Philippine companies should strengthen their oversight of suppliers to manage potential regulatory and financial risks stemming from environmental, social, and governance (ESG) requirements, industry executives said.

Speaking at PASIAWorld 2026 on Thursday, industry representatives warned that businesses could face operational disruptions and added costs if their suppliers fail to meet international labor and sustainability standards.

Nienke Benders, Head of Global Alliance at Givvable, said companies should weigh potential compliance risks when selecting suppliers rather than focusing solely on procurement costs.

“If you make a choice for a cheaper supplier, but you haven’t checked the human rights risk in the supply chain, it might become a very high risk or cost down the line. Your product is getting stuck at the US border,” Benders said.

The discussion highlighted the potential consequences of US restrictions on imports linked to forced labor. Industry representatives cited nearly 16,000 shipments that, they said, had been subjected to US border enforcement measures since 2022 over suspected links to forced labor.

Benders also pointed to property developer Ayala Land, Inc.’s program to engage and train 2,500 suppliers on sustainability standards as an example of embedding ESG requirements into procurement practices.

Imelda Tiongson, Vice-Chairperson of the Institute of Corporate Directors, said companies should consider longer-term business risks alongside their immediate financial performance.

“There are businesses that are looking only short-term, but if you look at it in perspective, the better leaders are the ones looking at long-term. You can be profitable today and not be surviving tomorrow because of relevance,” she said.

The executives also urged companies to strengthen supplier coordination, rely on verified information when assessing compliance, and translate sustainability policies into operational measures. These steps place supplier compliance within routine procurement and business planning, rather than treating it as a separate reporting exercise.

Catherine Jalandoni, Country Director of the Global AI Council Philippines, likewise called on companies to align their operations with applicable international regulatory requirements. — Juliana Chloe A. Gonzales