Investing 101 June 23, 2026

Why Sustainability Is a Long-Term Investment, Not a Cost Center

Q: What is the Werbach principle, and how does it apply to business sustainability strategy?

Drawing from Adam Werbach's Strategy for Sustainability: A Business Manifesto, the principle holds that a core rule of sustainable business is never irreparably destroying your capital — financial, social, or environmental. For Philippine companies, this frames sustainability not as sacrifice but as long-term capital stewardship.

By Jose Mari "Jomar" Lacson

Philippine companies that commit to sustainability build resilience, trust, and competitive advantage over time.

Many local businesses have taken great strides in blending sustainability into their operations.

This observation is based on five years of consuming sustainability reports of over a hundred listed companies in the Philippine Stock Exchange as part of the research that drives the ATRAM Philippine Sustainable Development and Growth Fund.

Those who have doubled down on sustainability are what we consider sustainability champions.

Treating Shared Problems as Business Responsibility

Sustainability champions take the view that the problems that we face, whether as firms or as individuals, are shared problems. Big world problems like flooding, bad weather, traffic, diseases, poverty, crime, and others covered by the United Nations Sustainable Development Goals are not only for governments to solve.

Companies also share in the burden of developing solutions to weather the turbulence. Many of these champions have taken a strategic decision to switch to renewable energy to meet self-imposed targets to reduce their carbon emissions and contribute to climate change solutions.

Based on ATRAM’s research, we estimate that the use of renewable energy by listed Philippine companies increased annually by 41.3% on a compounded basis in the past five years, and we are beginning to see the fruits of their efforts. Carbon emissions for many of these champions, particularly those in property, are stable relative to peers and revenues. Businesses can grow without causing more harm to the environment.

We have likewise seen changes in how champions approach education and training, as well as investments in research and development to boost employee productivity and delivery of service.

Why Some Companies Still Hesitate on Sustainability

Unfortunately, we need more sustainability champions. Despite the progress, many companies still hesitate. Some focus only on one or two areas and then stop. Others focus only on compliance. This is understandable.

After decades of training to prioritize profit maximization and shareholder value, a shift in focus to sustainability and a broader stakeholder value can feel uncertain. This fear of the unknown is what causes doubt and hesitation for some of today’s leaders.

Tomorrow’s business leaders and investors, however, are the ones taking the first steps. They see sustainability not as a cost, but as an investment in future resilience.

Sustainability Strategy in Practice: Incremental Action and Long-Term Capital

Frequently Asked Questions

What does ATRAM's research on PSE-listed companies show about sustainability adoption in the Philippines?

ATRAM's five-year analysis of over 100 PSE-listed companies finds that sustainability champions — firms that treat ESG as a strategic commitment rather than compliance — demonstrate stronger institutional resilience, stable carbon emissions relative to peers, and deeper stakeholder trust over time.

Why do some Philippine companies still hesitate to adopt sustainability strategies?

Many Philippine companies hesitate because decades of shareholder-value and profit-maximization training make a shift to broader stakeholder accountability feel uncertain. This is compounded by a tendency to limit sustainability to one or two compliance-driven areas rather than embedding it as a long-term strategic commitment.

How fast is renewable energy adoption growing among listed Philippine companies?

Based on ATRAM's research, renewable energy use among PSE-listed companies grew at a compounded annual rate of 41.3% over five years, with a measurable impact on carbon emissions stability, particularly in the property sector, where companies have grown revenues without proportionate environmental harm.

What is the Werbach principle, and how does it apply to business sustainability strategy?

Drawing from Adam Werbach's Strategy for Sustainability: A Business Manifesto, the principle holds that a core rule of sustainable business is never irreparably destroying your capital — financial, social, or environmental. For Philippine companies, this frames sustainability not as sacrifice but as long-term capital stewardship.

Where should Philippine companies start when building a sustainability program?

ATRAM argues sustainability does not have to start in the boardroom. Individual-level data collection — tracking energy use, travel, waste, and health habits — builds the organizational foundation for credible sustainability planning. Leadership commitment remains essential, but meaningful action can begin at any level of the organization.

Jose Mari "Jomar" Lacson

Writer

Jose Mari Lacson is the head of Macroeconomics and Impact Investing at ATRAM. He has over 22 years of experience in investment and research. He was previously the Head of Equities Research at Maybank ATR KimEng Capital (Trust Department) and the Deputy Head of Research for BPI Securities.

Topics: