INDEPENDENT ASSURANCE STATEMENT
Scope and approach
Manila Water Company, Inc. commissioned DNV GL AS Philippines Branch (“DNV GL”) to undertake independent assurance of sustainability/non-financial disclosures disclosed in the 2017 Integrated Report (the “Report”) for the year ended 31 December 2017.
We performed our work using DNV GL’s assurance methodology VeriSustainTM1 , which is based on our professional experience, international assurance best practice including International Standard on Assurance Engagements 3000 (ISAE 3000) Revised* and the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.
We evaluated the performance data using the reliability principle together with Manila Water Company, Inc. data protocols for how the data are measured, recorded and reported. The performance data in the scope of assurance included economic, environmental and social data.
We understand that the reported financial data and information are based on data from Manila Water Company, Inc.’s Audited Financial Statements [posted March 1, 2018], which are subject to a separate independent audit process. The section on Financial Review was also excluded from the scope of assurance –as this was a summary of the 20-IS figure submitted to regulatory authorities (Philippines Stock Exchange – Securities and Exchange Commission).
We planned and performed our work to obtain the evidence we considered necessary to provide a basis for our assurance opinion. We are providing a ‘limited level’ of assurance based on DNV GL VeriSustain.
A multi-disciplinary team of sustainability and assurance specialists performed work at Manila Water Company, Inc. The boundary of assurance covered operations of Manila Water Company, Inc. in the Philippines, and operational activities in Vietnam, Myanmar and Indonesia.
Responsibilities of the Directors of Manila Water Company, Inc. and of the assurance providers
The Management of Manila Water Company, Inc. have sole responsibility for the preparation of the Report. In performing our assurance work, our responsibility is to the management of Manila Water Company, Inc.; however our statement represents our independent opinion about our assurance outcome to the readers of this Report.
We have no other contract with Manila Water Company, Inc. and this is the second year that we have provided assurance. DNV GL’s assurance engagements are based on the assumption that the data and information provided by the client to us as part of our review have been provided in good faith and free from misstatements.
Basis of our opinion
We undertook the following activities as part of the assurance process:
• Review of the current sustainability issues that could affect Manila Water Company, Inc. and are of interest to stakeholders;
• Review of Manila Water Company, Inc. approach to stakeholder engagement and recent outputs of a stakeholder engagement process conducted through a third party that included the vendors, government, parent companies and affiliates, and media and disaster respondents. Stakeholder engagement with employees and customers was carried out directly by Manila Water Company, Inc.;
• Review of information provided to us by Manila Water Company, Inc. on its reporting and management processes relating to GRI Sustainability Reporting Standards;
• DNV GL was free to choose personnel from various functions for the interview so as to ensure adequate coverage of the report. Functions interviewed included Human Resources, Enterprise Risk Management, Technical and Business Operations, Finance, Corporate Governance, and Sustainability;
• Site visits to Manila Water Company, Inc HQ, Marikina North Sewage Treatment Plant and Balara Filtration Plant for review of process and systems.
• Review of supporting evidence for key claims and data in the report. Our verification processes were prioritised according to materiality and we based our prioritisation on the materiality of issues at a consolidated corporate level.
The VeriSustain protocol is available upon request from DNV GL Website (www.dnvgl.com)
On the basis of the work undertaken, nothing has come to our attention to suggest that the Report does not properly describe Manila Water Company, Inc.’s related sustainability performance i.e. GRI Standards – In accordance – ‘Core’ option of reporting, including GRI Standards principles for defining report content and guiding principles of framework.
Without affecting our assurance opinion, we also provide the following observations regarding the adherence to the reporting principles for defining the sustainability report content and for defining report quality as defined in the Global Reporting Initiative (GRI) Sustainability Reporting Standards and Guiding Principles of the Framework.
Stakeholder Inclusiveness (GRI), Stakeholder relationships ( Framework)
The process of stakeholder identification and engagement is well established. Manila Water Company, Inc., describes how the concerns of different stakeholders are addressed in the Collaborating for Successful Partnerships section. However Manila Water Company, Inc. could include other non-local Stakeholders needs and expectations in the future reporting.
Sustainability Context (GRI)
The Report presents Manila Water Company, Inc.’s non-financial performance in the wide context of sustainability. Manila Water Company, Inc.’s Sustainability Framework commits to creating shared value and improving the impact on society and the environment through the five focus areas of the core businesses. The Report also explains how Manila Water Company, Inc.’s initiatives are aligned with the various United Nations Sustainable Development Goals.
Materiality (GRI, Framework)
Manila Water Company, Inc. has identified material topics based internal and external stakeholder opinions in 2017. The Report discloses the identified material aspects at macro-level and topic boundaries. The Report has not missed
out any known material aspects and the process of materiality assessment meets the requirements in GRI Standards. Additional material topics (non-GRI Standards) were also identified and included in the Report under the section Sustainability Framework and Material Topics.
Reliability and Completeness (GRI, Framework)
The Report discloses both the positive and the negative trend of Manila Water Company, Inc. performance in 2017. Manila Water Company, Inc. has selected, compiled and reported information in a relatively consistent manner. The presentation within the report enables stakeholder to analyze changes in the sustainability performance over time. The data used for reporting of the sustainability performance presented in the Report is collected from their own operations and subsidiaries by a centrally, dedicated function in Manila Water Company, Inc. headquarters and consolidated for reporting. Any errors or misstatements identified during the engagement were corrected prior to the Report being published. Data owners were able to demonstrate the origin and interpretation of the data in a reliable manner. The data was identifiable and traceable.
Strategic focus and future orientation ( Framework)
The Enterprise Risk Management section of the report describes the various risks, potential impacts, and corresponding mitigation strategies. Manila Water Company, Inc. utilizes Key Risk Indicators (KRIs) with regular monitoring and reporting to management to aid in the quantification of risks and determine the effectivity of risk management plans. The strategy for the company is also explained in the Business Review section under the various subsidiaries.
Connectivity of information ( Framework)
The business model of Manila Water Company, Inc. presented in ‘Creating Shared Value’ describes the connection with the respective subsidiaries roles and contribution to create the value in its unique value chain which begins from water source development and management to water treatment, water distribution, used water treatment and other services. Past and current performance of Manila Water Company, Inc. and its subsidiaries are presented in the Business Review and Sustainability Performance sections. The information is clear and understandable.
Conciseness ( Framework)
Relevant infographics and graphs have been used to supplement information in the Report. The Report generally addresses Manila Water Company, Inc’s material topics relating to strategy, governance, performance and prospects in a clear and logical manner without the use of jargon.
Consistency and comparability ( Framework)
Manila Water Company, Inc. has applied a consistent process to select, compile and report information across the subsidiaries. The Report in general presents its performance over time so that the reader can analyse changes and compare the performances.
In our opinion, the tone in the Report is generally balanced and with no obvious and deliberate intent to unduly influence the stakeholders.
The data measurement techniques and basis for calculations have been duly described to us and can be replicated with same results. We have evaluated the accuracy of data and information by sampling of data sets. Any errors or misstatements identified during the engagement were communicated for correction prior to the Report being published. Certain restatement are provided to changes in historical disclosure. The data used for reporting of the
sustainability performance presented in the Report is centrally collected from the subsidiaries and consolidated for reporting.
This is the second Integrated Report by Manila Water Company, Inc. and includes both the sustainability performance as well as the financial reporting. The Report clearly states which year it covers (1 Jan 2017 – 31 Dec 2017) and identifies any restatements of previous disclosures and the reasons for restatement.
The information is presented in the Report is communicated in a simple manner. Consolidated non-financial data tables help to make the information understandable. Manila Water Company, Inc. plans to publish the printed
version of the Report. Electronic copies of the Report in PDF format will be made available from its website which is publicly accessible.
Our assurance relies on the premise that the data and information provided by Manila Water Company, Inc. to us as part of our review procedures have been provided in good faith. Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk that errors or irregularities, possibly significant, may not have been detected. The engagement excludes the sustainability management, performance and reporting practices Manila Water Company, Inc.’s associated companies, suppliers, contractors and any third-parties mentioned in the Report, or any discrepancies between the Report and Manila Water Company, Inc’s website. The company position statements, the statements for the management approach, and case studies and examples are excluded from the scope of our work. We did not interview external stakeholders as part of this assurance engagement. The reported disclosures related to Economic performances are based on the financial disclosures and data, which were cross-checked with internal documents and the audited consolidated financial statements for transcription errors. Limited depth of evidence gathering including inquiry and analytical procedures and limited sampling at lower levels in the organization were applied as per agreed scope of engagement. The baseline data for Environmental and Social performance are verified with samples randomly taken by and the aggregated data at the corporate level are used for the verification. The procedures performed in a limited assurance engagement vary in nature and timing, and are less in extent than for a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained if a reasonable assurance engagement had been performed. We expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on this Assurance Statement.
Statement of Our Competence and Independence
DNV GL applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 – Conformity Assessment Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the DNV GL Code of Conduct 2 during the assurance engagement and maintain independence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability assurance professionals. DNV GL was not involved in the preparation of any statements or data included in the Report except for this Assurance Statement. DNV GL maintains complete impartiality toward stakeholders interviewed during the assurance process. DNV GL have no other contract with Manila Water Company, Inc. and did not provide any services to Manila Water Company, Inc. in 2017 that could compromise the independence or impartiality of our work.
For and on behalf of DNV GL Business Assurance Philippines
27 March 2018
DNV GL Business Assurance is a global provider of certification, verification, assurance, assessment and training services, helping customers to build sustainable business performance. www.dnvgl.com