Navigating Environmental, Social, and Governance (ESG) Principles: Understanding Coverage and Business Impact

Among modern businesses, sustainability is no longer a mere buzzword, but a crucial aspect of operations. A significant aspect of this green transformation is the adherence to local environmental compliance standards, often aligned with broader Environmental, Social, and Governance (ESG) principles.

ESG principles are guidelines that help businesses be environmentally sustainable, socially responsible, and ethically governed. One way to exhibit adherence is by securing an Environmental Compliance Certificate (ECC) for your development projects.

An ECC is a document issued by the Department of Environment and Natural Resources (DENR), through its Environment Management Bureau (EMB). It provides a green light to proceed with certain development projects that may impact the environment.

Getting an ECC means the agency has identified and evaluated your project’s environmental constraints, opportunities, costs, and benefits. The ECC also lists specific conditions and requirements that must be followed during project implementation.

• Environmental Protection: By ensuring compliance with local environmental laws and regulations, ECC aims to minimize pollution, habitat destruction, and other negative consequences. It promotes the conservation of natural resources and ecological balance, contributing to long-term ecosystem resilience.
• Sustainable Development: ECC fosters environmentally responsible development by requiring projects to undergo impact assessments and incorporate mitigation measures. This promotes progress that addresses the needs of the present and future generations.
• Public Health and Safety: ECC addresses issues — including air and water pollution, hazardous waste management, and occupational health and safety — that may pose risks to the health and well-being of workers and nearby communities.

Not all proposed development projects are required to secure an ECC from the DENR-EMB — only those with the potential to cause significant negative impacts on the environment.

Are you unsure if you need to get an ECC? These are high-impact industries typically mandated to comply with ECCs:

• Construction and Real Estate Development: These industries often involve land use changes, including soil erosion, deforestation, and habitat destruction. ECCs serve as proof that their projects are carried out with minimal environmental impact.
• Manufacturing and Industrial Operations: Manufacturing and industrial processes can generate hazardous waste and worsen air and water pollution. Mandating ECCs can help the agency check if regulated emissions and waste disposal practices are in place.
• Mining and Natural Resource Extraction: These industries can have significant environmental consequences. By requiring ECCs, the government can mitigate natural damage through the reclamation of the land after mining operations and the implementation of pollution control measures.

These are the criteria DENR-EMB will look into for covered projects:

• Project Location: The primary consideration is its ecological status, particularly its vulnerability to disturbances. The agency will check if the proposed project aligns with the existing land use of the site. They will also look into the natural resources’ relative abundance, quality, and regenerative capacity in the area.
• Project Characteristics: For this criteria, the agency considers the project’s scale, proposed use of natural resources, anticipated waste generation rate, potential to cause environmental hazards, accident risks, and overall impact on existing projects in the area.
• Nature of Impact: This is analyzed in terms of the project’s likelihood, duration, frequency, and reversibility of occurrence, as well as the magnitude, complexity, and size of the affected population.

Businesses and developers are required to submit an ECC as a demonstration of their dedication to environmental protection and sustainable business practices.

Following ecological laws and regulations is an essential part of running a business. In fact, research reveals that companies successfully navigating the sustainability shift often gain a competitive advantage by appealing to eco-conscious consumers in the existing unsustainable economy.

Maintaining environmental compliance also helps avoid fines, legal disputes, penalties, and ECC revokement, ensuring stable and uninterrupted business operations. Furthermore, you can achieve enhanced stakeholder relationships and investor confidence with your active environmental, social, and governance (ESG) considerations.

Securing an ECC is a crucial process for any development project in the Philippines. Here’s how to successfully obtain an ECC.

Visit the ECC Online Application System website and register by clicking on the “Continue” button. You’ll be directed to the necessary forms that you have to fill out with the correct details.

After registration, you’ll have to encode project information in the ECC Online System. You will receive a verification if your proposed project is qualified for the online process.

o accomplish the IEE checklist form, prepare the following attachments:

1. Site development plan, vicinity map, or sketch map signed by a registered professional
2. Project plant layout signed by a registered professional
3. Geo-tagged photographs of the proposed project site
4. Proof of authority over the project site
5. Certificate of Viability or Zoning Certification/Clearance issued by the concerned LGU.

Go to any Land Bank of the Philippines branch and pay the processing fee.

After paying the processing fee, have your accomplished IEE checklist with the accountability statement of the proponent notarized.

Submit a scanned copy of the deposit transaction slip online and other necessary documents.

The EMB Regional Office will evaluate your application. Check your ECC Online Account frequently — you will either receive “Approval” or a “Need to submit additional information.”

You can print your application result on the EMB Online System through your ECC Online Account.

Compliance with local ecological laws and regulations is essential for staying within the legal standards, safeguarding the environment, and ensuring long-term business sustainability.

Let Sprout’s legal compliance experts assist you with labor practice reviews, workplace policy evaluations, and government permit facilitation. Our experts also lead events about government compliance like Tax Changes and Compensation and PhilHealth Mandatory Contribution Changes. Rewatch those events here.

Sprout also provides a highly government-compliant and easily accessible payroll management system software. This solution fully automates payroll and government contributions computation and report generation, so you can just concentrate on growing your business. Learn more about why clients choose to work with Sprout here.