SEC, PSE, firms agree sustainability drives investor confidence, market value

The Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE), and key business leaders have agreed that sustainability must be embedded into corporate operations.

At the Economic Journalists Association of the Philippines’ inaugural Sustainability Forum last Monday, SEC Chairman Francis Lim argued that sustainability disclosure has moved from the margins to the center of investment decision-making, with climate risk, transition risk, governance weakness, and social fragility now measurable and material.

“Sustainability claims must not run ahead of fact. They must be grounded, measured, and governed with discipline. Anything less does not just weaken disclosure — it weakens the market,” Lim said.

Lim added that disclosure can no longer function as an aspirational narrative —it must be evidentiary, comparable, and embedded in governance and strategy.

The SEC issued Memorandum Circular No. 16 in 2025 to raise the quality of sustainability information available to the market, adopting an International Sustainability Standards Board (ISSB)-aligned framework under Philippine Financial Reporting Standards (PFRS) S1 and S2.

Implementation will be phased across three tiers of companies from 2026 through 2029. 

Tier 1 covers listed companies with market capitalization exceeding P50 billion, which are required to begin adoption this year, while smaller listed companies and large non-listed entities follow in subsequent years.

Lim said the SEC is pairing the requirements with capacity-building programs to ensure the reform is workable. 

“Lasting reform is not issued. It is built,” he said.

Bangko Sentral ng Pilipinas (BSP) Assistant Governor Pia Roman Tayag, for her part, said the banking sector is moving in the same direction, with 70% of banks now integrating sustainability into their strategies and 90% expressing inclination to support sustainable financing in areas such as climate-resilient agriculture, renewable energy, and climate-ready infrastructure.

“For us at the BSP, when we issue regulations and when banks see these regulations, we all understand that compliance is not the end,” Tayag said, adding, “it is to really fully integrate this — that ESG is sound for their business.”

PSE Senior Vice President Roel Refran said getting employees to genuinely embrace sustainability goals is what separates companies that succeed from those that merely comply. 

“Sustainability is not just about compliance or cost of capital. Sustainability must be embedded into decision-making, not treated as an afterthought. In the end, this is about more than technical standards. It's about ensuring long-term resilience-for businesses, for markets, and for society. And while we don't have all the answers yet, we are learning as we go,” Refran said. 

At the PSE, sustainability performance has been built into employee key performance indicators.

“This is us making sure by 2100, at the turn of the century, we created an impact — that’s what this story is about,” Refran said. 

Metro Pacific Investments Corp. (MPIC) Chief Finance Officer and Chief Sustainability Officer June Cheryl Cabal-Revilla said the group transitioned from focusing solely on risk management to emphasizing overall resilience. 

Cabal-Revilla cited how MPIC’s sustainability efforts and quality reporting resulted in real-world gains — Manila Electric Co. seeing a 35% increase in share price over the past 12 months and Maynilad Water Services Inc. recording a 30% increase in share price since its initial public offering in the fourth quarter last year. 

“We operate as an open book, which is why we attract and work with newer groups of investors. Overall, our improved performance has been very positive. We are living proof that sustainability works,”Cabal-Revilla said.

Lim, for his part, emphasized the need for transparency, accountability, and quality in sustainability reporting. 

“Trust depends on what can be verified. Sustainability claims must not run ahead of facts. They must be grounded, measured, and governed with discipline. Everything less does not just weaken disclosure, it weakens the markets,” Lim said. 

The forum was supported by MPIC as gold sponsor, with SM Investments Corp. and San Miguel Corp. serving as silver sponsors.

GCash, Globe Telecom, Inc., Ayala Corp., SM Prime Holdings, Inc., Development Bank of the Philippines, Maynilad, and GT Capital Holdings, Inc. were bronze sponsors.

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