“2025 has become the year where sustainability reporting moved from simply ‘coming soon’ to now fully operational.”
IT WAS another rollercoaster year for the sustainability industry, particularly among sustainability management professionals. Standards and regulations have become widespread, and it feels almost impossible to keep tabs on every change being implemented.
The adoption of the International Sustainability Standards Board (ISSB) is accelerating across different markets, and more companies are becoming aligned with the Task Force on Climate-Related Financial Disclosures (TCFD). Meanwhile, different jurisdictions across the world are applying various sustainability standards and frameworks for publicly listed companies. With all the standards in place, investors, in particular, find it difficult to make industry comparisons that should help in their investment decision-making processes.
Nonetheless, transparency has always been key in the sustainability industry, because without it, companies would not be able to efficiently address their biggest sustainability challenges. From the impacts of climate change to human rights and environmental problems in the supply chain, the practice of sustainability is only made possible by the transparent disclosure of companies’ material issues and concerns.
2025 has become the year where sustainability reporting moved from simply “coming soon” to now fully operational. In the Philippines, compliance among publicly listed firms have surged — from only 22% issuing sustainability reports in 2017 to 95% during late 2024. Most of these companies produce standalone reports or integrate sustainability contents into annual reports. The most common framework used is the Global Reporting Initiative (GRI), and more companies have also started using the TCFD.
It has been quite a journey for the sustainability disclosure landscape in the Philippines. In 2019, the Securities and Exchange Commission (SEC) originally issued its sustainability reporting guidelines requiring publicly listed firms to integrate Environmental, Social, and Governance (ESG) disclosures into annual reports. At that time, reporting was only made voluntary and not many companies had the capacity to create full-blown sustainability reports.
Recently this 2025, the SEC issued a draft that would make sustainability reporting more broadly mandatory not just for listed companies. The expanded coverage will now include non-listed entities with significant revenues. This expansion will occur in tiers, with tier 1 starting in 2026 (largest listed firms), tier 2 in 2027 (mid-sized firms), and tier 3 in 2028 to 2029 (smaller firms and large non-listed firms).
To align with current international standards, especially the ISSB standards, the SEC has also introduced the Philippine Financial Reporting Standards (PFRS) S1 and S2 for sustainability disclosures. The final SEC circular is expected to be released before the end of 2025.
This move by the SEC is a sign that the Philippines is moving away from voluntary sustainability reporting towards a compliance-based and standardized form of reporting. Ultimately, this is a welcome structural shift that is more aligned with global investor expectations.
It is, however, not without its challenges. Until today, many non-listed firms, especially smaller firms, do not have the sustainability teams, systems, and protocols required to conduct robust sustainability assessments and disclosures. A report by PricewaterhouseCoopers (PwC) also states that ESG data and external assurance among Philippine firms have remained weak.
Without proper ESG integration into Philippine companies’ systems and protocols, there is a high risk of “reporting fatigue,” “box-ticking,” or minimal compliance. In other words, the bare minimum would not suffice with sustainability reporting, as this would have implications not just with companies’ level of disclosures, but also with their overall treatment of material issues and concerns. In the long-term, a company that does not prioritize sustainability can lose the trust and confidence of its investors and other stakeholders.
Sustainability is no longer just a “nice-to-have” but has become a necessity for the Philippines. We have seen firsthand the devastating impacts of climate change to our communities, as well as the numerous societal issues our population faces due to government corruption and deep-seated political conflicts. All of these are linked to sustainability. While the private sector obviously cannot address them all, the transparent disclosure of negative externalities on society and the environment is a big stepping stone leading towards viable actions and solutions.
Ian Benedict R. Mia is a part-time lecturer at the Department of Management and Organization of De La Salle University (DLSU). He works full-time as a Sustainability Researcher at one of the top ESG Ratings firms globally. He can be reached at ianbrmia@gmail.com.
The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.
