Accounting Alerts

Sustainability Reporting Guidelines for Publicly-Listed Companies

On 18 February 2019, the Securities and Exchange Commission (SEC) issued Memorandum Circular (MC) No. 4, Sustainability Reporting Guidelines for Publicly-Listed Companies (the Guidelines), to promote sustainability reporting and make it relevant for Philippine publicly-listed companies (PLCs).

The Guidelines is intended to help PLCs assess and manage non-financial performance across Economic, Environmental and Social aspects of their organization and enable PLCs to measure and monitor their contributions towards achieving universal targets of sustainability, such as United Nations Sustainable Development Goals, as well as national policies and programs, such as AmBisyon Natin 2040.

Submission with SEC Form 17-A

The reporting template (Annex A of the Guidelines) shall be submitted together with the company's Annual Report (SEC Form 17-A).

The first report shall be attached to the 2019 Annual Report to be submitted in 2020.

For companies who already have sustainability reports in accordance with internationally recognized frameworks and standards, their reports shall already be considered as their compliance with the reporting template. Companies may choose to attach the whole sustainability report to their Annual Report or just include a statement providing a link to said report.

Comply or Explain Approach

The Guidelines shall be adopted on a "comply or explain" approach for the first three years upon implementation. By "comply or explain", it means the companies would be required to attach the template to their Annual Reports but they can provide explanations for items where they still have no available data on.

 

Penalty for Non-attachment of the Sustainability Report to the Annual Report

Non-attachment of the Sustainability Report to the Annual Report shall be subject to the penalty for Incomplete Annual Report provided under SEC MC No. 6, Series of 2015, Consolidated Scale of Fines.

This SEC MC No. 4 shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation.