Corporations are finding it difficult to comply with the Securities and Exchange Commission’s (SEC) template for sustainability reporting, a comprehensive study revealed.

The report, entitled "State of Sustainability Reporting in the Philippines" conducted by the Makati Business Club (MBC), in partnership with the Center for International Private Enterprise (CIPE) and its technical adviser, SGV & Co., revealed challenges that publicly listed companies (PLCs) are continuously facing in the sustainability reporting process.

The report stated that SEC's sustainability reporting template is a crucial tool for companies in starting their sustainability reporting journey, particularly for first-time sustainability reporters.

According to the report, 63 percent of companies surveyed found obtaining and verifying data points to fill out the template to be an overwhelming task.

Additionally, 45 percent of companies lack experts to help them follow the SEC sustainability reporting template and identify necessary data.

Sustainability officers also found it difficult to comply with sustainability reporting standards due to a lack of national-level data and statistics.

Based on the report, these challenges require both internal and external interventions, possibly from the SEC.

However, the report noted that companies in the Philippines are starting to develop strategies to improve their reporting, such as internal reviews and leveraging technology for data collection. This can lead to more efficient data management, reliability, and efficiency.

Active stakeholder engagement is another way to create better quality sustainability reports, as it allows for “more targeted problem-solving and goal-setting approach which helps the business create more value.”

Companies that report high stakeholder engagement have a better idea of what they can focus on and become more supportive of the sustainability reporting process, increasing reputation and efficiency throughout the business line.

Around 57 percent of surveyed companies use internal audits or board-level reviews on their sustainability reporting, benefiting from enhanced credibility and guidance.

However, “while companies interviewed reported that they recognize the importance of assurance, one big barrier is that this process also entails financial costs and a certain level of readiness or maturity in sustainability reporting,” the report said.

To help improve their disclosures, the report suggests that companies which started reporting ahead of the SEC guidelines should focus on reporting the most material risks or important issues first “as they would already have the knowledge and probably data to back up their reports even without external assurance.”

“Nonetheless, knowing the long-term benefits that assurance can give, it is highly suggested that companies position themselves where they can eventually be ready for external assurance in their sustainability journey,” the report added.