With the increasing number of companies becoming sustainable, many small and medium enterprises (SMEs) in the Philippines were left behind due to a lack of expertise and resources.
“Many probably do not care a lot about sustainability reporting, and it’s easy to understand why. Unlike bigger organizations, most SMEs lack the time, knowledge, and resources to grapple with such extensive problems like climate change or social prejudice,” the Association of Certified Public Accountants in Public Practice (ACPAPP), said in an article on SMEs’ journey for sustainability.
Further, ACPAPP mentioned that the most popular way to present sustainability to SMEs is by promoting it as a cost-effective opportunity rather than compliance.
“Practices such as energy conservation, waste recycling, using energy-efficient equipment, solar power, and water-saving mechanisms help keep costs down and have proven to be more cost-effective than the usual energy use. SME accountants can use their role as financial advisers to encourage SMEs to adopt these practices by pointing out the quick gains a business can achieve over the years through efficiency,” the association claimed.
The Securities and Exchange Commissioner Javey Paul Francisco also affirmed last March 24 that sustainability reporting is more than just compliance. It is a long-term investment for business, society, and the environment.
In 2022, the Philippine Statistics Authority (PSA) recorded 1,109,684 businesses in the country, with 99.59% or 1,105,143 categorized under micro, small and medium enterprises (MSMEs).
PSA defined MSMEs into two categories based on asset size and number of employees.
- Micro has one to nine employees with up to P3,000,000 asset size,
- Small has 10 to 99 employees and P3,000,001 to P15,000,000 asset size
- Medium has 100 to 199 employees and an asset size of P15,000,001 to P100,000,000.
“Philippines businesses and supply chains are under increasing pressure to embrace sustainability reporting and full supply chain transparency,” Global Compact Network Philippines (GCNP) and STACS stated in a press release last Wednesday.
To successfully achieve corporate sustainability and reporting in local businesses and SMEs in the supply chain, GCNP worked with STACS, an Asian Environmental, Social, and Governance (ESG) data and technology solutions company, in building the ESGpedia platform to facilitate the struggle of businesses.
Integrating the digitalized Sustainability Reporting Form (SuRe Form) into ESGpedia would assist entrepreneurs through digital assessment with guidance notes for additional information on the requirements of the said report.
“Digital enablement is key in helping companies and SMEs navigate the evolving ESG regulations and maintain competitiveness in the global supply chain,” STACS ESGpedia Managing Director Benjamin Soh shared.
Later this year, the Securities and Exchange Commission (SEC) will release the SuRe Form and implement reporting, due in 2025. – Almira Louise S. Martinez