SEC sets rules for first Green Equity label

Listed companies and firms eyeing to go public will now have to meet tougher sustainability requirements if they want to earn the country’s new Philippine Green Equity Label.

The Securities and Exchange Commission (SEC) has issued Southeast Asia’s first Green Equity Guidelines, directing companies to prove that at least half of their revenues and investments come from activities considered “green” under local or regional taxonomies. Those that qualify gain access to a label meant to attract climate-focused investors.

“The issuance of the SEC Green Equity Guidelines is a game-changing initiative that will help develop the capital market not only by boosting liquidity but also by supporting our climate goals,” SEC Chairperson Francis Lim said on Thursday.

“This also positions the country as an emerging destination for foreign investors seeking credible, transparent, and meaningful green investments,” he added.

The rules, issued under SEC Memorandum Circular No. 13, Series of 2025, lay out specific criteria for compliance. 

Companies must show that 50 percent of their revenues and the sum of their capital and operating expenditures are either derived from or directed toward activities aligned with the Philippine Sustainable Finance Taxonomy Guidelines or the ASEAN Taxonomy for Sustainable Finance.

Firms with exposure to fossil fuels also face restrictions, as revenues from such sources must remain below five percent.

Applicants must submit an external review assessment report to the SEC, with findings made available to the public. Compliance does not end at the initial approval stage—label holders will undergo yearly assessments by the Philippine Stock Exchange to confirm that requirements are still met.

To accommodate varying levels of readiness, the SEC included transition reliefs for companies still moving toward full alignment with the SFTG or ATSF. 

Even so, applicants must demonstrate that their activities contribute to at least one environmental objective and that these do not cause harm or violate minimum social safeguards at the time of application.

The new guidelines are part of the SEC’s broader push for sustainable finance and builds on existing frameworks, including the P1.02 trillion sustainable finance fixed-income market.