Last updated: May 2026. Sustainability reporting in the Philippines is now moving from the older SEC comply-or-explain template toward mandatory, ISSB-aligned disclosure under Philippine Financial Reporting Standards on Sustainability Disclosures.
Short answer: Philippine publicly listed companies already need to prepare sustainability disclosures. Under SEC Memorandum Circular No. 16, Series of 2025, publicly listed companies and certain large non-listed entities will phase into PFRS S1 and PFRS S2 reporting from FY 2026 onward, with external limited assurance over Scope 1 and Scope 2 greenhouse gas emissions required two years after each tier first adopts the standards.
Who needs to prepare sustainability reporting in the Philippines?
The Philippines sustainability reporting regime mainly affects two groups: publicly listed companies and large non-listed entities. Publicly listed companies were first brought into sustainability reporting through the Securities and Exchange Commission's 2019 sustainability reporting guidelines. The newer SEC MC No. 16, issued on 22 December 2025, expands the roadmap and adopts PFRS S1 and PFRS S2 for covered companies.
| Company type | Current direction | What to prepare |
|---|---|---|
| Publicly listed companies | Continue sustainability reporting and phase into PFRS S1/S2 based on tier | Board-reviewed sustainability report, climate-related disclosures, emissions data, governance and risk information |
| Large non-listed entities | Covered if they meet the large-entity revenue threshold under the new roadmap | Sustainability report with PFRS S1/S2 alignment, unless a qualifying parent-company exemption applies |
| Companies outside the mandatory scope | Not the main legal target, but may still face investor, lender, customer, or supply-chain requests | Basic sustainability data, GHG emissions calculations, and customer-ready reporting support where relevant |
How the rules evolved
The SEC released Memorandum Circular No. 4, Series of 2019 to make sustainability reporting more relevant for Philippine publicly listed companies. The circular noted that fewer than 22% of Philippine PLCs had published sustainability reports at the time, and it introduced a reporting template covering economic, environmental, social, and governance topics.
Under the 2019 framework, PLCs used the SEC sustainability reporting template, or an internationally recognized framework or standard, to disclose material sustainability impacts, risks, opportunities, and management approaches. The template was designed to sit alongside the annual reporting process and bring non-financial information closer to financial disclosure.
What changed under SEC MC No. 16, Series of 2025?
SEC Memorandum Circular No. 16, Series of 2025 adopts PFRS S1 and PFRS S2, the Philippine standards aligned with IFRS S1 and IFRS S2. PFRS S1 covers general sustainability-related financial disclosure. PFRS S2 focuses on climate-related disclosures.
This is a major shift because the reporting expectation is no longer only a broad sustainability template. Covered companies now need to prepare more decision-useful, comparable, investor-relevant disclosures, including climate-related risks and opportunities, governance, strategy, risk management, metrics and targets, and greenhouse gas emissions data.
PFRS S1 and S2 adoption timeline
The new roadmap phases adoption by company tier. The exact tier determines the first fiscal year of application and when the first report is expected.
| Tier | Covered companies | First FY of application | Expected first reporting year |
|---|---|---|---|
| Tier 1 | PLCs listed on the PSE with market capitalization above PHP 50 billion | FY beginning on or after 1 January 2026 | 2027 |
| Tier 2 | PLCs listed on the PSE with market capitalization above PHP 3 billion up to PHP 50 billion | FY beginning on or after 1 January 2027 | 2028 |
| Tier 3 | PLCs with market capitalization of PHP 3 billion or less, PLCs solely listed on PDEx, and large non-listed entities with annual revenue above PHP 15 billion | FY beginning on or after 1 January 2028 | 2029 |
What does the report need to cover?
The exact disclosure depends on the company tier and transition reliefs, but covered companies should expect to prepare information across these areas:
- Governance: board and management oversight of sustainability-related risks and opportunities.
- Strategy: how sustainability and climate-related risks and opportunities affect the business model, strategy, and financial planning.
- Risk management: how the company identifies, assesses, prioritizes, and monitors sustainability-related risks.
- Metrics and targets: performance indicators, targets, progress, and assumptions.
- GHG emissions: Scope 1 and Scope 2 emissions, and Scope 3 emissions after the transition relief period.
- Methodology: boundaries, calculation methods, data sources, estimates, and significant judgments.
Transition reliefs companies should understand
The SEC roadmap includes transition reliefs to help companies build reporting capability without requiring full disclosure maturity on day one.
- Climate-first reporting: Tiers 1 and 2 have one year, and Tier 3 has two years, where reporting may focus on climate-related risks and opportunities.
- Delayed sustainability report timing: for one year, companies may submit the sustainability report after publishing related financial statements, either with the next half-year interim financial statements or within nine months if no interim financial statements are issued.
- No comparative information in the first year: companies receive one year of relief from comparative data.
- Alternative GHG measurement method: companies have one year of relief before using the GHG Protocol corporate standard.
- Scope 3 relief: Scope 3 greenhouse gas emissions are not mandatory for the first two years.
External assurance over GHG emissions
SEC MC No. 16 introduces mandatory external limited assurance over Scope 1 and Scope 2 greenhouse gas emissions two years after each tier initially adopts PFRS S1 and PFRS S2. The assurance provider may be a Certified Public Accountant or a qualified non-accountant assurance practitioner, subject to the applicable assurance and ethical requirements.
This matters because emissions data can no longer be treated as an informal estimate inside a narrative ESG report. Companies need a defensible calculation file, clear data trail, and documented methodology before assurance becomes mandatory.
What should companies prepare now?
Companies do not need to wait until the first reporting deadline to begin. The most practical first step is to map the reporting requirement to the data the company already has and the data it still needs to collect.
- Confirm whether the company is a PLC, PDEx-listed entity, large non-listed entity, or outside the mandatory scope.
- Identify the applicable tier and first year of PFRS S1/S2 application.
- Assign ownership between finance, legal, sustainability, operations, HR, procurement, and investor relations.
- Prepare a GHG emissions inventory for Scope 1 and Scope 2.
- Start identifying relevant Scope 3 categories even if disclosure relief applies temporarily.
- Document organizational boundaries, data sources, assumptions, and estimation methods.
- Review climate-related risks and opportunities and connect them to business strategy and financial planning.
- Prepare board review and approval steps before issuance.
- Decide whether to use only PFRS S1/S2 or include additional frameworks such as GRI, SASB, or TCFD-style disclosures where useful.
What if your company is not listed?
Large non-listed entities are now part of the roadmap if they meet the revenue threshold. Some LNLs may be able to rely on a parent-company exemption if the parent prepares a suitable public sustainability report and the entity's sustainability-related disclosures are included in it. The company still needs to document the exemption route properly.
Smaller non-listed companies may not be directly required to report under the same rules, but many will still receive sustainability data requests from customers, banks, investors, or parent companies. In those cases, the practical need may be narrower than a full PFRS S1/S2 report: for example, GHG calculations, supplier-request response support, or a focused evidence pack.
How Keslio can help
Keslio supports companies that need to turn Philippine sustainability reporting requirements into practical workplans, data requests, calculations, and disclosure-ready outputs.
- Reviewing the applicable reporting requirement and likely tier.
- Preparing a data request checklist for finance, HR, operations, facilities, procurement, and management teams.
- Calculating Scope 1 and Scope 2 GHG emissions and preparing Scope 3 data where relevant.
- Documenting calculation methodology, assumptions, and data sources.
- Supporting sustainability report drafting and internal review.
- Preparing an annual refresh workflow so the next reporting cycle is easier.
Need help applying these requirements?
If your team is preparing a Philippine sustainability report, Keslio can support sustainability reporting and communications and GHG emissions calculations. If the request came from a buyer or customer rather than the SEC, see our supplier request support service.
