Filinvest Hospitality Sustainability Report | 2021

Mindful Hospitality Towards a Better Future

FILINVEST HOSPITALITY SUSTAINABILITY REPORT 2021

About this Report

This Sustainability Report is the first environmental, economic, social and governance (EESG) disclosure of Filinvest Hospitality Corporation (FHC) and Chroma Hospitality Inc. (CHI), collectively known as Filinvest Hospitality (FH).

This report covers our sustainability performance from January 1 to December 31, 2021.

It may contain forward-looking statements which are subject to a number of risks and uncertainties that could affect FHG’s business and results of operations. Although these were based on current assessments that we believe are reasonable, we can give no guarantee of future performance, action or events.

In writing this report, our company was guided by the Global Reporting Initiative (GRI) Standards and the Sustainability Accounting Standards Board (SASB), particularly the sector standards for Hotels and Lodging and Restaurants (Food and Beverage Sector). Specifications in the Securities and Exchange Commission’s Memorandum Circular No. 4, Series of 2019 were used as reference for the non-financial disclosures.

Feedback on or inquiries about this report may be forwarded to inquiry@filinvesthospitality.com.

Table of Contents

Message from the Leaders

About Filinvest Hospitality

The Filinvest Hospitality Ecosystem

The Core Values of the Filinvest Group

Our Brands and Services

ESG Highlights for 2021

Scope, Materiality and Stakeholder Engagement

Filinvest Hospitality’s Sustainability Performance

Filipino Hospitality-based Unique Guest Experiences

Safety and Security

Advocating Tourism Growth

Equitable Value Distribution

Community Engagement

Talent Development and Employee Engagement

Diversity, Equality and Inclusion

Energy Conservation and Efficiency

Water Conservation and Efficiency

Waste Reduction

Biodiversity

Green and Resilient Designs

Business Resilience

Moving Forward Sustainanility Index

4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

To our dear Stakeholders,

The past two years that were filled with uncertainty and upheaval for the travel and tourism sector. The COVID-19 global pandemic posed unprecedented disruptions which led the Group to take exceptional measures in order to protect our stakeholders. More than ever, I am inspired by the resilience and unshakable dedication of my team members during these challenging times. I am also grateful to our guests, business partners and shareholders for their enduring support and trust.

One thing this pandemic has taught us is that “business” and “slow down” are words that don’t always sound bad together. This particular time gave us pause to reflect and intentionally notice our ways of doing things while remaining open and curious to new possibilities. We discovered that Sustainability has been always part of our day-to-day business. In 2021, we took a hard look at the factors that sustain our business and started to develop a sustainability strategy and set of commitments as we grow hand in hand with our stakeholders to create positive impacts on the communities we live in, work for and travel to.

Despite the challenges, the Filinvest Hospitality Group has nonetheless continued to make progress in embedding long-term shared value commitments into our DNA. We are very proud to present our first Sustainability Report. As we look ahead, we will continue to lead the way to drive sustainable tourism practices and ethical hotel development.

Thank you for joining us on our sustainability journey and we are looking forward to working with you.

Francis Gotianun SENIOR VICE PRESIDENT FILINVEST HOSPITALITY CORPORATION

Dear Stakeholders,

I am proud to present to you the first Sustainability Report of the Filinvest Hospitality Group.

In this report we highlight initiatives we have already taken as a group to help advance sustainable development goals and the opportunities that we can explore. This report helped us to better understand the value of integrating sustainability into our business strategy. In fact, we realized sustainability is in everything that we do: from talent management to community engagement, from the management of valuable resources to managing risks. Being mindful of our impact in the areas where we operate just make good business sense.

Sustainability is no longer a nice to have for Hospitality. It has become a need. Our ability to exist and flourish as a business is dependent on decisions we make about economic, social and environmental issues that confront us.

Along with this report is a commitment to do more like:

On Biodiversity and Community Engagement – our resorts rely heavily on the natural and cultural resources that surround us. This is why in our future developments we intend to do more to help us protect these resources.

On Talent Development – our long-term success also depends on our ability to deploy great men and women to lead the hotels in our pipeline. This is why we will continue to invest on our people, helping our team members become future leaders and solid contributors to our business growth.

On Food Waste – our hotels generate a considerable amount of food waste. This is why we are committed to implementing measures to address this challenge such as a commitment to slowly move away from food buffets.

The importance of sustainability in hospitality is obvious. It is therefore imperative that Filinvest Hospitality continue our Sustainability Journey with intention and strong resolve knowing that the gains will eventually outweigh our effort.

Join us in this journey. Together let’s transform the way we do Hospitality and ensure that our natural and cultural attractions are available for future generations of tourists and hoteliers to appreciate.

Montenegro COUNTRY MANAGER CHROMA HOSPITALITY, INCORPORATED

James

Crimson Hotel Filinvest City, Manila

Mindful

Hospitality Towards

Filinvest Hospitality is the hospitality and leisure arm of Filinvest Development Corporation (FDC) and is responsible for the full life cycle development and management of hospitality assets. The Filinvest Group intends to grow its hospitality business to take advantage of the Philippines’ strong economic fundamentals and travel and tourism trends by efficiently developing and operating hospitality products in high potential and underserved markets.

Core Values of the Filinvest Group

Customer Centricity Keep our customers top of mind.

Change for the Better Innovation and agility rule our quest for operational excellence.

Filinvest Family Invest in bringing out the best in ourselves and our team.

Entrepreneurial Mindset

Pursue new opportunities and take ownership of our decisions.

Shared Benefit Grow hand in hand with our stakeholders.

Trustworthiness

Deserve and preserve trust.

Filinvest Hospitality Corporation (FHC) was established on August 22, 2011 as a wholly owned subsidiary of FDC to serve as the primary developer and owner’s representative of Group-owned hotel properties.

VISION

As the premier Filipino hotel ownership and management company, we want to open the world of Philippine hospitality by being at the forefront of delivering valuable, unique and meaningful experiences to guests, shareholders, employees, partners and local communities.

On November 28, 2008, FDC entered into a joint venture with Archipelago International Pte. Ltd (AIPL) and created Chroma Hospitality, Inc. (CHI) to manage and operate the Filinvest Group’s hospitality properties. CHI is 60% owned by FDC and 40% owned by AIPL.

VISION MISSION MISSION

To assemble and maintain a profitable and valuable portfolio of world-class hospitality products across different touchpoints and leisure segments in the Asia Pacific region.

Be the number one privately held hospitality management company in the Philippines.

To consistently deliver genuinely unique Filipino Hospitality across all our brands, with heartfelt service that is both inclusive and innovative by tapping into the brilliance of our people in making a positive impact to stakeholders.

Business Overview

CORAL BALLROOM

Crimson Resort & Spa, Boracay

The Brands and Our Services

Strategic Portfolio of Assets with Strong Homegrown Hospitality Brands

GRI 102-2, 102-4; SASB SV-HL-000.D

The Filinvest Group’s hospitality assets are well positioned to benefit from the growing Philippine tourism industry. As of December 31, 2021, the Group’s operating hotel portfolio consists of seven hotels with a total of 1,837 keys: the 290-room Crimson Resort and Spa Mactan, the 345-room Crimson Hotel Filinvest City, Manila, the 470-room Quest Hotel and Conference Center, Cebu (including 43 serviced apartments), the 304 room

Quest Plus Conference Center, Clark and 36-hole championship golf course, the 192 room Crimson Resort and Spa, Boracay, the 164-room Quest Hotel, Tagaytay and the 72-room Timberland Highlands Resort. All hotels of the group are independently and professionally managed and operated by CHI under management agreements.

The Group’s three main hospitality brands cater to distinct market segments:

Properties under the Crimson brand target mass affluent business and leisure clientele. Properties developed under this brand are designed to be luxurious full-service accommodations with a full range of amenities and meeting facilities for utmost comfort and convenience of its guests.

Quest is a premium value driven hotel for the business and leisure traveler looking for consistent services. Quest properties have further categories: Quest Basic which caters to the traveler looking for straightforward and consistent services with a cool, clean and comfortable experience; Quest Plus which provides unique meeting and event destinations to cater to the business and convention traveler looking for dependable and efficient MICE services; and Quest Residence which provides business travelers with the comforts of a home.

Grafik is envisioned to cater to mass middle independent travelers, groups of friends, “bizcationers” and couples who are looking for a fun and dynamic experience but do not want to give up the comfort of a full-service hotel. Grafik properties will be designed to be integrated spaces that merge style with practicality, offering communal areas to eat, play and work.

Growing Food and Beverage Business

The Group is also leveraging its industry experience to move into complementary hospitality businesses starting with its F&B brands Baker J and Firehouse Pizza.

FILINVEST CITY FILINVEST CITY | CLARK

Mimosa Plus Golf Course 36-HOLE CHAMPIONSHIP COURSE

SWIMMING POOL

Quest Plus Conference Center, Clark

EESG Highlights for 2021

Timberland Highlands Resort

Crimson Resort & Spa, Mactan

Quest Plus Conference Center, Clark

Quest Hotel, Tagaytay

Crimson Hotel Filinvest City, Manila

Crimson Resort & Spa, Boracay

Quest Hotel & Conference Center, Cebu

•

Our Contributions to the UN SDGs

Made available free COVID-19 vaccines to all its employees and donated thousands of doses and RT-PCR testing equipment to local government units

•

Implementation of Target Zero and Culture of Clean accross all the properties

• •

Women comprise 37% of the workforce

43.8% in executive and managerial positions are women

• •

Onsite water security (desalination) for Boracay and Mactan, removing pressure on extraction from groundwater sources

Replaced our golf course turf with low-water demand grass, and installed a more efficient irrigation system

• •

Energy efficiency equipment and fixtures are part of the design of our hotels

Average energy use efficiency was 95.83 kWh per occupied room-night, better than benchmarks

• • •

831 total number of regular employees

317 indirect jobs generated by our service providers and suppliers

Development of tourism infra in areas where tourism value is not yet maximized

Contactless hotel and F&B operations through digital solutions •

Mindful

‘Build Back Better’ improves site resiliency and resource efficiency •

•

Promotion of local products in our properties (Live Love Local)

Single use plastics reduction policy

100% of hazardous wastes are collected and treated

•

Build Back Better

Energy efficiency designs incorporated into newly constructed hotels

•

2 hectares of coral reefs adopted

All properties are served by compliant sewage treatment facilities, accounting for all the wastewater we generate

Biodiversity preservation in the covenant for Grafik Baguio •

•

CLUB SUITE

Quest Plus Conference Center, Clark

Mindful

Hospitality

Scope

The Filinvest Hospitality Group (FHG) is composed of Filinvest Hospitality Corporation (FHC), an asset development company, and Chroma Hospitality Inc (CHI), the operator of the hotel and Food & Beverage assets.

The scope of this report covers the non-financial or EESG performance of the head offices of the two companies as well as the hotel and restaurant operations of seven properties of Filinvest Hospitality, including the Mimosa golf course.

Materiality

The disclosures in this report are informed by the principles of materiality and focuses on the economic, environmental, social and governance (EESG) impacts of the operations and activities of FHG, as well as the management approach to the material topics listed.

Starting in late 2021, the FHG’s EESG team undertook an initial assessment of organizational processes, procedures, and policies to better understand how they relate to EESG issues. Given the inability to undertake face to face meetings with stakeholders

due to the continuing COVID-19 pandemic, the validation stage of the materiality assessment was done through online surveys and soliciting feedback from employees of FHG who were the key contacts of our various stakeholders, thus acting as proxies.

It is expected that a full-blown materiality assessment with external stakeholders can be undertaken in 2023, consisting of various focus group discussions that will seek feedback and suggestions from the attendees.

Crimson Resort & Spa, Mactan (CRSM)

Quest Hotel & Conference Center Cebu (QHCC)

Crimson Resort & Spa, Boracay (CRSB)

Quest Hotel Tagaytay (QHTC)

Crimson Hotel Filinvest City, Manila (CFCM)

Quest Plus Conference Center Clark (QPCC)

Timberland Highlands Resort (THR)

Mimosa Plus Golf Course

MATERIAL TOPICS WHICH HAVE AN IMPACT ON BOTH STAKEHOLDERS AND FHG

ENVIRONMENT ECONOMY SOCIAL GOVERNANCE

Environmental Compliance

Resource Efficiency

Energy Efficiency

Water Conservation Waste Minimization

Single-use Plastics

Biodiversity

Green Buildings and Spaces

Climate Change Mitigation

Distribution of Economic Value

Supply Chain Support, Particularly Local Businesses

Jobs Generation Logistics in the Time of COVID-19

Lockdowns in Philippine Tourism Sites

International Tourist Arrivals

Tourism Infrastructure and Hotel Rooms Backlog

Transportation and Interconnectivity

Food Security

Employee Development

Employee Engagement

Diversity, Inclusivity and Equal Opportunities

Occupational Health and Safety (including COVID-19 pandemic)

Staff Mobility

Work from Home and Flexible Work Arrangements

Employee Attrition and The Great Resignation

Customer Service Quality

Customer Relations

Data Privacy

Community Relations and Investments

Operational Resiliency and Climate Change Adaptation

Procurement Practices

Code of Conduct and Business Ethics, including Anti-corruption Compliance Risk Management

The insights from the materiality assessment were discussed by the FH leaders leading to the formulation of the group’s Sustainability Framework which identifies their sustainability focus areas.

Incidentally, Filinvest Hospitality signed up as a supporter to the Hotel Sustainability Basics (HSB) launched during the World Travel and Tourism Convention held in Manila in February 2022. The HSB is a globally recognized and coordinated set of sustainability indicators that all hotels should implement as a minimum. Developed by the industry for the industry, they represent twelve actions that are fundamental to hotel sustainability, covering aspects related to efficiency, planet and people. Filinvest Hospitality’s sustainability commitments completely align with the actions proposed under the HSB.

STAKEHOLDER ENGAGEMENT

In realizing shared goals with stakeholders, Filinvest Hospitality identified its key stakeholders, took note of their concerns and established channels of engagement and initiatives that aim to either enhance the positive impacts or mitigate negative ones fo all parties.

STAKEHOLDER CONCERNS

Service quality

Data Privacy

HOTEL AND F&B GUESTS

EMPLOYEES

Health and Safety

Value for money

Career Development Work-Life Balance Health and Safety

Connectivity and Mobility during the Pandemic

Accreditation

Transparency of processes and on-time payments

Service quality

Data Privacy Health and Safety Value for money Transparency EESG / non-financial disclosures

Financial liquidity

Site-specific community or LGU issues

COMPANY RESPONSE

Brands developed per market segment

Customer service and satisfaction surveys

Cybersecurity and Data Privacy protocols; COVID-19 protocols, incl. contact tracing; Compliance with IATF directives

Online training and development portal, and one on one mentoring Mental health and employee engagement program

Work from Home arrangements, with IT and logistical support COVID-19 protocols in the workplace; Health services support for COVID-affected employees FilVax vaccination program

Documented accreditation process

Systems process review and revised procedures, with digitization initiatives

Continuous collaboration with DOT, industry peers and local governments

Timely renewal of permits

Business code of conduct and employee trainings on good governance; Boardroom Innovations Series for improving competencies of Board and C-suite officers

Regular disclosures

Compliance with government requirements

Relationship management and community social investments, incl. partnerships on specific programs; FilVax - vaccines and test kits donated to national and local governments

Green design principles and materials

Energy and Resource Efficiency initiatives Water conservation and reuse

Environmental impacts

Solid waste and hazardous waste management

Environmental compliance: projects and operations

Biodiversity-related programs

Timberland Highlands Resort

&

Filinvest Hospitality’s Sustainability Framework

To support our sustainability vision in Filinvest Hospitality, we have defined focus areas which we believe are the key to our long-term survival and growth. These are clustered under four pillars - exceptional service delivery, environmental responsibility, inclusive growth, and business resilience.

These commitments are also aligned with the hospitality industry’s shared goals, and with covenants and movements we have signed up for.

We have assessed where we currently are on each focus area and have articulated corresponding aspirations for enhancement and mitigation. These are covered in the subsequent narratives of this report.

Future disclosures will reflect where we are in our sustainability journey and hopefully we can count on the support and engagement of our various stakeholders to achieve shared success.

Mindful

• •

We at Filinvest Hospitality Group have a vision of being a recognized champion of sustainability within the Philippine tourism sector, where our long term ability to create exceptional guest experiences is fostered through partnerships with stakeholders with whom we share common goals.

SERVICE INCLUSIVE GREEN RESILIENT

Filipino Hospitality-based unique guest experiences

• • • • •

Equitable Value Distribution

Community Engagements & Partnerships

Advocating Tourism Growth

Talent Development & Employee Engagement

Diversity, Equality and Inclusion

• • • •

Energy Efficiency and Conservation

Water Efficiency and Conservation

Waste Management and Circular Economy

Enhancing Biodiversity

• •

Climate Resilient & Environmentally Sustainable Properties

Business Resilience

Delivering Filipino Hospitality and Unique Guest Experiences

Our hospitality business takes pride in providing warm and authentic guest experiences. We aspire to be the top-of-mind Filipino hospitality brand, not only in the Philippines but abroad, through the meaningful memories we provide our guests. Our guests are valued stakeholders who share our well-executed experiences and their positive feedback in their own circles. This has attracted more guests to our properties, allowing our business to grow and steadily contribute to the Philippine tourism industry.

ACHIEVING BRILLIANT RESULTS

Our dedicated teams take pride in our efforts to delight our guests consistently, even during challenging situations. Throughout the health crisis and several widely damaging natural disasters, we were able to adapt swiftly to delivery exceptional service to our guests while keeping them safe. We have consistently received positive reviews on social media and client surveys that attest to our team’s commitment.

Currently running three hotel brands in seven properties, Filinvest Hospitality is the highest ranking, locally owned and managed hotel group based on TrustYou and Tripadvisor results. In 2021, we had an average score of 89% and we are aiming to exceed 90% in 2022.

Timberland Highlands Resort

Crimson Resort & Spa, Mactan

Quest Plus Conference Center, Clark Quest Hotel, Tagaytay

Crimson Hotel Filinvest City, Manila Crimson Resort & Spa, Boracay

Quest Hotel & Conference Center, Cebu

CONTINUOUSLY IMPROVING

We do not rest on our laurels and we always strive to take our products and services to the next level.

We aim to achieve operational excellence and exceed our current rating of 89.01% in TrustYou, a customer satisfaction tool where guestsand clients can freely comment about their stay. This will be achieved through the continuous improvement and development of our team members who are enrolled in relevant trainings and industry leading workshops.

On Tripadvisor, our target is to maintain our top ranking among locally managed group of hotels and achieve our long-term aspiration of being in the Top 3 of the Tripadvisor global rankings.

We will achieve this by sustaining our high level of customer service and by working on high-impact initiatives that will provide guests with more value and meaningful experiences.

FILIPINO HOSPITALITY SHINING AFTER A DEVASTATING TYPHOON

On the evening of December 16, 2021, Category 5 super typhoon “Odette” ravaged through Central Visayas and wreaked havoc on the island of Mactan.

One of our major leisure properties, Crimson Resort and Spa, Mactan, was not spared.

Strong winds and storm surges damaged both the landscape and resort facilities, and threatened the lives of both guests and employees. Community lifelines were cut. There was no electricity, no communication lines, no water, and transport services for the evacuation of guests were unavailable.

The resort staff were quick and decisive, immediately making the rounds at first light to assess the condition of all the guests, and promptly declared that Crimson Resort and Spa, Mactan was no longer a resort, but a shelter. It became an ‘all hands on deck’ scenario.

Guests who were unable to leave immediately were advised they can stay for free, and were provided with breakfast, lunch and dinner. As the cleanup work on the landscape and the facilities were going on, the staff even found the time to organize a bonfire and dinner buffet at the beach area on the second day, deploying mats and bean bags on the sand. All guests were taken care of and assisted by staff until they all found their way back home safely.

Yvonne Lucindo Biyo, a guest who was checked in at the time had this to say on her Facebook page:

Redefining Safety And Security in the New Normal

Being in a customer-centric industry that primarily exists to provide unforgettable experiences, the safety and security of our employees and our guests are fundamental.

Events in the recent past redefined the nature of health, safety and security threats, and our organization should be able to stand up to the challenges posed by the ‘new normal’, or else we risk losing our guests’ confidence in us, hurting our reputation and the business itself. Thus, we needed to provide the necessary support and introduce renewed standard operating protocols.

To ensure that we provide the guests a safe and secure place to stay in our hotels and restaurants during the COVID-19 pandemic, we launched the Culture of Clean initiative in August 2020 which featured the following:

Compliance with regulatory requirements on occupational health and safety, including the policies set forth by the Department of Health and the Inter-Agency Task Force on COVID-19.

Provision of free COVID-19 vaccines (primary series and boosters) to all employees under the Filinvest Group’s FilVax program. As of the end of 2021, 100% of employees were fully vaccinated.

A ‘Target Zero’ training module that taught the employees to regulate physical contact in day to day operations to manage the transmission of the virus.

The execution of Culture of Clean was continually calibrated in accordance with the latest guidance and standards of the national government and World Health Organization. This led to our hotels being one of the first to be granted a ‘Safe Seal of Travel’ by the World Travel and Tourism Council (WTTC) in June 2020.

In addition, we also require the following ‘must happens’ in all our properties to ensure the safety of guests:

Safety certifications for staff that are directly involved in day-to-day operations (e.g. lifeguards, safety officers)

Compliance with HACCP (hazard analysis critical control point) standards and sanitation regulations by our food and beverage outlets

ENSURING PHYSICAL SECURITY AND GUEST PRIVACY

We are aware that the sustainability of hospitality services hinges on how we secure our guests’ physical safety, privacy and personal information. Here are some of the initiatives that we have in Filinvest Hospitality.

On security, we have installed the necessary security infrastructure in all our properties, such as CCTV cameras, and provide adequate deployment of security personnel on a 24/7 basis. To minimize theft incidents, our guests are provided with vaults in each guestroom.

On protecting the personal information of guests, we ensure compliance with the Data Privacy Act of 2012 by adopting digital infrastructure safeguards.

CONTINUING IMPROVEMENT

While we have been able to manage our security and health risks in recent times, we believe there is always room for improvement.

On health and safety, our goal is to be a leader in applying best practices in occupational health and safety, codified through a safety manual in accordance with regulations and industry norms. This will be validated by securing health and safety-related credentials most relevant to the hospitality industry, such as Red Cross certifications for lifeguards. This will be complemented by institutionalized quality audits to ensure that safeguards are maintained, including continuing compliance with the latest COVID-19 protocols.

On data privacy, we aim to have best in class security practices in all our properties, codified in a security manual and vigorously enforced. We continue to assess any emerging threats and trends on data privacy, to be complemented by penetration testing and internal or 3rd party audits.

On physical security, we continue to improve the quality of our security infrastructure through revised technical standards, and the implementation of a refurbishment plan. As part of our overall business continuity plans, we also will be undertaking regular security drills on various scenarios.

Inclusive

Advocating Tourism Growth

Tourism in the Philippines is vital to the country’s economic growth and social security. It provides jobs to communities, helps maintain environmental integrity that magnifies the value of destinations, and builds confidence in the Filipino identity on the world stage. It is in our best interest to promote travel to the Philippines, to increase tourist arrivals and build the demand for hospitality services which we are ready to provide.

We are in constant pursuit of activating the untapped potential of local communities to generate more employment and business opportunities through active leadership roles and partnerships with tourism-related organizations such as Philippine Hotel Owners Association, Inc. (PHOA), Hotel Sales & Marketing Association International, Inc (HSMA), Philippine Tour Operators Association (PHILTOA), and Philippine Travel Agencies Association (PTAA).

We also nurture relationships with government agencies in developing tourism infrastructure and Philippines destination promotions through partnership with the BCDA agencies such as Clark Development Corporation (CDC) and John Hay Management Corporation (JHMC), Tourism Infrastructure and Enterprise Zone Authority (TIEZA), Department of Tourism (DOT) and the Tourism Promotions Board (TPB).

TOURISM INDUSTRY PARTNERS

PARTNER GOVERNMENT AGENCIES

HELPING MAKE THE PHILIPPINES A DESTINATION OF CHOICE

We anchor our business goals in alignment with the Department of Tourism’s focus points: connectivity, convenience, and equality. Through socially responsible, environmentally sustainable, unique, and globally competitive investments in strategic locations, we envision to be the recognized private sector expert on building foundations of highly trusted destinations that welcomes more tourists and travelers in the Philippines.

Specifically, we commit to enhance the Philippine Tourism ecosystem and increase visitor arrivals through:

• • • •

Diligent monitoring and improving of our customer’s net promoter score, contribution in tourism direct gross domestic product, number of overnight stays, and inbound tourism revenues per visitor by source market

Maximization of domestic and international tourism by leveraging on technology in marketing, promotions, and efficiency initiatives

Strengthening tourism governance through close coordination with local government units and stakeholders

Continuous investment in our people to be globally-competitive hospitality leaders

•

Constantly narrow the gap of supply and demand by developing properties in areas where the tourism potential has not yet been fully unlocked

•

Engaging with local communities concerning tourism-related issues and opportunities

Driving Tourism Relevance during the Pandemic

Faced with lockdowns, travel bans and the downturn in global travel and tourism, we believed that promoting Philippine tourism and maintaining brand recall should not cease. We introduced Candid with Chroma Web Talk Series, an internally produced casual talk shows on Facebook Live open to the public, where we presented curated topics relevant to the Philippine travel and tourism industry and our specific hotels and destinations under the ‘new normal’.

Some notable guests were James Deakin, spouses Drew and Iya Arellano, Sam YG, and former DOT Secretaries Bernadette Romulo-Puyat, Mina Gabor and Sen. Richard Gordon. Our top-rated episode was entitled “Safe Summer Travels” featuring Karen Davila and Divine Lee which garnered 11,000 views. The episode focused on helping tourists make the most of their 2021 summer by learning how to plan their summer vacation safely and get the best deals.

Last 2020, we were awarded by HSMA’s Virtus Awards for being the Champion of Resiliency under the Marketing Communications Category for Safely Apart, Closer at Heart and one of the key efforts of that campaign was the Candid with Chroma Web Talk Series.

The tourism and hospitality industry is an ecosystem consisting of collaborative stakeholders who interact in many ways to collectively create a positive impact on each other. Filinvest Hospitality Group’s stakeholders contribute the capitals – human, financial, intellectual, natural, manufactured and relationship – that are utilized by the organization in creating and delivering value in various forms, and certainly are a big support to the realization of our growth aspirations.

Our goal is not just to give excellent service to customers and increase shareholder value, but to share benefits to all stakeholders that contribute to our value chain: employees, suppliers, contractors, service providers, national and local governments, providers of capital and local communities.

This commitment to Creating Shared Value – contributing to addressing economic, societal, and environmental issues using the core business itself, not philanthropy – is reflected in one of the adopted core corporate values of the Filinvest Group: Shared Benefit. We strive to grow alongside each other because we know we cannot succeed on our own. We win together, we win as one.

Despite the devastating effects of the recent pandemic on the global economy and on the travel and tourism sector, we were resilient. We were able to keep the businesses running, our talents employed, meet our obligations and contribute to keeping the sector afloat. We believe that tourism is still a major engine of economic growth in the post-pandemic Philippines.

GROWING HAND-IN-HAND

As we grow and expand our business, we are embedding a commitment to building a long-term shared value into the DNA of our business. This will be achieved through the following actions:

We expect to hire more people, capacitate them to be ready to spread our brand of Filipino hospitality worldwide, and ideally increase our number of local hires wherever we put up hotels and restaurants.

We will be engaging more with local contractors, service providers and suppliers as we expand the business.

We will be spending more on CAPEX projects which will generate jobs for businesses and individuals and help spur the growth of local economies.

We hope to continue supporting the delivery of social services of the national and local governments through the taxes we pay.

We will be partnering with more financial institutions to fund our capital projects, to harness opportunities in increasing shareholder value.

We will engage with new business partners in developing new operating models in the hospitality space.

We will engage with more communities that will economically benefit from our presence, especially in areas where the intrinsic tourism value is not yet fully unlocked.

We will be doing more to protect, rehabilitate and enhance the integrity of the physical environment that sustains our operations and help make valuable guest experiences.

The Value of Community and Collaboration

We understand that our actions have a direct impact on the communities where we operate. In the same manner, the community’s decisions also have a direct impact on our brand, our guests and the other aspects of business operations. We proactively engage our surrounding communities so we can help solve social and environmental issues that we share.

PARTNERSHIPS WITH THE LOCAL GOVERNMENT UNITS

Crises like the COVID-19 pandemic and other natural calamities have brought devastation to our country but also opened opportunities for partnering with communities to collectively manage risk.

Through our mother company Filinvest Development Corp. (FDC), we donated P100 million worth of COVID-19 test kits, personal protective equipment (PPE) to the frontliners and hospital workers of the Research Institute of Tropical Medicine (RITM).

To help help fast-track the required COVID-19 tests of locals and tourists in Aklan, we donated an RT-PCR System to the Molecular Laboratory of the Dr. Rafael S. Tumbokon Memorial Hospital located in the provincial capital.

Through a program called “Rise Again Cebu”, Filinvest Hospitality raised 3 million pesos to help three communities (Naga, Maribago, Kamputhaw) in Cebu who were badly hit by Typhoon Odette in December 2021.

PARTNERSHIPS WITH LOCAL MICRO, SMALL AND MEDIUM COMMUNITY BUSINESSES

A key initiative in 2021 is Live Love Local, where our hotels and resorts support locally crafted products from micro, small and medium enterprises at our destinations. This is evident in our hotel and resort lobbies where kiosks that feature artisanal products.

To date we have collaborated with more than 30 local partners from communities where we have hotel operations. The initiative aims to provide a wider audience for these businesses - that includes not just the local market, but international travelers as well. They are invited to showcase their products at no rental cost, and we share their story to our media partners where we can.

We want to sustain and expand the Live Love Local initiative in 2022 to help magnify the local culture of the community and its value as a travel destination. Enhancing our relationship with our surrounding community partners will also involve:

• •

Partnerships with the LGU in promoting local tourism and in disaster risk reduction and response,

Growing the vendor pool to include more local suppliers for specific material inputs or ingredients

•

Tapping the local community as a first-option source of talent or support services

Employee Engagement and Talent Development

Of all the various forms of capital available to us in Filinvest Hospitality, we see people as the most vital as we are in a customer-centric business. We understand the that it is essential to have talents who are enabled, empowered and engaged to deliver the best service and fuel the growth of the company.

BUILDING OUR HUMAN CAPITAL

As we grow our portfolio of hotels and restaurants across the country, we need to be able to have a sufficient number of competent employees who can fill in the human capital needs of the organization, especially the critical roles. With this, we continue to invest in the continuous development of our people.

In line with this, the identification of the core, leadership and functional competencies for all roles is ongoing, including the specifications for desired proficiency levels for each role. These will be the basis for the individual development plans for each team member after the assessment of any competency gaps in roles currently occupied, and at a later stage will also guide the glide path for ensuring the readiness of individuals for future roles.

Current training modules are thus being recalibrated around those competency models and proficiency levels which will be complemented by setting competency improvement targets as part of the performance management system. Formal training will also be supported by coaching and mentoring, assigning stretched goals and learning on the job, while digitization of modules will introduce self-paced training and automate training records.

KEEPING THE PASSION ALIVE IN OUR TEAMMATES

Having a throve of competent talents is one target but retaining them and keeping them passionate about the work we do is another goal.

We were not spared from the effects of the Great Resignation Wave of 2021. However, the latest employee engagement survey did indicate that 82% of our employees are satisfied with their overall experience with the company, driven primarily by pride in the company and the work they do and complemented by good relationships with leaders and colleagues.

This level of passion for our brands and hotels was not achieved overnight. This was the byproduct of several initiatives such as a strong onboarding program and the utilization of mixed communications strategies like social media and townhalls to keep people informed and engaged. Our hotel brands and the corporate office maintain Facebook groups for employees which was found to be an effective channel to inform everyone about the latest updates in the company and the hotels.

Our employee engagement initiatives in the near future will address the areas of improvement identified in the latest employee engagement survey.

We are developing a group-wide holistic wellness program that covers not just physical fitness but also mental health. The COVID-19 pandemic shed light on the need to manage the mental well-being of our people.

We are also revisiting our compensation and benefits strategy to help make our total employment package more competitive, so that we can attract talents and reduce attrition. We are also reviewing our work loads and the provision of work tools that will maximize our team members’ productivity.

GROWING TALENTS FROM WITHIN: THE ALIGNMENT OF PERSONAL GROWTH AND BUSINESS GROWTH ASPIRATIONS

Filinvest Hospitality is proud to have been part of the development of many of our team mates who responded to the challenge of building their careers with us across the years.

Arlene Tongco former Front Office Manager, now a General Manager

Mabel Roman former Director of Sales and Marketing, now an Executive Assistant Manager

Randie Gutierrez former Rooms Division Manager, now a Hotel Manager

Zeon Luis former Front Office Manager, now a Director of Operations

Kirk Llamas former Director of Sales and Marketing, now a Corporate Executive for Business Development

Richard Cajucom former Rooms Division Manager, now a Corporate Rooms Division Manager

Patrice Nepomuceno former Management Trainee, now a Restaurant Manager

All on Equal Footing

Diversity, equality, and inclusion are integral parts of our values. We aim to create a consistently high-trust workplace for everyone—where diverse sets of people are equally involved, developed, empowered and trusted to reach their potential.

DIVERSITY IN OUR TALENT POOL

Gender diversity is an important indicator of an inclusive workplace. In our head offices, the gender of employees is relatively balanced across all ranks. In 2021, 47% of executive and management positions and 37.4% of our total workforce were female.

Aside from achieving gender balance, we also leverage on the geographical spread of our operations in order to provide employment opportunities to people from different regions. In 2021, we were able to account that 49% of employees are from Luzon and 50% are from Visayas.

PROMOTING EQUALITY AND INCLUSION IN THE WORKPLACE

We foster equality and inclusion by creating an environment of greater awareness of unconscious bias in the workplace. We undertake capacity building sessions for our teammates on anti-discrimination and SOGIE empowerment, and organize annual events that celebrate women and the LGBTQ community.

CAPACITY BUILDING ON SOGIE AND ANTIDISCRIMINATION

SOGIE Bill Talk was conducted which aims to provide a better understanding on the differences between sexual orientation, gender identity and expression

Safe Spaces Act training program

Anti-Sexual Harassment training program

ANNUAL CELEBRATIONS

Pride Month Campaign across all properties

Active observation of International Women’s Day

We also engage with persons with that are differently abled – either as guests or partners – by addressing their special mobility needs in our properties and in providing employment opportunities for them.

• • •

ENGAGING THE COMMUNITY OF PERSONS WITH DISABILITY (PWD)

Quest Cebu entered a partnership with Philippine Accessible Disability Services, Inc. (PADS), an independent non-government organization working to enable the PWD community to grow and develop as independent, integrated, fully human and empowered citizens in society. The property currently employs five PWDs: three in housekeeping and two in stewarding.

We have an employee in Crimson Mactan who practices sign language to communicate with guests

Both Quest Cebu and Crimson Mactan provide basic trainings on Philippine Sign Language

•

All hotel properties are compliant with the building code and regulatory provisions for accessibility by mobility-challenged persons (BP 344).

CONTINUOUS IMPROVEMENT

Our goal is to shift the company’s talent hiring and management paradigm from ‘cultural fit’ to ‘diversity, equality and inclusion’ and will set performance metrics based on these new parameters. The following steps will be taken to manifest our intention.

Baseline and Target Setting. Define which diversity, equity and inclusion areas will be monitored that are relevant to the business goals and establish metrics.

Policies. Establish effective policies and programs to promote and advance the culture of Diversity, Equity and Inclusion in the Workplace as supported by hiring practices, onboarding programs, reward and recognition programs, performance management programs (no details yet on the specific programs). Establish a Zero Tolerance Policy based on the organizational needs including specific references to diversity, equity and inclusion (no specifics yet).

Capacity Building. Provide courses on Diversity, Equity and Inclusion to increase employees’ knowledge and awareness of cultural, racial and other differences while delivering information on how to be more inclusive.

Partnerships. Encourage other properties to explore partnership with PADS and similar organization to help create more opportunities for the PWD community.

Building Green and Resilient

The irony in Philippine tourism is that the country is blessed with places with great tourism potential, but the same places are also vulnerable to natural calamities. Being located in the Ring of Fire, there is always the threat of earthquakes and volcanic eruptions. Being located across the Typhoon Belt, we encounter at least 20 typhoons in a year, and some of them are super typhoons. Climate change is expected to make it worse.

These pose a threat on our ability to serve our guests and give them an exceptional visitor experience.

We have resolved to incorporate green designs into our properties to help reduce our environmental impact especially on climate change, and plan better to improve the resiliency of our assets and operations.

ENERGY EFFICIENCY

With energy as a major contributor to our operating costs, we have invested in the latest technologies to reduce the consumption of energy in our properties. Our properties in Boracay and Mactan, for example, use Low-E and double glazing to reduce the entry of heat in rooms exposed to direct sunlight. Common areas are naturally lit and ventilated, and all artificial lighting use LED. Variable frequency drives are installed for pumps and motors to allow real-time adjustment to demand. In Alabang, our hotel enjoys the services of a district cooling system which was designed to use 40% less electricity and 65% less water compared to traditional onsite air-cooling systems.

WATER EFFICIENCY

As part of the green design of our properties, we have installed low-flow water fixtures and low flush water closets in our guestrooms and common areas.

In our island properties where there is significant water stress such as Mactan and Boracay, we have incorporated into our design water security solutions such as desalination.

Being responsible stewards of the water environment, all our properties have onsite sewage treatment plants, or have connected to the available public sewer infrastructure. In Alabang, the sewage works return part of the treated effluent to Filinvest City for irrigation purposes.

SITE RESILIENCE

Choosing the best possible location is paramount for our hotel investments. We consider several factors in our decision making such as natural, economic, socio-cultural, legal and other risks. Asset and operating risks related to water availability, geologic hazards, flooding and typhoon hazards and even supply chain-related logistics concerns are assessed during the feasibility stage. Risk mitigating measures are adopted during construction and operations to ensure that disruptions do not hamper our ability to recover quickly and continue construction work or day-to-day hotel operations. Risk transfer mechanisms are also put in place.

GREEN SPACES AND BIODIVERSITY

Investing in green landscapes is part of the development of any hotel property. They help reduce the heat island effect and provide a pleasing panorama for the guests’ eye. The presence of native flora also encourages wildlife to thrive and form part of the appeal of the property.

To improve biodiversity, we are planning to transition our existing landscapes towards being mostly or fully vegetated with native trees, shrubs and groundcover.

For our properties with beachfronts, we take note of the biodiversity of the marine flora that provides ecological services like storm surge protection and enhancing the experience of guests who snorkel and dive. In CRSM, we have adopted two hectares of the coral reef.

MAINSTREAMING

EFFICIENCIES AND RESILIENCY AS WE GROW THE BUSINESS

As we grow our asset base, we have made it a design objective to:

• • • •

Mainstream natural calamity scenarios risk assessment in the site acquisition stage

Target a 20% reduction in the use of potable water versus traditional designs

Target a 10% reduction in energy consumption versus traditional designs

Provide 30% vegetated open spaces and commit to use native species for landscaping

Furthermore, we have a goal to have our hotels undergo green building certification under EDGE (Excellence in Design for Greater Efficiencies), starting with Level 1 certifications that cover energy, water and materials categories.

Presidential Villa Crimson Resort & Spa, Boracay

Suite

Grafik Baguio

Villa Crimson Resort & Spa, Boracay

Suite Grafik Baguio

Energy Conservation and Efficiency

To decrease our carbon footprint and greenhouse gas emissions, we will continuously search for better energy efficient options, including the adoption of renewable energy sources in the near future.

Engineering solutions to improve the overall energy efficiency of our hotel and restaurant operations are already incorporated in the original design of the newly built properties such as Crimson Resort & Spa Boracay. In some of the older properties that we took over such as Quest Plus Conference Center, Clark, where we have updated 50% of the equipment and fixtures that were intended for completion in 2021.

ENERGY

OPTIMIZED ENERGY EFFICIENCY METRICS DURING THE PANDEMIC

We compared our Energy Use Intensities (EUI) against the published Cornell Hotel Sustainability and ASEAN Hotels benchmarks, and in 2021, our EUI per square meter basis was lower than the industry benchmark due to the COVID-19

pandemic. Room occupancy was low and, in some cases, zero, with this the overall consumption was drastically low compared to 2019. Our portfolio average EUI was also 28.1% lower than the ASEAN benchmark for hotels.

*Excluding golf-related data for the QPCC property

**Electricity utilization per occupied room is based in operational months only (QHTC – with 2 months not operating; THR – with 3 months not operating)

***Cornell Hotel Sustainability Benchmarking Index for Energy in the Philippines 2019 (used the mean value)

In terms of occupied rooms, most of our hotels were better than the benchmark except for Timberland Highlands Resort that was newly added to the portfolio only in 2021. This was the result of the very low ratio of the total number of rooms to the total area of the hotel.

The 2021 occupancy rate was 33.16% lower compared to 2019 so the portfolio average intensity in KWH per occupied room was 106% higher. This is expected to improve in future years as the property gradually transitions to normal operations.

Mimosa Plus Golf Course, Clark had an Electricity Utilization Index (ELUI) of 0.76 KWH per square meter, 23% lower than in 2019.

The carbon footprints of the hotels are being tracked and reported accordingly through the use of standard emission factors in calculating the corresponding carbon dioxide emissions. Scope 1 direct emissions are due to the consumption of fuel for vehicles and the use of liquefied petroleum gas of the restaurants. Scope 2 indirect emissions are due to the electricity purchased. We are not yet tracking Scope 3 emissions from business travel and other indirect emissions attributable to the supply chain, but we are in the process of how these can be measured.

WHAT’S NEXT IN OUR ENERGY CONSERVATION AND DECARBONIZATION JOURNEY

Our goal is to reduce our energy consumption where possible and achieve consistently improved scores versus the benchmarks set by Cornell Hotel Sustainability and ASEAN Benchmarking. Since the 2021 performance cannot be considered as normal hotel operations, we intend to reset the baselines for 2022 and 2023 and set intensity reduction targets for both energy consumption and greenhouse gas emissions.

The government has also reinforced its goal on national energy conservation with the new provisions of RA 11285 Energy Efficiency Act. Our policies and roadmaps per hotel will be established to comply with the program and its reportorial requirements.

On energy efficiency, we will continue our initiatives such as the submetering of high usage areas for proper monitoring and analyses; equipment retro-commissioning and efficiency improvement in older hotels; full conversion of all lighting fixtures to LED bulbs; conversion to inverter type air conditioning units from conventional air conditioning units, and the installation of timers, light/motion sensors, and solar powered outdoor lighting.

With regards to Renewable Energy, we are looking at the installation of onsite power generation capacity wherever feasible, in partnership with a sister company, Filinvest Engie (FREE), to partially avoid the indirect GHG emissions from electricity provided by the local distribution utilities which remain fossil fuel intensive. We are also looking at purchasing renewable power directly from a Retail Electricity Supplier (RES) through the Department of Energy’s Green Energy Options Program (GEOP) for large electricity users.

In subsequent years, we will also be quantifying and reducing indirect GHG emissions from our supply chain and the embedded carbon in our construction projects, segmented as Scope 3.

Efficient Water Usage and Conservation

GRI 303-3; SASB SV-HL-140a.1 ; SASB FB-RN-140a.1

Having a reliable and clean water supply is essential in the hospitality industry. Our properties which are located in water-stressed areas, such as Boracay Island and Mactan, need to innovate to connect to secure water lines.

The risk of water security is also getting more apparent in Clark Pampanga, Alabang, Rizal, and Tagaytay which have seen an increased dependence on groundwater reserves.

Addressing water scarcity in these locations will prevent increased competition among consumers relying on the same water source.

Supporting water security through conservation and efficiency will ensure that our business and the community around us thrives.

Our key strategy in water conservation is to apply water efficiency solutions wherever feasible and develop our own onsite water sources to augment the supply from public utilities. We are also looking at adopting a circular economy approach on our wastewater to further increase efficiency and reduce the water taken from natural sources.

WATER EFFICIENCY AS PART OF GREEN DESIGNS FOR HOTELS

Our hotels are equipped with submetering in areas with high consumption, low flow rate plumbing fixtures, and efficient water management in our cooling towers.

Although we had higher occupancies in 2021 compared to 2020, and added a new property to the asset portfolio, a significant reduction in total water consumption by 38.62% was observed.

This was due to the completion of a major pipe leak replacement project in Mactan, this coupled with irregular hotel operations due to a natural disaster. The high consumption of ground water in 2020 was due to the refilling of dried-up lakes in Mimosa Plus Golf Course, which was being rehabilitated at the time.

*Excluding golf-related data for the QPCC property

**Cornell Hotel Sustainability Benchmarking Index for Energy in the Philippines 2019 (used the mean value)

Out of our seven properties, four performed well against the benchmark. The ones that didn’t fare so well were CRSM and CRSB due lower occupancy rate of 72.08% and 59.20%. Similarly, THR, which was opened in 2021, also didn’t fare well mainly due to the very low ratio of total number of rooms versus the overall size of the hotel. THR’s vast landscapes that requires irrigation also contributed to the high-water intensity mark it received.

Compared to its 2019 performance, a pre-pandemic year, the 2021

portfolio average water intensity was higher due to the 46.83% reduction in total number of guests and 33.16% reduction in total occupied rooms.

The Mimosa Plus Golf Course water index was 0.01 cum/sqm and 92.31% lower than 2020. Also due to the refilling of dried-up lakes during rehabilitation work. An updated irrigation system was completed in 2021 which is expected to provide efficient water distribution in the future.

IMPROVING WATER RELIABILITY THROUGH DESALINATION AND REUSE

In areas of high-water stress such as in Mactan and Boracay, where the water sources in the vicinity are almost depleted or unavailable, we installed our own desalination facilities to reduce our dependency on the freshwater supply. The water from the public utilities such as Boracay Island Water Company (BIWC), are used as a back-up only, while treated wastewater is used for irrigation. We have yet to propose a final schedule of monitoring to effectively gauge the success of this effort. There is still a big potential in treated effluent reuse that we have yet to maximize.

CONTINUING OUR WATER JOURNEY

The ongoing challenge is to manage and reduce water usage without compromising the unique guest experience we hope to deliver. We want to achieve lower water intensities than the benchmarks for each hotel, but we will also reset our normal baseline by 2022 or 2023 as operations return to normal.

We are finalizing a roadmap on water conservation and efficiency, targeting non-potable water reuse for irrigation and water withdrawal from sustainable sources wherever possible.

Projects such as the replacement of old and inefficient plumbing fixtures and additional sub-metering needed will be continued. In addition, we will institutionalize a regular water balance review and wastewater compliance audit to ensure proper implementation and documentation.

Further to the current steps being taken, we will also be preparing our future designs for hotels. They will include rainwater collection tanks as a standard design feature which we plan to add this to existing hotels after testing for its feasibility. We will also look at replacing the current plants used in landscaping to those that are locally grown as require less water and can withstand droughts.

Reducing Our Wastes

Hotel operations tend to generate significant quantities of both municipal solid waste and hazardous waste. With the inadequate solid waste management infrastructure in many locations across the Philippines, we need to be good stewards of the environment by participating in the creation of a circular economy.

Our hotels and restaurants generate municipal solid waste and hazardous waste such as packaging materials, food waste, used oil, batteries, retired light fittings, which are disposed responsibly following government directives and ordinances. In 2021, we generated our municipal solid waste and the hazardous waste of 1,358.99 and 9.87 tonnes, respectively.

Given the amount of waste produced in our daily operations, waste reduction has been identified as a material sustainability issue for the group. One of the major policies adopted in 2018 was a gradual elimination of single-use plastics in our operations. The policy triggered the implementation of the following projects: An information campaign on the dangers posed by unmanaged single-use plastic; the use of alternative materials to replace plastic straws; the replacement of bottled water in guestrooms with glass pitchers refilled from water stations in every floor; and the replacement of bathroom amenities with eco-friendly alternatives such as wall mounted shampoo and soap dispensers.

Recently however, the recognizing the need to ramp up the hygiene practices in our properties as part of the COVID-19 Target Zero

initiative, required the temporary use of the use of plastic materials. Our hotels started wrapping and sanitizing hotel amenities with plastic sheaths, and bottled water had to be provided to guests once more.

As we move towards the recovery of tourism in the country, we hope to adopt a more strategic approach to waste management. The ban on single use plastics will just be one of the initiatives in a comprehensive waste management program that will include proper segregation at source, paper waste minimization, collecting recyclables coupled with reuse or upcycling solutions.

We will also recalibrate how we do our buffet spreads to better manage food waste. A recent study** has shown that mismanaged buffets are one of the top, if not the top, contributor of food waste, and we would like to ensure that our hotels and resorts can start a sustainable way of providing this service.

In addition, we will include in the comprehensive solid waste management system policies that cover materials procurement, institutionalizing our waste data collection process, reviewing our compliance with hazardous wastes and expanding our pool of service providers, and partnering with external organizations to implement solid waste management and recycling plans.

**Examining effective means to reduce food waste behaviour in buffet restaurants by Yevvon Yi-Chi Chang, Jo-hui Lin and Chiu-Han Hsiao. International Journal of Gastronomy and Food Science, September 2022

The Role We Play in Biodiversity

GRI 303-3; SASB SV-HL-140a.1 ; SASB FB-RN-140a.1

Most of our properties are in areas that are highly dependent on its surroundings and local offerings. For both our businesses and local communities to thrive, we must protect our eco-system. We proactively include plans for the preservation and enhancement of a location from the development stage of our properties until it is operational. We believe that this provides added value only for our guests but the local communities as well.

CURRENT EFFORTS

Each property has their own efforts that are specific to their locations and ecosystems. Crimson Resort & Spa Mactan is actively restoring 2-hectares of coral reefs that is home to 77 fish species which was further damaged during Typhoon Odette. Crimson Resort & Spa Boracay is committed to biodiversity protection and preservation efforts in their cove; Grafik Baguio which will open by 2025 will include biodiversity protection in its architectural plans. These initiatives are being done in collaboration with local government partners.

PLANNING FOR THE FUTURE

Our goal is to be proactive in enhancing and monitoring the ecosystem services where we operate, especially in the areas where biodiversity is higher. To fulfil our commitment, we will take the following steps:

• • • •

For Crimson Mactan, we will continue coral gardening and preservation and establish a coral nursery

The architectural design of Grafik Baguio will include features to preserve biodiversity:

o More than 30% vegetated open space

o Landscape planting selection/consideration are all native plants.

o Recycled water for landscape watering.

Introduce native flora in the properties and identify and monitor prominent and unique flora and fauna in existing and future properties

Newly renovated Mimosa Golf Course planted Zeon zoysia – this grass requires less water and is low maintenance

•

Establish bird biodiversity preservation efforts in the Mimosa Golf Course and Timberland Highlands Resort

Resilient

Building a Resilient Business

Our ability to continue providing unique guest experiences and growing the hospitality business portfolio is hinged on our capacity to withstand the impact of sudden natural and manmade disruptions to our business operations.

Despite its rich potential as a cultural and ecotourism destination, the Philippines situated in the Ring of Fire and has been tagged as one of the most vulnerable countries to climate change. Thus, the travel and tourism industry is constantly under threat of natural, man-made and other Black Swan-type of disruptions, such as the COVID-19 pandemic. It is imperative that our organization can adapt and recover quickly amid these disruptions.

RELIABILITY SYSTEMS IN PLACE

Our seven operational properties have extensive maintenance programs in place to ensure that all major equipment and our fleet are functioning optimally. Contingencies such as standby units are so that services are not disrupted by any breakdowns.

To be ready for natural disasters such as typhoons, earthquakes, fire and even manmade events such as terrorism, our properties have established standard operating procedures for immediate response. A command center receives all types of emergency or distress calls and coordinates rescue and response activities. On the protection against data breaches and theft, we have an established IT disaster response and recovery plan coupled with cybersecurity training for staff.

IMPROVING OUR RESILIENCE FURTHER

Learning from our experience with Typhoon Odette in late 2021, we have resolved to “Build Back Better” through better risk assessment of our proposed new sites and constantly improving our building designs to not just be green but also resilient.

We are working on setting up an Enterprise Risk Management Program that will establish risk ownership across the enterprise, to be supported by comprehensive risk assessment tools, identification of clear controls and adaption of indicators for key business risks.

Our existing Business Continuity Plans across the properties will be further improved and integrated to cover different risk event scenarios, putting in place contingency systems and inter-operability protocols with key stakeholders and other Filinvest business units. We will also be improving our standby agreements with key suppliers and enhance our involvement in the local governments’ disaster preparedness and response plans. We will also be strengthening our risk transfer mechanisms to ensure sufficient financial buffers against any disruptions.

RESILIENCE AWARDS

Filinvest Hospitality Group received Champion of Resilience – Marketing Communications and Most Resilient Business – Hospitality Group awards in 2020 and 2021 respectively. These are proof that the Group is positioned to ride the wave as it adapts and thrives in the new normal. The awards were given by Virtus Awards, the award giving body of the Hotel Sales and Marketing Association, to recognize the resiliency of businesses and departments during the pandemic.

COBALT POOL Crimson Resort & Spa, Boracay

Moving Forward in Creating Shared Value

With the articulation and adoption of our sustainability focus areas, we at Filinvest Hospitality will continue to assess our business risks and measure the effectiveness of our response. We will pivot to adopt new strategies and success metrics and recalibrate our targets when necessary.

To give credence to our disclosures, we intend to have our non-financial performance reports externally assured.

Underlying all our efforts is a vison to create shared value.

•

We will uplift the lives of our teammates and supply chain partners and continue to grow with them.

• •

We will contribute to the wellbeing of the communities we are in through local hiring, local procurement and implementation of shared initiatives with local governments and civil society partners.

We will play a part in the transition to a decarbonized economy by optimizing our energy, water, and material inputs.

• •

We will be mindful of our impacts to the fragile ecosystems that enhance the value of our locations through sound environmental practices such as waste management and biodiversity preservation.

We will continuously improve the resilience of our business against man-made or natural disruptions, promising to rise again after being affected, to continue delivering shared value for all stakeholders.

Our sustainability targets are not an end in themselves, but merely stepping stones towards being better than who we were. As we reach milestones, we will set the bar higher.

We will keep our stakeholders informed and engaged, cognizant that we cannot achieve everything on our own. The evolving quest for sustainability is a shared journey with you.

THE LIBRARY Crimson Resort & Spa, Boracay

Sustainability Index

Economic Performance & Governance

ECONOMIC DISCLOSURES 2021 GRI and SASB index Remarks

Direct Economic Value Generated P 1,206.7 M GRI 201-1

Direct Economic Value Distributed P 3051.5 M GRI 201-1

• Operating Costs P 628.0 M GRI 201-1

• Employee Wages and Benefits P 447.9 M GRI 201-1 Total mancost for regular employees only

• Payments to Suppliers P 1,501.2 M GRI 201-1 Includes mancost for employees of service providers

• Payments given to providers of capital P 628.2 M GRI 201-1 Pertains to loan principal and interest payments, no dividend declaration in 2021

• Taxes paid to government P 403.1 M GRI 201-1 Local and national government

• Community Investments P 3.1 M GRI 201-1 CSR initiatives and donations

LOCAL PROCUREMENT 2021 GRI and SASB index Remarks

Local Procurement: Proportion of Spending on Local Suppliers

P 748.2 Million; representing 50% of total payments made to supply chain GRI 204-1

Remarks

Percentage of employees to whom the company’s anti-corruption policies and procedures have been communicated to 100% GRI 205-2

Percentage of business partners to whom the company’s anti-corruption policies and procedures have been communicated to 100% GRI 205-2

Percentage of directors and management that have received anti-corruption training 100% GRI 205-2

Percentage of employees that have received anti-corruption training 100% GRI 205-2

Number of incidents in which directors were removed or disciplined for corruption 0 GRI 205-3

Number of incidents in which employees were removed or disciplined for corruption 0 GRI 205-3

Number of incidents when contracts with business partners were terminated due to incidents of corruption 0 GRI 205-3

ANTI CORRUPTION 2021 GRI and SASB index

Social Performance

EMPLOYEE MANAGEMENT DATA (2021)

Employee Ratio by Gender

Male – 63% Female – 37%

Executive

• Male – 2%

• Female – 1%

Manager

• Male – 8%

• Female – 8%

Supervisor

Employee Ratio by Role and Gender

• Male – 11%

• Female – 6%

Rank and File

• Male – 19%

• Female – 9%

Employees by Service Providers*

• Male – 26%

• Female – 10%

GRI and SASB Index Remarks

GRI 405-1 831 regular employees; 317 contractual employees

Employee Ratio by Origin

Local*– 75% Non-local – 24% Expat – 1%

Employee Ratio by Location/Region

Luzon – 49% Visayas – 50% Foreign – 1%

Generation Z (18-25 y/o) – 10% Millennials (26-41 y/o) – 67%

GRI 405-1

Employees by service providers render 100% of their service hours to Filinvest Hospitality

Employee

Ratio by Age (Generation)

Generation X (42-57 y/o) – 21% Baby Boomer (Over 57 y/o) – 1%

GRI 405-1

Local refers to the employees that live within the boundaries of the province or region where property is located

GRI 405-1 Total mancost for regular employees only

GRI 405-1 Reflects ages of employees by the end of 2021

New Employee Hires, by Age Group

• <30 y.o.

• 30-50 y.o.

• >50 y.o.

No disclosure

GRI 401-1

New Employee Hires, by Gender

• Male

• Female No disclosure GRI 401-1

New Employee Hires, by Region

• Luzon

• Visayas

• Mindanao No disclosure GRI 401-1

Filinvest Hospitality Corporation –16%

Employee Turnover

Chroma Hospitality, Inc. and all properties – 27%

Ratio of Lowest Paid Employee against Minimum Wage 1:1

GRI 401-1 SASB SV-HL-310a.1 SASB FB-RN-310a.1

Employee turnover rate = (Number of employees who separated from the company from January 1, 2021 to December 31, 2021 ÷ Average number of employees in 2021) x 100

SEC MC 2019-04 SASB SV-HL-310a.3 SASB FB-RN-310a.2

Indirect Jobs 317 jobs Outsourced support services

EMPLOYEE TRAINING AND DEVELOPMENT

Training Hours, by Gender

DATA (2021) GRI and SASB Index Remarks

Male, 6488.38 (total) Male, 12.4 (average) Female, 5243.24 (total) Female, 17 (average) GRI 404-1

LABOR RELATIONS DATA (2021) GRI and SASB Index Remarks

Employees under Collective Bargaining 0 GRI 407-1

Legal Actions or Employee Grievance Cases

• Forced Labor

• Child Labor

• Human Rights

• Sexual harassment

0

GRI 408-1 GRI 409-1 SASB SV-HL-310a.4

LABOR LAWS AND HUMAN RIGHTS DATA (2021) GRI and SASB Index Remarks

Policies that explicitly disallow violations of labor laws and human rights (e.g. harassment, bullying) in the workplace 1 SASB SV-HL-310a.4

Compliance with Safe Spaces Act. Anti-sexual harassment policy incorporated in employee code of conduct

DIVERSITY AND EQUAL OPPORTUNITY DATA (2021) GRI and SASB Index Remarks

Gender Distribution

63% Male, 37% Female GRI 405-1

Employees from Indigenous Communities or vulnerable Sector No disclosure GRI 405-1

OCCUPATIONAL HEALTH AND SAFETY DATA (2021) GRI and SASB Index Remarks

Employee Safe Manhours 1,308,868 GRI 403-9

Non-Employee Safe Manhours No disclosure GRI 403-9

Number of Fatalities 0 GRI 403-9

Number of Injuries 0 GRI 403-9

Number of Reported Near Misses No disclosure GRI 403-9

Number of Work-related Ill Health No disclosure GRI 403-9

Tracking of non-employee safety statistics will commence in 2022

There were no documented transmission of COVID-19 in the properties

Number of community-based partnerships No disclosure

For operations affecting IPs, total number of Free and Prior Informed Consent (FPIC) consultations and Certification Preconditions secured Not material

CUSTOMERS DATA (2021) GRI and SASB Index Remarks

Customer Satisfaction Score Rank 3 (90.28) as of October

Number of substantiated complaints on product or service health and safety No disclosure

TrustYou, our official guest experience tracker, allows us to compare our score against five competitors in the Filipino-run Hospitality sector

GRI 416-2

Number of health and safety complaints addressed No disclosure GRI 416-2

Number of substantiated complaints related to marketing and labeling No disclosure GRI-417

Number of marketing and labeling complaints addressed No disclosure GRI-417

Number of substantiated complaints on customer privacy 3

GRI 418-1 All logged complaints are requests to delete collected personal information

Number of customer privacy complaints addressed 3

GRI 418-1 All logged requests to delete personal information were resolved

Number of Data Breaches, including leaks, theft and loss of data 0

GRI 418-1

Environmental Performance

RESOURCE MANAGEMENT

ENERGY DATA (2021) GRI and SASB Index Remarks

Energy consumption – gasoline 0

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

Energy consumption – diesel 220,722 L 8,520 GJ

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

Diesel is used mainly for generator sets and vehicles for use within the properties

Energy consumption - LPG 63,693 kg 3,159 GJ

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

LPG is used in the F&B operations

Energy consumption – electricity (renewable) 0

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

Energy consumption – electricity (non-renewable) 21,644,153 kWh 77,919 GJ

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

Energy consumption – electricity, total 21,644,153 kWh 77,919 GJ

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

Energy consumption - TOTAL 89,598 GJ

GRI 302-1 SASB SV-HL-130a.1 SASB FB-RN-130a.1

WATER AND WASTEWATER DATA (2021) GRI and SASB Index Remarks

Water used 386,150 m3

GRI 303-3 GRI 303-5, SASB SV-HL-140a.1 SASB FB-RN-140a.1

Wastewater generated 42,204 m3 GRI 303-4

Wastewater treated 28,654 m3 GRI 303-4

Wastewater recycled and reused 13,550 m3

Water withdrawn from sea water, surface water, deep wells, and purchased water from water utility providers

There are properties where the sewage is collected and treated by the public water utility

Water reused for irrigation

Wastewater discharged 15,104 m3 GRI 303-4 Estimates only

WASTES

DATA (2021) GRI and SASB Index Remarks

Solid Wastes Generated (total) SASB FB-RN-150a.1 SASB FB-RN-150a.2

Reusable 10,171 kg GRI 306-3

Recyclables Not being monitored. GRI 306-3

Compostable 21,297 kg GRI 306-3

Incinerated 0 GRI 306-3

Residual (sent to landfill) 1,330 tons GRI 306-3

Hazardous Wastes Generated 4,182 kg GRI 306-3 SASB FB-RN-150a.1

Hazardous Wastes Transported, Treated and Disposed 3,974 kg GRI 306-3

AIR POLLUTION AND GREENHOUSE GAS EMISSIONS

AIR POLLUTANTS DATA (2021) GRI and SASB Index Remarks

NOx Not material

GRI 305-7

SOx Not material GRI 305-7

Persistent Organic Pollutants (POPs) Not material

GRI 305-7

Volatile Organic Compounds (VOCs) Not material

Hazardous Air Pollutants (HAPs) Not material

GRI 305-7

The air emissions are generally due to genset operations. Usually, gensets are turned on for a few minutes during regular preventive maintenance. Thus, the mass quantities of air quality constituents are deemed insignificant. In 2021, there were no extensive operating hours for the gensets.

GRI 305-7

Particulate Matter (PM) Not material GRI 305-7

Scope 1 – direct GHG emissions 693 tonnes CO2-eq GRI 305-1

Scope 2 – indirect GHG emissions (electricity bought)

15,415 tonnes CO2-eq GRI 305-2

Fuel consumption of vehicles, gensets, and LPG used in kitchens

Purchased electricity only.

Scope 3 – indirect GHG emissions (supply chain) No disclosure GRI 305-3

Total GHG (Scope 1, 2, 3)

16,108 tonnes CO2-eq RI 305-7

We are currently exploring which Scope 3 categories are material to Filinvest Hospitality

GREENHOUSE GASES DATA (2021) GRI and SASB Index Remarks

Operational sites owned, leased, managed in or adjacent to, protected areas and areas of high biodiversity value outside protected areas

ECOSYSTEMS AND BIODIVERSITY

DATA (2021)

Crimson Mactan* and Timberland Highlands** are operational sites currently owned by Filinvest Hospitality Corporation that are adjacent/situated in areas of high biodiversity value.

Boracay ‘critical habitat’ designation of DENR (unofficial)

GRI and SASB Index Remarks

GRI 304-1 SASB SV-HL-160a.1

Habitats protected or restored

2 ha of coral reef in Crimson Mactan

IUCN Red List species and national conservation list species with habitats in areas affected by operations Not being monitored

GRI 304-3 SASB SV-HL-160a.2

The coral reef adopted by Crimson Mactan is supported by an undergoing coral reef nursery and restoration project

GRI 304-4

ENVIRONMENTAL COMPLIANCE

DATA (2021)

Number of environmental NOVs issued 0

Number of pending cases 0

Number of cases resolved 0

Number of non-monetary sanctions for non-compliance with environmental laws and/or regulations 0

Total amount of monetary fines or penalties for non-compliance with environmental laws and/or regulations 0

GRI and SASB Index Remarks

Activity Metrics (SASB)

DATA (2021)

SASB Index Remarks

Number of available room-nights 607,899 SASB SV-HL-000.A

Average occupancy rate* 50% SASB SV-HL-000.B

* Measured as number of (1) occupied room-nights divided by (2) available room-nights across all properties.

Gross area of:

• rooms

Total area of lodging facilities*

Number of lodging facilities and the percentage that are: (1) managed, (2) owned and leased, (3) franchised

Number of (1) company-owned and (2) franchise restaurants

Gross floor area of all properties: 161, 418 m2 SASB SV-HL-000.C

• hotel premises

• function rooms

• restaurants

7 SASB SV-HL-000.D

24 restaurants/outlets for 2021; all currently company-owned

2 restaurant brands: Baker J and Firehouse

SASB FB-RN-000.A

Sustainability Council

Josue David Romano

Director for Organizational Development and Culture

Chroma Hospitality, Incorporated

Diana Bulawit

Senior Strategic Finance Manager

Filinvest Hospitality Coporation

Pamela De Guzman

AVP for Project Development Filinvest Hospitality Coporation

Jan Edward Cruz

Data Privacy Manager Chroma Hospitality, Incorporated

Heidi Manabat

Athena Rhae Bisnar

Sr. Business Process and Innovation Manager

Filinvest Hospitality Coporation

Gilbert Malong

Head of Interior Design Group Share Pro, Incorporated

Flordeliz Cabasa Corporate Engineer

Chroma Hospitality, Incorporated

Publication Team

Director of Marketing Communications & Public Relations

Chroma Hospitality, Incorporated

Mark Tom Mulingbayan

Head of Sustainability

Filinvest Development Corporation

Francis Gotianun

Senior Vice President for Hospitality

Filinvest Development Corporation

James Montenegro Country Manager

Chroma Hospitality, Incorporated

Advisers

Albert Jasper Acuña

Senior Graphic Designer

Chroma Hospitality, Incorporated

Nancy Rivera

SAVP for Accounting and Controllership Filinvest Hospitality Coporation

Ria Jareno

Vice President for Operations Chroma Hospitality, Incorporated

David Gotianun

Assistant Vice President for Special Projects Share Pro, Incorporated

Filinvest Hospitality welcomes inquiries, recommendations and feedback from experts and the general public. Please contact: +63 2 8 846 0278 | info@filinvesthospitality.com

Mindful Hospitality Towards a Better Future

EXECUTIVE LOUNGE Crimson Hotel Filinvest City, Manila