THE Securities and Exchange Commission (SEC) will instruct publicly listed companies (PLCs) to submit sustainability reports in two formats as part of the proposed revised guidelines on sustainability reporting.
In a statement on Thursday, the corporate regulator said it issued the draft memorandum circular (MC) containing the revised sustainability reporting guidelines on Oct. 4 for public comment. The draft seeks to update current rules provided by MC No. 4 issued in 2019.
Under the draft MC, PLCs would be required to submit sustainability reports in the sustainability reporting narrative and sustainability report (SuRe) form formats.
For the sustainability report narrative, PLCs should pass a narrative report using the format provided in MC 4, which would be submitted in conjunction with the companies’ annual report.
The companies would pass the SuRe form via the SEC electronic filing and submission tool. The form template has three sections consisting of the sustainability and climate-related opportunities and risks exposures (SCORe), cross-industry standard metrics (CISM), and industry-specific metrics (ISM).
“The SuRe Form aims to elevate the quality of sustainability reporting and ensure the consistency of non-financial information submitted by PLCs,” the SEC said.
According to the SEC, it would also release separate guidelines for ISM at a later time.
“In keeping with the commitment to be at the forefront of promoting good corporate governance, and aligned with international best practices, the SEC considers it imperative to keep sustainability reporting regulations responsive to latest global developments,” SEC Chairperson Emilio B. Aquino said.
“The further development of the sustainability reporting framework in the country contributes to the creation of a green and blue economy, as well as the establishment of sustainable communities,” he added.
In 2019, the SEC issued MC 4 which instructed PLCs to pass sustainability reports via a “comply or explain” approach that allowed them to disclose corporate sustainability data, when available, and provide explanations for items where there are none.
Meanwhile, the SEC said the draft MC considered the latest sustainability reporting frameworks such as International Financial Reporting Standards (IFRS) S1 on the general requirements for disclosure of sustainability-related financial information and IFRS S2 on climate-related disclosures.
The corporate regulator added that the guidelines recognize other frameworks such as the United Nations Sustainable Development Goals, Global Reporting Initiative, Sustainability Accounting Standards Board, International Integrated Reporting Council, and the United Nations Conference on Trade and Development-International Standards of Accounting and Reporting Guidance on Core Indicator.
“The adoption of sustainability reporting across covered entities has been very positive, with an average of 96% of PLCs submitting sustainability reports annually,” the SEC said.
Interested parties have until Oct. 16 to submit their comments regarding the draft MC on the revised sustainability reporting guidelines for PLCs. — Revin Mikhael D. Ochave