For Philippines’ businesses, nowhere to go but net-zero

The road to net-zero is not an easy path, but for the Philippines, the journey is even more difficult.

As the Philippines prepares to update its Nationally Determined Contribution (NDC) before COP30, a key question is whether it will finally set a net-zero emissions target.

The country remains the only one in ASEAN to not have such a pledge. In recent months, observers have noted that some government agencies are hesitant to make this commitment, deeming it as either a low priority or technically infeasible for now. 

However, parts of the Philippines' private sector are already moving forward with net-zero initiatives.

Pioneers leading the way

The Net Zero Carbon Alliance (NZCA) is the Philippines’ first private sector-led initiative striving for net zero. Established in 2021, it regards transitioning to net-zero not only as its contribution to addressing the climate crisis, but also as a business enabler and a way for  its “partners” to be future-proofed from potential economic losses and physical risks.

Frances Ariola, lead convenor of NZCA, declared during a recent meeting with the Japan External Trade Organization that "Our alliance does not create a roadmap for the partners, but we help them create their own roadmap with our guidance".

This alliance uses a science-based, multi-stakeholder approach, based on inputs from climate scientists and other experts: this is its way to get aligned with the IPCC’s recommendations of achieving net-zero by the mid-21st century and avoid the risk of greenwashing. 

This approach is reflected in the innovations pipeline and tools provided to help its members achieve their respective goals. For instance, NZCA has been conducting a series of capacity-building sessions and regular assemblies to address different topics, such as conducting GHG accounting, greening value chains, and updates on global and national climate policies and laws.

It also recently introduced a web-based portal to enable partners to compute their emissions and track their progress: a way to  further empower businesses to continue on their net-zero journey, but also a tool for internal coordination and ensuring transparency and accountability within the alliance.

“We uphold credibility through partnerships. We are very particular in partnering with companies that are going for net-zero and those that are keen to help companies go net-zero," added Ariola, who  also acts as Head of Corporate Communications of the Energy Development Corporation.

NZCA currently has 34 partners, mostly businesses ranging from local branches of global brands to top Philippine-based companies. It also involves other stakeholders, such as academic and scientific institutions, communications groups, and standards bodies.

Last year, the alliance reported significant gains in its efforts to achieve net-zero. For example, 83% of its partners that were using its web-based portal were enabled to track their emissions, with some of them reducing Scope 1 emissions by as much as 35%. Six of its partners also increased their dependence on renewable energy, with one now operating fully free from fossil fuels.

"Philippine business representatives meet with members of the Japan External Trade Organization to discuss decarbonisation strategies" (Photo credit: NZCA)

A path with roadblocks

Nonetheless, the road to net-zero in the Philippine context remains filled with obstacles to overcome. One of the major challenges encountered by NZCA is the resistance to change by most of the 200 companies they have engaged with in the past three years, living up to the term “business-as-usual”. 

Yet, Ariola does not see this as a solely disappointing outcome. She said that “we're not keen to really grow because we'd rather work with a small group of serious companies going for net-zero”.

Within this group is Drink Sustainability Communications, a consultancy firm helping different organisations, including small and medium enterprises (SMEs) in Southeast Asia improve their capacity for communicating sustainability through different formats. Its emphasis on a data-driven approach fits well with NZCA’s strategy.

“What is important is to use the data to strengthen your brand and your advocacy," said Harris Guevarra, President and CEO of Drink.

As one of NZCA’s pioneer members, Drink has demonstrated that its commitment to sustainability is evident in both its actions and words. It has been tracking its Scope 1 and Scope 2 emissions, with plans for Scope 3 emission assessment to start soon. Part of its initiatives include improved practices in energy efficiency, reforestation projects, paperless operations, and active transport for its staff.

Yet through its engagements for the past few years, the firm has observed that SMEs have not made similar progress in committing to net-zero. They face numerous issues including lack of access to green technologies, limitations in assessing their supply chains, short-term business pressures like maximizing profits, and difficulties in finding reliable RE providers.

Despite the imperative of decarbonisation being more on big businesses that have higher capacities, resources, and likely contributions to the climate crisis, Guevarra observed that “more and more SMEs are committed to doing good. They are ready to contribute to the sustainable development of our country.”

The same may also be said for some of the bigger companies in the Philippines, but too often, many of them ultimately view decarbonisation as a potential threat to their profitability or not as a priority goal. They also look at net-zero as too difficult of a goal to achieve, especially without the necessary enabling policies from the government.

Yet the efforts of NZCA are an indicator that starting decarbonisation is already possible in the country. While a long-term process with multiple challenges to overcome, the alliance is also an example of why this journey requires a multi-stakeholder approach to succeed. 

If the Philippines’ private sector truly wants to decarbonise and continue to operate for decades to come, all roads will have to first pass through the point of net-zero. There’s nowhere else to go.

Check Data Hub™ for the sustainability performance of companies part of ASEAN: Petronas (49.2 mtCO2 per year),  PLDT Inc., PTTEP...

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