Regulators are pushing to make greenhouse gas (GHG) reporting mandatory for businesses after signing an agreement with Japan to strengthen the systems needed to measure, verify, and disclose corporate emissions.

The Securities and Exchange Commission (SEC), the Department of Environment and Natural Resources (DENR), and Japan’s Ministry of the Environment (MOEJ) signed a Letter of Intent (LoI) to advance climate transparency and improve the country's GHG accounting, reporting, and verification framework.

The partnership falls under the Partnership to Strengthen Transparency for Co-Innovation (PaSTI), a program launched by the MOEJ in the Philippines in 2019. 

“Under the PaSTI Project, our target is clear: transition the private sector from voluntary to mandatory GHG reporting.

By aligning DENR’s technical tools with the SEC’s revised Sustainability Reporting System, we establish a unified whole-of-government approach,” DENR Undersecretary for Finance, Information Systems, and Climate Change Analiza Rebuelta-Teh said.

The initiative is expected to help publicly listed companies and large non-listed entities meet international requirements, including the EU’s Carbon Border Adjustment Mechanism and Article 6 carbon markets, while strengthening compliance with the SEC’s sustainability disclosure standards.

SEC Commissioner McJill Bryant Fernandez said stronger coordination among regulators, businesses, and international partners is needed to build credible climate reporting systems.

“We acknowledge that climate transparency cannot be achieved by the financial sector alone. It requires close coordination among environmental authorities, financial sector regulators, the private sector, and international partners to ensure that reporting systems are credible, practical, and responsive to the needs of our stakeholders,” he said.

The LoI was signed by Fernandez, MOEJ Vice-Minister for Global Environmental Affairs Kentaro DOI, and Rebuelta-Teh.