Kathrina Dineros

Sustainability Report 2018 92 About This Report Our 2018 Sustainability Report details GT Capital Holdings Inc.’s sustainability performance in terms of the economic, environmental, and social impacts across the company’s operations. This report covers the reporting period January 1 to December 31, 2018 and discusses GT Capital performance at the parent company level, unless otherwise stated (102-46). This report has been prepared in accordance with Global Reporting Initiative (GRI) Standards: Core Option. Sustainability reporting specialists from the University of Asia and the Pacific oriented GT Capital on the GRI framework and guided the company in the required stakeholder consultations needed to generate the report. Our company was given recommendations that require organization-wide actions, which we look forward to implementing in the succeeding months. This Sustainability Report is printed on Magno 150gsm, a PEFC Credit material and FSC Mix Credit material certified product made from European mills. By optimizing the use of natural resources, this product achieves environmental sustainability while keeping the highest quality. Sustainability Report 1 Message from the President Dear Fellow GT Capital Stakeholder, Clearly, the private sector performs a crucial role in alleviating the country’s manifold challenges, such as mobility and transportation gaps, underserved demand in housing, and low levels of life and general insurance coverage, just to name a few. As a publicly listed conglomerate invested in key sectors of the Philippine economy, our company, GT Capital Holdings, Inc. (GT Capital) clearly commits to its social responsibility of providing solutions to those aforementioned challenges. In fact, an integral part of GT Capital’s vision is to contribute to nation-building by generating a sustainable social value, hand-in-hand with our financial and economic undertakings. To better enable us to achieve this objective, we have, over the decades, established strategic long-term partnerships with global best-of-class brands that are recognized experts in their respective lines of business. Together with our strategic partners, we endeavor to provide the country with durable vehicles through Toyota Motor Philippines Corporation, secure financial products and services through the Metrobank Group, quality homes through Federal Land, Inc., reliable infrastructure via Metro Pacific Investments Corporation, and trustworthy insurance protection with AXA Philippines. These ventures form our core businesses, which operate in underpenetrated sectors, are dominant in their respective markets, and benefit from group-wide synergies. Furthermore, GT Capital’s access to capital 2 Sustainability Report markets enables it to financially support these component companies in order for them to further expand and grow. Consequently, they are better positioned to contribute in no small measure to the improvement of people’s lives. Our commitment to improve society started when our late Chairman Emeritus, Dr. George S.K. Ty, founded Metropolitan Bank & Trust Company (Metrobank) in 1962. Metrobank has since evolved to be one of the largest banks in the Philippines with a strong network abroad. Through Metrobank, we have provided numerous small and medium-sized enterprises (SMEs) access to capital, including those located in agricultural areas, which in turn contributed to inclusive economic growth. This noble commitment extends to other GT Capital component companies as well. For instance, Toyota Motor Philippines (TMP) has introduced affordable car models acquired by transport network vehicle scheme (TNVS) drivers and operators, when the innovative service was first introduced in the Philippines. This helped in generating additional income for TNVS drivers, operators, and their families. Similarly, we realized the need to provide more homes in Metro Manila and nearby areas. Through Federal Land, we built condominium towers and master-planned communities in strategic locations inside the National Capital Region. We then partnered with Property Company of Friends, which developed Lancaster New City, a vast, budding satellite city in the province of Cavite to provide affordable, secure homes for thousands of Filipinos. Our equity investment in Metro Pacific further supports our vision of nation-building by providing our stakeholders access to basic services such as clean water, reliable power, tollways, railways, and hospitals, in consonance with the government’s thrust to significantly enhance the country’s infrastructure landscape. As we continue to grow our businesses, we acknowledge that our economic, environmental, and social impacts grow alongside them. Our impacts affect all of our stakeholders, which include our host communities, customers, shareholders, employees, suppliers, and business partners. We also know that our businesses cannot thrive without a sustainable environment and society. With these, we embarked on our sustainability journey and this inspired and convinced us to craft our first report, using the Global Reporting Initiative (GRI) standards. The essence of this journey supports the United Nations’ Sustainable Development Goals (UN SDGs). We have analyzed the risks and opportunities to our businesses that may arise from the 17 UN SDGs. Based on our study, we have determined that, initially, 10 out of the 17 SDGs are aligned with our businesses. While there are several areas where we contribute to the UN SDGs, one of our most significant contributions is our investment in various industries that increase productivity and generate more jobs that result in national prosperity. At present, we are looking at the possibilities on how GT Capital and our component companies may expand our contributions to the specific targets of these UN SDGs. As we harness the energy and contribute to the capacity of the private sector to spearhead change, we keep in mind the legacy that Dr. George S.K. Ty set upon us – that there should be a synergistic approach when it comes to our investments and initiatives, which means that not one undertaking operates separately in a silo, but rather all of them must cooperate and work together to achieve success. That is our formula for being one of the leading conglomerates in the country, and that is also how we will champion sustainability at GT Capital. With this maiden report, we are presenting our 2018 sustainability efforts. We commit ourselves to be advocates of sustainability through our economic, environmental, and social practices. As we pledge to bring excellence to our operations, we shall treat sustainability with the same level of commitment and importance. Since we are just in the beginning of our sustainability journey, we believe that there are still opportunities for improvement. Thus, with your invaluable trust and support, we at GT Capital are confident that, working together, we can enhance our sustainability initiatives and thereby contribute to the improvement of the conditions prevailing in our developing and growing country. CARMELO MARIA LUZA BAUTISTA President Sustainability Report 3 Sustainability Framework have created a sustainability strategy that aligns with our business model and the Three P’s of Sustainability (People, Prosperity, and Planet). We at GT Capital have been committed to nationbuilding through business excellence for several years. Embracing our business model, we place a premium on value creation and appreciation, strategic partnerships, and synergistic growth in our business practices. While we continue to recognize the advantages of our model, we are compelled to explore a more appropriate approach specific to our sustainability operations. With business excellence at its core, our sustainability framework ensures we place equal importance to our economic, environmental, and social inputs, ensuring that these generate excellent and quality outputs. Our practice of business excellence comes with our adherence to economic, environmental, and social best practices. Looking beyond value creation and appreciation from the perspective of economic value, we also acknowledge that our business also significantly affects our society and the environment. With this, we We recognize that the journey to sustainability will present challenges, but these are challenges we are committed to overcome these. With robust leadership, positive economic performance, planet-conscious operations, and growing partnerships, GT Capital is ready to take on sustainability and ensure a better future for succeeding generations. PLANET Sustainability Report M Le R IT Y Sus ta e Lea inabl dership PE BUSINESS EXCELLENCE OS E 4 PL MARKET LEADERSHIP IN UNDERSERVED SECTORS nic Orga th Grow STRATEGIC PARTNERSHIPS PEO organic growth Str Par ateg tne r new sectors lue Va tion ea Cr synergy ic hip s Conscious Operations a ad rket ers hip EXTENDING THE VALUE CHAIN PR Our Materiality Process In determining the GRI Standards topics that are material to our stakeholders, we partnered with the University of Asia and the Pacific (UA&P) to conduct the materiality process. With the help of UA&P, we identified the stakeholder groups that were consulted by prioritizing them in terms of their influence on our economic, social, and environmental performance, and who among them are most affected by our operations (102-42). Hence, even without a complete knowledge and understanding of the GRI disclosures, one would be able to select which statements would be of greatest interest to and possible impact on them in relation to the operations and sustainability performance of the company. This process resulted in 16 material topics and 26 material disclosures for our stakeholders (102-44 and 47). Economic (4) Economic Performance Indirect Economic Impacts OUR STAKEHOLDERS (102-40) Principals Capital Fund Providers Employees Senior Executives Regulators Component Companies An online survey was distributed among the identified stakeholders (102-43). The questionnaire was structured in such a way that the respondents were able to conveniently express their expectations from our company. In answering the questionnaire, the respondents simply checked a box expressing their interest in whether the company reports on the specified statements, which were modified versions of the indicators from the GRI Standards. These statements are codified in a special manner so that they may not appear too technical to any respondents. Anti-corruption Anti-competitive Behavior Environmental (2) Energy Environmental Compliance Social (10) Employment Labor/Management Relations Training and Education Diversity and Equal Opportunity Nondiscrimination Human Rights Assessment Supplier Social Assessment Marketing and Labeling Customer Privacy Socioeconomic Compliance Sustainability Report 5 How We Contribute to Building our Nation (103-1,2,3,203-2) We continue pursuing our business because we know that we not only gain for ourselves, but also for our society. We are aware that our operations stimulate smaller economic activities that eventually yield to productivity and profitability at the local level. As an investment holding company, our indirect economic impacts primarily occur through our component companies and the supply chain which includes both customers and suppliers. One of our impacts in the economy is the creation of employment. Because of our investments, GT Capital has generated 26,346 jobs. Component Companies Total Number of Employees (102-7,8) GT Capital Holdings, Inc. 36 Metropolitan Bank and Trust Company 18,510 Toyota Motor Philippines Corporation 1,925 Federal Land, Inc. Property Company of Friends, Inc. 1,524 Philippine AXA Life Insurance Corporation 2,419 Toyota Manila Bay Corporation 983 Toyota Financial Services Philippines Corporation 417 Metro Pacific Investments Corporation 6 480 Sustainability Report 52 We ensure that investment decisions made are consistent with our core values of integrity, competence, respect, entrepreneurial spirit, and commitment to value creation. We guarantee due diligence for new investments by considering our overall economic contribution and position. We undertake regular monitoring of already existing investments to determine their alignment to GT Capital’s corporate mission, vision, and core values. The company has developed an investment criteria and risk appetite highlighting a target investment’s contribution to the national and fiscal economy. It also commits to continuously invest in companies that will not just make positive returns for stakeholders but will also stimulate and uplift the national and local economy. GT Capital’s goal is to engage in meaningful investment ventures that contribute to nation-building and to continuously support component companies in venturing into expansion initiatives which further improve its economic contribution Small- and MediumSized Enterprise (SME) Agribusiness Loans (203-2) Banks foster and contribute to the growth and expansion of small- and medium-sized enterprises (SMEs) in like manner that they do with large or toptier corporates: through loans. By lending to these enterprises, banks enable them to either start, maintain, or grow their operations. Metrobank has been operating for more than 55 years, and in those years, it has helped small businesses grow through its SME-lending services. Committed to that particular stakeholder base, Metrobank launched the SME Agribusiness Loan Program, which offers seasonal loans to SMEs, especially in underbanked provinces such as Ilocos Sur, Cagayan Valley, Ifugao, Isabela, Pangasinan, Nueva Vizcaya, Nueva Ecija, and Occidental Mindoro. The SME Agribusiness Loan Program aims to align the financing needs of SMEs with their businesses, primarily by providing access to additional working capital at a more affordable cost and taking into consideration seasonal demands. The Bank, however, does not stop at providing financial products and services. It also aims to feed SMEs with relevant and timely information that they need to further expand their businesses. The Bank does this by educating them on the proper handling and reporting of their financial and operating performance and on how bank loans can maximize their income while minimizing their interest expense. As the Bank equips them with needed knowledge, it also helps build their clients’ reputation and creditworthiness in the banking sector. We are proud of the transformation brought about by this program. Agribusiness SMEs who formerly relied on informal, usurious loan providers charging interest rates as high as five to six percent a month are now able to minimize their expenses, improve cash flows and therefore become more profitable and sustainable. What used to be undocumented, dubious borrowings are now legal, duly acknowledged, and aptly transparent banking transactions. The program also helps our SME clients become better informed when it comes to banking. One of our clients expressed his gratitude to Metrobank by saying, “Having a credit facility, we were able to maximize the return of our loan with a lower interest rate. Because of that, we are expanding our business now with additional capital. Before, we were terrified to avail of loans with banks, but with your help, we were able to fully understand the process and remove that fear.” Sustainability Report 7 SME Kapihan (203-2) Metrobank aims to provide SMEs the information they need to sustainably grow their businesses. As a result, Metrobank has launched SME Kapihan – a product presentation activity for business owners that provide participating SMEs an avenue to acquire information relevant to their businesses. In order to reach and inform more stakeholders, the program is conducted nationwide, from as far as Aparri, Cagayan in the north to the Zamboanga Region in the south. The SME Kapihan program targets SMEs that are as yet unfamiliar with banking products and services, raising their awareness of how the Bank’s SME Loan Program could support their capital requirements and expansion plans. The product presentation lasts for 8 Sustainability Report one to two hours, with a minimum of five and a maximum of 15 attendees, all from the same industry or sector. By educating the SMEs on loan services, the participants are enlightened on various bank loan benefits such as lower interest rates, zero hidden charges, and gradual improvement in their credit history. The SME Kapihan program does not only address the loan-related issues experienced by SMEs, it also helps them become more knowledgeable business owners who can make well-informed choices relating to their operations. Participants who attended SME Kapihan sessions are thankful to be informed and enlightened on the Bank’s loan services because these made them realize the potential costs savings and efficiencies that they can realize. In turn, Metrobank appreciates the shift in the narrative that the Bank only caters to large companies, as participants recognize its efforts in helping SMEs build, maintain, and enhance their operations. established in 1975. In 2004, VPMI began supplying metal fuel CARS Program Participation (203-2) tanks for Toyota’s Corolla Altis and Camry sedan models, and subsequently, for the Innova multipurpose van. In recent years prior to the CARS Program, VPMI was awarded contracts to manufacture parts for the Vios and the Innova, such as front bumpers and instrument panels. When TMP selected VPMI as a participating car maker for the CARS Program, VPMI enjoyed The Comprehensive Automotive Resurgence Strategy (CARS) increased business through an expanded parts supply contract, Program is a government initiative geared towards revitalizing the which now includes wheelhouse and quarter panels, among Philippine automotive industry. It aims to attract domestic and others. To enable VPMI’s participation in CARS, it engaged foreign direct investments into the sector and subsequently in the Ogihara (Thailand) Co. Ltd. as its technical agreement partner medium- to long-term, developing the Philippines as a regional to train personnel on spot welding techniques. As a result of the automotive assembly or manufacturing hub. The participating car CARS program, VPMI expanded the number of parts it made brands will have to comply with the performance-based terms and for the Vios. In addition, the firm was able to expand its process conditions of the program, including the assembly and sales of at capability through new press machines and welding equipment. least 200,000 units of the enrolled car model over six years. As an Subsequently, VPMI’s sales are projected to increase by an incentive, participants that meet the requirements will receive tax additional Php40 million a year, over the program’s six-year certificates that they can use to defray specific types of taxes. timeframe. With the approval of the Department of Trade and Industry’s Board Because of its participation in the CARS program, TMP not only of Investments (BOI), TMP is one of the two car companies that delivers customer satisfaction through its best-selling Vios, but have qualified for the CARS Program. As a proud participant of the also sustainable manufacturing capabilities for local enterprises. CARS Program, TMP has invested at least Php5.2 billion into the Efforts such as these contribute to the Group’s thrust of providing initiative. gainful employment and a thriving business environment for nation-building. Under the program, TMP is committed to assembling at least 200,000 units of the all-new Vios, the country’s bestselling passenger car, over the model’s six-year life span. To achieve this ambitious target, Toyota bolstered its manufacturing capabilities at its Santa Rosa plant, which now includes a 3000T plastic injection system, a 1600T AO servo press machine, stamping dies, a roller hemming system, and equipment for press and resin parts. TMP’s involvement in the CARS Program created new jobs and capabilities not only for itself, but also for several participating parts makers, namely Technol Eight Philippines Corp., Toyota Boshoku Philippines Corp., Valerie Products Manufacturing Inc., Ogihara (Thailand) Co. Ltd., Manly Plastics Inc., and Toyoda Gosei Co. Ltd. One of these firms is Valerie Products Manufacturing Inc. (VPMI), a fully Filipino-owned automotive and appliance parts manufacturer Sustainability Report 9 How we build our trust with our stakeholders Risk Oversight Committee. It is also important to note that any changes in the risk management process that may arise from self-improvement initiatives and recommendations from internal audits must be approved by our Board (102-30; 102-31). GT Capital is a listed major Philippine conglomerate with interests in market-leading businesses across banking, automotive assembly, importation, distribution and financing, property development, life and general insurance, and infrastructure and utilities, (102-2). The risk management function performs annual risk reassessment geared towards prospective identification, assessment, and analysis of risks which then guides GT Capital in its business activities in the coming year. The annual risk reassessment is presented during the company’s strategic planning conference through the Risk Steering Committee after consultation with each risk owner. The results of the reassessment are then presented to the Board of Directors through the Risk Oversight Committee (102-11). The governance of our overall operations is handled by GT Capital’s Board of Directors, encompassing all our established committees (102-19; 102-22). GT Capital is governed by its 11-member Board of Directors. It exercises authority over specific aspects of its business through various Board Committees - Executive, Nominations, Compensation, Audit, Corporate Governance and Related Party Transactions, and Risk Oversight (102-18). GT Capital’s Board of Directors is responsible for decision-making on economic, environmental, and social impacts. Our Risk Oversight Committee, Risk Steering Committee, and Sustainability Technical Working Group handle our stakeholder consultations, while the Risk Oversight Committee manages the general oversight of our sustainability activities. Our company has identified the Chief Risk Officer (CRO) as our sustainability champion who reports administratively to the President and functionally to the Risk Oversight Committee of the Board of Directors (102-20;102-21). Our Risk Department conducts an annual risk reassessment process to mitigate any activity that may jeopardize the company’s operations. The results of this assessment are reported to the Risk Steering Committee and to the Board of Directors through the 10 Sustainability Report In its latest risk reassessment, the Risk Department identified, in relation to sustainability, a sustainability risk which covers risk events in environmental, social, and governance aspects. The identification of this specific risk and the resulting assessment and controls initiated are results of the company’s acknowledgement of its exposure to risks related to sustainability, not just in its business operations but in terms of reputational and social impact as well (102-15). Furthermore, risks and opportunities related to sustainability are indirectly addressed in other risk items primarily under strategic, operational, and reputational aspects. In practicing our corporate governance structure, we ensure that with respecting the line of authority also comes our own initiative of fulfilling our duties and responsibilities either as an employee, an officer, or a committee member of GT Capital. We recognize the fact that aside from stakeholders of the company, we also serve as the face of the company’s years of excellence and commitment to nation-building. Promoting a culture of Good Governance (103-1,2,3) We do not tolerate corruption in the workplace as it may damage GT Capital’s reputation which may eventually result in the low morale of our employees. It may also have financial, legal, and regulatory consequences. The company had all deals for 2018 assessed for corruption risk to avoid such consequences. GT Capital’s Code of Discipline provides penalties for corruption violations. Our Code of Ethics also enjoins that all directors, officers and employees shall ensure the conduct of fair business transactions and guarantee that personal interest does not affect the exercise of their duties. Likewise, they shall not use their position to profit or acquire benefits or advantage for themselves or related interests. GT Capital has established procurement policies and contracts to avail crucial services which are reviewed and approved by the Bids and Awards Committee or the Senior Executive Committee for extraordinary service engagements. We aim to continue our zero corruption-related violations. We also intend to have a refresher on policies for our employees, as well as a periodic review and adjustment of our Code of Discipline. All deals entered into in 2018 were assessed for corruption risk. No significant corruption risks were identified (205-1). Communication received by the Chief Audit Executive (CAE) through the governance hotline were reported during the monthly Management Committee meetings or forwarded to the concerned departments, as applicable (205-2). Anti-competitive Behavior (103-1,2,3) Competition stimulates innovation, productivity and competitiveness, all of which contribute to an effective business environment. We conduct due diligence and engage legal advisers to ensure compliance with the Philippine Competition Act. Being compliant with the said Act, the company experienced zero legal actions in relation to anti-competitive behavior, antitrust, and monopoly practices. There were no legal actions pending against the company in relation to anti-competitive behavior, anti-trust, and monopoly practices (206-1). Sustainability Report 11 Performance Highlights 12 Sustainability Report GT Capital serves customers nationally across sectors including (a) automotive assembly, importation, distribution, dealership and financing, (b) banking, (c) property development, (d) life and general insurance, (e) infrastructure and utilities, and (f) motorcycle financing (102-6). The entities consolidated in the financial statements are Federal Land, Inc., Toyota Motor Philippines Corporation, Property Company of Friends, Inc., Toyota Manila Bay Corp., and GT Capital Auto Dealership Holdings, Inc. GT Capital also has significant investments which are accounted for using the equity method in Metropolitan Bank and Trust Company, Metro Pacific Investments Corporation, Philippine AXA Life Insurance Corporation, Toyota Financial Services Philippines Corporation, and Sumisho Motor Finance Corporation (102-45). At the consolidated level, GT Capital has generated Php 215,825 million for 2018. A total of Php 205,836 million was distributed to our business partners and stakeholders. 201-1 Direct Economic Value Generated and Distributed (in Php)* Direct Economic Value Generated Direct Economic Value Distributed Operating Costs Employee Wages and Benefits Payments to Providers of Capital Payments to Government Community Investments/Donations Economic Value Retained 215,825,000,000 185,106,000,000 3,676,000,000 12,853,000,000 4,200,000,000 1,000,000 9,989,000,000 Defined Benefit Plan for Employees (201-3) GT Capital has provided defined benefit retirement plans for their employees. GT Capital’s pension liability for 2018 is Php 859 million at the consolidated level. * Exact from millions place and greater Sustainability Report 13 Environment Toyota Motor Philippines Solar Farm at its assembly plant in Sta. Rosa, Laguna 14 Sustainability Report ENERGY (103-1,2,3) We commit to lessen our impact in the environment. Energy conservation also positively contributes to cutting back our operating expenses, which is key to sustainable and profitable business operations. We exert conscious efforts in energy conservation at our head office through shifting into more energy-efficient office equipment and minimizing consumption only to necessary usage. We plan to draft our environmental policy in the coming years. We also aim to achieve a reduction in our energy consumption which translates to lower energy costs and contributes to sustainable business operations. We also target a net percentage decrease in total energy consumption and in average consumption per employee. To measure our performance against the target percentage decrease, we have gathered baseline data for our 2018 energy consumption, which stands at 151,696 kWh. Additionally, we are proud to disclose that we have been compliant of environmental laws and regulations – having received zero fines and sanctions for the year. Sustainability Report 15 Social Workers at a TMP OEM partner for its participation in the CARS program 16 Sustainability Report Partnering with Employees EMPLOYMENT (103-1,2,3) We maintain healthy relationships with our employees through hiring of highly qualified candidates, provision of acceptable compensation packages (benchmarked), ensuring a healthy working environment, and ensuring employee satisfaction through surveys. We commit to hire, retain, and develop talents. One of the goals and targets of our Human Resources and Administration Department (HRAD) is to achieve attrition and vacancy rates that are below the industry average. The HRAD Head primarily manages the human resource administration and development processes. We also have a payroll system that facilitates compensation and other benefits. The hiring and compensation processes are subject to regular internal audits in accordance with the Internal Audit Department’s plan. Competency assessment for employee candidates are also facilitated by a third-party consultant. Our Human Resources Committee reviews and proposes changes and improvements to the compensation and benefits package every year subject to the approval of the Executive Committee. As a result of this initiative, our Executive Committee has approved an increase in group life insurance coverage and improvement in the car plan package for senior officers. Regular employees are also granted life insurance, health care, disability and invalidity coverage, parental leave, and retirement provision. The HRAD conducts continuous reviews on an annual basis and proposes changes as necessary. Improvements identified relate to the documentation of leaves and the acquisition of a timekeeping system to be able to incorporate the necessary adjustments in the management approach. Sustainability Report 17 NEW EMPLOYEE HIRES (2018) (401-1) Age PARENTAL Leave (401-3) Male Female 20-30 1 0 30-40 0 1 41-50 1 0 51-60 1 0 EMPLOYEE TURNOVER (2018) Age Male Female Male 7 0 0 - 1 - 0 1 Number of employees that are entitled to benefits (401-2) Life insurance 139 Health care 139 0 Female Total number of employees that were entitled to parental leave, by gender. Total number of employees that took parental leave, by gender. Total number of employees that returned to work in the reporting period after parental leave ended, by gender. Total number of employees that returned to work after parental leave ended that were still employed 12 months after their return to work, by gender. Return to work and retention rates of employees that took parental leave, by gender. Disability and invalidity coverage 0 MINIMUM NOTICE PERIOD (401-4) Parental leave 2 Retirement provision 0 30 days (4 weeks) prior to implementation of operational changes 18 Sustainability Report 7 2 2 2 2 LABOR/ MANAGEMENT RELATIONS (103-1,2,3) Our Company is committed to ensure sufficient information dissemination through active employee engagement. This is done through one-on-one meetings or group discussions. As of this writing, our management is in the process of updating its manual specifically on the areas such as: update of job description and update of relevant Policies and Procedures Manual (PPM) for new functions. We aim to maintain healthy relationships with employees through full disclosure of plans that may affect employees’ well-being. We also commit to provide employees with a reasonable notice period prior to operational changes. As of 2018, we provide a notice period of at least 30 days (4 weeks) before implementing operational changes. TRAINING AND EDUCATION (103-1,2,3) Training presents a prime opportunity to expand the knowledge base of all employees, which will be beneficial not only to them, but to the company as well. We provide individual development plans (IDP) for our employees based on their competency assessments. IDP includes career and succession planning. We are now in the process of including talent management and training and education in our manual. We commit to upgrade our employees’ competencies through individual development plans and aim to provide at least 16 hours of training per employee per year. We encourage our employees to improve their knowledge base through training programs relevant to their fields of expertise. For 2018, GT Capital has 53.3 average training hours per employee having attended the following training programs (404-1; 404-2): • Effective Communications and Human Relations • ASEAN Corporate Governance Scorecard Workshop for Publicly-Listed Companies • VBA Macro 2013 Training • Diploma Program in Corporate Finance • Value Added Tax Philippines: In and Out • Company Valuation: Principles, Method, and Application • Business Continuity Management Practitioner • Annual Disclosure Rules Seminar • SEC-PSE Corporate Governance Forum • Commercial Arbitration Training • 7 Habits Application for Managers Public Workshop • Analytical Problem-Solving Workshop Sustainability Report 19 • • • • • • • High-Impact Presentation Effective Business Writing Strategic Business Economics Program Institute of Internal Auditors Convention Certified Financial Analyst Review Executive Leadership Summit Corporate Governance Scorecard Workshop For GT Capital, education is eyed as the great equalizer, providing the poor with opportunities to lift themselves out of poverty. With this vision, GT Foundation, Inc. (GTFI) awards scholarship grants to financially-challenged and deserving students via two tracks: The Scholarship for Technical-vocational Education Program (STEP) aims to equip out-of-school youth and other marginalized students with skills that are 20 Sustainability Report in demand and will help them gain immediate employment. Through this program, GTFI supports scholars of some of the best technicalvocational education and training schools in the country with industry tie-ups for guaranteed employment. These schools are the Toyota Motor Philippines School of Technology, Don Bosco Technical Institute, and DualTech Training Center Foundation. College-level scholarships are provided by GTFI and give opportunities to students with high potential of becoming future leaders who will contribute to nation-building through college-level scholarships. Presently, GTFI has partnerships with the University of the Philippines – Diliman College of Engineering, University of San Carlos, and the Manila Tytana Colleges (MTC). AVERAGE TRAINING HOURS (by gender) (404-1) Male Female 61.7 48.1 AVERAGE TRAINING HOURS (by employee category) (404-1) Senior Officer Junior Officer 43.4 53.4 TOTAL NUMBER OF HOURS OF TRAINING Employee Category Number of Training Hours Junior Officer 1,336 Senior Officer 477 In 2018, We have provided a total of 1,813 training hours to our employees. (404-3) Number of programs implemented, and assistance provided to upgrade employee skills: 44 Percentage of total employee by gender and by employee category who received a regular performance and career development review: 100% - (Female: 58.33%, Male: 41.66%) Sustainability Report 21 DIVERSITY AND EQUALITY (103-1,2,3) We value diversity across all ranks and aim to provide equal opportunity for all relevant stakeholders. We ensure that equal opportunity is provided to employees and no preference is given on the basis of gender, ethnicity, or race. Our company is now in the process of including a policy on diversity and equal opportunity in its manual. Through HRAD, Human Resources Committee, and other relevant department heads, we commit to provide our employees and applicants equal opportunity on the basis of competencies, and not on the basis of any discriminatory factor especially when it comes to diversity of governance bodies and employees, and salary and remuneration of women to men. So far, there are no complaints from employees and applicants arising from issues related to diversity and equal opportunity. DIVERSITY OF GOVERNANCE BODIES AND EMPLOYEES (405-1) Gender Percentage Male 21 58.3% Female 15 41.7% Age Group Percentage Under 30 12 33.3% 30-50 18 50.0% Over 50 6 16.7% 22 Sustainability Report NON-DISCRIMINATION (103-1,2,3) We aim to provide a safe and healthy working environment by ensuring that controls are in place to prevent and address incidents of discrimination through the provision of mechanisms to raise awareness on and to report incidents of discrimination. Acts of discrimination are covered by the Code of Discipline of our company. Through HRAD, Human Resources Committee, and other relevant department heads, we aim to provide our employees and management a working environment free of discrimination. So far, we have zero incident of discrimination and corrective actions taken. Our company also implements a whistleblowing policy for any complaints against its employees, officers, or directors. The CAE receives the messages from the whistleblower. A related investigation is performed based on the complexity of the issue (can be by the CAE, through a task force) (406-1). HUMAN RIGHTS ASSESSMENT We at GT Capital ensure that our component companies follow acceptable and sustainable business practices involving human rights issues. Our company complies with its GT Capital is committed to provide appropriate training on human rights policies and procedures. Our company is also committed to ensure that track record on human rights is considered in its investment decisions. The offices human rights policies and procedures. Our company’s human rights assessment primarily impacts the following stakeholder groups: the management, the principals, the shareholders, the regulators, and the employees. Committed to ensuring that no human rights incident responsible for the implementation of these policies and procedures are the HRAD, Corporate Planning and Business Development Department, and Legal and Compliance Department. In 2018, our company held a two-hour training session happens in our operations, all deals in 2018 on human rights policies and procedures were assessed in relation to compliance with all applicable laws including those related to human rights practices (412-3). attended by 58% of our employees (412-2). (103-1,2,3) Sustainability Report 23 SUPPLIER SOCIAL ASSESSMENT (103-1,2,3) GT Capital ensures that there is an assessment of our activities in order to prevent and mitigate our negative social impacts in the supply chain. These include impacts of GT Capital that are directly linked to our activities, products, or services. In 2018, none of our suppliers were identified to have significant negative social impacts. There were also no new suppliers contracted for the year. (414-1; 414-2) 24 Sustainability Report Our company shall strive to prevent and mitigate negative social impacts in our supply chain. Part of our goals and targets include development of a supplier social policy, which will be the responsibility of HRAD, as well as the Bids and Awards Committee. Moreover, as part of our specific actions, GT Capital aims to formulate a supplier social policy which will be cascaded to all of our component companies. Partnering with Customers data privacy through implementation of security MARKETING AND LABELLING (103-1,2,3) Our company’s policy on customer privacy is GT Capital ensures stakeholders’ access to included in our Data Privacy Manual which accurate and adequate information about includes GT Capital’s Privacy Policy (public) and our company and its transactions. Through Privacy Notice (public). GT Capital is committed timely and accurate disclosures of material to protect the fundamental human right of our information, we aim to mitigate the negative data subjects to privacy while ensuring free flow effects of inadequate marketing. GT Capital is of information to promote innovation, growth, committed to respect the stockholders’ right and development. To attest to this commitment, to information based on prescribed rules and we have no substantiated complaints concerning regulations. Our company also aims to provide breaches of customer privacy and losses of stockholders accurate and timely information customer data for 2018. (418-1) measures for organizational, physical, and technical aspects. during the annual stockholders’ meeting and quarterly briefings, and to achieve non-violation of disclosure rules. We are proud to disclose that we have no incidents of non-compliance with regulations and/or voluntary codes concerning marketing communications as of 2018. (417-3) As part of evaluating the effectiveness of our approach in this area, we ensure regular audits on processes, feedback forms, and consultations with investors. CUSTOMER PRIVACY (103-1,2,3) We at GT Capital process the personal data of our data subjects, including our stockholders in accordance to the Data Privacy Act of 2012 (DPA). Our company manages the impacts on Part of our company goals and targets are related to privacy are zero breach and full compliance with the DPA, and related laws and issuances as well as the requirements of the National Privacy Commission (NPC). The departments responsible for this are the Data Protection Officers and the Data Breach Response Team. Finally, the company specifically aims for organizational security measures and physical security measures such as outlining of storage type and location of documents with personal data, rules on sharing of personal data with third parties, and technical security measures in the form of personal data back-up in electronic format, monitoring of security breaches, and regular testing of security measures. Sustainability Report 25 Partnering with the Government environmental-related government requirements such as sanitation certificates. GT Capital strives to prevent and avoid ENVIRONMENTAL COMPLIANCE AND SOCIOECONOMIC COMPLIANCE (103-1,2,3) violations of Philippine environmental laws and regulations and continues its compliance with all laws and regulations in the environmental, social, and economic areas. We aim to formulate Acting in an environmentally and policies on environmental compliance socially responsible way is our duty including inclusion of the matter as a to our stakeholders. GT Capital consideration in transactions, as well as believes that doing so can positively investment in sustainable companies. affect its bottom line and long- (307-1; 419-1). We set a zero-violation term success as a conglomerate. threshold on all applicable rules and With these, environmental and regulations as our target and goal. We social responsibility have been also have a whistleblowing policy as part included as a covenant in our of our grievance mechanism. contracts. Our Legal and Compliance Department ensures that we In 2018, GT Capital recorded no fines adhere to laws and regulations or non-monetary sanctions for non- while the Human Resources and compliance of environmental, social, Administration Department processes and economic laws and regulations (307-1, 419-1). 26 Sustainability Report GRI Content Index For the Materiality Disclosures Service, GRI Services reviewed that the GRI content index is clearly presented and the references for Disclosures 102-40 to 102-49 align with appropriate sections in the body of the report. Disclosure Number GRI Standard Title GRI 101: Foundation 2016 GRI 102: General Disclosures- Name of Organization 102-2 Activities, brands, products, and services 102-3 Location of headquarters- Location of operations Ownership and legal form - Markets served Scale of the organization Information on employees and other workers Supply chain Significant changes to the organization and its supply chain - Precautionary Principle or approach External initiatives - Membership of associations Statement from senior decision-maker Key impacts, risks, and opportunities References and Omissions GT Capital Holdings, Inc. p. 10 43rd Floor, GT Tower International, Ayala Avenue corner HV dela Costa St., Makati City Philippines GT Capital is a corporation registered with the Philippine Securities and Exchange Commission. As of December 31, 2018, GT Capital is 56.14% owned by Grand Titan Capital Holdings, Incorporated, directors and officers. The remainder is public float. p. 13 p. 6 p. 6 This disclosure is not applicable for GT Capital. The Board of Directors of GT Capital approved the declaration of 3.50% stock dividends to its common stockholders equivalent to 6,740,884 shares; thus, increasing the outstanding common shares to 199,337,584 from 192,596,685. p.10 Global Reporting Initiative, ASEAN Corporate Governance Scorecard Philippine Stock Exchange pp. 2-3 p.11 Sustainability Report 27 Disclosure Number GRI Standard Title References and Omissions 102-16 Values, principles, standards, and norms of behavior https://www.gtcapital.com.ph/about/visionmission - Governance structure List of stakeholder groups Collective bargaining agreements - Identifying and selecting stakeholders Approach to stakeholder engagement Key topics and concerns raised Entities included in the consolidated financial statements Defining report content List of material topics Restatements of information p.10 p. 5 GT Capital has no collective bargaining agreements at present. p. 5 p. 5 p. 5 p. 13 102-49 Changes in reporting - Reporting period Date of most recent report - Reporting cycle Contact point for questions regarding the report Claims of reporting in accordance with the GRI Standards GRI content index External assurance - ECONOMIC Economic Performance GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 201: Economic Performance- Direct economic value generated and distributed 201-3 Defined benefit plan obligation and retirement plans for employees 201-4 Financial assistance received from the government 28 Sustainability Report p. 1 p. 5 This is the first GRI sustainability report of GT Capital Holdings, Inc. This is the first GRI sustainability report of GT Capital Holdings, Inc. January to December 2018 This is the first GRI sustainability report of GT Capital Holdings. Annual Mr. Winston Peckson, Chief Risk Officer This report has been prepared in accordance with the GRI Standards: Core option. p. 27-32 The report has not been externally assured. p. 13 p. 13 p. 13 p. 13 p. 13 GT Capital did not receive any financial assistance from the government. Disclosure Number GRI Standard Title References and Omissions Indirect Economic Impacts GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 203: Indirect Economic Impacts- Significant indirect economic impacts Anti-Corruption GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 205: Anti-corruption- Operations assessed for risks related to corruption 205-2 Communication and training about anticorruption policies Anti-Competitive Behavior GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 206: Anti-competitive Behavior- Legal actions for anti-competitive behavior, antitrust, and monopoly practices p. 6 p. 6 p. 6 pp. 6-9 p. 11 p. 11 p. 11 p. 11 p. 11 p. 11 p. 11 p. 11 p. 11 ENVIRONMENT Energy GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 302: Energy- Reduction of energy consumption p. 15 p. 15 p. 15 151,696 kwh of electricity (baseline) Sustainability Report 29 Disclosure Number GRI Standard Title References and Omissions Environmental Compliance GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 307: Environmental Compliance- Noncompliance with environmental laws and regulations p. 26 p. 26 p. 26 p. 26 SOCIAL Employment GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 401: Employment- New employee hires and employee turnover 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 401-3 Parental leave Labor/Management Relations GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 402: Labor/Management Relations- Minimum notice periods regarding operational changes Training and Education GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 404: Training and Education- Average hours of training per year per employee 30 Sustainability Report p. 17 p. 17 p. 17 p. 18 p. 18 p. 18 p. 19 p. 19 p. 19 30 days p. 19 p. 19 p. 19 p. 21 Disclosure Number GRI Standard Title 404-2 Programs for upgrading employee skills and transition assistance program 404-3 Percentage of employees receiving regular performance and career development reviews Diversity and Equal Opportunity GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 405: Diversity and Equal Opportunity- Diversity of governance bodies and employees 405-2 Ratio of basic salary and remuneration of women to men Non-discrimination GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 406: Nondiscrimination- Incidents of discrimination and corrective actions taken Human Rights Assessment GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 412: Human Rights Assessment- Employee training on human rights policies or procedures 412-3 Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening Supplier Social Assessment GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach References and Omissions p. 19 p. 21 p. 22 p. 22 p. 22 p. 22 0.97:1.00 p. 22 p. 22 p. 22 There were no incidents of discrimination reported in 2018. p. 23 p. 23 p. 23 p. 23 p. 23 p. 24 p. 24 p. 24 Sustainability Report 31 Disclosure Number GRI Standard Title GRI 414: Supplier Social Assessment- New suppliers that were screened using social criteria 414-2 Negative social impacts in the supply chain and actions taken Marketing and Labelling GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 417: Marketing and Labelling- Incidents of non-compliance concerning marketing communications Customer Privacy GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 418: Customer Privacy- Substantiated complaints concerning breaches of customer privacy and losses of customer data Socioeconomic Compliance GRI 103: Management Approach- Explanation of material topic and its boundaries 103-2 The management approach and its components 103-3 Evaluation of the management approach GRI 419: Socioeconomic Compliance- Non-compliance with laws and regulations in the social and economic area 32 Sustainability Report References and Omissions p. 24 p. 24 p. 25 p. 25 p. 25 p. 25 p. 25 p. 25 p. 25 p. 25 p. 26 p. 26 p. 26 p. 26