- In 2025, 97% of local companies have set sustainability targets. However, only 51% have implemented comprehensive strategies, leaving a 46% gap between ambition and execution.
- 92% of companies in the Philippines this year are already applying or interested to apply AI to advance their sustainability ambitions, demonstrating its potential as a sustainability accelerant.
- For the private sector, sustainability investments remain constrained, with economic uncertainty still the top concern but easing from 49% in 2024 to 45% in 2025.
Schneider Electric, a global energy technology leader, today announced the results of its annual Green Impact Gap survey revealing that Philippine business leaders increasingly view sustainability as a driver of growth and competitiveness, even as they cite economic uncertainty and geopolitical instability as barriers to further sustainabilityinvestment.
Ninety seven percent of companies have established sustainability targets. Among them, 58% report that sustainability reporting has become easier over the past year, largely due to technology advancements. Yet, 32% still face challenges, citing factors such as rising costs.
This year, 55% of company leaders identify innovation and competitiveness as key drivers of sustainability, with the strongest emphasis from the semiconductors (71%) and data centers (60%) sectors, followed by real estate (53%) and healthcare (52%). This underscores how industries increasingly link sustainability with business innovation.
Sustainability is also delivering tangible business value. This year, 52% of leaders say it creates new business opportunities, up from 42% in 2024. Similarly, 42% pursue sustainability to strengthen brand and reputation, compared with 32% last year, while 46% cite cost savings and financial benefits, up from 43%. These year-on-year gains demonstrate that sustainability has evolved from a peripheral initiative into a core strategy for competitiveness and resilience.
Misalignment between declared goals and tangible action persists
While findings underscore the growing commitment to sustainability in the Philippines, they also reveal a persistent ‘Green Impact Gap’ — the misalignment between companies’ declared sustainability goals and the tangible actions taken to achieve them. This year, 97% of companies set targets, but less than half are taking comprehensive action, keeping the regional Green Impact Gap at 46%.
With 2025 marking a critical milestone on the path to 2030 climate goals, companies remain optimistic. Around 84% express confidence in meeting or exceeding their 2030 targets, while 20% report being more than three years ahead of schedule.
“Companies across the Philippines are not just weathering the storm—they’re using sustainability as a compass to navigate it,” said Ireen Catane, Country President, Schneider Electric Philippines. “Despite volatile economic conditions, early movers and adopters are turning to digitalization and AI to drive efficiency, mitigate risk, and create lasting value.”
In parallel, two-thirds of companies (66%) report being very or moderately familiar with Republic Act 11285, the Philippines’ Energy Efficiency and Conservation Act. Among these, 85% express moderate to high confidence in meeting its requirements, signaling readiness to implement concrete energy-efficiency measures. This trend aligns with the DOE’s national efforts to promote energy efficiency, supporting businesses and local governments in optimizing energy use while advancing sustainability goals.
AI unlocks cost savings and energy efficiency
Artificial Intelligence (AI) is helping companies address financial and energy risks. 92% of companies in the Philippines this year are already applying or interested to apply AI to advance their sustainability ambitions. At 59%, AI for energy consumption optimization now tops the list of energy and resource efficiency applications, rising ahead of waste management (50%) and smart building management and automation (49%).
Companies see AI’s biggest impact on sustainability in automating data collection and reporting (51%), optimizing energy use (44%), and enhancing product design (44%). By improving energy efficiency, AI helps mitigate cost risks, aligning with the 46% of company leaders who cite financial benefits and savings as key drivers for sustainability amid persistent energy price concerns.
With the rise of energy demand in the Philippines, which the Department of Energy (DOE) projects will grow 4–5% annually and potentially double total power consumption by 2040 under the Philippine Energy Plan, companies continued to adjust their decarbonization strategies in 2025. The most widely adopted measures were switching to low-carbon or electric vehicles for transport (27%, up from 25%), and investing in research and development to drive innovation in low carbon technologies (27%, up from 25%).
From 2024 to 2025, companies advanced in cutting Scope 2 emissions—indirect emissions from purchased energy such as electricity, steam, heating, and cooling—through onsite renewables (34%, up from 29%) and energy-efficient equipment (41%, unchanged). They also adopted emerging measures like Green IT plans (31%). Efforts to reduce Scope 3, or value chain, emissions also grew, with gains in supply chain optimization (33%, up from 29%) and in promoting remote work and video conferencing to cut commuting and travel-related emissions (31%, up from 30%).
Investments hold steady despite economic uncertainty
With business leaders seeing the bottom-line benefit of sustainability, planned investment in sustainability transformation has held steady with 23% of companies planning to invest at least $US1 million over the next two years.
While investment in sustainability continues to face key limiters, most have eased slightly year-on-year. Economic uncertainty remains the top concern but dropped from 49% in 2024 to 45% in 2025. Internal budgetary constraints show a sharper decline, from 48% to 37%, while regulatory and policy difficulties (37% to 35%) and poor incentives (36% to 35%) also decreased marginally. These shifts suggest that while structural and financial challenges remain, the investment landscape in 2025 has become relatively more favorable for corporate sustainability compared to the previous year.
Now in its third year, the Schneider Electric Green Impact Gap survey, conducted with Milieu Insight, gathers insights from 4,500 middle- to senior-level executives across nine Asian markets—Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam—on how businesses are prioritizing and investing in sustainability through a 30-question assessment.
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Key Survey Highlights: Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam
What does the current ecosystem look like?
- Economic uncertainty is the biggest barrier to private sector investing in sustainability (46%).
- However, leaders continue to see the business value in sustainability progress in the areas such as innovation and competitiveness (46%, up 3 points from 2024), increased business opportunities (43%, up 5 points from 2024), and brand perception and reputation (37%, up 6 points from 2024).
Investment Priorities for Asian Companies in the Next Two Years
- 36% of companies intend to invest at least US$1 million in sustainability initiatives over the next two years.
- 45% of businesses have identified digitalization as a top investment priority, with one in three actively using AI to advance their sustainability objectives.
How is AI being utilized as a sustainability tool?
- Companies are using AI optimization (36%), up significantly from 31% in 2024, followed by paperless processes (35%) and supply chain digitization (33%).
- 34% of companies surveyed are using green IT to advance their sustainability goals, to offset the energy demands of AI.
- The Utilities (55%) sector takes the lead in AI adoption for sustainability, followed by Financial and Professional Services (45%), and Data Centre, Cloud and Service Providers (44%).
How are impact makers faring compared to other organizations in closing the Green Impact Gap?
- Thailand (47%, down from 51% in 2024), Vietnam (41%, down from 45%), South Korea (48%, down from 53%), and Taiwan (46%, down from 51%) have made notable improvements in closing the gap.
- Industries such as Oil and Gas (44%, down from 53%), and Data centre, Cloud and Service Providers (43%, down from 49%), showed strong progress in narrowing this gap.
