Green equity rules relaxed to attract firms

The Securities and Exchange Commission (SEC) has eased accreditation requirements for the Philippine Green Equity label to encourage more publicly listed companies to pursue sustainable investments.

Under SEC Memorandum Circular No. 30, issued on 3 November, the regulator transferred authority to grant the Green Equity label to the Philippine Stock Exchange (PSE), allowing the bourse to process applications and monitor compliance directly.

“As regulator of the Philippine capital market, we recognize the Commission’s role in promoting sustainable development in the business sector. This is the vision that guided us when we issued the first Green Equity Label guidelines in Southeast Asia last year,” SEC Chairperson Francis Lim said on Thursday.

“The amended guidelines reflect our commitment to continuously update our rules in line with global trends, to ensure a more seamless and accessible process for our stakeholders,” he added.

The revised framework gives the PSE authority to evaluate applications, grant the label, and accredit external reviewers to assess companies’ compliance with sustainability requirements.

The exchange must notify the SEC within five days of granting a label, including the basis for its approval, while remaining subject to regulatory oversight.

To give companies more breathing room, the SEC also extended by one year from the effectivity of the revised guidelines the transition period for full compliance with the Philippine Sustainable Finance Taxonomy Guidelines or the ASEAN Taxonomy for Sustainable Finance.

During this period, firms will be exempt from administrative penalties and sanctions but must still disclose how their green activities contribute to at least one environmental objective under the applicable standards.

Full compliance will become mandatory after the transition period for companies seeking to obtain, retain, or renew the Green Equity label.

The PSE may also suspend or revoke the accreditation of external reviewers that violate prescribed standards, subject to due process and SEC review.

The reforms follow the SEC’s introduction last year of Southeast Asia’s first Green Equity label guidelines, part of efforts to strengthen the credibility of sustainable investments and provide investors with clearer benchmarks for identifying environmentally responsible companies.