In photo: Traffic in Metro Manila and other key provincial cities in the Philippines contribute to the pollution that affects the environment and health (Photo from THEPHILBIZNEWS/MAS)
Sustainability is becoming increasingly important for German companies abroad. These findings come from the special evaluation on the sustainability of the AHK World Business Outlook Survey Fall 2021 survey conducted by the German Chamber of Commerce Abroad (AHK) which includes the German-Philippine Chamber of Commerce and Industry (GPCCI – AHK Philippinen).
“We acknowledge the need to conduct sustainable and honorable business practices which many of our members already do,” says GPCCI President Stefan Schmitz. “As a platform, we support companies for example by helping capacitate in the field of waste water management, in the past in Renewable Energy and Green Financing.
Views on sustainability issues
About two-thirds of the surveyed companies worldwide that are either German or doing business with German firms say that they are following the global discussion on these issues despite not feeling any practical effects. In the Philippines, three out of four respondents report the same context
German Law on Due Diligence on Supply Chains
The German government passed a new law on Due Diligence on Supply Chains that aims to ensure that larger German companies take care of their suppliers’ compliance with certain social and environmental standards from 2023 onwards by anchoring corresponding obligations in their supplier contracts.
About 44% of German companies around the world are preparing to comply with the aforementioned law. However, only 18% of participating companies in the Philippines look at implementing the prescribed measures in their respective supply chains.
EU Carbon Border Adjustment Mechanism
To address and comply with EU’s enhanced climate target of reducing CO2 emissions, the planned Carbon Border Adjustment Mechanism (CBAM) would require companies to disclose how much CO2 is emitted when their products are produced outside the EU.
Globally, about 41% of participating companies say that they are dealing with the expected mechanisms under CBAM. The numbers are observed to be higher in the Eurozone and nearby countries with almost a half of the respondents saying that they are aware and will be complying with CBAM. However, in other parts of the world, about 60-76% do not see relevance on the issue and in the Philippines, about 84% of companies said no or have no answer.
The European Emissions Trading Scheme
The EU Emissions Trading System (EU ETS) is a cornerstone of the EU’s policy to combat climate change and its key tool for reducing greenhouse gas emissions. Worldwide, 43% say that companies are affected by the scheme. Meanwhile, only 23% of participating firms in the Philippines are said to have been affected by EU ETS.
Sustainable Corporate Financing
The topic of applying sustainability to the financing of companies (sustainable financing) is also becoming increasingly important around the world. 63% of companies worldwide say that the issue of corporate financing is gaining significance. In the Philippines, this is also notably observed as 58% of participating firms reported its importance.
Environmental or Climate Protection Legislation to Promote Sustainability
Reforms that promote sustainability in respective countries may have been a key issue around the world at 49%. While this is observed less in EU and North America, countries in Asia, South / Central America, and Africa / Middle East region have seen great importance in passing local sustainability legislation where 50-58% of companies say that they need these reforms to enable themselves to make considerable efforts. The Philippines is seen to agree with worldwide numbers at 49%.
Company’s Own Sustainability Targets seen to be a priority
Companies worldwide understand the importance of applying sustainability practices in their respective companies where two-thirds say that they prioritize their own company sustainability goals. In the Philippines, three out of four companies also see this as part of their targets.
“We support in the knowledge transfer of these sustainable business practices, that is why we are glad to have upcoming business missions in the fields of energy efficiency, cold chains, and waste management.” says GPCCI Executive Director Christopher Zimmer. “We are also currently investigating opportunities on green hydrogen as well as environmental technologies.”
About the Survey
The participating 74 firms in the GPCCI survey are companies that are related to German-Philippine business relations with 24% coming from the manufacturing and construction sector, 30% from trade, and 46% from services. 50% of the participants have less than 100 employees, 20% have 100 to 1000 employees, and 30% have more than 1,000 employees in their global workforce.
The AHK World Business Outlook (AHK WBO) is based on a regular DIHK survey among member companies of the German Chambers of Commerce Abroad, delegations, and representative offices (AHK). It encompasses the feedback from more than 3,700 German companies, branches, and subsidiaries worldwide.