Globally, the transformative impact for businesses to embrace and drive sustainable development is on the rise. With the age of social media, increasing levels of public awareness exert more pressure on companies to pursue a larger social and environmental purposes, other than just augmenting profits.
Terms such as “People, Planet, Profit,” “Environmental Social and Governance (ESG) standards,” “Impact Financing,” “Green Investing,” “Sustainable Business,” “Social Entrepreneurship,” and “Conscious Capitalism” have proliferated in private, public, and societal spheres in order to overturn the traditional way of doing business.
While these terms seem novel, the concept of sustainability was already in existence decades ago. In fact, sustainable development was described as early as 1987 in the United Nations Bruntland Commission Report as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Years later, the term “ESG” was first coined in the “Who Cares Wins Conference Report: Investing for Long-Term Value” by the United Nations Global Compact in 2005, wherein it was recognized that environmental, social, and governance factors play an important role in the context of longer-term investment.
In 2015, these principles were formally encapsulated in the United Nations Sustainable Development Goals (SDGs), as a “universal call to action to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030.” The 17 SDGs — namely, No Poverty, Zero Hunger, Good Health and Well-being, Quality Education, Gender Equality, Clean Water and Sanitation, Affordable and Clean Energy, Decent Work and Economic Growth, Industry, Innovation and Infrastructure, Reduced Inequality, Sustainable Cities and Communities, Responsible Consumption and Production, Climate Action, Life Below Water, Life on Land, Peace and Justice Strong Institutions and Partnerships — recognize that “ending poverty must go hand-in-hand with strategies that build economic growth and address a range of social needs including education, health, social protection, and job opportunities, while tackling climate change and environmental protection.”
THE ROLE OF BUSINESS IS EVOLVING
As sustainable development is inarguably recognized as an issue of global importance, businesses should carefully consider the social and environmental risks and threats to their long-term corporate existence in a world of poverty, climate change, and inequality.
Seeking to be part of the solution rather than the problem, companies are created and/or reinvented to not only seek financial returns, but to further address social and environmental impacts by reducing poverty, meeting basic human needs, and ensuring fair and equal opportunities, which are all in keeping with the UN SDGs.
The understanding that businesses play a vital role in addressing the world’s complex social and environmental problems is now widely recognized. This recognition and commitment towards sustainability, most especially in the investment community, is validated in a research study conducted by Robert G. Eccles and Svetlana Klimenko, as published in the May-June 2019 issue of Harvard Business Review, wherein it was reported that ESG was a “top-of-mind” for 70 senior executives at 43 global institutional investing firms, including the world’s three biggest asset managers (BlackRock, Vanguard, and State Street), giant asset owners such as the California Public Employees’ Retirement System (CalPERS), the California State Teachers’ Retirement System (CalSTRS), and the government pension funds of Japan, Sweden, and the Netherlands.
Following this trend locally, top executives of the Philippines similarly recognize the concepts of sustainability in their businesses. In a report by PwC in collaboration with the Management Association of the Philippines (MAP) entitled “The Future of Business: Sustainability. Development. Impact,” which discusses the results of the 2019 survey of 127 CEOs in the Philippines from a mix of large (50%), medium (27%), small (14%), and micro (9%) enterprises from various sectors, over 80% of CEOs expect to change their production or service model in the next three to five years to promote more sustainable practices. Notably, in the past PwC surveys, CEOs were mostly concerned with issues related to policies and terrorism. This year, however, CEOs are acknowledging that climate change and environmental damage are serious problems that they need to face.
GEARING UP TO MEET 2030 SUSTAINABLE DEVELOPMENT GOALS
In the same vein, strengthening environmental protection and combating climate change are recognized by the government and civil society as one of the most important gaps which need to be closed by 2030.
In the 2019 Asia and the Pacific SDG Progress Report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), environmental targets in the Asia Pacific Region would require a complete turnaround in order to meet the SDGs. Specifically, a quarter of Asia Pacific Region targets that have worsened are linked to natural resource management — including sustainable food production, populations suffering from water scarcity, renewable energy, management of chemicals and wastes, and the loss of biodiversity.
The South-East Asian (SEA) subregion, comprised of Brunei Darussalam, Cambodia, Indonesia, the Lao People’s Democratic Republic, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Timor-Leste, and Vietnam, leads other subregions of the Asia Pacific on three goals: quality education (Goal 4), affordable and clean energy (Goal 7), and industry, innovation and infrastructure (Goal 9). According to the report, the SEA region can expect to achieve 2030 goals by maintaining the current pace of progress on all targets on affordable and clean energy except for renewable energy consumption, where every subregion in Asia-Pacific needs to accelerate progress.
SUSTAINABILITY IS THE NEW REALITY
While government takes the lead in achieving these sustainable development goals, the private sector is now recognized as a key player in addressing the most pressing environmental challenges in the world today.
Serious commitments on a global scale are being launched by some of the world’s leading consumer brands. Big investments to produce environmentally friendly packaging alternatives that will not compromise food quality and safety are in full swing.
The Coca-Cola Company’s “World Without Waste” initiative has committed to an ambitious goal to collect and recycle 100% of its packaging by 2030. In the country, Coca-Cola Philippines recently launched its P1-Billion PET (polyethylene terephthalate) bottle recycling facility.
Unilever’s global commitment is to ensure all of its plastic packaging is 100% designed to be reusable, recyclable, or compostable and to increase the use of recycled plastic to 25% by 2025. They will also share their technical solutions to recycle multi-layered sachets with the industry.
Due to the increasing awareness of benefits of companies to pursue a larger and societal purposes, it seems that sustainability is the new reality for businesses.
The future of sustainability rests in commitment, continuity, and innovation which require the collaborative efforts of the businesses, government and civil society.