SEC flags ESG reporting gaps; tighter rules ahead

Despite stricter alignment with global standards and tighter disclosure requirements, the Securities and Exchange Commission (SEC) said local companies still face major hurdles in sustainability reporting.

Speaking at the ASEAN-EU Sustainability Summit 2026 in Cebu, SEC Commissioner Javey Paul D. Francisco cited “organizational capacity, reporting costs, and data comparability” as among the key challenges confronting companies.

In response to these challenges, he said the SEC is working to ease the transition for companies by adopting sustainability reporting standards aligned with the International Sustainability Standards Board.

The Commission is also implementing phased assurance requirements to enhance the reliability, consistency and comparability of ESG disclosures.

“Sustainability disclosure is no longer a peripheral reporting exercise but an increasingly material component of market integrity, investor confidence, and long-term corporate resilience,” the SEC said.

Francisco also said investors are demanding “more consistent, comparable, and decision-useful sustainability information” as climate and governance risks increasingly affect capital allocation and business strategy.

The regulator said the shift toward stricter sustainability disclosures will follow a “phased and proportionate approach” that takes into account market readiness and institutional capacity.