[Submitted by Dennis D. Estopace, Reporter, to BusinessMirror on Sept. 26, 2010.]
A RESEARCH being sold for US$350 tagged Philippine companies as lagging those in eight other Asian nations in governance.
Responsible Research Pte. Ltd. ranked the Philippines as just a notch above the People's Republic of China but at the ninth position according to the research firm's proprietary Asian Sustainability Rating (ASR) for 2010.
"Outside of a few top-performing companies the Philippines universe is characterized by widespread non-disclosure," the Singapore-based company said in a statement.
"Reflecting on the deeply entrenched culture of corporate philanthropy many companies see sustainability as the activities of the company foundation rather than an embedded part of corporate practice," it added.
Responsible Research noted that two companies in the Philippines ranked low among 542 publicly-listed companies it applied ASR with.
Food and beverage conglomerates San Miguel Corp. and Jollibee Foods Corp. were in the 474th and 502nd position, respectively, among the total rated firms. Responsible Research gave a low 11 percent to San Miguel while Jollibee was ascribed nine percent.
The highest is a hundred percent ASR to which no company reached. The highest rating of 87 percent was ascribed by Responsible Research to Taiwan Semiconductor Manufacturing Co. The lowest ASR of three percent were ascribed to five companies, two of which were domiciled in Taiwan and one each in India (Indiabulls Real Estate Ltd.), Indonesia (PT Delta Dunia Makmur Tbk.), and South Korea (GS Holdings Corp.).
South Korea led the ASR per country ranking, followed by India, Malaysia, Thailand, Singapore, Indonesia, Taiwan, and Hong Kong.
In the statement, Responsible Research said its ASR methodology "is based on a set of 100 sustainability indicators, split into four … categories –General, Environment, Social and Governance, which cover disclosure on the main elements of ESG [environment, social and governance] risk."
According to the report released mid-September, Responsible Research scored all companies "across the same ESG factors based on publicly available information only."
"In order that the end results are as unbiased as possible, there is no engagement or questionnaire of the companies in the methodology."
The firm's statement, however, contradicts this when it said that "few companies in our universe are willing to provide a direct named contact for ESG queries from stakeholders."
"Normally, when a contact is given, it is often someone in the PR or corporate communications office, revealing a commonly held belief in Asia that sustainability reporting is more of a marketing tool to prove a company's 'green' credentials," it added.
Two other companies in the Philippines fared better in the ASR: Ayala Land Inc. (ALI), ranking 15 of the total 532 companies, and Manila Water Co. (MWC) at 64. Both, to note, are subsidiaries of Ayala Corp.
ALI was given a 78-percent ASR while MWC got 61 percent.
The report said that it analysed 20 companies in the Philippines, which got a 29% country ASR, tailing Hong Kong with 33-percent ASR, but ahead of China that was given a 20-percent ASR.
"Outside of the top three or four companies, our Philippines universe is characterised by a widespread lack of disclosure on environmental and social indicators and mostly immaterial reporting in general," the report said.
It added: "Reflecting on the deeply entrenched culture of paternalistic corporate philanthropy, many companies in the Philippines see sustainability as the company Foundations' activities, rather than an embedded part of business practice."
The Philippines, to note, had the lowest free float market capitalization of US$20 billion among the ten countries. China has the highest free float market capitalization at US$1.951 trillion.
Responsible Research said that companies included in the ASR who "would like to access [its] full indicator breakdown" can do so by paying the equivalent of P15,050 (at US$1=P43).