BPI | Creating Green And Profitable Businesses With Green Financing

Until recently, environmental consciousness has been deemed incompatible with the profit motive of companies. A growing number of enlightened businessmen know better now.

Green businesses that care about greenhouse gas emissions and the environment can be more profitable than those that care about profits alone.

It used to be that going green entailed working with environmental experts and tech providers, but they’re not the only ones advocating this green movement. Banks are taking on a more active role, too.

Eric Luchangco, Head of Corporate Credit of Bank of the Philippine Islands (BPI), said, “Green initiatives not only help the environment, and therefore help protect our investments from the disruptive impact of climate change, they can also improve business profitability. Businesses that make sustainability and climate resilience part of their long-term planning can reap economic benefits.”

BPI, through its Sustainable Energy Finance (SEF) program, has been urging companies to cut their carbon footprint and go green since 2008. The Bank has helped companies by providing financing for projects involving renewable energy, energy efficiency, and climate resilience.

Energy Efficiency and Energy Savings

Energy-efficient initiatives alone can help businesses lower electricity bills by 30 percent or more. BPI can help identify opportunities for energy savings by determining the appropriate technologies as well as evaluating vendors, suppliers, integrators, and their proposals. There is free evaluation of project feasibility studies to validate savings and production projections. The more widely-known energy efficiency innovations include shifting to more efficient lighting (LEDs), air-conditioners and chillers, and machines which consume much less electricity.

“The comprehensive approach here is that the corporate loan with BPI is packaged together with expert technical evaluation of the project design and proposals, validation of estimated savings, electricity production and income projection levels, as well as review of contracts and client education. This combined service ensures that all projects under the BPI Sustainable Energy Finance (SEF) Program are technically feasible, financially viable, compliant to laws and regulations and also meet the green standards set by IFC of the World Bank Group,” said Jo Ann Eala, Head of BPI SEF.

With commercial real estate properties complying with the new Philippine Green Building Code— mandated by the Department of Public Works and Highways (DPWH) for new building construction— this means that the country will see even more environment- friendly structures.

IFC-World Bank’s Green Building standards are under the “Excellence in Design for Greater Efficiencies” or EDGE certification. EDGE provides a free online system which allows building developers and owners to verify if the target savings of 20% each in electricity, water and materials for their green building projects are achieved.

“This is really a revolutionary tool that each building design must be subjected to. EDGE allows our building project owners to do a real time and interactive check on the drop in OPEX versus the increase in CAPEX, if any. The EDGE tool also computes the project’s overall profitability, via its return on investments (ROI) computation as a result of each type of innovation”, said Eala.

UN Sustainable Development Goals

Luchangco added, “There’s higher awareness about sustainability now and we want to continue supporting businesses with their green projects to help ensure success and profitability, while maintaining social responsibility. We really see BPI’s efforts in this initiative growing, and look to support not just environmental responsibility, but more broadly contributing to the 17 Sustainable Development Goals of the UN as much as possible”.

“Green initiatives will improve a company’s profitability, increase reliability and availability of equipment, and improve operational efficiency, productivity and product quality. Moreover, green innovators can provide better employment, help the community within which they operate while ensuring compliance to laws and regulations and climate-proofing their investments. If you put the whole picture together, it becomes profitability with a purpose. It becomes more sustainable. And this is all part of nation-building, economic growth and financial inclusion for all Filipinos, including businessmen who want to secure their companies’ long-term survival. This is the winning formula.” said Eala.

The BPI SEF Program has already financed over 300 projects, with around 150 energy-efficiency projects and 150 projects in renewable energy and climate resilience. These include building retrofits, solar and biogas projects, as well as the popular green buildings and tunnel ventilated housing facilities for pigs and chicken. To date, BPI has already funded PhP126 billion worth of sustainable energy and climate resilience projects, across the whole country. The Bank continues for to look for companies that can greatly benefit from its SEF Program.