Overview of the rules
Introduced: SEC Memorandum Circular 4-2019 (voluntary / explain)
Effective from: FY 2025 mandatory reporting (filing begins 2026)
Last modified: February 2025 (SEC market-readiness update)
Region(s): Philippines
About the SEC’s sustainability rules
Following years of strong voluntary participation, the Philippine Securities and Exchange Commission (SEC) is moving to mandatory SEC sustainability reporting within the Philippines.
Starting with FY 2025 reports, all listed companies must disclose climate-related and ESG data aligned with ISSB’s IFRS S1 and S2 standards. The revised rule ends the previous “explain” opt-out clause and anchors climate risk as a formal element of corporate governance in the Philippines.
The SEC has signaled a future phase that could introduce external assurance and quality audits as early as 2028.
Criteria for compliance
All companies listed on the Philippine Stock Exchange (~270 issuers), regardless of size, industry, or ownership structure.
Compliance timelines
2019-2023
Voluntary “comply-or-explain” phase
2024
Transition year with updated guidance; early ISSB alignment encouraged
FY 2025
First mandatory sustainability reports (submitted in 2026)
2028–2030
SEC to initiate quality reviews and explore verification requirements
Disclosure requirements
Environmental
- Scope 1 & 2 GHG emissions required; Scope 3 encouraged if significant
- Energy consumption, water usage, and waste generation
Climate risk (TCFD-aligned)
- Governance structure for climate
- Strategic impact and scenario analysis
- Climate risk management practices
- Metrics, targets, and transition progress
Social & governance
- Workforce diversity and health/safety
- Community engagement and social impacts
- Ethics, board structure, and ESG governance
Key obligations
- File Sustainability Report along with SEC Form 17-A (Annual Report)
- Disclose climate-related financial risks, emissions, and mitigation plans
- Adopt ISSB-aligned content from IFRS S1 & S2
- Monitor developments for potential third-party assurance requirements post-2028
Third-party assurance
Currently not required. However, the SEC may introduce limited assurance or independent verification after 2028 based on market maturity and compliance quality.
Penalties for non-compliance
- SEC may impose administrative fines for incomplete or missing reports
- Daily penalties for continued violations
- Risk of trading suspension for persistent failure to comply
- Reputational consequences with investors and regulators
