By Henry Empeño | October 2, 2025

THE Securities and Exchange Commission (SEC) has launched “Green Equity” guidelines for companies in the Philippine stock market that voluntarily choose to align their equity offerings or listings with environmentally sustainable finance goals.

The guidelines are contained in SEC Memorandum Circular No. 13, series of 2025, which was issued on September 23, the SEC Tarlac Extension Office said in a statement on Thursday, October 2.

Under the guidelines, companies may qualify for the Green Equity label by satisfying four specified criteria on revenue, investments, fossil fuel limitation, and alignment with taxonomy guidelines for sustainable finance.

For the first criterion, the SEC required at the minimum that more than 50 percent of company revenue as reported in the latest audited annual financial statements, must be derived from green activities.

In terms of investments, the SEC also obligated at the minimum that more than 50 percent of company investments as reported in the latest audited annual financial statements, must be channeled towards green activities.

Third, the SEC said that revenues of the company derived from fossil fuel must be limited to less than 5 percent.

Lastly, company activities must meet the eligibility criteria of the Philippine Sustainability Finance Taxonomy Guidelines (SFTG) or the ASEAN Taxonomy for Sustainable Finance (ATSF).

The Green Equity Guidelines, according to SEC Memorandum Circular No. 13, seeks to enhance the visibility and attractiveness of companies that actively engage in green activities, and to direct capital flows to enterprises that demonstrate environmental stewardship.

The guidelines are also intended to complement existing sustainable finance instruments by establishing a parallel equity-based framework to support environmentally sustainable enterprises.

The Green Equity Guidelines, the SEC added, “forms part of a series of sustainable finance frameworks to expand markets in sustainable growth and development, complementing the P1.02-trillion sustainable finance fixed-income market.”

SEC Chairperson Francis Lim said the issuance of the Green Equity Guidelines, which is touted to be the first in Southeast Asia, “is a game-changing initiative that will help develop the capital market not only by boosting liquidity but also by supporting our climate goals.”

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

To help companies transition in adopting sustainable finance standards, the SEC said it will provide for “adequate reliefs” to companies that are on their way to full alignment with SFTG or ATSF guidelines.

The SEC clarified that applicants would be expected to show that the green activities covered by the revenue and investments criteria make a substantial contribution to at least one environmental objective under the SFTG or ATSF.

Applicants should also attest that the covered activities are not known to cause harm or to be in non-compliance with the minimum social safeguards at the time of application, the SEC added. 