SEC: Green equity label requires over 50% green revenues, investments

THE SECURITIES and Exchange Commission (SEC) has released the country’s first green equity guidelines, requiring companies to derive over half of their revenues from environmentally sustainable activities and allocate most of their investments toward such initiatives to qualify for the label.

Under Memorandum Circular No. 13, series of 2025, companies listed or preparing to list on the Philippine Stock Exchange (PSE) may apply for the Philippine Green Equity Label if more than 50% of their revenues and more than half of their capital and operating expenditures are from or directed toward green activities, as defined under the Philippine Sustainable Finance Taxonomy Guidelines or the ASEAN Taxonomy for Sustainable Finance.

Revenues from fossil fuel–related operations must be limited to less than 5%, the SEC said.

Applicants must submit an external review assessment report to the SEC, which will also be made public. Label holders will undergo an annual assessment by the PSE to ensure compliance.

The SEC said the label is expected to expand the investor base for listed companies by boosting market liquidity and channeling more funds into sustainable enterprises.

“The issuance of the SEC Green Equity Guidelines is a game-changing initiative that will help develop the capital market not only by boosting liquidity but also by supporting our climate goals,” SEC Chairperson Francisco Ed. Lim said in a statement.

“This also positions the country as an emerging destination for foreign investors seeking credible, transparent, and meaningful green investments,” he added.

The guidelines are part of the SEC’s sustainable finance framework designed to complement the P1.02-trillion sustainable finance fixed-income market by providing an equity-based option for green investments.

The SEC said adequate reliefs would be available for companies transitioning toward full alignment with the sustainable finance taxonomies, but applicants are expected to demonstrate that their green activities make a substantial contribution to at least one environmental objective and to attest that these do not cause harm or violate minimum social safeguards. — A.G.C. Magno