Instructional Material

INSTRUCTIONAL MATERIAL
FOR
ACCO 30173 –
SUSTAINABILITY AND
STRATEGIC AUDIT
(Simplified Module for the New Normal, Second Semester of AY – 2020-2021)
COMPILED BY:
PROF. MARK ANECITO R. PERLAS, CPA
All rights reserved. December 28, 2020
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SUSTAINABILITY AND STRATEGIC AUDIT
SUBJECT CODE : ACCO 30173

PRE-REQUISITE : ACCO 20163 GOVERNANCE, BUSINESS ETHICS, RISK
MANAGEMENT, AND INTERNAL CONTROL
CREDIT : THREE (3) UNITS
COURSE DESCRIPTION
This course complements somehow the course in corporate social responsibility and this
provides a holistic overview of the environmental, social, civic, community, economic and
governance aspects of sustainability responsibility management and how to address them
strategically to maximize business and product performance to meet changing stakeholders’
opportunities and expectations. Students will have the opportunity to learn about a variety of
sustainability challenges faced by a variety of entities or industry sectors as they conduct their
business, such as:
• mitigation and adaptation to climate change;

• energy, water, materials and resource management;
• minimizing supply chain risks that can derail business continuity.
The need to approach these broad challenges in a strategic manner is discussed, along with best
practices that include:
• going beyond corporate social responsibility;

• sustainability reporting frameworks to manage and communicate performance; and
• the importance of life cycle thinking for credible environmental marketing activities.
Students will gain a cross-sector, cross-functional, cross-disciplinary perspective that will prepare
to lead and facilitate sustainability management programs in virtually any industry. The importance
of integrating strategic sustainability management into the interconnected network of systems that
make up the business -to-business value chain will be discussed. The value of strategically
managing sustainability impacts throughout the full life cycle of products will also be addressed.
Internationally recognized frameworks, best practices, methodologies, tools and standards will be
introduced as vehicles to tie the concepts together for practical application of solutions that
support leadership in sustainability performance improvement.
This course comprehensively explains the theory and procedures if necessary, behind and
involving the sustainability reporting and strategic audit of such reporting by the business entities.
GOALS OF THE COLLEGE OF ACCOUNTANCY & FINANCE
The College aims to:
1. To ensure the development of globally-competitive professionals, managers and leaders

in the field of accountancy & finance and other allied disciplines through excellent, relevant
and responsive accountancy & finance education, accessible to all Filipinos particularly to
the socio-economically disadvantaged population as well as to the global community.
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2. Ascertain the generation and diffusion of knowledge and technologies in the broad range
of disciplines, relevant and allied to accountancy & finance through continuing education
and research, information & communication technology, networking, and linkages with
local, national and foreign organizations.
3. Strengthen / enhance its organizational capability to become the leader in advocating

reforms and innovations and fulfilling its social responsibility commitment through research
and development studies, extension and consultative services.
OBJECTIVES OF THE COLLEGE OF ACCOUNTANCY & FINANCE
1. Provide and sustain the excellent quality education in accountancy and finance that meets
international standards and broaden opportunities to deserving students.
2. Generate and diffuse knowledge through intensive research and extension to make
accountancy & finance education both relevant and responsive to the dynamically
changing domestic and international environment;
3. Provide the students with unique opportunities for personal and professional growth by
improving their skills for learning, analyzing and critical thinking;
4. Encourage the students to express/convey their own ideas steered towards moral
aesthetic and cultural values, fostering desirable attitudes and personal discipline in the
field of accountancy and finance; and
5. Ensure the competences of our graduates through the continuous professional education
of their dedicated, socially-responsible, research-oriented and computer literate faculty
members.
COURSE OBJECTIVES:
At the end of the course, the students are expected to have:
a. Identify the drivers, risks, challenges and opportunities associated with addressing
sustainability management challenges.
b. Apply the guiding principles and values that are a foundation for a holistic mindset that
guides an effective sustainability vision, strategy and implementation plans.
c. Measure the impact of an enterprise on the environment, society and economy using
benchmarked indexes, map an enterprise sustainability goals
d. Identify the factors in developing a credible business case for common sustainability
management approaches that deliver actual improvements and breakthrough
sustainability performance.
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e. Navigate common and conflicting needs, perspectives and interests of multiple
stakeholder groups, cross-sector, cross-disciplinary, cross-functional and industry-specific
perspectives.
f. Promote strategic benefits of integrating and engaging the business value chain from
suppliers through to end customers for achieving and communicating breakthrough
sustainability outcomes.
g. Propose to incorporate sustainability strategy into an overall enterprise strategy
h. Apply your understanding of sustainability at three levels: societal, organizational, and

individual. Identify next steps to better leverage sustainable development.
COURSE OUTLINE
Week Topic Learning Outcomes

At the end of the lecture, the
learner will be able to:
• Understand all the policies and in-
house classroom management of the
• Orientation of the course syllabus, grading professor.
1 system to be used, class management • Make students at ease and have an
policies, preferred requirements by the eagerness in learning new knowledge
respective faculty for completing the course in the world of accounting.
successfully. • Acquire the relation of the subject to
• Overview of the Subject their course and ultimately give
importance to each topic to be
discussed in the succeeding
meetings.
• Describe state of the world and the
country; introduce the sustainability
mindset.
After thorough discussion of the
topics, at the end of the lecture the learner
will be able to:
• Understand the nature of
sustainability reporting.
• Learn the background and trend of
Introduction to Sustainability Reporting sustainability reporting.
2 • Appreciate the need and benefits of
sustainability reporting.
• Grasp the Securities and Exchange
Commission’s (SEC) vision and
action plan on sustainability
reporting in the Philippines.
• Know the role of accountants in
sustainability reporting
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will be able to:
• Differentiate sustainability reporting
from financial reporting.
• Know the provisions of SEC
Memorandum Circular No. 4, series
of 2019, including its guidelines
• Understand the nature of Global
3 Sustainability Reporting Framework and Reporting Iniative (GRI) Standards.
Concepts • Familiarize with the foundation and
general disclosures under GRI.
• Grasp the different concepts
underlying GRI reports such as
materiality and management
approach.
will be able to:
• Identify the nature of economic and
environmental impact as part of GRI
Standards.
• Understand and describe the different
Economic and Environmental Impact – GRI disclosures under economic and
4-5 Series 200-206 and 300-308 environmental impact per GRI.
• Familiarize with the related reporting
template as mentioned by SEC Memo
Circular No. 4, s, 2019.
• Apply the minimum disclosure
requirements of GRI and SEC Memo
• State existing relevant laws and
regulations in the Philippines that
relates to this GRI impact.
will be able to:
• Identify the nature of social impact as
part of GRI Standards.
• Describe the different components of
Social Impact – GRI Series 400-419 and UN SDGs.
6 Sustainable Development Goals • Understand and describe the different
disclosures under social impact per
GRI and UN SDGs.
• Familiarize with the related reporting
template as mentioned by SEC Memo
Circular No. 4, s, 2019.
• Apply the minimum disclosure
requirements of GRI and SEC Memo
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• State existing relevant laws and
regulations in the Philippines that
relates to this GRI impact and UN
SDGs.
will be able to:
• Identify the nature of other reporting
frameworks in sustainability reporting.
• Differentiate GRI with other reporting
Other Reporting Frameworks and Overview frameworks in sustainability reporting.
7-8 of Sustainability Assurance • Familiarize with the nature and need
of assurance engagement for
sustainability reports.
• Know the elements of assurance
report in sustainability reporting.
• Check the application of assurance
reports on sustainability reporting in
the Philippines.
Midterm Departmental Examinations
will be able to:
• Define stakeholders and stakeholder
engagement.
• Understand the benefits of
stakeholder engagement.
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Corporate Stakeholder Engagement • Familiarize with the design of
stakeholder engagement plan.
• Know the method and forms of
stakeholder engagements.
• Know the principles of successful
stakeholder engagement.
will be able to:
• Define eco-business and
11 Sustainability Management and Reporting environmental management.
Approaches • Describe lean manufacturing.
• Know the concept of sustainability
strategy.
• Understand the forms of sustainability
reporting.
will be able to:
Product Life Cycle Management
12 • Define product life cycle and product
life cycle management.
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• Understand the product life cycle
management stages.
• Know how to measure and evaluate
product life cycle management.
• Discuss other related concepts under
product life cycle.
• Cite example of product life cycle.
will be able to:
• Describe the design for sustainability
and design management (ISO 9001)
• Known supply chain sustainability and
sustainability procurement.
• Understand environmental accounting
13-14 Product Sustainability Tools, Marketing and
and marketing.
Stewardship
• Familiarize with embedded energy
and water (PAS 2050) and
greenwashing.
• Identify product stewardship and
extended producer responsibility.
will be able to:
• Understand the current status of
sustainability reporting in the
Philippines.
• Identify the companies, particularly
Sustainability Practices of Selected Public publicly listed companies (PLCs),
15 Companies in the Philippines which have best sustainability
practices
• Familiarize with the nature and details
of sustainability reports of selected
PLCs
• Appreciate the need of sustainability
reporting in the Philippine setting.

will be able to:
• Prepare proposal for a sustainability
Sustainability Practice/s Proposal for practice to implement in a company.
16-17 Reporting (Application) • Integrate the concepts applied from
previous discussions to support the
project proposal.
• Familiarize with the minimum
reporting requirements under SEC
Memo No. 4, s. 2019
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• Have clear understanding of the
project proposal with references of the
details presented.
• Appreciate the need of sustainability
reporting in the Philippine setting.
FINAL DEPARMENTAL EXAMINATIONS
OVERALL TOTAL NUMBER OF HOURS 54
REFERENCES:
• SEC Memorandum Circular No. 4, series of 2019, including its guidelines
• Global Reporting Iniative Standards
• Dow Jones Sustainability Index
• Sustainability Accounting Standards
• Various resources on stakeholder engagement, sustainability and product life cycle concepts
• Sample Sustainability Reports/Annual Reports in the Philippines
• Assurance Engagement Framework in the Philippines
• Philippine Financial Reporting Standards
• https://www.sec.gov.ph/
• https://www.globalreporting.org/
Grading System
Quizzes 50%
Assignments, Cases, Etc. 20%
Departmental examination
(Midterm + Final Exam/2) 30%
Total 100%
Final Grade = (1st Grading Period + 2nd Grading Period)

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The committee should adhere to the guidelines issued by the Dean regarding the giving of
the Departmental Examination. Computation of grade, encoding of grades to SIS Faculty
Module and Submission of Grade Sheets to the Office.
ACADEMIC HONESTY
All ACCO 30173 students are expected to be academically honest. Cheating, lying and
other forms of immoral and unethical behavior will not be tolerated. Any student found guilty
of cheating in examinations will (at a minimum) receive a grade of 5.0 or failure in the course
requirement or in the course.
END OF SECOND SEMESTER
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Prepared by:
Prof. Mark Anecito R. Perlas

Instructor
Reviewed by:
Prof. Marietta M. Doquenia

Chairperson – Management Accounting
Noted by:
Prof. Lilian DM. Litonjua

Dean
Approved by:
Dr. Emanuel C. De Guzman

Vice-President for Academic Affairs
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Lesson 1 – Introduction to Sustainability Reporting
Overview:
‘Sustainability revolves around the idea that, as the human population and demand for
food and finite natural resources grow, in order to ensure our own survival and that of future
generations, we need to recognise and adapt our behaviours so their impact on our natural
environment is minimised,’ says Elaine Conway, senior lecturer in accounting and finance at the
University of Derby.
In a business context, sustainability is about better business. ‘Better for society, better for
the planet and better for companies’ own long-term growth,’ says Charlie Ashford, senior
researcher at global sustainability consultancy Corporate Citizenship.
‘By working to understand and improve their wider economic, social and environmental
impacts, businesses around the world can create more resilient growth for the economy and help
to find solutions to global issues.’
Learning Objective:
After studying this lesson, the student should:

1. Understand the nature of sustainability reporting.
2. Learn the background and trend of sustainability reporting.
3. Appreciate the need and benefits of sustainability reporting.
4. Grasp the Securities and Exchange Commission’s (SEC) vision and action plan on
sustainability reporting in the Philippines.
5. Know the role of accountants in sustainability reporting.
Course Materials:
Nature of Sustainability and Sustainability Reporting
Sustainability is defined as “development that meets the needs of the present without
compromising the ability of future generations to meet their own needs”. It focuses on how a
company manages its economic environmental and social impacts, risks and opportunities.
Disclosure on these non-financial matters are done through sustainability reporting (also known
as EESG (economic, environmental, social and governance) reporting, non-financial reporting, or
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triple bottom line accounting), which is a central element of modern corporate reporting that
includes strategy, governance and performance.
Sustainability reporting is an organization’s practice of reporting publicly on its significant

economic environmental and/or social impacts, in accordance with globally accepted standards.
Such disclosures enable organizations to measure, understand and communicate their EESG
performance and then set goals and manage change more effectively. Often, they go hand in
hand with the setting of performance targets related to EESG impacts.
Sustainability reporting also benefits stakeholders interested in an organization’s ability to

create value over time, including employees, customers, suppliers, investors, business partners,
local communities’ legislators, regulators, and policy makers. This promotes transparency and
accountability, empowering stakeholders to make informed decisions and helps the company
manage its EESG impacts.
Conceptual Background of Sustainability Reporting
Sustainable development as a concept was launched in the late 1980s. The UN’s
Brundtland report defined it as “development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. Sustainability recognizes
the interdependence of economic, social and environmental factors. With reference to future
generations, it is also forward-looking. On the macroeconomic level, sustainability has been
linked to arguments about national accounting and limitations of using Gross Domestic Product
(GDP) as an indicator of economic performance and social progress. For example, traffic jams
may increase GDP as a result of the increased use of gasoline, but obviously not the quality of
life or the state of the environment. As a consequence, there is increasing interest in developing
new welfare indexes, such as the creation of gross happiness indexes, originally invented in
Bhutan.
There is also the development of environmental accounting. Environmental accounts have

been created to complement national financial accounts, by detailing the full economic costs of
natural resources used and environmental effects caused. Sustainability concerns have been
introduced to the debate about organization-level annual reporting as well. In most countries,
private and public organizations are required by law to publish an annual report on their financial
performance. It contains all the relevant financial information and is presented in a structured
manner. Usually, a financial report or financial statement is audited by an external auditor in order
to provide the user of the accounts with reasonable assurance about its completeness and
accuracy and, in the public sector, to attest the proper financial accountability of the audited entity.
Corporate decision-making is often heavily reliant on financial information, although this

information may not give a complete picture about an organization and the environment in which
it operates. The success of an organization might not only depend on its financial results, but also
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on issues such as its capacity to reduce greenhouse gases or its efficient use of resources.
Environmental and sustainability issues are not only a moral concern, but are increasingly
important because of their financial significance. Another example is how an organization can act
in order to maintain employee and customer satisfaction. These examples are related to the
growing importance of corporate governance in the private sector and good governance in the
public sector. These kinds of issues cannot be reported solely through the use of traditional
financial reporting. In order to provide such a broader perspective on their performance, some
organizations have started to report their performance on environmental issues, social
responsibility or sustainable development, alongside financial issues.
Sustainability reporting is a systematic tool to gather and present sustainability information

for the management process, and to stakeholders such as employees, shareholders, customers,
local communities, NGOs, investors or financial analysts. Whether organizations choose to report
or not, information that affects the environment and communities has become more easily
available with globalization and social media platforms.
In the late 1980s, the first voluntary environmental reports were published. Companies
with environmentally sensitive operations, especially large polluters, started to develop
sustainability reporting. This was done partly as a response to pressure from non-governmental
organizations that criticized the power of multinational companies. This indicates the importance
of sustainability reporting as a tool in communicating with stakeholders and managing business
reputation. At the same time, the development of voluntary codes of environmental conduct and
eco-auditing led to the development of environmental management systems (EMS) and the
creation of standards, such as the ISO14000 standard series. The ISO 14001 standard, which
provides requirements for environmental management systems, was first launched in 1996. The
European Union soon launched its own Eco-Management and Audit Scheme, EMAS.
Since the mid-1990s, sustainability reporting has developed in various directions.

Companies with socially sensitive operations started to develop corporate social responsibility
(CSR) reporting, which had some roots in earlier philanthropic movements. The European Union,
for instance, currently defines CSR simply as “the responsibility of enterprises for their impacts on
society”. One of the drivers of CSR reporting was concerns about labor conditions in supply chains
that were becoming more complex at the same time that human rights and particularly the use of
child labor had become concerns for consumers.
Sustainability reporting developments have taken different forms, one of them being triple
bottom line (TBL) reporting, where the three dimensions are social, economic and environmental,
or people, planet and profit. At the same time, global organizations supporting sustainability
reporting were founded. One of them is the Global Reporting Initiative (GRI), which has developed
a voluntary sustainability reporting framework. In addition, there are country-specific initiatives,
such as Connected Reporting, developed in the United Kingdom,17 which aims to provide a new
approach to corporate reporting and improve annual reports and accounts.
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The social emphasis of sustainability is visible in the UN’s Global Compact, which was
launched at the turn of the millennium. It encourages businesses worldwide to adopt sustainable
and socially responsible policies and to report on their implementation. It concentrates on the
areas of human rights, labor, environment and anti-corruption. The OECD also has Guidelines for
Multinational Enterprises that are recommendations by to governments, aimed at providing
voluntary principles for responsible business conduct. One example of changing concerns is that
the 2000 update of these Guidelines added recommendations on the elimination of child labor
and forced labor, and new chapters on combating corruption and consumer protection, whereas
the 2011 update contained a new chapter on human rights.20 Also, the attention paid to climate
change issues is now more pronounced.
Another development was the launch of the ISO 26000 guidance for social responsibility
in 2004. It is voluntary guidance and is not used as a certification standard unlike other ISO
standards. According to the ISO 26000 guidance, the objective of social responsibility is to
contribute to sustainable development. Social responsibility has the organization as its focus and
concerns its responsibilities to society and the environment. According to ISO 26000, the core
subjects of social responsibility are issues related to organizational governance, human rights,
labor practices, the environment, fair operating practices, consumer issues, and community
involvement and development. ISO 26000, however, notes that as society’s concerns change, its
expectations of organizations also change, and therefore the elements of social responsibility are
liable to change.
In addition to wider social and environmental reporting, the growing concern about climate
change has made carbon reporting more popular. One example is the Carbon Disclosure Project,
which has encouraged companies and cities around the world to measure and disclose their
greenhouse gas emissions, climate change risks and water strategies.
Sustainability Reporting in the Philippines
Consequently, Sustainability Reporting has emerged as a common practice for companies

globally. In fact, 93% of the world’s largest 250 companies and 75% of the top 100 companies in
49 countries report on sustainability. However, for the Philippines, less than 22% of publicly-listed
companies have published a report on sustainability impacts and performances.
The need to promote sustainability reporting to Philippine companies served as the

impetus for the SEC to include Principle 10 in the Code of Corporate Governance for Publicly-
Listed Companies (PLCs) stating that companies should ensure that material and reportable non-
financial and sustainability issues are disclosed. Recommendation 10.1 of the same Code further
provides as follow:
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“The board should have a clear and focused policy on the disclosure of non-financial
information, with emphasis on the management of economic, environmental, social and
governance (EESG) issues of its business, which underpin sustainability. Companies should
adopt a globally recognized standard/framework in reporting sustainability and non-financial
issues.”
The Securities and Exchange Commission (SEC) encouraged the corporate sector to
integrate sustainability in their business practices, as it formally launched the Sustainability
Reporting Guidelines for Publicly Listed Companies (PLCs) during the SEC-PSE Conference on
Building a Sustainable Business Community. The Commission presented the business case for
sustainability reporting, in particular, during the conference it held together with the Philippine
Stock Exchange (PSE) and in partnership with the Global Reporting Initiative (GRI) and Australia’s
Department of Foreign Affairs and Trade (DFAT) on April 12, 2019.
"With the issuance of the Sustainability Reporting Guidelines, your SEC has high hopes
that PLCs would not only be made aware of sustainability but would make it a part of their
priorities," SEC Chairperson Emilio B. Aquino said. "We hope we would all be reminded that the
responsibility of creating a sustainable environment is an obligation so basic and imperative that
it precedes any kind of law. It is a call for the preservation of humankind, of our generation and of
the generations to come."
The PSE also underscored the role of businesses in sustainable development and
acknowledged the Commission’s support for sustainability initiatives in the Philippine capital
market. "Companies have the inherent responsibility to take care of human, social and
environmental capitals,” PSE President Ramon S. Monzon said.
SEC’s Vision on Sustainability Reporting
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SEC’s Action Plan on Sustainability Reporting
1. Creation of a Technical Working Group
Commission En Banc Resolution dated 16 July 2020: Approval of the Proposed Formation of
a Technical Working Group (TWG) for the Drafting of the SEC Sustainability Reports (SR)
2. Strict Monitoring of SR Submissions
The SEC’s Corporate Governance Division shall strictly monitor SR submissions and study
the trends for purposes of policy formulation.
3. Strict Imposition of Penalty for Non-Submission of SR

The SEC’s Corporate Governance Division shall strictly monitor SR submissions impose
penalty for non-submission. Non-attachment of the SR to the Annual Report shall be subject
to the penalty for Incomplete Annual Report provided SEC Memorandum Circular No. 6,
Series 2005 (Consolidated Scale of Fines).
4. SR Workshops Conducted by the SEC
5. Issuance of SEC Memorandum Circulars
• Evaluate the SRs submitted.
• Issue Memorandum Circulars to adjust approach (from “comply or explain mandatory) and
coverage of compliance with the SR guidelines (expanded coverage to include all types of
corporations).
6. Coordination with Different Market Groups on Sustainability Reporting
• HS MARKIT
• S&P GLOBAL
• PHILIPPINE BUSINESS COALITION FOR WOMEN EMPOWERMENT (PBCWE)
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• ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD)
• ASIAN INSTITUTE OF MANAGEMENT (AIM)
• OTHER ENTITIES
• COORDINATING WITH DIFFERENT ORGANIZATIONS (e.g.ASEAN CAPITAL
MARKETS FORUM)
Benefits of Sustainability Reporting
Internal Benefits
1. Identification Effective management of sustainability risks and opportunities

The process involved in sustainability reporting allows companies to know and better
understand their sustainability risks and opportunities. This would in turn result to a more effective
assessment and management of said risks and opportunities.
2. Sustainable Vision, Strategy and Business Plans

Sustainability reporting encourages companies to assess, and if necessary, to update,
their visions, strategies and business plans to ensure that sustainability is embedded in their
organizations. It gives companies the opportunity to determine the necessary changes in their
vision strategies and performance goals/targets for more sustainable operations.
3. Improved management systems

Sustainability reporting involves tracking and gathering data which when evaluated can
identify the areas that need improvement. In addition, public reporting on performance motivates
companies to improve in succeeding reporting periods, thus, resulting to improvement in
management systems, such as streamlining of processes, reduction of costs and over-all
improvement in efficiency and productivity.
4. Motivated workforce
Creating a sustainability report requires a concerted effort from companies’ employees,
exposing them to the companies’ commitment to sustainability. Knowing that the company is
environmentally and socially conscious increases morale and motivates the workforce to work
hard for the company.
External Benefits
1. Investor attractiveness
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Institutional investors are now looking at the ESG practices of companies and makes this
a key element in their investment analysis and decisions. In CFA Institute Survey done in 2017,
73% of the survey respondents answered that they take into account ESG issues in their
investment analysis and decisions. Sustainability reporting, thus, provides institutional investors
easy access to ESG information of companies. At the same time, it allows companies to discuss
their sustainability performance in a clear and concise manner.
2. Improved company reputation and brand value

Having a sustainability report indicates the companies’ commitment to full transparency
and accurate and complete reporting on both positive and negative news. Moreover, it shows the
companies’ efforts towards sustainability. This improves the company’s image and builds trust
and respect for the company. Thereby, improving company reputation and brand value.
3. Stakeholder Engagement
The process of sustainability reporting provides companies with opportunities for stronger
engagement with their stakeholders, which in turn can result in better relationships with them.
Stakeholders would feel empowered while the companies can gain valuable insights beneficial to
their sustainability journey.
4. Competitive Advantage
Awareness on sustainability reporting is still quite low for most Philippine companies. As
such, having a sustainability report may provide companies with a competitive advantage.
Role of Professional Accountants in Sustainability Reporting
Professional accountants working in commerce, industry, financial services, education,

and the public and not-for-profit sectors undertake diverse roles in leadership and management
(e.g., chief executive officer, chief financial officer, chief operating officer), operations
(e.g., management accountant or performance analyst), management control (e.g., risk manager,
compliance manager, internal auditor) and in stakeholder communications (e.g., head of
reporting, financial controller, investor relations). IFAC refers to these accountants collectively as
professional accountants in business.
In all these roles, professional accountants in business are involved in activities
and decisions that influence their organization’s ability to create and preserve value over time.
Delivering continuing value to providers of financial capital and other stakeholders is the key
to business resilience and requires longer-term thinking on a broader range of matters.
Professional accountants need to consider how, through their work and positions of influence,
they can contribute to business resilience and influence organizations to integrate sustainability
matters into organizational strategy, finance, operations, and communications.
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Accountants have historically provided stewardship of an organization’s assets and been
responsible for sound financial management and reporting. However, their professionalism and
professional skills enable them to effectively exercise stewardship of a broader range of assets
and capitals upon which an organization depends. Evidence suggests they are increasingly taking
on this broader stewardship role. In a business partnering capacity, accountants are expected
to increase their support of strategic and operational decision making in addition to fulfilling
traditional stewardship responsibilities. This can involve helping organizations respond
to uncertainty, improve decision making, and identify new business opportunities, and innovative
processes, products, and services. Professional accountants are poised to help their
organizations develop more sustainable business practices.
Sustainability needs to be measured, reported and assured and all these areas fall under
accountants’ remit. ‘Accountants have an important role to play in helping companies embed
sustainability into their corporate strategies, and are very well placed to do so,’ confirms Gordon
Hewitt, sustainability adviser at Association of Certified Charted Accountants (ACCA). ‘A
company’s finance function is responsible for producing much of the management information
that forms the basis for internal strategy as well as reports for external stakeholders.’
A business can only modify its behavior if they have good quality, trusted information.
‘When looking to address sustainability issues, companies can only manage what they can
measure so it’s important that accurate, complete and reliable information gets collected,’ says
Hewitt. In organizations where sustainability reporting is yet to be adopted, accountants have just
the right knowledge and skills to help develop a credible standard of reporting. ‘They recognise
the need to be accountable to external stakeholders and the need to operate to good governance
and ethical standards; they can develop performance metrics and monitoring/auditing systems,
they can set budgets, produce strategic plans and manage risk,’ says Conway.
Many accountants are also good team-players and able to work with colleagues in the
areas of the business beyond the finance function, which is important as sustainability reporting
requires inputs from across the organization and incorporates a lot of non-financial data.
‘However, they must also be prepared to acquire new skills in developing verifiable non-financial
measures for issues that cannot be easily monetized, and in enhancing estimation techniques
and forward planning, especially in areas that are more subjective than many traditional
accounting measures such as environmental or health impacts,’ points out Conway.
Practice clients also now expect their accountants to be ‘trusted business advisers’,
including on the issues of corporate sustainability, rather than just ‘number-crunchers’. ‘The
accountant’s role has shifted over the past 20 years from a reporter of historical performance to
being much more the forecaster and the business planner,’ says Russell. ‘This trend will almost
certainly continue as the financial services industry is now increasingly pointing out that historic
performance is no indication of future performance.’
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What Can Professional Accountants in Business Do?
To be effective business partners in the various roles they perform, professional
accountants can focus on the following actions:
• IDENTIFY AND CONNECT trends and impacts that are important to the organization
and the connection to the organization’s strategy, business model, and performance.
• INTEGRATE significant natural and social capital issues into management information
used to formulate strategies, plans, and targets, and investment decisions.
• ASSESS the benefits of responding to environmental and social matters, for example
how they contribute to value creation, cost reduction, or revenue generation, as well as other
benefits, such as making the organizations more attractive to employees or improving
its reputation.
• ORGANIZE systems, processes, and people to support decision making and ensure that
what matters gets measured and managed.
• LINK TO VALUE CREATION to ensure resources are used effectively in creating value
for shareholders, customers, and other stakeholders.
• DRIVE EFFICIENCY through reducing waste and lowering costs.
• PROVIDE CREDIBILITY to data and information through effective governance and
oversight.
• COMMUNICATE clearly to facilitate transparency through stakeholder communications
and disclosures supported by appropriate reporting frameworks, such as integrated reporting.
ACTIVITY
Sustainability “Audit” and Personal Sustainability Plan
The theme to this assignment is “accountability.” It is really easy for most of us to see the
problems, flaws and mistakes of others; in turn, this makes it easy to criticize, to look down upon,
and to get mad about the behavior of others. At the same time, it’s also easy for most of us to
justify our own behavior to ourselves; it can be really difficult to look inward and face up to our
own perceived shortcomings. So, what changes could you personally make to lead a more
sustainable life? For this assignment, you should complete the following:
1. The Inventory: Take an inventory of your life for one week, and consider everything that you do
as it relates to sustainability. This should include what you buy and the services that you use, the
food that you eat, what you throw away, the decisions that you make or choose not to make (is
passive acceptance as bad as doing it yourself?), anything and everything. The level of detail is
up to you, but what you should be considering is how your decisions relate or could relate to
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Sustainability. Capture this information in some sort of journal that allows you to tally this up at
the end of the week.
a. Be sure to calculate your carbon footprint as part of the inventory. Go to the Carbon
Footprint Calculator webpage, create an account, and calculate your carbon footprint. You
will be looking at the flows of energy and materials that you use on average. You may also
ask people who are living with you to engage in this assessment. What is your global
footprint? How many earths does it take to sustain your lifestyle? Capture a digital image
of the results page and post to MS Word.
b. Don’t forget your social impact. (For instance, do you volunteer your time or give money
to a particular cause? On the negative, is your residence a constant source of noise or
odor for your neighbors?)
2. The Changes: Then, what are the implications of this finding? What are some of the things that
you could change to lessen your impact? Consider at least 10 changes that you could make to
lead a more sustainable life and rank them 1-10 from the most practical to the least. Some
categories to consider regarding environmental impacts include energy use, consumer choices,
food choices, personal action, waste disposal and recycling, transportation. Again, be sure to
include some changes to improve your social impacts.
3. The Upshot: Look carefully at each proposal for yourself, being critical, practical and honest.
Consider the pros and cons. Consider your time, money and life situation. What is the likelihood
that you actually will make these changes in your life to live more sustainably? If not now, then
when? In systems language, discuss the factors that might enable or constrain you from getting
the improvement in sustainability. (Consider also your own mental model of the world.) Draw a
simple system map that shows feedback loops.
Importantly, your grade has nothing to do with the choices that you make. If you really
analyze your daily decisions and figure out that you’ve been making some poor choices for no
good reasons, then that’s an excellent revelation. If you feel like you should be making changes,
but you can’t afford it or you’re just not ready to, then that’s an excellent acknowledgement. Don’t
be embarrassed or ashamed because of your choices. Please do not try to paint yourself as an
angel either because we can all benefit by taking an honest look at ourselves. Just be analytical.
You should present the results of your investigation in the form of a brief memo to yourself
1000-1500 words). The memo will be assessed based on clarity of thought, organization,
communication skills, and quality of the context. While not required, feel free to use photos,
graphics, sketches, diagrams, charts, etc., to explain your ideas. A key point of the audit is that it
should be supported with analysis.
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Lesson 2 – Sustainability Reporting Framework and Concepts
Overview:
A sustainable strategy can lead to business resilience by enabling an organization

to create value for its shareholders while it also contributes to a sustainable society by meeting
the needs of this generation without sacrificing future generations. A truly sustainable strategy is
one that integrates material sustainability issues, leading to business models that enable net
positive economic, environmental, and social impacts. For example, Ikea strives for resource
independence by encouraging all waste be turned into resources; energy independence by being
a leader in renewable energy; and becoming more energy efficient throughout its operations and
supply chain.
Organizations that are proactively changing their business models to respond

to sustainability challenges typically have an external and integrated focus that continually looks
outside the organization to help gain a deeper understanding of:
• how value can be created over time given the capitals the organization relies upon and
affects, and how the business model may need to adapt;
• the nature of opportunities and threats arising from megatrends, such as natural resource
depletion and scarcity, climate change, population growth, urbanization, and growing middle
class, which can ultimately drive sustainable growth;
• stakeholder perceptions of how the organization’s activities affect and are affected by
society. Meaningful stakeholder engagement can also help facilitate pooling of resources in a way
that helps multiple parties gain insights and knowledge, solve problems, and reach goals and
targets that none of them could reach alone; and
• how changing consumer preferences can inspire the development of new products and
services that meet customer demand while also improving efficiency. Consumers are also
increasingly expecting organizations to be more accountable, particularly by demanding products
and services with a lower impact on the environment and that follow just labor laws and practices
globally.
Learning Objective:

1. Differentiate sustainability reporting from financial reporting.
2. Know the provisions of SEC Memorandum Circular No. 4, series of 2019, including its
guidelines
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3. Understand the nature of Global Reporting Iniative (GRI) Standards.
4. Familiarize with the foundation and general disclosures under GRI.
5. Grasp the different concepts underlying GRI reports such as materiality and management
approach.
Course Materials:
Sustainability accounting entails systems, methods, and processes of creating

sustainability information for transparency, accountability, and decision-making purposes. This
includes the identification of relevant sustainability issues of the company, the definition of
indicators and measures, data collection, overall performance tracking and measurement, as well
as the communication with to internal and external information recipients.
Sustainability information includes both financial and non-financial information. Financial

information has a direct link with the financial accounting system and is expressed in monetary
units. Non-financial information means that it is not presented in monetary terms and is not based
on an accounting standard. Non-financial information can be both quantitative, such as tons (or
units) of greenhouse gas, or qualitative, such as governance processes, the reputation of an
organization or the organization’s impact on the state of biodiversity. Non-financial information is
often more difficult to handle compared with financial information because there are generally no
accepted reporting principles and the data can take many different forms. It is often the case that
this information is qualitative and can be difficult to measure and access. These difficulties should
not limit the use of non-financial information because this kind of information might be very
relevant to information users, whether citizens, investors or society at large.
A Dutch project has defined non-financial information in the public sector as information
that comprises all quantitative and qualitative data on the policy pursued, the business operations
and results of this policy in the form of output or outcome, without a direct link with a financial
registration system. As noted above, sustainability information is not solely non-financial
information. Sustainability information may include financial information, although sustainability
reporting practices show only little use of monetary values in disclosures. Sustainability
information, however, always includes some non-financial elements.
For instance, an organization can measure and present information related to energy in
financial terms referring to expenditure on energy. In non-financial terms it could be about carbon
dioxide emissions where the distinction between energy gained from renewable and non-
renewable sources also makes a difference. Some of the environmental factors are quite easily
converted into financial terms. Other indicators, for example, attention to biodiversity and
ecosystem services, might have consequences that are less easy to calculate in monetary terms.
The same is often the case with social issues that could range from employee satisfaction to the
number of women or ethnic minorities in management positions – issues that are difficult to
express as, and often unnecessary to turn into, financial figures. It doesn’t, however, mean that
they would be less important.
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Consequently, for sustainability to be measurable and reportable, performance indicators need to
be chosen. For sustainability reporting to be meaningful, it needs to be connected to the strategy
of an organization. Therefore, the indicators need to be relevant for the organization. There is a
risk that the indicators chosen will not be the best possible ones with reference to sustainability.
For example, the amount of recycled waste could be less important than whether the organization
was able to reduce the creation of waste in the first place. In addition, it is important to remember
that sustainability information is not only about minimizing negative effects (e.g., greenhouse gas
emissions) and preventing negative issues (e.g., accidents having environmental or social
implications). It is also about enhancing positive impacts, such as using more sustainable products
or production methods, innovative new services, or increasing the wellbeing of employees.
Differences between Sustainability Reporting and Financial Reporting
Sustainability Reporting Guidelines for Publicly-Listed Companies
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On 18 February 2019, the Securities and Exchange Commission (SEC) issued
Memorandum Circular (MC) No. 4, Sustainability Reporting Guidelines for Publicly-Listed
Companies (the Guidelines), to promote sustainability reporting and make it relevant for
Philippine publicly-listed companies (PLCs). The Guidelines is intended to help PLCs assess and
manage non-financial performance across Economic, Environmental and Social aspects of their
organization and enable PLCs to measure and monitor their contributions towards achieving
universal targets of sustainability, such as United Nations Sustainable Development Goals, as
well as national policies and programs, such as AmBisyon Natin 2040.
Submission with SEC Form 17-A

The reporting template (Annex A of the Guidelines) shall be submitted together with the
company's Annual Report (SEC Form 17-A). The first report shall be attached to the 2019
Annual Report to be submitted in 2020.
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. Companies may choose to attach the whole sustainability
report to their Annual Report or just include a statement providing a link to said report.
Comply or Explain Approach

The Guidelines shall be adopted on a "comply or explain" approach for the first three years
upon implementation. By "comply or explain", it means the companies would be required to attach
the template to their Annual Reports but they can provide explanations for items where they still
have no available data on.
Penalty for Non-attachment of the Sustainability Report to the Annual Report

Non-attachment of the Sustainability Report to the Annual Report shall be subject to the penalty
for Incomplete Annual Report provided under SEC MC No. 6, Series of 2015, Consolidated Scale
of Fines. This SEC MC No. 4 shall take effect fifteen (15) days after its publication in two (2)
newspapers of general circulation.
Sustainability Reporting Framework
The sustainability reporting guidelines is crafted for PLCs operating in the Philippines with
a goal of making sustainability reporting relevant and value-adding for companies. The Guidelines
focuses on economic, environmental and social disclosures since governance disclosures are
made in the Integrated Annual Corporate Governance Report (I-ACGR) submitted separately to
SEC.
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Beyond the purpose of transparency, it is designed to help PLCs assess their non-financial
performance across environment, economic, and social aspects of their organization to optimize
business operations, improve competitiveness, and long-term success. Disclosures contained in
these guidelines are those that contribute to describing and measuring the company’s
sustainability performance. Broadly, sustainability performance is measured in the way the
corporation conducts its business, and how it manages its key economic, environmental and
social impacts. It builds on the principles and metrics provided by the GRI Standards, SASB
Standards, TCFD Recommendation and other internationally accepted standards for non-financial
reporting.
The over-all sustainability reporting framework for Philippine PLCs follows this structure:
The terms economic, environmental and social are defined as follows:
Global Reporting Iniative

Founded in 1997, one of the main developers of sustainability reporting has been the
Global Reporting Initiative (GRI), which is a non-profit organization that promotes sustainability
reporting. The GRI currently provides the most widely adopted sustainability reporting framework.
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The GRI’s mission is to make sustainability reporting standard practice by providing guidance and
support to organizations. Its reporting frameworks are developed with private sector business in
mind. The GRI, however, emphasizes that public sector organizations can also use the same
reporting principles. The GRI reporting framework provides flexibility to the reporters so that they
can connect reporting to their strategic targets and sustainability impacts.
The GRI published the third version of its Guidelines (G3) in 2006. In 2011, the Guidelines
were updated to G3.1, expanding guidance on local community aspects, human rights and
gender. The Guidelines cover both aspects of how to report and what should be reported. In
practice, what seems to be difficult for reporters is to consider the topics that should be included
in the report. This is related to the questions of which issues are material for the organization and
can advance sustainability performance.
The first part of the Guidelines deals with report content. Principles of materiality,
stakeholder inclusiveness, sustainability context and completeness provide help with this. The
quality of reported information can be ensured with the principles of balance, comparability,
accuracy, timeliness, reliability and clarity. The second part of the Guidelines deals with standard
disclosures that should be included in sustainability reports. This is divided into three types of
disclosure:
• Strategy and profile, setting the overall context for understanding organizational performance
and sustainability impacts.
• Management approach, covering how an organization operates, providing context for
understanding performance in a specific area.
• Performance indicators, dealing with comparable information on the economic, environmental
and social performance of the organization.
Performance indicators are classified as core and additional indicators. Core indicators
are identified to be of interest to most stakeholders and assumed to be material, whereas
additional indicators represent emerging practice or address topics that may be material to some
organizations but not, generally, for a majority. Economic performance indicators illustrate the flow
of capital among different stakeholders and the major economic impacts of the organization
throughout society. Environmental indicators reflect the inputs, outputs and modes of impact an
organization has on the environment. Social indicators are divided into four subgroups. First, labor
practices and decent work indicators deal with fair globalization, which aims to achieve both
economic growth and equity through a combination of social and economic goals. Second, society
performance indicators focus on the impacts that organizations have on the communities in which
they operate, and how the organization’s interactions with other social institutions are managed
and mediated. Third, human rights performance indicators deal with the impacts and activities an
organization has on the civil, political, economic, social and cultural human rights of its
stakeholders. And finally, product responsibility indicators address the effects of products and
services on customers and users. At the time of finalising this report in May 2013, GRI launched
a new G4 version of the guidelines (https://www.globalreporting.org/reporting/g4).
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The GRI Standards begin with three Universal Standards to disclose general information
about an organization and its approaches to sustainability management. Further topic-specific
standards outline approaches to disclosing qualitative and quantitative information deemed
material to each reporting organization.
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GRI 101: Foundation is the starting point for using the set of GRI Standards.
GRI 101 sets out the Reporting Principles for defining report content and quality. It includes
requirements for preparing a sustainability report in accordance with the GRI Standards, and
describes how the GRI Standards can be used and referenced. GRI 101 also includes the specific
claims that are required for organizations preparing a sustainability report in accordance with the
Standards, and for those using selected GRI Standards to report specific information.
GRI 102: General Disclosures is used to report contextual information about an organization and
its sustainability reporting practices. This includes information about an organization’s profile,
strategy, ethics and integrity, governance, stakeholder engagement practices, and reporting
process.
GRI 103: Management Approach is used to report information about how an organization
manages a material topic. It is designed to be used for each material topic in a sustainability
report, including those covered by the topic-specific GRI Standards (series 200, 300, and 400)
and other material topics.
Applying GRI 103 with each material topic allows the organization to provide a narrative
explanation of why the topic is material, where the impacts occur (the topic Boundary), and how
the organization manages the impacts.
Reporting Principles per SEC Memo No. 4 s, 2019 Guidelines
The Reporting Principles for defining report quality guide choices on ensuring the quality
of information in a sustainability report, including its proper presentation. The quality of
information is important for enabling stakeholders to make sound and reasonable assessments
of an organization, and to take appropriate actions. For more information read GRI 101:
Foundation.
Materiality
An organization is faced with a wide range of topics on which it can report. Relevant topics,
which potentially merit inclusion in the report, are those that can reasonably be considered
important for reflecting the organization’s economic, environmental, and social impacts, or
influencing the decisions of stakeholders. In this context, ‘impact’ refers to the effect an
organization has on the economy, the environment, and/or society (positive or negative). A topic
can be relevant – and so potentially material – based on only one of these dimensions.
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In sustainability reporting, materiality is the principle that determines which relevant topics
are sufficiently important that it is essential to report on them. The global standards/frameworks
for reporting sustainability presented propose different but related definitions of materiality, which
focus on the following elements:
Significant economic, environmental, and social impacts of the organization
Information that substantively influence the assessments and decisions of
stakeholders, including
investors
Matters that substantively affect the organization’s ability to create value over the
short, medium and long term
A topic may be considered material if it falls into any of the following:

1. It is a KEY CAPITAL/ RISK/ OPPORTUNITY that impacts value creation
2. Your KEY BUSINESS ACTIVITIES impact the topic
3. Your SUBSISIARIES/ CONTRACTORS/ SUPPLY CHAIN contribute significant
impacts to this topic
4. Your PRODUCTS/ SERVICES contribute impacts to this topic
5. There is a TREND that points to a future where this topic will become material to you
The assessment of materiality associated with sustainability issues should take into
account their influence on the stakeholders’ assessments and decisions and the significance of
the company's economic, social and environmental impacts. This can be analyzed and reported
using a materiality matrix (shown below) that ranks the importance of sustainability issues based
on the impact on the company and its stakeholders.
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In general, a disclosure is considered material if it reflects the significant economic,
environmental, and social impacts of the organization of the stakeholders, and the capacity of the
stakeholders to influence the economic, environmental and social impacts or activities of the
organization.
Please see below the suggested materiality assessment process adopted from the Bursa
Malaysia Sustainability Reporting Guide:
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Stakeholder Inclusiveness
The reporting organization should provide insight into the nature and quality of the
organization’s relationships with its key stakeholders, including how and to what extent the
organization understands, takes into account and responds to their legitimate needs and interests.
Stakeholders provide useful insights about matters that are important to them, including economic,
environmental and social issues that also affect the ability of the organization to create value.
Balance
Reporting must have no bias in the selection or presentation of information. The reported
information shall reflect positive and negative aspects of the reporting organization’s performance
to enable a reasoned assessment of overall performance. Reporting may also be compared against
previously reported targets, projections, and expectations
Completeness
The reporting organization should consider the extent of information disclosed and its level
of specificity or preciseness, which might involve considering potential concerns regarding
cost/benefit, competitive advantage, and future-oriented information.
Reliability
The reporting organization should gather, record, compile, analyze, and report information
and processes used in the preparation of the report (similar to maintaining an audit trail) in a way
that they can be subject to examination, and that establishes the quality and materiality of the
information.
Accuracy
The reported information should be sufficiently accurate and detailed for stakeholders to
assess the reporting organization’s performance. Reports should include proper citation of
information sources, including estimated data and methodology for estimation.
Consistency and Comparability

The information in the report should be presented on a basis that is consistent over time
and in a way that enables analysis of any changes in the organization’s performance over time and
comparison with other organizations to the extent it is material to the organization’s own ability to
create value over time.
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MANAGEMENT APPROACH
Disclosures should also be accompanied by a management approach which describes the

management of material sustainability issues. This includes explaining how the organization (1)
avoids, mitigates, or remediates negative impacts to the economy, environment, and society, and
enhances positive ones, and (2) addresses its climate-related issues. The management approach
also includes an assessment of material risks and opportunities associated with sustainability,
management and oversight of such opportunities and risks at the highest level of the organization
and performance assessment, using key performance indicators. These approaches can be in the
form of organization policies, commitments, goals and targets, responsibilities, resources,
grievance mechanisms as well as processes, projects, programs, and initiatives. See GRI 103 for
more guidance on the management approach.
Reporting organization should report on the management approach for each material issue
with the following information:
a. An explanation on the materiality of the topic;
b. The boundary for the material topic, which includes a description of where the impacts occur,
and the organization’s involvement with the impacts.
c. An explanation of how the organization manages the topic and the objectives.
Management Approach Components

When reporting on the management approach for a material topic, the reporting
organization should ideally include a description of the following components, when applicable:
i. Policies.
Summary or link to the publicly available policies relevant to the topic.
ii. Commitments.
Intent of the organization to manage the impacts related to the topic (e.g., for regulatory
compliance, compliance with international standards).
iii. Goals and targets
Highlights of the following: (i) baseline and context; (ii) expected result (quantitative or qualitative);
and (iii) expected timeline for achieving each goal and target.
iv. Responsibilities.
Assigned responsibility for managing the topic and whether the responsibility is linked to
performance assessments or incentive mechanisms.
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v. Resources.
Financial, human, or technological resources allocated for managing the topic.
vi. Grievance mechanisms.
Highlights of the following: (i) purpose of the mechanism; (ii) activities covered by the mechanism;
(iii) how the mechanism is managed; (iv) process to address and resolve grievances, including how
decisions are made; and (v) effectiveness criteria used.
vii. Specific actions, such as processes, projects, programs and initiatives.
May include actions that aim to avoid, mitigate, or remediate the negative impacts relative to
chosen topic; and whether actions take international norms/standards into account.
Discussion Questions:
1. Describe the mandate, functions and role of Securities and Exchange Commission in the
Philippines and to the businesses.
2. Who is the current chairman and commissioners of Philippine SEC?
3. What is Sustainability Reporting and why it matters?
4. Describe investors’ interest in sustainability. Ensure to cite references.
5. As future professional accountants, what is your role in promoting and achieving
sustainability and to sustainability reporting?
6. Read Chapter 1 of Laudato Si. Questions for Reflection:
1. Do you agree with the Pope that the Earth, our common home, is falling into
serious disrepair? What evidence can you provide to support your opinion?
2. Over the last few years there has been contention over the causes of global
warming. Pope Francis says that while there are other causes, the main one is human
activity. What do you think? What can we do in our personal, communal and social lives
to address the causes of climate change?
7. Watch Giselle Weybrecht - How to Make Anything More Sustainable and create reflection
paper, minimum of 1000 words.
https://www.youtube.com/watch?v=WoA9vnNff1I&portfolioCats=17
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Lesson 3 – Economic and Environmental Impact
GRI Series 200-206 and 300-308
Overview:
Sustainability is centered on the premise that, as the human species continues to

populate the world and the demand for food and natural resources rise, we identify and adjust
our behaviors to lessen the impact on the natural environment.
Sustainability typically has 3 key aspects, namely economic, social and environmental
impact. The economic dimension entails the financial aspects of a company’s performance. The
social dimension, at its broadest, includes anything that impacts on a company’s relationship with
all its stakeholders. The environmental facet involves the impact of the company’s activities and
operations on the natural environment.
Learning Objective:

1. Identify the nature of economic and environmental impact as part of GRI Standards.
2. Understand and describe the different disclosures under economic and environmental
impact per GRI.
3. Familiarize with the related reporting template as mentioned by SEC Memo Circular No. 4,
s, 2019.
4. Apply the minimum disclosure requirements of GRI and SEC Memo
5. State existing relevant laws and regulations in the Philippines that relates to these GRI
impact.
Course Materials:
Economic
Economic disclosures relate to how the company directly increases the pool of economic
resources that flows in the local and national economy. Included in the disclosures are the risks
and opportunities due to climate change, procurement practices with respect to local suppliers
and anti-corruption. The Standards in the Economic series (200) address the flow of capital among
different stakeholders, and the main economic impacts of an organization throughout society.
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ECONOMIC
Economic Procurement
Anti - corruption
Performance Practices
Direct Economic Training on Anti -

Value Generated & Proportion of corruption policies and
Distributed spending on local Procedures
(201) suppliers (205)
(204)
Incidents of C corruption
Climate Related
(205)
Risks and
opportunities
(201 and TCFD )
Economic Performance
Measuring the direct economic value generated, measured as revenue and distributed (costs)
shows that an organization does not just create economic value for itself but also ensures that
this value flows back to its various stakeholders such as stockholders, suppliers, employees,
government, and the community. This also discloses the remaining value that is retained in the
company for liquidity and for future investments. Figures for this disclosure can be derived using
the audited financial statement with the revenue as the economic value generated for the reporting
period.
This disclosure answers the questions:

• How much direct economic value (revenue) did you generate?
• How much of this flowed back to society (costs disaggregated according to
stakeholders)?
• How much of this was retained in the company for liquidity and to fund future
investments?
See GRI 201-1 for more guidance on the disclosure.
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Disclosure of an organization’s climate-related issues helps stakeholders make sound and
reasonable assessments of the impact climate change may have on the organization. Companies
should disclose the climate-related risks and opportunities they have identified and how they
assess and manage those issues. See GRI 201-2 and the Recommendations of the Task Force
on Climate-related Financial Disclosures for more guidance on the disclosure.
Procurement Practices
Disclosure on the proportion of spending on local suppliers show’s an organization’s support for
local groups, including those owned by women or members of vulnerable sectors. Supporting
local suppliers can indirectly attract additional investments to the local economy. The disclosure
describes the policies and practices used to select locally-based suppliers and to promote
economic inclusion when selecting suppliers. See GRI 204 for more guidance on disclosures
Anti-corruption
Disclosures on training on anti-corruption policies and procedures show how the company
ensures that it has the necessary capability to fight against corruption through proper training and
awareness building for its directors, management, employees and business partners. Disclosures
on incidents of corruption and how the company responded on the incidents show how serious
an organization is on combatting corruption. See GRI 205 for more guidance on the disclosures.
Environment
Environmental disclosures relate to how the company manages the natural resources it needs for
its business, as well as how it minimizes its negative impacts to the environment, including
biodiversity. The company’s ability to access materials needed for its operations is critical to
company’s long-term success. In the context of the GRI Standards, the environmental dimension
of sustainability concerns an organization’s impacts on living and non-living natural systems,
including land, air, water and ecosystems.
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ENVIRONMENT
Resource Ecosystem and Environmental Environmental

Management Biodiversity Impact Compliance
Solid and Hazardous

Watersheds Air Emission Effluents
Energy (302) Waste
(303,304) (305) (306)
(306)
Marine
Water (303) GHG
(304)
Materials IUCN/KBA
NOx,Sox,PM
(301) (304)
Ecosystems and Biodiversity
Disclosure on activities that show how an organization protects, conserves, or rehabilitates

ecosystems and biodiversity therein such as in watersheds and coastal and marine areas gives
an idea of how that organization appreciates the ecosystem and the services it gives that make
business thrive. Ecosystems and Biodiversity is vital to human existence. Companies have the
responsibility and clear business case for ensuring ecosystems and biodiversity around its sites
are protected and restored. See GRI 303 and GRI 304 for more guidance on the disclosures.
Resource Management
Disclosures on resource management such as energy consumption, water consumption, and

materials use show how efficiently an organization uses scarce natural resources, which has
implications on reduction of environmental impacts from extraction and processing of these
resources. The efficiency of managing resources relates to profitability of the organization. See
GRI 301, GRI 302, GRI 303 for more guidance on the disclosures.
Environmental Impact Management
Reporting on an organization’s impact on air, soil, and water through emissions, wastes, and
effluents provides basis for companies to manage these impacts. Responsible companies take
an effort to minimize such impacts through cleaner production and pollution prevention measures.
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Companies should disclose on their performance on these topics including how well the
organization mitigates, reduces, and/or prevents these impacts to the environment in compliance
to Philippine Environmental Laws or on efforts beyond compliance. See GRI 305 and GRI 306
for more guidance on the disclosures.
Environmental Compliance
Disclosure on an organization’s compliance with environmental laws and/or regulations shows an

organization’s ability to conform to certain performance parameters. The strength of an
organization’s compliance indicates its concern for environmental protection. See GRI 307 for
more guidance on the disclosures.
Pro-forma Disclosures
Contextual Information
Company Details
Name of Organization
Location of Headquarters
Location of Operations
Report Boundary: Legal
entities (e.g. subsidiaries)
included in this report*
Business Model, including
Primary Activities, Brands,
Products, and Services
Reporting Period
Highest Ranking Person
responsible for this report
*If you are a holding company, you could have an option whether to report on the holding
company only or include the subsidiaries. However, please consider the principle of materiality
when defining your report boundary.
Materiality Process
Explain how you applied the materiality principle (or the materiality process) in
identifying your material topics.1
1
See GRI 102-46 (2016) for more guidance.
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ECONOMIC
Economic Performance
Direct Economic Value Generated and Distributed
Disclosure Amount Units

Direct economic value generated (revenue) PhP
Direct economic value distributed:
a. Operating costs PhP
b. Employee wages and benefits PhP
c. Payments to suppliers, other operating costs Php
d. Dividends given to stockholders and interest PhP
payments to loan providers
e. Taxes given to government PhP
f. Investments to community (e.g. donations, CSR) PhP
What is the impact and where Which stakeholders Management Approach

does it occur? What is the are affected?
organization’s involvement in
the impact?
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Identify the impact and where it (e.g. employees, What policies, commitments, goals
occurs (i.e., primary business community, suppliers, and targets, responsibilities,
operations and/or supply chain). government, vulnerable resources, grievance mechanisms,
groups) and/or projects, programs, and
Indicate involvement in the
initiatives do you have to manage the
impact (i.e., caused by the
material topic?
organization or linked to impacts
through its business
relationship) This may include
where your primary business
operations are and your supply
chain.
What are the Risk/s Which stakeholders Management Approach
Identified? are affected?
Identify risk/s related to material

topic of the organization
What are the Opportunity/ies Which stakeholders Management Approach

Identify the opportunity/ies

related to material topic of the
organization
Climate-related risks and opportunities2

Governance Strategy Risk Management Metrics and Targets
Disclose the Disclose the actual Disclose how the Disclose the metrics
organization’s and potential impacts organization and targets used to
governance around of climate-related identifies, assesses, assess and manage
climate-related risks risks and and manages climate- relevant
and opportunities opportunities on the related risks climaterelated risks
organization’s and opportunities
businesses, strategy,
where such
and financial planning
where such information is material
information is material
Recommended Disclosures
2
Adopted from the Recommendations of the Task Force on Climate-Related Financial Disclosures
40
a) Describe the a) Describe the a) Describe the a) Disclose the
board’s oversight climate-related organization’s metrics used by
of climate-related risks and processes for the organization
risks and opportunities the identifying and to assess
opportunities organization has assessing climaterelated
identified over the climaterelated risks and
short, medium risks opportunities in
and long term line with its
strategy and risk
management
process
b) Describe b) Describe the b) Describe the b) Describe the
management’s impact of organization’s targets used by
role in assessing climaterelated processes for the organization
and managing risks and managing to manage
climaterelated opportunities on climaterelated climaterelated
risks and the risks risks and
opportunities organization’s opportunities and
businesses, performance
strategy and against targets
financial
planning.
c) Describe the c) Describe how
resilience of the processes for
organization’s identifying,
strategy, taking assessing, and
into managing
consideration climaterelated
risks are
different
integrated into the
climaterelated organization’s
scenarios overall risk
including a 2°C management
or lower
scenario
Procurement Practices
Proportion of spending on local suppliers
Disclosure Quantity Units
Percentage of procurement budget used for significant %
locations of operations that is spent on local suppliers
Percentage of procurement budget used for significant %
locations of operations that is spent on women or members
of vulnerable sectors
*Vulnerable sector includes, elderly, persons with disabilities, vulnerable women, refugees,
migrants, internally displaced persons, people living with HIV and other diseases, solo parents,
and the poor or the base of the pyramid (BOP; Class D and E).
41
the impact?
material topic?
chain.



organization
Anti-corruption
Training on Anti-corruption Policies and Procedures
Percentage of employees to whom the organization’s %
anticorruption policies and procedures have been
communicated to
Percentage of business partners to whom the %
organization’s anti-corruption policies and procedures have
been communicated to
Percentage of directors and management that have %
received anti-corruption training
Percentage of employees that have received anti- %
corruption training
42
the impact?
material topic?
chain.




organization
Incidents of Corruption
Number of confirmed incidents of corruption #
Number of incidents in which employees were dismissed or #
disciplined for corruption
Number of confirmed incidents when contacts with #
business partners were terminated due to incidents of
corruption
43
the impact?
material topic?
chain.




organization
ENVIRONMENT
Resource Management
Energy consumption within the organization:
Energy consumption (renewable sources) GJ
Energy consumption (gasoline) GJ
Energy consumption (LPG) GJ
Energy consumption (diesel) GJ
Energy consumption (electricity) kWh
Reduction of energy consumption
44
Energy reduction (gasoline) GJ
Energy reduction (LPG) GJ
Energy reduction (diesel) GJ
Energy reduction (electricity) kWh
Energy reduction (gasoline) GJ

the impact?
material topic?
chain.



organization
Water consumption within the organization

Water withdrawal Cubic
meters
Water consumption Cubic
meters
45
Water recycled and reused Cubic
meters

the impact?
material topic?
chain.



organization
Materials used by the organization

Materials used by weight or volume
renewable kg/liters
non-renewable kg/liters
Percentage of recycled input materials used to %
manufacture the organization’s primary products and
services
46
the impact?
material topic?
chain.



organization
Ecosystems and biodiversity (whether in upland/watershed or coastal/marine)

Operational sites owned, leased, managed in, or adjacent (identify all sites)
to, protected areas and areas of high biodiversity value
outside protected areas
Habitats protected or restored ha
3
IUCN Red List species and national conservation list (list)
species with habitats in areas affected by operations
3
International Union for Conservation of Nature
47
the impact?
material topic?
chain.



organization
Environmental impact management

Air Emissions
GHG
Direct (Scope 1) GHG Emissions Tonnes
CO2e
Energy indirect (Scope 2) GHG Emissions Tonnes
CO2e
Emissions of ozone-depleting substances (ODS) Tonnes
48
the impact?
material topic?
chain.



organization
Air pollutants
NOx kg
SOx kg
Persistent organic pollutants (POPs) kg
Volatile organic compounds (VOCs) kg
Hazardous air pollutants (HAPs) kg
Particulate matter (PM) kg

the impact?
49
material topic?
chain.



organization
Solid and Hazardous Wastes

Solid Waste
Total solid waste generated kg
Reusable kg
Recyclable kg
Composted kg
Incinerated kg
Residuals/Landfilled kg

the impact?
50
material topic?
chain.



organization
Hazardous Waste
Total weight of hazardous waste kg
Amount of hazardous waste transported kg

the impact?
51
material topic?
chain.



organization
Effluents
Total volume of water discharges Cubic
meters
Percent of wastewater recycled %

the impact?
52
material topic?
chain.



organization
Environmental compliance
Non-compliance with Environmental Laws and Regulations
Total amount of monetary fines for non-compliance with PhP
environmental laws and/or regulations
No. of non-monetary sanctions for non-compliance with #
environmental laws and/or regulations
No. of cases resolved through dispute resolution #
mechanism

the impact?
53
material topic?
chain.




organization
1. Research and reflect on Levi Strauss & Co.: Driving Adoption of Green Chemistry.
2. State at least five existing relevant laws and regulations in the Philippines that relates to
each of these GRI impact, economic and environmental and describe.
3. Research a publicly-listed corporation in the Philippines that promotes sustainability in
particular with economic and environmental impact per GRI standard, 1 each, and
describe.
54
Lesson 4 – Social Impact GRI Series 400-419 and UN Sustainable Development
Goals
Overview:
GRI Sustainability Reporting Standards (GRI Standards) are designed to be used by

organizations to report about their impacts on the economy, the environment, and society. The
GRI Standards are structured as a set of interrelated, modular standards. The full set can be
downloaded at www.globalreporting.org/standards/. There are three universal Standards that
apply to every organization preparing a sustainability report:
GRI 101: Foundation
GRI 102: General Disclosures
GRI 103: Management Approach
An organization then selects from the set of topic-specific GRI Standards for reporting on
its material topics. These Standards are organized into three series: 200 (Economic topics), 300
(Environmental topics) and 400 (Social topics). Each topic Standard includes disclosures specific
to that topic, and is designed to be used together with GRI 103: Management Approach, which is
used to report the management approach for the topic.
Meanwhile, the Sustainable Development Goals are a call for action by all countries –
poor, rich and middle-income – to promote prosperity while protecting the planet. They recognize
that ending poverty must go hand-in-hand with strategies that build economic growth and address
a range of social needs including education, health, social protection, and job opportunities, while
tackling climate change and environmental protection. More important than ever, the goals provide
a critical framework for COVID-19 recovery.
Learning Objective:

1. Identify the nature of social impact as part of GRI Standards.
2. Describe the different components of SDGs.
3. Understand and describe the different disclosures under social impact per GRI and UN
SDGs.
4. Familiarize with the related reporting template as mentioned by SEC Memo Circular No. 4,
s, 2019.
55
5. Apply the minimum disclosure requirements of GRI and SEC Memo
6. State existing relevant laws and regulations in the Philippines that relates to this GRI impact
and UN SDGs.
Course Materials:
Social
Disclosures on social topics relate to how the organization manages its relationship with its
stakeholders such as employees, customers, suppliers, communities, the public and the
government. It includes disclosures on issues related to human rights, access to and quality of
products and services, responsible business practices in marketing, and customer privacy.
Disclosures on social topics relate to how the organization relates and manages its relationship
with its stakeholders such as employees, communities, customers, and suppliers.
56
Employee Management
Disclosing on employee management indicates of how good an employer the organization is in

engaging its employees. It also provides a sense on how the organization develops its employees
and gives equal opportunity for all, such as indigenous people and those coming from vulnerable
groups which include elderly, persons with disabilities, vulnerable women, refugees, migrants,
internally displaced persons, people living with HIV and other diseases, solo parents, and the poor
or the base of the pyramid (BOP; Class D and E). See GRI 401, GRI 402, GRI 404, GRI 405, GRI
406, GRI 407, GRI 102-8, and GRI 10241 for more guidance on the disclosures.
Workplace Conditions and Labor Standards
Disclosures on workplace conditions and labor standards show how an organization gives
importance to occupational health and safety and how it upholds labor standards and human
rights in the workplace. See GRI 403, GRI 408, GRI 409, and GRI 412 for more guidance on the
disclosures.
Supply Chain Management
Disclosures on supply chain management is most relevant for companies with a significant portion
of value creation carried out by suppliers. Organizations can report on how the reporting company
ensures that supplier upholds with sustainability standards and practices including compliance to
Philippine laws. The reporting company may also disclose how it influences its suppliers to be
sustainable through supplier accreditation processes, among other approaches. See GRI 308 and
GRI 414 for more guidance on the disclosures.
Relationship with Community
These disclosures show how an organization meaningfully engages the community around their
sites and how it aims to create a net positive impact to its host or neighbors. These also includes
how the company contributes in addressing issues of indigenous people and those coming from
vulnerable groups [youth, elderly, persons with disabilities, vulnerable women, refugees, migrants,
internally displaced persons, people living with HIV and other diseases, solo parents, and the poor
or the base of the pyramid (BOP; Class D and E)] in its business operations. See GRI 411, GRI
412, and GRI 413 for more guidance on the disclosures.
57
Customer Management
Disclosing on customer management shows how well an organization upholds the rights of its
customers to privacy, safety, and security from probable negative impacts of its products and
services. See GRI 416, GRI 417, and GRI 418 for more guidance on the disclosures.
Data Security
Reporting on the number of data breaches, including leaks, thefts and losses of data shows how
much importance an organization places on keeping data secure. Organizations can indicate how
they manage risks related to the collection, retention and use of sensitive information. See SASB
Standards General Issue Category: Data Security for more guidance on the disclosure.
UN Sustainability Development Goals
The United Nations Sustainable Development Goals (SDGs) are a universal call to action to end
poverty, protect the planet and ensure that all people enjoy peace and prosperity and includes
seventeen (17) goals seen below. Disclosure would be required on how companies are able to
contribute to the SDGs through their products and services.
58
The Sustainable Development Goals (SDGs), also known as the Global Goals, were
adopted by all United Nations Member States in 2015 as a universal call to action to end poverty,
protect the planet and ensure that all people enjoy peace and prosperity by 2030. The 17 SDGs
are integrated—that is, they recognize that action in one area will affect outcomes in others, and
that development must balance social, economic and environmental sustainability. Through the
pledge to Leave No One Behind, countries have committed to fast-track progress for those
furthest behind first. That is why the SDGs are designed to bring the world to several life-changing
‘zeros’, including zero poverty, hunger, AIDS and discrimination against women and girls.
Everyone is needed to reach these ambitious targets. The creativity, knowhow, technology and
financial resources from all of society is necessary to achieve the SDGs in every context.
SDGs were born at the United Nations Conference on Sustainable Development in Rio de
Janeiro in 2012. The objective was to produce a set of universal goals that meet the urgent
environmental, political and economic challenges facing our world.
The SDGs replace the Millennium Development Goals (MDGs), which started a global
effort in 2000 to tackle the indignity of poverty. The MDGs established measurable, universally-
agreed objectives for tackling extreme poverty and hunger, preventing deadly diseases, and
expanding primary education to all children, among other development priorities.
For 15 years, the MDGs drove progress in several important areas: reducing income
poverty, providing much needed access to water and sanitation, driving down child mortality and
drastically improving maternal health. They also kick-started a global movement for free primary
education, inspiring countries to invest in their future generations. Most significantly, the MDGs
made huge strides in combatting HIV/AIDS and other treatable diseases such as malaria and
tuberculosis.
Key MDG achievements
• More than 1 billion people have been lifted out of extreme poverty (since 1990)
• Child mortality dropped by more than half (since 1990)
• The number of out of school children has dropped by more than half (since 1990)
• HIV/AIDS infections fell by almost 40 percent (since 2000)
The legacy and achievements of the MDGs provide us with valuable lessons and experience
to begin work on the new goals. But for millions of people around the world the job remains
unfinished. We need to go the last mile on ending hunger, achieving full gender equality, improving
health services and getting every child into school beyond primary. The SDGs are also an urgent
call to shift the world onto a more sustainable path.
59
The SDGs are a bold commitment to finish what we started, and tackle some of the more
pressing challenges facing the world today. All 17 Goals interconnect, meaning success in one
affects success for others. Dealing with the threat of climate change impacts how we manage our
fragile natural resources, achieving gender equality or better health helps eradicate poverty, and
fostering peace and inclusive societies will reduce inequalities and help economies prosper. In
short, this is the greatest chance we have to improve life for future generations.
The SDGs coincided with another historic agreement reached in 2015 at the COP21 Paris
Climate Conference. Together with the Sendai Framework for Disaster Risk Reduction, signed in
Japan in March 2015, these agreements provide a set of common standards and achievable
targets to reduce carbon emissions, manage the risks of climate change and natural disasters,
and to build back better after a crisis.
The SDGs are unique in that they cover issues that affect us all. They reaffirm our international
commitment to end poverty, permanently, everywhere. They are ambitious in making sure no one
is left behind. More importantly, they involve us all to build a more sustainable, safer, more
prosperous planet for all humanity.
The SDG Compass can be used as guidance for companies on how they can align their
strategies as well as measure and manage their contribution to the realization of the SDGs. The
SDB Compass can be accessed at https://sdgcompass.org/
Moreover, a recent publication with the title: Integrating the SDGs into Corporate
Reporting: A Practical Guide helps companies of all sizes to prioritize SDG targets to act and
report on, set related business objectives, and measure and report on progress. This is a co-
production between GRI and UN Global Compact (UNGC).
Pro-forma Disclosures
SOCIAL
Employee Management
Employee Hiring and Benefits
Employee data
4
Total number of employees
a. Number of female employees #
4
Employees are individuals who are in an employment relationship with the organization, according to national
law or its application (GRI Standards 2016 Glossary)
60
b. Number of male employees #
5
Attrition rate rate
Monthly salary of the lowest-paid employee PhP
Employee benefits
List of Benefits Y/N % of female % of male
employees who employees who
availed for the year availed for the year
SSS
PhilHealth
Pag-ibig
Parental leaves
Vacation leaves
Sick leaves
Medical benefits (aside from
PhilHealth))
Housing assistance (aside from
Pagibig)
Retirement fund (aside from SSS)
Further education support
Company stock options
Telecommuting
Flexible-working Hours
(Others)
What is the impact and where does it occur? Management Approach

What is the organization’s involvement in the
impact?
Identify the impact and where it occurs (i.e., What policies, commitments, goals and
primary business operations and/or supply targets, responsibilities, resources, grievance
chain). mechanisms, and/or projects, programs, and
initiatives do you have to manage the material
topic?
Indicate involvement in the impact (i.e., caused
by the organization or linked to impacts through
its business relationship) This may include where
your primary business operations are and your
supply chain.
5
Attrition are = (no. of new hires – no. of turnover)/(average of total no. of employees of previous year and total
no. of employees of current year)
61
What are the Risk/s Identified? Management Approach
Identify risk/s related to material topic of the

organization
What are the Opportunity/ies Identified? Management Approach
Identify the opportunity/ies related to material

Employee Training and Development

Total training hours provided to employees
a. Female employees hours
b. Male employees hours
Average training hours provided to employees
a. Female employees hours/employee
b. Male employees hours/employee

impact?
topic?
supply chain.

organization

Labor-Management Relations
62
% of employees covered with Collective Bargaining %
Agreements
Number of consultations conducted with employees #
concerning employee-related policies

impact?
topic?
supply chain.

organization

Diversity and Equal Opportunity

% of female workers in the workforce %
% of male workers in the workforce %
Number of employees from indigenous communities #
and/or vulnerable sector*
*Vulnerable sector includes, elderly, persons with disabilities, vulnerable women, refugees,
migrants, internally displaced persons, people living with HIV and other diseases, solo parents,
and the poor or the base of the pyramid (BOP; Class D and E).
impact?
topic?
63
its business
relationship) This may include where your

primary business operations are and your supply
chain.

organization

Workplace Conditions, Labor Standards, and Human Rights

Occupational Health and Safety
Safe Man-Hours Man-hours
No. of work-related injuries #
No. of work-related fatalities #
No. of work related ill-health #
No. of safety drills #

impact?
topic?
supply chain.
64
organization

Labor Laws and Human Rights

No. of legal actions or employee grievances involving #
forced or child labor
Do you have policies that explicitly disallows violations of labor laws and human rights (e.g.
harassment, bullying) in the workplace?
Topic Y/N If Yes, cite reference in the company policy
Forced labor
Child labor
Human Rights

impact?
topic?
supply chain.

organization

65
Supply Chain Management
Do you have a supplier accreditation policy? If yes, please attach the policy or link to the policy:
_________________________
Do you consider the following sustainability topics when accrediting suppliers?

Topic Y/N If Yes, cite reference in the supplier policy
Environmental
performance
Forced labor
Child labor
Human rights
Bribery and corruption

impact?
topic?
supply chain.

organization

Relationship with Community

Significant Impacts on Local Communities
66
Operations Location Vulnerable Does the Collective or Mitigating
with groups (if particular individual measures (if
significant applicable)* operation rights that negative) or
(positive or have have been enhancement
negative) impacts on identified measures (if
impacts on indigenous that or positive)
local particular
people
communities concern for
(Y/N)?
(exclude CSR the
projects; this community
has to be
business
operations)
*Vulnerable sector includes children and youth, elderly, persons with disabilities, vulnerable
women, refugees, migrants, internally displaced persons, people living with HIV and other
diseases, solo parents, and the poor or the base of the pyramid (BOP; Class D and E)
For operations that are affecting IPs, indicate the total number of Free and Prior Informed
Consent (FPIC) undergoing consultations and Certification Preconditions (CPs) secured and still
operational and provide a copy or link to the certificates if available: _____________
Certificates Quantity Units
FPIC process is still undergoing #
CP secured #

organization

Customer Management
Customer Satisfaction
Disclosure Score Did a third party
conduct the customer
67
satisfaction study
(Y/N)?
Customer satisfaction

impact?
topic?
supply chain.

organization

Health and Safety

No. of substantiated complaints on product or #
service health and safety*
No. of complaints addressed #
*Substantiated complaints include complaints from customers that went through the
organization’s formal communication channels and grievance mechanisms as well as
complaints that were lodged to and acted upon by government agencies.
impact?
68
topic?
supply chain.

organization

Marketing and labelling

No. of substantiated complaints on marketing and #
labelling*

impact?
topic?
supply chain.
69
organization

Customer privacy
No. of substantiated complaints on customer #
privacy*
No. of customers, users and account holders #
whose information is used for secondary purposes

impact?
topic?
supply chain.

organization

70
Data Security
No. of data breaches, including leaks, thefts and #
losses of data

impact?
topic?
supply chain.

organization

UN SUSTAINABLE DEVELOPMENT GOALS

Product or Service Contribution to UN SDGs
Key products and services and its contribution to sustainable development.
Key Products and Services Societal Value / Contribution to UN SDGs
* None/Not Applicable is not an acceptable answer. For holding companies, the services and
products of its subsidiaries may be disclosed.
71
You may use the following framework to determine which area of sustainable development your
company is contributing to improve people’s quality of life. For more information on how private
sector can contribute to sustainable development, you may visit www.sdgsbiz.ph or refer to the
guidance document Integrating the SDGs into Corporate Reporting: A Practical Guide, which
can be accessed at https://www.globalreporting.org/resourcelibrary/GRI_UNGC_Reporting-on-
SDGs_Practical_Guide.pdf
1. Research and reflect on Unilever and its Sustainable Living Plan.
2. State at least five existing relevant laws and regulations in the Philippines that relates to
each of the social impact and UN SDGs and describe.
3. Research a publicly-listed corporation in the Philippines that promotes sustainability in
particular with social impact per GRI standard and UN SDGs, 1 each, and describe.
72
Lesson 5 – Other Reporting Frameworks and Overview of Sustainability
Assurance
Overview:
“Sustainability calls for a decent standard of living for everyone today without
compromising the needs of future generations” (UNWCED, 1987). Economic, social and
environmental dimensions of human welfare are main parts of sustainable development. Global
society including both public and private agents take care about more than ever on sustainability
issues, such as global warming, environmental pollution, life quality, income distribution
differences, in short, better social, economic and environmental system. One of the most
important elements of the sustainability is better sustainable accounting all the activities in the
value chain management. Sustainable accounting is evolved form of social and environmental
accounting.
Learning Objective:

1. Identify the nature of other reporting frameworks in sustainability reporting.
2. Differentiate GRI with other reporting frameworks in sustainability reporting.
3. Familiarize with the nature and need of assurance engagement for sustainability reports.
4. Know the elements of assurance report in sustainability reporting.
5. Check the application of assurance reports on sustainability reporting in the Philippines.
Course Materials:
Sustainability reporting is an organization’s practice of reporting publicly on its significant

economic, environmental and/or social impacts, in accordance with globally accepted standards.
Such disclosures enable organizations to measure, understand and communicate their EESG
performance and then set goals, and manage change more effectively. Often, they go hand in
hand with the setting of performance targets related to EESG impacts.
Sustainability reporting also benefits stakeholders interested in an organization’s ability to

create value over time, including employees, customers, suppliers, investors, business partners,
local communities, legislators, regulators, and policy makers. This promotes transparency and
73
accountability, empowering stakeholders to make informed decisions and helps the company
manage its EESG impacts.
Globally Recognized Standards/Frameworks in Reporting Sustainability
This Guidelines builds upon four of the globally accepted frameworks, which companies
use to report on sustainability and non-financial information - the Global Reporting Initiative’s
(GRI) Sustainability Reporting Standards, the International Integrated Reporting Council’s (IIRC)
Integrated Reporting (IR) Framework, the Sustainability Accounting Standards Board’s (SASB)
Sustainability Accounting Standards, and the recommendations of the Task Force on Climate-
related Financial Disclosure (TCFD).
The GRI Standards has a comprehensive reporting requirement covering economic,

environmental, and social topics. It is also aligned with international standards and normative
frameworks such as the United Nations Global Compact (UNGC) and the International Labour
Organization (ILO) Tripartite Declaration.
The <IR> Framework defines six capitals, seven guiding principles, and eight content
elements of an integrated report but does not specify topic disclosures and measurement
methods. It aims to monitor how the capitals are used and created by the business model and
discloses the companies’ strategies in light of risks and outlook.
The SASB Standards provides industry-based sustainability standards for more than 80
specific industries. It has five general sustainability themes including environment, social capital,
human capital, business model and innovation, and leadership and governance. To address
sustainability issues, a minimum set of topics for consideration in each industry are also provided,
together with quantitative and comparable accounting metrics.
The TCFD – a private-sector task force created by the Financial Stability Board – issued
its final recommendations on climaterelated financial disclosure in June 2017, focusing on
climate-related risks, opportunities, and financial impacts, as well as scenario analysis.
The table below distinguishes the reporting standards/frameworks and compares the
guiding principles for defining report content and sustainability topics covered in each. More
information can be found in the full guidance documents for these reporting standards/frameworks
that can be access via their websites.
74
Coverage Reporting Standards/Frameworks
GRI IR Framework SASB TCFD
General • Economic • Financial • Business • Climate-related

capital model and
Sustainability • Environmental innovation Financial
• Manufactured
Topics • Social capital • Leadership
Disclosure
and governance • Climate-Related
• Intellectual
Risks,
capital • Human
capital Opportunities, and
• Human
Financial Impacts
capital • Social
capital • Scenario Analysis
• Social and
and Climate Related
relationship capital • Environment
Issues
• Natural
capital
Guiding For defining report Strategic focus and For topic selection: Climate-Related Financial
content: future orientation Impacts:
Principles Financial
Stakeholder materiality, based on Transition Risks
inclusiveness (i) potential to
Policy and Legal
75
• Sustainability • Connectivity affect corporate • Technology
content of information value or (ii) interest of
investors • Market
• Materiality • Stakeholder
relationships • Relevant • Reputation
• Completeness across an industry
• Materiality Physical Risks
• Actionable
• Chronic
• Conciseness by companies
For defining report
quality: Accuracy • • Acute
Reliability • Reflective of
and completeness stakeholder Opportunities Resource
• Balance
consensus
• Consistency Efficiency
• Clarity
and comparability
• Comparability • Energy Source
For accounting
• Reliability metrics: • Products/Services
• Timeliness • Fair • Markets

representation
• Resilience
• Useful
Thematic Areas:
• Applicable
• Governance
• Comparable
• Strategy
• Complete
• Risk Management
• Verifiable
• Metrics and
• Aligned targets
Neutral
• Distributive
Materiality “Material aspects” are A matter is A fact is material if Public companies’ legal
those that reflect the there is a substantial obligation to disclose
organization’s material if it could likelihood that a material information in their
significant economic, substantively affect the reasonable investor financial filings— including
environmental and organization’s ability to would view its material climate-related
social impacts; or that create value in the omission or information
substantively influence short, medium, or long misstatement as
the assessments and term having significantly
decisions of altered the total mix of
stakeholders information
76
More information can be found in the full guidance documents for these reporting
frameworks that can be accessed in their respective websites. It can also be noted that these
standards and frameworks can complement each other and can be used in a single document.
For example, a report can be published which uses the <IR> framework and discloses information
in accordance with the GRI Standards.
In addition to these four frameworks, the International Finance Corporation, the private
sector arm of the World Bank Group, has developed a Toolkit for Disclosure and Transparency
with guidance for companies in emerging markets. This toolkit aims to help companies begin the
process of sustainability reporting and move toward integrated reporting, with guidance on how to
development disclosure over time.
Sustainability Accounting Standards Board (SASB)
The Sustainability Accounting Standards Board (SASB) is an independent 501(c)(3)

nonprofit organization. SASB’s mission is to develop and disseminate sustainability accounting
standards that help public corporations disclose material, decision-useful information to investors.
That mission is accomplished through a rigorous process that includes evidence-based research
and balanced stakeholder participation. SASB standards are designed for voluntary use in
disclosures required by existing U.S. regulation in with the Securities and Exchange Commission
(SEC), such as Forms 10-K and 20-F.
Sustainability accounting reflects the management of a corporation’s environmental and

social impacts arising from production of goods and services, as well as its management of the
environmental and social capitals necessary to create long-term value. It also includes the impacts
that sustainability challenges have on innovation, business models, and corporate governance
and vice versa. Therefore, SASB’s sustainability topics are organized under five broad
sustainability dimensions:
1. Environment. This dimension includes corporate impacts on the environment, either through
the use of nonrenewable, natural resources as inputs to the factors of production (e.g., water,
minerals, ecosystems, and biodiversity) or through harmful releases into the environment (such
as air, land, and water) that may negatively affect natural resources and result in impacts to the
company’s financial condition or operating performance.
2. Social Capital. This dimension relates to the perceived role of business in society, or the
expectation that a business will contribute to society in return for a social license to operate. It
addresses the management of relationships with key outside parties, such as customers, local
communities, the public, and the government. It includes issues related to human rights, protection
of vulnerable groups, local economic development, access to and quality of products and services,
affordability, responsible business practices in marketing, and customer privacy.
3. Human Capital. This dimension addresses the management of a company’s human resources
(employees and individual contractors) as key assets to delivering long-term value. It includes
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issues that affect the productivity of employees, such as employee engagement, diversity, and
incentives and compensation, as well as the attraction and retention of employees in highly
competitive or constrained markets for specific talent, skills, or education. It also addresses
working conditions and the management of labor relations in industries that rely on economies of
scale and compete on the price of products and services, and in industries with legacy pension
liabilities. Finally, it includes the management of the health and safety of employees and the ability
to create a safety culture for companies that operate in dangerous working environments.
4. Business Model and Innovation. This dimension addresses the impact of sustainability issues
on innovation and business models. It addresses the integration of environmental, human, and
social issues in a company’s value-creation process, including resource recovery and other
innovations in the production process; as well as in product innovation, including efficiency and
responsibility in the design, use phase, and disposal of products. It also includes management of
environmental and social impacts on tangible and financial assets—either a company’s own or
those that it manages as the fiduciary for others.
5. Leadership and Governance. This dimension involves the management of issues that are
inherent to the business model or common practice in the industry and that are in potential conflict
with the interest of broader stakeholder groups (e.g., government, community, customers, and
employees), and therefore create a potential liability or, worse, a limitation or removal of a license
to operate. This includes regulatory compliance, and regulatory and political influence. It also
includes risk management, safety management, supply-chain and materials sourcing, conflicts of
interest, anticompetitive behavior, and corruption and bribery.
Dow Jones Sustainability World Index
The Dow Jones Sustainability World Index, or DJSI World, is a global index consisting of
the top 10% of the largest 2,500 stocks in the S&P Global Broad Market Index based on their
sustainability and environmental practices. The index was launched on Sept. 8, 1999, and is
maintained by S&P Dow Jones Indices in conjunction with RobecoSAM, a Zurich-based
investment specialist that conducts detailed sustainability research on thousands of global market
capitalization leaders each year.
The Dow Jones Sustainability World Index (W1SGI) is part of a larger family of Dow Jones
Sustainability Indices (DJSI) that launched in 1999 as the first global sustainability benchmark.
The family of indices includes DJSI World counterparts specific to North America, Europe, Asia
Pacific, Korea, Australia, Chile, and emerging markets. DJSI World covers dozens of industry
groups and has members in more than 20 nations. Because of increased investor appetite for
socially conscious investments and corporate environmental responsibility, the index has been
licensed by many private wealth managers to use as a benchmark and has billions of assets under
management pegged to it.
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As of Aug. 31, 2020, some of the index's top 10 constituents by weight included Microsoft
Corp, Nestle, Bank of America, Alphabet Inc, and Unitedhealth Group Inc.4 Many companies that
become members of the index see it as an opportunity to enhance shareholder awareness of
environmental efforts and will issue press releases to announce their index membership and tout
their environmental sustainability leadership.
DJSI World Characteristics and Methodology

DJSI World, in June 2020, reported 317 constituents and five-year annualized net total
returns of 7.8%. About 47% of the benchmark's weight by market capitalization was concentrated
in companies based in the United States, of which there were 59. The sector breakdown showed
that 25.3% of the companies listed in the DJSI World were information technology companies.
The second highest sector was health care at 21.3% and financials came in third with 12.3%.
In terms of environmental, social, and governance (ESG) disclosures, the index reported
a carbon footprint (measured in metric tons of CO2 emissions per $1 million invested) about 57.7%
better than the broader S&P Global BMI, the index from which DJSI World draws its constituents.
Fossil fuel reserve emissions averaged nearly 21.4% of those reported for the S&P Global BMI,
and DJSI World also fared better in terms of carbon efficiency.
The index is weighted based on free-float market capitalization, and changes are made
once each year in September based on updated sustainability scores. Each company represented
in the index has its corporate sustainability assessed through an intricate weighting system that
looks at economic, environmental, and social metrics. Candidate firms are further assessed based
on media and stakeholder commentary and industry-specific criteria.
Special Considerations
Companies listed in the DJSI World are reevaluated each year. The scoring process
begins in March, with new scores released in September. Those companies that fail to show
consistent progress may be removed from the index. Companies may also be deleted between
annual reviews if the index committee determines the company is not behaving in accordance
with sustainability guidelines. A company may be excluded from the index based on a variety
of ethical exclusions, including its exposure to alcohol, gambling, tobacco, armaments, firearms,
nuclear power, nuclear weapons, and adult entertainment. The index committee also reviews
news stories for each company's involvement with ESG issues that might damage the company's
reputation and core business. These include a wide range of issues such as human rights issues,
labor disputes, workplace safety, illegal commercial practices, fraud, and environmental disasters.
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Overview of Sustainability Assurance
Assurance is defined as “an engagement in which a practitioner aims to obtain sufficient

appropriate evidence in order to express a conclusion designed to enhance the degree of
confidence of the intended users other than the responsible party about the subject matter
information” (IAASB, 2013, p.7). The IAASB definition highlights the tripartite nature of assurance
engagements i.e. (1) responsible party, (2) an assurance provider (independent expert) and (3)
an intended user.
Using the IAASB definition, Farooq and De Villiers (2017) define sustainability assurance
as an engagement in which a third-party sustainability assurance provider (SAP) is recruited to
undertake assurance over a sustainability report. The responsible party in this instance is the
reporting organisation (or more specifically the board of directors) and the intended users are the
readers of the sustainability report. What this means is that the SAP is recruited to evaluate the
sustainability report, which has been prepared by the board of directors, and to provide an opinion
(an assurance opinion) on whether or not that sustainability report has been prepared according
to an agreed criteria (e.g. sustainability reporting standards) to the users of the sustainability
report. The SAPs opinion is designed to enhance the confidence (i.e. provide assurance) of the
users of the sustainability report i.e. users are provided comfort that the sustainability report is
credible. Figure below provides a summary of the relationship between (1) responsible party, (2)
an assurance provider (independent expert) and (3) an intended user in a sustainability assurance
engagement:
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However, sustainability assurance is still a voluntary undertaking in most jurisdictions and
the market is open to different types of SAPs who compete for a share of the market. As a result,
there is no consensus on who should undertake sustainability assurance services or how (i.e.,
approach) the engagement should be undertaken. This gives rise to a number of challenges both
for the field and assurance providers on the one hand, and organizations that seek to secure
sustainability assurance services on the other (i.e., sustainability reporters). The following section
examines these different types of SAPs, their competencies and the different approaches they
use. The issues and challenges that are facing sustainability assurance providers and
sustainability assurance seekers are also discussed.
The demand for sustainability assurance is a result of organisational stakeholders

expressing scepticism over the credibility of published sustainability reports. However, does
sustainability assurance actually improve the quality of published sustainability reports? Answers
to this question can be found in a study undertaken by Moroney et al. (2012) who examine the
quality of environmental reporting by Australian companies. They compared the quality of assured
and non-assured environmental reports to assess if there were differences in the quality of
disclosure. Their study indicates that assured environmental reports achieve a higher quality score
than non-assured environmental reports. They also found that the quality of environmental reports
improves over time i.e., reporters learn and this learning is also partly responsible for
improvements in quality.
Discussion Cases
1. Differentiate GRI with other reporting frameworks in sustainability reporting.

2. Identify companies in the Philippines who made it to Dow Jones Sustainability World Index
list.
3. Describe the sustainability reporting and assurance practice in the Philippines, cite
references.
4. Read. https://reports.manilawater.com/2019/sustainability-at-manila-water/independent-
assurance-statement
What are the parts of assurance report presented in this report, as per assurance/auditing
standards in the Philippines?
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Lesson 6 – Corporate Stakeholder Engagement
Overview:
Stakeholder engagement and stakeholder management are arguably the most important
ingredients for successful project delivery, and yet are often regarded as a fringe activity or one
that can be outsourced to business-as-usual functions. Project managers depend on people to
respond to the outputs and benefits that they deliver. People will only respond if they are engaged.
The phrase “stakeholder management" implies that these people can be made to respond
positively to a project, but the truth is that a project manager frequently has no formal power of
authority and therefore has to rely on engagement to achieve his/her objectives.
Learning Objective:

1. Define stakeholders and stakeholder engagement.
2. Understand the benefits of stakeholder engagement.
3. Familiarize with the design of stakeholder engagement plan.
4. Know the method and forms of stakeholder engagements.
5. Know the principles of successful stakeholder engagement.
Course Materials:
The term “stakeholders” generally refers to any individual or group that, either positively
or negatively, impacts or is impacted by the decisions and actions of an organization. They are
often categorized into two groups based on whether the impact is direct or indirect.
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Stakeholder engagement is the process by which companies communicate and get to
know their stakeholders. By getting to know them, companies are able to better understand what
they want, when they want it, how engaged they are and how the companies’ plans and actions
will affect their goals. Furthermore, they can improve their communication and rethinking their
strategies and operations, having long-term benefits such as brand reputation or first mover
advantage.
Benefits of engaging with stakeholders include:

Building Trust: Sincere efforts at engagement can improve relations between a company and its
stakeholders. This can diffuse existing tensions and make it easier to solve potential problems
down the road.
Risk Management: Working with stakeholders can lead to a more stable operating environment
and reveal critical information that is important for company decision-making.
Brand Enhancement: By engaging with stakeholders a company can improve its visibility and
reputation. Customers, investors, and other economic stakeholders may also view this
engagement as a differentiating factor in the market.
Improved Productivity: Better internal engagement can identify areas in which the company can
become more efficient. Additionally, employees that have a greater voice in the workplace tend to
have higher morale.
Strategic Opportunities: Engaging with stakeholders can help a company to identify new business
opportunities and market segments.
Partnerships: By collaborating with stakeholders, companies can pool resources to achieve a
common goal.
Increased Investment: Greater transparency and stakeholder engagement can be an attractive
draw for capital, particularly from impact investors.
Designing a Stakeholder Engagement Plan

1. Identify Stakeholders and Key Issues
• Profile stakeholders to understand their interests, knowledge, and capacity to engage.
• Categorize or map stakeholders based on the characteristics and issues that are most important
to the company or project. This can be accomplished through use of a table, chart, grid, zoning
map, or any other methods appropriate for the company and context. Common dimensions used
in stakeholder mapping include power, influence, interests, proximity and needs.
• Prioritize the issues and stakeholders that are most important to the business.
• Identify who are the legitimate and accountable representatives of each stakeholder.
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2. Establish Objectives and Process
• Decide on the scope of the process, timeline, and level of engagement.
• Set strategic goals and agree upon expectations. Determine what methods are best suited to
achieve these objectives and how to measure outcomes.
• Identify whether there are any regulatory or financial requirements for disclosure or engagement.
• Assign ownership for the process and outline responsibilities for carrying out the different
components of the plan.
• Determine the resources available for engagement and any training needed in order for all
stakeholders to engage effectively. This may include sharing knowledge of the issues and
process, supporting development of specific skills, or increasing resources, time or access to
information.
• Establish a method
3. Implement Plan
• Managers make sure that the process moves forward as planned, gather data, and coordinate
with any third parties that are involved.
• Embed commitment to engagement across all levels of company corporate and operating areas.
• Communicate progress to all stakeholders on a frequent and transparent basis.
• Enact written grievance mechanisms to allow stakeholders a chance to provide feedback during
the process.
4. Review and Report
• Keep track of how outcomes correspond with original objectives. Empowering stakeholders in
this process gives them more ownership and can strengthen the relationship. An independent
party is also helpful in certain circumstances in order to improve accountability and credibility of
the engagement process.
• Use findings and feedback to revise the plan as needed and capture key learnings that can be
applied in future stakeholder engagement initiatives.
• Provide regular and transparent information to stakeholders about the results of the
engagement
Principles for Successful Engagement

Engage with stakeholders early and often: Proactive, transparent communication with
stakeholders helps to build trust and shows that the company is committed to engagement. It is
important to remain in communication with key stakeholders even when there is not a pressing
need as this can pave the way for more effective problem solving when an issue does arise.
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Make it easy for stakeholders to understand: Ensure that the format (language, technology,
medium, etc.) of engagement is understood by and accessible to stakeholders.
Take a long-term approach to engagement: Cultivating a long-term relationship with stakeholders
can improve operational stability and sustainability.
Remain thoughtful and sincere: Listening is important. Successful engagement can enhance a
company’s reputation and brand, and stakeholders will be more willing to participate if they feel
they are being heard.
Mutually define expectations: Establishing goals and a feasible engagement plan increase
ownership and accountability. These should still be flexible enough to accommodate different
interests that arise.
Tailor engagement to the context: Different stakeholders will require different levels of
engagement depending on the company or project type, stage, size, and many other factors. What
is important is the quality and legitimacy of stakeholder engagement.
Sensitivity to stakeholder dynamics: Culture, gender, and political balance can be important to
different stakeholder groups. Make an effort to understand these and ensure that the company is
interacting with a person or group that is viewed as a legitimate authority by the stakeholders it is
trying to engage.
Recognize challenges: Engagement requires time and resources. It also raises stakeholder
expectations and can lead to disappointment if their views are not adequately incorporated into
decision-making.
Discussion Cases
1. What are the method and forms of stakeholder engagements?
2. Why do you need stakeholder engagement in your proposed sustainability project?
3. What will the company must do to maintain stakeholders’ engagement?
4. Investigate and reflect on the sustainability footprint for Patagonia.
5. Cite at least 3 samples of organization/stakeholders under the following with identified
sustainability projects:
a. Multilateral engagement (UN/World Bank/OECD)
b. Government engagement
c. NGO’s
d. Trade associations
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Lesson 7 – Sustainability Management and Reporting Approaches
Overview:
Sustainable management is the intersection of business and sustainability. It is the

practice of managing a firm’s impact on the three bottom lines—people, planet, and profit—so that
all three can prosper in the future. Sustainable management supports a business’s long-term
viability, because it’s preventative rather than reactive. It can take many forms including investing
in fair-trade products, reducing packaging materials, and ensuring humane working conditions at
supplier factories.
A growing number of organizations from a wide range of industries (e.g. retail, food and
beverage, agriculture, tech, insurance, automotive, military, healthcare, utility, and more) are
pursuing sustainable management business goals. Because the organizations most often noted
for their sustainable efforts are top global corporations, it’s easy to forget that smaller and more
local companies are also focused on sustainability.
Learning Objective:

1. Define eco-business and environmental management.
2. Describe lean manufacturing.
3. Know the concept of sustainability strategy.
4. Understand the forms of sustainability reporting.
Course Materials:
Sustainable business and environment management is the key competitive advantage in

the twenty-first century world. The sustainable management of people, process and product is a
difficult task and firms should install a sustainable architecture to get the best out of both “mind-
share” and “market-share” philosophy (Singh, 2018b). Leaders and managers across industry
are engaged in developing organizational sustainable capabilities through fundamental changes
in the organizational processes and systems to practice green management to develop green
products and services. However, it has been observed that plants located in the emerging
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economies than in the industrialized and the developing countries are more particular to
emphasize environmental initiatives across organizational processes, products and services
(Schoenherr, 2012). Therefore, it call upon leaders and manager to increase organizational
abilities to manage emerging challenges faced in both internal and external environments of the
firms (Singh, 2018a, b).
Environmental management involves being aware of how your business operations affect
the environment. Regardless of the size and type of business you run, it's possible to manage
your impact on the environment. This can include:
• reducing your energy consumption and emissions
• using water more efficiently
• managing waste better
Why is environmental management good for business?

As well as being good for the environment, making your business more sustainable has other
benefits:
• Cost savings – by spending less on raw materials, energy, water and waste
management.
• Business reputation – people may be more likely to support a business that cares
about its impact on the environment.
• Resource recovery – reducing, reusing and recycling is important for the environment
and can also be profitable.
• Work health and safety – reduced use of industrial chemicals and less waste can
improve workplace health and safety.
• Legal compliance – your business needs to meet certain environmental protection laws.
Overview of Lean Manufacturing
Lean is a methodology to reduce waste in a manufacturing system without sacrificing

productivity. The customer defines what is of value in terms of what they would pay for the
product or service. Through lean management, what adds value becomes clear by removing or
reducing everything that doesn’t add value.
Reducing or eliminating waste is essential to lean project management, but the ends that
it serves can be different depending on who is asked. Some say it is increasing company profit
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while others maintain its improvements are solely to benefit the customer. Some common goals
follow.
• Improve Quality: To stay competitive, companies can’t be complacent, but must meet
customers’ changing wants and needs. Therefore, processes must be designed to meet
their expectations and requirements. Adopting total quality management can make
quality improvement a priority.
• Eliminate Waste: Waste is bad for costs, deadlines and resources. It takes without
adding any value to a product or service.
• Reduce Time: Time is money, as the adage goes, and wasting time is therefore wasting
money. Reducing the time it takes to start and finish a project is going to create value by
adding efficiencies. Learn and apply some time management strategies.
• Reduce Total Costs: Money is saved when a company is not wasting time, materials
and personnel on unnecessary activities. Overproduction also adds to storage and
warehousing costs. Understanding the triple constraint is the first step to understanding
cost management.
Sustainability Strategy
A sustainability or corporate responsibility strategy is a prioritized set of actions. It

provides an agreed framework to focus investment and drive performance, as well as engage
internal and external stakeholders. Developing a sustainability strategy is an ideal opportunity to
engage external stakeholders and colleagues across the business. Indeed, involving senior
management is essential to success. The most effective way to do this is to involve senior
colleagues on the issues that matter to the business, using language that resonates with
commercial priorities.
Discussion Cases
1. Cite at least three eco-friendly business ideas you want to start up if given an opportunity
and describe.
2. What are the principles/ideas under lean manufacturing?
3. Read and reflect on sustainability management at BMW.
4. Research and reflect on Nestlé and its Shared Value strategy. How do they promote their
sustainability practices?
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Lesson 8 – Product Life Cycle Management
Overview:
Effective product life cycle management brings together the many companies,
departments, and employees involved with the product's production to streamline their activities,
with the ultimate goal of producing a product that outperforms its competitors, is highly profitable,
and lasts as long at consumer desire and technology permit. It goes well beyond just setting up
a bill of materials.
PLM systems help organizations cope with increasing complexity and engineering
challenges of developing new products. They can be considered one of the four cornerstones of
a manufacturing corporation's information technology structure, the others being the management
of communications with their clients (customer relationship management or CRM), their dealings
with suppliers (supply chain management or SCM), and their resources within the enterprise
(enterprise resource planning or ERP).
Learning Objective:

1. Define product life cycle and product life cycle management.
2. Understand the product life cycle management stages.
3. Know how to measure and evaluate product life cycle management.
4. Discuss other related concepts under product life cycle.
5. Cite example of product life cycle.
Course Materials:
Product Life Cycle (PLC) is an assumption that every product goes through that
involves the same pattern of introduction into the market, growth, maturity, and decline. As the
product spends more time in the market and it makes its way through the cycle, its sales
increase. Each product’s PLC is different in the length of scope and duration, and each product
is at risk of not making it out of the introduction phase. However, the company strategy should
remain consistent throughout each of the phases.
The PLC, in brief, is as follows:
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Stage 1: Product Development: The new product is introduced; this is when all of the research
and development happens.
Stage 2: Product Growth: The product is more than an idea or a prototype. At this stage, the
product is manufactured, marketed, and released. Distribution increases, demand increases,
and competition also increases.
Stage 3: Product Maturity: During this stage, the product is widely available, and there are many
competitors in the marketplace. You market the product to different segments, but more
spending on advertising will have no impact on its demand.
Stage 4: Product Decline: The product is losing market share, or becoming obsolete. It is well
past its point of highest demand, and the demand decreases.
Product life cycle management (PLM) is the integration of all aspects of a product,
taking it from conception through the product life cycle (PLC) to the disposal of the product and
components. PLM merges the overarching vision that an organization has for managing the
data, people, software, manufacturing, marketing, and overall plans for the product.
PLM lowers the cost and speeds the time to market for new product development (NPD).
Whether the new products consists of incremental or derivative changes to old products,
groundbreaking new items, or the next generation of platform, there need to be a process for
each organization to manage them. This new product development process (PDP) uses the PLC
to determine what the general shape and sequence of the process will look. A good PLM is
holistic, manages and secures the product information, and ensures that business processes
use and build upon the information.
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The three main elements of PLM are:
• The Information and Communication Technology (ICT): This is all about the necessary
unified platforms and systems, including the architecture, tools, and standards.
• The Processes: This includes all of the people, skills, and organizations involved.
• The Methods: This is the procedures, rules, and practices.
Life Cycle Thinking (LCT) is about going beyond the traditional focus on production site
and manufacturing processes to include environmental, social and economic impacts of a product
over its entire life cycle.
The main goals of LCT are to reduce a product’s resource use and emissions to the
environment as well as improve its socio-economic performance through its life cycle. This may
facilitate links between the economic, social and environmental dimensions within an organization
and through its entire value chain.
Looking at the industrial sector, taking LCT as an approach means going beyond the more
narrow traditional focus on an enterprise’s production facility. A product life cycle can begin with
the extraction of raw materials from natural resources in the ground and the energy generation.
Materials and energy are then part of production, packaging, distribution, use, maintenance, and
eventually recycling, reuse, recovery or final disposal.
Environmental Life Cycle Assessment
E-LCA is a time tested assessment technique that evaluates environmental performance

throughout the life cycle of a product or from performing a service. The extraction and
consumption of resources (including energy), as well as releases to air, water, and soil, are
quantified throughout all stages. Their potential contribution to environmental impact
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categories is then assessed. These categories include climate change, human and eco-
toxicity, ionizing radiation, and resource base deterioration (e.g. water, non-renewable primary
energy resources, land, etc.). The Life Cycle Initiative played a key role in the development of
the life cycle assessment midpoint-damage framework, which conceptualizes the linkages
between a product’s environmental interventions and their ultimate damage caused to human
health, resource depletion and ecosystem quality – information which is of critical importance
to decision makers.
Life cycle costing, or whole-life costing, is the process of estimating how much money
you will spend on an asset over the course of its useful life. Whole-life costing covers an asset’s
costs from the time you purchase it to the time you get rid of it.
Buying an asset is a cost commitment that extends beyond its price tag. For example,
think of a car. The car’s price tag is only part of the car’s overall life cycle cost. You also need to
consider expenses for car insurance, interest, gas, oil changes, and any other necessary
maintenance to keep the car running. Not planning for these additional costs can set you back.
The cost to buy, use, and maintain a business asset adds up. Whether you’re purchasing
a car, a copier, a computer, or inventory, you should consider and budget for the asset’s future
costs.
Conducting a life cycle cost assessment helps you better predict how much your
business will pay when you acquire a new asset.
To calculate an asset’s life cycle cost, estimate the following expenses:
1. Purchase
2. Installation
3. Operating
4. Maintenance
5. Financing (e.g., interest)
6. Depreciation
7. Disposal
Add up the expenses for each stage of the life cycle to find your total.
You might use past data to help you create a more accurate cost prediction. To simplify
the process, start with your fixed costs. Fixed costs for businesses are the expenses that stay the
same from month to month. Then, estimate variable costs, which are expenses that change.
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Lesson 9 – Product Sustainability Tools, Marketing and Stewardship
Overview:
Sustainable design seeks to reduce negative impacts on the environment, and the health
and comfort of building occupants, thereby improving building performance. The basic objectives
of sustainability are to reduce consumption of non-renewable resources, minimize waste, and
create healthy, productive environments. Sustainable design principles include the ability to:
• optimize site potential;
• minimize non-renewable energy consumption;
• use environmentally preferable products;
• protect and conserve water;
• enhance indoor environmental quality; and
• optimize operational and maintenance practices.
Utilizing a sustainable design philosophy encourages decisions at each phase of the

design process that will reduce negative impacts on the environment and the health of the
occupants, without compromising the bottom line. It is an integrated, holistic approach that
encourages compromise and tradeoffs. Such an integrated approach positively impacts all phases
of a building's life-cycle, including design, construction, operation and decommissioning.
Learning Objective:

1. Describe the design for sustainability and design management (ISO 9001)
2. Known supply chain sustainability and sustainability procurement.
3. Understand environmental accounting and marketing.
4. Familiarize with embedded energy and water (PAS 2050) and greenwashing.
5. Identify product stewardship and extended producer responsibility.
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Course Materials:
ISO 9001 sets out the criteria for a quality management system and is the only standard
in the family that can be certified to (although this is not a requirement). It can be used by any
organization, large or small, regardless of its field of activity. In fact, there are over one million
companies and organizations in over 170 countries certified to ISO 9001.
This standard is based on a number of quality management principles including a strong

customer focus, the motivation and implication of top management, the process approach and
continual improvement. These principles are explained in more detail in ISO’s quality
management principles. Using ISO 9001 helps ensure that customers get consistent, good-quality
products and services, which in turn brings many business benefits.
ISO 9001 is based on the plan-do-check-act methodology and provides a process-

oriented approach to documenting and reviewing the structure, responsibilities, and procedures
required to achieve effective quality management in an organization. Specific sections of the
standard contain information on many topics, such as:
• Requirements for a QMS, including documented information, planning and determining
process interactions
• Responsibilities of management
• Management of resources, including human resources and an organization’s work
environment
• Product realization, including the steps from design to delivery
• Measurement, analysis, and improvement of the QMS through activities like internal
audits and corrective and preventive action
Changes introduced in the 2015 ISO 9001 revision are intended to ensure that ISO 9001
continues to adapt to the changing environments in which organizations operate. Some of the key
updates in ISO 9001:2015 include:
• The introduction of new terminology
• Restructuring some of the information
• An emphasis on risk-based thinking to enhance the application of the process approach
• Improved applicability for services
• Increased leadership requirements
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Supply chain sustainability (SCS) is a holistic view of supply chain processes, logistics
and technologies that affect the environmental, social, economic and legal aspects of a supply
chain's components. Typically, sustainability initiatives include identifying the source of raw
materials, ensuring good conditions for workers and reducing the carbon footprint.
Historically, supply chain was simply about logistics and knowing when and where goods
were moving, but the rise of the digital supply chain and accompanying visibility and analytics
tools has provided companies with the ability to gather data about how well each component in
the supply chain demonstrates corporate social responsibility. This transparency has promoted
the concept of responsible sourcing and encouraged supply chain partners to develop and share
best practices for green operations and logistics. It has also allowed prospective partners to
demonstrate compliance with industry best standards for worker safety, environmental protection
and business ethics.
Factors that affect SCS include amount of waste, carbon footprint and emissions, air
pollution, labor violations, deforestation and the health and safety of workers. SCS is based on
the principle that socially responsible products and practices are not only good for the planet and
the people who live here, they are also good for building positive brand awareness, minimizing
environmental impact and improving long-term profitability.
In large companies, the task of demonstrating supply chain sustainability may be given to
a supply chain analyst or sustainability officer. In addition to developing and implementing
programs and processes in support of sustainability, the job may also involve qualifying new
suppliers, ensuring delivery and quality performance targets are achieved and supporting supplier
diversity policies.
Sustainable procurement means making sure that the products and services we buy are
as sustainable as possible, with the lowest environmental impact and most positive social results.
The 2015-17 UNDP Procurement Strategy represents a commitment by the organization
to realize the benefits sustainable procurement offers. As part of the strategy, UNDP procurement
will focus on:
• Incorporating sustainability criteria in the organization’s purchasing evaluations;
• Developing monitoring mechanisms and assessments to promote vendor compliance in
the UNDP supply chain;
• Stimulating innovation through crowd-sourcing, functional specifications and piloting other
innovative technologies;
• Better Integration of procurement at the project design stage;
• Promoting and utilizing public-private partnerships with companies that focus on
innovation and sustainability; and
• Enhancing the already high transparency standards in UNDP’s procurement activities.
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Environmental Accounting
The PAS (Publically Available Specification) 2050 provides a standard method for
calculating the greenhouse gas emissions embedded within the life cycle of a product or service.
The method was developed by British Standards Institute (BSI), at the request of Defra and the
Carbon Trust. It was launched in October 2008, following a period of consultation and testing.
Greenwashing is the process of conveying a false impression or providing misleading

information about how a company's products are more environmentally sound. Greenwashing is
considered an unsubstantiated claim to deceive consumers into believing that a company's
products are environmentally friendly. For example, companies involved in greenwashing
behavior might make claims that their products are from recycled materials or have energy-
saving benefits. Although some of the environmental claims might be partly true, companies
engaged in greenwashing typically exaggerate their claims or the benefits in an attempt to
mislead consumers. Greenwashing is a play on the term "whitewashing," which means using
misleading information to gloss over bad behavior.
The terms product stewardship and extended producer responsibility (EPR) are often
used differently. However, by speaking the same language, we can have a constructive public
discussion. PSI developed the nation's first Principles of Product Stewardship in 2001 and
updated them in 2011 to harmonize terminology in the U.S. to help streamline the development
of policies, legislation, and other initiatives:
96
Product stewardship is the act of minimizing the health, safety, environmental, and social
impacts of a product and its packaging throughout all lifecycle stages, while also maximizing
economic benefits. The manufacturer, or producer, of the product has the greatest ability to
minimize adverse impacts, but other stakeholders, such as suppliers, retailers, and consumers,
also play a role. Stewardship can be either voluntary or required by law.
Extended producer responsibility (EPR) is a mandatory type of product stewardship that

includes, at a minimum, the requirement that the manufacturer's responsibility for its product
extends to post-consumer management of that product and its packaging. There are two related
features of EPR policy: (1) shifting financial and management responsibility, with government
oversight, upstream to the manufacturer and away from the public sector; and (2) providing
incentives to manufacturers to incorporate environmental considerations into the design of their
products and packaging.
Reminders:
For Reflection Paper/Case Analysis
The written case analysis should follow this format:
I. Statement of the Problem
II. Objectives
III. Areas of Consideration
IV. Alternative Courses of Action
V. Recommendation/Justification
97
Sustainability Project Proposal
SECTION ITEMS TO ADDRESS
Title Page (Not included in page total) Title, Your Name, Title of this class
Introduction (About 2 pages) Provide a brief description of the company. Be sure to

note the boundaries of what you intend to cover in
your paper.
• Business Case Provide a brief outline of the business case for

sustainability for your company. What are the major
drivers for sustainability?
• Positive View Describe its positive view of a sustainable future. What

is its vision? Be sure to include 3-4 core values. How
could the vision or values be improved?
Background (About 3 pages)
• Sustainability Describe the sustainability “footprint” of the organization

Footprint – its activities, products and services. A table or chart
may help to describe this.
• Corporate List and describe any existing corporate compliance

Regulatory documentation. How is the corporation currently
Compliance & addressing its three responsibilities? How can it be
Governance improved?
• Stakeholder Identify and describe the stakeholders (you can use a

Engagement table if you wish).
Describe the engagement of the stakeholders (a flow
chart can be helpful here) How can it be improved?
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Discussion (About 8
pages)
• Environmental How does the organization address its environmental responsibility?

Responsibility How can this be improved?
• Social Responsibility How does the organization address its social responsibility? How can
this be improved?
• Economic How does the organization

Responsibility address its economic responsibility? How can this be improved?
• Corporate Does the organization have a sustainability strategy? If not, what

Sustainability would you propose? If it already has a strategy, how could it be
Strategy improved?
• Corporate Briefly describe the current state of the management system for the
Sustainability company. What benchmarks could be used to improve its program?
Management What additional measures would you recommend?
System
• Supply Chain Describe the supply chain of the company. What improvements
Management would you suggest to manage this supply chain?
Results (About 2
pages)
• Sustainability What are the likely outcomes once the sustainability management
Metrics and system is in place? What metrics would you use to report the results
Reporting to company stakeholders? How would you ensure transparency and
accountability?
References (Not Must use APA style format

included in the page
count)
End of Module
99

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What is the purpose of this course?

What is the purpose of this course?

What are some sustainability challenges discussed in the document?

What are some sustainability challenges discussed in the document?

All rights reserved. December 28, 2020

SUBJECT CODE : ACCO 30173

• mitigation and adaptation to climate change;

• going beyond corporate social responsibility;

GOALS OF THE COLLEGE OF ACCOUNTANCY & FINANCE

The College aims to:

1. To ensure the development of globally-competitive professionals, managers and leaders

3. Strengthen / enhance its organizational capability to become the leader in advocating

OBJECTIVES OF THE COLLEGE OF ACCOUNTANCY & FINANCE

At the end of the course, the students are expected to have:

g. Propose to incorporate sustainability strategy into an overall enterprise strategy

h. Apply your understanding of sustainability at three levels: societal, organizational, and

Week Topic Learning Outcomes

After thorough discussion of the

OVERALL TOTAL NUMBER OF HOURS 54

Final Grade = (1st Grading Period + 2nd Grading Period)

END OF SECOND SEMESTER

Prof. Mark Anecito R. Perlas

Prof. Marietta M. Doquenia

Prof. Lilian DM. Litonjua

Dr. Emanuel C. De Guzman

After studying this lesson, the student should:

Nature of Sustainability and Sustainability Reporting

Sustainability reporting is an organization’s practice of reporting publicly on its significant

Sustainability reporting also benefits stakeholders interested in an organization’s ability to

Conceptual Background of Sustainability Reporting

There is also the development of environmental accounting. Environmental accounts have

Corporate decision-making is often heavily reliant on financial information, although this

Sustainability reporting is a systematic tool to gather and present sustainability information

Since the mid-1990s, sustainability reporting has developed in various directions.

Sustainability Reporting in the Philippines

Consequently, Sustainability Reporting has emerged as a common practice for companies

The need to promote sustainability reporting to Philippine companies served as the

SEC’s Vision on Sustainability Reporting

3. Strict Imposition of Penalty for Non-Submission of SR

Benefits of Sustainability Reporting

1. Identification Effective management of sustainability risks and opportunities

2. Sustainable Vision, Strategy and Business Plans

3. Improved management systems

2. Improved company reputation and brand value

Role of Professional Accountants in Sustainability Reporting

Professional accountants working in commerce, industry, financial services, education,

Sustainability “Audit” and Personal Sustainability Plan

A sustainable strategy can lead to business resilience by enabling an organization

Organizations that are proactively changing their business models to respond

After studying this lesson, the student should:

Sustainability accounting entails systems, methods, and processes of creating

Sustainability information includes both financial and non-financial information. Financial

Differences between Sustainability Reporting and Financial Reporting

Sustainability Reporting Guidelines for Publicly-Listed Companies

Submission with SEC Form 17-A

Comply or Explain Approach

Penalty for Non-attachment of the Sustainability Report to the Annual Report

Sustainability Reporting Framework

The terms economic, environmental and social are defined as follows: