IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s 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 implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
Identification of Risks and Impacts
DALI manages E&S risks related to its operations by adhering to relevant national and local regulatory requirements, including business permits, government clearances, sanitary and health permits, fire safety inspection certificates, and FDA permits. The company addresses E&S risks through E&S management plans that identify potential risks associated with the construction and operation of new stores and distribution centers, and propose measures to mitigate these risks.
Policy and Management Programs
DALI has an ESMS that consists of various policies, management plans, operating procedures, and instructions to address its operational E&S risks. However, there is no established E&S policy. As part of ESAP #1, the Company will create a corporate Environmental, Health, and Safety (EHS) Policy consistent with IFC PS1 requirements.
Organizational Capacity and Competency
The General Director of Business Strategy (GDBS) oversees and promotes the implementation and continuous advancement of the ESMS scope to all daily operations, specifically the Director of Operations (DOO) and his Regional Managers, expansion, logistics, and stores. The ESG Officer, also serves as Strategic Supply Chain Director, oversees the ESMS agenda and leads the ESMS implementation within the organization. The ESG Officer also assists Senior Management, Regional Managers, and their teams on E&S matters, in addition to preparing and submitting ESG reports. In stores, store managers manage E&S risks as part of daily operations, and report to the Regional Manager. The Regional Manager maintains overall accountability for E&S matters within his/ her region and report to the COO and ESG officer. The Expansion Manager and Construction Manager are responsible for fulfilling E&S requirements during the construction of new stores and warehouses.
Emergency Preparedness and Response
An Emergency Response Plan (ERP) has been developed as part of the Store Operations Manual and Distribution Center Operations Manual. The ERP outlines procedures to be followed before, during, and after an emergency. The ERP defines the organizational structure of the ERP team, specifies the roles and responsibilities of staff and departments, and provides internal and external emergency contact numbers in each region. A Full-Scale Exercise will be conducted annually and will involve local police and fire authorities, while Walk-Through Drills, Functional Drills and Evacuation Drills will be conducted twice a year.
PS 2 – Labor and Working Conditions
As of June 2025, DALI had a total of 7500 employees, with 15 expats and the rest were locals. Part-time employees accounted for about 45% of total head counts. The male/female ratio was 56:44.
Human Resources Policies and Procedures
The company’s HR policies and procedures generally align with IFC PS2 requirements, covering Code of Conduct, Non-Discrimination and Equal Employment Opportunity Policy, Anti-Child Labor and Anti-Forced Labor Policy, Anti-Sexual Harassment, Internal Grievance Mechanism, Whistleblowing Policy, and Personal Data Protection.
Working Conditions and Terms of Employment
The company’s Terms of Employment include place and hours of work, annual and sick leave, salary, social insurance, medical insurance, transportation support, and procedures for resolving labor disputes. The basic salary includes a 48-hour workweek and up to 5 hours of overtime. Additional hours or holiday work are paid at premium rates as required by law and company policy. In addition to the basic salary, employees receive other allowances, such as a 13th-month salary, de minimis benefits, transportation support or mobile allowances.
Workers’ Organizations
DALI is committed to comply with the Philippine Constitution and Labor Code, upholding the principles of freedom of association and the effective recognition of the right to collective bargaining as stated in the Company’s ESMS. At present, there is no worker’s union established within the Company.
Non-Discrimination and Equal Opportunity
DALI maintains a documented Policy on Non-Discrimination and Equal Opportunity, stating that all individuals are treated equitably and fairly, irrespective of personal characteristics or status, in accordance with Philippine labor laws. The company also enforces a formal Anti-Sexual Harassment Policy, stating that no employee, regardless of gender, shall be subjected to any form of unsolicited or unwelcome sexual conduct, whether verbal or physical. The policies protect the confidentiality of complainants and guarantee that retaliation against those who report grievances will not be tolerated.
Grievance Mechanism
DALI’s Internal Grievance Mechanism covers both full-time and part-time employees. Employees can report issues to their supervisor or a dedicated grievance function, particularly for sensitive matters, while contractors may contact their designated company representative or any Company member. All grievances are formally recorded with relevant details and resolution actions, and confidentiality is strictly maintained throughout the investigation process. In 2024, 177 grievances were logged, all have been resolved.
Child Labor & Forced Labor
DALI prohibits the employment of individuals under the age of 18 or the use of forced labor in its operations or supply chains, as stated in its Anti-Child Labor and Anti-Forced Labor Policy. All hiring processes require age verification through submission of a Birth Certificate. Applicants must also provide the National Bureau of Investigation (NBI) clearance as part of pre-employment documentation. These requirements also apply to suppliers and third parties.
Occupational Health and Safety
As part of its operating management system, the Company has developed the E&S Management Plan and standard operating procedures to address occupational health and safety (OHS) risks across its operations. Each year, the Company submits its OHS program to the Department of Labor and Employment in accordance with Philippine OHS Law. OHS incidents are reported, investigated and monitored. In 2024, six Loss-Time Injuries were recorded, resulting in a Loss Time Incident Frequency Rate (LTIFR) of 0.34, compared to an overall LTIFR of 1.76 across all sectors in the Philippines. To strengthen the OHS incident monitoring, the Company will update its incident reporting and investigation procedure in accordance with international best practices, with the focus on incident classification and investigation (ESAP #2)
Workers Engaged by Third Parties
DALI has established a Contractor Management Plan to manage contractors for new or rebuild of stores, which includes key components: 1) Evaluation and selection of contractors - Provides details on the contractor pre-qualification process and requirements, particularly for EHS; 2) Training – Minimum EHS requirements to be met; and 3) Monitoring and reporting – Periodic monitoring and checking of contractor’s performance.
Supply Chain Management
DALI has developed a Supplier Code of Conduct requiring all suppliers to fully comply with relevant laws, rules, and regulations in their operating country. The Code addresses wages, working hours and conditions, freedom of association and collective bargaining, OHS, child and forced labor, discrimination, harassment, treatment of workers, and environmental management, including waste, emissions, effluents, and noise. As required by PS2, the Company will communicate the Code to all suppliers (ESAP #3).
PS 3 - Resource Efficiency and Pollution Prevention
Greenhouse Gases
DALI’s GHG emissions primarily come from three sources: 1) Direct emissions from store operations such as fuel use in company vehicles, and backup generators; 2) Indirect emissions from purchased electricity used for lighting, cooling, and refrigeration in stores and warehouses; and 3) Value chain emissions linked to the production, transport, and disposal of the goods and packaging it sells. In 2024, the total GHG emission was estimated to be 33,097 tons CO2-e. The company is undertaking initiatives to reduce emissions, such as installing solar panels on store rooftops and upgrading stores and warehouses with energy-efficient technologies, including LED lighting. As of the end of 2024, solar panels had been installed at 113 stores, with plans to expand this number to 200 stores by the end of 2026.
Wastes and wastewater
DALI produces various types of waste throughout its operations, primarily including packaging materials such as plastics and cardboard, as well as food waste resulting from products that are damaged, expired, or unsold. Plastics and cardboard are collected and recycled by waste management companies. In rare case of larger product volume being unsaleable due to quality or expiry issue, goods are properly disposed of by DALI or are returned to suppliers, who dispose of these items according to disposal certificates, and report the quantity of waste to local environmental authorities.
DALI joined the PCX market, a plastic credit marketplace where companies can trade plastic credits.
Wastewater is mainly produced from the store’s washrooms and is treated in an underground septic tank before being discharged into the public sewer system.
Hazardous Materials Management
DALI generates a limited volume of hazardous waste, including spent refrigerants, used oils and fuels from backup generators, chemical residues from cleaning agents, pesticides for pest control, and electronic waste such as fluorescent lamps and used batteries. These wastes are collected, treated, and disposed of by licensed waste management companies in accordance with Philippine regulations on waste management.
PS4 - Community Health, Safety, and Security
Community Health and Safety
Parking spaces are available at all DALI stores to reduce potential interference with local traffic. DALI operates its own truck fleet for transporting goods from distribution centers to its stores. There have been several reported accidents involving company trucks and other vehicles on public roads over the years. To improve the situation, the Company is required to update its safe driving training program for all drivers, with an emphasis on compliance with speed limits, adherence to traffic signs, and restricting the use of mobile phones or devices while driving (ESAP # 4).
Infrastructure and Equipment Design and Safety
All stores are constructed and maintained in compliance with Philippine building safety regulations and must secure a Fire Safety Inspection Certificate from the Bureau of Fire Protection prior to opening. Each store is equipped with emergency exits, emergency lighting, fire extinguishers, and fire alarms. Regular inspections are conducted by store personnel and regional managers in accordance with the Company’s Fire Safety Inspection Plan.
Security Personnel
The store operating hours are from 6:30 to 21:30. DALI stores do not employ on-site security personnel; instead, each location is monitored by security cameras and alarm systems with remote supervision capabilities. Warehouse security is outsourced to third-party service providers. As all warehouses are situated within industrial parks, there is no direct interaction between warehouse security guards and the community.
