ACEN utilizes an inclusive and iterative approach in crafting and executing a long-term strategic plan. It ensures that risks are managed appropriately using a risk management process as these plans are finalized.
Strategy formulation generally involves establishing the purpose and scope of the organization’s activities, defining the nature of its businesses, and setting long term goals, considering the risks and opportunities it faces and the environment in which it operates.
ACEN aligns itself with the United Nations Framework Convention on Climate Change and the Paris Agreement on reducing global carbon emissions to limit global temperature increase to well below 2 degrees Celsius. Consistent with the Ayala group’s commitment to the UN Sustainable Development Goals, ACEN is additionally focused on protecting the wider environment and creating value for the communities it serves. In Q1 2021, ACEN signed up as a supporter of the Task Force for Climate-Related Financial Disclosures(TCFD). The resilience of ACEN’s strategy under the face of heightening risks of climate change is continually discussed and taken into account in the refinement of the organization’s goals and strategies.
The following are the Physical Risks, Transition Risks and Opportunities identified by ACEN.
The company remains committed to sustainable development and drive the renewables expansion given its key role in the green-led recovery. These renewable energy investments help reignite the economy and create jobs while mitigating climate change.
ACEN has identified the following opportunities that climate change presents to its business model and operations.
These energy transition opportunities are key drivers of ACEN’s thrust towards renewable energy expansion, and complement ACEN’s commitment to Net Zero by 2050.
Risk management is core to ACEN’s strategy setting process. Key risks that could affect the achievement of the company’s goals are considered in strategy setting, and mitigation plans for key risk areas are included in the key result areas for the relevant business units.
The past few years have been very volatile, because of the pandemic, the global thrust towards energy transition, supply chain challenges, and recently the Ukraine crisis. As such, ACEN conducts semiannual planning sessions to review company performance, revisit targets, and recalibrate strategies as needed, depending on new and emerging risks and opportunities identified.
The risk management process is driven by the Chief Risk Officer, who leads the implementation of the Enterprise Risk Management process. ACEN is also represented at the ERM council led by Ayala’s Risk Management unit. ACEN seeks to continuously improve its risk management process by adopting processes and strategies in line with Ayala’s best practices.
ACEN is strengthening its approach to risk management through research and by consulting with risk management experts, including on improved disclosures over management of material climate risks. The recent adoption of the TCFD framework also initiated management discussions on the identification of key climate risks and opportunities affecting ACEN’s projects and the organization as a whole.
ACEN’s project development phase includes a review of the topography, weather patterns, hydrological studies, seismological studies, volcanic activities, and water levels of the site. As part of the insurance management process for new projects, ACEN availed of a natural catastrophe study for its select projects. The study, conducted by Munich Re, a leading global insurance provider, equips ACEN in determining the optimal construction design and engineering mitigation solutions. To see the results of the natural catastrophe study, click here.
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