Philippine firms prepare for stricter ESG reporting

SEC draft rules are pushing firms toward stricter ESG.

The Securities and Exchange Commission’s (SEC) draft rules requiring publicly listed companies and large non-listed entities to adopt Philippine Financial Reporting Standards (PFRS) in their sustainability reports have raised questions about industry readiness. But experts say many Philippine firms, particularly larger ones, are already in a strong position to comply.

Jozsef Acabo, Vice President of ESGpedia, said leading companies have made significant headway. “The first one would be the tier one companies, listed companies in the Philippines. They are ready. They have been reporting since 2019,” he said. While tier-two firms show progress, Acabo noted that some need more resources and are faced with different challenges, but in general, ready for adopting PFRs standards.

K Ganesan Kolan De Velu, Sustainability & Emerging Assurance Leader at Deloitte Southeast Asia, echoed this assessment, pointing out that Philippine readiness aligns with regional trends. “Most of the large companies in the Philippines, even some of the banks, are ready to implement these standards,” he said. Many have years of experience using frameworks such as GRI and TCFD, positioning them well as the country moves toward IFRS S1 and S2.

Despite the overall confidence, both experts acknowledged challenges ahead, particularly around data. Ganesan stressed that early-stage implementation issues are common: “The data collection process itself could be a bit difficult… it requires support from many stakeholders within the company and also within your value chain.” With SMEs forming a large portion of Philippine supply chains, “obtaining data, especially the quality data, might be a big challenge.”

Acabo added that even firms already reporting must deepen their disclosures. Tier-one companies need to improve context on “supply chain, disability reporting engagement of the community… as well as providing enhanced information for the scope three categories.” Tier-two and tier-three entities, he said, remain in “the infancy stage” and require more capacity building and better tools.

Still, the benefits of readiness are significant. Acabo noted that sustainability reports give investors insight into “what impact the enterprise would give for the community,” influencing capital decisions. Ganesan added that stronger reporting “definitely… help[s] the companies to grow bigger and better,” particularly by boosting investor confidence and access to capital markets.