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Tracking progress in PHL’s and SEA’s sustainability pursuits

By Angela Kiara S. Brillantes, Special Features and Content Writer

Sustainability has become one of the key components driving and transforming every business today, allowing them to perform their significant share in responding to the critical environmental, social, and governance challenges the world currently faces.

The United Nation’s Sustainable Development Goals (SDGs) function as a bridge in achieving a better, greener, and more sustainable future for all lives. These SDGs tackle issues like poverty, climate change, environmental degradation, peace and justice, and other global challenges. These SDGs serve as targets that must be met by 2030.

Today, many have been joining and strengthening the sustainability agenda globally. The public and private sector are joining hands together to pursue the agenda for a more sustainable future for everyone.

In the Philippines, the country’s dedication to prioritizing achieving SDGs remained amidst the coronavirus crisis. Sustainability efforts and initiatives were slowly taking effect and saw slow but steady progress in the Philippines.

UN’s The Sustainable Development Report 2022 revealed that as a result of the Philippines’ sustainability efforts and initiatives, the country is slowly progressing in achieving SDGs. It ranks 95th out of 163 member states, with an SDG Index Score of 66.6, quite exceeding the regional average of 65.9.

Among the SDGs found to be successfully achieved by the country, albeit remaining challenges, are SDGs 6, 12, and 13, which focus on clean water and sanitation, responsible consumption and production patterns, and climate actions, respectively.

The report also noted that the Philippines has been moderately improving in attaining SDGs 1 (no poverty), 2 (zero hunger), 3 (good health and well-being), 4 (quality education), 7 (affordable and clean energy), 8 (decent work and economic growth), 9 (industry, innovation and infrastructure), 10 (reduced inequality), 14 (life below water), and 16 (peace and justice strong institutions); while it is stagnating in SDGs 5 (gender equality), 11 (sustainable cities and communities), 15 (life on land), and 17 (partnerships to achieve the goal).

On top of these, the recent Global Sustainable Competitiveness Index reveals that the Philippines is placed 86th out of 180 countries in national sustainability and came in eighth among Southeast Asian countries. With a score of 41.9, the country falls short of the global average sustainable competitiveness score of 44.1.

Given its current progress, the Philippines still has a long way to go, especially as progress in some goals like SDG 4 were observed to be reversed; but the country is already incorporating sustainable efforts and initiatives that will help in achieving these SGDs.

At a recently concluded forum that tackled global sustainability development, Foreign Affairs Secretary Enrique A. Manalo emphasized that the Philippines is working on strengthening SDG implementation through national policies and programs that will not only help achieve and incorporate the said goals but also keep track of the progress.

To name a few sustainability efforts, the Department of Environment and Natural Resources and the United Nations Industrial Development Organization have partnered to establish an e-waste treatment, storage, and disposal facility, which intends to make recycling more sustainable and for better environmental protection. Other sustainability efforts cited are the increased use of energy-efficient electric vehicles (EVs), like electric jeeps and tricycles, in partnership with the local government units; and the adoption of low-carbon, zero-carbon, and renewable energy sources to meet the country’s energy needs.

Furthermore, companies here are also beginning to embed the sustainability agenda, as they recognize that sustainability is more than a trend to embrace but also a widespread need to address.

Among the country’s leading corporations that has been factoring sustainability into their operations is Ayala Corp. (AC).

“At Ayala, our focus has always been on being a responsible corporate citizen, understanding that care for the environment, fair treatment of people, and good corporate governance are part and parcel of doing business,” Ma. Victoria A. Tan, head of the Ayala Corp.’s Group Risk and Sustainability Unit, said in an email to BusinessWorld.

“In the words of our Chairman Jaime Augusto Zobel de Ayala, ‘Businesses can no longer afford to be driven solely by the need to maximize returns to shareholders,’” Ms. Tan added.

Regarding the environment, Ms. Tan highlighted AC’s ambition to achieve net-zero greenhouse gas emissions by 2050.

“We shall take concrete steps towards mitigating climate-related risks, adapting our processes, and innovating the way we do business to ensure sustainability moving forward,” she added.

An active participant in this area is Ayala Corp.’s real estate arm Ayala Land, Inc. (ALI). In a video explaining how it is investing in our planet, “step by sustainable step,” ALI President and Chief Executive Officer Bernard Vincent Dy stressed that it has been taking steps to reduce its carbon footprint since 2017.

“We’ve achieved carbon neutrality in all our commercial properties in 2022, from more efficient use of resources to procuring renewable energy and converting land to carbon forest,” Mr. Dy said.

Moreover, Mr. Dy shared that by 2022 it has already enabled energy efficiency for 111 buildings; 91% of its commercial properties are already using renewable energy; 586 hectares were converted to a carbon forest; and more than 200,000 of trees were planted.

By creating sustainable communities, ALI also believes that sustainable communities, for their hallmark features, can readily enhance the overall quality of life and bring occupants closer to opportunities of growth.

For instance, in ALI subsidiary Alveo Land’s developments, maximized natural lighting, low-energy consumption lighting fixtures in common areas, and a rainwater harvesting system, among others, make the condominium units sustainable. Their lots, meanwhile, feature natural ventilation, natural lighting, LED lights, landscaping with native plants, an efficient waste-management system, and a materials recovery facility.

Moreover, ALI added, its parks and gardens in the Makati central business district serve as the green lung of the city. These green spaces are said to enable residents and workers to benefit from fresh air, improved mood, and better productivity as being surrounded by greenery evokes feelings of rest, refreshment and peace.

With its commitment to conserving and protecting the environment, Ayala Corp. aims to set an example for the rest of the Philippine business community to emulate.

“Other than supporting the Philippine SEC’s disclosure mandate, we hope that we can encourage more Philippine businesses to be more deliberate about their own commitments on climate and the environment,” AC’s Ms. Tan said.

For its social agenda, AC is “focused on meaningful work and community vitality with targeted strategies across customers and communities, our supply chain, and the workplace.”

“While this is a work in progress, we are happy to share that we were able to generate more than 130,000 jobs in 2022 alone,” Ms. Tan said.

For governance, meanwhile, AC updated its board diversity policy in 2020 with a target of having at least 30% female directors or at least two female directors, whichever is lower by 2025.

“The first female director was elected in 2021. In 2022, we surpassed our target (three years ahead of schedule) of having at least two female directors in our board with the election of two more female directors. Women currently represent 42.86% of Ayala Corporation’s seven-seat Board,” Ms. Tan shared.

Photo from Freepik

Progress in SEA, Asia-Pacific

Looking at a wider landscape, the Southeast Asia (SEA) region, known to have the third-largest economy in the world, is getting more attention because of its growing population, its expanding digitalization, and the way it is transitioning as a business center hub for many multinational companies.

RIMM Sustainability, a sustainability management solutions provider, and YCP Solidance, a strategy consulting firm, revealed in a recent study that the Southeast Asia region is a top destination for multinational companies. In addition, the study showed that the market in Southeast Asia has so much potential and offers many opportunities for sustainable growth and development.

As the sustainability agenda spreads like wildfire, the Southeast Asian market is putting more effort into embracing and integrating sustainability into corporate strategies to not only fuel their growth but also to achieve the United Nation’s SDGs.

According to the YCP Solidance study, SEA is one of the leading regions in acquiring renewable energy resources; wind power in Vietnam, supplies of biofuel in the Philippines and Indonesia, and hydropower in Laos and Myanmar are among the sustainable practices that the region is taking advantage of.

At a much larger scale, however, the Asia-Pacific still faces many challenges, preventing them from fully accomplishing these goals. The progress has been slow and many saw that there has been less improvement.

According to a report by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the region’s average global progress attaining the SDGs only increased from 4.4% to 14.4% in a span of 15 years.

Out of the SDGs, the region has made the most progress in the areas of quality education (SDG 4), clean energy (SDG 7), and industry, innovation and infrastructure (SDG 9). Since 2015, there has been some fast progress in some SEA countries. For instance, SDG 4 (quality education) improved greatly for countries like Bangladesh, Bhutan, and Cambodia, while China and Myanmar are the leading countries for SDG 2 (zero and hunger), and the only country that outperformed the regional average for SDG 12 (responsible consumption and production), is the Philippines.

However, progress is falling behind on climate-related SDGs. According to the UNESCAP report, due to the increasing climate crisis, from water scarcity to the back-to-back climate disasters, the efforts to achieve the climate-related SDGs have been severely affected, causing a step backward in reversing climate change.

“Progress towards climate action is slipping away. The region is both a victim of the impact of climate change and a preparator of climate change, with a responsibility to reduce greenhouse gas emission,” as stated in the ESCAP report.

Challenges to sustainable recovery

Bringing our frame back to SEA, the region has to hurdle several challenges to even accelerate the progress achieved so far.

“Despite the conscious efforts made by the relevant public sector stakeholders in SEA, the path to long-term sustainable recovery will require consistent efforts as the countries in SEA face the need to balance their commitment to sustainability and high expected economic growth,” RIMM Sustainability & YCP Solidance said in their report.

One of the challenges noted in the report is concerning energy transition, given that the pressure to incorporate sustainable practices in the sector has increased greatly. Besides switching digitally, companies are getting ready for an energy transition to fight against climate change.

The report also stated that the demand for energy has accelerated in SEA. Thus, economies in the region started shifting to utilizing renewable energy sources to help reduce energy waste.

However, not all can freely switch to using renewable energy sources since it depends on the country’s circumstances. For instance, major external events, such as the COVID-19 pandemic and climatic disasters, among others, can hinder ensuring energy transition and security for some countries.

Emerging and developing countries are still yet to start transitioning to consuming cleaner energy as they still rely heavily on fossil energy sources, such as Cambodia and Myanmar.

There are also green investments and financial gaps seen in the region. While investing in green projects is important for sustainable development, many SEA countries experience financial gaps due to the pandemic’s outcomes. The lack of sustainable financing can be caused by “not fully leveraging opportunities associated with the transition to sustainable food energy, infrastructure, and transportation systems, and not proactively identifying clients requiring support to transition towards more sustainable business models.”

In terms of reporting, RIMM Sustainability & YCP Solidance spot insufficient quality data as a concern. SEA countries are observed to be struggling with the lack of high-quality data because businesses lack knowledge of the right procedures for collecting quality data and not having enough internal resources to put those methodologies to use.

High-quality data provides better data management, establishes data transparency, and helps local governments in implementing smarter policies and regulations for a successful sustainable recovery.

‘Interconnected challenges’

On top of these challenges, there is much in the country’s own sustainability agenda that remains to be addressed by corporations, as Ms. Tan of Ayala Corp. shared.

She said AC anticipates climate risks and the need for climate action to remain high on the agenda while momentum for nature positive action will continue to gain momentum after the successful United Nations Biodiversity Conference, more known as COP15, held in Montreal, Canada last December.

“We feel both are very much in line with the environmental priorities of the current administration and [that] will be key in advancing sustainability in the Philippines,” she shared.

Aside from these concerns, nonetheless, inequality is expected to be another topic of high urgency as current attempts to address it remain fragmented.

“This truly is an era of interconnected challenges. We believe solutions to connect and address climate, nature, and inequality must be done in a systemic and transformative way,” Ms. Tan added.

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