Atin Ito First Filipino Community Newspaper in Ontario
ACCORDING to the companies’ respective environmental, social and governance (ESG) reports made public last week, the two biggest ride-hailing and delivery firms in Southeast Asia — Singapore-based Grab, which is the leading operator here in the Philippines, and Indonesia’s GoTo, the parent company of ride-hailing firm Gojek and e-commerce company Tokopedia — are failing miserably in their efforts to work toward achieving their carbon-neutrality pledges, recording a surge in greenhouse gas (GHG) emissions in 2022. This is obviously a problem that cannot be ignored, but given the unique position these companies hold in the economies where they operate, the problem should be considered an opportunity rather than a reason to condemn them.
Grab and GoTo both pledged to achieve carbon-neutral or zero-emissions status in 2021; Grab set a target date of 2040, while the smaller GoTo, which does not operate in as many countries, set a goal of 2030. However, those pledges were almost immediately derailed by a sharp increase in reported GHG emissions by both companies. Grab’s carbon emissions skyrocketed by 123 percent to 3.35 million metric tons of carbon dioxide equivalent (CO2e) between 2021 and 2022, while GoTo recorded a 19-percent increase in the same period to just under 1 million tons of CO2e.
In both cases, the total emissions were almost entirely attributed to what are called Scope 3 emissions, or emissions that are from assets not directly owned or controlled by a company but are indirectly determined by the company’s value chain.
In the case of Grab and GoTo, that means the large fleets of vehicles used for transportation and deliveries; across Southeast Asia, these number more than 5 million for Grab, of which there were 65,000 in the Philippines before the pandemic — a figure determined by an arbitrary cap on the number of drivers imposed by the Land Transportation Franchising and Regulatory Board (LTFRB). What makes Grab’s surge in emissions all the more remarkable is that its roster of drivers significantly diminished during the pandemic, by almost half here in the Philippines.
In response to media questions about its surging emissions, Grab has highlighted several initiatives to reduce its environmental impact. Its latest ESG report claims that 39,000 metric tons of GHG emissions were eliminated by encouraging the use of zero-emission and low-emission vehicles, such as bicycles for deliveries and electric vehicles (EVs) or hybrid vehicles for transport services. The company has also emphasized that its decarbonization strategy takes into account its business expansion goals, although it does seem the sharp increase in GHG emissions last year may have come as a surprise.
In a thinly veiled, and we think justified, criticism of the governments in the countries where Grab operates, a Grab spokesman told a media interviewer that the success of its carbon neutrality strategy will largely depend on how quickly it can encourage its drivers to switch to EVs, which is, in turn, dependent on the market readiness for electrification. So far, only the Singaporean and Indonesian governments have announced strategies to shift their countries’ vehicle populations to EVs, by 2040 and 2050, respectively.
We believe our government should work with Grab to develop the policy goals of broadening the adoption of EVs and reducing vehicles that have already been stated, and supported by recent legislation. For the government, the Grab ecosystem of vehicles and drivers is a useful sandbox to test initiatives such as tax incentives and subsidies to promote EV adoption as well as assessing ways in which ESG reporting can be improved to provide even more accurate data. Grab has enough vehicles and drivers to provide sound results of tested initiatives, which can then be fine-tuned and expanded to the entire country.
Grab Philippines would obviously have to speak for itself, but we believe the company would welcome such a partnership with the government, and the chance to not only improve its only environmental footprint but contribute to greater sustainability on a national scale. As for the government, it should not neglect the chance to make use of private sector resources and expertise to achieve the country’s sustainability goals.
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