Related-Party Transaction Committee

The Related-Party Transaction (RPT) Committee evaluates relations between businesses and counterparties to continuously identify related-parties and review RPTs to ensure that these are undertaken on an arm’s length basis that is appropriately monitored, reported and disclosed. The RPT Committee further ensures that no corporate or business resources are misappropriated or misapplied, and determines potential reputational risks that may arise as a result of or in connection with the RPTs.

Executive Committee

During the intervals between the meetings, the BOD lawfully delegated to the Executive Committee (EXCOM) the exercise of the powers of the Board related to the management and direction of the affairs of the Company. All actions by the EXCOM are reported to the BOD at its meeting and may be subject to revision and alteration by the Board, provided that no rights of third parties are affected by targets and budgets, should there be any such revision or alteration.

Roles and responsibilities that may be relegated to the EXCOM include governance, strategic and operational leadership, drive portfolio/investment decisions, resource allocation, setting and approval budgets and hard targets, approval of strategic transactions and performance review.

Advisory Board

Acknowledging the wisdom of the Founders, the Advisory Board was established as a source of insights and advice, help explore new opportunities by stimulating robust, high-quality conversations and stimulate critical thinking to increase the confidence of decision-makers who represent the Company to help the organization achieve its goals and objectives. The Advisory Board helps fill in the knowledge gap in the Company and acts like an impartial third-party or a sounding board.

Corporate Governance & External Parties

External Auditors

PwC Philippines – Isla Lipana & Co.

Government Agencies

Investor Conferences

Membership Associations
GRI 2-28

Awards & Recognition

Corporate Governance & Internal Parties

Certifications
SDG 12.8

Enterprise Risk Management
GRI 3-3, 2-13, 2-24, 2-25

ERM is integral to an effective corporate governance process and the achievement of the Company’s value creation objectives. With an integrated approach, the BOD and Senior Management are in a position to make well-informed decisions, having taken into consideration risks related to significant business activities, plans and opportunities.

To ensure the integrity, transparency and proper governance in the conduct of its affairs, the Company continuously institutes a strong and effective internal control system and ERM taking into account its size, risk profile, nature and complexity of operations.

Governance guides the course of the organization and the effectiveness of ERM will be highly dependent on its integration to the Governance of the organization, thus D&L adopted the Integrated Corporate Governance and ERM Framework for better risk management.

An adequate and effective internal control system and ERM framework help sustain safe and sound operations as well as implement management policies to attain corporate goals. Moreover, an effective internal control system embodies the Management’s oversight and control culture, risk recognition and assessment, control activities, information and communication, monitoring activities and correcting deficiencies. On the other hand, an effective ERM framework typically includes activities such as identification, sourcing, measurement, evaluation mitigation and monitoring of risk.

Internal control is a process designed and effected by the Company’s BOD, Senior Management, and all levels of personnel to provide reasonable assurance on the achievement of Company objectives through efficient and effective operations; reliable, complete and timely financial and management of corporate information; and compliance with applicable standards, laws, regulations, as well as the Company’s policies and procedures.

Social Control

Integration with the Company’s culture and core values is the foundation and the Company’s first line of defense, having Risk Management in the employee’s DNA is key.

The Company has a Code of Business Conduct and Ethics that provides standards for professional and ethical behavior. The Code also articulates acceptable and unacceptable conduct and practices in its internal and external dealings. A code of Business Conduct and Ethics is an important tool to instill an ethical corporate culture that pervades throughout the Company.

Anti-Corruption Policy

The BOD sets the tone and makes a stand against corrupt practices. In this regard, the Company launched the iCARE (acronym from I Convey All Risks and Exposures) Program, a Whistleblowing Program that aims to create an open, transparent and safe working environment where all stakeholders can communicate their concerns like actual or suspected violation of the Company’s code of ethics and policies, criminal or unlawful acts or omissions, irregularities like fraud, embezzlement, harassment, theft, corruption, collusion and nepotism, bribery and other procedural malpractice. The iCARE Program encourages employees to report corrupt practices and outlines the procedures on how to combat, resist and stop these corrupt practices.

People Excellence and Succession

Policies, programs and procedures are established to encourage employees to actively participate in the realization of the Company’s goals and governance. These policies and programs covering among others health, safety and welfare, training and development and employee reward/compensation, encourage employees to perform better and motivate them to take a more dynamic role in the organization.

To ensure business continuity and uninterrupted operations, succession planning is instituted for the positions of directors, key officers and other identified critical roles and functions.

Output Control

The BOD oversees the development of and approves the Company’s business and strategy and monitors its implementation in order to sustain the Company’s long- term viability and success. Sound strategic policies and objectives guide the proper prioritization and allocation of resources for optimal value to the Company.

The President and CEOs of the business units lead in the realization of D&L’s Vision to be the Philippines’ Majority Leader in Sustainable Ingredients, Materials and Solutions, and a Major Exporter in identified continents.

With Capability as the Driving Force to pursue D&L’s Mission to Excel and Be the Leader in the identified Industries, the President and CEOs ensure the sustainability and continued relevance of the businesses by building Strategic Capabilities that include the development of integration plans to enhance synergies across Business Units (BUs); institution of a structured innovation process; establishment of talent development, engagement and succession plans; and building of capabilities in Business Intelligence and Operational Excellence.

Successes are measured through the following 5Ps:

Process Control

Process Controls like decision authority, segregation of duties, physical and access controls, having review, approval and audit processes, etc. are established to ensure the integrity of transactions, avoid conflict of interest situations, efficient and effective operations as well as compliance with applicable standards, laws, regulations, and the Company’s policies and procedures.

Process Control includes the clear definition of roles and responsibilities which starts with the BOD. This allows the BOD to act on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Company and all stakeholders. The position of the BOD Chairman and the CEO are held by separate individuals, each one has clearly defined responsibilities to foster an appropriate balance of power, increased accountability and better capacity for independent decision-making. Identification and definition of clear roles and responsibilities are implemented across all levels in the organization to empower employees while ensuring accountability.

Management Information System

Transparency is one of the core principles of corporate governance, thus to ensure better protection of stakeholders’ rights, the Company’s Management Information System (MIS) is instituted to allow monitoring and immediate response should there be a red flag. MIS is continuously built to provide reliable, complete and timely financial and other relevant non-financial information critical for business management and decision-making.

The BOD establishes corporate disclosure policies and procedures that are practical and in accordance with generally acceptable practices to ensure comprehensive, accurate, reliable and timely reports to stakeholders that gives a fair and complete picture of the Company’s financial condition and results of business operations. In addition, material and reportable non- financial and sustainability issues as well as RPTs are reviewed based on materiality thresholds to guarantee fairness and transparency of disclosures.

The Company maintains a website to provide a comprehensive, cost-efficient communication channel for disseminating relevant information to allow informed decision-making by investors and other stakeholders. The BOD also established an Investor Relations Office to ensure constant engagement and communication with its shareholders. This is also maximized as an avenue to receive feedback, complaints and queries from stakeholders and assure their active participation with regard to the activities and policies of the Company.

Performance Management System

Rewards, recognition and remuneration are given to employees based on meritocracy established relating to performance and contribution to the achievement of the Company’s goals and objectives.

At the Board level, the BOD conducts an annual self-assessment of its performance, including the performance of the Chairperson, individual members and committees based on minimum criteria using a predefined process that also allows feedback mechanism from stakeholders.

Assurance

Also in place is an independent internal audit function that provides an independent and objective assurance and consulting services designed to add value and improve the Company’s operations. It helps the Company achieve its objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of the Company’s governance, risk management and control functions.

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3 A capability-driven company has built special capabilities into its production process that allows it to make products with features that are difficult for its competitors to duplicate.

Research and Development

One of the Company’s core advantages is its strong R&D capabilities, allowing it to customize solutions and offer innovative product offerings to its customers to help them stay ahead of the competition. D&L puts strong emphasis in keeping abreast of the latest technology and having its fingers on the pulse of the market to identify the market needs that must be met. About 14% of the company’s workforce are in technology-related roles.

In the past, the company has successfully helped its customers adapt to the changing consumer preferences. As a leading B2B company, D&L works hand in hand with its customers in tweaking their product formulation in order to make them more economical, appeal better to the market, and even more environmentally friendly. D&L anticipates more of these opportunities moving forward, especially in the field of making product formulation more sustainable.

As such, the Company is strategically positioning itself by investing further in R&D to equip itself and stay ahead of the curve in offering customers innovative and sustainable product solutions.

Next Generation Facility in Batangas

This 2023, the Company is gearing up to commercially launch its next generation manufacturing facility, the culmination of half a decade’s worth of planning and more than doubling production capacity. The new plant sits on a 26-hectare property in First Industrial Township-Special Economic Zone in Batangas.

The new plant will be instrumental to the Company’s future growth, in line with plans to develop more high value-added coconut-based products and penetrate new international markets. It will mainly cater to D&L’s growing export business in the food and oleochemicals segment. It will also add the capability to manufacture downstream packaged products, allowing the Company to capture a bigger share of the production chain. For instance, while the Company primarily sells raw materials to customers in bulk, the new factories will allow it to “pack at source”. This means that D&L will have the ability to process the raw materials and package them closer to finished consumer-facing products.

This will enable D&L to move a step closer to its customers by providing customized solutions and simplifying their supply chain, which is of high importance given global logistical challenges and concerns.

The new facility is envisioned to showcase state of the art technology in manufacturing, as well as global best practices in incorporating sustainability in operations. The following are some of the key sustainability features of the said facility.

Sustainably Designed Buildings and a Central Command Center

Energy and water efficiency, CO2 emission reduction, and excellent indoor air quality are incorporated in the overall design of the new facility. In addition, a central command center will house the monitoring of all key environmental elements. It will also house the centralized security, risk management, and business continuity departments of the Company.

Renewable energy sources

A significant portion of the new facility’s power requirement will be coming from solar power. In addition, the Company is also exploring other renewable energy sources as fuel for its manufacturing plants.

Chilled Water System

All cooling requirements of the new facility will be centralized. This is expected to translate into greater energy efficiency and lower maintenance costs.

Water Retention System

Surface run-off and rainwater will be collected in a water retention pond which can store up to 5 days’ worth of the plant’s water requirements. This is expected to mitigate risk of water scarcity.

Sensors Throughout the Facility

Several sensors will be installed throughout the facility to monitor various indicators such as water turbidity and acidity levels, effluent leakage and other possible contamination. With sufficient sensors installed, any abnormal reading will be easily detected and a corresponding corrective action can be promptly done.

Continuous Emission Monitoring System (CEMS)

While not required by the Department of Environment and Natural Resources (DENR), the Company intends to install its own CEMS to consistently test boiler emissions. This is part of the Company’s initiatives to track and reduce its overall emissions.

Noise Monitoring System

In order to monitor and minimize noise pollution, noise monitors and sensors will be installed in the noisiest part of the plant to ensure adherence to the limits set by the park and to also ensure the surrounding communities are not adversely affected.

Coconut Greenhouse

The Company is awaiting industrial park approval to plant hybrid coconut trees within the compound. The planned greenhouse will serve as an R&D facility for coconut farming technologies, as well as a showcase for the Company’s Coconut Sustainability Initiative (CSI).

The Sustainability Challenge for Brands GRI 304-2

As the world slowly emerges from the throes of a global pandemic, the lingering effects of disrupted supply chains, mounting geopolitical uncertainties, and still unmitigated effects of climate change combine and continue to batter countries, companies, and consumers alike. Nations hold their breath on whether new COVID variants would again close borders and overwhelm hospitals. War in Ukraine continues to drive uncertainty in energy and global food supplies. Big business and small enterprises alike deal with wildly swinging labor supply and demand, even as ordinary shoppers flood the malls and online stores on weekends, but end the day with fewer purchases than they would like.In this environment, how can brands win? On the one hand, supply chains stretch and snake their way around roadblocks to and from the usual places in East Asia and their home markets. On the other, regulators, activists, and consumers alike are demanding better, cheaper… and more sustainable, everything, really. Sustainability adds a cost burden which must be borne. The question is, how could brands mitigate the rising cost of sustainability? The more disrupted the supply chain, the more nodes and stops there are, especially as new connections are needed to go around blocked normal routes. Each new intermediary adds cost. One seemingly simple but oh-so-hard-to-find solution? A one-stop shop.

Groundbreaking at FIT

A Vision for Vertical Integration The middle years of the past decade saw slow but consistent GDP growth of 2%-3% for the global economy. The Philippines, in turn, was roaring ahead versus much of the world in the 6%-8% annual GDP growth range. With excess manufacturing capacity at the time fast disappearing, listed company D&L Industries, Inc. (PSE:DNL) strategically invested in a 26-hectare property at First Industrial Township, a PEZA export processing zone. With groundbreaking in August 2018, D&L sought to combine the capabilities of its largest business units into an integrated facility targeting the ever-growing demand in export markets in the Americas, Europe, and the Indo-Pacific. In one fell but deliberate swoop, D&L would more than triple its capacity to fill the world’s shelves, cupboards, bedrooms, and homes with sustainable alternatives for the growing Gen Z and millennial consumer segments and their environmentally enlightened and socially responsible sensibilities. Boomers and Gen Xers alike would simply be swept along in their offspring’s wake of climate activism. Then again, no one could have anticipated the ravages of COVID from March 2020 onwards. The Natura Aeropack and D&L Premium Foods factories in Batangas would face years of construction and supply chain delays hence, and here we are.

Fully vertically integrated, from sourcing coconut oil to consumer packaging in one location Starting this 2023, Natura Aeropack offers the brand owner an integrated facility to serve its personal care and health & nutrition markets from one location. Housed at the First Industrial Township (FIT) economic zone in Tanauan, Batangas, just South of Manila, Natura Aeropack cuts through supply chain knots like a hot knife through vegan butter. Strategically placed in the Philippines, a global leader in the supply of coconut oil, Natura Aeropack has forged backward links to oil mills and small farmers throughout the country. All told, the company sources thousands of metric tons of coconut oil per month, serving export markets for oleochemical ingredients and specialty oils & fats alike. FIT is a nexus for a significant share of the Philippines’ coconut oil production. Within its research laboratories, scientists and specialists use high-tech tools to concoct, tweak, and deliver the exact color, aroma, flavor, texture, skin care, or other health benefit a brand owner seeks. Iterate to a formulator’s satisfaction. Test products to a marketer’s delight. Thereafter, Industry 4.0 automation takes over, guided through production by skilled engineers at every step. At the other end of the line, organic lotions, scented soaps, or health supplements emerge, ready to fill the shelves and virtual stores of the brand’s markets. Vertical integration brings ingredients, formulating & compounding, contract manufacturing, and OEM/ODM packaging together under the pivotal one roof, ready to ship to shelves worldwide.

Green chemistry, renewables, and carbon reduction Three all-new factories provide oleochemical ingredients, specialty fats & oils, and OEM/ODM packaging to brand owners wherever their customers are in the world. Copra from coconuts grown by small scale farmers are crushed into crude coconut oil (CNO) in strategic oil mills throughout the country, just one road or barge trip away to Natura Aeropack. Henceforth, this carbon-rich plant-based oil is refined, bleached, and deodorized (RBD) to various grades, up to the highest food-grade organically-certified coconut oil suitable for infants. Whether as food-grade specialty fats & oils or as base or high-grade carriers for beauty products, all-natural coconut oil takes the place of less sustainable alternatives, be they palm oil or petroleum-based ingredients. No rain forests or endangered orangutans were harmed. No crude oil was extracted from the sands or the deep blue seas. Coconut oil has a far smaller carbon footprint and environmental cost than both palm oil and petroleum. Coconut oil is sustainability embodied. The Natura Aeropack facility is engineered for safety, quality, and sustainability. From Autoclaved Aerated Concrete (AAC) used in construction for better thermal and acoustic performance to smart LED lighting and LEED Gold certification for employee work areas, painstaking attention to detail has been taken to ensure both active and passive measures are in place to ensure safety, enhance efficiency, and optimize operations. Biomass replaces fossil fuels in boiler systems. Condensate water is collected and recycled from air conditioning, providing a swimming pool’s worth of distilled water every day. Waste water treatment replenishes the needs of the cooling tower used in production. When and where commercially available, renewable grid energy is preferred over non-renewable sources. Multimegawatt solar energy will be available once the panels are installed and commissioned later in the year or soon thereafter.

Climate disaster is real Over the last decade, droughts have lasted longer, hurricane winds have become stronger, floods have destroyed more and more coasts along the Pacific, Atlantic, and Indian Oceans. Habitats for people, flora, and fauna are increasingly threatened by natural phenomena more devastating than the last. Without climate action, coastal cities and ecologies would be inundated in the next few decades. Entire species could disappear as food chains are disrupted. In response, the United Nations has forged the Sustainable Development Goals (SDGs). As countries commit to the SDGs, more and more ordinary voices add to the clamor to mitigate climate risk, protect biodiversity and animal rights, and rights for people of all ages, sexual orientation, races, religion, and income opportunities. Climate disasters do not discriminate between rich and poor. Hurricanes in the US Eastern seaboard, extreme drought and wildfires followed a year later by the worst flooding in decades in the Australian East, and frost devastating French vineyards have ravaged the haves in recent years. Equally tragic were the locust invasion in East Africa due to extreme rainfall, alternating floods and drought in Brazil, and thousands killed and millions displaced in Pakistan floods Nothing galvanizes action stronger than disasters close to home. With heatwaves and wildfires in Europe and Australia, torrential rains and storm surges in the Americas and Asia, people everywhere are bombarded with bad news whenever they pick up their smartphones. In turn, activists like Greta Thunberg, David Attenborough, and Leonardo DiCaprio amplify these messages, using combinations of carrots and sticks to entice governments and brands towards further climate action, or to desist from non-sustainable policies, products, and practices.

Responsible brands can respond Brand owners in the consumer products space can lead the drive to sustainability. As ESG resonates louder among higher income consumers, higher margin brands have the opportunity to deploy more sustainable ingredients and processes in their products. Take the base and carrier oils in beauty and healthcare. Petroleum production and consumption is one of the most destructive human activities vis-à-vis climate change. Removing petroleum-based ingredients should be a brand’s number one priority. Vegetable oils are a far better alternative, of which, the most prevalent and most affordable is palm oil. True, palm oil is a far better source of carbon as an ingredient than petroleum- based oil. However, in growing the palm oil industry to its current scale, vast tracts of tropical forests across Asia, Latin America, and West Africa were cut down. Orangutans have become endangered chiefly because their homes were converted into palm plantations. In response to the global backlash against palm oil, RSPO certification seeks to greenwash away the sins of the industry. Tell that to the vanishing orangutans. In stark contrast, coconut oil has none of the environmental trauma of palm oil. Allegations of harming biodiversity levied against the coconut oil industry are largely inflated, as anecdotal cases of endangered species in small tropical islands comprise a minuscule share of the global supply. As a leading producer of coconut oil, the Philippines has 346 million coconut palms growing in 3.64 million hectares (or 27% of agricultural land area) across most of the country. Most of these coconut plantations have been passed on from father to son across many generations, some even across centuries. No forests have been converted to coconut plantations in recent years. Natura Aeropack and its siblings under listed company, D&L Industries, Inc., have expanded the scope of corporate social responsibility (CSR) into environmental, social, and governance (ESG) advocacies for the farmer communities from which they draw their coconut supply. Working with other stakeholders and adhering to emerging standards and best practices in sustainability, the company has conducted agricultural training for farmers and provided educational scholarships. Programs for traceability, coconut replanting, and other initiatives to improve the livelihood of small farmers are being planned and integrated into overall ESG programs. Brand owners may even join in these smallholder initiatives, if they so wish to engage. Natura Aeropack could show them how.

Supply Chain Management
GRI 3-3, 308-1, 408-1, 409-1 | SDG 16.5

Sustainability in the supply chain has been of increasing importance and of growing concern in the past years, especially for manufacturing companies such as D&L. Much like many others, the company has followed that trend, and continues to improve its approach towards several sustainability topics.

The company’s Supplier Selection and Assessment procedure includes an initial and succeeding regular audit where potential suppliers’ manufacturing facilities and processes, employees’ welfare and human rights, health and safety programs, compliance to government regulations, waste management, and even their own supply chains are inspected and quantitatively evaluated. All materials purchased are traceable, and the company makes it a point not to purchase materials with banned or harmful minerals or chemicals. Certifications to guarantee the quality of the goods manufactured by D&L and the processes that went into them are very important to its business, so it is absolutely necessary for the company to go through great lengths, even at the beginning stages of procurement, to ensure compliance.

A Supply Chain Management System is in place across most of the companies under the group, and is compliant with the Quality Management System ISO 9001:2015, the Environmental Management System ISO 14001:2015, and the Occupational Health And Safety Management System ISO 45001:2018. It is the direction of D&L to qualify suppliers of direct and indirect materials to qualify on the said standards.

In addition, the subsidiaries of D&L also ensure that they are compliant with other rules, regulations and standards pertaining to their respective raw materials and products. The Food Division prioritizes suppliers that will support food safety concerns in order to maintain the Food Safety System Certification (FSSC), as it is fully recognized by the Global Food Safety Initiative (GFSI). The Chemicals Division is a qualified member of the Supplier Ethical Data Exchange (SEDEX) and the Sedex Members Ethical Trade Audit (SMETA), where an ethical standard practice is being followed across customers and suppliers. It also uses materials that conforms to the regulatory requirements of the Environmental Management Bureau and other controlled chemicals that may cause harm to the public and the environment.

The logistics department maintains proper storage separating food and non-food items to ensure the safety of the products. It is a medium-term goal to implement a warehouse management system tool to equip an error- free mechanism, and achieve near-perfect picking rates.

Moving forward, the company aims to move closer to a just-in-time inventory system in order to make more efficient use of its warehouses. It has also begun looking into materials and suppliers that support the call for a “circular economy”. Constantly looking towards global market trends, D&L ensures that it is always taking the necessary steps to improve holistically.

Path to Net Zero
GRI 3-3, 305-5 | SDG 6.4

D&L strives to reduce its carbon footprint throughout its operations, by renovating facilities, managing its use of resource, ensuring environmental compliance to regulations, and preserving biodiversity.

Cocomethyl Ester (CME), commonly known as coconut biodiesel, is the Company’s biggest contribution to the Philippines GHG reduction commitments from the inception of the B2 blend requirement under RA 9637 Biofuels Act of 2006.4

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4 Republic of the Philippines, “Republic Act No. 9367,” Official Gazette, accessed March 31, 2023, https://www.officialgazette.gov.ph/2007/01/12/republic-act-no-9367/.

Facility Renovation

The LBL Building has been the headquarters for D&L since 1981. The heritage building was due for several upgrades in line with the growth of the business and new building codes. The Company has completed an extensive renovation of the building to invest in the company’s most important asset: its people.

Through efficient design, the capacity of the building was doubled, and staff facilities and workspaces were upgraded. All works were done while all business functions remained fully operational. In 2021, the Company celebrated the LBL Building’s 40th birthday with the following installations, sustainable features, and improvements:

The company uses various types of energy sources for its operations. For the office buildings, the company uses purchased electricity. For the plant operations, the company uses boilers. Meanwhile, diesel is used to run generator sets during power outages.

The company is constantly looking for ways on how to further make its operations more efficient with lower energy consumed per unit of product manufactured. These initiatives include:

To monitor the company’s progress and to champion the resources conservation initiatives, an Environmental Group within the company was formed. This group is composed of Pollution Control Officers from each business unit.

Water Consumption
GRI 3-3, 303-1, 303-3, 303-5 | SDG 6.4

In the Company’s day to day activities, water is primarily used for the operations of the cooling tower, for equipment cleaning, and for domestic uses in the office buildings such as for restroom usage, washing, and food preparation in the canteens.

The Company is proactively looking for ways on how to further reduce its water consumption. Similarly, the company’s Environmental Group, which is composed of the Pollution Control Officers from each business unit, is in charge of monitoring and championing the water conservation initiatives of the company. Some of these initiatives include:

Environmental Impact Management
GRI 3-3 | SDG 12.4, 12.5, 13.1, 15.9

Air Emissions/GHG
GRI 3-3, 305-1, 305-2, 305-6

In the normal course of operations, the Company generates greenhouse gas (GHG) emissions. Direct emissions from boilers, oil heaters, generator sets, trucks, and service vehicles represent the company’s Scope 1 emissions. Meanwhile, the energy used to light up its facilities and office buildings comprise the company’s Scope 2 emissions.

The Company is committed to reducing its emissions over time and making its operations more environmentally friendly. To reduce emissions, the company has instituted various initiatives from energy conservation to prudently replacing equipment to make operations more efficient.

Air Pollutants
GRI 3-3, 305-7

D&L is fully-compliant with all the operating condition requirements by the Department of Environment and Natural Resources (DENR) and the Environmental Management Bureau (EMB). As far as air emissions and pollution are concerned, the company is strictly abides by RA8749 or Philippine Clean Air Act.

Solid Waste
GRI 3-3, 301-1, 301-2

Waste is generated by plants and offices. In order to properly manage waste, each plant has a designated Material Recovery Facility (MRF), in compliance with R.A. 9003 for Solid Waste management. Before waste materials get transferred to the MRF, each operating section already does the first layer of waste segregation. A designated person is responsible in each MRF who receives and further sorts the waste to facilitate systematic disposition.

Wastes are classified as hazardous, non-hazardous, sellable, and garbage. Hazardous wastes are hauled by accredited treaters before being hauled off site. Non-hazardous waste may be recycled for internal use. Sellable wastes such as old plastic and steel drums, wooden and plastic pallets, cartons, packaging materials, and metal debris are sold to recycling companies. The rest are considered trash and hauled by accredited garbage collectors. The company enforces strict accreditation policies to ensure that all plant and office wastes are disposed of in accordance with the standards of the regulating government agencies.

Lastly, to increase awareness and to encourage employees to help minimize waste, the company has various programs in place such as Trash to Treasure, War on Waste (WOW), and Reduce, Reuse, Recycle, Repair, Repurpose (5R).

Hazardous Waste
GRI 3-3, 306-1, 306-3, 306-5 | SDG 6.3, 6.6, 12.4, 15.1

Hazardous wastes are properly managed in compliance with government requirements. To ensure safe handling, procedures were established in the storage, treatment, and disposal of these materials. All facilities comply with the ISO standards for Environmental Management (ISO 14001:2015) and Occupational Health and Safety (OHSAS 18001:2007).

Each company has obtained its Generator Registration Certificate from the DENR. Waste classified as hazardous based on the DENR-EMB standards are disposed of by DENR-accredited third-party treaters which have passed the stringent accreditation process of this government agency.

As part of risk assessment during the design and development stage for both finished products and packaging, the Company strictly adheres to health, safety, and environment standards to further reduce hazardous waste.

Effluents
GRI 3-3, 303-4

In addition, the company invests in various infrastructure to make its operations more sustainable. For instance, its water treatment facility is much stricter than the standards set by the Department of Environment and Natural Resources, ensuring that water released is the cleanest possible.

The Company is compliant with all environmental laws and regulations that are applicable to its business operations. Management provides a clear statement of the Company’s responsibility towards creating, maintaining, and ensuring a healthy, safe, and clean environment for sustainable growth.

In summary, the Company is committed to:

Embedded in the Company’s Code of Business Principles is its commitment to sustainable development. D&L cares for the environment and strives to meet the ever-increasing needs of the business but never forgets the conservation and preservation of nature.

The Company’s long-haul horizon goes beyond the present and stretches to generations yet to come. The company endeavors not to endanger but rather enhance the ecosystem. The company also recognizes the importance of biodiversity and supports the global community in protecting it.

D&L is fully-compliant, and in many cases implements stricter measures than what is required by relevant laws such as: