What is Sustainability Reporting?
Sustainability reporting is our company’s way of publicly stating the significant economic, environmental, social, and governance (EESG) impact we have created over a given period. Produced following globally accepted standards, the report allows us to disseminate information about our performance and how we align with certain requirements.
Once only considered as a “nice-to-have” practice, sustainability reporting in the Philippines is increasingly becoming recognized among stakeholders as the best way to measure an organization’s accountability and transparency towards them.
This report improves not only our organization’s credibility but also our reputation. It also enables our people to accurately measure and monitor the results of our EESG efforts. It helps us understand how to continue improving our practices to meet sustainability targets and global standards.
Why Do Organizations in the Philippines Need to Do Sustainability Reporting?
When evaluating organizations for a potential business relationship or investment opportunity, their commitment to sustainability and sustainability reporting is a must.
The commitment to sustainability reporting in the Philippines requires a thorough review of your organization’s footprint and societal impact. It is no longer enough to disclose information on just financial matters to stakeholders but also should include non-financial and sustainability issues. Doing so allows potential business partners or investors to better evaluate a company’s long-term viability, competitiveness, and ability to overcome sustainability challenges.
For our organization, the sustainability report has also become an essential tool for risk management and investment planning. The report requires us to face the increasing social and environmental risks that may affect our organization on many dimensions. These challenges drive us to develop adaptive strategies to improve our productivity, deepen community impact, and make smarter investment decisions for long-term, sustainable organizational growth.
A sustainability report is also the way our organization can build trust among our stakeholders. Like any financial report, a sustainability report shows where we focus our efforts and what our shareholders’ investments are fueling. This transparency builds trust and boosts reputation, which helps build our business.
Moreover, sustainability reporting in the Philippines is now a compliance issue. In 2019, the Securities and Exchange Commission (SEC) announced that all publicly listed companies (PLCs) must submit their sustainability report starting in 2023. This requirement ensures a PLC’s associated risks and consequences are better understood and disclosed to the public.
The Goals of Sustainability Reports
By implementing mandatory sustainability reporting for Philippine PLCs, the SEC aims to meet the following objectives (stated in their Memorandum Circular) to make sustainability reporting relevant and value-adding to Philippine organizations.
Sustainability reporting in the Philippines will help organizations better evaluate and manage any economic, environmental, and social effects as well as opportunities. Publishing this report periodically helps an organization optimize its business operations, and improve its productivity and impact.
The report also allows organizations to efficiently monitor their contributions to global sustainability targets such as the United Nations’ Sustainable Development Goals. Here is where companies make their non-financial performance more transparent and understandable for relevant parties such as stakeholders.
Guidelines for Sustainability Reporting in the Philippines
The SEC released its sustainability reporting guidelines and a template report, which you can read here. These guidelines relate to what PLCs must disclose in their sustainability reports and how each contributes to measuring an organization’s performance.
These are the salient points in the SEC guidelines for sustainability reporting in the Philippines:
Comply and explain. PLCs are given enough time to determine what projects, practices, and other significant initiatives they will include in their report. They must state the material impact through collected data and explain if they do not have or lack data.
PLCs may either comply with or explain to the SEC publicly why they cannot or were unable to submit their report.
A sustainability reporting template is provided to assist PLCs with their compliance. The sustainability report will be submitted together with the company’s annual report.
Failure to comply. If PLCs fail to submit their sustainability report, they will be subject to the same penalties for incomplete annual reports.
The SEC also expounded on what should be included under the following sections: Economic Disclosures, Environmental Disclosures, and Disclosures on Social Topics, as well as how to perform Materiality Assessments, which you can read here.
Best Practices in Sustainability Reporting in the Philippines
The SEC does not require any particular framework for sustainability reports, but it does provide four globally recognized standards for reports on sustainability and non-financial information.
Of the four, the Global Reporting Initiative (GRI) guidelines are the most widely used and are considered the benchmark for sustainability reporting in the Philippines. This framework provides a comprehensive, flexible, adaptable tool for organizations of nearly every size and capacity to report their EESG impacts.
However, PLCs can choose to use other frameworks provided by the SEC: the Sustainability Accounting Standards Board (SASB), Integrated Reporting (IR) Framework, and Task Force on Climate-related Financial Disclosures (TCFD). Some organizations opt to utilize these, in addition to the GRI guidelines, to report on topics of industry-specific sustainability.
To date, very few organizations have been able to disclose their sustainability assessments in full; Occupational Health and Safety (OHS) is the most disclosed topic while environmental topics are the least discussed.
This is no surprise as the practice of sustainability reporting in the Philippines is still relatively new. But the Aboitiz Group has been producing a sustainability report since 2009, and we continue to improve both our performance in this area and the quality of its presentation.
We have long dedicated our efforts to our EESG practices and are well-versed in discussing key focus areas in our sustainability report. We believe in creating value led by values; the growth of the community and environment is fundamental to our continued organizational development.
We have consistently published and submitted extensive sustainability reports to the SEC, fully disclosing our practices, projects, achievements, and areas for further development concerning everything under the ESSG umbrella. Please read our latest sustainability report here
Improve Your Credibility And Reputation With Stakeholders In The Philippines Through Sustainability Reporting
With sustainability reporting in the Philippines now required by the SEC, itt is now considered a core component of an organization’s business strategy, risk management, and adaptability. Furthermore, it’s an essential tool for stakeholders and is used to measure the value behind the organization better.
At Aboitiz, we commit to driving sustainable and mutually-beneficial progress. For decades, we have always believed that advancing business and communities is crucial to our growth — this is reflected in our sustainability reports. To learn more about how we continue to drive innovation and sustainability within our organization and the community, send us a message today.