EC issues sustainability guidelines for publicly listed companies

MANILA, Philippines — The Securities and Exchange Commission (SEC) has issued the sustainability reporting guidelines for publicly-listed companies following its en banc meeting last Feb. 12. 

“The guidelines is intended to help PLCs assess and manage non-financial performance across economic, environmental and social aspects of their organization and enable PLCs to measure and monitor their contributions toward achieving universal targets of sustainability such as the United Nations Sustainable Development Goals as well as national policies and programs, such as AmBisyon Natin 2040,” the SEC said in a memorandum circular for publicly listed companies.

According to the SEC, the first report shall be attached to the 2019 annual report to be submitted in 2020.

“For companies who already have sustainability reports in accordance with internationally recognized frameworks and standards, their reports shall already be considered as the reporting template. Companies may choose to attach the whole sustainability report to their annual report or just include a statement providing a link to the said report,” the SEC said. 

The SEC said that the guidelines shall be adopted on a comply or explain approach for the first three years upon implementation. 

This means that companies would be required to attach the template to their annual reports, but they can provide explanations for items where they still have no data on.

The corporate regulator has warned those who would not comply with the circular. 

“Non-attachment of the sustainability report to the annual report shall be subject to the penalty for incomplete annual report provided under SEC Memorandum Circular No. 6. Series of 2005,” the SEC said. 

The SEC said companies’ stakeholders now give greater attention to how businesses impact the economy, environment and society and the way corporations respond to sustainability challenges, in addition to financial challenges.

“Consequently, sustainability reporting has emerged as a common practice for companies globally. In fact, 93 percent of the world’s largest 250 companies and 75 percent of the top 100 companies in 49 countries report on sustainability,” the SEC said.

However, the SEC said that for the Philippines, less than 22 percent of PLCs have published a report on sustainability impacts and performances.