2023 Sustainability Report

Our Path to Sustainability Our Material Topics Our Approach to Managing Climate Risks Our Sustainability Performance Annexes

Stakeholder Engagement

Keeping our focus on most
relevant and key ESG issues

Effective stakeholder engagement enables companies to identify material issues and concerns that might impact their long-term viability. By actively involving stakeholders, we gain a deeper understanding of their expectations, values, and potential risks; thereby fostering a collaborative approach to addressing shared challenges and contributing to positive outcomes.

Ultimately, the importance of stakeholder engagement lies in its ability to drive continuous improvement, align business practices with societal expectations, and contribute to the overall advancement of sustainable and ethical business conduct.

Stakeholder Engagement

Keeping our focus on most
relevant and key ESG issues

2023 Stakeholder
Engagement Results

Investors and Shareholders

MATERIAL CONCERNS

  • Financial growth and profitability
  • Ethical standards for governance and business conduct
  • Commitment and targets to social and environmental responsibility, especially on Climate Change

MODES OF ENGAGEMENT

  • Result briefings through Quarterly and Annual Reports
  • Annual stockholder meetings
  • Disclosures to the Philippine Stock Exchange and other pertinent agencies
  • Meetings with investors
  • Oversight of the Board through its Governance, Nomination, Remuneration and Sustainability Committee (GNRSC)
  • Correspondence with ESG rating agencies (e.g., CDP, Sustainalytics, MSCI)

RESPONSE

  • Continuous development of business strategy to improve financial and operational performance
  • Compliance with laws and regulations
  • Adherence to good governance principles
  • Incorporation of sustainability to business strategy
  • Enhanced sustainability disclosure to include strategy to reach targets along with milestones
  • Communication of received feedback to top management through Executive Leadership Council (ELC) meetings to further incorporate sustainability into business strategy

Employees

MATERIAL CONCERNS

  • Competitive compensation and benefits
  • Frequent career conversations between employees and their managers
  • Exposure to career advancement opportunities
  • Positive work culture is driven by purpose, values, and community

MODES OF ENGAGEMENT

  • Town hall meetings
  • Open dialogues
  • Pulse Employee Engagement Survey

RESPONSE

  • Continuous benchmarking to ensure up to date provision of competitive salaries, benefits, and employee growth initiatives such as formal training and e-training
  • Strong partnership between HR and leadership on employees' performance management and development
  • Setting of town hall meetings and other avenues for employee communication
  • Adherence to good labor practices and workplace standards
  • Purpose and values-driven initiatives to strengthen group identity, engagement and community

Suppliers and Service Providers

MATERIAL CONCERNS

  • Lasting business commitments
  • Complying to the sustainable policies of JGS
  • Timely payment

MODES OF ENGAGEMENT

  • Vendor audits
  • Open line communication

RESPONSE

  • Execution of purchasing ethics, strategic purchasing, and supplier relationship management
  • Strict implementation of Supplier Accreditation Policy
  • Practice of due diligence in processing liabilities

Regulators and Government Bodies

MATERIAL CONCERNS

  • Legal compliance with laws and regulations
  • Comments and improvements on legislative proposals
  • Partnership in social and environmental responsibility
  • Feedback and suggestions on existing policies, laws, and regulations affecting our other stakeholders

MODES OF ENGAGEMENT

  • Annual and Sustainability Reports
  • Statement of compliance
  • Licenses to operate
  • Position Papers
  • Corporate social responsibility programs
  • Association and/or community engagement with discussion regarding policies, laws, and regulations affecting the association members and/or communities

RESPONSE

  • Compliance with laws and regulations
  • Submission of official position papers on legislative proposals
  • Implementation of initiatives to support government programs (e.g., Lingkod Pinoy Centers and tree planting)
  • Drafting and submission of feedback and suggestions for and on behalf of the Association and/or community

Communities

MATERIAL CONCERNS

  • Community engagement and development
  • Responsible environmental management

MODES OF ENGAGEMENT

  • Corporate social responsibility programs
  • Environmental compliance programs

RESPONSE

  • Continuous development and design of projects and programs that respond to community needs
  • Compliance with environmental standards

Customers of SBUs

MATERIAL CONCERNS

  • Product quality
  • Health and safety
  • Marketing and labeling
  • Data Privacy

MODES OF ENGAGEMENT

  • Open Communication Channels
  • Customer Satisfaction Survey

RESPONSE

  • Quality assurance for products and services of each SBU
  • Implementation of environmental, safety, and quality standards and assurance systems
  • Proper marketing and labeling for product content, usage, and service inclusions
  • Enhanced JGS-wide information security system to prevent any data leak and security breach

Our Investor Engagement Process

JGS frequently engages with the capital markets to discuss its ESG practices through local and international investment conferences regularly hosted by stockbrokers, one-on-one meetings with current and potential investors, and, at times, non-deal roadshows in key financial cities worldwide. Material ESG topics usually covered in these discussions include carbon emissions, product safety, and corporate governance, among others. Aside from communicating the company’s ESG performance, these interactions also serve as venues for the company to collect feedback and better understand the topics and information that are important to investors.

The feedback received by the company during these engagements is in turn, communicated to top management through its monthly Executive Leadership Council (ELC) meetings, which are comprised of the company’s corporate center unit (CCU) heads and the CEOs of its SBU. Aside from feedback from investor engagements, the ELC also discusses ways to maximize the group's ecosystem in creating and implementing ESG initiatives, better understand emerging trends related to sustainability, and exchange best practices across the conglomerate, among others. The members of the ELC then cascade relevant information to their respective business units and are responsible for ensuring that these are considered in the unit's strategy and plans. In addition to the involvement of top management, the Board of Directors also has a role in the company’s Sustainability journey through its Governance, Nomination, Remuneration and Sustainability Committee (GNRSC), which meets at least twice a year and oversees the development and implementation of corporate governance principles and policies. The committee also has the responsibility to ensure overall company support and alignment with appropriate standards and best practices on economic, environmental, social and governance (EESG) and sustainable development.

Apart from these, JGS also regularly provides updates on the company’s Sustainability journey, as well as its progress against ESG commitments and targets through (1) quarterly results briefings, (2) annual reports, (3) annual shareholder meetings, (4) timely disclosures to the Philippine Stock Exchange and other pertinent agencies, and (5) engaging with ESG raters such as CDP, Sustainalytics, and MSCI. These reports are anchored on the outcome of the ESG Excellence project that the company conducted in 2022. Through questionnaires and follow-up interviews, this project dove deeper into how investors incorporate ESG into their analysis and investment decisions and helped surface their top concerns and data requirements. JGS recognizes that these factors continue to evolve, and the company monitors such by constantly engaging with the capital markets and conducting deep dives periodically or as circumstances require.

Our Supplier Engagement Process

In the fast-paced world of business, where change and uncertainty reign, making lasting commitments is vital for success and building trust. Two key strategies stand out: following sustainable standards and ensuring suppliers are paid on time. Not only do these practices uphold moral integrity, but they also pave the way for strong, thriving businesses.

Procurement holds a significant role in shaping our current company culture. It establishes standards for supplier qualifications, focusing on social responsibility, economic viability, and sustainability. Embracing sustainable policies means committing to ethical and legal practices and participating in community development goals. Supplier qualifications are part of a thorough process to define our business partnerships. Once accredited, suppliers attend Quarterly Supplier Onboarding to learn about business opportunities and procurement guidelines.

Balancing profit with moral obligations poses a challenge in maintaining sustainable policies. However, the shift towards sustainability shows they can coexist. Proactive businesses understand that sustainable practices not only mitigate risks but also usher innovation, enhance brand reputation, and attract ethical customers and investors.

Our stakeholder engagement initiatives serve as a keystone, providing invaluable insights into the concerns and priorities of diverse stakeholders. Simultaneously, our enterprise risk management processes offer a comprehensive lens through which we assess each issue's potential impact on critical facets of our operations. These include but are not limited to evaluating its implications on business performance, addressing stakeholder concerns, ensuring regulatory compliance, safeguarding against reputational risks, and fostering the long-term sustainability of our organization.

Together, these processes form a dynamic framework that not only enhances our understanding of sustainability challenges but also empowers us to proactively address them. By leveraging stakeholder engagement and enterprise risk management in tandem, we are better equipped to navigate the complexities of our operating environment, mitigate risks, seize opportunities, and drive sustainable value creation for all stakeholders involved.

In 2022, we embarked on refreshing our materiality and developed our ESG targets as described in the process below:

Enhancement of our ERM

  • We enhanced our Enterprise Risk Management (ERM) process to better capture sustainability risk drivers and megatrends.

  • Each strategic business unit identified, assessed, prioritized, and built risk responses on their identified top risks.

  • JGS, then consolidated all SBU top risks.

  • Appropriate risk responses are set in place for each JGS
top risks, with an established risk governance structure.

Strengthen our Materiality

  • Each business reviewed the materiality and scanned which sustainable development issues they are best positioned to tackle while also generating business value.

  • We prioritized sustainability issues based on set criteria and defined a set of actions that are most strategic for the SBUs to implement.

  • The identified contribution of each business shapes the development of our group-wide ambitions.

  • In 2022, we also set an engagement with investors to understand their view of sustainability as we accelerate our initiative to set long-term targets.

Identification of Targets and Strategic Actions

  • The strategic actions identified by each of our businesses were consolidated and aligned to the group's five (5) focus areas. Our goal is to have collaborative action towards group-wide ambition.

  • The proposed targets of each business unit are presented and approved by the highest governing body of each of the subsidiaries.

  • Through the establishment of JGS's Governance, Nomination, Remuneration and Sustainability Committee (GNRSC), formerly Corporate Governance and Sustainability Committee, we strengthen the integration of sustainability in our board level decision-making which includes the setting of targets.

Our Progress towards our ESG Targets

Climate Action

We will ensure a low-carbon transition for our businesses and strengthen our climate-related risk management.

TARGET

Major hotspots1 are assessed and managed on climate risk by 2030

KEY ACTIONS

Resilience (Climate Adaptation):

  • 2023 – Initiate Scenario Analysis in selected JGS hotspots1 (Metro Manila, Batangas City)
  • 2024/2025 – Continue Scenario Analysis in hotspots1
  • 2030 – Complete remaining hotspots1
2023 PROGRESS
  • Climate Hazard Assessment of 292 sites across JGS and RRHI included the modeling of top hazards: Typhoon cyclones, flooding, extreme heat, and sea level rise. Heat maps are available to show the low to high-risk locations per hazard.
  • We initiated facility-level Climate Scenario Analysis for identified sites in Metro Manila and Batangas City.
¹ Hotspot is defined as a location with major presence of JGS subsidiaries signifying where climate change can impact the businesses most
TARGET

Low carbon transition roadmap released by 2025, as we aspire to achieve net zero by 2050

KEY ACTIONS

Low Carbon Transition (Climate  Mitigation):

  • 2023 – Alignment to Science-Based Targets Initiative (SBTi)
  • 2024 – Evaluate our carbon reduction  initiatives and offset opportunities
  • 2025 - Explore carbon removal technologies and business models
2023 PROGRESS
  • A carbon footprint audit was conducted across SBUs to identify areas of improvement. All SBUs have re-examined their carbon footprint and initiated Scope 3 carbon footprint development.
  • CEB revisited its progress towards Science Based Targets. All SBUs evaluated alternative renewable energy sources.

Resource Efficiency & Circularity

We optimize our use of natural resources and foster circularity in all our businesses.

TARGET

Plastic neutrality by 20302

KEY ACTIONS

Circularity: Post Consumer Plastic wastes across the group are fully recovered and diverted

  • 2023 - 20% of plastic waste footprint
  • 2024 - 40% of plastic waste footprint
  • 2025 - 50% of plastic waste footprint
  • 2030 - 100% of plastic waste footprint
2023 PROGRESS
  • JGS Strategic Business units that are Obliged Enterprises under the Extended Producers Responsibility Act formed a collective and continued its efforts with an ecosystem approach in collecting and diverting plastic waste.
2 Plastic neutrality shall refer to a system or its desired outcome where, for every amount of plastic product footprint created, an equivalent amount thereof is recovered or removed from the environment by the product producers through an efficient waste management system. - EPR Law

Employee Growth and Well-being

We nurture our people by investing in their growth and well-being.

TARGET

Zero lost-time incidents annually

KEY ACTIONS

Continue Safety initiatives and monitoring of safety incidents

    2023 PROGRESS
    • 26% decrease from 66 to 49 Lost time incidents
    TARGET

    JGS Employees receive an average of 24 training hours annually per employee

    KEY ACTIONS

    Continue provision of online and face-to-face trainings for all JGS employees

      2023 PROGRESS
      • Average of 21 training hours per employee in 2023

      Shared Success

      We continually grow and invest in our businesses as we enable our people and partners to grow with us.

      TARGET

      All major vendors are aligned and comply with JGS key ESG practices by 2025

      KEY ACTIONS

      All key partners and vendors are assessed on ESG risks

      • 2023: Relevant supplier ESG risk parameters are identified
      • 2024: All key suppliers go through the assessment process
      2023 PROGRESS
      • URC continued its Supplier Food Safety and Quality Management System (FSQMS) Audits based on supplier risk assessment and supplier prioritization criteria to ensure the quality and safety of goods supplied to the company.
      • Sustainability overview delivered to engage Procurement Officers from various business units to initiate collaboration with suppliers.

      Better Choices

      We innovate for more accessible and responsive products and services to offer better choices to Filipinos and enable them to live the life they want for themselves.

      ‍

      TARGET

      For URC (updated target), by 2030

      100% passing 3 wellness criteria (BCF PH and INTL)

      KEY ACTIONS

      The group will continue to offer better choices through healthier and nutritious food

        2023 PROGRESS
        • Total URC Wellness Score for 2023 using updated criteria showed 86% passed 3 URC Wellness Criteria
        TARGET

        For RLC

        100% of new office buildings in Metro Manila will be GREEN Certified starting 2021

        KEY ACTIONS

        The group will continue to offer better choices through greener buildings

          2023 PROGRESS
          • 6 new Metro Manila Buildings are Green Certified
          TARGET

          For CEB

          34 million passengers, 100 routes and 50 destinations, 39 million seat capacity by 2026

          KEY ACTIONS

          The group will continue to offer better choices through affordable and accessible flight options

            2023 PROGRESS
            • 20.9 million passengers; 104 routes (68 Domestic, 36 International); 60 destinations (35 Domestic, 25 International); 24.8 million seat capacity
            TARGET

            For JGSOC

            • Expanded polymer product portfolio of EVALENE and EVALENE PLUS by 20% in 2027
            • Potential for increased incorporation of recyclates, up to 50%, in 2029 for targeted resin grades

            KEY ACTIONS

            The group will continue to offer better choices through innovative petrochemical products

              2023 PROGRESS
              • Our operations can now produce bimodal and metallocene PE grades that are tougher than commodity PE.
              • Certification by UL Solutions, a third-party global safety science company, through their Environmental Claim Validation (ECV) program, of JGSOC's two (2) EVALENE PLUS® random copolymer polypropylene (PP) injection molding grades.

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