Press releases
Dec 29, 2020

The Bank of the Philippine Islands (BPI) has put climate change, and Environment, Social, and Governance (ESG) issues front and center in its operations by helping clients achieve sustainability and profitability at the same time.

BPI has been assessing the bank’s and its clients’ exposure to natural calamities using the Hazard Hunter system—a first for a Philippine bank. Hazard Hunter is a free online tool produced by PHIVOLCS and funded by the Department of Science and Technology (DOST), which provides updated information on the susceptibility of Philippine locations to natural hazards.

Completed in 2020, BPI’s Environmental Risk Assessment (ERA) initiative involves mapping and evaluating the bank’s and clients’ assets (business site and collateral data) for their risk exposure to natural hazards. This is the second time BPI is assessing business risk exposure to climate change as a similar endeavor was done in partnership with WWF, from 2010 to 2014, with results shared nationwide to both the public and private sectors.

Equipped with the ERA results, BPI lending officers help clients determine corresponding risk-mitigating measures. These include appropriate insurance coverage and structural, technological, and engineering interventions for damage prevention, resilience, and compliance. The ERA exercise aims to protect both the clients and the bank from losses caused by climate and environmental hazards.

BPI started its ERA initiatives in 2019 and can now assess environmental and climate hazards in any country location, thanks to the Hazard Hunter system and a dedicated team within the bank. With BPI Account Officers’ and Operations Teams’ training and new risk management guidelines in place, BPI can now provide information on the natural hazards that a client’s project or investment is exposed to. With the help of BPI, clients can better avoid, manage, or minimize the potential impact of catastrophic events that have become more frequent and damaging.

Pivotal events in 2020, such as the Taal Volcano eruption and, more recently, a series of damaging typhoons – Rolly, Ulysses, and Vicky – reaffirmed the wisdom of this renewed focus on climate change and ESG issues.

In addition to its exposure to typhoons, the Philippines sits along the Pacific Ring of Fire and has numerous fault lines. The Philippine Institute of Volcanology and Seismology (PHIVOLCS) records an average of 20 earthquakes daily throughout the country. The recurrence of natural disasters has resulted in substantial losses for local businesses over the decades.

As climate change and its far-reaching impacts become more pronounced around the world, ESG issues have started to reshape organizations worldwide and redefine long-term corporate goals. For BPI, sustainability and profitability are inextricably linked, and climate and environmental risks have since become part of the development and improvement of risk management frameworks.


Published on December 29, 2020

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