MANILA, Philippines – Environmental groups and other advocates urged the Securities and Exchange Commission (SEC) on Tuesday, November 5, to impose “more stringent” climate disclosure rules on publicly-listed companies to exact more accountability from establishments allegedly contributing to the climate crisis.
On Tuesday, groups trooped to the SEC’s office in Makati and filed a demand letter addressed to SEC chairperson Emilio Aquino.
This comes after parts of the Philippines, mainly Luzon, experienced massive flooding, casualties, and damage to agriculture and infrastructure after the onslaught of several tropical cyclones.
Groups demanded through the letter the SEC’s “immediate action to make the Sustainability Reporting Guidelines mandatory, including the climate-related financial disclosures for publicly-listed companies.”
In 2019, the SEC established guidelines to help publicly-listed companies “assess and manage non-financial performance across economic, environmental, and social aspects of their organization” as well as measure their contributions against the targets of the United Nations’ Sustainable Development Goals.
The SEC recognized then that companies would be “at different levels” in terms of sustainability reporting. At the time it was implemented, SEC said less than 22% of such companies had published reports on sustainability impacts and performances.
The 2019 memo provides a template for companies to disclose actual and potential climate-related risks and how their management were able to identify these.
Companies are expected to identify how their business activities, products and services, subsidiaries and contractors cause economic, social, and environmental impacts. Disclosures should also include how management attempts to address these issues and urges them to set targets addressing these.
In keeping with the 2015 Paris Agreement, the SEC asked companies to assess companies’ resilience in a 2°C (or lower) scenario.
The SEC has said that 95% of publicly listed companies had been compliant with the guidelines, as of 2021.
Meanwhile, they have yet to release the revised guidelines since they announced back in 2023 that they are studying global standards on sustainability and climate-related disclosures.
Despite this, advocates critiqued the SEC’s “comply or explain” approach, where companies “can provide explanations for items they still have no available data on” for the first three years.
“Parang sinasabi nila na kailangan pagbigyan natin ang mga publicly-listed companies to actually comply,” Ryan Roset, a lawyer for Legal Rights and Natural Resources Center, said on Tuesday.
“Pero gusto ko lang i-emphasize or gusto ko lang i-juxtapose ‘yun sa karanasan ng ating mga komunidad na, for our community, the experience and the suffering of the climate crisis is now.”
(It’s like they’re saying that we have to give leeway for publicly-listed companies to actually comply. But I just want to emphasize or I just want to juxtapose that to the experience of our communities — their experience and suffering of the climate crisis is now.)
More stringent guidelines for reporting will not only benefit consumers and investors but also the companies themselves, advocates said.
“Ang transparency na dulot ng pagsisiwalat ay magbubunga rin ng kabutihan sa kumpanya sapagkat maagapan nila ang mga panganib na dala ng pagbabago ng klima,” the letter read.
(The transparency coming from the disclosure will result to improvements in the company since they will be able to combat early on the effects of climate change.)
The groups’ call comes less than a week before global climate talks happen in Baku, Azerbaijan, where civil society would have to once again lobby to hold carbon emitters and rich countries accountable for the climate crisis.
To aid this demand for accountability, Virginia Benosa-Llorin, climate campaigner for Greenpeace Philippines, said the government must “concretize the responsibility of businesses.”
“They must discourage corporate contributions to climate change and set up mechanisms to compensate affected communities who face yearly death and destruction from the worsening storms, floods, and other climate impacts,” Benosa-Llorin said on Tuesday.
“Making sustainability reporting guidelines mandatory is a crucial step toward achieving that,” she added.
Early this year, the United States’ SEC approved rules requiring companies to disclose climate-related risks and inform investors of their greenhouse gas emissions.
This was met with criticisms, with environmental groups saying the rules were diluted and Republican states arguing that the SEC went beyond its legal mandate. – Rappler.com
