Lopez Holdings


Remarks of Federico R. Lopez, chairman and CEO, at the First Gen Corporation Annual Stockholders' Meeting on July 29, 2020
Held via https://agm.conveneagm.com/fgen_asm2020

Good morning.

As I was writing this message to our stakeholders for our very first Integrated Report, the whole world was in varying stages of lockdown from the COVID-19 pandemic. With the prospect of a vaccine not yet in sight, we’re all still in a dangerous “dance” with the virus --- simultaneously avoiding it, yet trying to regain some of the normalcy of our past lives that now feel like a world away. Prescient voices warned of this possibility. We all assumed that dystopian events like this only happen in movies and sci-fi novels and most of us dismissed the probability of it even occurring in our lifetimes. We convinced ourselves that modern technology and medicine will always come to the rescue. So we went on with our lives.

What is overwhelming us today in this pandemic is but a sneak preview of the geologic-scale changes that will result from an unabated climate crisis. These changes are already evident in record- breaking temperatures and natural catastrophes hitting the planet every year now. Early this year, a record-high temperature of 20.75 degrees Celsius was set in the Antarctic. At the time of this writing, the Arctic also broke historic records with a high temperature of 38 degrees Celsius. The incessant rise in the world’s carbon emissions has put us on a trajectory of a global temperature rise of between 3.7 to 4.8 degrees Celsius by 2100. That’s an unlivable planet!

Today, we have a narrowing window left to keep warming within the desired 1.5 degrees Celsius agreed to in Paris under COP 21, or watch it run away from us irreversibly. The upcoming decade of the 2020’s will critically determine whether we succeed or not. To succeed, humanity needs to reduce carbon dioxide emissions by 6 percent every year until we achieve net zero emissions in 2050. For perspective, the lockdowns and passenger transport restrictions resulting from the pandemic are expected to bring emissions down this year by about 8 percent; which means we need a COVID-scale catastrophe every year until 2050 just to achieve the 1.5 degree Celsius target! How did we get into this existential crisis?

Central to all this is the all-too-common mindset that man is apart from, and not a part of, nature --- that nature exists to serve our wants and needs, regardless of the toll we inflict upon it. Today, our global population of 7.8 billion humans consumes an estimated 1.75 Earths per year. That’s 75 percent more resources than our planet’s ability to replenish. According to the Global Footprint Network, US lifestyles consume an average of 5 Earths, which many others on the planet aspire to attain. Yet the pattern of growth is broken: instead of lifting all boats, it has left too many behind. The top 10 percent of the world now owns 82 percent of the wealth, a trend that’s set to worsen over time. The populism that’s sweeping the world is a symptom of this growing disenchantment with business, politics, and life as usual. Clearly, our planet’s natural environment and its social fabric are already ripping at the seams.

The natural, social, and political forces being unleashed in the coming decade will likely make it the most challenging and most disruptive business has ever seen. The COVID-19 pandemic is but a mere “fire- drill” for what’s coming and demonstrates the scale at which things need to change. We are living in a time of great paradigm shifts, and businesses that seek to thrive in this era must be able to reimagine and redesign themselves for this new world.

In this kind of a world, corporate sustainability that seeks to simply “tick the box” or do less harm is no longer good enough. Sustaining our trajectory today will result in disasters that are not only greater in scale, but also are more unjust towards those who do not have the capacity to cope with the devastating changes that are already here and continue to escalate.

Businesses need to align themselves, their resources, and their capabilities towards a mission that seeks to elevate everything they touch – their customers, employees, suppliers, contractors, the environment, communities, and, of course, their investors. There is an urgency for all of us to go beyond incremental sustainability and transform into regenerative forces that align our profit engines with the need for a better world and a safer planet. I am certain that humanity, collectively, has the creativity and innovative energy needed to solve the world’s greatest problems. Unlocking these will be the foundation to some of the greatest business opportunities in the coming century.

This year we crystallized our Mission at FPH and our group of companies and that is: “To forge collaborative pathways for a decarbonized and regenerative future”. It’s a deliberately high bar and we’re nothing short of humbled by it. But we expect this short phrase to be the beacon that guides us through this turbulent decade and beyond.

We’ve also put into words our Purpose and Chosen Path, etching out the role we see for ourselves in the coming years with greater clarity. It reads as follows:

Our Purpose

We recognize that our planet’s life support systems and social institutions are now at a breaking point. Unbridled consumption and primacy of bottom-line growth are at the root of the climate crisis, our alienation from nature, and the profound social and economic divisions, that have become existential threats to humanity today.

Overcoming all of these challenges will require paradigm shifts in the ways that we think, live, and do business. It is now clear that pursuing sustainability that seeks only to do less harm is no longer good enough.

Instead, we need to create symbiotic, mutually beneficial relationships with nature and society that benefit more than just shareholders.

Businesses today must urgently become a regenerative force that elevates everything that they touch – customers, employees, suppliers, contractors, the environment, communities, and investors.

The transformation cannot be done by entities working alone. We are mindful that we exist within highly diverse and nested systems, and that we must all play unique, reciprocal, and synchronized roles in a world that needs to be healed.

Our collective success will be measured by how quickly we can decouple economic and social prosperity from the destruction of our planet’s life support systems.

We choose this path because it is the only way to a destination where everyone has the opportunity to thrive and prosper on a healthy planet. We choose this path because we believe it is the only way to create lasting value for all stakeholders and not just shareholders. We choose this path because it is inseparable from the Lopez Values that have, and always will, define us.

Our Chosen Path

We choose to harness only those energy sources that allow us to meet the needs of the present without harming the ability of future generations to meet theirs.

With a deep understanding of the evolving needs of our customers, we will deliver resilient and compelling energy solutions that will promote energy productivity, empowering our customers to make the right choices and to do more with less energy, simultaneously reducing their carbon footprints.

We will lead the transition to a decarbonized energy system in line with the UN IPCC target of limiting global warming to 1.5 °C, by focusing on the following:
• We will build on our platform of renewable and low carbon energy assets and complement them where appropriate with flexible generation and storage technologies.
• We will expand the use of clean and renewable geothermal resources that provide uninterrupted power 24/7 globally, deploying our extensive experience in geothermal development, gained over four decades in the Philippines.
• We will operate our geothermal and hydrological resources with a regenerative mindset that will strengthen and enrich the communities and biodiverse ecosystems in which we are all embedded.
• We reaffirm our 2016 commitment that we will not build, develop or invest in coal-fired generation plants because to do so would be inconsistent with the UN IPCC target and lead to a planet that is uninhabitable for future generations.
• We believe that natural gas, as the least carbon-intensive fossil fuel, will continue to play a vital role in the transition to a decarbonized world for some time. Natural gas-fired plants will enhance grid security and resilience and support the development of more variable renewable sources such as wind, solar, hydro, and storage. Gas-fired plants can respond quickly and reliably when variable renewable sources are not available, allowing the lights to stay on.
• We will pioneer the development of a liquefied natural gas(LNG) terminal that will introduce reliable, flexible, and cost-competitive LNG to the Philippines. Draft Minutes of the 2020 Annual General Meeting of First Gen Corporation July 29, 2020 6 | Page LNG will enable our own and other existing gas-fired plants to continue to operate by initially supplementing, and eventually even replacing, declining indigenous natural gas reserves. The LNG terminal can serve as a hub that will underpin new large and small-scale LNG opportunities as a means to introduce natural gas throughout the many islands of the Philippines.
• We will actively pursue new, innovative, economically viable technologies that can further reduce the carbon intensity of natural gas, recognizing that it may otherwise become necessary to phase natural gas use down in line with decarbonization targets. 
• We will lead the development of decentralized and resilient microgrids that enable universal access to electricity in ways consistent with social justice and the transition to a decarbonized future.

As we progress along our chosen path, we will always seek to enable shared prosperity and well-being in ways that will regenerate our planet for future generations.

The ideas and principles behind our words are not new. We’ve been living and breathing most of those principles the last decade. At times we felt we may have been getting ahead of ourselves and where our investors wanted us to be. But even back then, just like today, we’ve always been playing for the long term, reading the tea leaves, and conscientiously transforming ourselves into what the world needs us to be.

Thank you for your continued trust and confidence. I sincerely hope you’re encouraged to come along with us on what will be a rewarding and purposeful journey.


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Lopez Holdings Corporation 
16/F North Tower, Rockwell Business Center Sheridan, Sheridan St. corner United St., 1550 Bgy. Highway Hills, Mandaluyong City, Philippines

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