What The Country’s CEOs Really Think About Sustainability

“Profitability and sustainability are no longer mutually exclusive,” said Atty. Alexander Cabrera, chairman of PricewaterhouseCoopers (PwC) Philippines.

PwC, a leading consulting and research firm, embarked on a deep dive into the sustainable business practices of large, medium, small, and micro local businesses across all industries, including energy, finance, and infrastructure. After surveying 133 CEOs, PwC found that 80 percent of CEOs plan to adopt and promote more sustainable practices in the next three to five years, with some even planning an entire change to their production and service models to align with environmental and sustainable needs.

“Our CEOs agree that our country’s top problems such as rapid urbanization, environmental issues, and ecosystem degradation should push the companies to adopt sustainable practices,” explained Cabrera.

With their finger on the pulse of CEOs across the country, PwC has determined that sustainability can no longer be relegated as side projects within companies.

As the report states, “Sustainability should be embedded in a company’s DNA.”

The government agrees. Earlier this year, the Securities and Exchange Commission (SEC) filed a memorandum circular (No. 4 series 2019), which states that all publicly listed entities are now required to submit an annual sustainability report starting in 2020. The policy requires companies to “comply or explain,” in a bid to create an ecosystem of sustainable Philippine corporations.

The reality is that climate change has reached a point where humans will need three planets to provide enough natural resources to sustain a predicted population of 10 billion by 2050.

The Philippines alone is the third biggest producer of plastic waste in oceans. Even Unilever, which once admitted to being a “branded litter business,” is looking to cut its production of new plastic by 50 percent by 2025.

The CEOs surveyed by PwC revealed that 82 percent are extremely concerned or somewhat concerned about the threats that climate change and environmental damage could pose to their business growth.

As such, 83 percent of CEOs revealed that their companies have already adopted sustainable practices in their businesses. Of the 83 percent, 83 percent have lessened their use of inefficient energy, 71 percent recycle and reuse materials, 46 percent have improved waste collection, and 34 percent have extended the shelf life of their products.

The latter is a cause for concern as a linear business model is among the main causes of environmental pollution. A linear business model is when a product is made, sold, and no longer a concern of the company. The solution to this: a circular business model that advocates recycling and remanufacturing in order to “close the loop” and minimize waste and environmental pollution.

Of the 133 CEOs surveyed, only 33 percent plan to fully adopt a circular business model.

According to the CEOs, the following reasons have stopped them from fully adopting sustainable practices: high transition costs, inadequate technology, economic viability, existing organizational culture, upfront investment, and lack of talent.

There’s still a lot of work to be done in the private sector in terms of sustainability, but it’s a start to understanding that business leaders must “beyond revenues and profits,” as per Cabrera.