THE Securities and Exchange Commission (SEC) has recently signed a letter of intent with the Department of Environment and Natural Resources (DENR) and Japan’s Ministry of the Environment to strengthen cooperation on climate transparency and greenhouse gas (GHG) reporting systems.
The agreement reflects the parties’ commitment to advancing GHG accounting, reporting and verification frameworks, as demand grows for reliable sustainability-related information from companies and investors.
Signatories were SEC Commissioner McJill Bryant Fernandez, DENR Undersecretary for Finance, Information Systems and Climate Change Analiza Rebuelta-Teh, and Ministry of the Environment Vice Minister for Global Environmental Affairs Kentaro Doi.
The collaboration is part of the Partnership to Strengthen Transparency for co-Innovation (PaSTI), an initiative launched by the Japanese government in the Philippines in 2019 to support climate transparency efforts.
Through the program, the SEC has engaged in technical activities aimed at improving its understanding of international approaches to emissions measurement and verification systems, as well as the relationship between environmental reporting frameworks and corporate sustainability disclosures.
The initiative complements SEC efforts to strengthen sustainability reporting requirements, including the adoption of International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards S1 and S2 for publicly listed companies and large non-listed entities under SEC Memorandum Circular 16, series of 2025.
“We acknowledge that climate transparency cannot be achieved by the financial sector alone. It requires close coordination among environmental authorities, financial sector regulators, the private sector, and international partners to ensure that reporting systems are credible, practical, and responsive to the needs of our stakeholders,” Fernandez said.
“By aligning DENR's technical tools with the SEC's revised Sustainability Reporting System, we establish a unified whole-of-government approach,” Rebuelta-Teh said.
Stronger coordination between regulators would help prepare publicly listed companies and large non-listed entities for emerging international market requirements, including the European Union’s Carbon Border Adjustment Mechanism and carbon trading frameworks under Article 6 of the Paris Agreement, she added.