The Philippine SEC is introducing new guidelines aimed at fostering sustainable investment in the country.
According to ESG News, the draft memorandum circular, known as the Green Equity Guidelines, outlines measures to encourage the issuance of green equity, aligning with global sustainability commitments like the Paris Agreement and the United Nations Sustainable Development Goals (SDGs).
Under these guidelines, companies aspiring to issue green equity must ensure that at least 50% of their revenues and investments are derived from environmentally friendly activities, as defined by the Philippine Sustainable Finance Taxonomy Guidelines (SFTG) and the ASEAN Taxonomy for Sustainable Finance. Additionally, these companies are required to set, disclose, and externally verify measurable and benchmarkable key performance indicators (KPIs) related to their environmental targets, with progress reports to be made available on designated websites.
The SEC mandates that companies seeking the Green Equity label undergo rigorous assessments by independent external reviewers. These reviews are intended to guarantee compliance with the guidelines and to enhance investor transparency by making these reports accessible to the public.
The introduction of the Green Equity Guidelines aims to increase the visibility of companies actively contributing to environmental sustainability. It seeks to channel more capital towards businesses that support a low-carbon and climate-resilient economy, supplementing other sustainable investment products like green bonds.
To qualify for the Green Equity label, companies must apply through the SEC’s Markets and Securities Regulation Department (MSRD) and are expected to provide regular updates on their environmental goals and performance against set KPIs. They must also undertake annual limited reviews and comprehensive triennial assessments to maintain their certification.
However, the SEC warns that it will withdraw the Green Equity label from any company that fails to meet the standards, with potential penalties outlined in the Securities Regulation Code (SRC) and related laws. The guidelines are open for public comment until January 25, 2025, and the SEC invites stakeholders to submit feedback via email to aid in refining the proposal.
Keep up with all the latest FinTech news here
Copyright © 2025 FinTech Global
