Global German firms, including those operating in the Philippines, said sustainability is becoming increasingly important for German companies, according to a sustainability survey.

These findings come from the special evaluation on the sustainability of the AHK World Business Outlook (ABO) Survey Fall 2021 survey conducted by the German Chamber of Commerce Abroad (AHK) which includes the German-Philippine Chamber of Commerce and Industry (GPCCI – AHK Philippinen).

Overall, the survey showed that global German firms viewed sustainability’s increasing importance in their operations.

According to the survey, about two-thirds of the surveyed companies worldwide that are either German or doing business with German firms said that they are following the global discussion on sustainability issues despite not feeling any practical effects. In the Philippines, three out of four respondents report the same context

Companies worldwide understand the importance of applying sustainability practices in their respective companies where two-thirds say that they prioritize their own company sustainability goals. In the Philippines, three out of four companies also see this as part of their targets.

Notably, the survey showed that a higher number of German companies in the Eurozone said they will comply with Carbon Border Adjustment Mechanism (CBAM), but in other parts of the world including in the Philippines, majority of German firms do not see relevance of this issue.

The survey noted that to address and comply with EU’s enhanced climate target of reducing CO2 emissions, the planned CBAM would require companies to disclose how much CO2 is emitted when their products are produced outside the EU.

Survey results showed almost half of the respondents in the Eurozone and nearby countries said they are aware and will be complying with CBAM. However, in other parts of the world, about 60-76 percent do not see relevance on the issue and in the Philippines, about 84 percent of companies said “no” or have “no” answer.

Globally, about 41 percent of participating companies said that they are dealing with the expected mechanisms under CBAM.

On the EU Emissions Trading System (EU ETS), which is a cornerstone of the EU's policy to combat climate change and its key tool for reducing greenhouse gas emissions, 43 percent of respondents worldwide said that companies are affected by the scheme.

Meanwhile, only 23 percent of participating firms in the Philippines are said to have been affected by EU ETS.

About 44 percent of German companies around the world are preparing to comply with the Due Diligence on Supply Chains law. However, only 18 percent of participating companies in the Philippines look at implementing the prescribed measures in their respective supply chains.

The German government passed a law on Due Diligence on Supply Chains, which aims to ensure that larger German companies take care of their suppliers' compliance with certain social and environmental standards from 2023 onwards by anchoring corresponding obligations in their supplier contracts.

The survey also showed that the topic of applying sustainability to the financing of companies (sustainable financing) is also becoming increasingly important around the world. It showed that 63 percent of companies worldwide say that the issue of corporate financing is gaining significance. In the Philippines, this is also notably observed as 58 percent of participating firms reported its importance.

Reforms that promote sustainability in respective countries may have been a key issue around the world at 49 percent, according to the report.

While this is observed less in EU and North America, countries in Asia, South / Central America, and Africa/Middle East region have seen great importance in passing local sustainability legislation where 50-58 percent of companies said they need these reforms to enable themselves to make considerable efforts. The Philippines is seen to agree with worldwide numbers at 49 percent.

“We support in the knowledge transfer of these sustainable business practices, that is why we are glad to have upcoming business missions in the fields of energy efficiency, cold chains, and waste management.” said GPCCI Executive Director Christopher Zimmer. “We are also currently investigating opportunities on green hydrogen as well as environmental technologies.”

The participating 74 firms in the GPCCI survey are companies that are related to German-Philippine business relations with 24 percent coming from the manufacturing and construction sector, 30 percent from trade, and 46 percent from services. Fifty percent of the participants have less than 100 employees, 20 percent have 100 to 1000 employees, and 30 percent have more than 1,000 employees in their global workforce.

The AHK WBO is based on a regular DIHK survey among member companies of the German Chambers of Commerce Abroad, delegations, and representative offices (AHK). It encompasses the feedback from more than 3,700 German companies, branches, and subsidiaries worldwide.