BusinessMirror

SEC, PSE STILL TALKING ON ESG INDEX CREATION

- B VG C @villygc

THE Securities and Exchange Commission (SEC) said it is still in discussion­s with the Philippine Stock Exchange for the creation of a sub-index called ESG index, which will carve out those companies that strictly follow certain guidelines on environmen­tal, social and governance standards for the investors.

“We currently do not have an official stand but we already discussing it. Personally I don’t have any reason not to allow it we are always very open to new initiative­s and the PSE is always open and a partner of the SEC,” SEC Commission­er Kelvin Lester K. Lee said during the BM Coffee Club online forum.

“I don’t foresee any issue on that particular index not unless there’s touchy provisions that don’t follow for our mandate,” Lee said.

e PSE is bent on introducin­g three new sub-indices at the exchange in order to give

investors more choices to place their money.

PSE President Ramon S. Monzon earlier said they may introduce an index for mid-cap stocks and for those firms that give high dividends. ere are also plans to introduce an index for ESG or environmen­tal, social and governance compliance of companies.

e mid-cap and the highdivide­nd yield indices can be rolled out this year, but the ESG index may have to wait longer as the Philippine­s need to study what other markets in the region has done for the said index.

“Investment­s on the fixed income securities like the green bonds has been happening during the last three to four years, but in the equities market it has not happened. We started disclosure framework to allow investors to know the ESG compliance of listed firms. We want to create an ESG index but it is not just as easy as that. You need to craft rules how companies would get into that index,” Monzon said.

e PSE needs to secure the greenlight from the SEC before it can create a new sub-index.

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