How PH firms can surf the climate change wave
MANILA, Philippines – Climate change is considered one of the most pressing issues confronting nations across the globe today. The urgency was underscored late last year when 195 governments came together at the COP21 summit in Paris, where they reached a landmark agreement.
The deal was history in the making, but the clock is still ticking. Advocates emphasize the need for governments to follow through on commitments, and for civil society to join efforts in combating climate change.
Adopting green technology and practices, however, might initially seem like a hindrance to big business, as it adds another concern to a firm's strategy.
But the new direction the world is heading in, experts believe, may actually be a boon to companies.
At its core, adapting to climate change is all about making the best use of resources, which is what any good firm should be doing. A more efficient firm, after all, is a more profitable one.
The scale of climate change is also enlarging or creating new industries to help old industries wean themselves off wasteful consumption.
At the same time, the global economy's gradual shift to technology-enabled services and innovation has also opened new pathways for forward-thinking firms from developing nations.
Capturing global climate data
Climate change mitigation opens up massive opportunities for the country, said ADEC Innovations CEO James Donovan at a presentation to firms at the American Chamber of Commerce of the Philippines on Friday, March 4.
He would know – his firm is a major player in the sustainability space with over 30 years of experience in providing data-based environmental, social, and governance solutions. ADEC Innovations now has over 5,000 employees in 5 continents.
The key to making firms more sustainable is data, and the Philippines, with its well-established BPO industry and lower labor costs, seems tailor-made to manage all of the information.
"The thing about sustainability is that you want people to make smarter decisions. Whether a firm wants to see a better return on investment or do better for the planet, they need the data to be able to figure how to do so," Donovan explained.
Large corporations which have their data managed can have their usage of carbon, water, and other resources measured as well.
At the moment, only a few firms such as ADEC Innovations actively break down data to focus on sustainability, but it wouldn't be a stretch for other local BPO firms to do the same.
For example, Donovan shared that one of the largest sales customer relationship management (CRM) firms in the world has its energy efficiency data managed here.
"They are an IT company, but they would rather have a specialized firm focus on it, so handling data is absolutely an opportunity for future services from the Philippines," he said.
Donovan also shared that an estimated 10,000 global green initiatives have sprung up since climate change moved front and center into public consciousness.
These initiatives would all need data in order to formulate their research reports, policy recommendations, and other key activities.
A prominent one, the Carbon Disclosure Project (CDP), is already having its data managed in the country. CDP is the world's largest voluntary online registry for firms' carbon and soon-to-be water footprints.
Packaging services that work
Donovan also pointed out that the Philippines is 25 to 30 years ahead of where Africa is, so the country's services know-how and capability in the green tech area can also be repackaged and marketed to other countries.
It's about developing apps and technologies that are ready to use in developing countries, he said.
Donovan explained that developed countries like the US have packages, but these are often not yet ready to be rolled out in developing countries.
Another area where firms can profit from the shift to sustainability is by investing wisely in new technology.
Based on the Paris agreement, companies will now have to take into account their country's plans for reducing carbon emissions, called Intended Nationally Determined Contributions (INDCs). These INDCs will be submitted every 5 years, getting ramped up each time.
Val Roque, Director of the Environment and Climate Change Office at the Department of Foreign Affairs (DFA), said the INDCs can serve as a useful signal to firms.
For example, if the initial 5-year plan's target is 20% less emissions than below a certain baseline, that means that the next plan will probably be 25%. Since the government can't do it alone, the private sector will have a role to play in reducing consumption, Roque explained.
This in effect forces firms to be more efficient, which bodes well for them in the long run.
For the moment, the low-hanging fruit for businesses is energy efficiency, which can reduce electricity costs.
Roque added that increasing production efficiency will also be good not just for the environment but also for shareholders, as it will lead to lower production costs.
Pushing green energy
Another key concern is the shift to green energy, with advocates urging governments to enact laws that favor this. The Philippines already has one such measure – the Renewable Energy Act.
"With governments increasing their ambitions for climate change mitigation every 5 years, then perhaps that will signal to a firm to maximize the benefits that can be derived from the RE law by timing investments to be in sync," Roque said.
The key, however, is finding the right balance. Renewable energy is still much more expensive than coal plants and a carbon tax would almost certainly raise energy prices for consumers.
But Roque is hopeful that the gap is being narrowed, noting that innovations that make renewable energy cheaper are becoming more and more frequent and accessible.
He added that the Philippines is a signatory to an initiative seeking to find the most effective ways of pricing carbon in an effort to drive investment in cleaner solutions.
"That is a signal already from the government that it may consider instituting a carbon tax down the road," Roque said.
Donovan, for his part, agreed that some sort of price mechanism will eventually be put in place, but also said that the world is still trying to figure out the right balance between affecting incomes and fighting climate change.
He is likewise hopeful that the right balance will eventually be figured out.
"The world is changing and innovation is steering the future. We are seeing so many things being brought to the table in order to drive sustainability," Donovan said.
"After all, the climate change problem is so big that  governments actually agreed to this framework and that's a bit scary. We've got such a huge problem but everyone has their role to play in it." – Rappler.com
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