A message to the stockholders of San Miguel Corporation
From leaders of the Catholic Church, on the Occasion of SMC’s Annual Stockholders Meeting
We address you today as servants of the Church troubled by woes of our people and planet facing an ecological crisis, which San Miguel Corporation (SMC), through its dirty energy leadership, is exacerbating.
San Miguel Corporation is one of the largest conglomerates in the Philippines, if not the Southeast Asian region. Its size gives it disproportionate influence on the lives of Filipinos far beyond what simple investment decisions would suggest. With this power comes an added responsibility that goes beyond the normal fiduciary interests that are discussed in shareholder meetings. We write to you, the stockholders of SMC, to bring to your attention a matter of the utmost importance, so that you, as an owner of SMC, may take appropriate action in your stockholder’s meeting.
A recent report from a partner of the Church on development and sustainability advocacy found that SMC, through its subsidiary SMC Global Power, is the largest proponent of gas expansion in the Southeast Asian region. SMC Global Power’s gas-fired plant under development in Batangas – along the biodiversity hotspot known as Verde Island Passage (VIP) – and eight more being proposed across the country accounts for half of the planned gas expansion in the Philippines at 14.1GW. It is also the largest capacity proposed by a single proponent in all of Southeast Asia.
Gas has become the latest subterfuge of fossil fuel proponents, seizing on the narrative of transition to forward its use as a transition fuel, bridging the change from coal to renewable energy. However, we are all aware that the scale of investments locked up in this venture makes it difficult in the long run to turn these plants off, shrouding the future of the Philippines’ untapped renewable energy potential with uncertainty. It is, in effect, a detour on the road to a fully sustainable future for the Philippines in favor of the continued use of fossil fuels.
SMC’s leadership would be keen to tell you that these projects are profitable, a bridge to both an energy transition and to bringing in profit increases quarter by quarter. On one hand, we invite you to examine how accurate such profitability projections are, considering volatilities experienced by the gas industry from the Russia-Ukraine war. In fact, SMC recently acquired SPPC 1,200 MW Ilijan Natural Gas Plant has asked for a price adjustment for failure to recover costs due to Malampaya restrictions and high Wholesale Electricity Spot Market rates – a circumstance that is telling of risks involved in the volatility of gas prices. We also need to mention that the 1,750 MW gas plant of SMC’s EERI has been subjected to complaints questioning its compliance to environmental standards.
But more importantly, we ask you to go beyond the ledger and think of what it would mean for our country and the world if we continue to enable the massive use of fossil fuels.
We are in the middle of a climate emergency. We need to restrict the increase in global temperatures to no more than 1.5°C to prevent a global catastrophe. This means that we must restrict the emission of greenhouse gasses radically everywhere possible. Gas may emit less carbon dioxide than coal, but it emits them, nonetheless – on top of dangerous amounts of methane. And if SMC were to continue on its path, then it will be a major driver in the increased emission of greenhouse gasses from gas-fired plants, further challenging future generations in working for the rejuvenation of our Common Home.
Moreover, SMC will become culprit to further degradation of seascapes on which rely many communities for their livelihood, such as the VIP in Batangas and Tañon Strait in Negros-Cebu.
His Holiness, Pope Francis, has called on us to protect Earth, our only home. The Catholic Bishops’ Conference of the Philippines responded to this call through a pastoral statement issued in January which urged those part of the Church to use our position as stockholders and stakeholders of financial institutions and companies to demand for divestment from coal, gas, and other destructive industries. It is in the interests of everyone, and everyone’s children, that the 1.5°C goal of the Paris Agreement be met. Indeed, many of our brothers and sisters in Christ found it prudent in the past to entrust financial resources of the Church to such institutions, including SMC, and are now taking steps to live our responsibilities as stewards of Creation to call for action. We do not need to wait for the government to act, as we can act on our own to start the process.
As the owners of SMC, you have the power to alter the plans for gas expansion, to make the sustainable future happen. You can command your employees to halt further investments in fossil fuels. We ask you, to please consider your children, and use your voice to protect their future in and beyond the stockholders meeting.
Fr. Antonio Labiao, Executive Secretary
Most Rev. Gerardo Alminaza of the Diocese of San Carlos, Vice Chairperson
Most Rev. Jose Colin M. Bagaforo, DD, Chairman of the Board of Trustees
Most Rev. Cerillo Allan U. Casicas, DD, Corporate Secretary
Most Rev. Cosme Almedilla, DD, Member of the Board of Trustees
Most Rev. Ronald Tria Tirona, DD, Former Chairman and Archbishop of Caceres
for the Episcopal Commission on Social Action, Justice, and Peace