Sustainable Fitch Launches Review Service for Philippines' Green Equity Label

A unit of Fitch Group, Sustainable Fitch, has launched an independent review service aimed at assisting publicly listed companies in the Philippines seeking to qualify for the Green Equity Label. This label, introduced by the Securities and Exchange Commission (SEC) through Memorandum Circular No. 13, Series of 2025, certifies that a company derives a significant portion of its revenues from sustainable activities.

According to Aaron Wei, head of ESG and Sustainable Finance at Fitch Ratings, the introduction of the Green Equity Label represents a new frontier for sustainable finance. He stated that the firm is committed to helping issuers and investors unlock the label's full potential through rigorous and credible external reviews.

“The emergence of the green equity label opens a new frontier for sustainable finance, and we are committed to helping issuers and investors unlock its full potential through rigorous and credible external reviews.”Aaron Wei, Head of ESG & Sustainable Finance, Fitch Ratings

To qualify for the label, companies must demonstrate that over 50% of their revenue and investments are directed towards green activities, as defined under the Philippine Sustainable Finance Taxonomy Guidelines or the ASEAN Taxonomy for Sustainable Finance. Furthermore, revenue from fossil fuel-related operations must be less than 5%. As part of the application process, companies are required to submit an independent external review assessment, which will be conducted by Sustainable Fitch.

Candice Low, director for Ratings and Opinions at Sustainable Fitch, mentioned that the green equity label also demonstrates how sustainability classifications can be applied beyond traditional debt instruments. She added that Sustainable Fitch is well placed to perform external reviews for this label given the firm's deep experience using taxonomies in the analysis conducted at both the entity and transaction levels.

“The development of the green equity label presents another use case for local and regional taxonomies beyond fixed income.”Candice Low, Director for Ratings & Opinions, Sustainable Fitch

The SEC's initiative is part of a broader strategy to promote sustainable finance in the region, aiming to assist investors in identifying companies whose business activities align with recognized sustainability standards. This framework is considered Southeast Asia’s first green equity guidelines, marking a significant step towards enhancing transparency and credibility in the sustainable finance sector.

Sustainable Fitch's review service is also part of a global initiative to support emerging green and transition equity designation frameworks, with the firm recently announcing a similar role in Brazil's B3 Green Equities designation. The firm aims to expand its capabilities to cover comparable frameworks in other markets, thereby contributing to the development of sustainable capital markets.