By Revin Mikhael D. Ochave, Reporter
PHILIPPINE companies should start adopting environmental, social, and governance (ESG) practices to thrive, according to an IBM Consulting official.
ESG is “no longer a choice but a necessity for Philippine businesses to thrive in today’s environment,” Arun Biswas, IBM Consulting managing partner for Asia-Pacific strategic sales and sustainability consulting, said in an e-mailed reply to questions.
“Prioritizing ESG helps organizations operate in accordance with regulations, identify potential opportunities and risks and act in the best interest of their stakeholders,” he added.
Three-quarters of executives agree that sustainability drives better business results, while 72% view ESG as a revenue enabler, he said, citing an IBM Institute for Business Value study published on Feb. 27.
The study, co-authored by Mr. Biswas, was based on a survey done in the second half of 2023 covering 5,000 C-suite executives across 22 industries and 22 countries, including the Philippines.
Mr. Biswas said IBM Consulting has seen growing interest from Philippine clients on how to use technology to address sustainability issues.
“Though the market data show that more businesses are incorporating sustainability across their organizations, the key is to embed it throughout the business — truly bake it into operations — rather than treat it as an add-on,” he said.
“Sustainability must become a business transformation accelerant versus what it is in so many organizations — a reporting or accounting exercise,” he added.
He said Philippine companies should prioritize ESG because it promotes transparency and trust amid increased scrutiny from stakeholders.
He added that being transparent about business operations could help an organization’s bottom line by promoting a positive company reputation.
“Consumers are paying more attention to sustainability issues and have become more intentional with spending money on products or services that are aligned with their values,” he said.
“Additionally, investors are also demanding for more ESG information to ensure that the companies they invest in are not only sound, but also act responsibly towards pressing issues such as climate change, social development, transparency in business practices, etc.,” he added.
Mr. Biswas said focusing on ESG gives Philippine businesses a better value. It also allows them to comply with regulations and other international standards.
“By having a comprehensive ESG strategy, businesses can demonstrate their commitment to sustainability,” he said. “Reporting the impact of their strategy enables companies to be more transparent to stakeholders about how they are meeting targets, which could better enhance their reputation, attract investment and gain the support of more consumers.”
