An ASEAN Sustainability Summit (E-Summit) was convened on 21-22 October to tackle important issues on environmental, social and governance (ESG) principles as these provide the guideposts for enterprise action in response to the challenges posed by the continuing global pandemic.
SM Investments Corporation, one of the region’s leading conglomerates, has partnered with the Global Reporting Initiative (GRI) in organizing a forum for major organizations to share their insights on broadening the coverage of their sustainability initiatives.
The Bangko Sentral ng Pilipinas launched last year a three-year program for putting in place a Sustainable Finance Framework that would ”provide granular expectations in managing environmental and social risks in relation to credit and operational risk areas.” Part of the BSP’s plans is to grant incentives and it is now up to Congress to approve regulatory incentives so that banks could accelerate the adoption of sustainable principles as contained in the draft bills amending the Agri-Agra Law. The Agri-Agra Reform Credit Act of 2009 (Republic Act No. 10000) mandates all government and private banking institutions to allocate at least 25% of their total loanable funds for agriculture and agrarian reform beneficiaries (ARBs).
The BSP’s thrusts are in synch with the advocacy of the UN Environment Programme Finance Initiative toward a net zero carbon economy in order to mitigate the disastrous impact of global warming and climate change. Over 250 banks in 70 countries have signed up with the UN Principles of Responsible Banking and collectively, these banks’ assets are worth $60 trillion, about 40 percent of the global banking industry.
First-mover Philippine banks have issued about $1.15 billion sustainability bonds and P84.5 billion ($1.78 billion) peso-denominated green bonds since 2017. As of September 2021, 15 local banks have issued $4.8 billion worth of green bonds, about 29 percent of ASEAN-linked green, social, and sustainability bonds.
Also highlighted during the summit is the commitment of the next generation leaders of Philippine business and industry. They emphasized the need to “close the affordability gap,” considering that sustainable choices are often foregone in favor of cheaper and easier options. Closing this gap means making sustainable products that are well within the reach of consumers. This includes promoting green products, lessening the use of plastics in terms of packaging, and encouraging suppliers to obtain green certification for their products.
Good governance is now reckoned primarily in terms of mainstream efforts to ensure a sustainable environment that is free from air and water pollution and does not increase the level of toxic emissions that trigger global warming and set off natural disasters.
The Global Reporting Initiative (GRI) has emerged as the leading standard for ESG performance that has been adopted by almost three-quarters of the 250 largest companies in the world and two-thirds of the 100 largest companies in 52 separate countries. That the leading Philippine companies have adopted the GRI’s standards demonstrates their commitment to report the impacts of their activities on the economy, the environment and on society in a manner that is fully transparent, thereby holding themselves accountable to the government, investors and civil society.