By Beatrice M. Laforga

PHILIPPINE companies are being urged to consider sustainable financing solutions, as their operations may face risks brought by climate change in the future.

Securities and Exchange Commission (SEC) Commissioner Ephyro Luis B. Amatong warned that as Philippines is among the top countries to be affected by climate change, companies in the country should also understand the impact of such risks to their businesses.

“We think that sustainability is not just a CSR (corporate social responsibility) exercise, it should be a fundamental part of doing business because the risks associated with climate change affect the fundamental business,” Mr. Amatong said at a sustainable finance forum arranged by ING N.V Manila Branch on Thursday.

He noted that firms should know how to mitigate the climate change risks and discuss it with stakeholders since it may affect their business models in the near future.

For ING Bank Manila Country Manager Hans B. Sicat, sustainability efforts are “alive and kicking” as seen in the rising issuances of sustainable financing options such as green and social bonds.

Mr. Sicat said, citing data from Bloomberg, that issuance of such instruments rose to $267 billion in the nine months to September, already exceeding the total issuance recorded in 2018.

Bloomberg likewise reported that over the past two years, sustainable investments grew by 34% to $30.7 trillion globally.

However, Mr. Amatong pointed out that the Southeast Asia as a region “lags” in terms environmental, social and governance investments but is catching up.

“Now under the chairmanship of Thailand, sustainability and sustainable capital markets is a key theme for ASEAN. From starting behind, we are growing very fast and we hope that by putting regulation that will facilitate the discussion between issuers and investors, you can help grow this market even faster,” he said.

Mr. Amatong said companies in the Philippines have improved in terms of financing sustainable projects, or those that support environment-friendly causes.

“The interesting thing is even though we haven’t fully implemented our sustainability reporting guidelines, the Philippines seems to be doing well already… But we could do better and we need to do better,” he said.

Governments, corporations and financial institutions issue green bonds which are instruments that support environment-friendly projects.

Eligible projects based on the ASEAN Green Bonds Standards include renewable energy, energy efficiency, pollution control, clean transportation, sustainable water management, climate change adaptation and green buildings.

Earlier this year, the Securities and Exchange Commission (SEC) approved the Guidelines on the Issuance of Sustainability Bonds under the ASEAN Sustainability Bond Standards (SUS).

Issuance of green bonds, just like the regular bonds, are listed on the Philippine Dealing & Exchange Corp. Firms who issue sustainability bonds are also required to submit an annual report containing the use of proceeds to ensure that they were actually used for environmental purposes.