While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 6 – Biodiversity Conservation and Sustainable Management of Living Natural Resources
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
All of TCG’s “The Coffee Beanery” outlets are/will be rented and housed in shopping malls or in similar commercial buildings in urban downtown areas. Land required for new ASHA and CCA education and training schools, and the proposed commissary in Quezon City will be purchased on a willing buyer willing seller basis and leased on a lessor-lessee basis through a market based commercial transaction.

For the proposed coffee and cacao plantation in Bukidnon http://www.google.com/maps/@7.9101978,124.6511474,371m/data=!3m1!1e3, TCG already owns adequate land which was purchased in December 2012. TCG holds clear title for the same vide ‘Transfer Certificate of Title T-129263’ issued by the Register of Deeds Province of Bukidnon. This land is in an earmarked agricultural area and presently has a cover of trees and wild vegetation on it. Out of the larger parcel of the land purchased and held by TCG, it plans to use about 3,000 hectares for developing coffee and cacao plantation.

No physical or economical displacement of people due to the proposed project – especially coffee and cacao plantation - is expected, hence PS5: Land Acquisition and Involuntary Resettlement, PS7: Indigenous Peoples and PS8: Cultural Heritage do not apply to this investment.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

Key environmental and social (E&S) risks and issues related to TCG’s existing and proposed future projects include: adequate assessment of the E&S impacts of the projects; implementation of social, EHS and food safety management systems; implementation of sustainable agricultural practices at the proposed Bukidnon coffee plantation and engagement with communities in accordance with local requirements and IFC Performance Standards and World Bank Group (WBG) EHS Guidelines; assurance of fair, safe and healthy working conditions; resource efficiency; management of emissions, wastes and discharges; and life and fire safety management of the public access buildings (TCG operated schools, restaurants, coffee shops and hotels).

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. The company has presented the information about how the E&S issues and impacts are being addressed, to ensure that the project complies with the applicable E&S requirements including: the host country laws and regulations; IFC’s Performance Standards; and the relevant WBG Environmental, Health and Safety (EHS) Guidelines (viz.: General EHS Guidelines, EHS Guidelines for Tourism and Hospitality Development and EHS Guidelines for Plantation Crop Production). This information is summarized in the paragraphs that follow.

- Environmental & Social Assessment:



The company’s operations present relatively low E&S risks. The existing educational facilities (ASHA and CCA) are below the threshold stipulated by the Department of Environment and Natural Resources (DENR) Administrative Order 96 – 37 and so do not require an Environmental Clearance Certificate (ECC). However, TCG performs an internal E&S screening during site selection and prior to opening each new school or business hotel, as per its documented standard operating procedure, which is consistent with the requirements of PS1.



For business hotels, TCG will prepare Initial Environmental Examination (IEE) or an Environmental Impact Assessment (EIA) report as per the local regulatory and permitting requirements. The business hotels are within the school facility of ASHA and are below the threshold required by DENR and do not require an ECC.



TCG has plans to develop a coffee bean and cacao plantation in the agricultural belt of Bukidnon to support its TCB chain of coffee shops. While local regulations do not require a formal IEE / EIA to be prepared and approved by DENR for such agricultural development project; TCG will commission an external review of E&S impacts associated with the proposed plantation development particularly focused on water, ecology and community engagement, in accordance with IFC PS requirements, and develop an appropriate action plan to mitigate any negative impacts.



Management Systems:



TCG has a group environmental policy (http://www.tcgphil.com/cg3cef.htm ) and has achieved ISO 14001 certification for its environmental management system (EMS) covering its corporate office and operations at Katipunan, Quezon City. The Company has plans to extend the ISO 14001 certification to its entire business, covering different segments such as ASHA and CCA educational and training schools, coffee shops and restaurants and its hotels within next few years.



The TCG EMS primarily includes policies and procedures and a detailed Operations Manual, which documents standard operating procedures (SOPs) for various departments. The manual also covers aspects such as safety and waste disposal and provides standard templates and formats for monitoring the quantities of waste disposed, among others.



TCG’s educational, coffee shop and restaurant operations place a significant emphasis on its “Green Chefmanship” program. As a part of this program zero waste, food safety and other standardized environmental management practices are developed and implemented for a sustainable kitchen operation.



While TCG has policies and procedures for managing food safety associated with its different operations, the same needs to be structured and consistently implemented with clear identification of critical control parameters (“CCP’s”) for its different food products. The company will, therefore, implement a formal Food Safety Management System (FSMS) or its equivalent certifiable to international
standards such as ISO 22000 across all its operations in a phased manner starting with the proposed food production and storage facility (commissary) in Quezon City, which aims to develop a credible TCG brand of bakery and other food products to be supplied through its coffee shops and restaurant outlets.



- Organization:



TCG has an EHS department at the corporate level which co-ordinates E&S and Corporate Social Responsibility (CSR) functions with the help of the operational teams. The company has designated senior officers in charge for the E&S and CSR functions at the corporate level and “Environmental Champions” for each business unit to spearhead the implementation of EHS management system and activities throughout the company.



- Monitoring & Reporting:



TCG has implemented a group-wide resource usage and waste monitoring program. Monitoring of E&S compliance is carried out on a daily basis by all business units and reported weekly to the corporate office. Going forward, TCG will analyze the collected data for internal benchmarking related to E&S performance (such as water and electricity consumption, waste generation, etc.) and compare against international best practices, especially on resource efficiency and waste management.



For this purpose, the Company will develop and implement SOP on corporate level resource efficiency monitoring and develop internal benchmarks for water and energy consumption at its Commissary, hotel, coffee shops and restaurants.



-Training:

TCG organizes regular training and awareness programs on E&S issues such as waste management (Bokashi technology for waste management), occupational health and safety, resource conservation, waste minimization techniques, management of environment and safety for contractors, fire safety and emergency preparedness and response etc.



TCG has an annual training calendar for its employees across the group. In addition, the company’s official newsletter “Earth Matters” provides regular useful tips to employees for preserving environment through simple actions in their daily routine.

- Engagement with Local Communities



TCG’s existing sites are located in modified urban or sub-urban neighborhoods and the company engages with local community through its Culinary Education Foundation (CEF - http://www.cefmanila.com).



TCG has a Pollution Control Officer under its “Cravings Group Goes Green” (CG3) Program, who serves as the primary liaison for the communities or other stakeholder in case they have any concerns related to E&S issues.



TCG will engage with the local community around the proposed coffee and cacao plantation in Bukidnon to understand any issues, views and concerns that they may have with regard to the proposed project.



As part of the proposed E&S review, TCG will develop and implement a stakeholder engagement plan for Bukidnon coffee plantation as well as for other future construction projects comprising a plan for external communicat
ion on environmental and social impacts for the nearby communities and other stakeholders.



Based on the feedback received from the nearby communities, TCG will work together with the local community in Bukidnon and provide employment opportunities to the people in the vicinity of proposed plantation, as priority.

As of November, TCG employed a total workforce of 833 regular/full time employees and 189 temporary /part-time/contract employees across all its operations. 52 % of TCG staff is female.



Human Resource Policy (HR), Management



TCG, at corporate level, has developed an employee’s handbook and a code of discipline. The general management and staff rules, recruitment procedures, probation period, working conditions, wages and benefits, disciplinary procedures, nondiscriminatory and equal opportunity policies are outlined in the HR policies. The Occupational Health and Safety (OHS) policies and procedures include pre-employment and annual physical examination of all staff; pre-enrollment medical exam of all students and drug tests. TCG’s HR policies and procedures are compliant with local regulations and IFC PS2 requirements.



-Grievance Mechanism



TCG has a grievance redress mechanism (GRM) both for external and internal stakeholders and maintains its records. Employees can raise any grievance through verbal or written complaints submitted to the HR department at the corporate office. The contract workers at the site can raise any grievance to their supervisor which is directed to the HR department at corporate office in Katipunan for resolution.



-Occupational Health and Safety (OHS):



TCG operations do not present significant OHS risks for its employees and students. OHS hazards have been identified and TCG takes all steps to prevent such incidents. The number of OHS incidents is recorded by the company and generally relate to minor accidents such as burns and cuts in the kitchen laboratories.



-Construction Management



TCG has incorporated IFC PS compliant E&S requirements in contracts for construction of new facilities and to ensure adequate oversight and management on construction sites. TCG has developed a manual viz., “Environmental, Occupational Health & Safety Program” for its construction projects for ASHA educational schools. The manual covers areas such as safety management for excavation, trenches, ladder safety, hot work permits, confined space, accidents & incidents, first aid, emergency response, toilets and workers camp, etc.



TCG will review and update this manual as necessary, to apply the same to its other businesses and future projects, such as hotels and coffee plantation as and when they are initiated.



- Child and Forced Labor



Child or forced labor is not employed in any manner in TCG operations. There was no evidence of child or forced labor during the visits to TCG’s operational sites. The construction contractors have documented policy of no child labor.

-Resource Efficiency:



TCG is presently operating 3 hotels in Metro Manila, where it has implemented several ideas for enhancing resource efficiency, which include:



Electricity / Lighting Related:

Conversion of Incandescent, Fluorescent, Halogen, and early generation LED into 4th Generation LEDs

Optimizing the operating time of appliances, especially within peak load hours (by practicing Earth Hour) and turning off overnight

Use of Occupancy Sensor in Toilets

Use of Solar Panel (Photovoltaic Cells) at Roof Deck for selected LED lightings at Lobby

Use of LED Exit signs

Air-conditioning Related:

Standardize and control the room ambient temperature setting at 23 +/‐ 1 degC

Replacement of old models with more efficient and environment‐friendly models (Inverter‐type)

Install ceiling fans to promote air circulation and reduce the need for air‐conditioning at the lobby and back office areas

Water Conservation:

Use of double/low flush toilets (1.6 Gal/flush instead of 5‐6 Gal/flush)

Use of water‐less or sensor‐aided low‐flush (1 Gal/flush) Urinals

Use of spring‐loaded or sensor‐aided (less than 2.5 Gal/min) faucets in toilets

Harvesting and filtration of rainwater at the Roof Deck for irrigation

Use of low‐flow shower heads (less than 2.5 Gal/min) in the Bathroom

Install sub-meters for water that does not go into Sewer (e.g. swimming pool wastewater); re‐use for watering plants, fish pond and the toilets

Sidewalks, drives, and parking lots are swept rather than watered



TCG has implemented rain water harvesting systems at its newly constructed ASHA educational facility in Antipolo and a three chamber septic tank with reed bed and sewage treatment plant that feeds the grey water system for toilet flushing and garden watering.



TCG monitors the effectiveness of these initiatives by regular monitoring and comparing with the international benchmarks.



TCG for its corporate office has plans to set up a grid tied roof mounted solar power system. This system is estimated to generate around 21,000 kWh/year of solar power. TCG has already secured quotations for these and is in the process of evaluating the proposals.



- Water and Wastewater:



Water requirement for the existing operations is around 280 cum/day. This requirement is met through municipal water supply. TCG has plans to implement water harvesting system for its future expansion projects similar to the one implemented at its Antipolo educational institute. Wastewater from the company’s facilities is discharged to municipal sewers for further treatment and disposal in the municipal wastewater treatment systems.



- Energy Supply and GHG Emissions:



The primary source of energy for all the TCG operations is electricity, which is sourced from the national grid. In addition, the ASHA and CCA schools and hotels have diesel generators of adequate capacity to provide backup power. TCG monitors and manages emissions from back up diesel generators in accordance
with environment permit conditions.



The GHG emissions of the project are, therefore, dominated by those due to the electricity consumption, diesel consumption and a small contribution from loss of refrigerant from HVAC systems. TCG has estimated the GHG emissions from its current operations at about 1,300 kg of CO2e/day due to electricity consumption, plus about 475 kg of CO2e/day due to backup power.



- Waste Management:



TCG has implemented solid waste management system which includes control of solid wastes from source through the material recovery facility up to their end form. This includes food waste, assorted paper waste, milk carton, glass bottle, plastic bottle, egg shells and cans.



TCG has been a pioneer in implementing ‘Bokashi Technology’ for waste management. Bokashi composting is a safe, convenient and quick way of composting food waste from kitchen. This uses a selected group of microorganisms to an-aerobically ferment organic waste.

Community Health and Safety:



TCG has an emergency preparedness and response procedure and provides regular training to its staff on emergencies such as typhoon, fire and earthquake. TCG employs a medical officer who provides services to the staff and students in Manila. One of the roles of the medical officer is to raise awareness on communicable diseases, off-campus activities of students and classes.



Life and Fire Safety in Public Use Buildings:



Host country regulatory requirements for hotels, educational premises, restaurants and other public access places in the Philippines require compliance with building codes, including life and fire safety (L&FS) codes, prior to receiving an operational license. TCG’s buildings are inspected annually and fire certificates provided by the Fire Department.



Newly constructed educational institute (ASHA) in Antipolo and the boutique hotel under construction in Makati were visited as part of the appraisal and were found to be equipped with life and fire safety systems such as smoke sensors, fire hydrants, fire extinguishers, fire exits, etc.



TCG’s coffee shops and restaurant outlets are mostly rented and housed in shopping malls where L&FS is responsibility of the property management company. TCG conducts regular mock drills for fire safety across all its operations including the rented outlets.

.

In order to ensure minimum common fire safety design standards across all its hotels, restaurants and coffee outlets and educational and training institutes and other operational buildings and stores consistent with the international standards, TCG will commission a fire safety professional acceptable to IFC, to undertake a review of fire safety systems for a sample of its existing operations for different occupancy types. Based on this review, the professional will prepare:

if found necessary, a Corrective Action Plan for individual properties with proposed completion dates; and

a corporate L&FS Manual defining

high-level fire protection system requirements applicable to all company’s properties, both owned and leased, to comply with L&FS requirements of the WBG’s General EHS Guidelines and

the process to keep the existing portfolio in line with defined operational requirements.

These will be then implemented for all existing and future properties of TCG.

For any hotel to be constructed in future, TCG will translate the requirements of the corporate manual into individual Master Plans and provide professional certification to IFC that engineering design meet the requirements of local and an international code, as required by the WBG EHS General Guidelines.



Following construction, the company will also provide a professional certification affirming that hotel construction faithfully incorporates all elements of the engineering design. 

In designing the future buildings, TCG will consider the potential risks due to natural hazards such as earthquakes or typhoons and shall incorpor
ate the principles of universal access. Structural elements will be designed and constructed by competent professionals, and shall be certified or approved by competent authorities or professionals.

For its proposed development of coffee and cacao plantation in Bukidnon, TCG will undertake an E&S review and stakeholder engagement activities, as described earlier. While the plantation is being developed on the already converted land, the company will develop and manage the plantation in accordance with the international best practices. For this purpose, the company will develop an operational manual for good agricultural practices for the plantation to articulate and operationalize its commitment to applying good international industry operating principles, management practices, and technologies. In future, company will explore the possibility of getting certified to one or more relevant and credible international sustainable management practices standards/certification programs (such as Organic, Fairtrade, Rainforest Alliance, Bird-friendly, UTZ Certified, Starbucks C.A.F.E, 4C etc.) through an independent verification.

Company will disclose this ESRS and the ESAP at its website: http://www.tcgphil.com , as well as locally at the following address:TCG Main Office: 287 Katipunan Avenue, Loyola Heights, Quezon CityAll inquiries and comments may be directed to:Marinela G Trinidad
287 Katipunan Avenue, Loyola Heights, Quezon CityTel: (632) 4261338
Email: mailto:mgtrinidad@cravingsgroup.com

For any concerns and queries related to E&S issues at existing operations:
Judith Imperial, Pollution Control Officer, TCG,
Tel: (632) 426 13 38.
Email: mailto:Judith.Imperial@cravingsgroup.com

Broad Community Support is not applicable for this project

Title	Anticipated completion Date
1. TCG will commission an external review of E&S impacts associated with the proposed plantation development particularly focused on water, ecology and community engagement, in accordance with IFC PS requirements, and develop an appropriate action plan to mitigate any negative impacts.	03/31/2015
2. Develop and implement a stakeholder engagement plan for Bukidnon coffee plantation as well as for other future construction projects comprising a plan for external communication on environmental and social impacts for the nearby communities and other stakeholders.	03/31/2015
3. Develop an action plan to extend the Environmental Management System to all TCG’s hotels, ASHA & CCA educational schools, coffee shops and restaurants.	03/31/2015
4. Implement Food safety management system for proposed commissary at Quezon City.	09/30/2015
5. Develop and implement SOP on corporate level resource efficiency monitoring and internal benchmarking for water and energy consumption at its Commissary, hotel, coffee shops and restaurants	03/31/2015
6. Review and update as necessary TCG’s Environment, Occupational Health and Safety Manual, to apply the same for the construction of future projects, such as hotels and coffee plantation	03/31/2015
7. Commission qualified professionals to undertake a review of fire safety systems for a sample of TCG’s existing operations. Based on this review, agree, if necessary, on a Corrective Action Plan (CAP) for individual properties with proposed completion dates; and a corporate L&FS Manual defining (a) fire protection system requirements applicable to all company’s properties, both owned and leased, to comply with L&FS requirements of the WBG’s General EHS Guidelines and (b) the process to keep the existing portfolio in line with defined operational requirements.	03/31/2005
8. Develop a design and operational manual for good agricultural practices for the plantation to articulate and operationalize its commitment to applying good international industry operating principles, management practices, and technologies.	03/31/2015
9. Provide certification to IFC for the upcoming hotels in and outside Metro Manila that engineering design is responsive to all national requirements and an internationally recognized fire and life safety code (as required the life and fire safety section of the WBG EHS General Guidelines and specified in the corporate L&FS Manual).	12/31/2018
Upon completion of construction, the company will also provide a professional certification affirming that facilities construction faithfully incorporates all elements of the engineering design	12/31/2019