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Table of Contents
1.0 Introduction 6
4.1 Introduction 22
4.2 Metropolitan Waterworks and Sewerage System 22
4.3 Company Profiles 23
5.1 Overview 26
5.2 Sustainability Dimensions Addressed 26
5.3 Under-developed Sustainability Dimensions 27
5.3.1 Economic Dimension Reporting 28
5.3.2 Environmental Dimension Reporting 28
5.3.3 Social Dimension Reporting 30
6.1 Conclusion 37
6.2 Recommendations 39
References 40
List of Tables
Table 1 GRI G4 Reporting Guidelines: Specific Standard Disclosures 18
Table 2 Proposed Scoring System based on GRI G4 Performance Indicators 21
Table 3 Sustainability Reporting Frameworks of Manila Water Company, Inc.,
2004-2015 24
Table 4 Sustainability Reporting Frameworks of Maynilad Water Services, Inc.,
2011-2015 25
Table 5 Scores of the reports based on GRI G4 performance indicators 26
Table 6 Number of indicators not reported by the sustainability reports 27
Table 7 Scores on economic aspects 28
Table 8 Scores on environmental aspects 29
Table 9 Scores on labor practices and decent work under the social dimension 30
Table 10 Scores on human rights under the social dimension 31
Table 11 Scores on society under the social dimension 32
Table 12 Scores on product responsibility under the social dimension 32
Chapter 1
INTRODUCTION
6
these issues is the inherent systems thinking that is required to pursue sustainability in the corporate
level.
Systems thinking necessitates that corporations think of economic, social and
environmental issues as interconnected and that addressing these require a holistic approach.
Systems theory forwards the idea that a system is made up of interrelated parts and that the whole
system is greater than the sum of its parts (Sridhar & Jones, 2013). Such systems thinking, if
employed, will be reflected in SRs.
In contrast to this, current reporting practices suggest that corporations are employing silo
thinking - the social, environmental and economic reports are usually reported in isolation. These
reports when combined in one document are seen as equal to sustainability (Sridhar & Jones,
2013). This then prevents companies to grasp the importance of systems thinking and results to a
fragmented approach when it comes to sustainability.
Majority of studies so far focused on surveying the contents of these SRs through the
employment of scoring systems (see Morhardt, Baird, & Freeman, 2002; Ratanajongkol, Davey,
& Low, 2006; Skouloudis, Evangelinos, & Kourmousis, 2010; Yadava & Sinha, 2016). These
studies in one form or another scored the amount and quality of economic, social and
environmental indicators reported. With some exceptions (Davidson & Wilson, 2006; Sridhar &
Jones, 2013), many content analysis studies contribute to this silo mentality by just merely scoring
the quality of the content and not considering how discussions about these three aspects are
integrated. This is the gap that this research study aims to fulfill.
7
1.3 Research Objectives
The study aims to derive valuable insights about the SRs of select Philippine companies
by describing and analyzing the contents of the reports. The study will do so through the
achievement of the following objectives:
1. To identify the sustainability dimensions addressed in the reports
2. To determine the areas that are under-developed in the reports and require further
improvement
3. To discover whether the information in the SR reflect a systems approach in discussing
the sustainability initiatives of the company
8
To the readers. Currently, there are several studies regarding sustainability reports in
certain countries but there is none particular to the Philippines. As such, this will contribute to
knowledge to this field of study by providing the Philippine context.
To future researchers. Given that this is primarily an exploratory study on select
Philippine companies, the results can serve as a basis for future studies comparing corporations
across industries. It can also serve as a basis for future studies going beyond content studies and
incorporating both the collection of primary data through interviews and secondary data through
the SRs.
9
Chapter 2
Review of Related Literature
10
All these developments - the establishment of institutions like the GRI, the subsequent
creation of its sustainability reporting frameworks and the resultant rise in the number of
corporations creating and publishing SRs - may be viewed as a welcome development. However,
several authors have criticized this development.
11
combined in one document are seen as equal to sustainability (Sridhar & Jones, 2013). This then
prevents companies to grasp the importance of systems thinking and results to a fragmented
approach when it comes to sustainability. Milne and Gray (2013) agrees with this observation
when they wrote:
Through the practice of incomplete TBL (aka sustainability) reporting many
organizations seem to confuse narrow and incomplete, partial reporting with
claims to be reporting on being sustainable, actually being sustainable, or more
commonly, with claims to be moving towards sustainability (Milne & Gray, 2013,
p. 12).
Several authors point to a more fundamental issue – the issue as to whether companies can
contribute to making the world sustainable. Milne and Gray (2013) points to the fact that the mere
existence of corporations is one of the major causes of global ecological unsustainability. As such
they advocate to calling sustainability reporting as reporting on lessening the ecological
unsustainability of corporations (Milne & Gray, 2013).
With the arguments presented above, one could not help but to question the value of
corporate SRs. The following section would seek to address this issue.
12
the business case, however, the reports offer stakeholders a previously unavailable way to know
more about a corporation’s sustainability strategy and non-financial performance (Morhardt et al.,
2002). This then makes it possible to evaluate these in terms of the corporation’s compliance with
regulations and compare performance with a corporation’s peers within or beyond the
corporation’s industry (Morhardt et al., 2002).
Aside from this, the researcher believes that what the GRI and other sustainability reporting
frameworks offer are better than not having any framework at all. The researcher concedes that
the existing frameworks are lacking as already discussed above. However, this can easily be
countered by indicating that GRI is an evolving framework (Hedberg & Von Malmborg, 2003).
This then connotes the possibility of the framework being better with each version. Given that the
guidelines have seen improvements through many multi-stakeholder consultations (Brown, de
Jong, & Levy, 2009), the suggestions offered by Moneva and colleagues (2006) regarding the
adoption of integrated indicators can be incorporated on future versions.
With regards to the gap of actual behavior to that of what is being reported, the author
believes it is up to the vigilance of all stakeholders. The lack of mandatory measures is beyond the
scope of GRI as an institution and as such would require the complementary governmental actions.
GRI’s strength as a reporting framework is the contextual flexibility it allows companies in
defining sustainability and reporting on sustainability issues relevant to an industry. However, it
seems that this is also its greatest weakness.
13
Country-wide surveys can be grouped into those conducted in developed and developing
countries. For the former, some samples include Chapman and Milne’s (2003) comparison of the
reports of 30 companies in New Zealand. A similar study was conducted by Daub (2007) in
Switzerland, Skouloudis and colleagues (2010) in Greece, by Sawani et. al in Malaysia (2010), by
Roca and Searcy in Canada (2012) and Aktas and colleagues in Turkey (2013). The latter includes
surveys conducted in Thailand (Ratanajongkol et al., 2006), in Bangladesh (Sobhani, Amran, &
Zainuddin, 2009) and more recently in India (Yadava & Sinha, 2016).
The studies cited reveal certain trends in corporate sustainability reporting. These include
the wide variety in content, structure and quality of reporting. These trends had been attributed to
the existence of different SR frameworks (Christofi, Christofi, & Sisaye, 2012), the wide number
of reporting instruments (KPMG et al., 2016) as opposed to a single reporting framework that
exists for annual reporting (Davis & Searcy, 2010).
14
focused on determining whether SRs incorporate an integrated approach to sustainability. This is
the gap that this research study aims to fulfill.
15
Chapter 3
Research Framework, Design, and Methodology
The definition begs the question legitimacy for what? In the case of corporations,
legitimacy theory forwards the assumption that corporations exist because society allowed it to do
so (Ratanajongkol et al., 2006). Guthrie and Parker (1989) forwards the idea of a social contract
wherein society allows corporations to exist in exchange for the corporations’ provision of goods
and services for the betterment of society. It is because of this that Ratanajongkol and colleagues
(2006) further stated that corporations would have to meet the expectations of the broader society
if it wants to continue its operations.
As a logical extension and as it applies to sustainability reporting, the theory suggests that
creating and publishing the document is one of the many ways in which a corporation may seek to
gain or maintain the legitimacy for its existence (Ratanajongkol et al., 2006; Vormedal & Ruud,
2009).
3.1.2 Systems Theory
Systems theory is a transdisciplinary framework that forwards the idea that a system is
made up of interrelated parts and that the whole system is greater than the sum of its parts (Johnson,
Kast, & Rosenzweig, 1964). Johnson and colleagues (1964), forwards the idea that while the parts
16
of a system can be analyzed individually, the whole system cannot be understood completely
without looking at the interrelationships among the individual parts. Doppelt, as mentioned by
Sridhar and Jones (2013), appreciates the value in thinking through systems as it enables us to
move beyond mere cause and effect relationships and enables us to appreciate the complex realities
that we are faced with. As such, systems thinking “helps in building more accurate mental models
for understanding complex phenomena” (Sridhar & Jones, 2013, p. 98).
Capra (1996) applied systems theory in forwarding the importance of thinking holistically
when it comes to sustainability. Particularly, he advocated the appreciation of the interrelationship
between our social systems and the Earth’s natural systems (Capra, 1996). As such the
sustainability of the world is dependent upon healthy subsystems operating within the overall
world system. If any of the subsystems were to function sub optimally then the entire world system
will be affected in turn (Sridhar & Jones, 2013).
As such, the corporation can then be viewed as a subsystem of the economic systems that
is turn one of the social systems. All social systems closely interacts with the Earth’s natural
systems (Johnson et al., 1964). This is why the triple bottom line or corporate sustainability is an
inherently systems concept in that the interrelationships of the three dimensions is the very reason
it makes sense.
17
Table 1. GRI G4 Reporting Guidelines: Specific Standard Disclosures
Category Aspect Indicator Example
Economic Economic performance Direct value generated
Market presence Entry-level wage by gender compared to local
minimum wage
Indirect economic impacts Impact of infrastructure investments
Procurement practices Spending on local suppliers
Environmental Materials Materials used
Energy Energy consumed
Water Water withdrawal by source
Biodiversity Operational sites adjacent to protected areas
Emissions Direct greenhouse gas emissions
Effluents and waste Quality and destination of water discharge
Products and services Mitigation of environmental impacts of products and
services
Compliance Fines and nonmonetary sanctions for noncompliance
Transport Environmental impacts of transporting products and
workforce
Environmental protection expenditures and
Overall investments
Supplier environmental assessment Suppliers screened using environmental criteria
Environmental grievance mechanisms Environmental impacts grievances
Social: Labor Employment Hires and turnover by age
Practices and Labor/management relations Operational change notices
Decent Work Occupational health and safety Workforce participation on health and safety
committees
Training and education Annual training by gender and employee category
Diversity and equal opportunity Employees by gender, age, and minority group
Equal remuneration for women and
men Remuneration by gender
Supplier assessment for labor practices Suppliers screened for labor practices
Labor practices grievance and Labor practices grievances
mechanisms
Social: Human Investment Investment agreements that include human rights
Rights clauses
Nondiscrimination Incidents of discrimination
18
Freedom of association and collective Operations and suppliers at risk for violating right to
bargaining exercise freedom of association
Child labor Risk for incidents of child labor
Forced or compulsory labor Risk for incidents of forced or compulsory labor
Security practices Personnel trained in human rights policies
Indigenous rights Violations of rights of indigenous peoples
Assessment Operations subject to human rights reviews
Supplier human rights assessment Suppliers screened using human rights criteria
Human right grievance mechanisms Human rights grievances filed
Social: Society Local communities Community engagement, impact assessments, and
development programs
Anticorruption Operations assessed for risks of corruption
Public policy Value of political contributions
Anticompetitive behavior Legal actions for anticompetitive, antitrust, and
monopoly practices
Sanctions for noncompliance with laws and
Compliance regulations
Supplier assessment for impacts on Suppliers screened using criteria for impacts on
society society
Grievance mechanisms for impacts on Grievances about impacts on society
society
Social: Product Customer health and safety Assessment of health and safety impacts
Responsibility Product and service information labeling
Product and service labeling requirements
Marketing communications Sale of banned or disputed products
Customer privacy Breaches of customer privacy and losses of customer
data
Compliance Noncompliance in the provision and use of products
and services
Note: From “The evolution of sustainability reporting: Using the GRI’s latest guidelines and looking to integrated
reporting” by D. English and D. Schooley, 2014, The CPA Journal, p. 26–36
19
looked for any form of discussion that links the company’s efforts in any one of the three
sustainability dimensions with the other one or two dimensions.
Aside from this, the researcher also paid attention to discussions relating to management
systems. For example, an environmental management system (EMS) enables a corporation to
make sure that negative environmental impacts are reduced (Darnall, Jolley, & Handfield, 2008).
Shireman as cited by Darnall and colleagues (2008) said that this is done in such a way that the
practices become embedded in a corporation’s operation so that protecting the environment
becomes an integral part of business strategy. It is for this reason that Curcovic and colleagues (as
cited by Darnall et. al., 2008, p.31) claims that EMS are “recognized as systematic and
comprehensive mechanisms for improving environmental and business performance.”
This study employed a multiple case design with the SRs as the unit of analyses. Herriott
& Firestone as cited by Yin (2014) said that evidence from multiple cases are more compelling
and makes the results of a study more robust. Replication logic was used as it is predicted that the
SRs of the two water companies in the Philippines (Manila Water Company Inc and Maynilad
Water Services Inc.) do not demonstrate systems thinking. The 2013-2014 SRs analyzed were
downloaded from the companies’ websites. The recent SRs of the two companies were not used
because MWCI has issued a combined annual report and sustainability report for 2015 while
MWSI has issued a standalone SR. As such, the two recent reports might not be comparable.
The researcher did a content analysis of the two SRs. Content analysis is a research method
used to discover the presence or the absence of information about a particular topic (Krippendorff,
1989). This method of analysis has been used in past researches that also analyzed sustainability
reports (Aktas et al., 2013; Asif et al., 2012; Kolk, 2003; Roca & Searcy, 2012; Yadava & Sinha,
2016).
Like Yadava and Sinha (2016), the analyses of SRs were limited to the performance
indicators because these are the important dimensions in the generation of sustainability insights.
The numerical scoring system used by Yadava and Sinha was adapted with some modifications as
the researcher would use the latest GRI version. Each of the 91 performance indicators (9 for
economic, 34 for the environment and 48 for social dimensions) of the GRI 2013 Guidelines were
20
assigned a score between 0 and 3 with 273 as the maximum possible score. Table 2 shows the
maximum possible score for each category and the scoring breakdown.
Table 2. Proposed Scoring System based on GRI G4 Performance Indicators
Note: Adapted from “Scoring sustainability reports using GRI 2011 guidelines for assessing environmental, economic
and social dimensions of leading public and private Indian companies” by R. Yadava and B. Sinha, 2016, Journal of
Business Ethics, p. 549-558.
A report was given a 0 score if there was no mention of the indicator. A brief or generic
statement gained the report a score of 1 (i.e. The company does not have a mechanism for dealing
with grievances regarding human rights). An extensive discussion of an indicator not covering
more than one year of data received a score of 2. A report that discusses an aspect systematically
with comparison of performance across years scored the maximum (Yadava & Sinha, 2016).
Scoring sheets were created and utilized in assessing the SRs.
The scores were then tabulated and provided the basis for answering the first two research
questions stated in the beginning of this research proposal. The third research question was
answered via the employment of coding. The contents of the SRs were analyzed and the searched
for any evidence pertaining to the employment of systems thinking as discussed in the operational
framework.
21
Chapter 4
Research Context
4.1 Introduction
This section of the paper will focus on the context within which the two water companies
operate. The discussion starts with a discussion about the regulatory office, Metropolitan
Waterworks and Sewerage System (MWSS), that oversees the operation of the two companies.
This discussion was deemed essential because the relationship of MWSS and the two water
companies may provide insights related to the motivations of the company for issuing SRs. The
next sections of this chapter focused on the company profiles.
22
regulates all aspects of the business operations of the two concessionaires. To do so, the RO
oversees
reviewing, monitoring and enforcing water rates and service standards, performing
regular independent audits on the performance of the concessionaires, monitoring
the condition of infrastructure assets, and handling customer complaints (MWSS-
RO, p. 60)
While it may seem that MWCI and MWSI operates as two monopolies, the government
exercises oversight functions to ensure that the public interest is continually protected and
promoted while the two companies reap the economic benefits of operating the water systems in
their respective areas.
23
Table 3. Sustainability Reporting Frameworks of Manila Water Company, Inc., 2004-2015
24
company (Maynilad Water Services Inc, n.d.-b). The change in ownership may partly account why
MWSI only started issuing SRs in 2011.
Table 4. Sustainability Reporting Frameworks of Maynilad Water Services, Inc., 2011-2015
25
Chapter 5
Cross Case Analysis
5.1 Overview
This chapter presents the research results bearing in mind the research problems stated in
the earlier part of the paper. The next sections discuss in detail the sustainability dimensions
addressed in the sustainability reports and the under-developed areas. It will also discuss the
presence or absence of any evidence relating to systems thinking in the SRs.
The result of the analysis of the two SRs revealed that both reports addressed the three
dimensions with varying intensities (Table 5). Overall, MWCI scored higher than MWSI in the
scoring for individual dimensions as well as the total score. This means that MWCI has a higher
quality of reporting in terms of quality of coverage and the number of aspects compared to MWSI
reporting.
Table 5. Scores of the reports based on GRI G4 performance indicators
Dimensions Highest Possible Scores MWCI Scores MWSI Scores
Economic 27 16 (59) 8 (30)
Environmental 102 48 (47) 45 (44)
Social 144 34 (24) 31 (22)
Total Score 273 98 (36) 84 (31)
Value in parenthesis represents percentage of highest possible score
Despite this, the percentages (calculated by dividing the scores of the SRs by the highest
possible scores) reveal that the difference in the total quality of reporting is only 5%. The
difference in scores for both environmental and social dimensions was only a maximum of 3%.
The biggest difference in the quality in reporting can be found in the reporting of the economic
aspects with MWCI scoring 59% compared to MWSI’s 30%.
26
Looking at the individual companies, MWCI scored highest in the economic dimension
(59%) and lowest in the social dimension (24%). Meanwhile, MWSI scored highest in the
environmental dimension (44%) and lowest in the social dimension (22%) like MWCI.
Overall, both SRs’ quality of discussions of the dimensions addressed did not even reach
half of the highest possible scores for both SRs. This implies that while the reports address the
dimensions, there is still a need to improve the quality of discussions.
27
5.3.1 Economic Dimension Reporting
The two companies reported on three out of four of the economic aspects (Table 7). There
was an absence in the discussion of market presence in both reports and as such it got the lowest
score. The absence of this aspect highlight the need for the inclusion of the two companies’
information about its compensation practices vis a vis the minimum wage as well as procedures
for hiring. The reports would also have to discuss the number of senior managers that are hired
from the local community. The MWCI report was able to discuss its indirect economic impacts
fully but MWSI was only able to discuss this partially even failing to discuss the development and
impact of the company’s infrastructure investments and services. Both reports contained quality
discussions regarding their procurement practices.
Table 7. Scores on economic aspects
The total score garnered for the environmental aspects by the two reports only differ by
3% (Table 8). MWCI discussed effluents and waste (80%) most extensively while MWSI covered
both aspect of water and overall expenditure on environmental protection (67%) most extensively.
However, both companies failed to discuss the significant environmental impacts of transporting
employees.
MWCI’s report lack any mention of the products and services, compliance, transport and
overall environmental expenditures aspects. MWSI only lacked mention in the aspects of transport
and environmental grievance mechanisms.
28
Table 8. Scores on environmental aspects
Interestingly, the discussion in the water aspect varies between the two companies. Given
that both companies are water and used water service providers, it will be natural to expect that
the discussion in this aspect would be most extensive. However, the results of the scoring clearly
show otherwise. The water aspect includes total water withdrawal by source, the location of the
water sourced and water recycled and reused. MWCI’s report contained a comprehensive
discussion on the total water withdrawal by source but lacked any discussion on the other topics.
Compared to the MWSI report, the MWCI report scored lower on this indicator. MWSI’s report
comprehensively discussed all the topics related to water except for water recycled and reused.
29
5.3.3 Social Dimension Reporting
The social dimension includes four subcategories – labor practices and decent work, human
rights, society and product responsibility. Overall, both reports scored the lowest in reporting the
social compared to economic and environmental dimensions (Table 5). It is noticeable that there
is no great variation between the total scores of the two reports.
5.3.3.1 Labor Practices and Decent Work Reporting
Among all the topics discussed, it is only in the discussion of labor practices and decent
work that MWSI’s report got a better score compared to MWCI’s (Table 9). The two reports scored
the same in its discussion of employment and labor practices grievance and mechanisms and both
reports lacked discussion on labor/management relations. MWSI’s report got the higher score in
occupational health and safety and training and education.
Table 9. Scores on labor practices and decent work under the social dimension
Aspect Highest possible score MWCI MWSI
Employment 9 5 (56) 5 (56)
Labor/management relations 3 0 (0) 0 (0)
Occupational health and safety 12 2 (17) 4 (33)
Training and education 9 4 (44) 6 (67)
Labor practices grievance and mechanisms 3 1 (33) 1 (33)
Total 36 12 (33) 16 (44)
Value in parenthesis represents percentage of highest possible score
30
Table 10. Scores on human rights under the social dimension
The trend of low quality discussion continued in the reports’ discussions of local
communities (Table 11). MWCI addressed all aspects while MWSI was only able to address one
aspect. This is interesting considering that the websites of the two companies show very strong
community engagement initiatives.
31
Table 11. Scores on society under the social dimension
Among the four sub-categories under social dimension, product responsibility reporting
received the least attention in the two reports. Both reports addressed customer health and safety
with MWCI’s report gaining a higher score compared to MWSI. However, MWCI’s report only
addressed that one aspect while MWSI’s report also addressed the compliance aspect albeit
superficially.
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5.4 Evidence/Non-evidence of Systems Thinking
The results revealed that the SRs revealed systems thinking through the reports’
discussions of two or more sustainability dimensions together and management systems employed
by the companies. MWCI’s report revealed a more in depth understanding of systems thinking
compared to MWSI. MWCI’s discussions regarding interdependencies were always exhaustive
usually comprising multiple sentences if not paragraphs. However, MWSI’s coverage are usually
limited to a single sentence or a paragraph.
Systems thinking was reflected in MWCI’s report due to the in-depth discussion of the
company’s sustainability policy and its accompanying sustainability framework. The framework
guided and informed the topical discussions in the report. MWCI’s appreciation of the
interdependencies of the three sustainability dimensions in its sustainability policy is clearly
reflected in the following passage.
Manila Water puts a very high premium on sustainable development and inclusive
growth and, as much as practicable, integrates these principles into its business
processes. Manila Water believes that the sustainability of its business is dependent
on the communities that it serves, the environment that provides its resources, as
well as other stakeholders who support its programs and provide valuable insights
and feedback to improve the Company’s sustainability thrusts. With this in mind,
the Company will be able to address the needs of the communities, the environment
and the economy, thereby creating and maximizing shared value (Manila Water
Company, 2014, p. 28).
This discussion is then followed by how the company translates its policy to its business
operations. The ten commitments explained immediately after this policy is intended to inform the
reader how MWCI puts into practice their sustainability policy. It is interesting to note that how
this study operationalizes systems thinking was verbalized in two of these commitments. The
economic dimension and social dimension was linked in this commitment:
33
enterprises strengthen and expand their businesses (Manila Water Company, 2014,
p. 28)
While the employment of management system was explicitly stated in its third commitment to
“design and develop an environmental management system that would ensure continuing
environmental compliance and sustainability of our operations” (Manila Water Company, 2014,
p. 28).
Because the policy and commitment discussion gave insights to how the company views
itself, there was still a need to look at what the company has done according to its report. The
evidences of systems thinking were usually found in the management approach part that serves as
the introductions for the chapters in the report.
For example, in the introduction to the chapter relating to environment, the report
mentioned that
This statement clearly reflects the link between the company’s business model and the
health of the environment. As such, MWCI clearly understands that protecting the environment is
congruent with its economic interests. The same message was also repeated in the closing part of
the chapter where the company’s future plans relating to the environment were discussed - “Manila
Water’s core business is highly dependent on the environment” (Manila Water Company, 2014, p.
92).
The environmental dimension was also linked with the social dimension in various
instances. Samples included the discussions related to MWCI’s efforts in helping build
communities. This discussion related to how MWCI’s services create “an enabling environment
where development can thrive without unduly sacrificing the quality of the environment and the
health of the population” (p. 51). To complete the picture, the report also discussed the importance
of making sure the proper treatment of used water before its return to the environment. This is to
34
assure that the ecosystem remains healthy and in turn, the communities that rely on the marine life
would have a continued source of livelihood.
Systems thinking was also reflected in MWSI’s report however the discussion was
relatively weaker compared to MWCI. MWSI also discussed the framework they employ which
they call the Quality, Environmental, Safety and Health (QESH) Management Framework. Like
MWSI’s Sustainability Framework, the MWSI’s QESH framework guided and informed the
topical discussions in the report. The QESH Framework was not thoroughly discussed in the report
however there were several images related to it.
In terms of discussions relating two dimensions, there were many evidences of these. The
economic and social dimensions were connected in the reports in its discussions about the
company, its efforts to strengthen its business and enhance its operations. For example, the report
specified that MWSI exists “to provide safe and sustainable water solutions that mean profit for
our shareholders and access to life-giving water for previously unserved communities” (Maynilad
Water Services Inc, 2014, p. 20). Aside from this, the report has also made mentioned that in its
pursuit of profit, it has done so by economically benefitting its stakeholders. The benefits of its
reduction of non-revenue water has also been discussed in light of the interconnection of the social
benefit in terms of more water reaching its customers and the economic benefit for the company
in terms of an increase in its revenue (Maynilad Water Services Inc, 2014).
The economic dimension has been linked to the environmental dimension in the report’s
discussion on environmental protection. The report made mention of the importance of watershed
protection as it is the source of water and as such the very reason why the company exists in the
first place. Meanwhile, in the report’s discussion on energy efficiency, it has explained that “for
every peso that we generate, we emit less CO2 than in the past years” (Maynilad Water Services
Inc, 2014, p. 90).
35
Finally, the environmental dimension was related to the social dimension of sustainability
in the report’s coverage on the company’s operation improvement and in its protection of the
environment. For the former, the report made mention of how the project developments of the
companies are assessed for environmental and social impacts. Such linking was also evident in the
report’s discussion on the importance of safeguarding the quality of wastewater discharges. It
indicated that doing so contributes to the prevention of pollution in waterways and as such assures
the health of customers through proper sanitation. Discussion regarding the latter, related to the
results of a workshop for one of the company’s watershed protection project. To wit:
Each area of concern (1) overlaps to improve the socioeconomic well-being of the
host communities within the Ipo Watershed area and (2) is designed to fortify the
current envi-eco structures for a more sustained water supply (Maynilad Water
Services Inc, 2014, p. 94).
Similar to MWCI’s report, MWSI’s report also made mention of the company’s
employment of the management systems relating to energy, business continuity, environmental
management systems, quality management as well as occupational health and safety management
systems.
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Chapter 6
Conclusion and Recommendations
6.1 Conclusion
In summary, this research study was able to achieve the three objectives stated in the earlier
part of this paper. The first objective pertains to the identification of sustainability dimensions
addressed in the reports while the second objective related to the identification of under-developed
areas in the reports. The two reports analyzed addressed all three sustainability dimensions with
varying intensities. MWCI’s discussion relating to the economic dimension was the most
comprehensive, followed by the environmental with the least coverage given to the social
dimension. Meanwhile, MWSI’s report covered the environmental dimension most followed by
the economic and the social dimension.
The prioritization in the coverage can be analyzed from a legitimization standpoint. For
MWCI, the amount of coverage dedicated to the economic dimension signals their prioritization
of shareholders as their primary stakeholder. Asif and colleagues (2012) highlight the legitimation
function of communicating through corporate sustainability reporting in that doing so assures a
corporation a steady supply of resources including finances from investors and shareholders. Thus,
the report’s prioritization of the economic dimension becomes logical given MWCI’s status as a
publicly traded company and the company’s expansion plans. In this light, the MWCI SR can now
be viewed as a very important channel of communication instrumental for the solicitation of
additional capital from both existing and potential shareholders. It is interesting to note that this is
in direct contradiction to the report’s declaration that their employees are their primary stakeholder
(Manila Water Company, 2014).
For MWSI, the priority given to the environmental dimension might be incidental. If
MWSI has its financial matters in order, the prioritization in the coverage of dimensions might
have been the same as that of MWCI’s. Although the company is not currently a publicly listed
company like MWSI, it has similar expansion plans that will necessitate the infusion of capital
from financial institutions. Thus the MWSI’s report serves the same function as that of MWCI’s.
Assuming that the prioritization is intentional, the alternative explanation might be that the
continuance of the concession agreement is the priority of the company. As such, regulators are
37
the primary target audience of the MWSI report and the report is instrumental in its demonstration
of the company’s fulfillment of its service obligations.
The dismal results in the quality of coverage of the social dimension has been similarly
observed by Yadava and Sinha (2016) in their study of public and private oil and gas Indian
company SRs. This could either mean that the companies examined did not have good social
performance or that the companies need to develop their social dimension reporting skills (Yadava
& Sinha, 2016).
Despite the variation in the most and least covered sustainability dimensions, the results
show that the two reports are comparable in terms of scores garnered with MWCI gaining a higher
score compared to MWSI. This came as a surprise as MWCI’s 11 years of reporting experience
compared to MWSI’s 3 years would lead one to assume that there would be a bigger difference in
the scores. This lower difference in the reports’ total scores may be attributed to the fact that
MWCI’s report covers four companies – Manila Water, Boracay Water, Clark Water and Laguna
Water. The inclusion of data from the three MWCI subsidiaries may have resulted to compromises
in terms of completeness and quality in the discussion of the three sustainability dimensions.
The last objective of this research pertains to the reflection of systems thinking in the
discussion of the reports. Both reports were able to do so in their respective narratives. As such,
this leads to the invalidation of the proposition forwarded in the earlier part of the paper. As
opposed to what Sridhar and Jones (2013) hypothesized, the selected reports did reflect systems
thinking. Comparing the quality of discussion of the two companies, however, MWCI’s report had
a higher quality of discussion compared to MWSI. As such, MWCI’s report is better in terms of
the completeness and quality of reporting and in the way it reflected systems thinking.
The overall superiority of the MWCI report can be attributed to the difference in the context
within which the two companies operate. MWCI belongs to a conglomerate group and as such it
has access to more resources that can be tapped for the improvement not only of its operations but
also for the development of its report. This may also explain why MWCI was able to avoid the
financial troubles of its western zone counterpart and was able to manage its operations well. This
enabled MWCI to focus on the creation and development of its SR throughout the years that it
became the pioneer in sustainability reporting and resulted to a seven-year advantage in the
development and enhancement of the quality of its SRs. In contrast, MWSI’s re-privatization
38
experience has resulted to MWSI prioritizing its financials first before giving attention to corporate
sustainability reporting.
6.2 Recommendation
Considering the results of the content analysis, the study recommends the following to the
two service providers, policy makers and future researchers.
Given the scores garnered by the two SRs, MWCI and MWSI are enjoined to improve the
completeness and comprehensiveness of the reports in light of the GRI G4 aspects particularly
those in the social dimensions. One way of doing this would be through the provision of statements
about the exclusion of certain aspects and a discussion on why it was excluded. The companies
are also called to improve the quality of discussion in their reports by “strengthening their reporting
skills and activities related to the different components of sustainability” (Yadava & Sinha, 2016,
p. 557). MWCI and MWSI are also encouraged to integrate the discussion of the three
sustainability dimensions in their reports. This way, the reports would be able to truly reflect
systems thinking and be able to demonstrate the companies’ efforts towards true corporate
sustainability.
In anticipation of this future law, future researchers are encouraged to go beyond content
analysis and incorporate data from primary sources to assure that the legislation developed is
relevant to current reporting practices. Yadava and Sinha’s (2016) discusses the importance of
soliciting suggestions on “how to meet the minimum score on each dimension for different sectors”
(p. 557) to aid companies in complying with this future law.
39
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Bridging faith and scholarship ~ Influencing policy and practice
The Center for Business Research and Development (CBRD) is the research
and advocacy arm of the Ramon V. del Rosario College of Business
(RVRCOB) of De La Salle University (DLSU).
Research thrusts
Keeping in mind DLSU’s mission “to be a leading learner-centered research
university, bridging faith and scholarship in the service of society, especially
the poor”, CBRD provides support to research programs and activities that
address the following themes: responsible management education,
multistream management approaches, humanistic management, ethical
business practices, sustainable business practices, corporate social
responsibility, corporate governance, social marketing, SME development,
family business management, and social entrepreneurship.
Room 214-A Medrano Hall, St. La Salle Building. 2401 Taft Avenue. Manila 1004. Philippines
+63-2-524-4611 loc. 149. +63-2-303-0869 (telefax) . http://www.dlsu.edu.ph/research/centers/cberd