Our natural capital comprises the material resources and utilities we use to develop our products and services and, in general, use to run our businesses.  As all of the resources we use ultimately come from the environment, we seek to manage them well, use them efficiently, and conduct activities that give back to our natural environment. More details on our approach to managing natural capital can be found in Annex 3 of our 2020 Integrated Report, available on our website at https://www.fphc.com.

In this section, we present the KPIs we use to monitor our environment-related material ESG topics, discuss  the performance of our businesses within these areas, and review the outcomes of their activities.

Energy Management

Overall, energy consumption across the group slightly declined. This has been due to varying factors in the operations across the businesses. Many of our businesses have had less activities in 2023 than in 2022. But of those that had an uptick in business activity, we can see that there is a shift to using more renewable energy. This shows the progress of our past activities geared towards energy use, efficiency, and sustainability. Details of energy use across our businesses are discussed below:

GHG Emissions and Management

In 2023, FPH had two major activities to enhance our greenhouse gas (GHG) inventory:

Capability Building Sessions for Scope 3 Greenhouse Gas Emissions

In the fourth quarter of 2023, FPH engaged an international ESG services provider to conduct capability-building sessions for the organization to understand the foundational concepts of Scope 3 GHG emissions as well as to do an initial run of developing the Scope 3 inventories of our businesses. The engagement, lasting for 13 weeks, involved several sessions covering: a review of organizational boundaries; value-chain mapping of all businesses involved; carrying out a Scope 3 materiality assessment; understanding the data that needs to be collected; data collection and gap analysis; a trial run of calculating Scope 3 emissions; and a hotspot analysis. Following this project, we endeavor to complete our Scope 3 GHG inventory for the next reporting cycle.

ESG Data Management Platform

The transition to using a formal ESG Data Management Platform, as mentioned previously, carried with it a variety of changes and updates to the methodology used to put together FPH’s greenhouse gas inventory. As this project is ongoing, the full recalculation of previous years’ data has yet to be done. This will be updated in the subsequent 2024 Integrated Report. Nevertheless, the trend of emissions from 2021 through to 2023 is still reflective of the activities that transpired.

GHG Emissions of Business Segments

The following presents the greenhouse gas emissions generated across our businesses for the year 2023. With the transition to using a formal ESG Data Management Platform, we were able to include partial Scope 3 emissions. This will be further refined in the next reporting cycle as we begin to implement our learnings from the Scope 3 project.

Other Air Pollutants

Apart from greenhouse gases, our businesses may generate other air emissions. These include carbon monoxide, nitrogen oxides, sulfur oxides, and total suspended particulates. Most of these are emitted by the natural gas power plants of our energy segment, followed by the generator sets of the construction and energy services segment for drilling geothermal wells, and the generator sets of our real estate segment used to provide backup power in their properties in case of power interruptions. All sources of air emissions are monitored and emission concentrations remain within allowable limits as prescribed by the national government.

More information on the metrics of our power generation businesses is available in the 2023 First Gen Integrated Report, available on its website at https://www.firstgen.com.ph/.

Material Use

The materials used across our businesses decreased in 2023 from 2022, driven by less fuel used in the operations of our power generation segment. Our energy solutions business continues to maintain its production of transformers; our real estate businesses generally had fewer construction activities in 2023; while our construction and energy services businesses had less activity and less fuel use, as mentioned in previous sections.

Waste Management

Solid waste from all our businesses are hauled and treated by DENR-accredited waste haulers. Hazardous waste is appropriately treated according to the requirements of each specific waste type by the same DENR-accredited contractors. 

Between 2023 and 2022, the amount of waste disposed is reflective of the uptick or slowdown of activities in our businesses:

1.  In our power generation business, there has been an overall reduction in waste, particularly non-hazardous waste as there have been no major outage activities. The amount of their hazardous waste however did increase, due to tank cleaning and painting activities for the liquid fuel tanks of FGCEC. 

2.  Our energy solutions business, First Philec, is now under a complete return-to-work regime and thus shows an uptick in the generation of office and cafeteria waste.

3.  In our real estate businesses, waste disposed of in 2023 increased over two-fold. This has been due to Rockwell Land’s completion and subsequent operations of three new properties, more activity in their office properties as more tenants increase their in-office working days, and more activity in their retail segment. In FPIP,  major hauling activities were conducted wherein scraps that were stored in their materials recovery facility were hauled out after a few years in storage. The majority of these scraps were recycled.

4.  In our construction and energy services business, First Balfour shows a significant decrease in disposed waste in 2023 as they had fewer ongoing projects in the year compared to the previous. 

5.  For our business reporting under the health and education services segment, gathering data on waste management begins in 2023 and as such, will likely increase in coverage in the next few years. Mostly hazardous waste is recorded as these are handled by AEI itself, whereas its non-hazardous waste is collected and managed by the property managers where their clinics reside.

Waste management activities of our businesses

The following summarizes the various waste management activities our businesses have been developing to either mitigate the generation of waste or to better manage the waste generated. Several of these activities resulted from the Waste Management lecture and workshop series we conducted in 2022:

* Accounting for non-hazardous waste generated by AEI clinics is still being developed.
** 2022 data of First Balfour was adjusted to account for only waste managed by First Balfour. Data in 2022 FPH Integrated Report included First Balfour data from projects wherein waste was managed by their project clients. Relatedly, First Balfour did not have any hazardous waste disposal in 2022 that they themselves managed.

Water Use and Wastewater Management

Similar to data and trends in waste, the trends in water use of our businesses are generally reflective of the changes in activities between 2023 and 2022, with some notable exceptions:

In the management of wastewater, all our businesses comply with national and local regulations for the appropriate treatment before its release into the environment. All of our offices produce domestic wastewater; this is collected and treated in the wastewater systems of the properties in which we hold office. In our real estate segment, each property has its own wastewater management system that treats the wastewater before release into the nearest bodies of water, in compliance with all pertinent regulations on effluent water quality. For our construction and energy services segment, wastewater from construction and drilling activities is managed by their clients. More details on the wastewater treatment methods of our various business segments and the pathway for treated effluent release are detailed on page 139 of our 2020 Integrated Report, available on the FPH website at https://ww.fphc.com.

Biodiversity and Habitat Protection

Of our major businesses, the power generation subsidiaries have a higher stake in the area of biodiversity and habitat protection as they operate in areas of ecological interest. Of particular interest are our geothermal forest reservations across the country and the First Gas Clean Energy Complex (FGCEC) located in Batangas relatively close to the Verde Island Passage, a marine protected habitat. With their proximity to these areas and acknowledging that the health of these ecosystems is vital to our operations on site, our power businesses lead programs ensuring the integrity of nature in these areas.

All our non-power generation businesses operate in urban areas, with perhaps some exceptions of the construction projects and geothermal drilling operations that First Balfour works on, and in which case it partners with its project proponents to ensure that its operations are environmentally sound.

As the social aspect cannot be separated from the environmental aspect when caring for the environment, the programs led by our business cover both nature’s integrity and the welfare of host communities. This section details the accomplishments related to biodiversity and habitat restoration and management. The information on the social components of these programs is detailed in the section on Social and Relationship Capital.

Bantay Dagat support in Lobo

First Gen’s Center of Center project supports the conservation and protection of the Verde Island Passage (VIP) in partnership with local communities, local government units (LGUs), and other stakeholders in the area. The project began in 2004 along with First Philippine Conservation, Inc. and Conservation International. Part of the program is the provision of operational support to the Bantay Dagat (sea patrols) in Lobo, Batangas. The program, including the operational support, concluded in 2023. The Lobo local government unit has shown maturity in their capacity to continue the work. First Gen shifted to institutional assistance supporting the provincial network plan.

Mini - Mangrove Forest

FGCEC maintains a 10-hectare mangrove area within the complex. Located within the host barangays of Sta. Clara and Sta. Rita Aplaya of Batangas City, this mangrove forest functions as a seat of biodiversity by providing a suitable habitat to an array of both aquatic and terrestrial species. The mangrove forest stabilizes the shorelines, reduces erosion, and protects its vicinity from flooding and storm surges. The forest also has the potential to sequester carbon at a rate of approximately 88.4 tons per hectare.

Adopt-a-River/ Water Body Program

First Gen also continues its long-term partnership with the Department of Environment and Natural Resources (DENR) under the Adopt-a-River/ Water Body Program, which aims to protect and enhance the Cabubulag River in Brgy. Sta. Clara, Batangas City through regular water quality monitoring and cleanup activities.

BINHI PROGRAM

Led by First Gen’s subsidiary, EDC, the BINHI program is our power generation segment’s major program for forest conservation, rehabilitation, and preservation. In recent years, the expertise of EDC in these activities have allowed them to forge numerous local and international partnerships and collaborations, allowing them further to be a regenerative force in the area of forest conservation.

In 2023, EDC invested PHP27 million in its various environmental initiatives and watershed management programs organized under the BINHI Program. The company continues to collaborate with the country’s top foresters, botanists, and wildlife biologists to reforest degraded watersheds; rescue, secure, and mainstream the 145 most threatened Philippine native tree species; protect forests and watersheds; and conserve the diverse wildlife that thrives within the geothermal reservations that it manages.

The following summarizes the 2023 accomplishments under the BINHI program:

Forest Protection

Forest Restoration

Biodiversity Conservation

EDC has a Biodiversity Conservation & Monitoring Program (BCMP) executed by an in-house team comprising of wildlife biologists and foresters in collaboration with esteemed institutions such as the University of the Philippines Institute of Biology (UP-IB), Silliman University in Negros Oriental, and the Philippines Biodiversity Conservation Foundation, Inc. (PBCFI) in Negros Occidental.

Through its BCMP, EDC has documented at least 514 total unique species of fauna, composed of 344 species of birds, 39 species of bats, 25 small to medium-sized mammals, 51 species of amphibians, and 55 species of reptiles within its project sites. Results from the biodiversity monitoring activities conducted in 2023 are currently being validated.

More details on the marine and forest programs of our power businesses, including an assessment of species and their conservation status, are available in the First Gen 2023 Integrated Report available on their website, https://www.firstgen.com.ph.

Mainstreaming of Philippine Native Trees

In total, EDC and its BINHI partners have so far established 41 arboreta, with an additional 2 in development, and 165 tree parks nationwide that serve as safe havens for threatened native tree species.

Other activities of the non-power generation business

Summary
  • Energy consumption across the businesses declined between 2023 and 2022, primarily from reduced activities in certain businesses. Some businesses posed higher ratios of renewable to non-renewable energy use as they transition their energy sources to renewable.
  • Overall emissions significantly increased due to the beginning of FPH’s journey to develop our Scope 3 GHG emissions inventory.
  • Wastes disposed increased, driven by increased activity in our residential and commercial real estate business.
  • Water use decreased, driven by less water intake for electricity production by one of First Gen’s hydro power plants and less intake for cooling in First Gen’s natural gas power plants.
  • Activities under biodiversity and habitat protection led by our power generation business continue to be maintained and created 165 tree parks as of 2023. These incrementally built up natural capital in the long run.
Non-financial Outcomes
  • Overall, the natural capital of FPH’s businesses was maintained. Generally, less material and utility consumption in 2023 preserve our resources. Additionally, the businesses’ activities for biodiversity and habitat build up natural capital.

    At the same time, the activities and programs to better manage our resources required investments and activities within the domain of Intellectual Capital and Social and Relationships Capital—such as the plans and agreements that needed to be made by our businesses to transition to using more renewable energy and developing roadmaps for better resource management such as in FPIP’s Water Sustainability Master Plan.

Financial Outcomes
  • The activities mentioned in the Non-financial Outcomes would need financial investments for their development and execution.