Mandatory Sustainability Reporting: A crucial step toward corporate climate accountability in the Philippines

In a landmark move to enhance corporate transparency and accountability, the Philippine Securities and Exchange Commission (SEC) has announced that sustainability reporting will become mandatory for all publicly listed companies by 2026. This decision, which will initially operate under a “comply or explain” framework, is being widely praised by communities and climate groups as the first concrete step toward holding carbon-intensive corporations responsible for their environmental impact.

A Bold Step Toward Transparency

The new mandate requires companies to disclose their sustainability practices and the environmental impact of their operations. By enforcing regular reporting on assets, liabilities, and significant changes in personal data, the SEC aims to detect early signs of financial irregularities and unsustainable practices. This level of transparency is essential for identifying companies that may be contributing disproportionately to climate change.

Community and Climate Group Reactions

Communities affected by climate-related disasters, such as those impacted by Super Typhoon Yolanda, have been vocal in their demands for stronger climate accountability. Representatives from these communities, along with prominent environmental organizations, see the SEC’s move as a long-overdue measure. Lorena Ivy Ogania, a community leader from Salcedo, stated in Tagalog:

“Bilang magulang at kinatawan ng komunidad namin, masaya ako sa desisyon ng SEC. Pinatutunayan nito na ang pagkakaroon ng tapang kumilos para manawagan ay maaaring magdulot ng mabuting resulta. Gusto kong tumigil na ang hirap na nararanasan namin dahil sa krisis sa klima, para hindi na maranasan ng aking anak ang mga suliraning kinakaharap natin taon-taon.”

Greenpeace campaigner Virginia Benosa-Llorin added,

“The SEC’s move to make sustainability reporting mandatory is long delayed but a welcome step toward a more stringent regulatory regime for corporate climate accountability. Coupled with the Climate Accountability Bill, this regulation can drive proactive measures against climate change and prevent further harm to vulnerable communities.”

Typhoon survivor Mary Mergal from Salcedo, Eastern Samar, holds a fragment of furniture—an object of memory from Super Typhoon Haiyan. Alongside community representatives, she joined a call for stronger corporate climate accountability at the SEC office in Makati. [Photo by Jilson Tiu | Greenpeace]

The Path Forward for Corporate Accountability

Mandatory sustainability reporting is not only about monitoring environmental impact; it is also a strategic tool for encouraging companies to address climate risks proactively. The transparency provided by regular disclosures will allow both regulators and the public to identify and act upon unsustainable practices. In turn, companies can adjust their operations to reduce risks, potentially improving their competitiveness and resilience in a rapidly changing global economy.

By requiring detailed updates on personal data and financial status, the SEC’s initiative will help uncover inconsistencies such as sudden changes in lifestyle or spending habits that might indicate deeper issues. This approach fosters a culture of accountability, ensuring that businesses are held responsible for their contributions to the climate crisis.

As the deadline for mandatory sustainability reporting approaches, all eyes will be on the implementation of this policy and its long-term effects on corporate behavior in the Philippines. While this is just the first step, it lays a robust foundation for future regulatory measures that could compel companies to invest more heavily in sustainable practices and ultimately reduce their carbon footprint.

The move signals a promising shift towards greater corporate responsibility and transparency, setting a global example for how emerging economies can tackle the challenges posed by climate change.