BUSINESSWORLD: Planting that ‘first tree’
July 17, 2009

ONE WOULD be correct in assuming that corporate social responsibility (CSR) refers to philanthropic ideas that range from feeding programs to livelihood essentials but one group sees it another way.

First Gen Corporation considers maximizing core strengths that will, in the end, provide the best benefit to just about anyone.

Planting a tree, for example, will not directly benefit a poor family. But when one looks closer at the supply chain, the tree indirectly benefits that family.

First Gen aims to plant that tree.

The company is the largest vertically-integrated power generation company in the Philippines with an installed capacity of 2,852 Megawatts (MW). Practically all its plants use indigenous energy resources, such as natural gas, hydro- and geothermal energy.

"As we think of our CSR initiatives, we have to ask ourselves... where can we have the greatest impact?," First Gen president and chief executive officer Federico R. Lopez said.

Citing a 2006 article from the Harvard Business Review by Michael Porter and Mark Kramer, he noted how corporations, no matter how big they are, cannot solve all society’s problems. Instead, a company should first identify the problem and focus their efforts on solving it with the available resources and expertise.

"One thing about our plants is that they exist side by side with the best of what nature has to offer," said Mr. Lopez who is also president of First Philippine Conservation, Inc., a foundation that supports biodiversity conservation.

The company’s so-called environmentalism kicked in when the company operated the 1,000-MW Sta. Rita and the 500-MW San Lorenzo plants in Batangas in 2000 and 2002, respectively.

Based on its 2008 annual report entitled Responsible Generation, a major project that the firm implemented was the protection of a mangrove area inside the compound.

Mangroves act as filters for estuarine waters and act as a carbon sink that captures and stores carbon dioxide and other pollutants.

The firm has since expanded the original area of the mangrove. It is now home to 28 different species, and hundreds of trees and plants.

A nearby beach, which is also overseen by the firm, is a nesting site for Olive Ridley turtles. First Gen intends to maintain this, as the turtles return to their nesting grounds.

Environmentalism further became a byword when First Gen purchased the Philippine National Oil Co.-Energy Development Corp. (EDC) in November 2007, the firm that sells geothermal energy.

To be able to make use of the energy, however, a healthy watershed should always be harnessed, Mr. Lopez stressed. Geothermal energy is dependent on steam and heat coming from the earth.

"The geothermal reservoirs are also recharged naturally via rainwater. However, to keep water from being lost as runoff, it is critical that we maintain a healthy forest cover," he said.

EDC has long been at the forefront of the reforestation efforts. A major stakeholder of Mt. Apo, for example, EDC has helped bring back the mountain’s former grandeur.

The First Gen subsidiary has, in fact, guarded the forests by organizing local communities to patrol against illegal logging.

"All these programs for the environment and communities were already being done by EDC management before we acquired it in 2007. What we intend to do is build on that and strengthen these programs," Mr. Lopez said.

To this end, First Gen and EDC launched last December a major reforestation project called "Binhi: A Greening Legacy."

"The unique feature of the program is the planting of rare and indigenous tree species to reforest 10,000 hectares with 6.5 million of these trees over 10 years," Mr. Lopez said.

The program consists of four modules: Tree for Food, which fosters livelihood by re-vegetating open and denuded forest lands; Tree for Life, which assists natural regeneration by bridging forest gaps; Tree for Leisure, or putting up of ecotourism parks; and Tree for the Future, or the urban forestation of prime endangered tree species.

Mr. Lopez does not see consider this project as plain environmental activism.

"CSR is not just peripheral to our operations. This corporate social responsibility is at the heart of our corporate strategy and reflects the choices we make," he said.

As a power firm, First Gen aims to bring about competitive power rates. At the moment, the country’s power rates are higher compared to those in neighboring countries.

"This is mainly due to a high dependence on imported energy relative to our Asian neighbors... This is why, we see ourselves as being on a mission to develop more indigenous power sources for the country," he said.

This brings us back to the tree and its relation to the poor family. Lower power rates provide relief for different industries that in turn, will hopefully benefit and augment that family’s income.

This result, Mr. Lopez said, can only be achieved if the environment is properly cared for and looked after.- Ira P. Pedrasa

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