March 7, 2021
This was highlighted by Climate Reality Leaders Rex Barrer, Climate Governance Head of the Institute for Climate and Sustainable Cities, and Sara Ahmed, Finance Advisor to the Vulnerable Group of Twenty Ministers of Finance of the Climate Vulnerable Forum, during yesterday’s virtual forum entitled Climate Targets of the Philippines: A Town Hall Discussion for Corporate Stakeholders on the Philippines’ Nationally Determined Contribution.
The forum was organized by the Sustainarumble Podcast in collaboration with the Society of Sustainability Practicioners with support from The Climate Reality Project Philippines and the Institute for Climate and Sustainable Cities.
The Department of Finance and the Climate Change Commission presented last month the draft NDC to stakeholders, which enshrines the country’s commitment to a projected greenhouse gas emissions reduction and avoidance of 75 percent below 2010 levels by 2030.
“The NDC is being touted by the government as the national industrialization strategy. It would therefore require consideration on how the private sector could actually contribute to that in the long run,” Barrer said as he emphasized the need for the private sector to be involved in the NDC process.
Ahmed said that the NDC presents an investment opportunity for the private business sector. “The whole point of the NDC and all these discussions on climate action and climate ambition is really to promote an alternative economic and financial vision,” she said.
Citing the guidelines for sustainable finance framework issued by the Bangko Sentral ng Pilipinas, Ahmed noted that domestic banks are beginning to integrate into its operations safeguards from evolving material hazards of physical climate risk and transition, including stranded assets.
Ahmed also explained that accessing international capital would require SMEs and corporations to transition their portfolios. “More than 100 globally significant banks have coal exit strategies. Most recently, industries are also leaving the oil and gas sectors,” she noted as she explains that investors are now valuing the shift to climate-resilience and low-carbon opportunities.
There are conglomerates in the Philippines—Ayala being the largest one—that are already pursuing the shift to more sustainable investments, Ahmed said. “There is a benefit to shifting early. You get first dibs to new investors and you get more capital to invest in projects that will have higher deals over in the long run than future stranded assets,” she added.