Sustainability reporting rules undergoing revamp

The Securities and Exchange Commission or SEC is seeking the public's comments and suggestions to improve the sustainability reporting of companies that will be required in the revised Sustainability Reporting or SR Guidelines for publicly listed companies or PLCs.

The goal is to ensure that the measure aligns with the interests of consumers and supports the development of a sustainable economy.

SEC chairperson Emilio Aquino pointed out that the move is part of the Commission's efforts to "be at the forefront of promoting good corporate governance and international best practices."

"The SEC considers it imperative to keep SR regulations responsive to the latest global developments. The further development of the SR framework in the country contributes to the creation of a green and blue economy, as well as the establishment of sustainable communities," he added.

Guideline gets revised
The SEC issued the draft Memorandum Circular on the Revised SR Guidelines on 4 October. It will be up for public comment until 16 October.

Primarily, it the upgraded rules aim to update current rules on sustainability reporting provided under SEC Memorandum Circular 4, series of 2019 or MC 4.

According to the updated guidelines, PLCs will be required to submit sustainability reports in two formats — the SR Narrative and the Sustainability Report or SuRe Form.

The companies must also provide a written report using the format specified in MC 4. This report should be submitted alongside the company's yearly report.

Meanwhile, PLCs will be required to submit their duly answered SuRe Form through the SEC Electronic Filing and Submission Tool. Its template comprises three major sections, namely Sustainability and Climate-related Opportunities and Risks Exposures; Cross-Industry Standard Metrics; and Industry-Specific Metrics.

Separate guidelines for ISM, which largely considered the existing Philippine Standard Industrial Classification, will be released later.

In 2019, the SEC made sustainability reporting mandatory for PLCs through MC 4.