Ayala, SM spearhead sustainability agenda

MANILA, Philippines — Conglomerates SM Group and Ayala Corp. are taking an active role in the private sector’s involvement in sustainability reporting and sustainable development.

At the first Global Reporting Initiative Sustainability Summit at Conrad Manila, SM vice chair Teresita Sy-Coson said the agenda of businesses today is closely linked with sustainability and all are faced with greater predictability due to the devastating effects of climate change.

“As more and more businesses get together to pursue the objective of operating sustainably, there is a need for us to have common measures on how we are performing,” she said.

During the forum, Ayala Corp. chairman Jaime Augusto Zobel de Ayala said in order for businesses to remain relevant, they must contribute to society as a whole.

“As we evolved and adjusted our own business models to be far more inclusive in meeting the needs of a much broader consumer segment, we have identified three key challenges to operating within the base of the pyramid,” he said.

 He cited the operational challenge. “There are implications of affordability and access during the initial entry into low-income consumer markets. For example, lower disposable incomes limit the amount of a product that can be purchased at any one time. This is why ‘parceling’ or purchase-as-needed small amounts have become popular in emerging markets,” Zobel said.

Zobel also cited the fundamental culture challenge as corporate decision-makers do not typically come from the base of the pyramid.

“Finally, there lies the challenge of improving the overall framework for doing business, with uncertainties in regulation and enforcement of policies increasing the complexity of developing inclusive businesses,” he said.

From these experiences, the single most important take away is the need for businesses to be open to experimentation and to look at business models from a new and innovative perspective, he added.