Why Energy Shouldn't Compromise Sustainability, From the Chief of AboitizPower
Esquire Corner Office is a space for CEOs, presidents and other business leaders to share their professional stories and talk about their passions in and outside of the boardroom. We are debuting this space with the president and CEO of AboitizPower, Emmanuel “Manny” Rubio.
“I rose from the ranks and had the opportunity to hold several leadership positions in the industry,” he shares. Rubio was posted in different countries and was designated to lead a sales organization in Malaysia after the company was acquired and renamed to become Consolidated Industrial Gases Inc. (CIGI).
This overseas placement would be different from his other overseas postings, though. His wife, Mich, had just joined UnionBank, Aboitiz’s banking and financial services company. “In the past, when I moved out of the country, she would come with me,” Rubio recalls. “I said ‘Mich, we’re going to move again to Malaysia. And we’re moving in a month.’ And she said, ‘Nope, I’m not going. I love my job. I’m going to stay. You take the role.’” The executive soon realized that shuttling from Kuala Lumpur and Manila was not an ideal situation.
“I was looking for an opportunity and the opportunity to work for Aboitiz came,” he says. “I joined the group in 2007 as president of a joint venture…between AboitizPower and SN Power of Norway won the bid to acquire the Magat Hydroelectric Plant. They were looking for someone to manage it, to lead it. I got called in for the interview and I was given the role.”
Rubio became chief operating officer (COO) of AboitizPower in 2018, until he received a text message from then-company president and CEO Erramon “Montxu” Aboitiz in April 2019. It was the night before the annual stockholders’ meeting and Rubio was asked to arrive earlier to meet with Aboitiz.
He wondered what he may have missed in the last board meeting after reading the SMS. “I brought all the files with me and went to the venue (of the stockholders’ meeting) early.” Aboitiz invited Rubio to step out of the room where other directors were already present. “Manny, this afternoon we will announce that you will be replacing me,” his erstwhile boss had told him. “And you will be the next CEO of AboitizPower effective January 2020.”
Significantly, Rubio became the first COO and CEO of the firm who did not carry the Aboitiz name.
“It comes with a lot of responsibility,” he avers. “I would think that if you’re family, you would assume that you would be in the role. (They gave) words of encouragement—that I can do it, that I have proven myself, that they have complete trust and confidence in me. I was excited. Not many are given this opportunity. So (I ran away) with it.”
And run away he did. Rubio sat down with Esquire Philippines a few days after AboitizPower reported its P26.7-billion net income in the first nine months of 2023 in its disclosure to the Philippine Stock Exchange. The figure is 37 percent higher than the result over the same period last year. “I will not attribute (the achievements) to a single person,” the executive maintains. “I think that whenever we accomplish something, it’s always about the organization. It delivers the success.”
Rubio banked on his expertise and experience from the acquisition of his former firm, British Oxygen Company Limited by German industrial group Linden, when AboitizPower had bid for the Magat Hydropower Plant at the time the government deregulated the power industry and privatized the National Power Corporation (NPC).
“We were one of the first to acquire power assets, specifically the Magat Hydropower Plant,” he says. “We conducted trainings, change management. That’s very important. And we made sure that people who are manning the facilities feel safe, feel that they should belong. It’s a different organization but it’s an organization that’s starting for the better, growing with better opportunities.
“The transition, I believe, is the first seamless transition of a privatized asset by the government, by NPC,” Rubio continues. “So much so that they asked us to document the transition process and include that in the next asset purchase agreement that was privatized by government. Fortunately, we won the next ones as well: Ambuklao and Binga (hydropower plants). And after that, it was already included in all the transactions moving forward.”
Rubio is now at the helm of AboitizPower’s journey of “transforming energy for a better world.” The firm is seeking growth by expanding from its core businesses of energy generation and distribution. “The transition needs to be managed and does not need to be full speed at all costs, otherwise we’ll have issues,” he explains. “We cannot just say shut down all carbon-emitting facilities and put renewable energy. They’re free—from the sun, from the wind. But what if there’s no wind? What if there’s no sunlight?
“We’re looking at decentralized energy, the Internet of Things, and opportunities in microgrids; all technologies to cleaner energy. We have no choice but to clean it up,” he continues. “We are a responsible energy player that is delivering the country energy that is stable, reliable, cost-effective but in a sustainable way.
“One thing that’s not being discussed now is that, currently in the Philippines, all land is arable. You throw a seed somewhere, as long as there’s soil, it will grow. So, whenever we convert land for solar, we’re taking it away from food production. That is something that is not being put on the table. That’s why I think in any discussion for transition to cleaner energy, energy equity and a just transition should also be included.
Rubio also puts First World countries to task for their significant contributions to carbon emissions.
“We’re not responsible for the carbon buildup,” he says. “It’s the Western countries, so why penalize Filipinos? Unfortunately, it’s not a popular discussion. It’s not just about going for renewables. No problem with that, as long as we can have the technology that will allow the Philippines to have stable, reliable, and cost-effective energy. We want to make sure that we drive economy.”
According to Rubio, AboitizPower established a plan in 2020 to transition to cleaner energy with an aspiration for 50 percent renewable and 50 percent thermal capacity. This mix will be achieved, in part, by operating facilities “in a way that can really sustain the environment. We know that by 2030, there will still be no cost-effective option to provide baseload capacity other than thermal plants. The tipping point is that when (we realize) a combination of energy storage in whatever form and variable renewable energy is as competitive as, say, an LNG (liquefied natural gas) or coal facility. Then that’s game over for thermal. But I don’t see that happening in the next 10 to 15 years. I hope I’m wrong, but I think that’s just too much to ask for today.”
AboitizPower is embarking on a transformation, as with all strategic business units of the Aboitiz group, dubbed GT2025 (Great Transformation 2025). “GT2025 for us means having a decarbonized portfolio, that we’re ready for a decentralized energy system. And we digitalized our operations where we need to,” he reports. This goal is driven by efforts focused on decarbonization, digitalization, and decentralization.
“Our (Aboitiz) CEO, Sabin Aboitiz, has this goal of transforming the company as the first ‘techglomerate,’” he says. “It’s a conglomerate that takes advantage of synergies across the group and the use of technologies. We want to be the first techglomerate in the country, if not in the world. We are going to spend quite a hefty amount on digital operations, particularly in our operations to do predictive analytics across operating facilities and to create digital twins of our plants. The ultimate goal is that operators can operate anything offsite, and we can virtually simulate plans, see if we want to run efficiency or output. We’ll run it because it’s a digital twin of an existing facility and it will show us how the plant’s going to behave. And we can make informed decisions out of those. Those are the goals.”
Aside from internal goals, Rubio and team also have to look after the firm’s stakeholders, including the communities where their facilities are located. “We always believe that the reason we are in those communities is that we are just given a social license to operate. That social license is giving back something to the community. I think social development will only be possible if there’s corporate support in that area. Only when there is social development can it sustain corporate success. It’s a symbiotic relationship.”
AboitizPower is also focused on meeting customer needs in terms of reliability of supply, Rubio says. “Unfortunately, we don’t have control of reliability of supply because we don’t have control of transmission,” he says. “But in the way we supply our energy, we make sure we have unique advantages over competitors: over pricing, over service, even after sales and other add-ons. We do energy-efficiency audits, and those are actually valued by our customers. Proof is that we are now the largest retail electricity operator in the country. I think we have above 30 percent share of the retail electricity market. Retail are customers consuming 750kW and above that we can service directly and not go through the distribution utility.”
The executive underscores the importance AboitizPower puts on human capital and how the firm’s core values of innovation, teamwork, integrity, and responsibility contribute to achieving the organization’s goals.
When he assumed office, a primary focus for Rubio was giving professional managers the opportunity to occupy senior positions in the company. “I was thinking I can open or close the floodgates for (them) in roles that were previously only given to family members. Look at us now. I guess the professional managers occupying senior positions really outnumber the family members. I think that’s one of the things that I am going to leave behind when it’s time for me to give it to the next one.”
Rubio adds that while succession plans in the Aboitiz Group are very much in place, they also want to ensure they have talent for new technologies, including disruptors, for the future. “I believe that nuclear will be an option for the country in 10, 15 years from now. Where do we get nuclear engineers? Do we train our energy people now? Send them abroad to learn about nuclear energy and make them nuclear engineers? Is it too early?”
All these are driven by Rubio’s leadership style that is focused on respect, fairness, and trust. “I operate that way. My default is I’m trusting. Because that controls the environment right away. That drives the conversation, the vibes of that moment. The rest will follow—leading from the front; leaders eat last. But all of those boil down to those three.
“I think that nothing prepares you for something that’s bigger or higher in terms of roles and responsibilities. It’s what you make out of it and your past experiences: the collective learnings, and being aware of what is actually needed and what the expectations are. That way, that’s your guiding principle, what needs to be achieved. But as CEO, of course, you come up with your vision for the organization. I make sure that that vision is communicated and accepted throughout the organization. This belief in the organization that that vision is worth doing.”
“I believe up to now that power is an industry where you can make a difference,” Rubio says. “It’s a highly political product. It’s a product needed by every Filipino. So, the decisions that you make affect the lives of Filipinos. And to me, there are many measures of success. But one way I believe it should be measured is how we can make a difference in the lives of the people where we operate. I think that that’s quite impactful.
“Seeing how a community develops and grows where we are located, contributing through our CSR (corporate social responsibility), through our taxes, mandated and even voluntary contributions, I think it’s quite rewarding,” he adds. “And that keeps me in my role; keeps me engaged.
Rubio is taking his responsibility of stewarding a company that will have a major impact on how we live our lives in the future quite seriously. It’s a daunting task, but one that he seems to be fully equipped to handle.
“We need to understand the value of what we have today,” he says. “We are trying to take care of the environment as best we can to make sure that there’s still an Earth for our grandchildren. And I hope that the generations after me would still have that kind of mindset: To preserve what we have as much as we can. We only have one planet Earth and good planets are hard to come by. We need to make sure that we appreciate what we have and preserve what we have.”