The Philippine Securities and Exchange Commission (SEC) will not delay the implementation of stricter sustainability reporting rules, despite numerous requests from publicly listed companies.

“After careful consideration of the valuable feedback received, and in the interest of ensuring and maintaining meaningful compliance by PLCs [publicly listed companies],” the SEC states, “please be informed that the Revised Sustainability Reporting Guidelines for PLCs and the SEC Sustainable Reporting (SuRe) Form is scheduled for release in the year 2024.”

The regulator says it will release a new memorandum circular on the new guidelines in the coming months, adding that it will move from the current comply-or-explain method towards more stringent reporting. 

“In keeping with developments on the globally recognized reporting frameworks, the commission,” it notes, “is looking at making compliance applicable to data covering the year 2024, with reporting due [in 2024] or on 2025.”

However, the regulator did say that reports covering the year 2023 as well as those due in 2024 can still follow the old comply-or-explain provisions of SEC Memorandum Circular No 4 series of 2019.

Comply or explain is a regulatory approach in corporate governance and financial supervision that sets out a code, which listed companies may either comply with, or if they do not agree, explain publicly their reasons. The model is distinct from the regulatory approach that sets out binding laws that all must follow.

However, under the revised guidelines, which were first floated in October 2023, listed companies will be mandated to submit their annual sustainability reports in two formats: the SR Narrative, a narrative report that will accompany the company’s annual report, and the SuRe form, answered using a template and submitted through the SEC electronic filing and submission tool.

The regulator has earlier said that the stricter reporting rules will hopefully elevate the quality of Philippine companies’ sustainability reporting, which has historically lagged behind its regional peers.