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SEC issues rules for listed firms’ reports on sustainability
THE SECURITIES and Exchange Commission (SEC) has formally launched the sustainability reporting guidelines for publicly listed companies (PLCs), which will be required to submit their sustainability reports starting next year.
“With the issuance of the Sustainability Reporting Guidelines… SEC has high hopes that PLCs would not only be made aware of sustainability but would make it a part of their priorities,” SEC Chairman Emilio B. Aquino said in a statement on Monday.
The corporate regulator said that the reporting guidelines were launched on Friday at the SEC-Philippine Stock Exchange Conference on Building a Sustainable Business Community.
The commission presented the business case for sustainability reporting during the event, which is done in partnership with the Global Reporting Initiative (GRI) and Australia’s Department of Foreign Affairs and Trade (DFAT).
“We hope we would all be reminded that the responsibility of creating a sustainable environment is an obligation so basic and imperative that it precedes any kind of law. It is a call for the preservation of humankind, of our generation and of the generations to come,” Mr. Aquino said.
The PSE also emphasized the role of businesses in sustainable development and acknowledged the SEC’s support for sustainability initiatives in the Philippine capital market.
“Companies have the inherent responsibility to take care of human, social and environmental capitals,” PSE President Ramon S. Monzon said in a statement.
“As companies, we are enablers. We must accept the moral and social accountability to be at the forefront in acting on and upholding the SDGs (sustainable development goals) relevant to us. To realize this, sustainability should be at the core of our corporate culture and ingrained in the organization’s mindset from the board of directors to our newest hire, even the interns,” he said.
The SEC quoted Jose Teodoro K. Limcaoco, chief sustainability officer at Ayala Corp., as reiterating in his keynote address the importance of preserving the environment and creating a just society for businesses to thrive, as he shared the conglomerate’s journey in integrating sustainability into its corporate strategies.
The agency also quoted Kanna Mihara, vice-president at Macquarie Capital Securities (Japan) Ltd., as noting how sustainability has increasingly become a major consideration for investors.
The official also cited the latest biennial report from Global Sustainable Investment Alliance that estimated the value of assets professionally managed under responsible investment strategies at $30.7 trillion in 2018.
SEC Commissioner Kelvin Lester K. Lee presented the Sustainability Reporting Guidelines for Publicly Listed Companies approved by the commission on Feb. 12.
The agency said the guidelines reflect four of the globally accepted frameworks for reporting sustainability and non-financial information: the GRI’s Sustainability Reporting Standards, the International Reporting Council’s Integrated Reporting Framework, the Sustainability Accounting Standards Board’s Sustainability Accounting Standard and the recommendations of the Task Force on Climate-related Financial Disclosure.
It said the guidelines, which are also in line with Principle 10 of the Code of Corporate Governance for Publicly Listed Companies, list information that PLCs will have to disclose in relation to their non-financial performance across the economic, environmental and social aspects of their organizations.
“For economic impacts, the information may relate to the companies’ contribution to the pool of economic resources that flows in the local and national economy such as data on employee wages and benefits, investments in communities and procurement practices,” the SEC said.
“For environmental impacts, the information may pertain to energy and water consumption, materials used, operational sites near protected areas and areas of high biodiversity value outside protected areas, air emissions as well as solid and hazardous wastes. Disclosures should include the PLCs’ initiatives to enhance their operations’ positive impacts and minimize the negative impacts,” it added.
“For societal impacts, the information may range from employee benefits, diversity and equal opportunity at the workplace and occupational health and safety to customer satisfaction, customer privacy and data security.” — Victor V. Saulon