REPORTING ENTITY

The entity that filed this Integrated Report is the First Philippine Holdings Corporation (FPH), the same organization that filed the consolidated financial statements of the conglomerate and its subsidiaries with the SEC in accordance with the Philippine Financial Reporting Standards (PFRS).

FPH is a publicly listed company in the Philippines with office address at the 6th Floor Rockwell Business Center Tower 3, Ortigas Avenue, Pasig City, Metro Manila. The Company operates in the three major island groups of the country, namely Luzon, Visayas, and Mindanao.

SCOPE AND BOUNDARY

The scope of the report includes the business segments where FPH has major management and operational control. These include power generation, energy solutions, real estate development, construction, and health and education services. For the last segment, we are only reporting on the health sector this year while we assist the education sub-segment to complete their ESG processes in preparation for next year’s report. Some ESG material issues may extend to other stakeholders in line with our mission to help the regeneration of the planet and people.

Detailed discussions are provided on our mission, the core pillars of governance, strategy, and risk management, as well as metrics and targets. We also discussed our material issues, the six capitals (financial, intellectual, human, manufactured, natural, and social and relationship) we used through our business model, the value creation process, and the values we generated for the business and our pentad stakeholders (customers, co-creators, earth, communities, and investors).

TIMING OF REPORTING

This IR covers the period January 1, 2023, to December 31, 2023 and is being filed at the same time as the financial report with the Philippine SEC.

No new condition was recorded at the time of the issuance of this IR on April 11, 2024 . Conditions that prevailed during the reporting period were the same as the time of the IR issuance. Thus, amendment of the IR will not be necessary.

LOCATION OF DISCLOSURES

The information on sustainability-related and climate-related disclosures can be found in this IR as well as in FPH’s ESG World platform, which can be accessed at https://www.fphc.com/investor-relations/esg-profile.

SOURCES OF GUIDANCE

Reporting Framework

The International Integrated Reporting Framework was used to guide the report’s structure and content.

Standards

We referenced our analysis of material indicators on the proposed standards in the draft SEC Memo Circular of October 2023, namely the Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB), United Nations Sustainable Development Goals (UN SDGs), UN Conference on Trade and Development - International Standards of Accounting and Reporting Guidance on Core Indicators for SDG (UNCTAD-ISAR), and IFRS S1 and IFRS S2, collectively known as the standards of the IFRS - International Sustainability Standards Board (ISSB). We also used, as a reference, a non-mandated set of standards from the UN Guiding Principles on Business and Human Rights (UNGP).

MATERIALITY

Materiality Approach

The FPH mission serves stakeholders beyond the business fence. Thus, we continue to adopt the “double materiality” approach in this report. This report specifies two points of view:

• “Financial materiality,” which assesses the influence of the planet and people on the Company’s financial performance and long-term value. We look into this to gain  insights on how to protect business value. In our analysis, we used the prescriptions of IFRS-ISSB, SASB, and TCFD as our reference.
• “Impact materiality,” which assesses the effects of the business on the planet and people in determining how the Company can contribute to sustainable  development. Used as references were the prescriptions of GRI, UN-SDGs, UNCTAD-ISAR, and UNGP.

Scoping of Material Issues

Sustainability-related and climate-related risks and opportunities can affect our prospects as well as impede our capture of ESG benefits. Scoping of material ESG issues was based on the following:

• relevance in the implementation of the FPH mission and its value creation for the business and its pentad stakeholders;
• ESG information that will provide context on current challenges and expectations for the decision-making of the Board and Senior Management relative to their  strategy review and goal setting;
• mandatory reporting requirements of Philippine laws and the international conventions signed by the country; and
• ESG requirements of external users of the report.

More information on the materiality assessment method and identified material ESG issues are discussed in the section on Materiality (pages 100 to 107).

OTHER REPORTING PRINCIPLES

Fair Presentation

The climate-related and sustainability-related risks and opportunities discussed in the report are based on the third-party materiality surveys that included a cross section of FPH investors in November to December 2022. Their involvement helped FPH capture the ESG indicators that are important to them in deciding on the prospects of the company.

Comparative Information

For a better understanding of the report, comparable 3-year data are presented under the section on “Values Generated” on pages 108 to 177.

Connected Information

The connection of financial and non-financial information for a coherent and holistic discussion is assisted by the following attributes of the report:

• adoption of integrated thinking principle of the Framework;
• simultaneous submission of both the integrated report and financial report to the SEC; and
• the “system value” approach of our mission that recognizes that business is embedded in and dependent on the planet and society.

HOW TO READ THE REPORT

Our message in 2023 stems from our advocacy in 2022 where we affirmed that “While addressing climate crisis seems to be a daunting task, it is not impossible as there are solutions in sight but we need to work quickly to secure a livable planet”. In 2023, we echo the report of the FPH leadership of our continuing deep analysis of climate measures and options and our focus on full execution next year and beyond to realize our mission and to have a positive contribution to avert the climate impacts. Climate change and the havoc that it brings in the form of a damaged earth and social inequity require government and the non-state actors to now contemplate on how to act as one with climate action becoming an imperative. The world needs a new track to resilience, one that is carbon neutral, nature positive, and socially equitable. We in FPH are committed to do our share towards this aspiration.

Supporting our 2023 messages are our contributions to a regenerative world in the areas where we operate. After the discussion of our performance highlights, the Chairman’s and President’s messages and company profile, below is the flow of our discussion explaining how we created value for the business and our pentad stakeholders.

• We describe the current developments in our business segments under the section on Business Review in (pages 32 to 51).
• The Business Environment that influenced our operating units in 2023 is  presented in (pages 26 to 31).
• We introduce the FPH Integrated Management Framework (IMF), which refers to the core elements needed for value creation in FPH, on (pages 52 to 95). The conglomerate’s IMF is aligned with the core elements of IFRS S1 and S2, namely, Governance, Strategy, Risk Management and Metrics and Targets.
• We share updates on our value creation process on (pages 96 to 99).
• We discuss how we delivered on our Business Strategy through the six capitals that generated the values for the business and others in (pages 108 to 195).
• We project the impacts of the evolving landscape on the business under the Outlook section in (pages 196 to 199).

ASSURANCE AND CHECKS

The report went through two levels of review. The FPH Board provided internal assurance of the report, assisted by its Corporate Governance Committee. The full certification by the FPH Board is provided on page 7. To check the compliance of the report with the Guiding Principles and Content Elements of the Framework, as well as the sustainability standards we used as references, we commissioned the University of Asia and the Pacific - Center for Social Responsibility (UA&P-CSR) as external and independent expert to review the report (pages 202 to 211).

In 2023 and through 2024, we are developing guidelines for ESG Data Assurance. We aim to obtain certification by next year.