The Philippine Stock Exchange introduces initiatives to promote sustainable business practices

With less than 1% of the population invested in equities in 2019, the Philippine Stock Exchange (PSE) has made financial literacy its main corporate social responsibility. As a regulator, the PSE has advocated the adoption of environmental, social and governance (ESG) as a standard for evaluating sustainable business practices. It showcases listed companies with ESG initiatives and extends support to those that are just starting on their ESG journey. As a listed company itself, the PSE has introduced its own sustainability programmes.

PSE Goals

The PSE first started to publish its sustainability efforts in its annual report in 2015. The exchange then introduced a sustainability programme, known as PSEG oals, in 2018. The programme has three key pillars: good governance, going green and growing generation. The first covers the PSE’s initiatives to promote excellence in corporate governance both within the company and among listed companies and trading participants. The second highlights the PSE’s efforts to protect the environment, and the third includes programmes to develop human capital for both PSE employees and future stock market investors.

These three pillars link to five of the UN’s Sustainable Development Goals (SDGs), which the exchange is also working to support. As part of SDG 1, which aims to eradicate poverty, the PSE volunteered with international NGO Habitat for Humanity to help build new homes and held several donation drives in 2018. In line with SDG 3, focused on health and well-being, the exchange launched a campaign to promote health and financial wellness for employees, which included sessions led by health practitioners and sporting activities. The PSE has also sought to encourage SDG 12, for responsible consumption, by holding information sessions to encourage sustainable lifestyle habits.

The exchange supported SDG 13, promoting climate change action, by supporting zero-waste and carbon-offsetting products and services, and encouraging the adoption of energy- and water-saving practices. These efforts have already yielded results: in October 2018, 51.5 kg of plastic waste was collected and converted to ecobricks, a light and insulating building material, removing 160.6 kg of CO₂ from the atmosphere.

Lastly, SDG 17 seeks to foster further collaboration between organisations in order to promote the UN’s other SDGs. To this end, the PSE has partnered with the Philippine Securities and Exchange Commission (SEC), the Australian Department of Foreign Affairs and Trade, and the World Wildlife Fund.

Raising Standards 

In October 2018 the SEC and PSE held the fifth Corporate Governance Forum, with the theme of “ushering in the era of sustainability and sustainable business”. At this event the SEC also introduced its sustainability reporting (SR) guidelines and a template for publicly listed companies (PLCs). In April 2019 the PSE co-organised a sustainable business conference with the SEC, and in June 2019 the two bodies held a series of sustainability awareness sessions for PLCs. The sessions included workshops to assist PLCs in completing the SR template introduced in 2018.

The exchange is particularly committed to supporting SR frameworks. As a listed company itself, the PSE aims to continue to improve its disclosure and reporting of sustainability initiatives, to ensure that shareholders are kept well informed. In 2019 the PSE intends to revisit the criteria for the Bell Awards, a recognition given to PLCs and trading participants that display excellence in corporate governance.

As a regulator, the PSE will also continue to offer assistance to PLCs, as well as build its own capacity in terms of capital market sustainability. New initiatives in this area are currently being explored, such as the development of an ESG index. The PSE affirmed its commitment to sustainability in May 2019 when it became part of the UN’s Sustainable Stock Exchanges (SSE) Initiative. Joining more than 30 organisations from around the world, SSE membership will bring more opportunities to collaborate and share knowledge.

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The Report: Philippines 2019

Capital Markets chapter from The Report: Philippines 2019

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