Publicly-listed companies will be required to submit sustainability reports separate from their annual reports from 2023.
Philippines’ Securities and Exchange Commission (SEC) is reportedly planning to make sustainability reporting mandatory for all listed firms by 2023.
The SEC issued sustainability reporting guidelines for listed companies in 2019. While sustainability reporting is on a comply or explain basis, the regulator noted a compliance rate among publicly listed companies of over 90 percent in each of the last two years.
According to Business Mirror, SEC commissioner Kelvin Lester K. Lee said at an online forum last week that an additional requirement will be imposed on publicly listed companies by 2023, requiring them to submit their sustainability reports to the SEC apart from their annual reports.
Lee noted that sustainability reporting is already mandatory in countries such as Thailand, Singapore, Malaysia and Indonesia, and that researchers have identified a positive correlation between good sustainability practices, profitability and higher stock prices.
The SEC is also seeking to introduce the sustainability reporting obligations for companies that are not publicly listed on a comply or explain basis, Lee said. “Later on, we want to adopt a mandatory approach to sustainability reporting for all types of corporations.”
According to Lee, the SEC intends to help listed companies prepare for mandatory sustainability reporting by making it easier for them to identify, manage and measure their employee, environmental, social and governance (EESG) risks and opportunities.
In this vein, the SEC is seeking to introduce a mechanism that would allow listed companies to communicate with stakeholders, while also enabling them to better measure and monitor their contribution towards the United Nations Sustainability Development Goals (SDGs).