Sustainable, Impact & Green Investing for Pinoys

Nowadays, people want to align their investment portfolios with their personal beliefs as well as thinking about societal good. The Philippines is among the most vulnerable to the effects of climate change. We have seen how increasingly severe weather conditions inflict a growing cost on our economy, increase the vulnerability of our communities and threaten our food security.

Sustainable investment is aligned with Duterte Administration’s thrust to dramatically upgrade the nation’s infrastructure through the Build, Build, Build. That infrastructure must be efficient as well sustainable and resilient to climate change.

Investing not only for profit but also people and planet

According to Global Impact Investing Network (GIIN), impact investing is investing made into companies, organizations and funds with the intention to generate social and environmental impact alongside a financial return.

As a growing number of people become acutely aware of the need to protect the environment, the demand for goods and services that are sensitive to such inclinations will also undoubtedly increase.

Investing in Green Bonds

The SEC previously identified projects that can be funded by ASEAN Green Bonds. These include renewable energy, pollution prevention and control, clean transportation, and climate change adaptation among others.

A green bond is a debt instrument to be earmarked for climate and environmental projects.

Recently, Rizal Commercial Banking Corp. (RCBC) completed the issuance of Php8-billion in sustainability bonds which will fund environmental and social projects and listed at the Philippine Dealing and Exchange Corp. last June 4. The two-year debt papers carry a coupon of 6.15% per annum to be paid quarterly until May 2021.

Green Real Estate

The trend of sustainable spaces and green buildings is not only geared toward attracting investors but a long term plan to build sustainable and resilient communities. Aside from the environment-friendly practices that reduce energy consumption, and air pollution causing emissions, green buildings yield strong financial returns for owners and tenants of these buildings as well.

HTLand, Inc., the joint venture of internationally-listed Hong Kong Land, LLC and Cebu's Taft Property Ventures Development Corporation, recently launched the One Mandani Bay. The building is registered by the Philippine Economic Zone Authority (PEZA) and by the Philippine Green Building Council under the Building for Ecologically Responsive Design Excellence (BERDE) Program, a combination of economic advantage and nature-aligned design, which is unprecedented in Cebu.

Investing in socially responsible firms

How it works is that it requires investors to consider a company’s commitment to corporate social responsibility, or the sense of duty to positively impact society as a whole, before investing with that company. You can access and invest directly to some of these firms in the Philippine Stock Market.

One company to consider is Aboitiz Power Corp. as they have invested in Renewable Energy through the years (biomass, solar, wind, hydro, geothermal power generation facilities nationwide).

Another is SM Investments Corp., who has also partnered and funded a lot of green and sustainability projects across their group of companies.

As more people realize the social and financial benefits of impact investing, more companies and individuals will put their money in social responsibility.

What's the best way to invest for the long haul? Do you have questions about how to build wealth? Feel free to send me an email and it may be included in a future column.

This article is for general information only and is not a substitute for investment advice where the facts and circumstances warrant.

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Vernon Joseph Go, RFP®, REB, is a Public Speaker, Content Producer and  Author of the book “A Lazy Investor’s Way”.