The Philippines’ Securities and Exchange Commission (SEC) will soon release a new set of sustainability reporting guidelines for listed companies, in an effort to “ensure consistency and uniformity in the sustainability measures reported”.
The move is seen as a way to align Philippine companies with global peers, which have leapt ahead thanks to their own regulators’ stricter reporting requirements.
New rules will include a sustainability reporting form to guide publicly listed companies (PLCs) in crafting their reports.
“This is a significant step towards consistent, comparable and reliable sustainability information, ending the so-called alphabet soup of voluntary adoption of various standards,” says SEC chairperson Emilio Aquino.
Previously, industry players have pointed out that the Philippines is lagging behind its Asean neighbours when it comes to the adoption of environmental, social and governance (ESG) principles due to the lack of a “forcing mechanism” from regulators.
WIth the announcement of the impending new guidelines, the SEC also says it will take into consideration global sustainability standards such as the General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related Disclosures (IFRS S2).
“These standards serve as an effective and proportionate global framework of investor-focused disclosures on sustainability and climate-related risks and opportunities,” the SEC says, adding that the International Organization of Securities Commissions endorsed the standards earlier this year and called on its members to consider adopting and applying them within the context of their own jurisdictional arrangements.
While the SEC has had sustainability reporting guidelines since 2019, it previously followed a “comply or explain” model, which did not require PLCs to complete and submit a detailed sustainability reporting form.
Prior to the regulator’s 2019 guidelines, only around 22% of PLCs disclosed their sustainability reports, the regulator says. Since the advent of the 2019 guidelines, the SEC says the compliance rate for sustainability report submissions stood at 95% as of 2020.