From boardrooms to climate accountability: SEC’s

From boardrooms to climate accountability: SEC’s | Daily Tribune

International climate law is sending a clear message to regulators that climate governance now requires credible oversight of private corporate conduct. Recent advisory opinions from the International Court of Justice and the Inter-American Court of Human Rights sharpen that expectation.

The ICJ warned: “A State may be responsible where, for example, it has failed to exercise due diligence by not taking the necessary regulatory and legislative measures to limit the quantity of emissions caused by private actors under its jurisdiction.”

Meanwhile, the IACHR emphasized that “business enterprises are called on to play an essential role in addressing the climate emergency.”

Together, these statements articulate an “enhanced” regulatory due diligence standard.

It is objective in character, evaluates the adequacy of regulation of corporate behavior, is stringent given the severity of climate risks, and is demonstrated through adherence to procedural safeguards, including risk assessment, reliance on scientific standards, and precaution.

In the Philippine setting, this is where the Securities and Exchange Commission becomes central.

The SEC is not an environmental regulator. It does not set emissions caps. But climate change is now a financial and governance risk. And the SEC regulates governance, disclosure, and market integrity.

Recent SEC issuances reflect this expanding role.

The Code of Corporate Governance for Publicly-Listed Companies embeds board accountability, risk management systems, and sustainability oversight within governance frameworks.

It requires boards to establish effective risk management structures, a foundation for integrating climate-related risks.

The Sustainability Reporting Guidelines (SEC Memorandum Circular No. 4, s. 2019) require listed companies to disclose environmental, social, and governance (ESG) impacts.

While not climate-specific, the framework compels corporations to publicly account for environmental exposure and management strategies, strengthening transparency and deterring greenwashing.

The SEC has also reinforced independence and competence at the board level (Memorandum Circular No. 7, s. 2026). Through its corporate governance issuances, the SEC has imposed strict term limits for independent directors, preserving objectivity and preventing long-term entrenchment. True independence is critical when boards must scrutinize long-term environmental and transition risks.

Further, the SEC has sought public comment on requiring continuing education and training for independent directors. In an era where climate risk involves complex financial modeling, regulatory developments, and scientific projections, ongoing education ensures that board oversight evolves alongside emerging systemic risks.

These measures may not be labeled as “climate regulation,” yet they directly support enhanced regulatory due diligence.

They strengthen board independence, improve risk disclosure, and elevate governance standards.

In doing so, they demonstrate that corporate actors within Philippine jurisdiction are subject to structured oversight.

By embedding risk management, sustainability disclosure, independent oversight, and director competence in corporate practice, the SEC contributes to a governance architecture capable of responding to climate risk.

Climate accountability is no longer confined to environmental statutes. It resides in boardrooms, financial disclosures, and regulatory supervision. The SEC’s expanding role reflects that reality — and positions Philippine corporate governance within the evolving global standard.