The Potential of Green Investments for Economic Recovery in the Philippines
The Bangko Sentral ng Pilipinas recognizes the importance of sustainability objectives and views green investments as a way to achieve economic recovery. The pandemic presents an opportunity to expand investments in green projects and activities.
Green stimulus measures offer new jobs from renewable energy, energy efficiency, and sustainable agriculture. These help decrease unemployment rates and boost economic growth. By investing in sustainable practices and technologies, businesses enhance their efficiency and productivity while decreasing their environmental impact. This, in turn, can lead to reduced expenses, increased profits, and improved competitiveness.
Furthermore, green investments mitigate the risk of environmental damage and related expenses, such as fines and litigation, safeguarding businesses and investors against financial losses. These also contribute to a healthier public by reducing pollution and other environmental hazards, resulting in lower healthcare expenses and improved well-being for individuals and communities.
Finally, investing in green technologies and practices attracts socially responsible investors who value businesses that prioritize sustainability and social responsibility. Foreign investors who wish to venture into environmentally sustainable investments are encouraged to avail themselves of online lawyer consultation provided by the best corporate law firm and energy lawyers in the Philippines.
Three Components for Sustainable Finance
Sustainable Finance consists of three key components. Firstly, the pivotal role played by banks’ board and senior management in leading and establishing sustainability principles within the organization. Secondly, it encourages the adoption of an Environmental and Social Risk Management System aimed at identifying, assessing, monitoring, and mitigating exposure to environmental and social risks. Finally, the framework mandates banks to meet disclosure standards, which promote transparency and market discipline by revealing the significant aspects of their sustainability plan and strategy in their Annual Reports.
Promoting Transition to a Low-Carbon Economy
Sustainable Finance or the “Green Force” aims to create and promote detailed and common standards to accelerate the implementation of green investments. Its purpose is to provide guidance on identifying economic activities that contribute to sustainable development, focusing on addressing the climate change impact. The goal is to empower banks to expand their sustainable or green finance initiatives and promote low-carbon transition financing.
The principle aims to facilitate a transition towards a low-carbon economy and away from high-emission economic activities, in line with the Philippines’ commitments under the Paris Agreement. Signatory countries of the agreement have pledged to support the development of low greenhouse gas emissions and climate-resilient infrastructure through financial resources. This requires investment in eco-friendly initiatives and financing the shift towards a decarbonized economy. Examples are:
- Financing an activity, entity, or project that would contribute to Green House Gases (GHG) reduction throughout the lifecycle of a product.
- Financing a project relating to or contributing to products with the level of best performance for low GHG emissions in line with a reputable global or regional standard for such sector or industry (E.g. production of highly efficient motors and projects related to its value chain and production of items regarded as “top-runner” in terms of efficiency.)
If you are considering venturing into green investments, it is highly advisable to consult the best corporate law firm and energy lawyers in the Philippines. This way, you will be confident that you are getting the greatest service by consulting with the top law firms in the Philippines.
Written by: Atty. Ma. Micaela Santana G. Tolentino