Businesses urged to include ESG in core strategies

MANILA, Philippines — The Philippine Economic Zone Authority (PEZA) is encouraging businesses to incorporate environmental, social and governance (ESG) strategies, emphasizing that these will give them competitive advantage.

“As key players in the global market, we all have the responsibility to raise our levels of consciousness and action toward sustainability,” PEZA officer-in-charge deputy director general for operations Vivian Santos said at the PEZA- Global Reporting Initiative Sustainability forum.

“We must upgrade global and local value chains to be sustainable in a way that usage of resources promotes and protects the present and future generations’ right for a clean environment. Economic growth, poverty alleviation, and generating job opportunities are not isolated or opposite to sustainable development, but altogether must be present in long-term development programs and regulations as we live, work, and breathe in one earth,” she said.

Santos said that whether big-ticket investments, start-ups, or micro-, small-, and medium-sized enterprises all businesses in global supply chain and localities must identify Sustainable Development Goals (SDGs) and align them with their core business models and the products and services they offer.

She emphasized that sustainability is part of individual, regulatory, and corporate responsibilities.

“By expanding the existing sustainability program into areas that are core to each company’s business model, competitive edge may be attained in terms of market penetration, client and employee branding, and community development,” Santos said.

“At the same time, we need to strengthen our ESG initiatives and allow our stakeholders to understand we are managing risks and opportunities related to environmental, social, and governance criteria and even provide avenues for them to participate in this cause,” she added.

The PEZA official said businesses may use this as a competitive advantage especially with today’s generation given that they are provided with a space to collaborate and support a cause that will affect their future and the years to come.

As a regulator of ecozones and an investment promotion agency for export and domestic industries, Santos said the PEZA is strategic in including sustainability goals in its regulatory powers over registered enterprises and ecozones.

She cited that among PEZA’s non-negotiables for registration are the requirements for Department of Environment and Natural Resources-issued environmental compliance certificate and labor right compliance.

While ESG is now non-negotiable among businesses especially in the ASEAN, Santos acknowledged that there are a number of existing key barriers that need to be resolved, from the financial and operational impact of the pandemic to confusion over developments in regulations and reporting.