Allan Barcena is Assistant Vice President and Head of Corporate Social Responsibility and Public Relations at Energy Development Corporation (EDC). He is also the Executive Director of the Net Zero Carbon Alliance (NZCA). EDC is the largest renewable energy company in the Philippines and is involved in diversified energy projects, including geothermal, hydroelectric, and wind, with geothermal as its primary power source. Its mission is to forge collaborative pathways for a decarbonized and regenerative future. At a time when climate change affects every economy, CAPS spoke with EDC’s Allan Barcena to gain a deeper understanding of their Regenerative Strategy and how they integrate ESG into it.

CAPS: Allan, thank you very much for joining us today. EDC has recently introduced a regenerative strategy. As a starting point, what is a regenerative strategy, and why did the company think such a strategy was needed?

Allan Barcena: It’s a new strategy that was introduced in 2019. We started with a sustainable development business strategy, but our Chairman, Federico R. Lopez, wanted to go beyond sustainability. So, we revised our mission to “forging collaborative pathways for a decarbonized and regenerative future.” Decarbonization, regeneration, and collaboration are the three pillars of EDC’s current mission, and the regenerative strategy is part of achieving this.

As I mentioned, regeneration goes beyond sustainability. If sustainability aims to minimize the harm and the damage and to sustain the status quo for future generations, then regeneration means to grow it in a way that is equal or better than the original state. It produces more positive outcomes, minimizes the harm simultaneously, and ensures that you create the conditions for positive outcomes. Regeneration should be transformational, meaning you transform the lives of the communities, employees, and stakeholders.

CAPS: How has the introduction of the strategy influenced EDC’s operations?

Allan Barcena: With the regenerative strategy, we need to view our operation through a different lens. For example, we must think of ways to improve our environment and ecosystems. We need to ensure that our communities do not just become beneficiaries of CSR projects but are part of the development process, growing their capacity to become self-reliant and sustainable long-term.

There’s not a single set of key performance indicators (KPIs) on regeneration. We are in the process of defining what regeneration means to the workplace, to our communities, to the environment, and to our suppliers and customers. So, it’s an ongoing process of defining the KPIs, and we’d like to align it with ESG. By connecting the regenerative mission to ESG metrics and targets, we can make our operational goals clearer, more defined, and more measurable.

CAPS: Are these metrics and targets coming from your company, or are they set from outside? How are you measuring it?

Allan Barcena: It’s basically internal. From the elements and KPI, we pick what is relevant to us through a principle of materiality – what is material to the company and our business operation. We are in a unique situation; we’re a producer of renewable energy and have a unique set of stakeholders. Therefore, we need to determine the materiality of the metrics and what is relevant to the business of renewable energy. And after that, we would like to have validation and assurance of these KPIs and targets. But we’re not there yet. As I mentioned, we are still in the process of identifying relevant KPIs and metrics.

CAPS: What challenges have you faced with this change in strategy, and how are you resolving them?

Allan Barcena: Regeneration is a new concept to us. So, a big challenge internally is coming up with clear objective metrics and KPIs, related to the strategy. It’s not easy, unlike sustainability, which already has a set of clear and defined parameters. We might have some ideas about regeneration, but it’s still early to have a single set of criteria and KPIs around the concept.

The external challenge is to get others involved in the strategy. How can you convince customers, suppliers and partners to be part of the regenerative strategy as well? On the one hand, we supply clean and renewable energy to help companies lower emissions and decarbonize, and we offer offset solutions. We share knowledge, technology, and experience, such as tree-growing and forest restoration, to involve those interested in exploring nature-based solutions to lower their emissions.

On the other hand, creating the Net Zero Carbon Alliance in the Philippines was part of addressing this challenge. It started with a small group of customers who are committed to reducing their carbon emissions and becoming net zero in 2050. But it has expanded to include other companies that are not necessarily customers of EDC but are committed to becoming net zero by 2050. So that’s the other work I do, managing this alliance of companies and organizations who are advocating and taking the journey towards net zero.

CAPS: EDC is heavily involved in philanthropy and CSR. How has the regenerative strategy influenced those aspects of your business?

Allan Barcena: For a long time, what we did was only transactional and philanthropic. Now, we have slowly shifted from transactional CSR to transformational CSR. That’s quite a big change. Because transformational means we must invest in long-term projects that will eventually build the communities’ capacity to grow and become self-reliant. To me, regeneration and transformation are quite connected, and it should be long-term and strategic.

We focus our resources on strategic projects that will create a bigger impact and contribute to the long-term development and welfare of the communities. We used to have multiple CSR projects providing everything the communities needed: livelihood, education, health, etc. But then we realized this was not strategic. So, we’ve shifted from supporting direct livelihood projects to social enterprise projects. We require a project to be income-earning, and it should be sustainable so that it creates multiple benefits – a ripple effect. To us, this is regeneration and transformation. Because you’re not giving them fish, you’re teaching them how to catch it. And this will sustain them in the long run, and hopefully, they can also help other community members by expanding their social enterprise projects.

CAPS: Can you give an example of a project you are working on under the regenerative strategy?

Allan Barcena: Sure. We are quite proud of the BINHI Forest Restoration program, the largest private-sector-led forest restoration initiative in the Philippines. This project is part of our nature-based solutions and is a long-term commitment for EDC. Through this project, we have planted and restored over 10,000 hectares of degraded forest land, specifically focusing on endangered native trees. And we don’t do this alone. We work with the communities, other partners, and even customers.

Our chairman has emphasized the importance of working with others. We try to bring as many organizations and companies as possible along on the journey to create greater impact for the environment and communities. And collaboration means synergy, more partners, better outcomes, and more beneficiaries.

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The Doing Good Index comes at a critical time when economies have been heavily impacted by the Covid-19 pandemic. Inequalities have been exacerbated, and hard-won progress in social and economic growth has been undone. An estimated two-thirds of those newly forced into poverty live in South Asia, East Asia and the Pacific.

To address these shared challenges, all parts of society—individuals, companies, government and the social sector—must work together to drive more resources towards building a better future together. The Doing Good Index shows how. It provides a roadmap of the policies and practices that can unleash this capital by mitigating the trust deficit; leveraging local support; and facilitating cross-sector collaboration.

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