Management Consulting

Carlos Aboitiz, Chief Corporate Services Officer at AboitizPower, is at the forefront of navigating the energy transition in the Philippines, a country facing unique challenges due to its vulnerability to climate change and energy poverty. AboitizPower is tasked with balancing the need for a sustainable energy system while also addressing the socio-economic realities of a population that requires affordable energy. The company grapples with the complexities of transitioning from fossil fuels to renewable energy sources, particularly in a market where the utility of energy sources varies significantly, akin to comparing a bicycle to a car in terms of transportation needs. One of the critical issues AboitizPower faces is the rising cost of insurance due to the high risk associated with extreme weather events, which are frequent in the Philippines. The company has responded by establishing a captive insurance company, allowing it to manage risk more effectively and reduce reliance on external insurance markets that impose penalties on coal energy infrastructure. This strategic move not only helps in mitigating costs but also enhances the company's understanding of risk pricing, enabling better communication with stakeholders about the financial implications of various risks. AboitizPower has also pioneered the use of parametric insurance solutions, which have proven beneficial during significant weather events. For instance, after a storm that caused extensive damage, the parametric insurance facilitated a quicker claims process, allowing the company to focus on restoring essential services rather than getting bogged down in lengthy claims negotiations. This innovative approach to risk transfer has positioned AboitizPower as a leader in the insurance landscape, particularly in how the industry adapts to the realities of climate change. Furthermore, AboitizPower emphasizes the importance of data in decision-making, particularly in managing the complexities of its fossil fuel operations. By leveraging data analytics, the company aims to enhance the reliability of its operations, ultimately delivering greater value to customers while ensuring the safety of its employees. This data-driven approach is crucial for navigating the intricate trade-offs involved in the energy transition, allowing AboitizPower to make informed decisions that align with both business objectives and environmental responsibilities.