Listed firms told to step up sustainability reporting

Philippine Tribune
Philippine Tribune

Iris Gonzales – The Philippine Star

October 6, 2023 | 12:00am

MANILA, Philippines — The Securities and Exchange Commission (SEC) is requiring publicly listed companies to provide a more comprehensive report on their sustainability initiatives.

The move is aimed at aligning the sustainability reporting of the country’s listed companies with global sustainability frameworks.

The SEC issued a draft memorandum circular on the Revised Sustainability Reporting Guidelines.

SEC chairperson Emilio Aquino said it’s about being aligned with international best practices.

“In keeping with the commitment to be at the forefront of promoting good corporate governance, and aligned with international best practices, the SEC considers it imperative to keep SR regulations responsive to latest global developments,” Aquino said.

More importantly, Aquino said, a better sustainability reporting framework in the country would help create a sustainable economy in the country.

“The further development of the framework in the country contributes to the creation of a green and blue economy, as well as the establishment of sustainable communities,” Aquino said.

Under the revised SEC guidelines, PLCs will now be mandated to submit sustainability reports in two formats.

The first is the SR Narrative which will be submitted in conjunction with the company’s annual report.

The second format is the Sustainability Report (SuRe) Form which PLCs will be required to submit through the SEC Electronic Filing and Submission Tool (eFAST).

The template comprises three major sections, namely Sustainability and Climate-related Opportunities and Risks Exposures (SCORe); Cross-Industry Standard Metrics (CISM); and Industry-Specific Metrics (ISM).

There will be separate guidelines for ISM, which largely considers the existing Philippine Standard Industrial Classification (PSIC).

The SuRe Form aims to elevate the quality of sustainability reporting and ensure the consistency of non-financial information submitted by PLCs.

The SEC institutionalized sustainability reporting among corporations in 2019 when it mandated PLCs to submit sustainability reports on a “comply or explain” approach.

This allowed PLCs to disclose corporate sustainability data, when available, and provide explanations for items where there are none.

So far, the SEC said an average of 96 percent of PLCs submit sustainability reports annually.

The revised SEC guidelines consider the latest global advancements in sustainability reporting frameworks, notably the IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures).

Both frameworks are fully aligned with the recommendations of the global organization, Task Force on Climate-related Financial Disclosures (TCFD).

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