Actualizing inclusive capitalism towards shared prosperity
By Lito Villanueva, RCBC EVP, and Chief Innovation & Inclusion Officer
Speech delivered during the FINEX 53rd Annual Conference last October 4, 2021
To our guest speaker Mr. Jaime Augusto Zobel de Ayala;
To my co-panelists Mr. Michael Richard Enriquez and Mr. Francis Estrada;
To our moderator Mr. Michael Guarin;
To FINEX President, Atty. Francis Lim; and to all who are in attendance in today’s session, a pleasant afternoon.
Innovation with empathy.
Doing well by doing good.
These have become good-to-hear catchphrases in business to describe how we should balance and synergize the values of purpose and profit.
But the challenge has always been on how to actualize. If we still ask ourselves, the question “why”, then it simply means we have yet to fully embrace this concept. For inclusive capitalism to work, we need to make it work for everyone – the business, the employees, the people we serve, and the communities and environment we serve in.
To genuinely help in uplifting the socio-economic conditions of our country, we should allow our industries and institutions to become instruments of positive social transformation.
We are all in unison with our esteemed guest speaker, JAZA, who emphasized – that inclusivity, profit with purpose, and shared prosperity are “moral and market imperatives.”
We recognize that there is still a lot of work to be done, that is why RCBC, from the top leadership and across the organization, has remained steadfast and faithful in advocating the United Nations’ Sustainable Development Goals or SDGs in the various aspect of our business, and in formulating our informed decisions. RCBC adheres to a three-pronged approach which drives our core business anchored on inclusive capitalism. And these are:
- Enabling equitable opportunities through digital
- Stewarding environmental sustainability
- Harnessing competition for greater customer empowerment
First, enabling equitable opportunities through digital.
RCBC has embraced contextual banking to cater across the spectrum, from the mass affluent to the mass market. It’s about enabling digital technologies to provide equal, responsive, and responsible access to finance. It’s about empowerment with empathy. Being a bank for all is imperative to drive the essence of inclusion. And to successfully introduce innovative, interoperable, and inclusive digital financial services.
The introduction of the multi-awarded DiskarTech as the Philippines’ first and only Taglish and Cebuano inclusion super app is just one of the few interventions we introduced at the height of the pandemic. And our efforts have been rewarded by the warm reception of its target clientele with close to 5 million app downloads across all 81 provinces in the country. And now, just after 14 months, it has facilitated in excess of Php 13.1 billion (US$257.6 Million) in gross transaction volume. This is despite the presence of over 200 finance mobile apps in the country today. Even becoming a breakout finance app in 2020 according to global data provider, App Annie. It also goes beyond a mobile app as it provides livelihood opportunities for micro enterprising Filipinos called the PakiSuyo program. Even enabling the renewable energy ecosystem of our partner One Renewable Energy through payments, lending, microinsurance, microlending, and telemedicine in remote island barangays in Sibutu and Sitangkai in Tawi Tawi, to name a few.
While the RCBC mobile app meant for the mass affluent remains to be amongst the most advanced in digital banking features. And of course, the pioneering RCBC ATM Go still continues to be the reliable community mobile ATM with handheld terminals that cater to ATM cardholders in far-flung areas, the majority of whom are conditional cash transfer (CCT) or Pantawid household beneficiaries.
We are humbled that our efforts have paid off and were lauded not just locally but internationally as well. This honor includes RCBC’s back-to-back best digital bank in the Philippines award from Asiamoney.
Second, stewarding environmental sustainability.
We take on the role of environmental stewards seriously, as evidenced by the bold move RCBC made as the first bank to declare “no coal.”
We have stopped funding new coal projects two years ago, and we expect our coal portfolio to drop to half in five years. Our green and sustainable projects now account for 10% of our total loan portfolio. And the goal is to grow the sustainable portfolio by 100% in terms of the amount by 2030 or approximately P120 billion (US$2.3 billion) covering a wide pipeline of projects on solar, wind, and hydro.
Our efforts in taking the lead in employing industry best practices in the areas of environmental, social responsibility, and corporate governance has been reinforced by a number of global and local recognitions including the Asset ESG Corporate Awards.
The bank has continuously sharpened its focus on sustainability efforts with a number of trailblazing initiatives such as the (1) development of the Environmental and Social Management System as early as 2011, (2) the development of a Sustainability Finance Framework in 2018, (3) the issuance of Sustainability and Green Bonds aligned with the ASEAN Sustainability Bond Standards also in 2018, and (4) taking on lead roles in financing some of the country’s biggest green infrastructure projects. And these are some of those green and sustainable financing initiatives. RCBC has been funding renewables for seven years now. Some of these key green and sustainable financing include AC Energy’s largest wind farm at 81-mw in Pagudpud, Ilocos Norte, 54-mw Pililia wind farm in Rizal, 132.5-mw Cadiz solar farm in Negros Occidental, 3.2-mw CitySun solar rooftop in Aklan, Negros, and Davao, and 50-mw AMI Khanh Hoa solar energy in Vietnam, among others.
Recently, RCBC has been the first Philippine bank to join the Partnership for Carbon Accounting Financials as part of its commitment towards sustainable growth and environmental protection. The bank is committed to disclosing the greenhouse gas (GHG) emissions of its portfolio within three years from membership.
Our goal is to make a sustainable impact on society by offering low-carbon and climate-resilient financing to environmentally harmful enterprises and increasing support for cleaner businesses with less GHG emissions. As a PCAF member, the bank also contributes to achieving the Paris Agreement objectives.
And lastly, harnessing competition for greater consumer empowerment.
With the current Open Finance Framework issued by the BSP, the industry can now unlock the huge potential of collaboration. A testament on the healthy relationship among industry players and the regulators with the consumers as the ultimate winners.
Coopetition is how the industry will thrive in the coming years. This led to RCBC championing SynerFi or Synergy in finance which aims to level the playing field by enabling rural banks, MFIs, cooperatives, and other small players to implement and scale digital transformation and financial inclusion initiatives with our customers in mind.
It allows us to work closely together and align our initiatives and innovations with personalized, human-centric solutions that directly address the common Filipinos’ needs. To help us truly understand the genuine needs of the market we serve and wish to further reach.
We can only attain a sustainable future if there is inclusive prosperity or at the very least, we should set the stage to enable this to happen. It is not a choice between profitability and inclusion. If we are still asking this to ourselves, then it means that we haven’t understood or embodied the true essence of sustainability. Again, for inclusive capitalism to work, we need to make it work for everyone. In the vernacular “lahat kasama-walang maiiwan’.
This concept as JAZA points out should be intrinsic to the company’s goals and in business decisions. It is not a “choice” between the two, but the “will” to see them both through.