MSMEs advised to go green as sustainability movement swells

Senior government officials are encouraging micro, small and medium enterprises (MSMEs) to adopt green processes as sustainable consumption and production increasingly becomes the global norm.

Ann Claire Cabochan, assistant secretary for consumer protection of the Department of Trade and Industry (DTI), said in a recent trade webinar that it is important for
companies to implement sustainability standards in their manufacturing processes even though these standards are voluntary.

“There are a lot of sustainability standards that have been adopted as Philippine national standards, but the standards are voluntary, and it is important that the private sector, especially the business sector with various industries and manufacturing concerns, adopt those standards as part of their processes,” she said.

As an example, Cabochan said the application of the ISO 9001 management standard—the international standard that specifies requirements for a quality management system—is voluntary but it can “level up” an enterprise’s performance.

“If you adopt such a standard you become more efficient, more predictable about processes and you are able to save costs,” Cabochan said.

Nieva Natural, director of Agriculture, Natural Resources and Environment Staff at the National Economic and Development Authority, said the government is doing all it can to encourage people to shift to sustainable products even though organic or green goods are more expensive.

One way the government is seeking to address this issue is by exploring the idea of extended producer responsibility (EPR), Natural added.

EPR is defined as an environmental protection strategy that makes the manufacturer responsible for the entire life cycle of the product, especially for its return, recycling and final disposal.

Natural noted that there have been initiatives or trials to sell shampoos or cooking oil in refillable bottles as part of the collaboration between government and private sector to extend producer responsibility and lower the cost of going green.

Both Cabochan and Natural also urged MSMEs to study what incentives are being made available to them to reduce their costs for embracing sustainability.

Cabochon mentioned that if a business or an activity is included in the Investments Priorities Plan, it can avail of government incentives like income tax holidays or tax-free importation of capital equipment and spare parts.

Natural said there are already several laws that encourage businesses to shift to sustainable practices. Among these are the Energy Efficiency and Conservation Act, which provides incentives for energy-efficiency projects and energy-efficient technologies, and the Green Jobs Act, which provides tax deductions relating to the promotion of green jobs as well as tax-free imports for capital equipment to be used to promote green jobs.

Meanwhile, Annabelle Briones, director of the Industrial Technology Development Institute of the Department of Science and Technology (DOST), shared that they plan to establish a laboratory at the DOST to provide biodegradability and composting testing for alternative plastics.

“We have already established the Philippine national standards for that because we are also working with the Bureau of Product Standards to come up first with our national standards for biodegradability and composting testing. We are really working on that to come up with a laboratory to start first at DOST then cascade it to the regions because we also have our regional testing and services laboratories,” Briones said.

She added that the DOST also has the OneLab network of laboratories, but it still needs to send samples abroad for tests on biodegradability. “So our goal for the government side is to establish a testing facility for that kind of requirement.”

Cabochan suggested that while awaiting the DOST laboratory, manufacturers can inquire with the DTI’s Philippine Accreditation Bureau (PAB) about product testing, as PAB is a member of the International Laboratory Accreditation Cooperation (ILAC)/Asia Pacific Laboratory Accreditation Cooperation (APLAC).

“This is a network of laboratories in Asia-Pacific and once it is tested by a laboratory that is accredited by a member of ILAC/APLAC, the requested results can be accepted in any other country which is a member of that mutual recognition arrangement,” she continued.

For example, if a company wants to export bags to an ASEAN country where there is a laboratory accredited by ILAC/APLAC and that accredited laboratory tests the product, then the importing country will now be required to accept this product if it passes all the requirements, she added.

Cabochan stressed that MSMEs already need to embrace the circular economy, one of the pillars espoused by DTI under its sustainability and resilience agenda.

She expressed confidence that even if businesses need to invest in green processes, they will recoup this investment and thrive because demand is expected to increase.

“Years ago, organic produce had a very small share in the market, but now increasingly people are looking at all these products and making a very deliberate choice to purchase them,” Cabochan recalled. “So MSMEs that know that these are the trends will be well placed to compete in the market and to supply to outside the Philippines because our biggest trading partners also have regulations that support green.”

MSMEs that are not compliant won’t be able to sell to these overseas markets, she said.

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