Navigating geopolitical tensions and the pursuit of sustainability

A cursory review of current talk on sustainability in the Philippines is largely focused on initiatives of organizations to adhere and embrace environmental, social, and governance (ESG) principles and their valiant efforts to align operations with global standards like the United Nations’ Sustainable Development Goals (SDGs). In the public speaking circuit, we often hear businesses tout their successes in making positive environmental and social impacts, strengthening resilience, and engaging responsibly with their impact communities. There is, however, a dearth of information, more so discussions, on how Philippine businesses are navigating their journey toward sustainability in an environment that is increasingly becoming complex due to geopolitical tensions and regional instability.

Evidently, in Southeast Asia, territorial disputes, shifting trade dynamics, and unpredictable political landscapes present significant obstacles and barriers to successful implementation of sustainability initiatives. Given the country’s interlocking links with its allies in the region and beyond, knowingly, or unknowingly, Philippine companies are especially affected by current tensions and challenges. Thus, surely, businesses in the Philippines need to consider how to advance sustainability goals while managing external potential flashpoints that may seriously impact and shift their priorities and business goals.

THE SOUTH CHINA SEA DISPUTE: A CRUCIAL CHALLENGE TO STABILITY AND SUSTAINABILITY
One of the most visible headline-hogging and serious geopolitical kinks is the dispute over the West Philippine Sea — considered by all as a highly strategic and resource-rich area. This vast ocean, and the resources in and around it, is claimed by multiple countries, including China, the Philippines, Vietnam, and Malaysia. Given the reliance of some Filipino companies on maritime resources, logistics, and unimpeded sea lanes for transport of goods, the West Philippine Sea dispute certainly introduces both environmental and operational risks —which, to my mind, complicate efforts of many to protect biodiversity, manage resources sustainably, and maintain safe navigation channels.

Several Filipino fishing companies operate in these contested waters, and they are faced with major concerns that impact sustainability, i.e., overfishing, coral reef degradation, and water pollution. The absence of regional cooperation in adopting and promoting sustainable fishing practices further exacerbates the above-mentioned issues. This sorry state is further affected by the escalating tensions with China and this sidelines environmental management in favor of military and economic concerns.

Given there is no end to this issue in sight, some companies in the Philippines’ fisheries sector are investing in sustainable aquaculture practices to reduce their reliance on these troubled waters. One Philippine agri-focused firm has already intensified efforts to cultivate fish in controlled environments. This approach not only helps alleviate environmental impacts but also reduces the company’s exposure to the geopolitical risks associated with working in contested waters.

Another sector that is seriously affected by this geopolitical tension is the energy sector. It is known that the disputed area contains a huge volume of offshore oil and gas reserves — which, when tapped and managed well, can be critical for energy security. Unfortunately, political disputes hinder the exploration of these resources that can further boost economic growth of the country. Sadly, the Philippine government has placed moratoriums on certain exploration activities, slowing the nation’s transition to sustainable energy.

Some companies have pivoted toward renewable energy sources such as wind and solar power, to reduce their dependence on oil exploration in conflict-prone areas. By focusing on clean energy, these firms are not only working to meet sustainability targets but also lowering the risks that come with operating in contested waters.

SUPPLY CHAIN DISRUPTIONS AND THE US-CHINA TRADE WAR
Another layer of complexity in Southeast Asia’s sustainability efforts stems from the global trade tensions between the United States and China. As these superpowers impose tariffs and sanctions on each other, companies across Southeast Asia experience ripples of disruption throughout their supply chains.

For example, Filipino companies in the electronics manufacturing sector are heavily affected by these trade shifts. As we all know, the Philippines continues to be one of the significant players in the electronics industry, producing components for global technology companies, and yet, as tariffs disrupt supply lines, local manufacturers face challenges in sourcing essential materials and technologies. This, in turn, increases costs and complicates sustainable sourcing.

To mitigate these challenges, some Filipino businesses are transitioning to sourcing from local and/or regional suppliers. This shift not only reduces the risks associated with the reliance on unstable supply chains but also aligns with sustainability goals by lowering the carbon footprint of long-distance transportation.

There are also tech and telcos that are investing in digital tools to streamline their supply chains. This improves resource efficiency and enhances data-driven sustainability practices. For one, these forward-looking and adaptive firms are using artificial intelligence and big data analytics to optimize operations and reduce energy consumption.

POLITICAL INSTABILITY AND CSR EFFORTS
While trade tensions and territorial disputes pose substantial challenges, political instability in neighboring countries also complicate Philippine companies’ sustainability initiatives and Corporate Social Responsibility (CSR) efforts.

For example, in countries like Myanmar and Thailand, there exist political unrest, significant military actions, and human rights concerns that create an environment of uncertainty — affecting businesses that operate or want to operate in these countries. One Filipino energy company had invested in solar energy projects in Myanmar that aimed to support the country’s transition to sustainable energy. Unfortunately, due to political instability following the 2021 coup, the project has faced significant delays and obstacles, underscoring the risks of sustainable investments in volatile regions.

Meanwhile, there are other Filipino companies that are addressing potential uncertainties in the political environment by developing flexible CSR strategies that allow for scalable or redirectable projects in times of crisis. One business conglomerate can diversify their sustainability and CSR initiatives geographically by focusing on countries and regions with more stable political climates. By broadening their geographic reach, this company can mitigate the risk of local political dynamics disrupting their long-term sustainability goals.

Philippine companies face numerous challenges as they pursue sustainability in a region marked by complex geopolitical dynamics. Territorial disputes, trade tensions, and political instability all influence the trajectory of sustainability initiatives. However, through adaptive strategies, diversification, and technological innovation, companies are finding ways to reconcile the pursuit of sustainability with the reality of operating in an unpredictable geopolitical environment.

By investing in renewable energy, securing more resilient supply chains, and embracing flexible CSR approaches, Philippine firms are paving a path forward in sustainability that accounts for both local challenges and broader global dynamics. While obstacles remain, these companies’ resilience and commitment to sustainability serve as a testament to the potential for growth, environmental stewardship, and responsible business in Southeast Asia.

Dr. Ron F. Jabal, APR, is the CEO of the PAGEONE Group (www.pageonegroup.ph) and is the founder of Advocacy Partners Asia ( www.advocacy.ph ).