The Philippine Securities and Exchange Commission announced the adoption of the Philippine Financial Reporting Standards (PFRS) on Sustainability Disclosures, a new set of sustainability and climate-reporting guidelines based on the standards developed by the IFRS Foundation’s International Sustainability Standards Board (ISSB).
The new standards will form the basis of new mandatory sustainability and climate-related reporting requirements being implemented by the Commission for large and listed companies over the next few years, with reporting for large public companies beginning in next year on 2026 information.
According to the Commission, the new standards will enable Philippine companies to prepare and submit sustainability reports in line with international standards. The new standards include PFRS S1 and PFRS S2, which correspond to the IFRS Foundation’s ISSB’s S1 (sustainability-related) and S2 (climate-related) standards. The IFRS released the inaugural general sustainability and climate reporting standards in June 2023. To date, around 40 jurisdictions have started the process to use the standards. The Commission noted that several other ASEAN markets are adopting IFRS-based sustainability reporting standards, including Singapore, Thailand, Malaysia, and Indonesia.
The Commission announced that mandatory application of the standards will be rolled out on a tiered basis, with publicly listed companies with a market capitalization of P50 billion (US$840 million) required to start reporting in 2027, covering the 2026 fiscal year, followed by publicly listed companies with market capitalization greater than P3 billion one year later, and all other publicly listed companies, as well as large non-listed companies with annual revenues greater than P15 billion (USD$250 million), starting reporting in 2029, covering the 2028 fiscal year.
The new rules also require companies to implement a mandatory limited assurance on Scope 1 and 2 greenhouse gas (GHG) emissions by an independent assurance practitioner two years after they begin reporting under the new standards.
The Commission also announced that it has implemented a series of transitional reliefs, in response to feedback from a public consultation on the new standards, including allowing companies to not submit Scope 3 emissions for two years, and allowing tier 1 and 2 companies to disclose only climate-related risks and opportunities for the first year of reporting, and for the first 2 years of reporting for tier 3 companies, among other reliefs.
SEC Chairperson Francis Lim said,
“The adoption of the PFRS on Sustainability Disclosures underscore our commitment to high-quality, comparable, and globally aligned sustainability reporting.”
