Green governance – Manila Bulletin


At the ICD (Institute of Corporate Directors) roundtable last month, we discussed an interesting and timely topic: “Corporate Governance in the Green Era”. This was presented to members by Mr. Octavio B. Peralta, Secretary General of ADFIAP, an association of development and financing institutions in Asia and the Pacific.

Corporate governance, which has had to be accepted since the first financial crisis triggered by a company that had such devastating effects on capital markets in 2000, has nevertheless been called into question by the derivatives crisis of 2008. -2009 which is marketed all over the world. At the same time, our world is facing yet another crisis which could also devastate the world if the problem is not resolved – we are talking about recent events in various countries which fall squarely under what we call environment and change. climate.

One might wonder how these two seemingly disparate topics should be of concern to business and the corporate sector, when most people shrug their shoulders and say that the environment is the responsibility of government, in fact dismissing any form of individual responsibility. And this is where businesses and development institutions can step in and partner with government to aim for a sustainable environment – for businesses, for the community, for everyone’s life for that matter.

To begin with, and to emphasize that companies cannot ignore the impact of climate change on their bottom line, Mr. Peralta mentioned a recent report that analyzed the greenhouse gas emissions of the top 500 publicly traded companies in the world. world and revealed that businesses would not be immune to predicted climate changes and thus may experience disruption to their operations and profitability. Thus, the report indicates that it makes sense for companies to start accounting for their own greenhouse gas emissions and thereby enjoy the following benefits: (1) identify opportunities for reduction and subsequent money savings ; (2) reduce business regulatory risks that may result from more stringent national, regional or international efforts to curb global warming; and (3) improving reputation in the eyes of their consumers and other stakeholders.

How then can we promote a culture of “green governance” among businesses and entrepreneurs? ADFIAP began in 1998 to provide its member banks with the relevance and opportunities offered by “greenbanking”. With the help and encouragement of USAID, the European Commission-Asia, ADFIAP has produced two environmental management tools for banks and financial institutions, namely the “internal management system” which provides measurements on how to operationalize “green banks” and the “environmental risk scan” which provides a framework for integrating environmental aspects into bank lending decisions.

Likewise, Mr. Peralta presented case studies from the Philippines, Sri Lanka, Malaysia and China that show what member banks are doing to promote a low carbon economy in their countries. In the Philippines, the DBP has three loan programs that (1) provide financing to owners or managers of large tracts of land that can be planted with fast-growing, high-yielding fruit trees that help reforest the countryside and sequester GHGs as well as providing income streams for the long-term landowner (DBP Forest); (2) finance projects reducing greenhouse gases in accordance with the Kyoto Protocol (clean development mechanism); and (3) provide local communities, public and controlled enterprises, cooperatives, water districts, private enterprises and private water service providers with access to long-term funds in order to mobilize, encourage and support activities and investments in the environment. – friendly projects (Environmental development project).

Sri Lanka has a Renewable Energy for Rural Economic Development project that aims to electrify remote rural homes through solar home systems and hydroelectric, wind and biomass projects in off-grid villages. Malaysia has two funding programs, namely the Biofuels Finance Program which supports all biofuel related activities and the Renewable Energy and Energy Efficiency Program which supports government efforts in development and improvement. projects benefiting from the environmental benefits of renewable projects. The fourth case study, which comes from the China Development Bank, describes initiatives that include monitoring loans to energy-intensive and pollution-intensive industries, such as protecting Crescent Springs in Gansu, cleaning up the Quinhuai river and the protection of rare crested. species of bird, the ibis.

Truly, such initiatives can help protect our planet from degradation as well as renew and sustain new life. Governments, through their regulators – the Bangko Sentral ng Pilipinas, the Philippine Securities and Exchange Commission, for example – should take the lead in adding a “green perspective” to governance structures, policies and practices. business. Businesses can cooperate with government by being selective in the projects they undertake, leaning towards activities that protect and improve the environment.

For its part, ICD might find it useful to include in the corporate governance scorecard issues and actions that would encourage companies to adopt a green attitude. In other words, let’s not just focus on the now accepted principles that relate to the profit orientation of shareholders, boards of directors and owners and not move towards promoting “green governance”. .

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