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International financiers told to drop investments in fossil fuel giant San Miguel

Representatives from communities, consumers, fisherfolk, youth, people’s organizations, church leaders, and environmentalists from the Philippines sent letters to financial institutions in Europe and the United States urging them to defund San Miguel Corporation (SMC) for being one of the country’s biggest developers of dirty, deadly, and costly energy from coal and gas.


In letters sent to chief executives, sustainability heads, and regional and country offices of SMC investors including UBS, Allianz, HSBC, BlackRock, JPMorgan Chase, and Standard Chartered, the groups said that by financing SMC, the banks are exposing themselves to mounting public opposition and financial and legal risks, especially with SMC’s gas projects in a biodiversity hotspot dubbed as the “Amazon of the oceans.”


“The Philippines is home to the highest concentration of marine shorefish species in the world, sheltered in a marine corridor known as the Verde Island Passage (VIP). The richness of biodiversity in the VIP makes it comparable to the Amazon.This biodiversity hotspot is being imperiled by fossil gas projects of SMC. Its power subsidiary San Miguel Global Power Holdings (SMGPH) controls the 1.7-gigawatt (GW) Excellent Energy Resources Inc. (EERI) and 1.2-GW South Premiere Power Corporation (SPPC) fossil gas-fired power plants, both of which are located along the VIP in Batangas City, over 100 kilometers south of the Philippine capital. Operating these plants and increasing shipping activities for LNG importation lead to the degradation of marine and coastal ecosystems and livelihoods of communities in their vicinity,” the letters read.


Legal risks faced by SMC’s gas activities in the VIP include a confirmed violation of land conversion law that led to a cease-and-desist order in 2022. In fact, the Japan Bank for International Cooperation (JBIC), an equity investor of an adjacent LNG terminal’s developer, commenced an environmental standards compliance investigation in response to the said complaints against the terminal and EERI, which share the same project site.


According to the groups, investors should also take caution over the company’s ill financial health, in relation to its challenges in securing and implementing power purchase agreements for its fossil fuel power plants. This has also been reflected in analyses of credit rating agencies that raised the alarm over SMC’s capacity of paying its debts.


By funding SMC, the investors are exposing themselves to a company “still betting on dirty coal and promoting massive LNG buildout while lagging behind in the Philippines’ renewable energy transition.” Today, SMC still seeks to build 1.3 GW of new coal power, 14 GW of new gas and liquefied natural gas capacity, and retains links to coal mining activities.


“SMC’s fossil fuel buildout represents a clear choice away from renewables, rendering the company and all its other peers still pursuing fossil gas and coal in the Philippines vulnerable to stranding risks as the country accelerates its development of renewable energy. Around 5.5 GW of renewable energy are slated to go online in the coming years as a result of the government’s two rounds of Green Energy Auction Program (GEAP), of which none of SMC’s subsidiaries took part,” the letter read.


The letters were signed by groups including Protect VIP, Caritas Philippines, WagGas (No to Gas Alliance), Bukluran ng Mangingisda sa Batangas (Solidarity of Fisherfolk in Batangas), Power for People Coalition, Conference of Major Superiors of the Philippines - Justice, Peace, and Integrity of Creation (CMSP-JPIC) Commission, Youth for Climate Hope, Greenpeace Philippines, and others.


“Any financial support extended to SMC contributes to harming communities and biodiversity. It signifies acceptance of an abundance of risks and complicity in the obstruction of the Philippines’ climate ambitions and energy transition,” the groups said.


The groups urged investors holding bonds or providing loans to SMC to divest from SMC bonds they currently hold as soon as possible by selling them on the secondary market; avoid participating in future issuances and underwriting of SMC bonds, or purchasing the same; and publicly state that these decisions are made based on financial risk assessments, alongside considerations of socio-economic and ecological concerns as detailed above.




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