Human Capital Performance

The Power Group Culture Journey

A major initiative for the year was to kick off the culture journey for all the power and energy companies under the FPH group. This initiative was deemed a priority as the companies adapt to the ongoing and emerging changes in the industry landscape, mobilize and execute on our decarbonization and regeneration goals, and engage more talents.

Culture assessments confirmed behavior strengths in clarity and primacy of mission, responsible corporate citizenship, care for employees and the workplace, and high standards for performance and execution. On the other hand, results highlighted the need for greater collaboration and synergy across boundaries to maximize the advantages of the group’s unique energy portfolio in crafting solutions to customers’ varied needs, especially in the energy transition.

These assessments will inform our key culture initiatives for 2024, starting with articulating and defining the critical few behaviors that will have the highest impact on our execution effectiveness. With leaders at the forefront, we envision the creation of shared spaces and leaders’ toolboxes to create a shared understanding of and spotlight the “power group” ways of working. These initiatives will be carefully crafted to build a culture connection with all employees, and harmonized with our hybrid working arrangements.

Employee Training and Development

Our commitment to achieving our mission, purpose, and business aspirations starts and ends with our talent. First Gen is committed to nurturing and cultivating our talent by empowering them to drive their own development. Through this, we enable them to achieve and realize their career and performance goals, as well as fulfill their individual aspirations.

Emphasizing our commitment to developing and cultivating our talent pool, 2023 saw a noteworthy upswing in our training hours. Total training hours for 2023 were recorded at 82,040 hours, a 78% increase compared to 2022’s 46,096 hours. As a result of our increased total training hours, our average training hours per employee also increased to 35 hours, a 67 percent increase compared to 2022’ s 21 hours per employee. The increase in training hours can be attributed to the following programs:

• FUNCTIONAL/TECHNICAL TRAINING PROGRAMS:
  These programs addressed the need to optimize our systems and technology installation to improve efficiency and generation across the fleet. Some of these programs are related to asset management, systems end-users training, and highly specialized training and certifications addressing reliability issues and predictive maintenance. Other training programs include the ongoing operators and maintenance training and certifications to assure the competency level of our line personnel in operating and maintaining the power facilities.
• HEALTH ENVIRONMENT, SAFETY, AND SECURITY PROGRAMS:
  The majority of the programs address our need for safe execution of activities to prevent and minimize workplace incidents. We have focused on safe execution by enhancing and deliberately ensuring that our people are trained in accordance with our safe work permit requirements, which include training and certification of our personnel in our Safety Rules.
• MORE DIGITAL COURSES IN WORKDAY LEARNING AND IN UDEMY:
  We offered new learning videos, some of which are mandatory to fulfill OSH requirements that employees can go back to and complete at their own pace. With these online platforms, tracking of compliance and learning hours have never been this easy.

We continue to build a robust Career Development System (CDS) designed to facilitate employee development at every level. With the rollout of the Internal Recruitment Policy and the updating of the Company’s Functional Job Ladders in 2022, we have followed through with the launch of the Employee Development Policy, which promotes a culture of adaptive and lifelong learning. This policy launch was complemented by the conduct of Effective Career Conversations training for people managers from November 2022 to February 2023.

The workshops have equipped our people leaders with the skills to conduct an engaging career conversation using a model. As a result, employees who had a career check-in with their managers were able to come up with an updated Individual Development Plan (IDP) based on their development goals and identified training priorities. To promote the ongoing professional growth and development of employees, a web-based Career Development Toolkit was made available for easy access by both people managers and employees.

Embedding Decarbonization

In 2023, First Gen continued our unwavering commitment to decarbonize our operations. Achieving this goal is more than just implementing decarbonization methods in our business functions; it should also involve taking transformative steps in developing our skills and development plans at a workforce level.

The Human Resources Group (HRG) implemented various learning initiatives aimed at enhancing our workforce’s skills and capabilities that are aligned with the organization’s commitment to decarbonizing their operations. This embedding of awareness and building a mindset towards decarbonization starts during the onboarding session for new hires. With an hour of the onboarding process dedicated to discussing the Company’s Mission, Purpose, and ESG advocacies, this initiative fosters an understanding of regenerative language and appreciation of decarbonization goals from the beginning of our employees’ careers with First Gen.

To boost workforce skills, HRG curated the ESG & Sustainability - Regenerative Learning Path on Udemy Business, aligned with COP26 discussions on addressing talent gaps for decarbonization targets. Specialized courses were also offered to ESG champions to build their expertise on leading decarbonization initiatives. In May 2023, HRG collaborated with the CSR team to facilitate the “RegeneRace to Kapamilyarization,” a plant tour and adventure race activity that further reinforced the integration of decarbonization principles.

First Gen also encourages our workforce to take advantage of our collective learning opportunities. In November 2023, the Lopez Learning Synergy Summit (LLSS) was held to provide a platform for employees and leaders to learn from industry experts about sustainable and regenerative best practices. Lastly, HRG has also made available learning on-demand content through video recordings on Workday. This proactive approach enables our employees to be updated on ESG Company initiatives, fostering continuous learning.

These and other initiatives collectively empower the workforce with the knowledge and skills to actively contribute to First Gen’s journey towards a decarbonized and regenerative future.

Our Hybrid Work Journey

First Gen remains firm in our commitment that a hybrid work model empowers employees to perform at their best and enhances productivity. While the COVID-19 pandemic made the hybrid work model a necessity, the Company has now fully embraced this working model to foster a greater sense of responsibility, accountability, and independence among the workforce.

In 2022, we conducted the Flex Your Ways of Working (WOW) workshops with the goal of helping our different teams establish a conducive and optimal hybrid work environment tailored to their team identities. Throughout 2023, follow-up check-ins were conducted to gather valuable feedback from employees regarding their WOW and any adjustments made since the workshop. These check-ins have revealed that the majority of teams have adapted well to our hybrid work environment, making the most of the resources available to them and practicing both asynchronous and synchronous collaboration, time management, and effective communication. Face-to-face meetings are reserved for tasks or discussions that require in-depth focus, brainstorming, and critical decision making.

Sustaining the hybrid work model required a strategic enhancement and optimization of both our physical and digital resources. This offered our employees a rewarding experience, regardless of their chosen work method.

Physical - With the official reopening of our RBC office, employees gained access to newly renovated hot desks, meeting rooms, and collaboration areas that advocate productivity, creativity, flexibility, and inclusivity. The reopened office also offered our workforce an environment to enhance their physical and mental well-being through different amenities such as a fully-equipped gym (accompanied by coaches and trainers), the game corner, a dedicated room for mental well-being, and online booking app for meeting rooms, parking, and visitor management, and service requests.

Digital - Online tools, software, and technologies were also at the forefront of innovation. In 2023, the organization embarked on our first steps in the digital transformation of our workforce’s 201 files, aiming to ultimately establish an efficient pull system capable of accommodating the hybrid work model. The Employee Portal was also launched as our employee’s central hub for any essential information, helpdesks, and guidelines.

Given the diminishing threat of COVID-19 and the completion of our newly renovated office, we seized the opportunity to prioritize face-to-face employee engagement activities. The new hire Onboarding and Meet and Greet with the President are now conducted onsite, fostering a more immersive and informative engagement experience. In-person events such as town halls, learning summits, training, and departmental quarterly assemblies also made a welcome return in 2023.

Communications Checkpoint

First Gen conducted the annual Communications Checkpoint survey in 2023 to assess the effectiveness and quality of our various communication channels and the information received by employees. The insights from this survey will further help our internal communications and engagement team with their efforts to continuously improve First Gen’s communication environment, given the current flexible and hybrid work arrangement that has been going on since the COVID-19 pandemic.

The results of the 2023 survey yielded favorable results on all our communication channels and the quality of information communicated to our employees. Our employees noted that the consistency and quality of communication channels are crucial to their work experience, as they are their primary source of information about the evolving work environment. Based on the survey, our employees also stressed the significance of face-to-face interactions, as they view them as a means to foster a sense of community and belonging.

Diversity, Equity, and Inclusion (DE&I)

2023 was a landmark year for First Gen, as it made significant strides toward nurturing a more inclusive work environment. Taking into consideration our three Gender Equality and Diversity (GED) targets that were identified and committed to in 2022 (in the areas of Corporate Culture and Leadership, Attraction and Talent Outreach, and Recruitment), we undertook new initiatives and continued partnership with different organizations, such as USAID - Enhancing Equity in Energy for Southeast Asia (E4SEA), Philippines Business Coalition for Women Empowerment (PBCWE), and UN Women’ s Empowerment (UN WEPS), to reach our end goal.

With our partnership with E4SEA, we selected change agents who trained as the primary resource for developing our in-house training on overcoming unconscious bias, an awareness program for people managers in creating and leading a diverse and inclusive workforce.

Our policies are now responsive, not just to GED and DE&I, but are also aligned with our values of social justice. In addition to this, these policies are now being reviewed with a comprehensive gender lens. Examples of these policies are the Employee Development Policy, the Internal Recruitment Policy, and the ongoing review of the Respectful Workplace Policy.

The UN WEPs Gender Gap Analysis Tool was completed by First Gen in 2023. A joint project of the UN Global Impact, UN Women, the Multilateral Investment Fund of the Inter-American Development Bank (IDB), and IDB Invest, the Gender Gap Analysis Tool is designed to help companies identify gaps and employ a holistic approach to gender equality and women’s empowerment. The results of our WEP underscore our strength in our application of a gender lens to community relations, corporate social responsibility, philanthropy, and partnerships, and at the same time provides insights on areas where we need to improve on.

First Gen actively participated in forums and discussions related to GED and DE&I initiatives. We participated in the PBCWE’s Focus Group discussion for the policy paper “Census on Women in Executive Leadership Teams in Philippine Publicly Listed Companies.” Additionally, we participated in the Asian Development Bank’s (ADB) Gender Forum. A globally recognized forum featuring 400 participants from 70 countries, it served as a platform to discuss perspectives from all intersections of gender equality and climate action, specifically on these themes: Women in the Energy Transition, Gender-Responsive Climate Change Adaptation, Women in the Green Economy, and Gender-Responsive Private Sector-led Climate Action.

As a result of our various partnerships and combined with our goal of promoting a more inclusive work environment, we took proactive steps toward embedding our GED and DE&I initiatives in our day to day practices.

• Our recruitment ads are more gender neutral in order to promote equal opportunity and ensure representation of diverse talents.
• Our workshop on Overcoming Unconscious Bias in the Workplace (with the goal of increasing awareness of our mental shortcuts and reducing bias in our attitude and behavior at work) has been attended by 84 percent of people managers. This has paved the way for embedding awareness for a more inclusive work environment, employee selection, and hiring process.

Promoting Wellbeing and Human Rights of our Employees and Suppliers

At First Gen, we have an unwavering commitment to the well-being and human rights of our employees. In 2023, we developed and implemented new policies aligned with this commitment:

• POLICY ON SMOKING CESSATION - We recognize the importance of smoking cessation as one of the pillars of our Occupational Health Programs and Services and thus shall promote health and safety benefits for all persons in the workplace. The new policy outlines the commitment to ensure a smoke-free environment through health and education advocacy that seeks to generate awareness of the negative health effects of smoking. It shall also provide the appropriate workplace health strategies for employees wishing to quit smoking, thereby helping them improve their overall health and well-being.
• FAMILY PREPAREDNESS PROGRAM - Our Family Preparedness Program (FPP) was created to increase awareness of disaster preparedness and enhance the survival skills of workers and their families through continuous learning and sharing of best practices. We also developed a Personal Disaster and Emergency Playbook that serves as an avenue to create personalized action plans according to employees’ unique circumstances, improving their capabilities to respond to disasters and other natural events.
• BREASTFEEDING POLICY - While the Company has been practicing all provisions and legal requirements stated in the law (RA 10028) prior to its enactment, we were duty-bound to formalize breastfeeding benefits and privileges into a Company policy as required by this labor law. The policy promotes well-being and child-care for women.
• POLICY AGAINST FORCED LABOR AND CHILD LABOR - We are steadfastly committed to promoting and protecting human and children’s rights and taking a strong stance against forced or child labor. The new policy outlines our commitment to ensuring that our operations, supply chain, and business relationships are free from forced and child labor. The policy also establishes compliance, implementation, and enforcement guidelines, emphasizing the importance of working with suppliers and partners who share our commitment. Our new policy will align our Company with the global movement against forced and child labor and reinforce our position as a socially responsible and ethical business. All employees were required to complete the annual mandatory e-learning on Workday.
• We established the VENDOR GRIEVANCE REDRESS MECHANISM GUIDELINES to ensure prompt, fair, and transparent resolution of vendor-related concerns and issues, thereby promoting a positive vendor relationship and enhancing overall operational efficiency.
• We offered HUMAN RIGHTS-RELATED TRAINING to employees, resulting in a total of 1,749 total training hours on human rights topics, and 564 employees trained. Examples of these are: Overcoming Unconscious Bias in the Workplace, Anti-Sexual Harassment Policy Re-orientation, How To Create a Safe Space At Work, and many more.
• COLLECTIVE BARGAINING AGREEMENT - In 2023, EDC, a First Gen subsidiary, concluded four Collective Bargaining Agreements (CBA) with four Unions across the fleet. This covered the Supervisory Unions in Bacman, Negros, and Mt. Apo. Instead of giving out tokens, we continued to commemorate the conclusion of the CBAs by planting trees through the EDC BINHI CommuniTREE and donated a portion of the savings to the SIKAT scholarship program. To continuously support labor management relations specifically for the Rank and File and Professional-Technical employees, we regularly conducted Employee Council Meetings, a labor management council that discusses the collective concerns of all employees. Employee representatives were also tapped to participate in organizing various employee engagement activities.
• ANNOUNCING THE NEW SET OF CODI MEMBERS FOR 2023 - 2024 - Established through election by our employees, the Committee on Decorum and Investigation (CoDI) was created to serve as a safe and equitable forum for addressing and resolving reports of sexual harassment.

Occupational Safety and Health

With the objective of First Gen to provide a safe and secured workplace to its employees and workers, it has established and maintained its Occupational Safety and Health Management System (OSHMS) based on Philippine OSH regulations and in reference with ISO 45001:2018. This OSHMS was also institutionalized by its various operating assets, ensuring that all employees and outsourced workers know how to determine occupational hazards and risks, carry out their responsibilities in a safe manner, and maintain a safe and healthy workplace and environment.

All employees and contractors are covered by our OSHMS that is internally audited on an annual basis. The OSHMS of the First Gen’s subsidiaries namely FGPC, FGP, FNPC, PMPC, EDC, FGHydro, and FGBukidnon covers both employees and contractors and are all certified to ISO 45001:2018. OSH risk assessments are periodically performed to ensure that all routine and non-routine tasks, workplace and equipment state and employee well-being are considered in the safe execution of work.

While we maintained our hybrid ways of work arrangement, we ensured that all areas and work practices in our premises are assessed for hazards and risks. The process of hazard identification, risk assessment and control (HIRAC) is periodically performed to ensure that all routine and non-routine tasks, workplace and equipment state and employee well-being are considered in the safe execution of work. All employees are enjoined to have the basic knowledge of hazards identification which led to the 100% completion of the employees on the mandatory eight-hour OSH training in compliance with the DOLE DO# 198 Series of 2018 in reference to IRR of RA 11058.

IMPACT TO OUR STAKEHOLDERS

Safe and healthy
workplace

Health and
wellness
consciousness

Improved
productivity

Safety culture
that can be
imparted to their
families and
the community

Agreeable
partnership with
OSH regulating
agencies

To maintain good health and fitness to work of our employees, we continued the conduct of the following shared services facilitated by our FPH-First Gen OH Team (OH Team): annual physical examination (APE), clinical consultations, prescribing and dispensing of medicines in our clinics, medical referrals and immunization. OH also validates and approves reimbursements of medicines, laboratory tests, dental, optical services via the Workday platform in coordination with HRD.

The COVID-19 outbreak in the past three years has significantly affected the implementation of various occupational health programs as required by the Corporate Health Management System and Standards (HMSS) and those required for regulatory compliance. The primary focus then was addressing the risk of COVID-19 to our workers, their families, our host communities and to our operations. COVID-19 related restrictions and resource limitations further contributed to health program implementation. In 2023, evaluation and assessment was initiated by our OH Team using the HMSS Assessment Tool. There were two health risks identified across the FPH Group: a) Mental health, and b) Ergonomics concerns. The mental health concerns were addressed via existing health and wellness/emotional well-being programs, which consists of education and awareness training, access to mental health counseling services and evaluation of fitness to work for mental health concerns. Ergonomic concerns arising from work- from-home arrangements were similarly addressed through information, education and awareness on ergonomic solutions and the provision of health services for ergonomic related health needs. The OH Team continues to implement and promote other health programs considering the identified OH risks, current health needs and post pandemic assessments. The pre-COVID OH programs are continued to be revived, effectively implemented and ready for verification. This include the following:

• Health risk assessment and management of health hazards in the workplace
• Occupational Health Reporting and Recording
• Health Services and Medical Emergency Response
• Substance Abuse Management Program (Alcohol and Drugs)
• Industrial Hygiene
• Health and Wellness programs including Emotional Well-being
• Ergonomics in the Workplace
• Blood Supply Programs
• OH programs for contractor operations
• Promotion of OH programs through various platforms: ESH Hub, emails, and Slack

To maintain data privacy and compliance with the Data Privacy Act of 2012, the OH Team ensures that all medical data and information of employees are maintained in a safe and secure manner through the FPH OH Data Management System applicable to all FPH subsidiaries. To mitigate the impact of Lagging incidents, the Company implements a robust Incident Reporting and Investigation Standard and fit-for-purpose hierarchy of controls in the implementation of corrective actions. Depending on the severity of the incident, a team composed of OSH specialists, subject matter experts, management and workers representatives jointly collaborate on incident response and incident investigation.

Company Remuneration

EMPLOYEES

STRATEGY, COMPENSATION PHILOSOPHY, AND GOVERNANCE

Our primary considerations of the First Gen’s compensation philosophy are three-fold, namely:

• Alignment to long-term goals. Ensuring that compensation programs and policies support the delivery of the corporate strategy and create long-term sustainable shareholder value;
• Equity or pay for performance; and
• Competitiveness. Keeping our competitive market position in relation to total rewards (base pay, variable compensation, and benefits)

Our compensation philosophy seeks to attract people to join the organization, retain key talent, and reward high-performing individuals, and motivate employees to develop their skills and competencies based on the changing demands of their jobs and of the business. The policy applies to the Company’s senior management and to the overall workforce.

Our compensation and benefits programs contribute to our business success by balancing market competitiveness and affordability based on a total compensation approach. These are legally compliant, performance driven, flexible, are absent of any gender-discriminatory pay practices, and are designed to be more inclusive. The key elements of our compensation structures are annual base salary, fixed bonuses, variable compensation based on annual targets, and employee benefits.

We manage our remuneration through clearly defined processes and principles, ensuring that no individual is involved in the decision-making related to their own remuneration and that there is appropriate oversight and governance of compensation decisions.

PAY AND BENEFITS PRACTICES

We ensure regular reviews of pay equity within the organization and the external labor market through the benchmarking of practices. We design our salary structure and benefits package taking into consideration the needs and preferences of our target employee and candidate groups, and, at the minimum, legal requirements. We conduct regular touchpoints with employees to gather their views on the existing benefits program, how it can support the evolving needs of our multi-generational workforce, and the quality and effectiveness of our benefits service delivery. We ensure that third-party service providers are aligned with this direction.

DIRECTORS

Directors of the Company receive a standard per diem for attendance at each board meeting and bonuses. Under the Company’s By-laws, directors do not receive any stated salary for their services, but per diem in the amount determined by the board of directors may be allowed for attendance at each meeting. A resolution was likewise passed by the stockholders of the Company fixing the maximum annual compensation of the board of directors at a certain percentage of the Company’s net income before income tax for the preceding year.

BETTERING OUR PEOPLE FOR A MORE EMPOWERED WORKFORCE

First Gen made significant investments in our people in 2023, giving them the tools, equipment, and access to services needed to help them become productive at work. The Company strongly believes that our people are our most important investment and will continuously strive to invest our resources to help build a better workforce. Our launch of DE&I initiatives also ensures that First Gen’s working culture and environment are welcoming to all employees, regardless of their gender identity or preference. The Company believes that fostering this landscape will not only meet the various regulatory requirements expected of any company in 2023, but will also improve morale, align with our Purpose, and support our employees long-term. The Company’s optimizations of our own internal operations also further our commitment to creating a conducive working environment for all. By deploying, innovating, and acquiring new digital tools and software, we are able to improve efficiency in our workplaces. Our investments in these tools and processes are more than just quality of life improvements; they are crucial elements to providing our people the tools they need to succeed. These investments (both new, continued, and planned) reflect First Gen’s strong support for our employees. It is our hope that these initiatives will help our employees align their own personal values with the regenerative aspect of the Company’s Mission, and help First Gen move forward to a more productive 2024.

SUMMARY OF OUR HUMAN PERFORMANCE, IMPACTS AND PLANS