Better Lives
through
Sustainable
Innovation
through
Sustainable
Innovation
Sustainability Report 2022
D&L Industries, Inc.
Message from the CEO
GRI 2-22
Dear Fellow Stakeholders,
In 2022, our Company recorded its highest ever net income, demonstrating a full recovery from the COVID pandemic amidst a confluence of macroeconomic headwinds and an Omicron surge early in January. Last year’s results outperformed expectations and were mainly driven by strong consumer spending amidst a wider economic reopening and the Company’s exports undergoing resilient growth. The three biggest business segments of the Company—food ingredients, oleochemicals and other specialty chemicals, and specialty plastics—all booked positive earnings growth for the year which were either at or close to record highs.
D&L’s robust earnings for 2022 demonstrated its ability to weather various macroeconomic conditions given its diversified businesses, the essential nature of the products it manufactures, and its ability to adjust its selling prices regularly.
While macroeconomic risks remain in the form of elevated inflation, the threat of a US recession, and a global banking turmoil, we remain optimistic on the structural growth story of the Company. By the middle of 2023, our plant in Batangas is slated to commence its commercial operations. It will further complement our capabilities that will allow us to increase our relevance in the overall production chain and service new and bigger customers globally.
From a sustainability perspective, the new plant is crucial in our high impact sustainability initiatives where we advocate for a dramatic reduction in the carbon footprint of the coconut oil and derivatives industry, by enabling global brands to buy direct from source. This direct from source approach simply means converting raw materials into finished goods in the country of raw material origin, instead of going through multi-leg production stages which usually happen across different locations in the globe.
We believe that our Batangas facility and our high impact sustainability efforts put us in a very good position as the world shifts towards more sustainable consumption. With a strong conviction in the long-term prospects of the businesses we are in, we look forward with eagerness and hope.
We see the coming decade as transformational for us, both from a business and sustainability perspective.
We are deeply grateful for the trust and support given by our shareholders throughout the years. Rest assured that D&L’s management team is working extra hard to continuously enhance shareholder value while building a more sustainable future for all of us.
Better Lives through Sustainable Innovation
GRI 2-29, 3-1, 3-3
2022 was a great year for D&L!
The Company emerged from another year of the pandemic with its strongest corporate performance in history, eclipsing its record net income in 2018.
This was not apparent in January 2022 when Omicron wreaked havoc through the ranks of management and staff returning from the Christmas holidays. Thankfully, the Company’s health protocols and relentless drive to vaccinate stakeholders and their families bore fruit, as most COVID infections at this time were mild and cured within a week or so. Still, leadership prepared contingency plans as weakness in sales at the beginning of the year and the continuing supply chain disruptions threatened the hoped-for recovery from the global pandemic.
ESG | Five Themes
GRI 2-9, 3-1, 3-3
D&L has identified five themes on what comprises ESG in the Company, each embodying the drive for greater positive and lesser negative impacts across a combination of environmental and human conditions.
These five themes promote understanding, transparency, and accountability in the Company’s ESG performance, fostering a culture of trust and collaboration among its various stakeholders.
Sustainable Growth
Sustainable Growth is the foundation of the Company’s ESG efforts, and is achieved through good governance, risk management, and a culture of ethics that promotes positive outcomes for all stakeholders. These principles lay the groundwork for how the Company builds competitive advantage on top of its capabilities.
Responsible Products
Responsible Products use sustainable materials, ethical supply chains, and carefully calibrated processes to create products that have positive impacts on society and the environment.
Resilient Supply
The Resilient Supply chain is built through close collaboration with upstream and downstream partners to promote sustainable practices, reduce disruptions, and enhance the lives of each stakeholder in the value chain. This approach drives the Company’s Coconut Sustainability Initiative.
Better Lives
The Company promotes Better Lives for its stakeholders through diversity and inclusion in the workplace, by delivering best-in-class products and services for its clients and customers, and by working with its communities on safety, training, education, and holistic development.
Outreach
Finally, D&L engages in Outreach efforts by itself and through its various subsidiaries, especially through independent non-profit Lao Foundation, Inc. (LFI), to fund its own initiatives or forge multi-sectoral partnerships that positively impact the lives of the families of its workforce, the communities and environment around its facilities, and beyond.
Frameworks & Standards
The Five Themes present a narrative structure that allows D&L to present its ESG efforts in an engaging way without getting lost in the technical details of the frameworks. This approach captures the interconnections between economic, environmental, and social aspects of the business, providing a holistic view of the Company’s sustainability efforts. The simplicity of the narrative immerses the reader in the story, while meeting the reporting requirements of the standards.
UN Sustainable Development Goals
D&L Industries is strongly committed to support specific targets of the United Nations Sustainable Development Goals in areas which the Company can have significant positive while addressing negative impacts.
GRI Standards 2021
D&L Industries, Inc. has reported in accordance with the GRI Standards for the period January 1, 2022 to December 31, 2022.
Philippine SEC Framework
For companies who already have sustainability reports in accordance with internationally recognized frameworks and standards, their reports shall already be considered as their compliance with the reporting template.