‘For the private sector, ESG principles can guide their strategies towards sustainable and inclusive growth.’
Aligning corporate investments to community and environment responsive initiatives continue to gain traction in the Philippines through environmental, social and governance (ESG), elevating the level of corporate citizenship of businesses.
Auditing and consultancy firm PricewaterhouseCooper (PwC) said the Philippines has the second-highest proportion of green investors in Southeast Asia next to Malaysia, based on a recent survey conducted by Milieu Insight.
PwC said the Milieu Insight survey showed 70 percent of those which showed support for green investments have increased their allocation in the past two years.
According to the initiative Advanced Early Detection and Exploration Service (AEDES), which aims to improve public health response against dengue in the Philippines by predicting dengue cases from climate and digital data and pinpointing possible hotspots from satellite data, ESG’s importance to the Philippines coincides with its “unique socio-economic and environmental landscape” such as climate vulnerability, social inclusion, and governance reform.
Ranked among the world’s most climate-vulnerable countries, the Philippines stands to significantly benefit from businesses adopting robust environmental practices, AEDES said.
Towards inclusive growth
AEDES also noted companies can contribute to inclusive growth by integrating social factors into their business strategies.
“Prioritizing fair labor practices, community engagement, and customer welfare can yield shared value–benefitting both society and their bottom line,” it stressed.
AEDES added: “The Philippines has progressed in promoting good governance and transparency, particularly in the public sector. In the business realm, robust corporate governance mechanisms can bolster investor confidence, mitigate risk, and enhance business performance.
AEDES noted for the private sector, especially corporations, ESG principles can guide their strategies towards sustainable and inclusive growth.
“The adoption of these principles can fortify their reputation, enhance stakeholder engagement, and foster long-term business sustainability,” it said.
Leading the way
Aboitiz Equity Ventures Inc., one of the big businesses leading the adoption of ESG into their corporate culture, likened adopting ESG to evaluating what it has set about in its corporate social responsibility (CSR) mission.
“CSR is somewhat related to ESG – but it does not cover the same things. CSR is a business framework that helps organizations develop and implement programs that positively impact both the organization and its communities. ESG, on the other hand, is how an organization’s efforts and initiatives are measured with regard to being ‘socially responsible’,” Aboitiz said.
“In short, companies in the Philippines use ESG to measure the results of their social commitments, while CSR is used to create their sustainability and corporate responsibility plan. CSR is a company’s framework of sustainability plans and responsible cultural influence, whereas ESG is the assessable outcome concerning a company’s overall sustainability performance,” it added.
For Ayala Land Inc., senior vice president Mariana Zobel de Ayala, said the company “has taken significant steps to embed environmental sustainability as a fundamental part” of how it operates with a focus on efficient land use and eco-efficiency.
“This is evident in the way that we’ve run our malls and offices on renewable energy and continue to explore circular approaches to waste in our estates. These efforts are also in line with the Ayala Group’s commitment to achieve net zero greenhouse gas emissions by 2050,” she said.
“Our commitment to sustainability stems from our belief that we have a responsibility to our stakeholders for the environmental impacts of our business activities, and that we owe it to future generations to leave behind a world they can still inhabit and a world where no one is left behind. There is so much more that businesses can do to work more closely with their stakeholders, from ensuring a safe and inclusive work environment for their employees, treating their partners with dignity and respect, and collaborating more effectively with communities in the areas where they operate,” she added.
Investing in green projects
PwC said more and more investors are looking to invest in green projects or in companies that are not only profitable but also those that are able to create growth and long-term value through sustainable practices.
“While the demand for more green investment is on the rise, so is the demand for higher accountability and responsibility from companies to develop effective and sustainable ESG programs that keep up with the times. And as we continue to navigate beyond the pandemic, it is paramount for companies to start shifting resolutely from a purely profit-centric orientation to taking on ESG-focused commitments, recognizing that when we put ESG at the heart of business operations, value can be generated for the company,” it said.
“Making that shift today would mean a step towards a more sustainable and equitable future, one where ESG is no longer an ideal but a norm,” PwC added.
