SEC Draft Rules for Green Equity in the Philippines
Recently, the Securities and Exchange Commission (SEC) in the Philippines introduced draft rules for green equity offerings. This framework is designed to give companies more clarity on activities that make a significant impact on environmental goals.
The SEC’s guidelines, based on global principles, may evolve over time with market developments and regulatory changes. The goal is to boost the visibility of companies actively supporting green initiatives.
The concept of green equity involves shares of a company whose revenue comes primarily from green activities. Additionally, investments align with a net-zero trajectory by 2050 and broader environmental objectives.
Green equity serves as a complement to sustainable debt instruments, diversifying sustainable investment options and aiding the transition to a net-zero carbon economy.
To qualify for green equity designation, a company needs to demonstrate that more than 50% of its revenue and investments are from green activities, as detailed in the latest financial statements. Pre-revenue companies must meet minimum revenue thresholds outlined in their business plans.
Moreover, companies seeking green equity status must align with the Philippine Sustainable Finance Taxonomy Guidelines and the ASEAN Taxonomy for Sustainable Finance, where applicable. These guidelines emphasize avoiding significant harm, implementing transition measures, and meeting social safeguards.
In conclusion, the SEC’s green equity rules aim to guide capital towards environmentally conscious enterprises, supporting the country’s sustainable development goals. By promoting transparency and awareness of green initiatives, these guidelines pave the way for a greener, more resilient economy.
