(Makati City, November 5, 2024) Legal and policy advocacy institution Legal Rights and Natural Resources Center (LRC) supported climate change victims from Salcedo, Eastern Samar today in filing a demand letter to the Securities and Exchange Commission (SEC) to impose more stringent reporting guidelines on climate-related financial disclosures and sustainability for publicly listed companies (PLC).
"The SEC is mandated to establish a socially conscious, free market, and as such should ensure businesses are accountable not only to their shareholders but to the broader public as well. In the context of the climate crisis, this duty includes ensuring that corporations, most especially those in environmentally critical or carbon-intensive industries such as energy, oil, gas, and mining, comply with stringent requirements on climate-related financial disclosures,” said Atty. Ryan Roset, Senior Legal Fellow of LRC.
To recall, the SEC en banc issued SEC Memorandum Circular No. 4 Series of 2019 in February 2019 to introduce Sustainability Reporting Guidelines for PLCs to assess and manage non-financial performance across economic, environmental, and social aspects of these businesses and monitor contributions to sustainable development goals.
As part of the guidelines for Sustainability Reporting, the SEC adopted a “Comply or Explain” approach, which gave PLCs the option to report or provide an explanation as to why information, such as environmental and climate impact, cannot be disclosed. The SEC too gives PLCs the privilege to incrementally transition by treating Sustainability Reporting “as a journey.”
For LRC, the current policy only gives companies leeway to justify the non-disclosure of their environmental impacts, possibly covering the actual effects of their business operations.
“The SEC policy undermines the constitutional right to a balanced and healthful ecology and the statutory directives to protect the climate system on the basis of climate justice,” Atty. Roset explained.
“Mandating the full disclosure of these practices compels companies to actively manage their environmental impact and recognize any associated risks, prompting them to ensure their operations carry little or no risk to communities,” he furthered.
“Fifteen years have passed since the enactment of the Climate Change Act, which directed the integration of climate change in various phases of policy formulation. Although the business interests benefit from the SEC’s policy hesitancy, the most vulnerable communities do not enjoy the same privilege inasmuch as they already asymmetrically suffer the effects of climate change and its impacts.” Atty. Roset ended.
The action comes in the context of consecutive powerful typhoons Carina, Kristine, and Leon inflicting massive damages upon the Philippines. Typhoon impacted communities from Montalban and Marikina and environmental groups Greenpeace and Tara Youth joined the Eastern Samar residents to show their support and solidarity.
According to various government reports, an accumulated P37.11 billion in damages to agriculture and infrastructure has been incurred in these extreme weather events.###
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