AS URBANIZATION sweeps across the globe, cities are at the forefront of our future, offering opportunities for businesses and people to thrive. Yet, they also grapple with climate change and growing inequality.
The ASEAN region bears significant responsibility to mitigate these challenges, especially as almost 56% of its population is projected to reside in cities by 2030.
In the Philippines, where more than half of its 109 million population live in urban areas, rapid urbanization exacerbates not only climate hazards, but also risks like straining resources for basic services.
As we celebrate World Cities Day (Oct. 31) under the theme of “Financing sustainable urban future for all,” we must recognize how businesses can lead the green urban transition through innovative financing, insightful knowledge and expertise, and wider social responsibility.
NEW WAYS OF FINANCINGThe development and maintenance of critical urban infrastructure and services demand substantial investment. Meanwhile, new technologies that can accelerate the sustainability of these systems might be unaffordable, or seen as an expense rather than an investment.
The World Bank estimates that more than $4.5 trillion per year is needed to fund climate-resilient urban infrastructure, yet climate finance flows for cities are only approximately $384 billion annually. Businesses are ideally positioned to bridge this gap through innovative financing.
For instance, public-private partnerships (PPPs) enable partners to share risks, resources and decisions in implementing projects. In the Philippines, PPPs such as Laguna Water have improved the provision of water and wastewater in Laguna’s cities, and supported community development, health and safety as well as environmental protection programs.
New business models can also encourage the adoption of new technology, where solutions providers can help reduce investments risks associated with sustainable projects, offer flexible payment plans, or incorporate efficiency savings achieved by customers into payment schemes. Notably, Grundfos introduced Grundfos Energy Earnings, where businesses can benefit from energy savings without an initial investment, as Grundfos shares realized savings to finance installed solutions.
Moreover, strategic partnerships can support businesses facing budget constraints. To help private commercial and public customers with limited funds improve water efficiency and access, Grundfos and EKF Denmark’s Export Credit Agency signed a unique financing partnership in 2022 to fund new solutions that reduce CO2 emissions and provide vulnerable areas with access to clean water.
KNOWLEDGE-SHARINGBeyond financing, businesses can provide critical insights for urban sustainability across various industries.
By sharing their best practices and collaborating with governments, research institutions, fellow industry players, and communities, businesses can drive and co-develop innovative urban solutions that ultimately further industries’ green transition.
Such partnerships can also help businesses better understand the complexity of the green transition. Recognizing the advantages of this approach, Grundfos has formed partnerships with Singapore Polytechnic and Ngee Ann Polytechnic. The latter specifically targets advancing sustainability in the regional built environment.
STRONGER COMMUNITIESFinally, businesses can be forces for good by contributing to the social fabric and overall resilience of cities.
Some tech giants, for example, have committed to using 100% renewable electricity. Their efforts have influenced their peers, led to positive changes in energy policies and increased renewable energy adoption.
Businesses can also uplift the livelihoods of community members including marginalized groups such as women. For instance, inclusive and fair hiring practices and workplace cultures can better support local jobseekers and employees. Meanwhile, integrating sustainability and social impact considerations into wider supply chain decisions further extends the positive impact of businesses on local communities.
Businesses are catalysts for sustainable urban transformation with the power to shape the future of our cities. However, the work is far from over. Scaling a multi-pronged approach is crucial to ensure that our cities lead the way toward a more inclusive and sustainable urban future for all.
Bent Jensen is the chief executive officer for commercial building services at Grundfos. Grundfos is a leader in advanced pump solutions and trendsetter in water technologies. Grundfos Philippines was established in 2004, and has offices, representatives, as well as dealers and distributors in Luzon, Visayas and Mindanao.