Sustainable procurement vital for competitiveness, ESGpedia says

PHILIPPINE COMPANIES should make sustainable procurement a core part of environmental, social, and governance (ESG) practices to strengthen their supply chains and stay competitive, sustainability consulting firm ESGpedia said.

“Another equally important pillar to consider is sustainable procurement, where companies evaluate and engage suppliers not just on price and efficiency, but on environmental performance, ethics, and social impact,” ESGpedia Vice-President Jozsef Acabo said in an e-mailed reply to questions.

He said this approach embeds sustainability across the entire value chain — from raw materials to distribution — not just within the organization.

Companies that share data openly with suppliers and uphold ESG standards can better manage Scope 3 emissions, meet global expectations, and maintain resilient supply chains over the long term, he added.

Scope 3 emissions are indirect greenhouse gases from a company’s supply chain, excluding direct operations and purchased power, which make up the majority of a company’s carbon footprint.

“In many cases, responsible sourcing becomes a competitive advantage, especially for organizations aiming to export or partner with global brands,” Mr. Acabo noted.

He said that adopting ESG practices is not just about compliance, but also a strategic step for companies seeking to secure international contracts and partnerships.

Philippine firms need to integrate ESG into core operations, including reducing emissions, improving social impact, strengthening governance, and adopting transparent ESG reporting aligned with global standards, he said.

“My advice to Philippine companies would be to view ESG as an opportunity to future-proof their business, especially as the regulatory landscape evolves toward 2026. With mandatory sustainability reporting on the horizon, companies that prioritize sustainability now will be ahead of the curve,” Mr. Acabo said.

He added that focusing on ESG from the outset can also unlock new revenue opportunities through sustainability-linked loans and green financing, which are increasingly important to investors looking for measurable sustainability goals. — Alexandria Grace C. Magno