The Securities and Exchange Commission (SEC) showcased its efforts and achievements in pursuing sustainable finance during the Organization for Economic Co-operation and Development (OECD) Ministerial Meeting in Paris.
During the meeting on Responsible Business Conduct (RBC) in the Global Economy, SEC Commissioner Kelvin Lester K. Lee discussed the Commission’s initiatives in pursuing sustainable finance through its commitment to the United Nation’s (UN) Sustainable Development Goals (SDGs), before fellow regulators, ambassadors, and other delegates.
“Promoting and enabling a sound and sustainable investment framework is of principal interest to policy-makers to ensure that business activities and investment decisions contribute to progress while also protecting Philippine resources for the future,” Lee said.
The OECD is an international organization, co-chaired by France and the United States, that works alongside various government agencies, policy makers, and regular citizens to establish evidence-based international standards and search for solutions to various social, economic, and environmental issues.
Aside from the SEC, the Philippines was also represented by the First Secretary of the Philippine Embassy to France, Kristine Margret Malang, and Commercial Counsellor of the Department of Trade and Industry, Rosa Katrina Banzon.
The ministerial meeting aimed to reflect on the role of RBC in creating an international rules-based trade and investment system that can be used across several thematic and policy areas as well as a baseline expectation for businesses in the global economy.
In line with the Philippines’ Sustainable Finance Roadmap, the Commission has issued several guidelines that would promote good corporate governance and support the deepening of the capital markets through sustainable investment products.
In 2019, the Commission the Sustainability Reporting Guidelines for Publicly Listed Companies (PLCs) to aid PLCs in assessing their non-financial performance and monitoring their contributions towards achieving universal targets of sustainability set by various initiatives, such as the UN SDGs.
The SEC in 2022 also issued the Rules on Sustainable and Responsible Investment Funds, which provides guidelines for newly formed and existing investment companies that are qualified as Sustainable and Responsible Investment (SRI) Funds.
The Commission is likewise drafting guidelines on sustainability-linked bonds integrating the ASEAN Sustainability-linked Bond Standards (SLBS).
To further promote capital market integration in the region, the Commission has been actively involved in the regional sustainability agenda of the ASEAN Capital Markets Forum (ACMF), currently working as co-chair of the ACMF Sustainability Finance Working Group.
The SEC also sits as a member of the ASEAN Taxonomy Board, an initiative that seeks to develop, maintain, and promote a multi-tiered ASEAN Taxonomy for Sustainable Finance that will identify sustainable economic activities and serve as a framework for ASEAN members to create their respective national sustainability initiatives.
In line with this, the SEC is working with the Bangko Sentral ng Pilipinas and other financial regulators on the Philippines’ Proposed Sustainable Finance Taxonomy that will provide clarity in communicating standards with market participants.
The SEC is currently taking the lead in the Technical Working Group on Sustainable Finance – Taxonomy Sub Group for these Guidelines.
“The Philippine taxonomy is designed as an evolving framework similar to the development of the ASEAN taxonomy. It will employ a phased approach: from a qualitative, principles-based framework towards a metrics system utilizing threshold-based screening criteria,” Lee said.
He added that, “At the core of the Philippines’ efforts is to ensure that laws, policies, and roadmaps, and the appropriate principles such as RBC, can have far-reaching impacts and successes that benefit not only the financial system but the whole of society and the environment.”