Lopez Holdings

Six years ago we decided to express in a few words the vision of First Philippine Holdings Corp., which is: “Uplifting lives through key industries and infrastructure that advance national development.”
Today, we live in an era where change hurtles at us with blinding speed. Corporations and business models come and go. The average life span of a Fortune 500 corporation has now shortened from 67 years in the 1920’s to a mere 12 to 15 years. And more critically, we see a fragile world pummeled everyday by climate events.
How then do we “uplift lives” in such a massively disrupted world?
Just last March 2016, I sat with a crowd of over 700 other people here in Manila listening to Al Gore weave his two-­‐hour presentation on the state of the global climate. I was particularly struck as he emphasized this point: “All our infrastructure was built for a world that’s now changing.” Immediately, images of our typhoon-­‐damaged plants in Leyte flooded my mind.
I’m sure you all remember, when Typhoon Yolanda hit in November 2013, much of what worked for four decades, particularly at our geothermal plants, was overwhelmed by a force no one had ever seen before. The forces unleashed by climate change are now more powerful than they’ve ever been, which compels that we build stronger as we move forward in this changed world. But the phrase also rings true from yet another perspective: now, more than ever, the world needs to rapidly switch to a new energy paradigm if we want to keep the planet inhabitable in the near future and for centuries to come.
Almost no one today doubts that climate change is exacerbated by human activity. Global average temperatures are rising and this is leading to more severe weather occurrences throughout the world. According to the US-­‐based National Oceanic and Atmospheric Administration (NOAA):
  • The year 2015 is now the hottest year on historical record globally and it has edged out the previous record of 2014 by a wide margin (+0.16°C, to be precise)
  • Fifteen of the sixteen hottest years on record globally have occurred after the year 2000
  • January 2016 was the hottest January on record; February 2016 was the hottest February, and March 2016 was, likewise, the hottest March ever recorded;
  • In the latest global climate report released just last week, April 2016 was also the hottest April on record; it’s the 5th consecutive month that the global monthly temperature departure from average has surpassed 1.0°C; and also the 12th consecutive month that a monthly global temperature record was broken—the longest such streak in the 137 years of record keeping.

So, it should come as no surprise if 2016 shatters 2015’s record as well.

The world is now 1°C warmer than it was in pre-­‐industrial times (the mean global temperature then was 13.7°C), which means we only have 0.5° -­‐ 1°C to go before we exceed the Paris COP 21 commitment of restraining the average global temperature rise to less than 2°C from what it was in pre-­‐industrial times. Beyond this threshold, scientists acknowledge that the world becomes extremely dangerous for its inhabitants and Yolanda will be nothing compared to what we will see then. It is now undeniable that human-­‐induced climate change is here and just this slight one-­‐degree change has already produced a highly disrupted, extreme–weather world.

With our current trajectory, more than half the species on earth today could be wiped out before the end of the century. Many scientists are calling this the sixth era of mass extinction over the last 450 million years; the other five occurred way before humans were around. The main difference between this and the other five is how rapidly the extinction is occurring today because of man-­‐made climate change.

As far back as 1981, then NASA Climatologist James Hansen was already advocating that the earth’s atmospheric concentration of CO2 should not go beyond 350 parts per million (ppm) if we are to maintain the stable climate that human civilization has been accustomed to over the last 11,000 years. But in 1985, when global CO2 concentrations breached this number, the target was reset to 450 ppm and a maximum temperature rise of 1.7°C from pre-­‐ industrial times. His view then, shared by many other scientists and being borne out by what we are seeing in the news everyday, is that a 1.7 or 2°C target is already a “disaster scenario” which will bring us back to conditions that existed 125,000 years ago where sea levels were 4-­‐6 meters higher than today.

Many experts believe that even if all the COP 21 targets are met, we’re still headed for a world that’s 2.5-­‐3°C warmer. This is probably why the charismatic Christiana Figueres, who led the Paris climate talks, believes that despite its rousing success, COP21 is only the first step; much, much more still needs to be done.

This year, carbon concentration already stands at 407.57 ppm and we’re no longer likely to see it go below that in our lifetimes. The world has already used up 90 percent of that grudgingly revised carbon budget and, at current accelerating emission rates, we will likely use up the rest by 2020 or shortly thereafter. Yet the energy infrastructure being built today still threatens to “lock-­‐in” these deadly carbon emission patterns decades into the future. CO2 stays in the atmosphere for thousands of years. The later we all take action in reducing carbon emissions, the more difficult, drastic, and impossible those reductions will be. Much of the warming already occurring will trigger widespread tipping points and feedback loops on ecosystems that cannot be reversed and will exacerbate climate change even more. The world has much less time to act than previously believed.

Fatih Birol, Chief Economist of the normally conservative International Energy Agency (IEA), was quoted in an article by The Guardian following the agency’s release of the World Energy Outlook report in November 2011: “The door is closing. I am very worried — if we don’t change direction now on how we use energy, we will end up beyond what scientists tell us is the minimum [for safety]. The door will be closed forever.”

The same article from The Guardian continued with this: “Yet, despite intensifying warnings from scientists over the past two decades, the new infrastructure even now being built is constructed along the same lines as the old, which means that there is a “lock-­‐in” effect — high-­‐ carbon infrastructure built today or in the next five years will contribute as much to the stock of emissions in the atmosphere as previous generations. The “lock-­‐in” effect is the single most important factor increasing the danger of runaway climate change.”

What’s even more disturbing is that our country and millions of less fortunate Filipino families are bearing, and will continue to bear, a disproportionate share of the devastation being wrought on the planet by climate change. In a report by Germanwatch, which releases the Global Climate Risk Index yearly, the country that suffered the most weather-­‐related disasters during the 20-­‐year period 1995-­‐2014 was none other than the Philippines (the Philippines recorded 337 events, Vietnam -­‐ 225, Bangladesh -­‐ 222).

We can see why it’s no coincidence that four of the five most powerful and destructive typhoons to hit the country happened in the last five years. Indeed, climate change is a disruptive force on the environment that carries ripple effects on everything: from public safety and infrastructure; food, water, and energy production; on controlling diseases and poverty alleviation; and really, life as we know it on our planet. If any country in the world has a stake in seeing global carbon emissions reduced, it’s the Philippines, where millions more innocent lives will be destroyed or lost if the march towards a warmer world cannot be stopped. With our subsidiary, Energy Development Corporation, having literally been at the center of events in 2013, we witnessed firsthand the devastation and suffering wrought on so many lives in the days, months, and years following Yolanda. That experience will always be a force that quietly but intensely guides how we move forward as a business group.

Climate change doesn’t only bring more powerful typhoons but also drier summers. The disruption of the earth’s water cycles with just a 1°C warming so far is already wreaking tremendous devastation. I’m sure you’re all aware of the massive wildfires in Canada that have already displaced more than 90,000 people, destroyed more than 400,000 acres of forest, and will cost insurers upwards of US$ 9 Billion. The massive forest fires are being fought by no less than 500 firefighters, 19 helicopters (four of them heavy-­‐lift), 31 air tankers, 44 pieces of heavy equipment and 88 fire engines. Despite the enormity of resources deployed, the blaze is expected to continue on for several more months.

Closer to home, these past few months, we’ve seen how drought from abnormally hot weather severely reduced agricultural food supply in several provinces, 18 of them now under state of calamity-­‐-­‐-­‐Palawan, Guimaras, Iloilo, Cebu, Bohol, Negros Occidental, Zamboanga del Norte, Bukidnon, Davao del Sur, Davao Oriental, North Cotabato, General Santos City, South Cotabato, Sultan Kudarat, Sarangani, Basilan, Maguindanao, and Butuan City; wildfires also burned hundreds of hectares of forests in Mt. Kitanglad, Mt. Banahaw, Mt. Kanlaon, and Mt. Apo, even threatening our power facilities in the latter. Fortunately, there was no damage and no lives lost but drought and wildfires were yet another warning of how a climate changed planet could strike us.

Disaster preparedness and response must now become a prime area of competence and expertise. It’s not just a question of how well we can do it but also how seamlessly we coordinate and integrate this capability with that of our host communities, as well as local and national governments and other private companies. Climate change adaptation isn’t something you can do alone but within the context of wider and smarter collaboration with everyone else.

The Philippines performed a crucial role in the recent Paris COP 21 climate talks, chairing the Climate Vulnerable Forum (CVF)-­‐-­‐-­‐an international partnership of countries highly vulnerable to climate change, and the V20-­‐-­‐-­‐the group of finance ministers representing twenty of the most vulnerable nations in the world. Both the CVF and the V20 provided the much-­‐needed emotional plea for a decarbonized world and although the agreements reached in Paris were dramatic, experts know they are still not enough. The world is still in dire need of more such voices to turn the tide in time to avert a global catastrophe. Sadly, however, the country’s credibility was built on the backs of thousands of Filipino lives, homes, and livelihoods that have already been lost and destroyed by climate change. The power of that voice grows only if we show the will to decarbonize our own economy. Conversely, that power dies when our actions are not consistent with that voice. We have no choice but to start walking that talk if we want the rest of the world to heed those urgent calls.

There are times when I hear otherwise responsible quarters from the business sector and our power industry reason that since the Philippines is responsible for only 0.3 percent of global carbon emissions we have the right to continue building more coal-­‐fired power plants. Doing so, the argument goes, will help us reduce power costs, create more jobs, and allow the Philippines to catch-­‐up with other nations and industrialize. That way of thinking could have passed muster a decade ago. However, given what we know about global climate today, that assertion, even if we choose to adopt such a parochial-­‐-­‐Philippines only-­‐-­‐perspective, is downright thoughtless and unconscionable. For every avoidable ton of carbon spewed into the air reverberates onto millions of vulnerable Filipino lives with an impact that’s disproportionate with the rest of the world. Meeting the economy’s power demand with more coal-­‐fired plants today means “locking-­‐in” those high-­‐carbon emissions for decades. And more time wasted changing course only means more lives lost, devastated, and more of our world vanishing, never to be recaptured again. This is a pivotal time in the history of the world and so much depends on us thinking and rowing in the same direction, taking responsibility for our respective piece of the biosphere and doing our share no matter how small. Business-­‐as-­‐usual is a sure road to disaster. These are extraordinary times that call for extraordinary change and everyone must shift to thinking about the quickest route to a decarbonized economy. The technology to do this is already here. It’s just our mindsets and our conversations that need to be transformed.

It is our aim that FPH and its subsidiaries will be among the bright navigating beacons of Philippine industry, lighting pathways towards a decarbonized economy. It will not be easy; we will have to explore many roads not yet taken and new business models that challenge old paradigms. This is precisely how opportunities will be created and won. I’m hopeful that soon, more in the Philippine business sector will move toward those junctions where their economic interests converge with that of society and the environment as well.

We are setting a higher bar for ourselves but, for us, it cannot be any other way. We will help power our nation’s growth ambitions yet achieve this in ways that recognize the need for a livable Philippines and a livable planet. TODAY, LET ME STATE UNEQUIVOCALLY AND FOR THE RECORD THAT FPH AND ITS SUBSIDIARIES WILL NOT BUILD, DEVELOP, OR INVEST IN ANY COAL-­‐FIRED POWER PLANT. I’M CERTAIN THAT WITHOUT HAVING TO LOOK TOO FAR, THIS COUNTRY ALREADY HAS ENERGY ALTERNATIVES THAT DO NOT MORTGAGE THE FUTURE OF OUR CHILDREN AND THE FUTURE OF OUR PLANET.

I believe the pioneering entrepreneurial spirit to accomplish this is alive and well at First Philippine Holdings and the Lopez Group. It is something we have done in the past and something we will, with certainty, do again. Times may be tough but we are a business group that shines when faced with that combination of challenge and purpose. We have the opportunity to address one of the most pressing needs of our times. We cannot ask for more.

Thank you and we look forward to your companionship on what will be an exhilarating and purpose-­‐filled journey that reinvents how we will “uplift lives” towards a more sustainable future.


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Lopez Holdings Corporation (formerly Benpres Holdings Corporation)
4/F Benpres Building, Exchange Road, 1605 Pasig City, Philippines

  • Trunkline: (632) 449-2345
  • Fax: (632) 634-3009