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Lenovo gets into e-scooter category with M2

AS PUBLIC transportation remains challenged and limited by the pandemic, more Filipinos are turning to affordable alternatives such as motorcycles, bicycles and, yes, e-scooters.

In a suddenly lucrative market, global innovation company Lenovo is bringing in its first offering for daily commuters. The M2 Electric Scooter, which measures 1115mm x 1115mm x 515mm, is positioned as “a smarter, safer, and more stylish alternative for traveling.”

Said Lenovo Philippines President and General Manager Michael Ngan, “The M2 Electric Scooter is in line with Lenovo’s unwavering dedication to constantly innovate and challenge conventions through our products. The ongoing health crisis highlighted the need to connect and do things smartly and safely. Through the M2 Electric Scooter and our other smart devices, Lenovo continues to transform the way people live, work, and play as we reshape expectations and experiences to empower customers with smarter productivity, smarter entertainment, and smarter living for all.”

The M2 Electric Scooter is fitted with a powerful 350W motor and 7.5Ah high-capacity battery — enabling it to reach top speed of 25kph and a distance of up to 30 kilometers in one charge. Lenovo equips the M2 with “an intelligent battery management system that protects the battery against common issues facing electric vehicles: short-circuiting, overcurrent, overcharge, over-discharge, and extreme temperatures.” A cruise control function lets the rider coast with steady speed without having to constantly press the acceleration button. The M2 also has three gears, while supporting “speed shifting” among these gears. It can charge from empty to full in three to four hours — which is 30% quicker versus the competition, said Lenovo Philippines.

Affixed to the handlebar is an LED screen that displays vital information such as speed, mileage, gear used, and battery capacity. Mobile app control and Bluetooth support enable riders to connect M2 to other devices or accessories.

The e-scooter boasts a “triple-brake and triple-damping system” which promise safety and a comfortable ride. A disc and pedal brake complement an electronic brake that cuts the motor’s power to prevent accidents. Absorbing road vibrations are a hidden shock absorption system, spring shock absorption, and honeycomb tire shock absorption.

Lenovo said the M2, made of a magnesium and aluminum alloy for strength and impact resistance, “matches the premium look and enhanced durability found in Lenovo PCs.” It is dustproof and has an IP54 waterproof rating for use even during a light shower and on dusty roads. Maximum payload is 120kg (264.5lbs), and riders can negotiate up to an incline of 15 degrees.

“It’s also small enough to be parked almost anywhere. If there’s no parking space, riders can simply fold and carry the M2 Electric Scooter along with them. It’s built with a one-step folding system, allowing it to be folded quickly in three seconds,” said Lenovo Philippines in a release.

The Lenovo M2 Electric Scooter comes in white or black colors, and is priced at P19,995. For more information, visit lenovo.com/ph.

Earnings and tightened lockdowns lift Puregold stock

INVESTORS snapped up shares in Puregold Price Club, Inc. last week with analysts attributing it to its earnings result and expectations that the tightened lockdown in the National Capital Region (NCR) and surrounding areas would increase demand for retail items.

Puregold was the eighth actively traded stock last week with a total of P1.011-billion worth of 25.351 million shares exchanged, data from the Philippine Stock Exchange showed.

Shares in the Lucio L. Co-led company closed at P40.2 apiece on Friday, up 8.6% from its March 19 closing price of P37 apiece. Year to date, its price has gone down by 2.1%.

“The imposition of NCR bubble this week can be seen to have influenced the market heavily into trading [Puregold stock] into higher prices most likely because investors interpreted the bubble to be something similar to that of the MECQ (modified enhanced community quarantine) and ECQ (enhanced community quarantine), wherein we saw the public stacked weeks-worth of pantry supplies to avoid going out frequently,” Regina Capital Development Corp. Equity Analyst Arielle Anne D. Santos said in an e-mail.

Ms. Santos said speculation of better earnings from the grocery operator also contributed to the surge in the stock’s share price.

In a separate e-mail, Mercantile Securities Corp. Analyst Jeff Radley C. See noted the stock is trading at “oversold levels” in the last few weeks.

“This prompted investors to buy the stock even before the company announced the 2020 earnings,” he said.

Puregold saw its closing price go higher the week before it reported its full-year earnings last Wednesday. From a closing price of P36.20 in March 18, it has climbed 13.3% to P41 in March 25 before dipping to P40.50 on March 26 last Friday to finish last week’s trading.

In disclosure to the stock exchange, Puregold reported an unaudited consolidated net income of P8.05 billion in 2020, an 18.9% increase from its net income of P6.77 billion in 2019. It posted net sales growth of 9.2% to P168.63 billion from P154.49 billion previously.

Puregold Stores network accounted for 73% of the company’s total revenues, while S&R Membership warehouse clubs and S&R New York Style Pizza stores contributed 27%. The company did not disclose specific figures.

The company also reported that Puregold Stores posted a same store sales growth (SSSG) of 2.4% last year, while S&R grocers recorded an SSSG of 8.7%.

Puregold has a total of 470 stores nationwide as of December 2020, including 403 Puregold stores, 20 S&R membership shopping grocers, and 46 S&R New York Style Pizza shops. 

Meanwhile, lockdown restrictions have been tightened for two weeks from March 22 to April 4 as coronavirus disease 2019 (COVID-19) cases have surged. Only essential travel will be allowed to and from Metro Manila and nearby provinces, or the so-called “NCR Plus” bubble.

“For this year, we forecast the company’s topline and bottom line to grow at a 3-year CAGR (compounded annual growth rate) of 6% and 5% respectively, factoring in the likelihood that restrictions would be further eased within this year,” Regina Capital’s Ms. Santos said.

“Puregold’s support can be traced all the way back on its MA50 (moving averages over 50 days) at P37.71. Meanwhile, resistance can be seen to be around P41.85,” she added.

Mercantile Securities’ Mr. See placed the stock’s support and resistance levels at P39.50-P38 and P41.5-P44, respectively.

“We might see a lower revenue for this year due to the increasing competition of online supermarkets and COVID-19 cases,” he said. — Lourdes O. Pilar

Philippine economy at a glance: Where are we now?

Philippine economy at a glance: Where are we now?

How PSEi member stocks performed — March 26, 2021

Here’s a quick glance at how PSEi stocks fared on Friday, March 26, 2021.

Peso to rise on lower imports due to lockdown

THE PESO is likely to appreciate against the greenback due to the shortened trading week and expectations of lower import demand due to the reimposed lockdown in Metro Manila.

The local unit closed at P48.49 versus the dollar on Friday, gaining nine centavos from its previous close of P48.58, data from the Bankers Association of the Philippine showed. It also strengthened by 13 centavos from its P48.62-per-dollar finish on March 19.

The peso appreciated versus the greenback on Friday on the back of market optimism amid anticipation over the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.

President Rodrigo R. Duterte’s signing of the CREATE Act was announced after the market closed on Friday. The tax reform measure will immediately bring down corporate income tax to 25% from 30% and will further slash the rate by a percentage point every year from 2023 to 2027 until it reaches 20%.

Mr. Duterte vetoed some sections of the measure, including one that allows incumbent and future presidents to exempt an investment promotion agency from CREATE’s coverage and another section that increases the threshold of low-cost housing eligible for VAT exemption to P4.3 million from P2.5 million.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said news of further stimulus in the United States was among the biggest factors that dictated foreign exchange trading last week.

For this week, Mr. Asuncion said the peso may strengthen due to a likely decline in imports amid the Holy Week holidays and the stricter lockdown in the country’s capital and nearby areas.

Mr. Duterte approved the recommendation to place Metro Manila and surrounding provinces Bulacan, Cavite, Laguna and Rizal under the tightest restriction measures starting March 29 until April 4, Presidential Spokesperson Herminio “Harry” L. Roque, Jr. said in a televised briefing on Saturday.

The announcement followed the record 9,595 new cases on Saturday which brought the country’s total to 712,442. Mr. Roque said the renewed lockdown was prompted by the diminished capacity of hospitals amid the surging cases.

Meanwhile, Mr. Ricafort said the release of February budget balance data on Monday may also affect market sentiment.

The Bureau of the Treasury will release its cash operations report for February today. In January, the fiscal gap stood at P14 billion, reversing the P23-billion surplus a year earlier due to lower tax collections and muted spending amid the pandemic.

Mr. Ricafort gave a forecast range of P48.35 to P48.60 per dollar this week while Mr. Asuncion expect the local unit to move around the P48.40 to P48.70 levels. — L.W.T. Noble

PSEi to slump as gov’t tightens restrictions anew

THE REIMPOSED enhanced community quarantine (ECQ) in NCR Plus, which includes Metro Manila and nearby provinces of Bulacan, Cavite, Laguna, and Rizal, amid rising coronavirus disease 2019 (COVID-19) infections is expected to dampen investor sentiment this week.

The benchmark Philippine Stock Exchange index (PSEi) inched down by 36.37 points or 0.55% to close at 6,544.63 on Friday.

Week on week, the index gained 108.53 points from its 6,436.10 close on March 19.

“The market went up 1.7% [last] week mainly on optimism after the status of vaccine rollout and deliveries was presented,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message. “The run-up was not supported by heavy volume as investors [stayed] on the sidelines given the spike in daily COVID-19 cases, with active cases at all-time high.”

This week, market sentiment will take a hit from the return of stricter lockdown measures, analysts said.

“The PSEi could correct lower largely due to the one-week enhanced community quarantine in NCR Plus that may reduce production, sales, income or livelihood of hard-hit businesses, industries, sectors that lead to lower valuation for some adversely affected listed companies,” Michael L. Ricafort, chief economist at the Rizal Commercial Banking Corp. (RCBC), said in a text message on Sunday.

China Bank Securities Corp. Research Associate Jason T. Escartin expects the move to “worsen selling pressure,” citing its adverse effect on investor sentiment.

Manila and nearby provinces will return to stricter quarantine measures from Monday, a senior official said on Saturday, as the Philippines battle to contain a surge in COVID-19 cases that has strained hospitals, Reuters reported.

Presidential spokesman Harry Roque said the measures, which will be in place until April 4, will ban non-essential movement, mass gatherings, dining in restaurants. They represent a further tightening of curbs imposed on March 22.

“Given the shortened trading week, which will likely be accompanied by lower trading volumes, and developments over the weekend, we think the PSEi may find some footing in the 6,000-6,200 support zone,” Mr. Escartin said via e-mail.

“Through the trading week, we will likely see investors progressively price in the possible next steps after the week-long ECQ, taking their cue from daily case counts and health-care capacity utilization,” he added.

RCBC’s Mr. Ricafort said the PSEi’s expected slump may be offset by the signing of the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act.

“[It] may reduce the corporate income tax rate of the biggest companies or businesses and correspondingly increase their net income by five percentage points and a bigger 10 percentage points for MSMEs (micro, small and medium enterprises), thereby [helping]… offset the adverse business or economic effects of the one-week ECQ,” he said. — Keren Concepcion G. Valmonte with Reuters

CARS program could be extended by three years

THE GOVERNMENT is considering a three-year extension to the compliance period for automotive companies participating in its incentives program, which was developed to support domestic parts production.

Toyota Motors Philippines Corp. and Mitsubishi Motors Philippines Corp. are participating in the Comprehensive Automotive Resurgence Strategy (CARS) program, which offers fiscal support to car companies that produce in the Philippines 200,000 units of high-volume car models over six years. Mitsubishi has a 2023 deadline for production of its Mirage compact car, while Toyota has until 2024 to produce its VIOS car.

An auto industry group has asked the government to review the conditions for the program after the pandemic caused an industry sales slump.

An interagency group on the CARS program is recommending a three-year extension, targeting the signing of an executive order by the end of June this year.

“We are confident that an executive order on the recommendation of the IAC (interagency committee) for the extension of the compliance period for the CARS program participants would be issued before end of June of this year considering IAC already includes different agencies relevant to issue,” Board of Investments Managing Head Ceferino S. Rodolfo said in an online briefing Thursday.

He added that the required number of cars to be produced and the budget caps will be retained.

“We of course do understand the challenging unforeseen circumstances, including the impact of the pandemic on automotive demand,” Mr. Rodolfo said.

The extended timeline, he said, will also cover investment incurred in the course of refreshing the car models.

“Mas gusto natin ‘yan kasi at least sigurado tayo na dito pa rin gagawin ‘yung succeeding model. (We want that because it ensures that the succeeding models will still be made here),” he said.

Car sales in 2020 declined 39.5% to 223,793 units, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. and Truck Manufacturers Association. — Jenina P. Ibañez

Domestic vaccine manufacturing seen possible by 2024, BoI says

PHILIPPINE companies are exploring how to develop the country’s capacity to produce various types of vaccines, with some producers possibly participating in the license-manufacturing of inoculations for coronavirus disease 2019 (COVID-19) by around 2024, the Board of Investments (BoI) said.

BoI Executive Director Ma. Corazon H. Dichosa said last week that the private sector is studying potential vaccine technology providers, facility costs, and domestic market demand for “fill-and-finish” vaccine production, in which the active ingredients are imported for local packaging.

Some firms may start working immediately on COVID-19 vaccines to address domestic demand while others may start with regular flu vaccines, she said in an online news conference Thursday.

Potential vaccine technology sources include Russia, South Korea, China, and India, along with US universities conducting vaccine research.

The government is in talks with six companies for domestic vaccine manufacturing, Trade Secretary and BoI Chairman Ramon M. Lopez said last week.

Fill-and-finish facilities could be up in two or three years, Ms. Dichosa said, as the companies obtain licenses to manufacture. Plant development could start by 2022 or 2023, she said.

“We have timetables. In fact, gusto na talaga namin siya i-fast track. But ‘yung mga tataya ng pera nila kasi syempre they also wanted to ensure na di sila malulugi… there are still some studies being done by private sector (We want to fast-track approvals, but the companies are studying feasibility to ensure they don’t lose their investment),” she said.

BoI Managing Head Ceferino S. Rodolfo said domestically-manufactured vaccines could be available by the “tail end” of the COVID-19 inoculation effort, or should the need emerge for additional jabs.

“Ang critical role ng government dito (The government’s role here) is to ensure that even after the threat subsides… we’ll (still have) this vaccine capability,” he said.

The Philippines imports its vaccines, and has inoculated over 508,000 people so far. — Jenina P. Ibañez

Cigarette makers oppose gov’t printing agency’s plan to raise tax stamp prices

THE PHILIPPINE Tobacco Institute (PTI), an industry lobby group, said it opposed plans by a government printing agency, APO Production Unit, Inc. (APO), to raise the price for tax stamps to 23 centavos from the current 15.

The PTI said in a statement over the weekend that APO will earn excessive profits from the price increase, which the latter blamed on higher ink and paper costs.

The plan to raise prices was disclosed in a series of meetings with the Bureau of Internal Revenue (BIR).

The PTI noted that the actual production cost for a tax stamp is 11.377 centavos, leaving APO a gross profit of 11.623 centavos per stamp.

The planned price hike is “unconscionable and excessive,” since APO is not a revenue-generating agency of the government, PTI President Rodolfo F. Salanga said in a letter to APO Chairman and President Michael J. Dalumpines.

Mr. Salanga said the agency’s monopoly on tax stamps was implemented to ease regulation, and was not intended as a revenue-raising arrangement for the government.

“In view of the foregoing, we believe that the eight centavos printing cost increase from the current 15 centavos per internal revenue stamp to the proposed 23 centavos is unconscionable and excessive. We wish to emphasize that the intent for the internal revenue stamp is to ensure the collection of excise taxes. APO should not opportunistically use such a requirement to collect internal revenue stamp printing cost with a target of more than 102% (profit relative to) actual cost,” PTI said.

The group said a more acceptable price increase would be two centavos per stamp, as happened in 2014 and 2018.

Cigarette tax stamps indicate that taxes have been collected by the government.

PTI includes major producers like Fortune Tobacco Corp., JTI Philippines, Inc., and PMFTC, Inc. 

APO is one of three entities assigned by the government to produce official forms and other sensitive, high-volume printed material.

PTI said it has been raising its concerns with the BIR and APO since December.

BusinessWorld asked APO to comment Sunday but it had not replied at deadline time. — Beatrice M. Laforga

ADB affirms support for waste-to-energy despite opposition

THE Asian Development Bank (ADB) said it will continue to support waste-to-energy (WTE) projects, noting their potential to help develop a recycling industry for valuable waste materials while enhancing the liveability of communities and reducing the need for landfills.

Over 50 environmental and human rights groups across the world have called on the ADB to divest from WTE projects that use incinerators.

“ADB will support waste-to-energy investments as they provide an opportunity for integrated cross-sectoral projects enhancing the livability and health in cities and rural areas, and prevent environmental hazards caused by landfills,” ADB Chief of Energy Sector Group Yongping Zhai told BusinessWorld in an e-mail Saturday.

He believes that WTE projects will “reduce waste generation while supporting information communication technologies in extracting valuable materials found in the waste logistics chain.”

“(These projects also allow for) increased integration with waste reuse and recycling, notably the integration of biological and mechanical and recycling, and us[e] waste to generate energy within the confines of planned eco-industrial parks,” Mr. Zhai said.

He added that the ADB has tackled WTE technology in its discussions with non-governmental organizations and stakeholders for the bank’s energy policy review update. The bank is in the process of revising its 2009 energy policy, which will guide its investment decisions until 2030.

The updated policy will “reflect the global commitments on climate and sustainable development” which will support developing member countries in their respective low-carbon transitions. 

The plan in running up against opposition from environmental advocates who claim incinerators add to the global warming problem.

“There is no reason why international financial institutions like the ADB should classify WTE incinerators as climate mitigation,” Froilan Grate, the Global Alliance for Incinerator Alternatives (GAIA) Asia Pacific regional coordinator, was quoted as saying in a statement Friday.

“Science and experience show that these dirty, waste-of-energy machines are contributing to global warming as much as fossil fuel-based sources of energy, and are causing harmful effects on human health,” he added.

A March 8 letter signed by GAIA and other organizations argued that WTE incineration is “not an efficient source of energy.”

“WTE projects pose irreversible and long-term fiscal, environmental and social risks for ADB and its (borrowers) because of operational incompatibilities with the region’s waste composition and existing regulations, job losses from recycling, and high investment requirements that profits alone cannot recover,” they said in the letter, which was sent to the ADB Board.

Early this month, the ADB’s Mr. Zhai said the bank is committed to helping its member countries access clean energy. He said the ADB has an $80-billion target for climate financing by 2030. — Angelica Y. Yang

CTA upholds cancellation of P45-million BIR tax assessment on Xylem Water Systems

THE COURT of Tax Appeals (CTA) has rejected a petition by the Commissioner of Internal Revenue (CIR) to review the CTA Special Third Division’s cancellation in 2019 of a P45-million tax assessment and Warrant of Distraint and/or Levy against Xylem Water Systems International, Inc.

The warrant would have authorized the Bureau of Internal Revenue (BIR) to seize personal and real properties over the taxpayer’s failure to pay the assessed taxes for the taxable year 2004 within the required period.

The CTA ruling, dated March 12, denied the CIR’s petition for lack of merit due to the failure to prove that Xylem received its demand letter, as required by law.

Under Section 228 of the Tax Code and Revenue Regulations 12-99 as amended, any assessment failing to comply with the due process requirements are void.

Xylem claimed that it found out about the BIR’s demand letter only when it requested a copy, after receiving the BIR’s preliminary collection letter that had referred to the demand letter.

Associate Justice Catherine T. Manahan issued a dissenting opinion which held that Xylem’s request for a copy of the demand letter and BIR’s compliance with the request satisfied the requirement of the law.

Xylem is a US company that makes, repairs and maintains pumps. — Bianca Angelica D. Añago

Sustainability reporting in the Philippines: Year One review

Today, as markets become more unstable, companies are obligated to create a sustainable business model and implement environmental and social initiatives that will benefit future generations as well as create long-term value for stakeholders.

Now more than ever, organizations need to recognize the value of transparency in reporting by disclosing non-financial information through sustainability reports. Sustainability reporting is no longer just a nice-to-have program but has been elevated as a requirement for publicly listed companies (PLCs).

GOVERNMENT MANDATE FOR SUSTAINABILITY REPORTS
On Feb. 18, 2019, the Securities and Exchange Commission (SEC) released Memorandum Circular (MC) No. 4, series of 2019, under the title Sustainability Reporting Guidelines for Publicly-Listed Companies, specifying the procedure for sustainability reporting in the Philippines. They require all PLCs to submit a sustainability report as part of their annual report each year.

The Commission said this requirement will help companies assess and manage their contributions towards the attainment of the 2030 United Nations Sustainable Development Goals (UN SDGs) and the Philippine Development Plan 2017-2022 or Ambisyon Natin 2040.

The first report was scheduled for submission in 2020, attached to the company’s 2019 Annual Report. For companies already producing sustainability reports in accordance with internationally-recognized frameworks and standards, their reports were considered sufficient compliance with the reporting requirement.

The guidelines also mandate a “comply or explain” approach for the first three years upon implementation. This means that companies need to disclose specific non-financial information using a suggested SEC template or a standalone report attached to their Annual Reports. They can also provide explanations for required data that companies are unable to provide. Companies failing to adhere to the guidelines are subject to the penalty for Incomplete Annual Report provided under SEC MC No. 6, Series of 2015, Consolidated Scale of Fines.

With the new regulation emphasizing the growing importance of non-financial disclosures, SGV conducted a review of how PLCs responded to the SEC requirement to publish sustainability reports and shared our findings in a study, Beyond the Bottom Line: Sustainability Reporting in the Philippines.

The report reviewed 73 PLCs that submitted sustainability reports for the financial year ending Dec. 31, 2019, with the demographic based on the number of PLCs within an industry, information from industry briefings, and changes to local industry regulations. It also included nine listed holding firms that had been reporting on sustainability and non-financial information before the SEC requirement. The study was limited to publicly available information, such as the SEC sustainability templates appended to SEC Form 17-A, standalone sustainability reports, integrated reports and annual reports.

The report also leveraged EY sector trends, the World Economic Forum’s Global Risks Report 2020 and SGV’s experience in supporting businesses in sustainability and non-financial reporting.

WIDELY USED SUSTAINABILITY REPORTING STANDARDS AND PRACTICES
Key findings from the study suggest that 64% out of the 73 companies reviewed used the reporting template provided by the SEC to ensure compliance on the first year. However, more organizations will likely transition to stand-alone or integrated reports moving forward. Of the PLCs assessed, 40% released stand-alone sustainability reports, while 30% disclosed sustainability information as part of their Annual Reports. Moreover, only a small percentage released Integrated Reports, which included financial and non-financial disclosures. These reporting formats are not mutually exclusive, as some PLCs disclosed their non-financial information using more than one reporting format.

Among the PLCs submitting stand-alone reports, the most widely referenced or adopted sustainability reporting standard was the Global Reporting Initiative (GRI) Standards. Companies also used other frameworks or standards, like Sustainability Accounting Standards Board (SASB), Integrated Reporting (IR) Framework and Task Force on Climate-related Financial Disclosures (TCFD), to address other topics like climate change or industry-specific material sustainability topics.

Further, only 11% of the PLCs obtained independent external assurance, all of which had limited assurance. Notably, obtaining assurance on non-financial information, while not required, is considered a global best practice. In fact, according to the EY Climate Change and Sustainability Services (CCaSS) investor survey, 75% of investors see independent assurance of a company’s processes and controls over sustainability reporting as “valuable” or “very valuable,” in addition to the 70% who say the same for non-financial and environmental, social, and governance (ESG) performance measures.

ADDITIONAL INSIGHTS ON SUSTAINABILITY REPORTING PRACTICES
Another significant outcome observed was the focus on the UN SDGs, with 77% of the sustainability disclosures linked to the SDGs, and 45 PLCs using the SDGs to inform about their sustainability strategy, materiality assessment process and/or material sustainability issues. Incorporating the SDGs in a company’s sustainability strategies ensures that their products, services and programs contribute to attaining the global sustainability goals.

Moreover, 60% established the scope and boundary of their reports while only 52% disclosed their materiality assessment process, or the method used to determine the sustainability issues material to the company and their stakeholders. Material sustainability issues are the key focus areas addressed by a company and relevant information or plans in these areas are included in its sustainability report. Stakeholder engagement is an important part of the materiality assessment process to demonstrate that companies listen to their stakeholders and address their concerns.

Meanwhile, only 32% disclosed having sustainability governance in place, which is not surprising since sustainability reporting is relatively new to the country. However, as sustainability issues continue to take center stage in developing business strategies, business leaders should consider having a member of management spearhead sustainability within the organization.

On specific disclosures, Occupational Health and Safety (OHS) was the most disclosed topic by PLCs, while the least discussed were environmental topics. This presents an area for improvement for PLCs as they will not be able to fully address their ESG impacts, risks and opportunities without measuring or reporting on environmental topics.

REITERATING THE SIGNIFICANCE OF NON-FINANCIAL REPORTING
The report reveals that the first year of reporting focused more on compliance. However, it still met the objective of creating awareness and inclusion of sustainability on the board and management agenda. Due to the impact caused by the pandemic, it is very likely that the 2020 sustainability reports will heavily focus on health and safety, with pandemic response programs such as Department of Labor and Employment (DoLE)-mandated safety protocols, testing and vaccinations getting reported as part of ESG concerns. We also expect more robust disclosures on climate-related matters such as decarbonization, baselining energy consumption and air and greenhouse gas emissions.

In addition, PLCs can improve their reporting on topics such as waste management to address pressing global concerns; resource management, specifically of materials and water, since unhampered consumption is not sustainable; and the protection and rehabilitation of biodiversity and ecosystems affected by operations to minimize negative environmental impact. Another area which may be improved further is social issues, particularly privacy and data security, after the pandemic rapidly shifted professional communications into the digital space.

After the initial year of compliance with the new SEC requirement, PLCs will hopefully realize the significance of non-financial reporting and develop strategies that incorporate global and national development goals. By measuring and addressing their current sustainability impacts, risks and opportunities, they can help create long-term value for stakeholders, and at the same time, ensure a sustainable future for generations to come.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Benjamin N. Villacorte is a Partner and Yna Altea D. Antipala is a Senior Associate from the Climate Change and Sustainability Services team of SGV & Co.

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