More CEOs adopt sustainable business models – survey

MANILA, Philippines — More chief executive officers (CEOs) in the Philippines are acknowledging the need to adopt sustainable business models, according to a survey by PwC Philippines and the Management Association of the Philippines (MAP).

Based on the results of the PwC MAP CEO Survey 2019, 80 percent of CEOs said they are planning to change their business model in the next three to five years to promote more sustainable practices.

About 83 percent of CEOs said they currently adopt sustainable practices in their business, while only 33 percent said they have formal plans of supporting their transition to a circular economy.

The circular economy is a system that seeks to keep products and materials in use for as long as possible, minimizing the amount used, extending their lifespan, and maximizing reuse and recycling of waste.

Among the sustainable practices CEOs seek to adopt in the future are lesser consumption of natural resources and materials; use of a product for different functions; and repair of a defective product so it can be used for its original function.

While majority of the CEOs fully support sustainable business practices, they identified high transition costs, inadequate technology, and economic viability as the main factors that are preventing them from fully adopting sustainable practices.

“Transitioning to a circular model brings in costs related to management, research and development and infrastructure. Our business leaders, however, should realize that the circular economy is a long-term strategy that helps address the serious environmental and business risks that we are facing,” PwC Philippines consulting managing principal Benjamin Azada said.

Azada also emphasized that this year’s survey results show the growing awareness for climate change and environmental damage issues among CEOs as 82 percent of respondents identified it as potential threats to an organization’s growth.

“What’s driving the move to circular economy worldwide is really customer behavior. In other countries, the reason why companies are being compelled to a circular economy and adopt more sustainable practices is because customers, the public, are demanding it. So there’s no choice for them not to do it,” Azada said.

“As that pressure grows and the clamor becomes louder, we’ll see more companies adopt them,” he added.

Meanwhile, PwC Philippines chairman and senior partner Alexander Cabrera expressed optimism the number of CEOs who adopt sustainable practices would continue to rise.

“While most are still using the traditional practices related to energy use and recycling, a good number have plans of shifting to a circular business model,” Cabrera said.

“A profitable business is not necessarily good business if it does not lead to ‘good’ growth, which is sustainable and emphatic,” he said.

Cabrera also said that while companies have expressed plans of moving toward the circular economy, it’s going to be a challenge for them to look for support services for this.

He emphasized that the implementation of incentives for companies that provide circular economy services such as refurbishing or recycling should be in place to help the shift of corporations to more sustainable practices.

The PwC MAP survey had a total of 127 respondents from large, medium, small and micro companies.

The survey, conducted by PwC for the 17th MAP (Management Association of the Philippines) International CEO Conference that will be held on Sept. 10 at the Makati Shangri-La Hotel, reflects the conference’s theme, “The Future of Business: Sustainability. Development. Impact.”