Companies should be able to realize how important sustainability mechanisms and reporting are for their operations, and the society at large, to ensure their compliance to this government mandate, speakers at the recently held Sustainability Fireside Chat said.
The Securities and Exchange Commission mandated sustainability reporting for publicly listed companies, through Memorandum Circular No. 4, in 2023. Sustainability reporting allows companies to trace their economic, environmental, and social impacts. Through this, companies can monitor their contribution to fulfilling universal sustainability targets.
SustainablePH Program Director Mai Baticulon said that one of the challenges in sustainability reporting in the Philippines is establishing relevance among businesses, and in turn, their stakeholders. “Because if you’re not able to establish relevance, they will just see it as another add on to their already business as usual, it will entail cost,” she said.
Baticulon is one of the speakers at the Sustainability Fireside Chat event led by Komunidad Global and Business for Sustainable Development. This edition of the Fireside Chat, held last September 20, was themed Shaping The Future of Sustainability: How Can We Advance our Action Plan?
She was joined by Rachel Remalante, Director of Corporate Governance and Finance Department, Securities and Exchange Commission, and Katreena Pillejera, Philippines, Country Manager Global Reporting Initiative (GRI). Arvee Perez, BSD program consultant for sustainability management systems, meanwhile moderated the panel talk.
Baticulon shared that in the trainings they lead at SustainablePH, an organization dedicated to raising more sustainability leaders, they discuss sustainability reporting not just an output they have to submit to the government, but what is in it for them if they comply with this mandate.
“Once you are able to establish that relevance, the business case is, they will be the ones wiling to gather information, see that this is actually an input to how we can improve our business processes, how we can realize some cost savings later on,” she said.
Pillejera, for her part, shared that GRI encounters problems with data collection. “We anticipated how they will be receiving it and beyond the 31 topic standards, we also have sector standards. We are developing 40 topic standards, we have already published coal, oil and gas, and agriculture, aquaculture, fishery. A lot more [are] in the pipeline,” she told the panel.
The GRI is an international organization that campaigns for a common language to communicate and determine impacts of businesses and other groups.
She said that GRI provides a comprehensive set of disclosures and metrics, but they understand that this may be overwhelming even for big companies. It would even be more difficult for small and medium enterprises to follow this. Because of this, companies may feel that sustainability reporting may be challenging.
Remalante, whose department at the SEC helps in handling sustainability reports, shared that they also encounter challenges with data collection because companies use different standards and metrics in their sustainability report, making alignment difficult.
The SEC official also said that they wish companies will not only submit sustainability reports just for the sake of compliance. She said they wish enterprises will also look at “why they were doing this, why [it] is important not only to investors but to society as well.”
“We sometimes forget the S in ESG and that’s the people, so we have been doing a lot… I’m one of the pushers [of this mandate]. We want to really start the behavior of companies to start reporting on their sustainability activities,” she added.
The SEC understands that sustainability reporting can be overwhelming and Remalante said they are continuously working on making reporting easier. It is through this that companies will realize why sustainability reporting is relevant and how this can push policies.
This can be an area for opportunity to improve sustainability reporting.
There is also an opportunity in capacity-building, which can be pursued in schools or upskilling of professionals, Baticulon, for her part, said.
Innovation meanwhile can “make it easy for anyone to just make the right things, whether that’s doing sustainability reporting properly, implementing the right sustainability practices, or upskilling your own workforce,” she added.
For capacity-building, GRI is looking to launch the Sustainability Innovation Lab of Asia where sustainability reporters and practitioners can learn more digital solutions while connecting with their peers on a local and global scale, Pillejera said.
Collaboration will also help address the challenges in sustainability reporting, Remalante said, adding that they at the SEC are working together with GRI and other similar organizations. The SEC is also eager to involve practitioners in drafting their regulations, she added.