Political priorities still drive ESG adoption — experts

POLITICAL FACTORS remain a key determinant of how fast the Philippines can implement international environmental, social and governance (ESG) standards, experts said.

“Political factors play an important role in shaping the pace of ESG regulatory adoption in the Philippines. The government’s growing recognition of the importance of sustainability is evident in the efforts to introduce and refine regulations that align with global best practices,” ESGpedia Vice-President Jozsef Acabo said in an e-mail interview.

“These initiatives reflect a positive commitment to fostering an environment where businesses can thrive while meeting international sustainability standards. At the same time, political transitions and shifting priorities may influence the speed at which full regulatory implementation takes place,” he added.

Securities and Exchange Commission (SEC) Chairperson Francisco Ed. Lim echoed the importance of stronger sustainability standards, saying they are critical to restoring investor confidence and narrowing the Philippines’ investment deficit compared with its ASEAN peers.

Speaking at the European Chamber of Commerce of the Philippines’ Philippine Economic Outlook conference last Thursday, Mr. Lim said upholding ESG standards, along with stable regulation and operational continuity, helps position the country as a more competitive and investment-ready market.

He warned that failure to address these concerns could lead to serious problems in 2026, when global investors are expected to place even greater weight on sustainability and governance metrics.

On the economic implications, Mr. Acabo said that although some companies remain wary of the cost of compliance, the growing availability of green bonds and other sustainable finance instruments is expanding funding options for companies looking to invest in sustainability projects. 

“These economic drivers help to ease the transition, making it more feasible for companies to adopt comprehensive ESG practices while contributing to a more sustainable future,” he said.

In a BusinessWorld report in September, market analysts noted that Philippine companies are increasingly turning to sustainable finance tools such as sustainability-linked bonds to raise capital and hedge against economic and political risks.

Banks, real estate, and utility firms are among the leading adopters of these products, which typically channel funds into renewable energy and other climate-related projects and impose financial penalties when ESG targets are not met. — Alexandria Grace C. Magno