About the Cover
The cover for First Philippine Holdings Corporation’s (FPH) 2022 Integrated Report is a departure from the dark, alarming covers we’ve used in previous years. While the climate crisis remains an urgent matter and addressing it may seem like a daunting task, it is not impossible. With solutions in sight, there is still hope but we need to work quickly to secure a livable planet for future generations.
The cover shows one of these solutions—the solar panels that are part of the microgrid project of FP Island Energy Corporation, a subsidiary of FPH, in islands off the coast of Camarines Sur. The project provides 24/7 power to off-grid island communities in Haponan, Lahuy, and Quinalasag, improving the standard of living of about 16,000 residents.
As more sectors tap into available technologies and develop new ones to provide essential services without compromising the environment, we remain hopeful that it is still possible to pass on a brighter future to the next generations.
About the Report
The year 2022 was a banner period for First Philippine Holdings Corporation (FPH), with all of its segments registering positive financial results while staying the course on the FPH mission of contributing to a decarbonized and regenerative future for the planet and people. With the sustained aggression of climate change, our constant investment in building the competence of our employees and partners to execute our mission is the foundation of our steady transformation to an antifragile organization that is stable and enduring.
Scope and Boundary
The FPH Integrated Report (IR) for January 1 to December 31, 2022, discusses the key elements of our value creation. In addition to business developments and financial performance, the non-financial aspects reported are our mission, business strategy, business model, external environment, operating context, and value creation through our six capitals (financial, manufactured, human, intellectual, natural, and social), progress in executing the FPH mission, our outlook, and governance.
The scope of the report includes the financial and non-financial (environmental, social, and governance or ESG) elements of our major business segments, namely, power generation, manufacturing that has evolved into energy solutions venture, real estate development, and construction, where we have major management and operational control. Some ESG material issues may extend to other stakeholders in line with our mission of contributing to the regeneration of the planet and the people.
Reporting Philosophy
Our discussion in the 2022 report conforms with the framework for Integrated Reporting guided by the Value Reporting Foundation (VRF). We have adopted the Philippine Financial Reporting Standards (PFRS) for our financial statements. For the concerns on planet and society, we referenced our ESG data analysis on specific sustainability standards based on their material impacts following the double materiality principle:
Financial materiality analysis used as reference the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD)
Impact materiality analysis or the effects of our business on the planet and people adhered to the Global Reporting Initiative (GRI) and UN Guiding Principles on Business and Human Rights (UNGP). The resulting outcomes were further aligned with the UN Sustainable Development Goals (SDG).
An index of the relevant ESG parameters that we assessed, and the corresponding standards are presented on page 212.
Materiality Approach
The FPH Integrated Report (IR) for January 1 to December 31, 2022, discusses the key elements of our value creation. In addition to business developments and financial performance, the non-financial aspects reported are our mission, business strategy, business model, external environment, operating context, and value creation through our six capitals (financial, manufactured, human, intellectual, natural, and social), progress in executing the FPH mission, our outlook, and governance.
The scope of the report includes the financial and non-financial (environmental, social, and governance or ESG) elements of our major business segments, namely, power generation, manufacturing that has evolved into energy solutions venture, real estate development, and construction, where we have major management and operational control. Some ESG material issues may extend to other stakeholders in line with our mission of contributing to the regeneration of the planet and the people.
Reported Improvements
This year, we communicated the new initiatives in our processes, namely, a) presentation of a point of view on the status of the capitals, b) adoption of the emerging process of total valuation, which includes the use of double materiality in selecting the ESG issues, c) financial tagging of expenditures to preserve capitals, d) disclosure of the implications of the external environment and risks to our value creation strategy, and e) presentation of the impacts of risks on the future of the business and the timeframe.
Assurance and Checks
The report went through three levels of review. The FPH Board provided internal assurance of the report, assisted by its Corporate Governance Committee. The full certification by the FPH Board is provided on the right.
To check the compliance of the report with the Guiding Principles and Content Elements of the ERM Certification and Verification Services Limited (ERM CVS) was engaged to provide limited assurance of selected information. Please see ERM CVS’ full assurance statement on pages 194-203.
How to Read the Report
The key message of the report is our growing understanding of the evolving climate battle we are up against and how this challenge compelled us in 2022 to prepare for this conflict through a more granular road map that will decarbonize and regenerate our businesses since solutions are in sight (see pages 79-83).
The first part of the report describes the group in terms of our purpose, mission, products, and services, as well as the developments in our various subsidiaries over the past year (pages 20-37). The second part presents our operating conditions consisting of our external environment and its implications to FPH, our material ESG issues, our risks and opportunities, and our stakeholder engagement (pages 38-69). The third part shows our progress on our mission, made possible by the upskilling of our subsidiaries on our mission’s environmental, social, and governance pillars and how those skills were applied to advance our decarbonization and regeneration goals (pages 76-85). To substantiate the progress in our mission, the fourth part of the report breaks down how we delivered our strategy through the six capitals that created value for the business and others (pages 86-149). Lastly, we inventoried the evolving future trends and issues we need to confront and how we will continue to strengthen our arsenal of measures to address them (pages 152-157).
Certification from the Board
I hereby certify that the 2022 FPH Integrated Report is a fair presentation of the company’s operations from January 1 to December 31, 2022. The company updated its material ESG issues at the end of 2022, and the disclosures on these material issues in the report were based on accurate information available to the company for the reporting period. This certification is being issued based on the February 4, 2021 authorization of the FPH Board for the annual issuance of an Integrated Report to communicate to the company’s stakeholders its financial and non-financial (environmental, social, and governance) performance and its designation of the Corporate Governance Committee to review and finalize the report.
The Management supported the Board through the inter-departmental Technical Working Groups (TWG) from all participating FPH subsidiaries. The President and COO provided oversight in collaboration with responsible officers from the Corporate Sustainability, Environmental Safety and Health, Enterprise Risk Management, Finance, Operations, and Integrated Corporate Communications groups. Based on the foregoing, the final review of the report was conducted by the Corporate Governance Committee, and the report was presented to the Board. It was authorized by the body to be released on March 30, 2023.
Report Disclaimer
Certain portions of the Integrated Report contain forward-looking statements regarding our growth prospects and outlook. These are based on the company’s analysis of trends, projections, plans, and other information available as of the writing of the report. The scenarios presented are not intended to predict likely future events and outcomes. While we believe that the declared expectations are reasonable, investors and other stakeholders are cautioned that the actual outcomes may differ materially from those expressed or implied. Due to risks and uncertainties that may be beyond the company’s control, future situations are difficult to predict. Two major disruptions, the sustained climate crisis and the Russia-Ukraine war that is evolving into a global economic recession, continue to pose uncertainties to our forecast of the Company’s outlook.
2022 Higlights
Operational Highlights
Financial Capital
PHP170.3 billion
consolidated revenue
PHP23.9 billion
consolidated net income
PHP12.7 billion
net income attributable to equity holders of the Parent
Manufactured Capital
22,489.9GWh
electricity sold
70
business units
2,013,426KVA
transformer manufactured
112,887.6 sqm
residential and commercial real estate completed
132,000.0 sqm
real estate sold and reserved
365,254.0
commercial, residential, and industrial real estate projects leased
Drilling projects for 2 major clients
Natural Capital
127,608.0 hectares natural forests protected
6.7 million tCO2e emitted
1.7 million tCO2e sequestered by watersheds protected
11.6 million tCO2e emissions avoided by using natural gas and RE in power generation
20.1 thousand tCO2e emissions avoided by using electricity from RE sources
1.7 million tonnes waste disposed
2,579.0 hectares across 54 sites of marine habitats protected
Intellectual Capital
Deepening sessions to strengthen FPH’s capability to execute the mission
Sustained IT efforts in pursuit of digitalization
Subsidiaries maintained ISO certifications 9001:2015, 14001:2015, 45001:2018, 55001:2014
Integration of mission in key business functions (business development, operations, product/service offerings)
Financial Highlights
