Introduction

DNV GL AS Philippines Branch (“DNV GL”) has been commissioned by the management of Ayala Corporation (“Ayala Corp.” or the “Company”, SEC Identification Number: 34218) to undertake an independent assurance of the sustainability/non-financial disclosures in Ayala Corporation’s 2019 Integrated Report (the “Report”) in its printed format for the year ended 31st December 2019. This Report is prepared by Ayala Corporation based on the Guiding Principles and Content Elements of the International Framework (“ Framework”) and presenting the Company’s performance related to its identified material topics for both listed and unlisted subsidiaries and affiliates as detailed in section “Reporting Scope” of the Report. The intended users of this Assurance Statement are the management of the Company.

We performed this assurance engagement using DNV GL’s assurance methodology VeriSustainTM1, which is based on our professional experience, international assurance best practice including International Standard on Assurance Engagements (ISAE) 3000 Revised*, along with the Global Reporting Initiative’s (“GRI’s”) Principles for Defining Report Content and Report Quality. The verification engagement was carried out from December 2019 to April 2020.

We understand that the reported financial data and related information are based on statutory disclosures and Audited Financial Statements, which are subject to a separate independent statutory audit process. We did not review financial disclosures and data as they are not within the scope of our assurance engagement.

Responsibilities of the Management of Ayala Corporation and of the Assurance Provider

The Board of Ayala Corporation has sole responsibility for the preparation of the Report and is responsible for all information provided as well as the processes for collecting, analysing and reporting the information presented in the Report. Ayala Corporation has stated that this Report was based on the Framework and has adopted general disclosures and selected performance indicators for disclosures related to identified material topics from the GRI Standards 2016.

Our verification engagement included limited level of verification of sustainability performance disclosures for the identified material topics of Ayala Corporation in the section “Materiality” of the Report. DNV GL’s assurance engagements are based on the assumption that the data and information provided by the Company to us as part of our review have been provided in good faith, true, and free from material misstatements. 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. Our verification applies a ±5% uncertainty threshold towards errors and omissions for the performance data brought out in the Report.

DNV GL was not involved in the preparation of any statement or datum included in the Report except for this Assurance Statement. DNV GL expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on this Assurance Statement.

Basis of our Opinion and Limitations

A multi-disciplinary team of sustainability and assurance specialists performed assurance at the Head Office at Makati City, and selected sites of subsidiaries of Ayala Corporation. We undertook the following activities:
• Review of the non–financial sustainability disclosures in this Report;
• Review of approaches to materiality determination and review of outcomes of stakeholder engagement; DNVGL did not have any direct engagement with external stakeholders;
• Review of information provided to us by the Company on its reporting and management processes related to sustainability performance for the reporting year based on the framework adopted by Ayala Corporation
• Interviews with selected members of leadership team, and senior managers responsible for management of sustainability issues and review of selected evidence to support generic disclosures. We were free to choose
interviewees and interviewed those with overall responsibility for the programmes to deliver the targets for medium- and long-term vision, mission and milestones;
• Performed desk review of selected sustainability parameters for sampled entities, and discussed findings with the Corporate Sustainability Team;
• Planned site visits to review the processes and systems for preparing site level sustainability data and implementation of sustainability strategy. We were free to choose the sites for verification;
• Review of supporting evidence for key claims and data disclosed in the Report. Our verification processes were prioritised based on risk-based approach, i.e. relevance of identified material topics and sustainability context of the business;
• Review of the processes for gathering and consolidating the performance data and, for a sample, checking the data consolidation at site and corporate levels.

The procedures performed in a limited assurance engagement vary in nature and are shorter 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. During the assurance process, we did not come across limitations to the scope of the agreed assurance engagement.

Opinion and Observations

On the basis of the assurance engagement undertaken, nothing has come to our attention to suggest that Ayala Corporation’s 2019 Integrated Report does not properly describe the non-financial performance of identified material topics based on the International Framework.

Without affecting our assurance opinion, we also provide the following observations:

Stakeholder Inclusiveness
The participation of stakeholders in developing and achieving an accountable and strategic response to Sustainability.
Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Stakeholder Inclusiveness.
The Report has brought out key stakeholders (eg. investors and shareholders, employees, government agencies and regulators, creditors and suppliers, customers, communities, industry associations) to engage with, to build trust based on significant influence on Ayala Corporation’s sustainability performance. The Process considers the influence that each stakeholder has in the range of businesses and overall decision- making processes. The Report also describes the engagement modes such as consulting, involving, or collaborating with each stakeholder considering based on the extent of influence and articulates the value Ayala Corporation seeks to deliver through various engagement platforms.

Materiality
The process of determining the issues that are most relevant to an organization and its stakeholders.
Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Materiality.
The Report describes the process adopted by Ayala Corporation in reviewing the material topic i.e. review of material topics considering rapidly shifting business and Environment Social and Governance (ESG) landscape, including review of its 360o Sustainability Reporting Framework in the context of emerging trends and urgent issues that affect its stakeholders. Further the Report states materiality is aligned to GRI Standards, SASB industry-specific topics and disclosures, and the 10 Principles of the UN Global Compact and WBCSD programs for business transformation and integrated Material topics to relevant Sustainable Development Goals (SDG’s).

Responsiveness
The extent to which an organization responds to stakeholder issues.
Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Responsiveness.
The Report brings out the Company’s responses to identified material topics and significant issues which have arisen during the reporting period through disclosures on Corporate Governance, Business Review, Business model, strategic responses to key stakeholders’ concerns, to deliver shared values. Further the Report also brings out its non-financial performance related to its material topics through selected GRI Topic Specific Standards as Performance Indices and its linkages to Six Capitals of framework.

Reliability
The accuracy and comparability of information presented in the report, as well as the quality of underlying data management systems.
Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Reliability.
The majority of the performance disclosures verified through onsite and offsite verification, i.e. at the Head Office and sampled sites, and through desk reviews, were found to be fairly accurate, reliable, identifiable and traceable to the source. Considering the limited sampling, we did not detect any major errors related to data collection or aggregation. We also reviewed the calculations and related assumptions used for its suitability, taking into account the principle of Reliability. Some of the data inaccuracies identified during the verification process were found to be attributable to interpretation and aggregation errors. These identified errors were communicated, and the responses and corrections made to the reported data and information were reviewed.

Completeness
How much of all the information that has been identified as material to the organization and its stakeholders is reported.
Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Completeness.
The Report discloses the Company’s non-financial disclosures based on the Framework and performance during the reporting period 2019 related to its material issues using appropriate GRI Topic Specific Standards, for the identified boundary of operations and covering the Company’s approaches to value creation and responses to key challenges faced during the reporting period.

Neutrality
The extent to which a report provides a balanced account of an organization’s performance, delivered in a neutral tone.
Nothing has come to our attention to suggest that the Report does not meet the requirements related to the Principle of Neutrality.
The Report presents disclosures related to the Company’s performance, challenges and concerns of stakeholders during the reporting period in a neutral, consistent and balanced manner, applying adequate consideration to not unduly influence stakeholders’ opinion made based on the reported data and information.

Statement of Competence and Independence

DNV GL applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2015 – 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 Conduct2 during the assurance engagement and maintain independence wherever 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 statement or datum included in the Report except for this Assurance Statement. DNV GL maintains complete impartiality toward internal stakeholders interviewed during the assurance process.

DNV GL has provided assurance to Bank of the Philippine Islands, Ayala Land Inc., AC Energy, Manila Water Company Inc. and Globe Telecom, Inc. In our opinion, there is no conflict of interest in the assurance engagement provided to the business units of Ayala Group. DNV GL did not provide any services to Ayala Corporation in 2019 that could compromise the independence or impartiality of our work.

For and on behalf of DNV GL AS Philippines Branch

DNV GL AS Philippines Branch is part of DNV GL – Business Assurance, a global provider of certification, verification, assessment and training services, helping customers to build sustainable business performance. www.dnvgl.com

1 The VeriSustain protocol is available on dnvgl.com.
* Assurance Engagements other than Audits or Reviews of Historical Financial Information.
2 The DNV GL Code of Conduct is available from the DNV GL website (www.dnvgl.com)

Project No.: PRJN-177672-2019-AST-PHL