Philippine companies are making progress in sustainability reporting, but many remain unprepared to handle the complexities of Scope 3 emissions disclosures and produce investor-grade environmental, social and governance (ESG) data, according to ESGpedia vice president Jozsef Acabo in an exclusive interview with the Daily Tribune.

Acabo said the Philippines is moving in the right direction through the rollout of sustainability reporting regulations, particularly with the phased implementation approach adopted by the Securities and Exchange Commission.

However, he noted that while large listed firms have made significant progress, many companies still struggle with Scope 3 emissions reporting because of its complexity and the lack of resources needed to gather data across supply chains.

“With the exception of the Group 1 listed companies, many companies are challenged to do Scope 3 measurements due to its complexity and lack of resources,” Acabo told the Daily Tribune.

Scope 3 emissions refer to indirect greenhouse gas emissions generated across a company’s value chain, including suppliers and business partners.

Acabo said the biggest challenge lies in collecting supplier-level information, which remains the weakest link in achieving audit-ready sustainability disclosures under the upcoming Philippine Financial Reporting Standards Sustainability Disclosure Standards (PFRS) S1 and S2.

He said digital ESG platforms could help companies streamline reporting, improve carbon accounting and engage suppliers more effectively while ensuring compliance with global sustainability standards.

The ESG expert also pointed to rising energy costs and oil price volatility as factors accelerating sustainability efforts across Southeast Asia.

According to Acabo, companies in the Philippines are increasingly treating climate-related issues as business risks rather than long-term environmental concerns, particularly because many industries remain dependent on imported energy.

He said some firms have reported supplier shortages as rising costs force businesses to increase prices, scale down operations or shift to other industries. As a result, some Philippine companies have expressed concern that additional ESG compliance requirements could further complicate supplier relationships.

Despite these challenges, Acabo believes the Philippines has an opportunity to strengthen its position within regional supply chains by integrating sustainability into core business operations.

“The country has a real opportunity to stand out in ASEAN by turning these pressures into resilient, differentiated growth,” he said.