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First Gen Corporation, the country’s largest clean and renewable energy producer, has earned an improvement in its environmental, social and corporate governance (ESG) rating from a US-based global finance company that regularly measures the resilience to ESG risks of companies all over the world.

New York-based MSCI Inc. raised First Gen’s ESG rating to “BB” in February 2020 from “B” a year ago because of the low greenhouse gas (GHG) emissions of First Gen’s natural gas-fired power plants, as well as the low water usage of these plants.

“The upgrade is driven by a reassessment of the water risk for natural gas-based power generation. Our research indicates that natural gas power generation involves relatively lesser water usage for electricity production as compared to coal and nuclear generation methods,” MSCI said in its report about First Gen’s ESG risks, dated Feb. 27, 2020.

First Gen’s portfolio of power plants run on geothermal, wind, hydro and solar, which are renewable energy sources; and natural gas, considered the cleanest form of fossil fuels. These power plants have a total installed capacity of 3,492 megawatts (MW).

“First Gen's gas and renewable energy power generation results in a lower GHG footprint as compared to coal-based power producers. Moreover, the company performs well in comparison to its global peers with its carbon emission intensity being significantly lesser than the industry average (0.25 tCO2e/MWh vs 0.52 tCO2e/ MWh),” MSCI added.

MSCI serves as a global provider of equity, fixed income, hedge fund stock market indexes, and multi-asset portfolio analysis tools. MSCI explained in the report that First Gen “was rated based on a standard version of the Utilities Industry ESG Rating Model.”

First Gen is the vehicle for power and energy-related projects of First Philippine Holdings Corporation (FPH), one of the country’s oldest diversified conglomerates. FPH has declared that the conglomerate will not build, develop or invest in coal-fired power plants because of their harmful impact on the environment.

Both natural gas and coal are used mainly to run power plants, but studies have shown that natural gas emits far lower carbon dioxide (CO2) than coal when they burn as fuel. CO2 has been tagged as a GHG behind adverse climate change. Geothermal, wind, hydro and solar power plants hardly emit any CO2 as they don’t require any combustion