assist our readers, this report flows as:

▸ We start with our leaders’ messages, which declare our concern for the metacrisis and the connectivity of the natural, human, and economic systems. We further expound on how this context will continue to affect our operations and host communities, and outline our possible responses (pages 18-33).
▸ The 2024 business developments are reviewed on pages 40-65.
▸ We discuss the core principles of governance, strategy and business model, risk management, and metrics and targets that inform the management of our operations on pages 82-125. At this point we describe how values are generated through the business model on page 98.
▸ The performance of our six capitals which are inputs to the business model are discussed on pages 126 to 203.
▸ A detailed value creation diagram is presented to show how the inputs from the capitals are transformed by the business activities into products, services, and outcomes. These generate the values for the enterprise and the other stakeholders, including our contribution to the Sustainable Development Goals or SDGs (pages 204-213).
▸ Enabled by financial and non-financial capitals, our progress on our mission on decarbonization and regeneration is shared on pages 214-221.
▸ We projected the implications of the evolving external environment to the future of our business in the Outlook section on pages 223-229.
▸ Any significant change, its rationale, and implications to the Company are reflected in the Restatement Section of the report on pages 300-307.

Assurance

To ensure the accuracy of and to improve the robustness of our report, we commissioned two third-party reviews:

▸ Assessment of the alignment of the report with the Guiding Principles and Content Elements of the Framework conducted by UA&P – CSR, whose Third Party Statement is found on pages 256-266.
▸ Any significant change, its rationale, and implications to the Company are reflected in the Restatement Section of the report on pages 300-307.