Philippine-listed companies and firms planning to go public will need to meet stricter sustainability requirements to qualify for the country’s new Philippine Green Equity Label, the Securities and Exchange Commission (SEC) said on Thursday.
The guidelines, the first of their kind in Southeast Asia, require companies to demonstrate that at least half of their revenues and investments come from activities defined as “green” under the Philippine Sustainable Finance Taxonomy Guidelines (SFTG) or the ASEAN Taxonomy for Sustainable Finance. Firms that qualify will be able to use the label 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 in a statement. “This also positions the country as an emerging destination for foreign investors seeking credible, transparent, and meaningful green investments.”
Companies with exposure to fossil fuels face additional restrictions, with revenues from such sources capped at below 5%.
Applicants must also undergo independent external review, with results made publicly available. Approved companies will be subject to annual compliance checks by the Philippine Stock Exchange.
To ease implementation, the SEC introduced transition reliefs for firms still working toward full alignment with the green taxonomies.
However, applicants must already demonstrate that their activities contribute to at least one environmental objective, do not cause significant harm, and comply with minimum social safeguards.
The new framework, issued under SEC Memorandum Circular No. 13, builds on the Philippines’ growing sustainable finance market, which has reached 1.02 trillion pesos ($17.9 billion) in fixed-income instruments.
DevFiNews.com
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