The Philippine Securities and Exchange Commission (SEC) has made sustainability and climate-related disclosures mandatory for large listed companies and select non-listed firms with market capitalization exceeding PHP 50 billion (about US$845 million). This landmark move adopts the locally adapted Philippine Financial Reporting Standards (PFRS) S1 and S2, directly based on the International Sustainability Standards Board’s (ISSB) IFRS S1 for general sustainability and IFRS S2 for climate risks.

Implementation follows a precise phased timeline to allow companies to adapt. Tier 1 firms – large listed companies with market caps above PHP 50 billion – must begin reporting in 2027, covering their fiscal year 2026 activities. Tier 2 companies, those above PHP 3 billion in market cap, follow in 2028 with FY2027 data. Tier 3 encompasses other listed firms plus large non-listed entities with over PHP 15 billion in revenue, reporting from 2029 on FY2028.

To smooth the transition, the SEC provides targeted relief measures. Companies can skip Scope 3 emissions reporting for the first two years, while climate-related risk and opportunity disclosures are limited; for Tier 1 and 2, that’s one year, and two years for Tier 3. Limited assurance on Scope 1 and 2 greenhouse gas emissions is only required two years after a tier’s start date.