SEC promotes sustainable finance

The Securities and Exchange Commission (SEC) highlighted its accomplishments in promoting sustainable finance during the Organization for Economic Co-operation and Development (OECD) Ministerial Meeting in Paris.

At the conference on Responsible Business Conduct in the Global Economy, SEC Commissioner Kelvin Lester K. Lee spoke about the commission's commitment to the United Nations' Sustainable Development Goals (SDGs) and its initiatives in pursuing sustainable finance to fellow regulators, ambassadors, and other delegates.

Lee emphasized the importance of establishing a sound and sustainable investment framework that protects Philippine resources for the future while contributing to progress, which is a crucial issue for policymakers. The OECD, an international organization co-chaired by France and the United States, works with government agencies, policymakers, and citizens to create evidence-based international standards and find solutions to social, economic, and environmental problems.

In addition to the SEC, the Philippines was represented by Kristine Margret Malang, the First Secretary of the Philippine Embassy to France, and Rosa Katrina Banzon, the Commercial Counsellor of the Department of Trade and Industry, at the ministerial meeting.

The meeting aimed to reflect on the role of Responsible Business Conduct in establishing an international rules-based trade and investment system that can be used across different thematic and policy areas and as a baseline expectation for businesses in the global economy.

The SEC has issued several guidelines in line with the Philippines' Sustainable Finance Roadmap to promote good corporate governance and support the deepening of capital markets through sustainable investment products.

The Sustainability Reporting Guidelines for Publicly Listed Companies (PLCs) were released in 2019 to assist PLCs in evaluating their non-financial performance and monitoring their contributions towards achieving universal sustainability targets established by various initiatives such as the UN SDGs.

In 2022, the SEC issued the Rules on Sustainable and Responsible Investment Funds, providing guidelines for newly formed and existing investment companies that qualify as Sustainable and Responsible Investment (SRI) Funds. The commission is also drafting guidelines on sustainability-linked bonds that incorporate the ASEAN Sustainability-linked Bond Standards (SLBS).

The SEC is committed to promoting capital market integration in the region and is actively involved in the regional sustainability agenda of the ASEAN Capital Markets Forum (ACMF), where it currently serves as co-chair of the ACMF Sustainability Finance Working Group. Additionally, the SEC is a member of the ASEAN Taxonomy Board, which seeks to develop, maintain, and promote a multi-tiered ASEAN Taxonomy for Sustainable Finance to identify sustainable economic activities and provide a framework for ASEAN members to develop their respective national sustainability initiatives.

The SEC is working with the Bangko Sentral ng Pilipinas and other financial regulators to establish the Philippines' Proposed Sustainable Finance Taxonomy, which will provide clarity in communicating standards with market participants. The commission leads the Technical Working Group on Sustainable Finance - Taxonomy Sub Group for these Guidelines.

Lee stated that the Philippine taxonomy is designed as an evolving framework similar to the development of the ASEAN taxonomy, utilizing a phased approach from a qualitative, principles-based framework to a metrics system that utilizes threshold-based screening criteria.

He emphasized that at the core of the Philippines' efforts is the assurance that laws, policies, roadmaps, and the appropriate principles, such as RBC, can have far-reaching impacts and successes that benefit not just the financial system, but society and the environment as a whole.