THE adoption of new sustainability reporting standards would make corporate disclosures more useful to investors by showing how environmental and climate risks affect companies’ finances and long-term prospects, according to data and solutions platform ESGpedia.
Jozsef Acabo, vice president at ESGpedia, said companies adopting the Philippine Financial Reporting Standards (PFRS) S1 and S2 framework should shift from broad sustainability narratives to disclosures covering the effects of material risks on strategy, costs, assets and revenue.
More consistent reporting on governance, climate risks, emissions and performance measures should also help investors compare Philippine companies with regional and global peers, Acabo added.
The Securities and Exchange Commission has introduced the standards through a tiered approach, with the country’s largest listed companies entering their first year of adoption.
Based on the International Sustainability Standards Board (ISSB) framework, PFRS S1 and S2 are designed to provide investors with more financially relevant information on sustainability-related risks and opportunities.
Acabo said stronger disclosures alone would not reverse weak foreign direct investment but could improve the “investability” of individual companies by reducing uncertainty over risks that may affect future value.
Better sustainability data could also help banks assess climate exposure, transition plans and emissions alongside traditional financial indicators. It may support companies’ applications for green or sustainability-linked financing, although improved disclosure would not automatically lower borrowing costs.
However, many Philippine companies are still developing the systems needed to comply.
A June 2026 ESGpedia poll found that only 17 percent of business leaders, directors and sustainability practitioners were reporting in line with PFRS S1 and S2. Another 44 percent were aligning their existing reports, while 39 percent were still exploring the requirements or beginning to build their capabilities.
Data management remains a major challenge because sustainability information is often scattered across finance, operations, human resources, procurement and suppliers. The poll showed that 45 percent of respondents relied on spreadsheets and manual processes, while 14 percent used several disconnected tools.
Measuring Scope 3 emissions could be particularly difficult because the data must come from suppliers that may lack emissions-tracking systems.
Acabo said companies need clear data ownership, internal controls and traceable reporting systems. Those not yet covered by the full requirements should use the transition period to identify material risks, establish baselines, map data sources, assign responsibilities and engage suppliers.
Companies that strengthen their systems early will be better prepared to meet regulatory requirements and the evolving expectations of investors, lenders, customers and supply-chain partners, he said.