Dear Stakeholders,

Back in 2013, we witnessed first-hand as a company the destruction and devastation wrought by Typhoon Haiyan, the most powerful typhoon ever to make landfall. The storm made a direct hit on the Island of Leyte, severely damaging our largest geothermal power plants and disabling them for a few months. More than that, the death toll exceeded 6,300 but was likely higher as hundreds more were reported missing. For many months after, our more than 700+ employees simultaneously focused on rebuilding our plants to get them back to service as well as all the rescue and relief efforts for affected communities and residents around the province. That single typhoon upended the lives of thousands of people on the island for years and, despite help and efforts to rebuild, many never recovered what they lost. It became crystal clear to us even back then that we had just experienced the fury of being at ground zero of a climate-changed planet. Typhoon Haiyan was our rude wakeup call that it can no longer be “business as usual.” As a result, in 2016 we began building our energy portfolio around the theme of decarbonizing our electricity supplies and, by 2020, we had recast the FPH group’s mission statement to read “to forge collaborative pathways for a decarbonized and regenerative future.”

Global Weirding

Since that time, all parts of the world have witnessed their own versions of the “global weirding” of our weather – a term that captures the intensifying, unpredictable, and often contradictory pattern of climate extremes. 2024 was another horrendous year for the planet with the average annual temperature hitting 1.55°C above that of pre-industrial times. This makes the year the hottest it’s ever been in the last 125,000 years or so (surpassing 2023). The year also became a global demonstration of what happens when you have those higher temperatures that cause both extremely wet and insanely dry conditions. The planet will survive, but can humans and biodiversity as we know it adapt fast enough to what’s coming? And can we do what’s needed to mitigate emissions and even reverse these forces set in motion by our carbon-intensive economies?

In 2024, deadly wildfires continued to rage across several countries in South America and in California, causing billions in damage. Scorching heatwaves gripped India, Mexico, the Middle East, and Southeast Asia, with the Philippines recording a 55°C heat index last May 26. Southern Africa suffered its worst drought in a century, threatening food security for millions of people and affecting livestock. Ocean temperatures hit record highs, fueling stronger typhoons and floods such as those experienced in Eastern Spain, Thailand and Malaysia. Metro Manila’s flooding from Super Typhoon Carina broke records set by Ondoy in 2009, dumping 471mm of rain in 24 hours. Across the Philippines, we experienced six destructive typhoons between October and November, resulting in 160 deaths, widespread destruction of homes, significant damage to public infrastructure, and extensive damage to crops, livestock and fisheries. In each of these events we see families losing almost everything they have and, being uninsured, keep having to restart their lives over and over again in some vicious and cruel cycle of nature.

The rising global temperature is also having a profound and accelerating impact on the Cryosphere, which includes all of Earth’s frozen water. The melting of the world’s ice sheets is accelerating; from 1992 to 2020, the total amount of ice lost by Greenland and Antarctica was enough to raise sea level worldwide by an average of three-quarters of an inch or more. Glaciers, which hold 75 percent of Earth’s freshwater, are disappearing at twice the rate they did in 2000 and its meltwater has contributed to 21 percent of global sea level rise. At 1.5°C of warming, half of the world’s glaciers could “disappear” by the end of the century. Melting glaciers and ice sheets have already raised sea levels by around 21 to 24 centimeters since 1880. If all of Greenland’s ice melts, sea levels will rise by seven meters. If Antarctica follows, the increase will be a staggering 58 meters.

Permafrost, the frozen ground in Arctic regions, is thawing, releasing massive amounts of methane, that’s up to 86 times more potent than carbon dioxide depending on the timeframe. The Arctic tundra has now transitioned from a carbon sink to a carbon source due to increasing wildfire activities and warmer temperatures. This could trigger a climate time bomb, accelerating warming in an irreversible way.

The rising temperature is also causing the destruction of our ecosystems, threatening biodiversity and disrupting the marine food chain. We experienced the world’s fourth global coral bleaching event in April 2024 that was “the worst on record,” as it affected 77 percent of the world’s coral reef areas. At 1.5°C of global warming, between 70-90 percent of coral reefs will suffer. At 2°C, more than 99 percent of coral reefs could be lost. Up to one million animal and plant species are now threatened with extinction, many within decades. This would lead to the further disruption of ecosystems and food chains, impacting agriculture and food security.

It’s becoming more and more apparent each year that we are crossing several irreversible tipping points for the planet. The rapidly changing climate is not only bringing massive destruction in its wake, but also dispossessing millions of families of everything they have on a brutal and repeated basis. The effects are cascading, and further inaction will make it increasingly more difficult for life on this planet to adapt fast enough.

Global Headwinds and Challenges

Now recall how the world came together ten years ago in Paris and agreed to limit global warming to well below 2°C above pre-industrial levels, with an aspirational target of 1.5°C. More recently, the UN IPCC has underscored the urgency to target 1.5°C to avoid catastrophic climate impacts.

Of course, COP29 last November brought some good news and culminated in several pivotal agreements aimed at intensifying global climate action, among them: the tripling of climate financing pledges from developed nations to USD300 billion annually, and the Loss and Damage Fund that is designed to provide financing to climate-vulnerable nations.

However, these wins for climate advocates were somewhat dampened by subsequent events that threaten progress on climate actions. Firstly, despite the dramatic 90 percent decline in renewable energy prices over the last 15 years, 2024 was also a record year for the global economy producing its energy from oil and coal, with hydrocarbons comprising 80 percent of the global primary energy mix, down only slightly from 85 percent in the 1990s.

Secondly, the United States, under its new administration, withdrew from the Paris Agreement, cutting climate funding and potentially stalling progress worldwide. This exit from the landmark agreement may be seen as an excuse by less committed companies to ease off their own efforts to curb their carbon emissions. Some oil and gas companies have announced plans to increase their output, reversing previous commitments to reduce fossil fuel production. Still, there are others that are advocating for stable, long-term climate policies to effectively address greenhouse gas (GHG) emissions. Other corporate leaders face the dilemma of aligning with policy shifts or adhering to their sustainability commitments.

Six major US banks have abandoned the Net Zero Banking Alliance, reducing decarbonization financing for many climate-vulnerable nations in Southeast Asia seeking investments and loans to build climate-resilient infrastructures. The US Securities and Exchange Commission has also introduced regulations that reduce funding for clean energy projects and has made it easier for companies to contest shareholder resolutions related to environmental, social, and governance (ESG) issues.

The global landscape of net-zero commitments has also experienced significant shifts, reflecting both progress and emerging challenges.