AIA Philippines shares sustainable investment initiatives
With its rebrand into AIA Philippines last month, the Company began sharing its transformation initiatives that are part of its alignment with the strategic direction of its Hong Kong-based parent company, AIA Group. Among these was its shift to an Environmental, Social and Governance (ESG) approach to embed sustainability into the conduct of its business, with specific focus on five pillars: Health and Wellness, Green Operations, Sustainable Investment, People and Culture, and Effective Governance.
“We want to be at the forefront when it comes to addressing environmental and social issues as part of being a good corporate citizen,” shared AIA Philippines Chief Executive Officer Kelvin Ang. “It’s no longer enough to give a portion of profits to do good, but the higher expectation now is to make sustainability practices a part of our day to day business to ensure a lasting impact in addressing these issues.”
Many companies are now stepping up to protect the environment, with some focused on helping mitigate climate change. For AIA Philippines, one way it is contributing to the alleviation of environmental issues is by investing in industries and companies that support its ESG objectives and avoiding those that promote unsustainable practices, these being part of its Sustainable Investment pillar.
The process of incorporating ESG principles into investment practices did not happen overnight. Following the Investment Governance Framework developed by the AIA Group, AIA Philippines took the first step with the implementation of improved policies, processes, and procedures in all areas of its operations. According to AIA Philippines Chief Investment Officer Arleen Guevara, “The framework addresses continuously evolving governance, risk, and compliance standards, which adapt to the changing market environment while keeping abreast with global best practices.”
With the improvements came actionable plans, such as the exclusion of non-compliant sectors to the AIA ESG Standards, in line with the modifications made to its investment policies. Beginning in the second quarter of 2020, AIA Philippines began its review of its equity portfolios to ensure full compliance with these standards. The Company is also completing its divestment in coal-related fixed income investments, to align with its commitment to adhere to the Group’s ESG Standards.
Deeper and meaningful conversations with partners
AIA Philippines has also begun embedding ESG factors in the fundamental research rating for its equity and fixed income investments. With the requirement of an ESG assessment portion in research reports, an investee company’s ESG efforts are factored in, from ESG-related risks and mitigating measures, to their level of carbon footprint, using globally-accepted calculation methodologies.
Discussion dialogues are also encouraged now to further deepen the ESG engagement of AIA Philippines with its investee companies, with the recent addition of the issue on effective governance to its initial focus on climate/ environmental considerations. Whenever necessary and appropriate, discussions serve as proper venues to communicate the Company’s commitment to the ESG standards.
Proxy voting actions are also thoroughly reviewed to avoid granting consent on corporate actions that are not aligned with ESG standards. Before a vote is finalized, all corporate actions are submitted to AIA for consent and are carefully reviewed by project managers and equity analysts.
“In keeping with our commitment to sustainability, we want to expand our sphere of influence and encourage other companies we engage with to do the same. To have a greater impact, we must do what we can to push for this agenda beyond AIA Philippines. As they say, together we can do more,” explains Guevara.
A lifetime commitment to its Purpose
Taking the first few steps to evolve into an ESG-focused business goes beyond benefits enjoyed by the Company’s customers. This also gives them an indirect opportunity to support businesses aligned with the sustainability agenda.
“The successful implementation of our ESG aspirations lies in the deep understanding of why we, as an organization, are doing it. Business is no longer just about delivering results. We need to focus on the process by which we deliver these results,” remarks Ang. “At the end of the day, these efforts have a profound impact on the world we live in, and go a long way in helping us fulfill our Purpose of helping people live Healthier, Longer, Better Lives.”
Click here to view the full 2020 ESG Report, for more information about AIA Philippines, or visit the AIA Philippines Facebook page, email , or call (02) 8528-2000.