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Philippine
businesses’
response
to climate
change
Climate change and
sustainability survey
June 2011
Foreword
Recent environmental events or natural disasters prompted us to look back and ask,
“What have we been doing?”
In the Climate Change & Sustainability Survey 2011, we delve into what Philippine
businesses are doing to take action on the effects of climate change. We have
benchmarked survey results with available PwC surveys on climate change and
business practices to enable us to assess how the private organisations are doing
against global peers. We strive to stimulate and scale up private sector involvement
and action on both adaptation and mitigation.
We aim to gather and ultimately provide baseline information on climate change
plans and actions of the Philippine private sector and help the businesses in:
•Understanding what the priorities of the private sector are in terms of plans,
investments, and actions;
•Evaluating what other businesses, within and outside the Philippines, are
planning and doing with respect to responding to the effects of climate change;
and
•Assessing common needs from other stakeholder groups, i.e. the national and
local government and its agencies, civil society/non-government agencies, media,
scientific and technical research providers, and international development
agencies.
This report likewise highlights the earnest need of harnessing private and public
sector partnership. The Philippine Climate Change Commission, with the objective
of raising public awareness on climate change and strengthening institutions and
mechanisms, is currently embarking on greater engagement with the business
sector in responding to the effects of climate change.
Let me take this opportunity to thank the survey respondents who shared their
thoughts, time and expertise. Your participation is crucial to the success of this
study. I am likewise grateful to the business and industry leaders who contributed
to and supported this endeavour. Also, I would like to extend my gratitude towards
the local Advisory and Marketing & Communications teams, PwC International
Survey Unit (United Kingdom), and PricewaterhouseCoopers LLP (United
Kingdom) for their invaluable effort and dedication to carry out this particular
undertaking. We shall strive to cultivate and sustain these efforts to better establish
private sector information not just in the Philippines but across South East Asia.
Our indispensable role as business leaders compels us to become socially
responsible, promoting public and environmental interest above all. Some of us
may have done well. Some of us are yet to take action. At any rate, all of us should
bend over backwards to promote sustainable growth for the environment. And we,
at PwC, shall keep that as a commitment.
2
Rossana S. Javier
Managing Partner and CEO
PricewaterhouseCoopers
Financial Advisors, Inc.
Climate change and sustainability survey
2011
Contents
Executive summary Background Response rate Survey structure Survey results and analysis Leading practice: The CEO view Conclusion Related reading Helping you grow your business Acknowledgment Key contacts 1
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2011Climate change and sustainability survey
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Executive summary
Lack of baseline information about how
businesses in the Philippines are
responding to climate change prompted
PricewaterhouseCoopers Financial
Advisors, Inc. (PwCFA), a Philippine
member firm of PwC
(PricewaterhouseCoopers), to conduct the
Climate Change and Sustainability Survey
2011.
The survey focused on
businesses in the Philippines
(57 company respondents from
various industries) and aimed
to solicit relevant information
about thinking and action on
climate change mitigation and
adaptation. The results have
been benchmarked against
business responses in other
parts of the world, using data
from PwC surveys. We hope
that the findings, summarised
below, and the summary
of leading practice, help
businesses, the government
and other stakeholders to
understand how best to further
efforts to manage the risks and
maximise the opportunities
from climate change.
How are businesses in the
Philippines responding to
climate change?
How do they benchmark
against each other and
overseas peers?
2011Climate change and sustainability survey
1
Key findings
The majority of respondent businesses are very concerned about climate change and
are thinking about the long-term impacts.
Almost all of the respondents have climate change plans, of which only a third are formal.
However, majority of them do not think they have sufficient capacity to manage climate
change. In order to maximise the opportunities and minimise the risks that climate change
poses, a step change is needed in the capacity of businesses to act.
The impact of climate change on the economy and markets is thought to be the most
significant impact that climate change will have, more so than physical damage,
changing consumer preferences, resource supply and labour force issues.
Over three quarters of respondent businesses see climate change as an opportunity
and want access to information about climate change technology. Just over half will
be increasing investment in their response to climate change over the next 12 months.
However, few (25%) of businesses are incentivising employees for climate change related
performance.
Ninety-five percent (95%) of respondent businesses are concerned about the
physical impacts of climate change, in particular flooding, drought and changes in
temperature.
Businesses think awareness needs to be raised of climate impacts and information and
training provided in adaptation leading practice.
Eighty-seven percent (87%) of respondent businesses perceive climate change
regulation as a threat.
However, some see the lack of regulation as a threat too. Businesses want more information
and support from government and they want a clear policy framework. This needs to be
consistent between the national and local level and it needs to be enforced. However, only
42% of businesses are engaging with policy-makers.
Survey responses indicate that businesses receive most support on climate change
from business organisations.
Non-government agencies, international development agencies and the media are also
regarded as supportive. However, all types of stakeholders were considered by at least some
respondents as both ‘never’ and ‘seldom’ supportive. This suggests a need to strengthen the
climate change and business ‘community of practice’ in the Philippines. Without strong
partnerships between the public and private sectors, tackling climate change is likely to take
longer and be more expensive.
Respondents are taking some action to mitigate and adapt to climate change. But high
cost is the main barrier holding back further progress.
Businesses want financial incentives, such as tax breaks and duty free imports for green
goods and services, if they are to make more progress.
2
Climate change and sustainability survey
2011
Background
Studies over the past few years have
confirmed that substantial climate change
is now happening and will continue
throughout the 21st century. The
changing climate is impacting businesses
across the world and creates both risks
and opportunities. Increasingly,
businesses are responding to climate
change, though many still are not.
Until now, there has been no
data about how businesses in
the Philippines are responding
to climate change or how these
responses benchmark against
in-country and overseas peers.
It is for this reason that PwCFA
has undertaken research, by
means of a survey, to establish
baseline information on the
initiatives of businesses in the
Philippines.
Our survey explores how
businesses are interacting
and cooperating with the
national and local government
in developing, implementing
and financing climate change
solutions. Furthermore, the
The first Climate Change &
Sustainability Survey in the
Philippines
2011Climate change and sustainability survey
3
survey seeks to understand how these businesses from
various industry sectors adapt to or mitigate against the
effects of climate change.
The survey leveraged the relationships that PwC has with its
clients and existing networks. Survey results were analysed
by PwC climate change experts and benchmarked against
other data sources, including the Carbon Disclosure Project,
for which PwC acts as global advisor and report writer, and
the Business Leadership on Climate Change Adaptation
report that PwC wrote for the United Nations Framework
Convention on Climate Change (UNFCCC).
Methodology
The survey was undertaken to the following timetable:
Table 1. Timetable
Task
Date
Project initiation
17 January 2011
Paper survey finalisation
23 February 2011
Online survey build and internal testing
24 February 2011
Pilot survey
02 March 2011
Limitations of the survey
Survey launch
07 March 2011
Survey close
31 March 2011
Invitations to participate in the survey were emailed to
various businesses and business organisations. A print
advertisement was published to stimulate responses.
Responses to the survey came from an array of sources not
under the control of PwCFA.
Data file delivery
05 April 2011
Report drafting
06 April 2011
Report publication
10 June 2011
Data protection and
confidentiality
Survey launch
Official survey invitations were sent out to businesses and
business organisations from 7 March 2011.
PwCFA collaborated with PricewaterhouseCoopers LLP
(PwC UK) International Survey Unit (ISU) in running the
survey to ensure confidentiality and anonymity of response.
PwC ISU is accredited under the Market Research Society
Code of Conduct in the United Kingdom and is a member
of the European Society of Opinion and Market Research.
Responses to the survey were sent directly to a secure
webserver allowing for independence and confidentiality.
The webservers are accomodated in an ISO 27001 certified
data centre managed in Germany.
At no stage will individual responses be attributed to any
organisation, without the expressed permission of the
organisation concerned.
Prior to the survey launch, local climate change and
sustainability experts from various industry sectors were
consulted about survey design. A pilot was used to test the
format and viability of the online questionnaire. Consultees
included representatives from:
•Ayala Foundation, Inc.
•EARTH Institute Asia, Inc.
•Lopez Group of Companies
•Management Association of the Philippines
•MFI Foundation, Inc.
•Philippine Business for the Environment
•Philippine Chamber of Agriculture and Food, Inc.
•Philippine Exporters Confederation, Inc.
•UN Secretary-General’s Advisory Board on Water and
Sanitation.
The survey was run from 7 to 31 March 2011.
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Climate change and sustainability survey
2011
Final report
The survey is composed of 40 questions filtered depending
on the responses for each question. For purposes of this
report, data gathered is presented in text, tables and
graphics to facilitate reader interpretation.
Analysis of some of the responses includes reference or is
benchmarked to global surveys or reports including the
Carbon Disclosure Project, for which PwC serves as global
advisor and report writer, and the Business Leadership on
Climate Change Adaptation report that PwC wrote for the
UNFCCC.
In no case shall this report be perceived as exhaustive in
terms of coverage. Recipients of this report must exercise
diligence and prudence in the use of the report.
This publication has been prepared for general guidance on
matters of interest only, and does not constitute professional
advice. You should not act upon the information contained
in this publication, and, to the extent permitted by law,
PricewaterhouseCoopers does not accept or assume any
liability, responsibility or duty of care for any consequences
of you or anyone else acting, or refraining to act, in reliance
on the information contained in this publication or for any
decision based on it.
2011Climate change and sustainability survey
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Response rate
More than 100 organisations were invited
to participate in the Climate Change and
Sustainability Survey 2011. Out of this
number, 98 registered as respondents to
the survey and 57 valid responses were
counted and considered in the analysis
and final reporting.
Industry
classification
The make up of the 57 valid
responses is set out in Figure
1. Of the valid responses, 67%
were from local businesses
and 33% multinationals. The
businesses that were engaged
represent those that are critical
to the response to climate
change, such as utilities,
agribusinesses and financial
services and by their size and
reputation able to influence
thinking and action on
business and climate change in
the Philippines.
Senior members of the organisation, knowledgeable of the climate change and
sustainability initiatives of the company, were requested to accomplish the survey.
Figure 1. Industry sector classification
Utilities/
energy
7%
ICT/
Retail
telecom 2%
5%
Services
25%
Financial
14%
57
Manufacturing
16%
respondents
6
Climate change and sustainability survey
Others
17%
Agribusiness
14%
2011
Survey structure
1
2
3
4
Climate
change
impact and
understanding
Climate
Climate
change
change
planning and action
strategy
Perceptions
of climate
change
stakeholders
This section explores
basic information about
the organisations’
understanding of climate
change and its impacts.
It deals with the general
aspects of climate change
that may be of interest to
the organisations as well as
the organisations’ sources
of information about
climate change. It discovers
the possible impacts on
businesses, the level of
concern the organisations
feel about climate change
impacts, and the aspects
of operations that would
be most affected by
climate change. Risks and
opportunities, in terms of
regulatory requirements and
physical impacts, as well
as investments on climate
change are also explored.
This section discovers the
level of preparedness the
organisations have against
the effects of climate
change. It pins down the
number of businesses
having dedicated or
formal, managementapproved climate change
plans. It identifies how
many organisations
have strategies such
as monitoring climate
change plans, achieving
emissions reduction targets,
rewarding climate change
related performance, and
engaging with policy-makers
on possible responses to
climate change. It also
explores the barriers to
taking sufficient action on
climate change.
This section explores
the perceptions of the
organisations about
other stakeholders such
as the national and local
government, government
and nongovernment
agencies, other business
organisations, the
media, and international
development agencies.
The level of satisfaction or
dissatisfaction is recognised
for each stakeholder group
in terms of initiatives
and performance,
and partnership and
cooperation. Furthermore,
the “should-be” priorities
of and the support required
from the government and
other stakeholder groups
in terms of adaptation
and mitigation have been
identified. This section identifies the
actions that have been
undertaken, are currently
being undertaken, and
will be undertaken by the
organisations to mitigate
or adapt to the effects of
climate change. It also
explores whether businesses
publicly disclose information
about climate change and
how this is carried out.
2011Climate change and sustainability survey
7
Survey results and analysis
1
Climate change impact and understanding
8
Climate change and sustainability survey
2011
Figure 2. Aspects of climate change of interest to the organisations
Number of
respondents
50
40
30
20
10
0
Developments in
climate science
Developments
in climate policy
and regulation
Developments in
technology
Developments in
climate finance
and business
Others
None
Base: All respondents (57)
Most popular sources of information for the following
aspects of climate change were identified:
Developments in climate science: Media, Business
Community, National Government, and Scientific and
Technical Research Providers
Developments in climate policy and regulation: National
Government, Media, Business Community
Developments in technology: Business Community, Media,
and Scientific and Technical Research Providers
Developments in climate finance and business: Business
Community, National Government, Media
Others: Risk Assessment and Management, Mitigation and
Adaptation best practices.
The UNFCCC/PwC report on Business Leadership on
Climate Change Adaptation identifies developments in
climate policy and regulation as well as developments in
technology as the aspects of climate change of most interest
to the surveyed organizations. The most popular sources of
information are the government, the business community,
and scientific and technical research providers.
Responses from businesses in the Philippines are consistent
with those of businesses in other countries, with most
interest in policy and regulation and tecnhology. The
importance of finance and business is also high. Businesses
are primarily looking to governments for information on
policy and regulations, but also on science and finance.
However, businesses are not looking to government for
information on technology. Instead the business community,
media and science & technology research providers are
seen as primary sources. Lower levels of overall interest in
science suggest businesses are interested in how to respond
more than in what is happening.
“We need to keep abreast
with the current
developments to know the
risks involved”
2011Climate change and sustainability survey
9
Figure 3. Extent of impact to businesses
Figure 4. Level of concern
Neither concerned
or not concerned Not very concerned
3% 2%
To some extent
35%
Somewhat
concerned
28%
To a great extent
65%
Very concerned
67%
Base: All respondents (57)
Base: All respondents (57)
The message is clear. All respondents expect climate change
to impact their organization, the majority to a great extent.
The Philippines has been identified as one of the top ten most vulnerable countries in the world in respect of the
impact of climate change. In its Fourth Assessment Report,
the Intergovernmental Panel on Climate Change (IPCC)
found that the mean average annual maximum temperature
in the Philippines has increased by 0.14 degrees celsius
between 1970-2000. Annual mean rainfall and the number
of rainy days have also increased, as have incidences of
landslides, floods and cyclones.1 This changing climate
impacts businesses; survey responses show that this trend is
expected to continue.
The vast majority of respondents are concerned about
the ability of their organization to manage the impacts
of climate change. Combining this response with the
expectation that the majority of organizations will be
impacted demonstrates the need for a ‘step change’ in
capacity, so that businesses in the Philippines are not
put at risk from the impacts of climate change. This lack
of capacity in businesses is also evident in government
agencies. Various development assistance projects have
been set up to increase the institutional capacity of the
Philippines to respond to climate change.
Intergovernmental Panel on
Climate Change. (2007). Fourth
Assessment Report.
1
10
Climate change and sustainability survey
“With the environment landscape
changing rapidly, climate change is a
critical concern to our shareholders as
well as stakeholders.”
2011
Economies and markets
will be most impacted by
climate change
Figure 5. Aspects of the organization most impacted by climate change
Number of respondents
25
20
15
10
5
0
Changing
consumer
behavior
Induced changes
in human
and cultural
environments,
e.g., migration
Impacts on
economies
and
markets
Damage
to physical
assets or
infrastructure
Rank 1
Challenges
in obtaining
resources
(supply)
Impacts to
workforce
location and
availability
Administration
of health/
safety hazards
Rank 2
Base: All respondents (57)
Note: Rank 1 indicates the number of respondents who considered each element (horizontal axis) as most important.
Businesses in the Philippines expect the largest impact
of climate change will be on the economy and markets.
The second largest impact is expected to be damage to
physical assets or infrastructure. It is estimated that the
costs of climate change in a business as usual scenario
will be 5-20% of global GDP annually.2 The costs to the
Philippines of climate change are calculated as 6-7% of
GDP.3 The Philipines is a bio-diversity rich archipelago, and
has an economy dependent on the natural environment for
resources and resilience to natural disasters.
Recent events such as Ondoy and Pepeng have shown how
costly natural disasters can be, with estimated damage of
US$4.4bn and 600 lives lost. Businesses are aware of the
risks and are expecting a variety of impacts. This signals the
need for planning and capacity building to mitigate risks
and maximise opportunities.
2
Stern, N., et. al. (2006). Stern Review: The Economics of Climate Change.
Asian Development Bank. (2009). The Economics of Climate Change in
Southeast Asia: A Regional Review.
3
2011Climate change and sustainability survey
11
Eighty-seven percent (87%) believe that
climate change regulations present risks to
their organisation. However, 51% also
believe lack of regulation is also a risk.
Figure 6. Regulatory requirements that present risks to the organisations
Uncertainty of future regulation
on climate change
Emission/environmental
reporting obligations
Planning regulations
Product efficiency standards
Fuel taxes
Lack of regulation on climate
change
Air pollution limits
Carbon taxes
International agreements
Voluntary agreements
Cap-and-trade schemes
(carbon trading)
Others
0
5
10
15
20
25
30
Number of respondents
Base: 47 respondents
The majority of respondents believe that climate change
regulations present risks to their organisation. Uncertainty
over future regulations is one of the most common
responses. This is consistent with views expressed by
business through other PwC surveys. International
negotiations are ongoing and to date, do not provide
certainty regarding overall targets and legal form. At a
national level, climate change plans are being drawn up,
including in the Philippines, however the implications of
such plans for specific businesses are not clear and could
take a number of different forms (e.g., taxes, standards,
obligations and incentives).
Mercer. (2011). Climate Change Scenarios – Implications for Strategic
Asset Allocation.
4
12
Climate change and sustainability survey
2011
A study of institutional investors by Mercer found that
regulation of GHG emissions could cost $8 trillion globally
by 2030 whilst the cost to the environment, health and food
security could range from US$2 trillion to US$4 trillion. The
study also found potential benefits of regulation, predicting
that low carbon technology investments could be worth
from US$3 trillion to US$5 trillion.4
Just over half of the respondents to the Philippine survey
saw lack of regulation as a risk. They are not alone.
Thousands of businesses around the world have been calling
for climate change to be regulated at a national and global
level. This has been driven in part by a desire for green jobs,
for a clean energy future and to ensure competitiveness with
businesses in other countries.
Ninety-five percent (95%) believe that
physical impacts present risks to their
organisation.
Figure 7. Physical impacts that present risks to the organisations
Increased frequency of extreme weather events
Flooding or sea level rise
(including decreased precipitation)
Drought or water scarcity
(including reduced precipitation)
Change in temperature
Induced changes in natural resources
Changing landscapes
Others
0
10
20
30
40
50
60
Number of respondents
Base: 52 respondents
Carbon Disclosure Project results show that 68%-69% of
the respondents think that current and/or anticipated
regulatory requirements and physical impacts related to
climate change present significant risks to their companies.
Belief in the risks posed by the physical impacts of climate
change to businesses in the Philippines is higher compared
to Carbon Disclosure Project respondents. This is likely to
reflect the vulnerability of the Philippines to climate change
impacts such as those highlighted in the survey – flooding,
droughts and changes in temperature – as well as the
low adaptive capacity of the government and businesses
themselves.
2011Climate change and sustainability survey
13
Figure 8. Respondents who believe that regulatory
requirements present opportunities
No
25%
Figure 9. Respondents who believe that physical impacts
present opportunities
No
21%
Yes
75%
Yes
79%
Base: 53 respondents
Base: 53 respondents
Amongst the regulatory requirement opportunities
identified by businesses in the Philippines were the
following:
Amongst the physical impact opportunities identified by
businesses in the Philippines were the following:
•Local ordinances or regulations focused on reducing the
effects of climate change, e.g., environmental or resource
depletion controls, carbon emissions reduction, tax
incentives, waste segregation, carbon trading/offsetting,
etc.
•Compliance to the Kyoto Protocol5
•Organic produce/goods certification.
“Kyoto Protocol is an international agreement linked to the United Nations
Framework Convention on Climate Change. The major feature of the
Kyoto Protocol is that it sets binding targets for hundreds of industrialised
countries and the European community for reducing greenhouse gas
emissions.” - United Nations Framework Convention on Climate Change
5
14
Climate change and sustainability survey
2011
•Maximised use of green facilities or buildings
•Use of recyclable materials
•Capitalising on capabilities and global access to
technically advanced suppliers
•Manufacture of green materials for local and international
markets
•Opportunities for innovation.
Eighty-eight percent (88%)
consider the longer-term impacts
of climate change in their
strategic plans or investment
decisions
Base: All responses (57)
Figure 10. How longer-term impacts of climate change are considered in strategic plans or investment decisions
Incorporated in some short-term
investments/operations (0-6 years)
Incorporated in some medium-term
investments/operations (6-20 years)
Incorporated in some long-term investment
decisions (including long-life assets - 20+ years)
Incorporated in all long-term investment
decisions (including long-life assets - 20+ years)
Incorporated in some long-term strategic plans
Incorporated in all long-term strategic plans
0
5
10
15
20
25
Number of respondents
Base: 50 respondents
These responses reveal a high level of forward thinking
amongst survey respondents with regard to the impact of
climate change on strategic plans and investment decisions.
The same question, when asked of businesses in other
countries as part of the UNFCCC/PwC Business Leadership
on Climate Change Adaptation report, revealed that 90%
are likewise thinking in this way. Trends show that the
majority of the global respondents have also invested
through some long-term strategic plans, some medium-term
plans (6-20 years), and some short-term plans (0-6 years).
Consideration of climate change in the long-term plans
of respondents is likely to be driven by concern over the
physical impacts of climate change and a lack of confidence
in the capacity to respond, as evidenced by survey
responses.
2011Climate change and sustainability survey
15
Figure 11. How climate change investment will be affected in anticipation of the impacts in the next 12 months
There will be no allocation of investment on
climate change
There will be a reduction of investment for
climate change
There will be a delay in investment for
climate change
There will be an increase in investment for
climate change
There will be no change on existing
climate change investment
0
10
20
30
40
Number of respondents
Base: 56 respondents
Just over half (52%) of survey respondents stated that they
will increase investment for climate change in the next 12
months. This highlights how climate change is not simply an
environmental issue but a financial consideration that can
impact on profit and loss. It also demonstrates the potential
opportunity that climate change presents for businesses
that provide goods and services that help organisations
respond to climate change. Other responses indicate that
investment in climate change will stay the same (30%),
whilst a minority (18%) will delay, reduce or not invest at
all in climate change.
16
Climate change and sustainability survey
2011
The UNFCCC/PwC Business Leadership on Climate Change
Adaptation report states that “early recognition of climate
risks can help identify impacts and develop more effective
business continuity strategies. Understanding how climate
risks could impact operational effectiveness can help
decision making on investments that can manage or lower
longer-term operational costs.”
2
Climate change
planning and strategy
2011Climate change and sustainability survey
17
Figure 12. Level of preparedness to manage climate
change impacts
Survey responses show that the majority of businesses are
very concerned about their ability to manage the impacts of
climate change. However, only 14% of respondents are very
prepared for these impacts and the vast majority are only
somewhat prepared. There is a clear mismatch between the
level of concern and the level of preparedness.
60% Somewhat prepared
24% Neither prepared
nor unprepared
14% Very prepared
2% Somewhat
unprepared
Base: All respondents (57)
Evidence of the level of preparedness can, in part, be found in the existence of plans or strategies. Survey results highlight
that a third of respondents have a formal management-approved plan. Of these:
•sixty-three percent (63%) focus on both adaptation and mitigation
•twenty-one percent (21%) focus only on adaptation
•sixteen percent 16% only on mitigation.
The majority (67%) either had only an informal plan (56%) or no plan at all (11%).
Regardless of the formality of the plan, 84% of respondents said there are specific individuals in their organisation tasked
with monitoring their climate change plan.
Thirty-three percent
(33%) have formal
management-approved
plan
Base: All respondents (57)
18
Climate change and sustainability survey
2011
Despite the majority of respondents signalling the existence
of formal or informal climate change plans, 61% do not
have an emissions reduction target. This is more than
double the response of businesses covered by the Carbon
Disclosure Project, which identifies only 29% of the
respondents who do not have an emissions reduction target.
However, when the lack of a regulatory driver for emissions
reductions in the Philippines is considered, the fact that
39% of respondents actually have a target demonstrates
how seriously businesses consider the need to reduce GHG
emissions.
Seventy-five percent
(75%) do not have
reward mechanisms
Sixty-one percent (61%)
do not have emissions
reduction target
Base: All respondents (57)
The Carbon Disclosure Project identifies only 36% of
the respondents who do not provide incentives for the
management of climate change issues, including the
attainment of GHG.
Base: All respondents (57)
Compared with businesses in other countries, fewer
businesses (42%) in the Philippines engage with
government policy-makers. Globally, according to the
UNFCCC/PwC report on Business Leadership on Climate
Change Adaptation, 50% of the organisations surveyed
engage with policy-makers, i.e. the national government,
on adaptation. The Carbon Disclosure Project identifies
80% of the respondents who engage with policy-makers
on responses to climate change. As 87% of business in
the Philippines think that regulation poses a risk to their
business, there appears to be a gap between concern over
regulation and engagement with policy-makers to mitigate
the perceived risk. Businesses have a critical role to play in
shaping national and international climate change policy
and leading practice encourages engaging with policymakers.
Fifty-eight percent
(58%) do not engage
with policy-makers
Base: All respondents (57)
2011Climate change and sustainability survey
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High cost holds back
climate change action
Figure 13. Key barriers to take action on mitigation and adaptation
Number of
respondents
25
20
15
10
5
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Mitigation
Adaptation
Base: All respondents (57)
The most significant barrier to action on climate change
for businesses in the Philippines is high capital costs. This
is followed by the lack of government policies and fiscal
incentives. Lack of knowledge and capacity to act is also
key.
20
Climate change and sustainability survey
2011
Globally, organisations consider lack of government
policies and fiscal incentives as well as uncertainty in
future environment as the key barriers to take action.
Responses in the Philippines are therefore consistent with
other countries with regard to the role of government.
However, they indicate that surveyed businesses in the
Philippines need more help in order to take further action.
In particular, they need financial support and capacity
building for knowledge and skills.
3
Climate
change
action
2011Climate change and sustainability survey
21
Figure 14. Actions on adaptation
Groundwater or
rainwater harvesting
11
Urban greening
11
11
Water efficiency
Other
1 2
9
5
17
13
22
17
19
1 3
29
17
14
Flood and assistance
shelters
Shoreline defence
11
6
12
9
47
9
Action
has been
undertaken
Action is
currently
being
undertaken
Action will be
undertaken in
the future
None
Base: All respondents (57)
Businesses can take a variety of actions to adapt to climate
change. These actions will vary from one business to
another and by geography. The most common climate
change adaptation action of businesses in the Philippines
is to use water efficiently. This is followed by urban
greening, action to manage the threat of floods inland and
groundwater/rain harvesting. Very few have taken action
on shoreline defence.
22
Climate change and sustainability survey
2011
These responses demonstrate an awareness amongst
businesses of how to adapt to climate change and of
the potential for ‘autonomous’ adaptation. However,
approximately one quarter of responses across all categories
indicate that no action is being taken.
Figure 15. Actions on mitigation
Tree planting and/or watershed protection
Offsetting
26
11
Process emission reductions
11
10
15
21
13
Low carbon energy purchase
9
11
Temporary fugitive emissions
9
11
24
25
12
8
17
29
11
18
15
Energy efficiency: Building services
18
8
17
5
19
11
16
Energy efficiency: Process
25
16
12
9
16
Action
has been
undertaken
Action is
currently
being
undertaken
11
10
18
11
4
11
11
12
Transportation: fleet
10
20
9
Transportation: use
6
23
15
Product design
Energy efficiency: Building fabric
29
24
Behavioural change
9
9
11
10
6
Solid waste management
Low carbon energy installation
13
14
21
Action will be
undertaken in
the future
None
Base: All respondents (57)
Mitigation actions also vary by business and geography.
Responses show that businesses in the Philippines are
taking or planning to take action to reduce GHG emissions.
The most popular responses are tree planting/watershed
protection and solid waste management. Both these actions
have wider benefits beyond emissions reduction.
The least common actions are low carbon energy
installation and offsetting. Energy efficiency emerged as a
middle ranking action in contrast to the predominance this
mitigation response commands in many other countries
around the world as evidenced in the Carbon Disclosure
Project. This is because the link between energy efficiency
and climate change mitigation may not be well understood
or appreciated by Philippine businesses as they view this
more of a cost saving strategy rather than a climate strategy.
2011Climate change and sustainability survey
23
Figure 16. Public disclosure of climate change action
Environmental/sustainability report
Company website
17
16
No
47%
Annual report
Yes
53%
17
Other company publications
Base: All respondents (57)
Base: 30 respondents
Just over half of respondents publicly disclose information
about climate change action. Methods of communicating
action include environmental and sustainability reports,
company websites, annual reports and other company
publications.
The first step towards mitigating and adapting to climate
change is to measure emissions and assess impacts.
Disclosing this information so that investors, corporations,
policy-makers, customers and other stakeholders can see
it helps create confidence in the management of climate
change and allows benchmarking across businesses and
industries.
24
Climate change and sustainability survey
2011
12
4
Perceptions of climate change stakeholders
2011Climate change and sustainability survey
25
Figure 17a. Level of satisfaction with stakeholders’ climate change initiatives and performance
35
30
25
20
15
10
5
0
Local
government
Government
agency
(environmental)
Not satisfied
at all
Government
agency
(economic)
Not very
satisfied
Nongovernment
agency
Neutral
Business
organisations
(environmental)
Quite
satisfied
Media
International
development
agencies
Very satisfied
N/A
Base: All respondents (57)
Figure 17b. Level of satisfaction on partnership or coordination with other stakeholders
35
30
25
20
15
10
5
0
Local
government
Government
agency
(environmental)
Not satisfied
at all
Government
agency
(economic)
Not very
satisfied
Nongovernment
agency
Neutral
Business
organisations
(environmental)
Quite
satisfied
Media
International
development
agencies
Very satisfied
N/A
Base: All respondents (57)
Results show that the surveyed organisations are generally
quite satisfied with non-government organisations such
as business organisations, media, and international
development agencies whereas they are generally not very
satisfied with governmental units. This trend encompasses
both the initiatives and performance as well as the level of
partnership or coordination with stakeholders. 26
Climate change and sustainability survey
2011
These responses are consistent with business responses
in other countries. A common theme that emerged from
other PwC business and climate change surveys is a desire
for greater clarity from governments regarding national
climate change plans as well as the need for public-private
partnerships.
Figure 18. Frequency of support received from stakeholders
International development
agencies
12
Local government units
19
14
Business organisations
(environmental)
7
21
Non-government agencies
(environmental)
7
21
Government agencies
(environmental)
3
14
14
5
5
5
20
3
22
10
10
21
14
0
4
7
20
12
Media
15
16
20
Never
15
30
Seldom
40
Often
3
6
1
50
5
60
Always
N/A
Base: All respondents (57)
Survey responses indicate that business receive support
most often from business organisations. International
development agencies and the media are also regarded
as supportive. However, all types of stakeholders were
considered by at least some respondents as both ‘never’ and
‘seldom’ being supportive.
The PwC 14th Annual CEO survey states that 54% of the
respondents believe that collaborative government and
business efforts will mitigate global risks such as climate
change.
This suggests a need to strengthen the climate change and
business ‘community of practice’ in the Philippines. Without
strong partnerships between the public and private sectors,
tackling climate change is likely to take longer and be more
expensive.
2011Climate change and sustainability survey
27
Figure 19. “Should-be” climate change priorities of the National government and other stakeholders
Behavioural change
Low carbon energy purchase
Energy efficiency: Building fabric
Energy efficiency: Building services
Energy efficient: Process
Tree planting and/or watershed protection
Temporary fugitive emissions reductions
Process emissions reductions
Low carbon energy installation
Transportation: fleet
Solid waste management and/or recycling
Mitigation
None
Adaptation
Urban greening
Flood and assistance shelters
Water efficiency
Groundwater or rainwater harvesting or desalination
Other
Shoreline defence
0
5
10
15
20
25
Base: All respondents (57)
Note: Rank 1 response only.
Other responses include:
Respondents think behavioural change should be the
priority response to climate change mitigation from the
government and other stakeholders. Low carbon energy use
was considered the second priority. Energy efficiency is also
seen as important, including efficiency in fabric (materials),
services and processes.
•education and awareness
•incentives for mitigation and adaptation
•poverty alleviation.
For adaptation, the most important response is considered
to be urban greening. This is followed by a number of water
management options.
28
Climate change and sustainability survey
2011
There is a gap between what respondents think the
priorities of the national government and other
stakeholders should be and their own actions, for example,
with regard to behavioural change, urban greening, water
management and energy efficiency. However, low carbon
energy purchase is seen as a more important response for
the national government and other stakeholders. This may
reflect the need for public intervention to make low carbon
energy viable. The same is also true of shoreline defence.
Table 2. Support from stakeholders
National government
Local government
units
Government agencies Other business
organisations
Other key players
Clearly defined
master plan and
implementation
Local policy
development and
strict implementation
of climate change
measures
Disaster risk
management
education and systems
preparedness
Sharing of leading
practices amongst
industries
Sharing best practices
on disaster risk
reduction and climate
change
Strict implementation
of environmental laws
and regulations
Environmental
awareness
programmes or
campaigns
Up to date information
on climate changes
Information
Voluntary efforts in
reducing waste, carbon dissemination (media)
emissions, use of
plastics, and recycling
regardless of the cost
Information drive
Consistency with the
national government
Training on disaster risk More partnerships with
reduction and climate other industries and
change
government
Frequent evaluations of
actual practices versus
plans
Tax incentives and duty Incentives to
free imports of green
participating
building materials
companies
Awareness and more
aggressive evacuation
and emergency
response campaigns
Promote CSR
and publicise how
businesses address
climate change
Formal dialogue
and joint action in
partnership with the
government
Funding or financial
assistance
Resource mobilisation
Environmental
awareness or
information drive
Behavioural change
Improved and impartial
enforcement of laws
and consistent drive for
change
Responses highlight a variety of areas where support is
needed on mitigation and adaptation. Despite this variation,
four common themes emerged, as follows:
1. Raising awareness of and providing information about
climate change is key.
2. Businesses want to know leading practice, in particular
how to adapt to climate change.
3. A clear policy framework is essential. This needs to be
consistent between the national and local level and it
needs to be enforced.
4. Businesses need financial incentives.
2011Climate change and sustainability survey
29
Leading practice: The CEO view
Leading practice in responding to climate
change requires businesses to do more
than simply minimise risks. Climate
change presents both risks and
opportunities for businesses across the
world.
For example, it is estimated that the costs of climate
change would be 5-20% of global GDP annually.6 When it
comes to opportunities, the value of the low carbon and
environmental goods and services industry is estimated to
be US$5 trillion and is projected to grow by 5% year on year
until 2014.7
The ability of a business to understand and respond to
climate change will be critical to ensuring business success.
This applies to businesses with a clear link to climate change
such as those in the power sector, but also to the broad
spectrum of industries that will be affected by the impact
of climate change. Responses to PwC’s 14th Annual CEO
survey show that around 64% agree or strongly agree that
developing products and services that are environment
friendly should be an important part of their innovation
strategy; roughly 15% say they are to raise commitment
significantly to addressing climate change.
Asian Development Bank. (2009). The Economics of Climate Change in
Southeast Asia: A Regional Review.
6
Department for Business Innovation & Skills. Low Carbon Business
Opportunities.
7
30
Climate change and sustainability survey
2011
How businesses should respond is a critical but complex
question. In order to shed light on this, PwC gathered the
thoughts of 10 Councilors from the Copenhagen Climate
Council who head companies in different industry sectors
in different parts of the world. These leaders distilled five
‘leading practices’ that simplify the business response. These
practices, ‘Climate change success and survival – Five key
roles’ are:
Role 1
Role 2
Role 3
Role 4
Role 5
Seizing growth opportunities
Preparing and protecting your business
Setting an example
Empowering others
Helping to define climate change policies
Some of these roles are crucial for survival, e.g., preparing
and protecting the business; others help define success,
not just in tackling climate change, but to gain a strategic
advantage over competitors. These roles are underpinned by
the understanding of the links between climate change and
business, including everything from physical and regulatory
risks to growth and market opportunities.
Conclusion
Reviewing the responses to the survey in
the light of the climate change leading
practice as distilled by the 10 CEOs
highlights the strengths and weaknesses
in the response of businesses in the
Philippines.
The perception of climate change as an opportunity not
just as a risk for both adaptation and mitigation should
be welcomed. Tapping into global markets presents an
opportunity for businesses in the Philippines, whilst
domestically, opportunities exist for new products and
services that can help make the Philippine economy and
society more resilient to climate change.
need for businesses to focus on their customers and the
bottom-line is recognised as a priority, it is critical that
climate change policies are developed with input from
businesses. This is evident from the survey responses – 87%
see climate change regulation as risk and respondents called
for greater clarity and consistency in climate change policy
making. Businesses want incentives to help them do more.
The importance of preparing and protecting businesses is
partially reflected by responses to the survey. Over half of
respondents have climate change plans but more businesses
need to formalise these.
Shaping the policy agenda does not have to be an onerous
task. Views can be captured by surveys and events.
Governments and international development agencies
should help facilitate business inputs to climate change
policy development. The climate change and business
community of practice in the Philippines needs to be
enlarged and strengthened. This is the aim of the Philippine
Business Climate Imperative (Imperative), launched
in 2009, and steered by the Philippine Business for the
Environment and its partners. The Imperative has laid the
foundation upon which to scale up the role of businsses
in the Philippine response to climate change upon which
additional support and guidance will be needed from the
public and private sectors.
The same is true when it comes to setting an example.
Whilst responses to the survey show that many businesses
are thinking about climate change, including in the longterm, and are undertaking a variety of actions, more need
to set emissions reduction targets and disclose information
about climate change.
When empowering others, businesses in the Philippines
need to think about who they can influence and how they
can play a supportive role. This includes incentives for
employees, contracts with suppliers and communications
with consumers and other stakeholders. Survey responses
indicate a general level of satisfaction with the support
the business community is providing but there is room for
improvement. More action is also needed to incentivise
employees.
Finally, CEOs flagged up the importance of businesses
helping to shape the climate change policy agenda. Only
42% of businesses engage with policy-makers. Whilst the
Respondents to the survey should be proud of the overall
results which show businesses in the Philipines to be making
some progress in responding to climate change. However,
much more still needs to be done. Questions remain about
the activity of businesses that did not respond to the
survey. Future surveys should secure higher numbers of
respondents. Those businesses that are actively engaging
are positioning themselves for the enormous opportunities
that climate change presents. Such interest is essential so
that the innovation, investment and efficiency of the private
sector can be harnessed in the fight against climate change.
2011Climate change and sustainability survey
31
Related reading
Carbon Disclosure Project 2010
Appetite for change
The Carbon Disclosure Project, to which PwC has been
appointed global advisor and report writer, provides
institutional investors with a unique analysis of how the
world’s largest companies are responding to climate change.
What is loud and clear this year is that, despite the lack of
a global climate change agreement, many of the world’s
largest companies believe carbon management is becoming
a real strategic business priority and competitive driver. So
it is no surprise that more Global 500, S&P 500 and FTSE
350 companies have responded to CDP this year, with
a particular increase this year from the BRIC countries
(Brazil, Russia, India and China).
Based on almost 700 interviews conducted in 15 countries,
Appetite for change examines attitudes in the international
business community towards environmental regulation,
legislation and taxes.
(December 2010)
32
Climate change and sustainability survey
2011
Executives shared their views on the impact of climate
change, their preferred environmental policy tools, the
role of government in protecting the environment, and the
ingredients necessary for a global climate change deal.
Business Leadership on Climate
Change Adaptation
(December 2010)
The Business Leadership on Climate Change Adaptation
report has been produced by PricewaterhouseCoopers LLP
(UK) in collaboration with the United Nations Framework
Convention on Climate Change. The report highlights the
critical role that businesses can play in adapting to climate
change across different sectors of the economy. In order for
this to happen, new partnerships are needed between the
public and private sectors so that risks can be managed and
new opportunities discovered.
Low Carbon Economy Index
(2010)
By the year 2050, the world will need to reduce its carbon
intensity by around 88% if it hopes to limit climate change
to 2°C of warming.
So concludes PwC’s Low Carbon Economy Index, a report
assessing the G20 countries’ achievements in reducing their
carbon intensity levels—defined as the ratio of emissions to
GDP—since 2000, and analysing the distance each nation
must still go to meet G20 carbon reduction targets by 2050.
The report is an update to a previous analysis in 2009 before
the UN Copenhagen climate summit.
2011Climate change and sustainability survey
33
Helping you grow your business
Creating the value you’re looking for
PwCFA is the financial advisory arm Why PwCFA?
of PwC in the Philippines
Clients engage us to help solve their strategic and day-toPricewaterhouseCoopers Financial Advisors, Inc. (PwCFA)
is a Philippine member firm of the PwC global network.
Isla Lipana & Co. is also a Philippine member firm of the
PwC global network.
PwCFA is the financial advisory arm of Isla Lipana & Co.
Both Isla Lipana & Co. and PwCFA are committed to provide
excellent and distinctive services to its clients. For 88 years,
we stick to the highest quality standards in delivering audit
and assurance, tax and advisory services within and outside
the Philippines.
Our clients include government agencies and leading
corporations, both local and foreign, across different
industries. We mainly serve these industries:
build effective organisations
innovate and grow
reduce costs
manage crisis, risk and regulation
leverage talent
execute better deals
restructure troubled business.
We help organisations to work smarter and grow faster. We
consult with our clients to build effective organisations,
innovate and grow, reduce costs, manage risk and
regulation and leverage talent.
Our diverse team of experienced professionals includes
accountants, tax advisers, systems analysts, economists,
human resources professionals, sustainability and climate
change experts, project development managers, industial
engineers, and investment advisors.
Our people are active in various professional, public and
private sector organisations and participate in public
forums involving taxation, investment incentives and
advocacy issues. We make sure we keep up with the latest
developments so that we can give clients informed advice
on different issues that might affect their business.
Climate change and sustainability survey
We help clients implement their business strategies by
working with them to:
Consulting
•Consumer and industrial products and services
•Financial services
•Technology, information communications and
entertainment
•Other services and emerging enterprises.
34
day problems. We do this by creating unique, value-added
solutions based on the combination of industry knowledge,
subject matter expertise in Consulting and Deals, and our
collective experience from all areas of PwC.
2011
Our aim is to support you in designing, managing and
executing lasting beneficial change.
Deals
We help clients do better deals and create value through
mergers, acquisitions, disposals and restructuring. We work
together with them to help develop the right strategy before
the deal, execute their deals seamlessly, identify issues and
points of negotiation and value, and implement changes to
deliver synergies and improvements after the deal.
Our competencies
Talk to us
Business recovery services, finance function reviews,
operations reviews, change management, process
streamlining and documentation, risk management,
corporate finance, due diligence, business forensics,
business and market strategy, information technology
consulting, HR consulting, sustainability and climate
change, transaction services, valuations.
Rossana S. Javier
Managing Partner and CEO
D: +63 (2) 459 3016
T: +63 (2) 845 2728 ext. 3016 or 3086
[email protected]
Mary Jade R. Divinagracia
Managing Director
D: +63 (2) 459 2060
T: +63 (2) 845 2728 ext. 2060 or 2070
[email protected]
We’d like to listen to you
describe the challenges
that you face so we can
understand how we can
help you.
Beyond the new look and logo, we at PwCFA, PwC
member firm, are committed to build stronger
relationships with you so we can create the value that
you’re looking for.
How we use our knowledge and experience depends on
what you want to achieve.
That’s why we want to listen to you, specifically on what
you want. What you tell us will shape how we use our
network of 161,000 people in 154 countries around the
world – and their connections, contacts and expertise – to
help you create the value you’re looking for.
“PwC” is the brand under which member firms of
PricewaterhouseCoopers International Limited (PwCIL)
operate and provide services. Together, these firms form
the PwC network. Each firm in the network is a separate
legal entity and does not act as agent of PwCIL or any
other member firm. PwCIL does not provide any services
to clients. PwCIL is not responsible or liable for the acts or
omissions of any of its member firms nor can it control the
exercise of their professional judgment or bind them in any
way.
2011Climate change and sustainability survey
35
Acknowledgment
PricewaterhouseCoopers Financial
Advisors, Inc., a Philippine member firm
of PwC (PricewaterhouseCoopers), would
like to thank the following organisations
or groups who participated and
contributed to the first Climate Change &
Sustainability Survey.
We received additional
support from a number of
individuals and organisations,
in particular, the Philippine
Business for the Environment
through Howard Belton
(President) and Lisa Antonio
(Executive Director), Grace
Favila (Adviser), and Olivia
Castillo (Adviser), EARTH
Institute Asia, Inc. through Dr.
Corazon Claudio (President),
Management Association of
the Philippines through Arch.
Felino Palafox, Jr. (President)
and Tammy Lipana (Chairman,
Environment and Sustainable
Development Committee), Far
Eastern University through
Dr. Lydia Echauz (President),
Asian Institute of Management
through Prof. Juan Miguel Luz
(Associate Dean, Center for
Development Management),
and the participants of the
pilot survey.
We likewise acknowledge
those organisations and groups
who have responded but do
not wish to be identified.
36
Climate change and sustainability survey
2011
Asia Pacific Projects, Inc.
Lopez Group Foundation, Inc.
Banco de Oro Unibank, Inc.
Manila Water Company
BDO Capital & Investment Corp.
Manly Plastics, Inc.
Brain Trust: Knowledge and Options for Sustainable
Development, Inc.
Manila Electric Company
Central Philippine University: College of Agriculture Alumni
Foundation
MFI Farm Business Institute
Mindanao Microfinance Council
Cleantech Innovations, Inc.
Naprossi Security Services, Inc.
Cummins Sales and Service Philippines, Inc.
Palafox Associates
Development Bank of the Philippines
Petron Corporation
Department of Education, Pantabangan District
Philip Morris Philippines Manufacturing, Inc.
DKSH Group
Philpacific Insurance Brokers, Inc.
Diversified Technology Solutions International, Inc.
Pilipinas Shell Petroleum Corporation
EARTH Institute Asia, Inc.
Platinum Island Farm
ePLDT Inc.
Robert Bosch, Inc.
First Philippine Holdings Corporation
SGV & Co./EY Philippines
First Western Visayas Biofileds Corporation
Sun Life Financial Philippines
Holcim Philippines, Inc.
Tambunting/Powernet Systems
Hongkong and Shanghai Banking Corporation
The Medical City
Isla Lipana & Co., the Philippine member firm of PwC
(PricewaterhouseCoopers)
United Laboratories, Inc.
Land Bank of the Philippines
Union Galvasteel Corporation
Vision A&E, Inc.
2011Climate change and sustainability survey
37
Key contacts
The survey was principally written by
PricewaterhouseCoopers Financial
Advisors, Inc. jointly with PwC UK
Sustainability and Climate Change
practice.
We would like to thank everyone involved in the
development and conduct of the Climate Change &
Sustainability Survey 2011 for their contributions and
support.
For further information on the survey, please contact:
PricewaterhouseCoopers
Financial Advisors, Inc.
Philippines
Rossana S. Javier
Managing Partner and CEO
D: +63 (2) 459 3016
T: +63 (2) 845 2728 ext. 3016 or 3086
[email protected]
Gene Alfred S. Morales
Executive Director, Consulting
D: +63 (2) 459 3003
T: +63 (2) 845 2728 ext. 3003
[email protected]
PricewaterhouseCoopers LLP
United Kingdom
Dan Hamza-Goodacre
Assistant Director, Sustainability and Climate Change
D: +44 (0) 20 78041133
[email protected]
38
Climate change and sustainability survey
2011
www.pwc.com/ph/thinktank
© 2011 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers Financial Advisors, Inc. All rights reserved. In
this document, “PwC” refers to PwC Financial Advisors, Inc., which is a member firm of PricewaterhouseCoopers International
Limited, each member firm of which is a separate legal entity.