ESG advisory Philippines: who must report

ESG advisory in the Philippines starts with one test. SEC Memorandum Circular No. 16, Series of 2025 requires a sustainability report from publicly listed companies and from large non-listed entities. A company the circular does not cover does not file that report. ESG consulting in the Philippines is the same work when a parent, a customer, or a lender asks for it.

Chamberlain tests the Philippine company against the circular, then prepares the report or the evidence pack that test requires.

Who must file a sustainability report

The Commission addressed the 2025 circular to publicly listed companies and large non-listed entities. It resolved to adopt the circular at the en banc meeting on 4 December 2025 and issued it in Makati on 22 December 2025. The Manila Bulletin and the Manila Standard published it on 24 December 2025. The circular records a filing with the UP Law Center on 5 January 2026. It takes effect 15 days after publication in two newspapers of general circulation.

The circular adopts Philippine Financial Reporting Standards S1, General Requirements for Disclosure of Sustainability-related Financial Information, and S2, Climate-related Disclosures. It calls these PFRS S1 and PFRS S2. The whereas clauses record that the Philippine Financial and Sustainability Reporting Standards Council approved local use of the IFRS S1 and S2 standards, and that the Professional Regulatory Board of Accountancy approved that adoption on 17 October 2024 through Resolution No. 61.

The tier sets the first fiscal year on PFRS S1 and S2. After that year, the company prepares and submits a sustainability report every year. The tier only sets the timing of that first adoption. Market capitalization means the market value of outstanding equity securities. Multiply the number of outstanding shares by the closing or last traded price on 31 December 2025, even if the fiscal year ends on another date. A company listed on the Philippine Stock Exchange after 31 December 2025 uses the price on its listing date.

Revenue, for the large non-listed test, is income arising in the course of ordinary activities, as the applicable PFRS accounting standards define it. A parent uses consolidated or group revenue. Any other company uses its own revenue. The circular tests large non-listed status on annual revenue for the fiscal year ending on or after 31 December 2027. A company that misses the revenue threshold that year is tested again each later year. Revenue in a foreign currency is converted at the closing rate on the measurement date. The circular defines that rate as the spot rate for immediate delivery into PHP.

A company at exactly PHP 50 billion is in Tier 2, because Tier 1 is “more than PHP 50 billion” and Tier 2 includes amounts up to PHP 50 billion. A company at exactly PHP 3 billion is in Tier 3, because Tier 2 is “more than PHP 3 billion” and Tier 3 is “PHP 3 billion or less”. A company at exactly PHP 15 billion of revenue is not a large non-listed entity under the “more than PHP 15 billion” line.

What the 2019 circular still requires

Section 6 of the 2025 circular repeals SEC Memorandum Circular No. 4, Series of 2019. Paragraph 4 of Section 1 tells each publicly listed company to keep following the 2019 guidelines from the effectivity of the new circular until the fiscal year immediately before that company’s PFRS year. The circular encourages the company to align its disclosures to PFRS S1 and S2 in the years before that mandatory year.

The 2019 circular was issued in Pasay on 15 February 2019 and published in the Manila Bulletin and the Manila Standard on 21 February 2019. It requires the reporting template in Annex A to be submitted with the annual report on SEC Form 17-A. The first report under that circular was attached to the 2019 annual report submitted in 2020. A company that already reports under an internationally recognized framework may treat that report as compliance with the template. It may attach the full report, or a statement that links to the report.

The 2019 guidelines say the company does not fill every row of the template. It discloses topics it has assessed as material. The same circular used a comply-or-explain approach for the first three years upon implementation. It says the company still attaches the template and may explain items where it has no data yet.

The SEC page for the 2019 circular is on the Commission’s issuance list.

How the report is filed

The 2025 circular splits the filing in two.

Paragraph 1 of Section 1 says publicly listed companies and large non-listed entities that are reporting entities under Section 17.2 of the Revised Securities Regulation Code attach the sustainability report to the annual report. Paragraph 2 says a large non-listed entity that does not fall under paragraph 1 submits the sustainability report with its audited financial statements. Paragraph 3 requires the board to review and approve the report before the company issues it. The annual report filing is covered on SEC annual compliance and registering with the SEC.

Other international frameworks may appear in the same report as an addition to PFRS S1 and S2. The circular allows that only if the added framework does not conflict with PFRS S1 and S2, the extra disclosure does not obscure material information, and the report names the framework used.

Transition reliefs and assurance

Section 3 limits the early-year reliefs to five. The circular says it adds no others, because companies may use reasonable and supportable information available at the reporting date without undue cost or effort.

1. The company may disclose only climate-related risks and opportunities. One year for Tier 1 and Tier 2. Two years for Tier 3.
2. The sustainability report may follow the related financial statements. File it with the next second-quarter or half-year interim financial statements, or within nine months after the reporting period if the company does not issue interim statements. One year for every tier.
3. Comparative information is not required. One year for every tier.
4. A greenhouse gas method other than the GHG Protocol Corporate Accounting and Reporting Standard, 2004 edition, is allowed. One year for every tier.
5. Scope 3 greenhouse gas emissions are not required. Two years for every tier.

Section 2 requires external limited assurance on Scope 1 and Scope 2 greenhouse gas emissions. That assurance starts two years after the tier’s first year on PFRS S1 and S2. Table 2 places it in the fiscal year beginning on or after 1 January 2028 for Tier 1, 1 January 2029 for Tier 2, and 1 January 2030 for Tier 3. The assurance practitioner may be a certified public accountant or a qualified non-accountant. The engagement follows International Standard on Sustainability Assurance 5000, if the practitioner meets that standard’s quality and ethics rules. The circular says the Commission will issue further assurance rules, and that the requirement will later move toward reasonable assurance. A company may obtain reasonable assurance on the full report before that is mandatory.

When a parent report can replace the local filing

Section 4 lets a large non-listed entity skip its own sustainability report only when all three conditions are true.

1. Its immediate, intermediate, or ultimate parent already prepares and files the prescribed sustainability report under the framework of the jurisdiction where that parent submits its corporate reports. The circular gives PFRS S1 and S2 in the Philippines, the European Sustainability Reporting Standards where the European Union requires them, and IFRS Sustainability Disclosure Standards where another jurisdiction prescribes them.
2. The subsidiary’s sustainability disclosures are included in that parent report, and the parent report is public.
3. The subsidiary attaches a completed Certificate of Exemption from Mandatory Sustainability Reporting, Annex A of the circular, to its annual financial statements.

Annex A is signed by the chief sustainability officer and the chairman of the board. The Commission may accept other exceptions. The section is written for a large non-listed entity. A publicly listed company does not get this opt-out in the circular.

Penalties the circular names

For a publicly listed company, the circular applies the incomplete annual report penalty in SEC Memorandum Circular No. 6, Series of 2005, the consolidated scale of fines, if the company fails to attach the sustainability report or fails to comply with PFRS S1 and S2. SEC Resolution No. 581, Series of 2021, gives non-submission or late submission of sustainability reports its own scale. The 2025 circular starts the offense count at the first offense under the new circular. Prior offenses under the 2019 circular do not carry forward.

For a large non-listed entity, the circular says penalties will be set in later Commission issuances. It does not state a fine.

What ESG advisory covers

The test above decides whether a report is mandatory. The advisory work is how the company writes that report, or how it answers a parent, a customer, or a lender when no SEC report is due.

Materiality assessment. Name the sustainability topics that belong in the report. Under the 2019 guidelines, the company discloses topics it has assessed as material. It does not complete every row of the template. Under PFRS S1 and S2, those standards set the disclosures for a covered company.

Reporting framework alignment. Map the draft to the 2019 template while that template still applies, then to PFRS S1 and S2 in the tier year. A company outside the circular follows the framework the parent, customer, or lender named. If a covered company wants a second framework in the same report, it has to meet the three conditions in Section 1 of the 2025 circular.

Data collection. Build the evidence behind each disclosure. For greenhouse gas figures, follow the method and the Scope 3 timing in Section 3, and set the Scope 1 and Scope 2 assurance year from Section 2 and Table 2. Keep the source documents a parent or a customer will ask to see, including labor and supplier records covered in your HR policies.

Disclosure drafting. Write the sustainability report, the board paper, and the Annex A certificate when a large non-listed entity claims the parent exemption. The board approval is a corporate act. Corporate secretarial services keep that approval with the rest of the minute book.

How an engagement runs

Chamberlain starts from the Philippine entity and from the request the company has received. The sequence is:

1. Identify the Philippine entity, whether it is listed, and whether market capitalization or revenue meets a tier. Record any parent, customer, or lender request at the same time.
2. Run the materiality assessment and name the framework.
3. Collect the missing data and list the gaps in writing.
4. Draft the disclosure, the board paper, and the exemption certificate if Section 4 applies.
5. Leave the annual file with the people who already submit the SEC annual report and the audited financial statements. That file is part of corporate compliance.

The circulars above do not set a duration for this work. The pricing page does not list an ESG advisory fee. The consultation is where the scope is set.

Who it is for

Use this engagement if any of these is true.

• The group has a Philippine publicly listed company, or a subsidiary whose revenue may cross the PHP 15 billion line.
• The Philippine company must supply numbers to a parent sustainability report, or you want to test the Section 4 exemption before the large non-listed year begins.
• The company is outside the SEC circular, and a customer or a lender has asked for labor, environmental, or governance evidence.
• You are assembling those records before a listing or a large contract.

Book a consultation. Chamberlain will screen the Philippine company against the 2025 circular before any report is drafted.

Sources

• SEC Memorandum Circular No. 16, Series of 2025, PDF text of the circular on PFRS sustainability disclosures for publicly listed companies and large non-listed entities
• SEC Memorandum Circular No. 4, Series of 2019, Philippine Stock Exchange copy of the sustainability reporting guidelines for publicly listed companies
• SEC issuance page for Memorandum Circular No. 4, Series of 2019