RP businesses committed to managing energy costs
RP businesses committed to managing energy costs
Businesses in the Philippines find it easy being green, according to the latest findings of the Grant Thornton International Business Report (IBR). Grant Thornton International is represented in the Philippines by member firm Punongbayan & Araullo (P&A).
The IBR reported that out of 7,200 privately held businesses surveyed in 32 countries, businesses in the Philippines have done the most to address energy and environmental issues. Businesses were measured by, and given corresponding points on, whether they had undertaken an energy review; reduced energy consumption; put measures to turn off electrical equipment; invested in energy-saving equipment; invested in alternative fuel sources; and considered relocating to reduce transportation costs.
Besides registering the highest overall score, the Philippines also topped the list in the first two criteria. 83% of businesses in the Philippines have undertaken energy reviews to understand how they may be wasting energy, compared to the global average of only 58%. In addition, an impressive 85% of businesses in the country have reportedly reduced their energy consumption, in contrast to the 59% average worldwide.
Companies in other emerging markets also appear to be doing the most to manage energy cost pressures: Brazil trails the Philippines in close second, followed by China, Malaysia, Germany, Turkey, Poland, Hong Kong, Mexico and India. It is equally interesting to note that the survey finds Singapore, Thailand and France at the bottom of the list of markets taking steps to mitigate energy costs.
Greg Navarro, Managing Partner of P&A, comments, “The social climate in the Philippines inspires businesses to action. Here, educational institutions and an active NGO network constantly promote environmental awareness, while both private and public sectors continue to drum up support for research on alternative sources of energy. The government itself works hard towards energy independence, and for the development of non-oil energy sources, and the efficient management of oil prices in the market. And of course, companies have recognized that energy costs—even more than staff costs or property costs—can, in fact, significantly hurt their finances. In 2006 alone, gasoline prices were adjusted at least a dozen times, mostly upward.”
Also according to the IBR, more than half of businesses in the Philippines identified energy costs and raw material costs as major concerns that could threaten their profitability. In the country, 68% of businesses (the highest percentage among countries surveyed) considered energy costs a primary threat, while 55% (the seventh highest) credited raw material costs as having a significant impact on cost pressures.
Alex MacBeath, global leader of privately held businesses for Grant Thornton International, explains, “There must be motivation to take action on raw material and energy costs. Otherwise, companies will continue to focus on other cost pressures such as salaries and wages.”
He adds, “There is also a role for national governments to look at the long-term competitiveness of their economies, and factor energy and raw material costs into that equation. Unless they take action to actively encourage businesses to invest for the future and reduce their impact on the environment, they will ultimately damage their economies.”
Early this year, during the Association of Southeast Asian Nations (ASEAN) Summit, the Philippines joined 15 other Asian nations in signing an energy security accord that would reduce the region’s dependence on fossil fuels, promote the use of alternative energy sources, and mitigate greenhouse gas emissions through effective policies and measures.
Also created this year was the Presidential Task Force on Climate Change, which will conduct a rapid assessment of the impact of climate change; ensure strict compliance with air emission standards;
combat deforestation and apprehend violators; initiate measures to improve fuel efficiency, energy conservation and promote renewable energy and waste management; and conduct a massive public information and education campaign on climate change.
Only last week, President Arroyo signed into law the Biofuels Act, which mandates the use of biofuels (from coconut and sugarcane) for transportation. This article of legislation is expected to enhance the country’s energy independence, reduce pollution caused by fossil fuel emission, and promote environment-friendly, indigenous, and renewable sources of fuel.
MacBeath remarks, “We are now at a tipping point in looking at climate change and environmental management. It is time businesses recognized the fact that unless they take action to reduce their impact on the environment, it will harm their long-term competitiveness.”
Grant Thornton International is one of the world’s leading organizations of independently owned and managed accounting and consulting firms.