The Securities and Exchanges Commission (SEC), in partnership with the Philippine Stock Exchange (PSE), convened with Publicly Listed Companies and sustainability experts last November 28, 2024, for the 11th Annual SEC-PSE Corporate Governance Forum. Entitled “Sustainalympics: Corporate Governance and Sustainability through Sustainability Champions”, the event sought to tackle the role of corporate governance in climate resiliency, as well as provide regulatory updates on sustainability reporting standards at the national and global scale. The event featured major sustainability reporting leaders such as the Global Reporting Initiative, the Philippine Sustainability Reporting Committee, and the Institute of Corporate Directors.
Updates to the Sustainability Reporting Standards
In a roundtable discussion on board strategies for climate resiliency, Dr. Allinnettes Go Adigue, Head of the GRI ASEAN Regional Hub, previewed upcoming GRI Standards for release in 2025. This includes developing an updated Climate Change Standard and Energy Standard, which both aim to expand climate-related disclosures to include climate change impacts, GHG emissions reduction targets, and GHG removals and carbon credits.
The Philippine Sustainability Reporting Committee also provided regulatory updates on the IFRS S1 and S2 guidelines. This involved an overview of the newly published guide for materiality and SRROs, where sustainability-related risks and opportunities (SRROs) were further expanded to discuss their impacts on the organization, their stakeholders, the environment, and the entity’s value chain. Furthermore, materiality is outlined and defined in this guide to relate it to the ISSB. The guide also includes a high-level roadmap for identifying and disclosing material information.
Changes to Timeline for SuRe Form Implementation
A major update from the forum included key announcements on the recently published SuRe Form, which was initially set for implementation among PLCs by 2025. Instead, the SEC has retained the existing SEC SR Guidelines (MC No. 4 Series of 2019) this 2025, reporting for the fiscal year 2024. A formal announcement of these changes is expected to be released by the SEC in the near future.
The SEC seeks approval for revised mandatory disclosure requirements, aiming to better align with IFRS S1 and S2 Guidelines. A phased approach to mandatory sustainability reporting is planned, starting in 2026. Large Capital Listed Companies (Tier 1) will initiate compliance, followed by Mid Capital LCs (Tier 2) in 2027, and Small and Medium Enterprises (Tier 3) in 2028.
Limited Assurance for PLCs
In addition to the roadmap presented by the SEC, limited assurance of mandatory disclosures is in the pipeline to increase the reporting accuracy of PLCs. This will also be implemented on a Tier Basis, with Tier 1 companies expected to comply by 2028. Tier 2 and Tier 3 companies will be following this requirement as well by 2029 and 2030, respectively.
Release of SuRe Platform
The annual forum also served as a gateway to introduce the new, web-based SEC Sustainability Reporting (SuRe) Framework Application. This platform made possible through SEC’s collaboration with climate analytics company Komunidad, aims to digitize and streamline SuRe Form compliance among PLCs. Enterprises can simply enter or upload their MC 28 information to the platform to comply with SEC sustainability reporting requirements. From a regulatory standpoint, the shift to digitalization allows the SEC to easily manage, monitor, and verify the compliance of PLCs with mandatory sustainability reporting.
The release of the online platform is expected in the coming months. The platform will also feature tools geared towards ESG Management, Climate Risk assessment, Social Impact, and online training.
