 Good afternoon. We're here this afternoon to discuss global citizenship and what kind of innovations are possible. I'm Pranjal Sharma. I'm a consulting editor with Business World from New Delhi, India. One of the key thoughts that we have to look at is that there has been a bit of a trust deficit if I can make that understatement between big corporations and the civil society. So the issue is that what can be done and what must be done to ensure that the gap is reduced to the minimum as possible. To join me in this discussion on what kind of innovations are being done and can be done across the world is a fantastic panel with me. On my right, I'd like to introduce Adil Garaz from PepsiCo. You have Asia Pacific. So we'd be very keen to know what you've been doing across the region. Martin Parker from Swissry. Martin, again, you have a huge influence over the companies and the ecosystem that you deal with. We'd like to know what can be done and whether you can actually leverage all the financial muscles you have to make a real change. Sebastian Marot has been working with several underprivileged sections of society across different countries. And again, as a social entrepreneur, Sebastian, we'd be really keen to know how you have been working. On my left over here is Jaime Ayala of Ayala Corporation. Of course, he's a resident of Manila and a very prominent industry leader of ASEAN. Jaime, we'd be very keen to know how you are taking on the issue of citizenship. We also have Yang Shu from Huawei Technologies from China and again, technology platforms, telecom platforms play a very key role in bringing societies together. To begin with, I'll request all of you to share your thoughts for maybe a couple of minutes each. We get into a great conversation. And then I'd like to invite the audience also to share some of your thoughts. Adil, if I could begin with you. PepsiCo is a great brand who works across so many geographies. What is it that you do to become a good global citizen? Yeah, let me start by talking very briefly about the geography that we cover here in Asia Pacific. We run businesses in 22 countries. We have 4,500 employees in Asia Pacific, add to this 70,000 employees in our bottling partners, a wide range of brands, global brands, regional brands, and local brands. So with this said, let me talk about PepsiCo. Overall, PepsiCo is committed to running a sustainable and responsible business. Because we truly believe that the success of our business is very linked to the success of the societies where we operate. But simply, if our financial success comes on the expense of the communities, consumers, the environment where we operate, it will never be a sustainable or viable business. So from this belief, we came up with the PepsiCo's philosophy of performance with purpose. In practice, it means four things. One is providing our consumers with a wide range of foods and beverages from treats to healthy eats. The second one is making sure that we minimize our impact on the environment wherever we operate, with specific focus on water, energy, and waste. The third one is providing a safe and inclusive environment for our associates in the workplace. And the last, but certainly not the least, is respecting, supporting, and investing in the communities where we operate. Has it increased the respect Pepsi has in the communities you are? I believe so. And when we measure success, we measure it two ways. One is the impact on the community and the beneficiaries, how many. So one of our projects, and probably I'll be talking about it at the later stage, is impacting close to 2.2 million people in the Philippines. And it has to do with water. We also measure success based on how our associates feel about it. And we have tools to measure this, like our organizational health survey. And it makes a big difference, by the way, and how people see the organization, how people feel proud about being part of this company. So that's the purpose element. The performance, obviously, is top tier financial performance while creating shareholder value. And they are both very linked. Thank you. Jaime, if I may come to you. Philippines and ASEAN and a lot of emerging markets, one of the key problems is the disparity of economic status. And organizations like yours have a great responsibility in working towards removing and reducing that. Atoyala, what do you do? Well, I'd like to echo a little bit the words of Mr. Gadas. I think all of us who are part of the corporate world and are working with institutions that interact in emerging markets, in many ways have to be relevant also to the needs of society beyond the products and services that we provide. Ever since I came back to work in the Philippines, that issue has been a glaring one. We're part of a community here in Southeast Asia that's growing. The growth of each of our countries has been tremendous. The populations are large. But there are still tremendous gaps that need to be filled. I think governments are trying hard. But I don't think it can be left in their hands alone. So all of us as institutions, with an inordinate access to capital, to great people, to brands, have to participate, I believe, in addressing some of the socioeconomic challenges, I guess, that we all face. So in our company, the way we looked at it, is once upon a time, 10, 20 years ago, the Ayala Group and the different companies that are part of our group, we're really dealing with products and services on the higher end of the income brackets. And over time, we decided that we needed to remain relevant to the needs of the Philippines. And so the first step we took is while we were doing a lot of work on the foundation side and trying to participate in addressing some of the social development and needs of the country, we, over time, started to integrate more formally rather than have it as a parallel track, have it come more formally and integrated into the business models we serve. And just to have a couple of examples as part of a contribution to the dialogue, first and foremost, we needed a set of products and services that would hit a whole different market segment to what we did in the past. That needed technology, that needed new ways of doing things, and then needed us to take cost down without sacrificing quality in some way. So you would go there to these markets because you want to serve the society even if the profit margins are reduced? Well, my feeling is you have to have sustainable models. So profitability is always part of the equation. That's the way I feel. There will always be a component of philanthropy and everything one does, but I believe the real solutions in society come from sustainable solutions. So you take our telecommunication business. We've actually worked very closely with the company of Mr. Yang, Huawei, to really bring the whole cost structure of our telecommunications infrastructure down to a different level to be able to address the needs of a market that traditionally could not afford a phone. And I think the technology provided, the network provided and the handsets provided, have now come down to a point where we can be relevant to the vast majority if not all the population and the way we address them, the way they pay, the way they use the service. In the banking side, we've moved much more aggressively in conjunction with our telecommunication company into the microfinance field. In housing, Ayala land, one of our subsidiaries just had one product line at the top of the market. Our company now has five product lines and we're dealing in housing. Sometimes it's just $10,000 a unit for one house. That was unheard of in the past. So we're now touching a much wider base and being much more relevant, I guess, to the needs of society at large. That's fascinating. I think when you say that to have a sustainable structure to take care of society where you're not doing pure philanthropy and it's not freebies that you're offering, but create a structure where there is a business case for going into providing services which the society really needs. I'll come back to you in this time. Let me come to you, Yungshu. You, again, as segueing from what I may have said, as a technology provider, and you come from China where, again, issues of disparities are very high, how, what does Huawei do to be a responsible citizen? Well, yeah, first of all, thanks to the appraisal and acknowledgement from Ms. Ayala, you know. Huawei is a leading company of providing the total asset distribution to the world. And we believe that you enrich people's lives through providing a better collection is our mission innovations. And we are doing well on that. So far, we are providing the connectivity to the more than one third of the worldwide population. We have done it well, and we are doing it well. But today, there is always a challenge that how to build up the collection with a better speed, faster speed, wider spectrum, and better coast to serve more and more peoples. However, today's my, I want to emphasize more on the entrepreneurship, which, you know, for technology company, is what always plays so important roles in our mindset. For example, I want to quote a few words from Narapage, the founder of Google's, he wrote these words in his latest opening letters to the Google stakeholders. Let me write a few words. He said, it's true that over time, many companies get comfortable doing what they have always done with a few incremental changes. This kind of incremental change leads to irrelevance over times, especially in technologies companies, because change tends to be revolutionary, not evolutionary. Good to know that Huawei is inspired by Google. Yeah, I think good companies inspire the world. You know, I have been working in the technology field for more than 20 years, and we know human beings come from industry revolution, then the information revolution, the internet revolution. So I would rather, being a technologist, I would rather believe that disruptive is always playing more important role than the incremental. And also the revolution is always playing more important role than the evolution. This is people's choice. You know, if companies don't have the poorest exchange of society, you'll have a revolution in a way you don't really want. But you know, Martin, I want to come to you. It also seems to me that sometimes corporations make a virtue out of a necessity. You have to go into new markets, and then they say that because we're going into new markets and markets which are untapped, it's really a great thing that we're doing. How do you see it? Yeah, thanks. I think just, if I may, just introduce Swiss Reef first. I think it's probably a brand that's not so well known around the room. We're a 150 year old corporation that does insurance for insurance companies, as well as large corporations. And in terms of the global citizenship for us as we move around the world, for us it's an absolute business imperative and it's not a charitable piece. So we certainly agree with you. Firstly, it's a talent proposition. Everybody is fighting for talent in the world. It's very hard to retain people. And we find that being attentive to climate change, the environment, having sensible, sustainable procurement policies, very much and diversity inclusive policies for our staff are very much retentive pieces. And people are expecting us to be really good citizens on a global scale in that way. It's also a license to operate. So when we look around at our stakeholders, our shareholders, our customers, they expect certain standards of us as a business. But we cannot be responsible for everything in the world. So we've decided to focus very much to things close to our core businesses. So within that, our innovation and our efforts have been made around, as I mentioned, climate change and adaptation, disaster resilience is a very important thing for the insurance industry. But there are unserved members of the population at the bottom of the pyramid. So we spent some time on microinsurance and helping water access and sustainability and also health risks. So just to give one quick example of that, we do some work with water.org. It's Matt Damon's charity. But this is linking into microfinance with microinsurance to enable people to put water supplies into the home and sanitation into the home in Bangalore. So this is something we're proud of, just one small example. We don't see that there is a charitable element, but that's not the principal driver. It's helping these people become sustainable over time and the opportunity for us in business is the microinsurance. But insurance companies have a tremendous power over corporations when they are ensuring them for various activities they can control and dictate their practices to make sure that the insurance premium is down, is lower. Do you use that power? It's... In reality, I think it's quite as strong as that. So we're in a scenario where if you're... That's a confession. Please put it on record. If your factory doesn't have sprinklers, we may insist your factory should have sprinklers before we'll insure you. But I think... You should just jack up the premium then, right? Yeah, we can choose not to do business with certain people who we feel are not being good global citizens in some ways. So sweatshop factories, that type of thing, may not be within our desirable risk transfer area. And we can encourage global citizenship, of course, but in an insurance transaction, if you were buying car insurance and somebody said, we only insure your car if it's a hybrid, I don't think you'd necessarily run out and buy a hybrid. So our power is limited. We can influence the risk management side. Thank you. I thought I'd come to your last, Sebastian, because you're closer to the ground. You are a social entrepreneur yourself. Do you believe in what the big corporations are saying? I come with a sense of urgency, and I will oversimplify, and I'm sorry, but basically for me, the model of... The current model doesn't work. The quick money and the minimum time, maximum profit, minimum time, doesn't work. The planet shows clearly that it's coming to saturations. Are you saying that big corporations globally are not doing enough and they're looking... I'm only for quick profits? I'm saying that in general, what's done is not sufficient. I think that the planet doesn't do it, the consumers want something else, the employees. Socially speaking, we're on places where it's very unstable because of the gaps that are being created. And I think there is a need for rapid, really rapid behavior change, a total behavior change, and integrating in all the businesses a sense of operating differently, where maximizing profit, the maximizing for social profit on the social side, so that's my angle, is also on the top priority. It has to be because making money alone will eventually... That's an interesting point, that maximizing social profit and not corporate profit, you make a clear distinction. It goes together because you cannot make good business and good profit in an environment that is volatile and is not going to support your business. You need people that are educated and have jobs because you need people to work for you. You need the market, people that buy from you, and you'd stability, people that are not angry at you. And if you don't have that, you're in trouble. So you have a responsibility to your entire community you work with. And if we take this even more globally, it's very nice that Singapore and Hong Kong are doing very well, but you don't want in the region, as you suddenly have Laos and Cambodia being the ones that are just exporting cheap labor or even worse than that in trafficking because it feeds your needs. So it's at local level, but it's also at the regional level that we need to be very concerned. I think the role of the government is very important, of course. NGOs are there to try to solve micro-problems, but it's by working together with the corporate sector and with a strong corporate will to change and to be part of it that we will make a difference. And the time is short. How many years? Yesterday. Okay, no, but before I come to Jaime because I know he'd like to add to this. What are the innovations that you have created in the work that you do, which can be an example for other corporations? We're trying two things. We're trying to show that you can do business that is very profitable with a very strong social input. So for example, we're running all of vocational training for young people as businesses. And okay, the numbers are very small because I'm talking to very large corporations, but we still make $4.6 million revenue and the final profit of about $500,000 that we can reinvest with a few restaurants and shops. The model works, you can make money and have a tremendous social impact. That's one side. The other side is by working with corporate sector and building a real partnership because I think that, again, it's through partnerships that we will achieve a big change that we can move away from philanthropy, CSR to real collaboration for major efficient change where eventually business will be better for everyone. Thank you, Jaime. I wanted to pick up on something Mr. Marot said because he said there is indeed a great deal of pressure on private institutions to quickly make a good return on the risk capital that gets put to work. I think these are very, very valid points. And to a certain extent, all of us in this room, particularly in the corporate sector, have a set of metrics by which we are measured. Some of them are demanded by the government, by our Securities and Exchange Commission, others by stockholders, and it's very financially driven. So the first order of the day is a leader has to believe in something bigger than what is demanded of him. And all of us as professionals generally are trained to follow those metrics, and that is an issue. And I think Mr. Marot has a very good point. So then one needs to be at the top and say, do I have a bigger responsibility than these metrics that are demanded of me? Of social profit. Well, in a bigger responsibility, it could be social profit, it could be engagement with communities. It has to come from the top because our traditional metrics really are very aligned to a very different set of results. So either in your mind you believe you build trust in different ways, you want to participate in your community in a different way, or you want to add value in a different way, and that's where I think it all comes from. So the first issue I wanted to put on the table is, perhaps the metrics that we're all using as institutions perhaps need redefining. I think they've served their time, they've created innovation, they've created profits, they've created driven executives, but maybe some new elements have to take place. So in our group, voluntarily, we've tried to move towards internationally acclaimed sustainability standards and incorporate it into our financial statements to broaden the set of metrics. It's not required in the Philippines, but we as a group of executives have said, let's set that as a new standard so that we see the complexity of our contributions as a business entity in a broader sphere. And perhaps that goes a small way to addressing Mr. Marat's concern. The second one I wanted to comment on just very briefly and I'm completely in agreement again is nothing can be done alone. I think this issue of partnership and collaboration is very powerful. It needs work, but only in that way can things get done. So I'll just take one example from our group. We've always wanted to remain engaged in the broader needs of the communities and we use our imagination to see where we can help. One strong component that the business sector has is the ability to convene and bring capital together for a cause. So in our case, for example, we still have a lot of public high schools in the Philippines five, six years ago that had no link to the internet, had no computer. So a group of us in the private sector said, look, it's in our interest that the country continue to progress. The Department of Education only has so much it can commit. Why don't we as a consortium of private sector groups do what we can to really create a program to put internet and computers in every single public high school in the Philippines? When we hit, this was a consortium of competitors and when we hit about the halfway mark, the government at that point said, you know what, this is a great program, we'll now take it over. And we passed it on and it moved on. And I think that goes towards, I think what Mr. Maratha is saying, there needs to be a sense of shared responsibility and people doing their part and then passing the baton on when it's appropriate. But I think it all comes from a sense of a broader responsibility, a broader sense of engagement that goes beyond the traditional metrics. I guess we all have a traditional. That's a critical point. And the cultural world of financial services and finance does not seem to respect companies who spend a lot of their profits on sustainability issues or taking care of citizens. So when we talk about innovating for global citizenship, do you think that's one of the key issues to tackle? You create, you change the framework at the top and everything below gets sorted out. You're a listed company as well, right? Yes, we are. And where is the sustainability index in the US? So does it help you? Does the financial world punish you for spending too much money on social issues and not on your business? You know, I think the financial world looks at a specific matrix and they don't get into this level of detail on how you spend the money. As Jaime said, does this matrix need a change? And I'll come to you on the same point, Martin. It's all about balance between delivering shareholder value and being good and being good to the community and the society. And both of them have to be rewarded. I agree with you. How to do it? I don't think it's going to be very easy, but it certainly has to be seriously considered. So perhaps moving from shareholder interests to stakeholder interests, which has been around for a while as a concept, but it's not really in practice. Martin, what's your view on this? I mean, does that matrix, can that be changed? Should it be changed? And if it should be, then who should do it? Yeah, I think it's, yeah, we're running financial businesses. So obviously the matrix there from our investor point of view are necessary. I think it's also necessary to put sustainability pieces together with it. We have done that. We've been very proud to be number one in the Dio Jones Sustainability Index for six out of the last eight years. So we're doing a lot there. We have a report on accounts that goes out with sustainability piece. We do find investors are expecting that. So rather than being decrying the investments we make and the money we spend in those areas and saying, don't spend that, that gives us some more profit, they are actually saying, because you're doing that, we're a comfortable investor in you. So global citizenship I think is on the investor as one of our stakeholders agenda. And the money that we spend on it is certainly not frowned upon. So you think that there is no change required in the matrix or is it going to improve as things go along? I certainly think it'll improve as we go along. So things like reducing carbon footprints, all sorts of things that we can be doing in our business running, which are eco-friendly, society-friendly are expected. So I think businesses will do more including our own business. To be honest, I haven't thought about and looked at any analysis of the matrix, but the financial matrix is the reason for being here. We will add things on that will become publicly accountable. Thank you. I have a follow-up comment on this one. If you de-link both of them, then your point is valid, how do you get rewarded? But if you truly believe that they're interlinked, that being good will impact your financial performance, then you really look at those things and take them very seriously. So you will get rewarded by consumers if they truly believe that you're a good company doing good for the society where you operate. And when consumers... Consumers, perhaps, but not investors. No, but consumers, when they feel this, they'll reward you by making choices and choosing you versus others. And when they make those choices, you gain market share. And when you gain market share, you deliver a better financial algorithm that would deliver when consolidated, it pleases the investors and so on and so forth. So it's truly linked. You cannot separate them. Thanks. The point of imbibing and internalizing these thoughts and you refer to entrepreneurship, which is really creating a culture of caring for the society in everything that you do. It's not just 2% of your profit are put into CSR activities. You run two hospitals and you think that all things are washed away by that. How do you do that? I mean, do you think that your cooperation and others from China are actually imbibing these ethos? Yeah, you know, as a technology company, as an enterprise, you have to run a business systemically. That means you have to run a business based on the incremental change. But however, you need to really cope with the disruptive changes. Otherwise, you'll be behind. For example, Kodak. Actually, Kodak was the one who really invented the digital camera. But they were so afraid of losing their interest. So they acted very much conservative. And that's why they missed the big chance. That's what happened to them. We all know the result. But you're talking about surviving, for how companies should survive in a fast-moving technology era. But how do companies survive by becoming more responsible? Or is that being responsible against survival? Yeah, that's a good point. I'll give you a showcase to make us understand better. You know, while we just enter into the consumer-device business, we have manufacturing platforms, the tablet. But we know we are not able. We cannot manufacture and design the handset beyond people's expectations. So then our aims become to be that, how to make sure that the quality is designed, a handset that makes really people really like it. They like the performance, they like the specification. More importantly, they like the price. So we, you know, there is a simple way that we do it in a very social innovation ways. We, because the Android system is opening systems. So we call more and more users to join our R&D process. We call them fans. So they can, you know, they are welcome. They are encouraged to share with us that what do they like to share our forms to be looked like? But Young, in your case, if you are launching products, now responsible citizenship from Huawei in this case would be to take responsibility for recycling of these products when they're end of the use of the cycle, right? Now, does a company like yours take responsibility for it? Because then you would be innovating for good citizenship. Yes, because we, because in this way, we can innovate as this, you know, this handset is formed, this new business model, you know, to be more affordable, to be more likeable, you know, to the users as much as possible. So that's an important point. I don't know what Sebastian would think about this, Sebastian. Companies feel that if they're making a better product, they're doing a great job for the society. Is that enough? It's great. Not enough. We're talking something different. This is, this is a good step. And it's part of the process of a company. It's creating the best product for, and that's absolutely great. And if it leads to better product with less waste, et cetera, tops. But there's more to that. I think that when I listen here, I think we need to think of this as an investment. And I'm surprised that companies don't see this as a, I think the issue is everything is short term and increasingly so quick return. We need this now. We don't know what tomorrow is about. The company's built up and sell for a million and then move on. And investment is long term. We need to think 100 years down the road, what's gonna happen in 100 years and how can I contribute to this? And building people and making sure that the societies are growing is a real investment. And it should be part of something you tell the shareholders. It's investment. So you're saying that it's, that pure consumer focus is misplaced. It has to be larger. If you, it should be larger, I think. And I think the concepts of having a real positive impact beyond just my products, but also outside of, within my community. Okay, fine. But since we're talking global, the community is very large is essential. We need to have a bigger view to make a big difference because if we think only of my products and my field, that's where we start, but we need to go beyond just that. That's a good point. And I think you mentioned this about leaders should be thinking more than what he actually does. And if you focus only on consumers, we realize that consumers and all of us on this whole are exceedingly selfish. We just look at what's going to be cheaper and better for us and really don't care about what's going to be the impact. Well, I think you bring up a very good point. And I'm very respectful of what Mr. Marot is putting on the table, but if he only understood the kind of pressures we face to succeed. And in the end, if we don't succeed as businesses, there's actually nothing to give back to the community. And this is the big balance that needs to be hit. And as every year passes, the challenges that most companies face to remain competitive and alive is phenomenal. I once ended up being handed by a daughter, an old magazine and it was a fortune magazine from the 60s. And she said, you know, that you're the only one who's going to read this thing. And so I ended up looking through it and none of the companies on it, very few were still around. And I remember reflecting on that saying, it's quite amazing how in very short periods of time, institutions just disappear. I think the only thing to bear in mind and I'm completely on Mr. Marot's side, is that the pressures also for success and survival and the business front have by the very nature, this mechanism to keep innovating, to keep technology alive, to keep progressing, to keep bringing costs down. It's what's led to tremendous, I believe, innovation and growth in the world. But the negative side of it is that said, it tends to put a lot of pressure on the short term. I think in the end all of us, as you move to senior positions, have to balance how does one build trust in society, how does one participate in civil society in a bigger way and business as much a role as any, other broader responsibilities we have beyond the ones that are required of us on the financial and marry that with what it is that we're doing. Now, all of us live in different environments. Mr. Marot lives in Cambodia with its many challenges. I've grown up and worked in a country like the Philippines, still an emerging market country, certainly with successes but with tremendous needs. Others live in very developed environments which our governments really take care of, the great needs of society. I believe that if you're working in an environment, in a society with a set of communities where the needs are tremendous and there is a limit to what the public sector can do to address them, I would argue that if you're a profitable, successful entity in that environment, you have a broader responsibility and you have to address it in any way you can without sacrificing the responsibilities you have as a profit making unit. So I don't think there are any hard rules. All of us have to continue to grow, to survive, to remain profitable and give investors back a fair return on the risk capital they put away. But I do believe we have a broader set of responsibilities that go beyond the metrics that were required from a financial point of view and that is a qualitative issue that has to be measured and either you have a broader sense of engagement and I think we should. But how to measure that and temper it in a way that creates value destruction as opposed to value creation is our qualitative value related issues. Now, if you can harness it and if you can form partnerships, if you can run a profitable business and at the same time contribute to the betterment of society, then you've got a tremendous winning formula that in the end makes life worth living and makes what one does in life worthwhile. And I think in the end, those are the kind of measurements one looks for. Thank you. Yeah, sorry. Yes, I very much agree with that. I just want to share three perceptions that when we redefine the social innovation or the entrepreneurship, I think first is whatever we do need to be in line with our vision and mission. Might not be in line with strategy because strategy changes. But it's got to be in line with our vision and mission. For example, our vision and mission is enrich people's lives through the collection. Number two is that we prefer to be more disruptive. For example, our way to not do the e-commerce business but in order to provide the affordable handset, we have to start our e-commerce business just to make sure our customer can get our handset with 30% cheaper than the normal channels. Number three is that it's got to be viable. Not talk about viable, not talk about sustainable ability because it's more inside out. You know, it gives people's hope. It gives consumers hope. It gives the social innovations hope. So it might be viable. Thank you. Let me take a quick poll from the audience and I'm going to ask you a simple question. How many of people in the audience think that companies spend more time and effort and resources in innovating for the product and services more than they do for being a good citizen? How many people believe that companies are spending more time on that and resources, right? So that's quite the overwhelming sense of perception. The reality might be different, but it's clear. Maybe you would like to come in on this. Why is it that people don't believe that companies are doing enough of innovation for being good citizens? You know, the topic is about innovating for doing changes. What we end up ending up discussing are innovations for making the company better, but not the society better. I think your question that you are addressing to me was a bit different than the question that you addressed. I'll tell you why. Because the question to the group was, are they doing the same effort? And I think the story is so many. The question was, companies are spending more time, effort and resources on innovating for the products and services and not for being better for society. Yeah, it is true, I think. But I also believe that the awareness and the change in philosophy is happening. It's happening and I think it's happening fast. I'll talk about our company. We talk about business matrix and social responsibility matrix. In our case, there are one. They are merged together. So, in the way we design our CAPEX spending, we have a line code sustainability. And in many cases, this line gets us to spend much more money than the returns that we get on saving of water or energy or the way we deal with waste. Way, way higher than the returns that we get. But now it's embedded in our financial matrix and our financial algorithm. And you keep building and building on it here after year. Now, five, seven years ago, did this exist? No. This comes with our belief and performance with purpose when it was launched in 2006 by our chairman, CEO, Intranui. We started doing a lot more on this front. Now, innovation was what that you mentioned. It's very critical. Doing citizenship work doesn't necessarily have to be expensive or doesn't necessarily require big money. With time, we started seeing our associates innovating in the way they deal with this. I'll give you a good example. I'll use the paper because it has some technical words. Here in the Philippines, we have the project called Leader of Light. Creator of Light. Leader of Light. And the leader is our bottle, our Pepsi bottle. Leader bottle. So one of our associates came up with the idea of adding water, bleach, and bleach to a plastic, empty plastic soft drink bottle. And they expose it to light in the morning to refracts natural sunlight and lights at home in the evening. For areas where people don't have access to electricity. We've already done 190,000 bottles of those and now we're expanding this project big time. So from a very simple concept, very... So that's a good example of innovation which is focused on helping people. Yes. And you cannot imagine the level of pride that the organization has to do by initiating this. And hopefully we can take this to other parts of the world. Martin, do you think more of this is happening? Yes, yeah, I think... And you saw the poll, you saw what the audience felt. Yeah, I heard the question too. But I think the... No, really, the... Something we've done on financial inclusion, we're a financial industry, but financial inclusion is something big society is now trying to help happen which I think is wonderful. But one of the aspects of that is we're giving people access to credit maybe for the first time. And if you take a range of small holder farmers in Africa, which is my example, these folks can be at risk of losing everything if they have a crop failure for mother nature interfering with winds or waters or droughts. And if we put insurance around those events for those farmers, when they wake up the next morning after the event, instead of losing everything and having a debt, they can have a debt forgiven plus a cash payment to help them start again. And we've been doing this now for... I think we've probably embraced approximately 2 million farmers. We're putting quite a lot of capital at risk. And the innovation we've had to find is a way to take cost and time out of the normal insurance process. And we've done this by having a weather index trigger. So weather stations will measure too much rain, too little rain, and once that triggers, the payment is made. So there's no inspection, like if you or I bumped our car, maybe people would come and inspect the car. So money can arrive very fast and it gives them a... If you get my expression for this, it's a ratchet upwards against poverty. They don't just slide back down again. And if we can turn those 2 million, 20 million, then we can start to feel very proud. Can the social innovation be incentivized? I think it's incentivized and it helps the members of the community inside the firm feel very proud. As I say, it's acknowledged by investors as a positive thing. I think that's in itself an innovation. I mean, we don't look... Sorry, stimulation, we don't look for tax breaks or anything in that way, but I think it's good to do. It makes people feel very proud. Do you want to add something? I think it has to be incentivized externally and internally. Internally, as driven as we are and as target-oriented as we are, most corporations, very important to incentivize the employees to make sure that they have this in mind and that they're delivering on this important priority. So it gets, you know, we have some very clearly set targets relating to the purpose agenda of the company. And that makes a big difference. When you have a target, you deliver on it. So that's one thing that I would really encourage most corporations to do. Thank you. Well, I think in the end, if your ultimate aim is to continue to build trust with the communities you serve, you naturally start to tend to address some of the issues that are of concern to society. We're very proud in the Ayala Group to have a company that will be recognized here at the World Economic Forum as a global growth company, Manila Water, which distributes water for the half the city of Manila, the CEO, Mr. Rablasa, sitting at the back there. We're very proud by the fact that they have innovated tremendously to be able to reach many traditionally unserved communities over the years. And in many cases, it was just having the kind of sensitivity that Mr. Maro was beginning to refer to. There were many communities that were underserved, that were less affluent, and were basically buying water through middlemen. And so this company went, listened to their needs and said, how is it that you would like to pay? We cannot afford to put the billing mechanism in each house. Some of these were informal settlers. But the company said, look, let's discuss this as a community. You need water. You need it cheap. How would it be easier for you to pay us because we need to be paid to provide the service to you and get the infrastructure built that is needed to supply water? And the community said, look, for starters, don't bill us individually. Maybe bill us as a community. And so the company said, fine. And how often would you like to be billed? And the community said, well, we can't do it this regularly. But if you allow us a little bit of leeway, we as community leaders will harness the needs of the community, we'll give you the amounts. And if you can allow us a little bit of flexibility on the payment, then we'll move ahead. And so agreements were reached and the infrastructure was built out. And I think the numbers, traditionally they were buying water from middlemen and we were able to deliver, I think at a 10th the price that was originally being charged to them. So a little bit of flexibility to the needs of community, a sensitivity to what they need. And at the same time, while maintaining a focus that you have a business to run and you've got to be profitable in order to be able to give a return, if you find the right balance between these issues, then I think you have a winning formula. That's a great example of fantastic innovation where you're working with the community to understand the needs and changing your billing cycle. Is that something that you would also expect a lot of other companies to go out, Sebastian, and work at such innovations? Absolutely. I think that the example you mentioned is fantastic. And across the region, there are plenty of such examples. Social entrepreneurs are doing fantastic experiments and showing that you can do extremely well business-wise and have a tremendous positive impact. And that is proof that this can be integrated, I think, within the entire company. It doesn't have to be a small part of, it has to be the way of functioning. And I understand entirely the pressure that managers and companies are under to make money and there are so many things that are to be done is the environment here and the social area. There should be a pressure on them to innovate as well. There is innovation necessary and that needs to be really well targeted because, again, that innovation is an investment. Those people are better off, they have more money, they become a consumer. They'll be happier people. Everyone benefits from it. They're healthier, the kids are going to school. 10 years down the line, people that are educated. It's an investment and that investment is priceless because, yes, under nowadays competition, but if you keep only this short-term view, okay, you will survive today, but in 10 years, you'll be gone because there will be upset people. The water will be up to here in Manila and everyone will be swimming. The consumers will be upset with your products. The list goes on. You don't have a choice. You have to integrate it if you want to survive. So short-term, fine, think long-term. So we're going to stop at this point when you talk about survival, but that seems to be the key theme of this afternoon. Let me take in some thoughts and questions from the audience and if you're behind me, please do let me know. If you could also introduce yourself, it'll be perfect. Hi, I'm Janice, a global shaper from the Hong Kong hub. I think that one of the underlying things you've been discussing is charity versus social investment and social business. One of them is a cost for your company and one of them is something that can potentially generate profits. So to that, and do you think that the future of business is something that has societal concerns at its core? And yeah, so I'd like to see your views. Do you have the question for anybody specific? Sorry. Any one of the panelists? Perhaps Mr. Zobelda Alaya, because he's been speaking about a few projects and some charity work as well. Well, I think there's room in the world for both philanthropy and sustainability components. I don't think they're mutually exclusive. I think there are moments in life when philanthropy can be of great use. People accumulate wealth and I think if there are incentives for them to give that wealth back to causes that they feel are important, education, art, whatever, there is room for that. I don't think everything has to have an equation. I just believe that in the broader scheme of things, finding a sustainable model where profits are taken into account as part of the equation of addressing a societal ill, you really have a very powerful formula. I think the public sector and governments have a lot of burdens, particularly in countries like ours. They have so many things they have to handle. If the private sector can be allowed to participate in a way where their profit equation continues to be robust, but at the same time, they temper it with services and goods that have a positive effect on society, you're finding a formula that's a winning one. Now, that's not always the role of business. I think businesses should be good citizens. I think they should contribute to a greater good. I think they should be careful about their, anything that they do that harms the environment that affect people in different ways. But I do believe that if you can find those formulas where you begin to address things, and if governments allow, and this is an important component, the private sector to begin participating and contributing to areas which have been traditional public sector responsibilities in ways, of course, that are responsible, then you have a winning formula. I use middle of water as an example because actually it is unfashionable in the world to privatize water systems. They're very emotional and strong feelings and in many cases, valid ones. I'm not saying they're not valid. We're just proud in the Philippines that we found a formula where it was privatized, private sector groups took it, and we like to think that the consumer, the public in general and the government have been happy with the results. They've been net net positives all around with a company that continues to be profitable and lay out massive capital expenditures to keep making it better. If you can find those formulas, the government has relieved itself of a public sector burden. They used to spend the budget in running it. And at the same time, the public and the consumer in general has been happy with the end result. They've gotten cheaper water, effectively 24 by seven when that was not possible in the past and touched vast community. I think it's a great formula. And I think as Mr. Garas said earlier, I think people in the private sector increasingly are beginning to think like that and people moving up organizations and moving up the periods, positions to seniority in general are beginning to be far more sensitive to this broader role they have. I think there's a long way to go. And I think Mr. Maro would probably argue that it should be faster than it is. But I like to think that the checks and balances of society on businesses are increasingly forcing leadership and institutions to be far more sensitive to broader needs. And I think that's a reality. And I think young people going through the business schools and the like are beginning to reflect that way. And I think the young global ship is like her. I'm sure they're going to put a lot of pressure on companies as they join them. Sebastian, do you want to add something? There's something I would like to add because Ayala is strongly resonating to me. I think we need to move away from the either or to the end. It's not philanthropy or CSR. It's philanthropy CSR shared value. It's not money or social, it's both. It has, it's not businesses or government. It's businesses, government, civil society. It's the end that's very important. And that's how we will achieve. So moving away from the either or, we cannot do both, yes we can, we should. Sure, let me get some more questions. Gentlemen there, let me then collect both the questions. The gentleman here and the lady here, please. Thank you. Andrew Tini from KPMG. One of the things that we've seen over recent years is a move to integrated reporting, which I think ties in with what Mr. Garras was saying about firms needing targets, but also the other point about needing those to be integrated so they're not seen as something standalone and separate. So question for me to the panel is, do you think the listing authorities in particular in the countries in Asia should be forcing companies to actually, in effect, take up integrated reporting and demonstrate and showcase what they're doing for sustainability as well as their financial information? Thank you, good question. Thank you, Kora Newman from care.com. I just wanted to know, get some feedback from the panelists on shareholder rights and what role that plays in decisions that are being made in relation to investor and shareholder interests in return on investment and how that affects decisions on sustainability. Thank you. Any other question behind me since I don't have eyes at the back of my head? Right, so can we begin? Sure, please. Let's take this question as well. I have this comment on Mr. Ayala's. If you could introduce yourself, sir. Go ahead, it's working. Three, three, yes. Here's an example where the business and the community were able to talk to each other without middlemen like bureaucrats or politicians in between. It seems to be a very good example. Is it something that is happening elsewhere? Are there other examples? Perhaps somebody can share. Sure. But if the business and the final end user community can speak directly to each other, it seems a better way of bargain that sustainable bargain comes through. Thank you. But just to remind you, it's not just about sustainability. It's a larger picture where you also talk about removing income disparities and improving quality of life and health. I don't, if you'd like to talk about this integrated reporting, which is the first question, and especially for listing authorities in Asia. I don't think there should be legislations forcing anybody to do this part of their responsibilities. But sir, there has to be improved corporate governance has come out of legislation. It hasn't come out of a will for the corporations to be better and be honest. So in some levels, legislation may be required, but I'd like to hear what you say. You could look at it both ways, the carrot or the stick. I believe it should be more of the carrot. They should reward it. They should celebrate it. They should encourage people to do it. But to take it to the extreme of penalizing, if you don't do it, I think it's a big step that is taking it a bit too far. Again, it has to be a belief. It has to be a philosophy. And it has to be integrated. And as you rightly said, it's not either or it should be and. So that's my view on this. Okay, on the question of shareholders. Young, would you like to take it? Or Martin, would you like to take this? I do a quick comment on the listing. Publication first, on the listing authorities. I think a voluntary code and encouragement is well worthwhile. I think when it's related to Asia, and you've got Laos and Cambodia mixed in with Singapore and Hong Kong, I think it's very difficult. But if the listing authorities save a signal that's set in five years or seven years, this is expected and people can move towards it. I think that's an environment that would be very beneficial. I think in terms of shareholder rights, decisions on sustainability, I've not come across a situation where one interferes with the other. So I think sustainability is on corporate agendas. I think perhaps to a greater extent than people realize. It isn't 10% of the cost of running the company yet. There may be some benchmark like that. That might be something interesting, but. Yeah, do you want to comment on this? I'd like to add up a little bit on that. When we talk about the CSR or social innovation or entrepreneurship, we never forget what is our mission and our missions. For example, our mission is to enrich people's lives through collections. So the thing we do not want to see most is that the digital divide is being enlarged. So whatever we can do to minimize, to bridge digital divide, we should do it in a way of doing business, in a way of social innovation or in a way of the entrepreneurship. And also, again, I'm assuming that being a technology company, we can do. We can make the entrepreneurship to be more disruptive than your routine business, which some of them might need to the great future, very bright future. I think we have to try. I think that's the essence of technologies. Otherwise, we are doing well on what we have done, but we missed very great opportunities. That's also not good to the shareholders, to our users in the long term. Okay, thanks. I think there was a question, a comment on your statement. Yeah, just a couple of comments and then one on the last one. Integrated reporting, and I believe personally, and I think I hinted at it early on, that metrics have to change. I think the metrics are too weighted on financial returns, and I think that's had its good results. It's created innovation, resulted in efficiency, but I think we need to widen them out and take some metrics into account that really encourage institutions and people are very metrics driven that takes into account the kind of role that institution has for the betterment of society. So therefore the listing authorities in countries, then does that matrix, the responsibility of changing the matrix depend on them? Well, I don't know which institution, sometimes it's not the listing authority, sometimes it can be the securities and exchange commission themselves. I just think that there should be a broader, I think the metrics should be broadened because many things are required of us. I mean, we have to file stuff all the time and why not broaden that a little bit to take into account components that really give some assurance that institutions are working for the betterment of society. So that's just my belief. On the second one, shareholder rights, I think somebody asked that. I think shareholder rights generally are fairly well-defined. There are a whole range of very strict components that we all have to adhere to that revolve around shareholder rights. I think that's progressed quite a bit. I don't believe that there are any significant changes that I can think of that should be added. I think it's quite robust right now. In the final issue, the gentleman behind me was talking about business and communities talking. I think there's so many issues on so many fronts, but there are some that cannot be, I think, resolved at the corporate level. There are specific roles that governments have. We can't have them. I'll give one example to the gentleman. I, for example, I'm supportive of responsible mining. Our country has many rich resources. It's done responsibly and well in a way that minimizes harm to the environment. Those resources and the funds generated from it can go into education and many things, health, many tremendous needs that our country has. That's just my point of view. There are others and certainly some members of the government that believe this is harmful to the environment, period. Now, a private corporation, particularly a mining company, has built up skills in that sector. They will always argue for mining, but somebody representing the people at large has to say, we want mining or we don't mining it. If we want mining, it's under these terms and we will regulate it and we'll come down hard. So there are decisions that go beyond discussions with communities. There will be a mining company and a community will not see eye to eye. A community may not want a mine right next to them and the mining company's business is mining. Neither one or the other is wrong or right. That's where governments come in and say, our philosophy is X and we will do it along that line. So sometimes dialogue is not enough. I think people have to make a decision. I'm not saying they're right or wrong ones. They're different decisions and some have benefits and you just have to weigh the pluses and minuses. And mining is a very tricky industry because as long as there's consumer demand, they would be mining. More questions? Thoughts from the audience? Does everybody feel that everybody is socially responsible enough? I think everybody is equally guilty. You know, I'll just let me take this advantage of asking this question of how much of a profit are corporations willing to sacrifice to be responsible? All right, are you going to answer that or ask a question? You raise your hand so quickly, I thought you were going to. Actually, the bigger question- If you could introduce yourself. Praveen Someshwar, I work with PepsiCo. Actually, the bigger question is, I think change will happen when community in large starts impacting corporations. I think you're asking corporations to change and that's important, okay? And I think the panelists have done a good job about what the- Defending regulations. Yeah, what the corporations can and can't and all the pulls and pushes about it. I think the balance will speak itself. The balance will change when the communities in large start impacting the corporations as well as the society. I think the bigger question which you need to discuss is, are the communities doing enough? So there's a community around us. Why don't you put the question- So that's really the question. Are the communities doing enough to bring about that change and persuade different delivery systems for corporations and governance to deliver? Sebastian, you're the only one who can answer this. No. That's a tough one. I think indeed communities are going to be major players. And I think- But we are not yet. They are working into it because social media, for example, is a fantastic tool for immediate response. And has tremendous influence on however we want to operate. And it's an immediate feedback and we need immediate reaction to it. In some areas where I function, people don't have enough voice or not access enough and rely on other ways, other channels, human rights NGOs and others. But the violence that is imposed on some communities is tremendous also. We should not forget that we have demonstrations and people are shot. We have people that are moved forcefully. So the governments have a philosophy, but they have a very forceful philosophy. So what you're saying to answer the question which he raises is that communities, when they try to create pressure, they are crushed. Some of them, yes. Some don't have enough power, but I think this is changing really fast again because the visibility of it is so huge. You can film it as it happens. It's on YouTube. Two seconds later, the world has seen it. It changes everything, how the communities can react and put a presence. And that is very strong on governments, on corporates, on NGOs, on everyone. And that's very positive. I think we're getting there. Would any of you like to add to this? Yeah, I want to share more about the community. Actually, Harvard has been entering the device business for many years. It was a billion dollar business, but we still do not think it's good at all because the price is still too high and the feature is not so good. So we define a new model to call more and more community to join us. We, you know, it's kind of a participate. We wanted them to give us feedback. We have tens of thousands of the fans to join together about our R&D. They tell us what it features they want, what features they do not like, and tell us how they want to buy directly instead of going to the shops. And also, you know, by doing so we, before, you know, we design, we manufacture, we sell, but now we collect, we sell first. Yeah, we know what's the order. You know, then we manufacture. So in this case, we kill all the inventory. And because we're selling directly, we jump over, we jump from the traditional channel. You don't have to wait for the community standing outside the company saying, please give us free messenger services. Right? So in this case, you know, they join us. You know, the witness, they participate in this whole process since the beginnings. Yeah, and the output, the outcome is actually, you know, much cheaper and, you know, much more affordable and much more likeable for them. Yeah, that's interesting. I think the role of the community is important. I think the gentleman's question was rhetorical to an extent, our communities as well, as it might be. And I think the point you made on social media is just beginning now to change our world. Just a couple of examples I've seen this week. So four British yachtsmen went missing in the US, North Atlantic. The US Coast Guard stopped looking after 48 hours. An online survey started and more than 100,000 signatures in five hours, the US Coast Guard started again because attention came. Complaints about products and their reliability on Twitter is embarrassing corporations to respond much quicker than they would to telephone inquiries or physical return of the goods. So I think we're going to see something entirely different. And the SDF understood the news bulletin correctly. Some young people arrested in Iran for showing some enjoyment around a music video. We're released after being arrested because of the social media response. So our world is certainly going to change. So the communities may not be communities physically meeting and representing themselves. But political leaders tend to be more sensitive to what the public thinks than corporations. Yeah, but the Twitter example of complaints about products I think is a good one. It's an exposure that says I had a bad experience with this organization. I'm asking you, please can you put this right? And all their followers can see this and things get retweeted. And I can't be so dramatic as to say businesses will fail if they don't act responsibility in that way. But you then bring it back to corporate sustainability and you have corporate citizenship. You have an opportunity there for the world to tell you what they think of it. But that's a strong point you make that businesses will fail if they're not responsible. That's a very strong point you say. There's a chance. I mean people will make choices between one product and another product depending on what they're hearing and understanding about the firm's way of doing business. Do you want to add? Yeah, I totally agree with this. And there was a survey that we ran in a country that is not part of Asia but it was very surprising to many of us when we asked consumers what are the elements that make you choose a product. Number one was obviously pricing and value. Number two was social responsibility. It came way, way before many of the other elements. So yeah, it has an impact. Yeah, it pays back and I agree with what you said. Thank you. We have time just for one last round of questions. Please can we have a mic here please? Do you say who you are? My name is Rishikesh Pradhan. I represent MegaLife Sciences, a pharmaceutical company in the Philippines. This question is Panjal actually aimed at you. OK. So the panel discussion really was really good in terms of giving a lot of information about what the corporations are doing in terms of being more socially responsible. And I agree completely with the whole of panel in terms of there are a lot of pressures on businesses to be profitable, to be sustainable. And at the same time, there is a lot of consumer pressure, media pressure, and stock holders pressure coming up in terms of being long-term sustainable for environment and for everything. There was a mention about rewards that adequate rewards does not exist today in the matrix, how it is being measured. How do you think that media as an important pillar of the society can help in creating that reward for doing something good for the corporations? Thank you. There must be a rule in the forum of not asking questions to moderators. But if the forum allows you know one, I don't own a media corporation, I wish I did. But yes, I do agree that media has a role to play. And I'll sort of go back to what Martin and Somesh there said that a lot of the traditional mainstream media is actually becoming less relevant. It's the social media which is becoming more important. Because what's also happened globally, and I'm sure I'll ask you to share your experiences, that a lot of media is now owned by big corporations. And there is a huge discussion about conflict of interest. So sometimes it's not in the interest of media to raise issues which may hurt their own bottom line. Therefore, I think the social media and the power for the citizens across the world, and that cuts across from East Africa to East Asia to West Asia to North America. I think it's pretty, people are pretty much on the cutting edge on that front. So yes, media has a role. But I don't think traditional media is living up to that responsibility. I think it's the new media will do it. But I'd like to get your thoughts. Maybe you would like to add to this. Well, I think everything in life is about balance. There will always be extremes. I don't think anyone is devoid of culpability on extremes. I think civil society NGOs can be extreme. I think media can be extreme. I think business groups can be extreme. I think all of us have a role to check on each other. And as long as society creates an infrastructure, a framework where those checks are respected and result in the right balance, then I think you have the right end results that come out. So in the end, I also do believe that governments, regulatory authorities, they're all put there for a reason. They're put there to put some balance into an equation. And I think media certainly has as much a role in this as possible. I think it was pointed out that social media has been a tremendous force for change. I completely agree with that. And where technology and telecoms play a huge role. Yeah, absolutely. It's basically the channel with which all this, and that sense of immediacy, that pressure that comes from it. I think it's a good thing. I don't think it's a bad thing. But like everything in life, there can be extremes. And so finding a balance between all these extremes, and I would agree media has as much of a responsibility in keeping that balance in check and making sure that the information gets out timely way and in a fair way and in a balanced way. But there will always be biases. There is no such thing as perfection. And so hopefully you create a society where the checks and balances limit the extremes. And if you don't have that, if those extremes are allowed, it doesn't matter from which sector they come. I think it'll result in a bad result. So I think we all have responsibilities to make sure we're part of institutions and governments and support governments that find the right balance. It'll never be perfect. It'll never be to any of our liking. But as long as there's fairness, there's balance, and pendulum tends to swing to a balanced approach, then I think you have a society that will flourish. If extremes are allowed to move unchecked and unhindered in whatever field, in whatever sector, I think you'll get bad results. Thank you. Would anybody of you want to add to this? Okay, I think that's also a great summary. I may thank you very much for this panel. I think the only thing I can add is that it's really, as you say, about balance, but also perhaps making some systemic changes which create the incentives for corporations and create a sense of social responsibility in what they do. I think if that can be addressed, we'll be in a better place. Please join me in thanking the panelists for being here this afternoon. Thank you. Thank you. Thank you.