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2013 ECONOMIC, ENVIRONMENTAL
AND SOCIAL REPORT
Specialists in creating…
SUSTAINABLE
SHOPPING
CENTRES
SONAE SIERRA
.01
contEntS
About this Report
01
Navigational buttons
corporate overview
Who We Are
02
CEO’s Statement
03
The Year at a Glance
05
Our Company
08
Our Business Model and Strategy
14
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2013 Economic, Environmental and Social Report
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Back to the Contents
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our performance in 2013
The Wider Context
21
Operational Performance
25
Consolidated Accounts
36
Future Outlook
44
Governance
46
Board Members and Executives
50
.....
annex: global reporting initiative
Introduction
54
General Standard Disclosures
55
Economic Aspects
68
Environmental Aspects
74
Labour Practices and Decent Work Aspects
105
Society Aspects
122
Product Responsibility Aspects
131
Independent Auditor’s Review
140
Feedback Form
142
Offices
144
about thiS rEport
We have long recognised that our long-term business viability
is dependent upon a healthy reserve of natural resources
and social cooperation. indeed, we believe that the economic,
environmental and social dimensions of our business
performance are inextricably linked. For this reason, we have
sought to report against all three dimensions over the past
ten years in accordance with gri guidelines.
In line with the official launch of our new sustainability
strategy in 2013, we have further evolved our approach to
corporate reporting. Our new strategy focuses on creating
long-term shareholder value by addressing significant global
challenges which impact upon the continuous success of
our business. Consequently, this report provides a fully
integrated account of our business strategy and operational
performance in 2013, demonstrating the alignment between
our core business and sustainability goals. In order to
develop a fully integrated report, we drew heavily upon
the International Integrated Reporting Council’s (IIRC)
Framework on Integrated Reporting, which was released
in 2013. As such, the ‘Our Performance’ section in this
report focuses on the most material aspects of our
economic, social and environmental performance as defined
by our integrated business and sustainability strategies.
In keeping with our long-standing commitment to
apply the most up-to-date sustainability reporting
guidelines, this report has also been developed in
accordance with the ‘Core’ Global Reporting Initiative (GRI)
G4 Sustainability Reporting Guidelines which were
published in May 2013. Furthermore, our 2013 Economic,
Environmental and Social report has integrated the
specific contents and performance indicators required
by the GRI’s G3.1 Construction and Real Estate Sector
Supplement (GRI CRESS) which was published in 2011.
Our compliance with these GRI guidelines has been
independently verified by Deloitte, whose assurance
statement can be found on page 140 of this report.
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corporatE ovErviEW
Who We Are
CEO’s Statement
The Year at a Glance
Our Company
Our Business Model and Strategy
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SONAE SIERRA
2013 Economic, Environmental and Social Report
02
03
05
08
14
Who WE arE
Sonae Sierra is a specialist at the cutting edge
of shopping centre development, ownership,
management and the delivery of professional
services in geographies as diverse as Europe,
South America, North Africa and Asia.
Passionate about bringing innovation and excitement to the shopping industry since 1989,
Sonae Sierra has been interpreting trends and spearheading a movement that has defined
the shopping centres of the future. Through our integrated strategy of investment,
development and property management, we have developed a unique understanding of
the business and markets we operate in, and we have earned more international awards
than any other company in our sector.
boulevard londrina Shopping, Brazil
passeio das Águas Shopping, Brazil
Further references:
For further information about the International Integrated Reporting Council, see:
http://www.theiirc.org/
For further information about the Global Reporting Initiative, see:
http://www.globalreporting.org/Pages/default.aspx
algarveShopping, Portugal
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CORPORATE OVERVIEW
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SONAE SIERRA
2013 Economic, Environmental and Social Report
.03
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CEO’S STATEMENT
A conversation with Fernando Guedes Oliveira
Sonae Sierra CEO
2013 SAW US CONSISTENTLY
OUTPERFORM THE RETAIL SALES
INDEX IN MOST OF THE EUROPEAN
COUNTRIES WHERE WE OPERATE;
CONTINUE TO EXPAND OUR BUSINESS
THROUGH THE INAUGURATION OF
NEW SHOPPING CENTRES AND
SECURE NEW MANDATES FOR OUR
SHOPPING CENTRE PROFESSIONAL
SERVICES BUSINESS.
Fernando Guedes Oliveira
Chief Executive Officer
Q: How would you describe the business’s performance over the
last twelve months? Has the year turned out as you expected?
l
A: Overall, Sonae Sierra’s business exceeded expectations for 2013.
In 2013 we concluded the sale of three assets – one in Spain and two in
Italy – to institutional investors, enabling us to perpetuate our capital
recycling strategy. These sales not only demonstrate that investor
interest is returning to these Southern European markets, but they
are also a testament to the quality of our portfolio and the strength
of our expertise in maximising asset value. Two more significant
achievements of our investment business were the extension of the
Sierra Fund for an additional five year period and the acquisition of
a further 50% stake in CascaiShopping, through a majority-owned
subsidiary, a prime asset in Greater Lisbon.
Our Net Result for the full calendar year was €3.6 million; we delivered
a Direct Net Profit of €57.6 million and presented an EBITDA of
€113.5 million. 2013 saw us consistently outperform the retail sales
index in most of the European countries where we operate; continue to
expand our business through the inauguration of new shopping centres
and secure new mandates for our shopping centre professional
services business. Whilst our direct results show a decline in comparison
with 2012, this is due to the sale of assets during the last two years in
line with our capital recycling strategy. On a like-for-like basis, our
Direct Profit and EBITDA would have in fact remained stable.
In Europe, we can identify a clear split in terms of the economic
conditions across the year. In the first five months of 2013, we saw
a decline in sales and expansion in yields as forecast. However, from
May onwards we witnessed an uplift in consumer confidence and
since October we have achieved month-on-month sales growth
across the majority of our portfolio, combined with a stabilising of
yields, particularly in Portugal and Spain. We feel confident that the
momentum will continue to pick up as we move into 2014 and we
have built a strong platform to take advantage of market recovery as
soon as it materialises. In Brazil, on the other hand, the economy is
still expanding in spite of recent deceleration: tenant sales increased
by more than 5% and we were able to deliver strong rental growth.
Q: What progress did Sonae Sierra make towards its objectives for
2013 and beyond?
A: Our business strategy remains the same and is validated by the
changes we saw during 2013. We continue to:
l
Maintain and enhance our shopping centre specialism.
l
Deploy our capital recycling strategy to fund new developments
and reduce our exposure to investment properties, with a shift
from a mature market concentration to a greater weight of
emerging markets (including Brazil).
l
Reinforce our professional services business.
Pursue new development opportunities with a capital-light
approach in the use of equity.
We inaugurated three new shopping centres – one in Germany and
two in Brazil. In Germany, Hofgarten Solingen is already exceeding
expected performance in terms of footfall and sales. In Brazil, our
expansion into two new states in the interior and south of the
country – Goiás and Paraná – has significantly added to the GLA
of our portfolio in this market. Boulevard Londrina Shopping and
Passeio das Águas Shopping are reference points in terms of
high-quality design and best practice in safety, health and
environment in these regions. Brazil offers strong potential for
new projects as well as expansions/refurbishments to existing
assets, and in this context we also launched a significant expansion
project at Franca Shopping in São Paulo. In terms of new
development, we commenced works on a new flagship shopping
centre in Bucharest, Romania in a joint venture partnership with
Caelum Development.
Our professional services business continues to bear fruit, with over
50 new contracts signed in 2013 and the successful launch of Sierra
Reval, a partnership created to deliver shopping centre services in
Turkey. At the start of 2014 we also finalised an important joint
venture partnership with Citic Capital to provide management and
leasing services in China. In geographies that are new to Sonae
Sierra, such as those in Asia and Africa, our professional services
activity enables us to ‘test’ the market before investing capital,
thereby supporting our capital light approach. This approach is
illustrated by the recent announcement of our first joint venture
development in Morocco.
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SONAE SIERRA
2013 Economic, Environmental and Social Report
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cEo’S StatEmEnt (CONTINuED)
Q: What have been the most significant challenges and how have
you overcome these?
a: Without a doubt the adverse economic conditions in Southern
Europe continue to present the greatest challenges for our business.
Scarcity of debt, weak retail sales and fluctuating yields continue to
compromise our ability to proceed with new development, maximise
rental income and improve our direct results.
However, our teams have deployed considerable initiative and
efforts to maintain our high occupancy rates – an average 94.4%
across our global portfolio and 97.4% in Portugal, one of the
countries most affected by the Eurozone crisis – and to strengthen
the appeal of our assets as cutting-edge shopping and leisure
destinations for consumers. On this front, I am particularly proud
of the work we have done to support our tenants’ businesses; drive
down service charges through cost-cutting measures (including
eco-efficiency); introduce exciting new retail concepts into our malls
and exploit digital media platforms to enhance sales activation.
Furthermore, the successful disposal of the three assets mentioned
previously enables us to release capital to fund our new investment
and/or development activity in the context of a constrained debt
market, whilst the impressive growth of our professional services
business bolsters our net income and opens up opportunities for
our business to expand further into emerging markets which hold
greater promise for retail growth.
Q: What do you consider to be Sonae Sierra’s greatest achievements
of 2013 and how will these affect the business going forwards?
a: Besides the specific events highlighted above, I would emphasise
above all our strong capital position with a low loan-to-value ratio and
a solid interest cover. Indeed, all the efforts we have made over the
last five years to contain our costs, sustain our rental income through
first-class operational management and expand into new geographies
through our competitive services business put us in an optimal
position to take advantage of the improved economic circumstances.
Another key achievement for our business has been, in my view, the
way in which we have embraced changing consumer habits through
intelligent use of digital media. Whereas e-commerce was initially seen
as a significant threat, the success of our PromoFans® promotions
platform proves that we can use the internet to our advantage. With
other digital projects already underway, we expect to reap further
rewards from the skilful use of digital technology in the future.
Taking a wider future perspective, I am particularly proud of the work
we have commenced in 2013 to support the long-term resilience
of our business, as well as our ongoing achievements in terms
of safety, health and environmental performance. Whilst
improvements in our management of energy, water and waste
enabled us to reduce our environmental impact and avoid costs
of €18.2 million in 2013, our research into solutions for effective
resource resilience (such as water reuse and renewable energy
systems) is vital for sustaining our assets’ value in the long-term.
Likewise, our efforts to support our tenants and to have a positive
impact on local economies has already given rise to new, unique
retail concepts – such as Flash Stores and Coop Stores – which are
fostering entrepreneurship and enhancing our offer to consumers.
All in all, these activities stand us in a good position to sustain the
success of our shopping centres in the context of significant global
challenges by ensuring that they operate in harmony with the
surrounding environment and local community.
Q: What are your priorities for 2014, and how do you see the
year unfolding?
a: Overall, I am cautiously optimistic about the year ahead.
Anticipating gradual stabilisation in Southern European markets,
we will continue to pursue a dynamic management approach with
a focus on improving occupancy, rental income and tenant sales.
In Iberia, where the market has bottomed out, we expect values to
improve slightly during 2014 at least for prime assets, and for more
investors to return to the market. Whilst we do not currently have
plans to acquire or develop any more assets in this market, we will
proceed with expansion and refurbishment works when the
conditions are right to enhance the value of our existing portfolio.
We believe that the German market will remain the strongest within
the Eurozone, with growing investor appetite for both primary and
secondary assets. Consequently, we will seek opportunities for new
developments and acquisitions in this country, as well as in Italy
where we are seeing patent signs of recovery.
In Brazil, the FIFA World Cup and the Rio 2016™ Olympic and
Paralympic Games will have a positive impact by drawing an influx
of visitors to the country, leading to higher footfall and sales in our
shopping centres, provided that the local construction industry and
infrastructure is able to support the increase in visitors. Inflation in
this market will remain a challenge in 2014 and we expect interest
rates to remain high, but GDP growth should nonetheless be
sustained at 2-3% fuelled by increasing consumption. The main
focus of our strategy in Brazil will be on development; we will
proceed with the construction of a new development pipeline and
exploit opportunities for redevelopment on key existing assets
through expansion and/or refurbishment projects. We will take an
opportunistic approach to acquisitions, targeting shopping centres
which offer strong potential for redevelopment when the market is
favourable, and we will pursue a strategy of capital recycling through
the sale of non-core assets.
Importantly, we will increase our presence in emerging markets;
both by entering new markets as a professional services provider
and growing our market share in the countries where we are already
present, with a particular focus on North Africa and Turkey. Our
development business will also seek opportunities for direct
investment, always in accordance with our capital light approach.
We will continue to innovate in our approach to business; ensuring
that our centres offer the most cutting-edge experiences for
consumers and that we deliver first-class solutions to our clients.
Equally we will proceed with our focus on enduring business
resilience through our four long-term priorities, tackling global
environmental and social challenges in a way that supports ongoing
value creation for our stakeholders.
With a robust strategy in place, we commence the New Year in a
strong position to exploit new opportunities and deliver solid
performance across all areas of our business.
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corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.05
thE yEar at a glancE
Key achievements
.....
INVEStMENt
SiErra Fund
and cbrE ibErian
valuE addEd Fund
Sold parQuE
principado (Spain)
For €141.5 million
.....
SiErra Fund Sold
valEcEntEr and
aironE (both in italy)
to blacKStonE rEal
EStatE partnErS For
€144.5 million
inauguratEd
€4.5 million
ExpanSion oF
algarvEShopping
and commEncEd
€5 million
rEFurbiShmEnt
oF nortEShopping
(portugal)
inauguratEd
boulEvard londrina
Shopping and
paSSEio daS ÁguaS
Shopping (braZil)
commEncEd thE dEvElopmEnt
oF parKlaKE in romania, a
Joint vEnturE With caElum
dEvElopmEnt
announcEd our FirSt
dEvElopmEnt in morocco, a
Joint vEnturE With marJanE,
al Futtaim and SociÉtÉ
d’amÉnagEmEnt dE ZEnata
(groupE cdg)
MANAgEMENt
launchEd ‘digital
loungE’ pilot proJEct
in hoFgartEn
SolingEn – thE
FirSt oF itS
Kind in our
portFolio
conSolidatEd promoFanS®
platForm achiEving 360,000
rEgiStErEd uSErS
SincE launch
3
.....
announcEd thE
ExpanSion and
rEFurbiShmEnt oF
Franca Shopping
(braZil), With
€31 million invEStmEnt
adding 11,000m2 gla
DEVELOPMENt
inauguratEd
hoFgartEn SolingEn
(gErmany)
.....
rEachEd agrEEmEnt
With rocKSpring
propErty invEStmEnt
managErS to acQuirE
50% StaKE in
caScaiShopping
(portugal)
launchEd coop StorE
proJEct to FoStEr
EntrEprEnEurShip and thE
EmErgEncE oF nEW brandS
and concEptS in
our Shopping
cEntrES
3
implEmEntEd rainWatEr
harvESting or WatEr rEuSE
SyStEmS at Six Shopping
cEntrES (34% oF our
cEntrES noW havE
thESE SyStEmS)
PROFESSIONAL SERVICES
SignEd 59 nEW SErvicE
contractS acroSS EuropE,
north aFrica and aSia
With a combinEd valuE
oF €12.2 million
EntErEd thE turKiSh marKEt
With thE crEation oF SErvicE
providEr company SiErra
rEval
conSolidatEd activity in
morocco, Signing SEvEn
nEW SErvicES contractS
With cliEntS
Joint vEnturE partnErShip
FormEd With citic capital
to providE propErty
managEmEnt SErvicES
in china
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corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.06
thE yEar at a glancE (CONTINuED)
awards and certifications1
aWardEd thE rEtail
riSing StarS aWard
at thE intErnational
rEtail propErty
marKEt (mapic)
aWardS 2013
For our activity
in braZil
honourEd For thE FiFth
conSEcutivE yEar by thE
EuromonEy magaZinE rEal
EStatE aWardS Winning
bESt dEvElopEr
ovErall and bESt
rEtail dEvElopEr
in portugal
rEcEivEd Four aWardS at
thE icSc Solal marKEting
aWardS – thE highESt
numbEr For a EuropEan
company
obtainEd Four nEW
iSo 14001
AND
iSo 14001 and FivE
iSo 18001
CERTIFICATIONS
nEW ohSaS 18001
ACHIEVED
cErtiFicationS at
thrEE opErational
Shopping cEntrES and tWo
conStruction proJEctS
Key performance indicators
1
€5,638m
€3.6m
€113.5m
OMV of owned Assets (€ million)
Consolidated Net Profit (€ million)
EBITDA (€ million)
2013
5,638
2013
3.6
2013
113.5
2012
5,789
2012
-45.9
2012
116.3
2011
6,320
2011
9.7
2011
112.8
2010
6,481
2010
8.7
2010
123.4
8,288
94.4%
€1,000m
Number of tenant contracts
under management
Average Occupancy Index
(% by GLA, across our owned portfolio)
Real Estate NAV (€ million)
2013
8,288
2013
94.4
2013
1,000
2012
8,428
2012
96.1
2012
1,050
2011
8,495
2011
96.7
2011
1,173
2010
8,521
2010
96.4
2010
1,251
1,896m2
2,303m2
GLA owned in operating centres
(000’s m2)
GLA under management
(000’s m2)
2013
1,896
2013
2,303
2012
1,893
2012
2,261
2011
1,924
2011
2,234
2010
2,017
2010
2,220
For a full list of awards received in 2013, please see our website.
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CORPORATE OVERVIEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.07
THE YEAR AT A GLANCE (CONTINUED)
Key Performance Indicators (continued)
2
4.6
32.2
8.4
Tenant satisfaction Index (scale of 1
(‘not satisfied’) to 6 (‘very satisfied’))
Average hours of training per employee
Number of non-conformities per hour
of reference SPO2
2013
4.6
2013
32.2
2013
8.4
2012
4.5
2012
35.8
2012
7.4
2011
4.6
2011
48.9
2011
7.8
2010
4.6
2010
38.1
2010
5.8
4.3
0.021
444kWh/m2
Lost Workday Case Accidents Frequency Rate
(LWCAFR) on construction sites
Greenhouse gas (GHG) emissions of our owned
portfolio and corporate offices (tCO2e/m2 GLA)
Electricity efficiency (excluding tenants) of our
owned portfolio (kWh/m2 mall and toilet area)
2013
4.3
2013
0.021
2013
444
2012
5.0
2012
0.043
2012
479
2011
17.2
2011
0.028
2011
514
2010
13.0
2010
0.034
2010
514
3.7
59%
Water efficiency (excluding tenants)
of our owned portfolio
(litres/visit)
Total waste recycled as a proportion
of waste produced (% by weight, across
our owned portfolio)
2013
3.7
2013
59
2012
3.6
2012
55
2011
3.7
2011
53
2010
3.7
2010
51
Safety, health and environment Preventive observations (SPO) are a form of safe behaviour audit undertaken at our shopping centres in operation. For further details,
please see page 109.
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corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.08
our company
Sonae Sierra is the international shopping centre specialist
that is passionate about creating unique shopping
experiences. Incorporated in Portugal in 1989, Sonae SgPS
(Portugal) and grosvenor group Limited (United Kingdom)
each control 50% of the Company.
We have an integrated business which encompasses owning,
developing and managing shopping centres as well as the
provision of professional services in geographies as diverse as
Europe, South America, North Africa and Asia. As a pioneer in
the creation of themed shopping centres, Sonae Sierra remains
a leader in the development of unique concepts for exceptional
shopping centres that offer great experiences and turn
customers into fans.
Our proactive approach to business ensures that we have the
necessary capital required to maintain and market our shopping
centres, attract new and innovative tenants and to increase our
centres’ asset values. This strategy has allowed us to develop
unique know-how and has earned us international recognition
for the development of innovative products and delivery of high
quality property management services. This has enabled us to
develop our activity as a professional service provider.
SonaE
SiErra
Shopping centres from a to Z
g
g
g
Development
Ownership
and asset
management
Management
and letting
g
g
KnoWlEdgE
proviSion
Shopping Centres
owned by Sonae
Sierra and its
Partners
Our Clients’
Shopping Centres
< >
III
.....
CORPORATE OVERVIEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.09
< >
OUR COMPANY (CONTINUED)
Our vision is to be the leading international shopping centre specialist.
Our mission is to provide ultimate shopping experiences to customers and to create
outstanding value to shareholders, investors, tenants, communities and staff, while
contributing to sustainable development.
Our vision and mission are underpinned by a set of core values and principles
regarding our business culture, responsibility towards our staff, the environment,
local communities where we operate and independence from political power.
Centro Colombo, Portugal
Further reference:
To read more about our values and principles see:
http://www.sonaesierra.com/en-gb/aboutus/visionmissionandvalues.aspx
Hofgarten Solingen, Germany
Boulevard Londrina Shopping, Brazil
III
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corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.10
our company (CONTINuED)
organisational structure
Sonae Sierra is a holding company for four separate Sonae Sierra businesses: Sierra Investments, Sierra Developments, Sierra
Management, and Sonae Sierra Brasil. Our businesses also act as professional service providers in Europe, South America,
North Africa and Asia.
SiErra invEStmEntS
Sierra investments owns the Company’s shopping centres and
is responsible for our investment activities. It contributes to the
Company’s results through a combination of net operating
income from shopping centres and the variation in the market
value of the shopping centres owned and in operation. The
team takes a long-term view of the potential of an asset to
increase in value over time, investing in a combination of assets
developed by Sierra Developments as well as acquired from
third parties. Sierra Investments holds 50.1% of the Sierra Fund
and 47.5% of the Sierra Portugal Fund, thus maintaining its
position as co-owner and manager of the Funds’ underlying
assets. Applying the extensive experience it has acquired, this
business also acts as a provider of professional services.
SiErra managEmEnt
Sierra management takes on the management of shopping
centres on behalf of Sonae Sierra and its co-owners, with a
focus on maximising long-term value. Furthermore, the
business is responsible for leasing the retail premises within
each shopping centre, including the vacant shops in our
operating centres and those in projects that are still in the
development stage. Sierra Management also provides
professional services in shopping centre management
and leasing.
SiErra dEvElopmEntS
Sierra developments constantly seeks opportunities to
develop new shopping centres. This business applies its internal
expertise from the conceptual architectural design phase
through to the construction and engineering management of
shopping centres (including expansion and refurbishment
projects). Sierra Developments is responsible for developing
new and innovative concepts that are adapted to local
communities’ needs, are respectful of local values and culture
and create value based on a sustainable and long-term
approach. Leveraging on its track record and know-how, Sierra
Developments also provides professional services in the
shopping centre development area.
SonaE SiErra braSil
Sonae Sierra brasil is listed in the BM&F BOVESPA (the
Brazilian Stock Exchange) with a 33% free float, the remainder
is a 50/50 partnership between Sonae Sierra and DDR, one of
the uSA’s largest real estate investment trusts (REITs) focused
on the shopping centre sector. Sonae Sierra Brasil’s business
operates autonomously and is focused on investing, developing
and managing shopping centres in Brazil.
All our businesses are supported by Corporate Services which includes: Finance, Legal, Taxes, Human Resources, Communication,
Sustainability and our European Shared Services Centre.
< >
III
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corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.11
our company (CONTINuED)
Where we operate
Our strong partnership policy, both with international investors
and local partners, provides the financial backing and market
intelligence necessary to successfully develop new business
in new geographies. Currently we are present in 13 countries:
Portugal, Algeria, Azerbaijan, Brazil, China, Colombia,
germany, greece, Italy, Morocco, Romania, Spain and turkey.
gErmany
Spain
romania
aZErbaiJan
portugal
colombia
grEEcE
turKEy
italy
morocco
algEria
china
braZil
Operations in
4 continents and 13 countries
passeio das Águas Shopping, Brazil
loop5, Germany
< >
III
.....
corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.12
our company (CONTINuED)
Key Facts
aS oF 31 dEcEmbEr 2013
Shopping cEntrES oWnEd
managEmEnt and/or lEaSing
total managEd gla oF
47
81
2.3 million m 6 projects
and an omv oF €5.6 billion
Shopping cEntrES acroSS
13 countriES
rEnt rEcEivEd at oWnEd
Shopping cEntrES3
viSitS madE to managEd
Shopping cEntrES
€391.8 405.6
million
million
undEr dEvElopmEnt
2
including Four For
proFESSional SErvicES
cliEntS, and Four nEW
proJEctS in thE pipElinE
tEnant SalES at managEd
Shopping cEntrES
dirEct EmployEES
€5,158 1,144
million
Further reference:
For further information about our performance in the countries where we operate, please see our ‘Sustainability Country Reports’ on our website.
alexa, Germany
3
Total rents received excluding our Torre Occident office building were €390.6 million.
boulevard londrina Shopping, Brazil
< >
III
.....
CORPORATE OVERVIEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.13
< >
OUR COMPANY (CONTINUED)
Our current partnerships and clients
When it comes to shopping centres, we aim to be the partner of choice. Our business, quite simply, would not be what it is today
C ). With their backing, we can ensure we have financial strength, the ability to quickly
P ) and service clients (0
without our partners (0
gain an in-depth knowledge of markets and create new opportunities.
ALGERIA
P Cévital Group
0
C Immobis
0
C Prombati
0
AZERBAIJAN
C Baghlan Group
0
BRAZIL
P Marco Zero
0
P Família Sé
0
C Tivoli EP
0
C Credit Suisse HG
0
PORTUGAL
P Estevão Neves
0
P Bensaúde Group
0
P Sonae RP
0
P Sonae MC
0
C CGD
P &0
0
C Millenium BCP
0
C Montepio Geral
0
C GIL
0
C The Edge Group
0
SPAIN
P Eroski Group
0
P Iberdrola Inmobiliaria
0
C Grupo Clásica Urbana
0
WE AIM TO CREATE MORE
LONG-TERM RELATIONSHIPS
WITH LIKE MINDED
ORGANISATIONS WHO
SEE US AS THEIR SHOPPING
CENTRE PARTNER OF CHOICE.
CHINA
C Citic Capital Real Estate
P &0
0
COLOMBIA
P Central Control
0
FINLAND
P KEVA
0
P ILMARINEN
0
FRANCE
P AEW Europe
0
P CNP Assurance
0
P CDC
0
P Foncière Euris
0
SWITZERLAND
P Partners Group
0
THE NETHERLANDS
P ING Developments
0
P APG Investments
0
P MAB Development
0
C Redevco
P &0
0
TURKEY
P Reval
0
C Banio
0
C Endülüs Gayrimenkul
0
C Krem Turizm
0
Boulevard Londrina Shopping, Brazil
UAE
GERMANY
P Deka Immobilien
0
C Union Investment
P &0
0
C Aachener Grundvermögen
0
C BHG Gewerb
0
C Commerzbank
0
GREECE
Charagionis Group
P
0
IRELAND
P Caelum Development
0
ITALY
P Coimpredil
0
C Faenza Erre
0
C Edilnaonis
0
C Immobiliare Helios
0
MOROCCO
C Marjane
0
C Foncière Chellah
0
C Facenor
0
C Groupe CDG
P &0
0
Uberlândia Shopping, Brazil
C Al Futtaim
P &0
0
UNITED KINGDOM
Grosvenor Fund Management
Rockspring
Schroders Investment
Management
C Scottish Widows
0
C Doughty Hanson
0
P
0
P
0
P
0
USA
P
0
P
0
P
0
P
0
AIG
TIAA-CREF
DDR
CBRE Global Investors
III
.....
corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.14
< >
our buSinESS modEl and StratEgy
Our business model and strategy depends on a number of resources and relationships for
its ongoing success. We focus on four strategic axes that we have identified as priorities.
these are supported by our sustainability strategy that addresses four long-term focus
areas designed to contribute to our continued success while delivering value for our
stakeholders and the environment. Our approach to safe people & eco-efficiency and risk
management are two key aspects of our day-to-day management activities that
underpin both our business and sustainability strategies.
how we create value
With 25 years of experience, the combination of our know-how, our commitment to innovation and our long-term approach has
created an integrated business model that embraces shopping centre development, ownership and management as well as our
professional services business. Our shopping centre specialism, the quality of our assets and our ability to create financial and social
value for stakeholders throughout the entire asset lifecycle constitute a competitive advantage and have enabled our business to
expand into 13 countries across four continents.
our business model
WE Fund
WEgFind
With extensive knowledge of the shopping centre business,
g we perform market, cost, community and environmental
studies to identify sustainable retail opportunities.
g
We provide effective investment solutions that
utilise capital while maximising returns.
WE dESign
g
WE acQuirE
PRE
DEVELOPMENt
We create innovative schemes and provide professional
shopping centre design services to offer exceptional retail
experiences and bring vibrancy to the local area whilst
sustaining environmental resources and ensuring high
safety standards. ASSEt
MANAgEMENt
INtEgRAtED
APPROACH
DEVELOPMENt
WE dEvElop
Combining know-how and experience, we bring
together exceptional construction and marketing
support to develop and commercialise
sustainable buildings covering both our owned
assets and as a professional service provider.
g
WE managE
We manage our assets in a way that maximises
returns for our professional services clients,
tenants and investors whilst also delivering value
for communities and visitors. At the same time,
we promote the efficient use of natural
resources and the safety of all people
in and around our properties.
PROPERtY
MANAgEMENt
g
g
g
g
g
g
We acquire the completed assets, many of which
we co-own through investment funds, offering
international investors sustainable financial rewards
from dynamic, high quality retail assets.
III
.....
CORPORATE OVERVIEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.15
OUR BUSINESS MODEL AND STRATEGY (CONTINUED)
The success of this business model nonetheless depends upon the availability of a range of resources and relationships which we have
defined with reference to the Integrated Reporting framework’s ‘six capitals’4. Our Company, through its specific activities, both relies
and impacts upon the quantity and quality of these capital stocks in different ways, as explained below:
.01
Financial Capital – funds for use in the
production of goods and/or provision of services,
which are obtained through financing and/or
generated through operations and investments.
Manufactured Capital – manufactured
.02
Inputs: In the context of our business, this
includes buildings and pre-fabricated building
materials; equipment and infrastructure to
develop, operate and invest in shopping centres.
Inputs: For Sonae Sierra, this includes debt,
equity and capital recycled through the sale of
assets. The success of our business is also reliant
on wider financial market stability and consumer
spending power.
Outputs: We develop new shopping centres and
operate expansions and refurbishments on
existing assets. Our activity as a shopping centre
operator encourages private consumption and
the acquisition of consumer goods.
Outputs: Our activities generate a profit for our
Company, our shareholders, the investors in our
Funds and our co-investors. We also provide a
marketplace for tenants’ sales and create
financial value for suppliers and local economies.
Intellectual Capital – organisational,
.03
knowledge-based intangibles, including
intellectual property, software, internal
knowledge, systems, procedures and protocols.
.04
Outputs: We provide livelihoods to employees
and suppliers and support them in developing
their skills. Our shopping centres provide services
to local community members. Our activities do
occasionally have an adverse impact on human
capital when accidents occur to people working
at or visiting the buildings and construction sites
we own and/or occupy.
Outputs: We create tailored IT and management
systems; we increase the skills and know-how of
our employees and contribute to knowledgesharing within the wider retail property sector.
Social and Relationship Capital – the
.05
Inputs: For us, relationships with local
communities, tenants and joint venture partners
are particularly important, as is the existence of
social cohesion, reliable public authorities and
social services – in particular education. The
sustained viability of our shopping centres also
relies upon active consumer spending.
Human Capital – people’s competencies,
capabilities and experience, and their motivations
to innovate.
Inputs: We rely upon healthy, skilled and motivated
staff and suppliers to devise our business strategy
and execute our day-to-day activities.
Inputs: Our real estate know-how, built up
through 25 years of experience and retained
by our skilled employees is most relevant in
this context.
institutions and the relationships within and
between communities, groups of stakeholders
and other networks, and the ability to enhance
individual and collective well-being.
physical objects that are available for use in the
production of goods and/or provision of services.
.06
Natural Capital – all renewable and
non-renewable environmental resources and
processes that provide goods or services that
support the prosperity of an organisation.
Inputs: Air, water, land, minerals and forests;
biodiversity, climate regulation and eco-system
health are all vital resources which we rely upon
in order to sustain the other capitals and enable
us to carry out our day-to-day business.
Outputs: Our direct activities generate GHG
emissions, waste and effluents, all of which
contribute to the erosion of natural capital.
Outputs: Our activities create jobs, provide
venues and services for local community
members and promote investment in the
communities where we operate. Our impact on
local businesses can be mixed: local shops are
often successfully integrated into our centres;
but in some cases the inauguration of new
centres can adversely impact on the existing
retail offer.
4
For more details, please consult the Integrated Reporting Framework of the International Integrated Reporting Council, available from http://www.theiirc.org/.
< >
III
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corporatE ovErviEW
SONAE SIERRA
2013 Economic, Environmental and Social Report
.16
our buSinESS modEl and StratEgy (CONTINuED)
our business strategy
Our business strategy comprises four axes to allow our business to expand its market presence, deliver sustainable financial returns
and create added value for stakeholders through our business model.
.01
Shopping centre Specialist
.02
There continues to be strong demand from the retail sector
worldwide. Consumer confidence across Europe has picked
up significantly over the last year, and retail is becoming an
increasingly important asset class in today’s ‘growth’ and
‘emerging’ markets, which are projected to account for
around one-quarter of global retail investment by 2020.
The retail investment market is becoming increasingly
internationalised, fuelled by the increase of consumer
purchasing power in diverse geographies across the globe.
Whilst growth in mature markets is projected to increase at a
slower rate, demand for quality developments in ‘growth’ and
‘emerging’ markets is likely to remain buoyant, albeit subject
to intermittent risk in markets which present a higher degree
of social and political instability.
We aim to maximise the value captured along the complete
value chain of the shopping centre business. For this, we
will keep an integrated approach, covering development,
investment and management of shopping centres. We
define ourselves by our sector focus and not by the
amount of financial capital committed to properties. That
means, in some properties:
l
In this context, we aim to increase our exposure to
developments. This will be achieved through a combination
of acquiring exposure to new development opportunities and
reducing our exposure to investment properties. We will also
shift from a mature market concentration to a greater weight
towards emerging markets. Our market priorities will be:
We may hold a controlling position, by ourselves or with
partners.
l
We may hold minority positions associated with
management services.
l
We may render services to third party owners without
any financial capital invested by the Company.
In all cases, we will strive for the creation of innovative
shopping concepts that will adjust and evolve in order to be
the preferred choice of the customer.
.03
professional Services
We will continue to reinforce a professional services
component focused on development, leasing and property
management services. This enables us to optimise the
resources of the Company under market fluctuations and
improve know-how on markets, partners and projects.
capital allocation
l
Brazil.
l
Emerging markets with significant shopping centre potential,
that can deliver high returns in the long term, and where we
may enter via the provision of professional services.
l
Germany, Italy and Romania where the objective is to reduce
financial capital employed and adopt a developer approach.
Portugal and Spain will continue to be core stable markets for
the Company but with no prospects for new developments.
For Greece, the objective is to realise value in an orderly way.
.04
capital intelligence
We will reinforce a capital-light approach in the use of equity.
For this, we will use partnerships with the purpose to minimise
the financial capital invested in a given operation allowing us to
share risk, maximise returns through service delivery and
improve know-how.
With increasing focus from investors and retailers on prime
assets that dominate their catchment areas, market
dominance is one of the more relevant variables when
assessing shopping centre strength and medium-term
potential. We will aim to maintain the financial capacity to
commit to ambitious and relevant shopping centre projects,
namely in terms of accessing funds in debt markets. For this,
we will aim to keep a relevant balance sheet size, associated
with prudent financial ratios.
< >
2013 Economic, Environmental and Social Report
.17
our buSinESS modEl and StratEgy (CONTINuED)
Our business strategy is supported by our sustainability strategy, including our
strong commitment to safe people and eco-efficiency and our continued focus
on best-practice risk management across all parts of our business. Each of these
practices is described in detail in the sub-sections below.
our sustainability strategy
To realise our objectives under all four axes of our business strategy, we rely upon inputs from all six of the ‘capitals’ described on
page 15, in particular financial capital, land, natural resources, infrastructure and materials for shopping centre development and
operations; relationships with joint venture partners, tenants and visitors; active consumerism and the skills and expertise of staff
and suppliers. Our sustainability strategy was devised to enable us to sustain the ‘capital stocks’ of resources and relationships
which we are dependent upon in the medium to long-term. This means that, by executing our sustainability strategy alongside our
business strategy, we aim to create a virtuous circle whereby we address the principal sustainability risks facing our operations in
order to safeguard our continued capacity to do business. The relationship between our business and sustainability strategies and
the ‘six capitals’ is shown below.
Financial Capital
SaF
Ep
Eo
pl
E&
nt
mE
E
g
na
cy
iEn
Fic
EF
o–
Ec
riS
Km
a
g
SHOPPINg
CENtRE
SPECIALISt
CAPItAL
INtELLIgENCE
CAPItAL
ALLOCAtION
PROFESSIONAL
SERVICES
LEVERAgINg
KNOWLEDgE
g
RESOURCE
RESILIENCE
g
Human Capital
PROSPEROUS
REtAILERS
SUStAINABLE
LIFEStYLES
Intellectual Capital
Natural Capital
Manufactured Capital
Social & Relationship Capital
g
g
III
SONAE SIERRA
g
.....
corporatE ovErviEW
< >
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SONAE SIERRA
2013 Economic, Environmental and Social Report
.18
our buSinESS modEl and StratEgy (CONTINuED)
our sustainability strategy (continued)
The past few years have seen some dramatic changes in the market which affect the quality and availability of the capital resources
which our business relies upon. Having consulted with our Sustainability Steering Committee and other key internal and external
stakeholders, we identified some key challenges which are impacting on our business and should be prioritised for action; among
these were:
l
Tenants need to adapt to radical technological, environmental and demographic changes.
l
There is increasing consumer demand for green and ethical/fair-trade products and services.
l
Competitive advantage will be achieved through the ability of a workforce to learn faster than the competition.
l
Natural resources are becoming scarcer and costlier.
Based on these challenges, we pinpointed four focus areas which will form the basis of our sustainability strategy in the medium-term,
in addition to our ongoing Safe People and Eco-Efficiency commitments. Two of these focus areas in particular required more
immediate action in 2013 in order to support our tenants and reduce costs wherever possible across our operational portfolio; for this
reason, most of our efforts to date have focused on Prosperous Retailers and Resource Resilience, whilst our plans for Sustainable
Lifestyles and Leveraging Knowledge are at an earlier stage of development and execution.
prosperous retailers
Sustainable lifestyles
Adapting to a changing world and new consumer demands
are key to our tenants’ success. Savvy retail operators can
leverage digital platforms to develop stronger relationships
with consumers, gaining insight into and effectively
responding to their behaviour and preferences in order
to activate sales. Retailers who embrace social and
environmental challenges through their business models
stand a better chance of sustaining their businesses in the
long-term and can deliver benefits to local communities.
The findings of our own consumer behaviour surveys – as well
as external data on shopping habits – reveal that consumers
are increasingly concerned with the environmental and
ethical impacts of their purchases; are keen to support local
businesses and in many cases want to adopt healthier, more
environmentally sustainable lifestyles. In fact, 75% of
consumers we interviewed in 2013 reported that they feel
more satisfied when they visit a ‘sustainable shopping centre’.
We are already taking actions to partner with current and
potential tenants to make their businesses more resilient,
in particular enabling small, local and sustainable
businesses to thrive in circumstances in which they might
not have done so otherwise. At the same time, this
approach supports our business strategy by allowing us
to promote new concepts that deliver unique experiences
to customers. Consequently, we can sustain our income
streams and maintain innovation at the heart of Sonae
Sierra’s business values.
We will use our reach and public influence to encourage visitors
to make the right choices. This involves promoting healthy,
green and local goods and services; improving well-being
through health activities in our shopping centres; and creating
a sense of place. This approach enables us to increase visitors’
satisfaction and loyalty, thereby increasing footfall in our
shopping centres, and adds to our brand value as we visibly
support health, well-being and environmentally-conscious
behaviour.
leveraging Knowledge
resource resilience
In today’s world, competitive advantage is driven by the
ability of a company’s workforce to learn faster and
innovate ahead of their peers.
Pressure on natural resources is anticipated to lead to an increase
in their costs. Furthermore, with ever-tightening regulation
around greenhouse gas emissions and other environmental
impacts in the context of global climate change, having
alternative, efficient and clean natural resource strategies in place
will be essential for assets to maintain their long-term value.
We aim to empower our employees by building their skills
and knowledge, unleashing their potential on an individual
basis and raising the standard of education at a collective
level in the communities where we operate. By doing so, we
can enhance the intellectual capital of our organisation and
the external pool of talent from which we aim to attract
ambitious people to join our workforce.
We are already investigating ways to future-proof our assets by
becoming energy independent and reusing water on our sites,
exploiting the latest innovations and technology in natural
resource management to rethink processes. This will protect our
assets against natural resource shortages and cost increases,
and reduce operating costs in the short to medium term
through alternative energy and water management strategies.
Altogether, this approach will enable us to reduce the
detrimental impacts of our Company on the environment and
help us to maintain the essential services that nature provides.
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algarveShopping, Portugal
Safe people and Eco-Efficiency
Whilst our sustainability strategy focuses on tackling specific challenges in order to guarantee
business resilience, making sure that our shopping centres are consistently run to the highest
standards of safety and eco-efficiency is a day-to-day priority for Sonae Sierra. We operate a
best in class, integrated Safety, Health and Environment Management System (SHEMS) which
enables us to effectively manage safe people and eco-efficiency aspects. Through our SHEMS,
we provide a better service and/or workplace to tenants, shopping centre visitors, professional
services clients, employees and suppliers alike whilst reducing operating costs for our business.
For a detailed description of our SHEMS, please see pages 47 to 48.
We have identified long-term objectives supported by annual targets to drive continuous
improvement across the five impact areas that sit under the umbrella of Safe People and
Eco-efficiency (energy and climate, water, waste, biodiversity and habitats and safety and
health). For a list of our long-term objectives, see the Disclosure on Management approach
for each impact area in the GRI section of this report, pages 81 (energy), 86 (water), 96 (waste),
91 emissions and 105 (safety and health).
In 2013, we fully achieved 19 out of 23 SHE targets (83%) and partially achieved 1 target (4%).
We also fully achieved 45 out of 61 SHE actions (74%) and partially achieved 9 actions (15%).
For a complete list of these annual targets (including non SHE targets) and the methodologies
applied to assess our performance, please consult the targets and actions reports on our website.
risk management
We operate a Risk Management Working Group to serve as facilitator and promoter of risk
management best practices company-wide. The Working Group gathers information and
reports on the risks that the Company is facing or may face in the future and reports, via the
CFO, to the Audit and Compliance Committee of the Company.
boulevard londrina Shopping, Brazil
In 2013, the Risk Management Working Group reviewed three risks included in the Sonae Sierra Risk Matrix
and promoted three debates with the business teams on the potential impact of specific risk topics. The
revised risks included guarantees on deferred tax liabilities, political risks associated with both mature and
emerging economies and an increase in yields. In each case we identified a number of mitigating actions and
committed to monitor the external factors that may contribute to their materialisation. Our risk management
targets for 2014 are to develop risk mitigation guidelines for the provision of professional services, to complete
the existing Crisis Management Manual with additional critical risk management aspects and reassess the
risks associated with security conditions in operational shopping centres.
The table below presents a summary of our key controllable and non-controllable risks and mitigation
strategies, covering financial and non-financial risks.
Key controllable risks
risk
mitigation strategy
liquidity risk: The lack of availability of bank debt in Europe
at present constrains our ability to finance new development
and refinance loans which are maturing.
Our capital recycling approach helps us to offset the lack of
available bank debt, the intention being to dispose of or refinance
assets in mature markets so as to fund new development activity
in rapidly growing economies. We maintain our loan-to-value ratio
at prudent levels below 50% (currently at 43.9%).
Safety, health and Environment (ShE) risks: Non-compliance
with increasingly demanding legislation around energy use,
GHG emissions, waste and effluent production and safety and
health at Eu and local level.
We operate a corporate Safety, Health and Environment
Management System (SHEMS) which covers all our business
activities. It is certified in accordance with ISO 14001 and
OHSAS 18001 environmental and safety management standards.
Furthermore, to date we have achieved ISO 14001 certifications
for the site-level SHEMS of 25 completed construction projects
and 87% of our operational shopping centres. We have obtained
OHSAS 18001 certification on nine completed construction projects
and at 60% of our operational shopping centres. III
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risk management (continued)
Key non-controllable risks
risk
mitigation strategy
increase in yields: Property valuations are affected by the
prevailing conditions in the property investment market and
the macro economic climate in general, and this impacts on
our indirect results. Increasing yields in many European
markets have been adversely impacting property values.
As a counter-measure to mitigate the adverse effects of yield shifts
on asset value, we have focused on increasing the operational
efficiency of our shopping centres, introducing tighter asset
management controls, and selecting new markets to invest in,
taking into consideration the medium-term potential for yield
compression (among other factors).
rents stability: The trading environment has been tough for
tenants in Europe, as the financial crisis has had an impact on
the sustainability of the rents; if the tenant´s businesses
cannot sustain the rents contracted, we are at risk of having
higher vacancy rates.
Our approach to property management has always involved close
scrutiny of our tenants’ business performance. Over the past years
we have increased the efficiency of our property management in
order to reduce service charges and have negotiated temporary
rental discounts with some tenants. We have also intensified our
efforts to increase footfall in shopping centres through our
marketing and events programmes. Our geographical spread, and in
particular our current presence in the Brazilian market reduces the
impact that individual tenant defaults can have on our business.
Safety, health and Environment (ShE) risks: Accidents and
catastrophic events (such as fires and extreme weather
events) on our projects and our operational shopping centres
can cause harm to people and infrastructure, incur delays and
result in a potential loss of asset value and reputation. Our SHEMS provides a framework for us to anticipate and manage
all safety risks on Sonae Sierra construction sites and shopping
centres. We deliver regular SHE training to suppliers and tenants
and perform safe practice behaviour audits on our construction sites
and operational shopping centres through our SPI and SPO tools5.
Moreover, both our Development and Property Management
businesses have integrated the requirements of Sonae Sierra’s
SHEMS into their Service Suppliers Management Procedures,
ensuring that our main suppliers’ performance meets with our SHE
requirements. With the collaboration of our suppliers and tenants,
we carry out emergency practice drills on a regular basis on all our
sites. For further details, see pages 107 and 110.
Regarding extreme weather events, we are pursuing an approach
of integrating climate change risk adaptation procedures into our
current risk management processes. In 2013, we updated our
acquisition checklist to ensure key risks related to weather related
events are evaluated. We will also aim to address specific climate
change adaptation priorities for each business activity, for example,
by ensuring that our design standards for new developments and
our procedures for operational assets ensure adequate protection
against heavy rainfall and an effective response in cases of flooding.
5
Our Safe Practice Index (SPI) and Safety Preventive Observations (SPO) are described on pages 110 and 109 respectively.
III
OUR PERFORMANCE IN 2013
The Wider Context
Operational Performance
Consolidated Accounts
Future Outlook
Governance
Board Members and Executives
SONAE SIERRA
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44
46
50
Centro Vasco da Gama, Portugal
Hofgarten Solingen, Germany
OUR PERFORMANCE
IN 2013
.....
BOLSTERED BY CAUTIOUS
OPTIMISM AT YEAR END,
IT IS IMPORTANT TO REMIND
OURSELVES THAT 2013 WAS
STILL A YEAR OF RECESSION FOR
MANY COUNTRIES IN EUROPE.
THE WIDER CONTEXT
The outstanding quality of our international portfolio,
combined with our relentless pursuit of long-term
strategic goals, continues to buffer us against the
worst of the economic downturn and position us
strongly for the recovery.
Edmundo Figueiredo
Director, Chief Financial Officer
Another challenging year, but reasons for optimism
Economic sentiment in 2013 has undoubtedly improved since
2012, but public debt is still significant and unemployment
rates remain high in Southern European countries. Austerity
measures continue to suppress consumer appetite for non-food
goods in these markets, and the threat of higher taxation levels
is causing financial anxiety for citizens.
Nevertheless, Portugal and Spain formally exited the recession
in Q3 and Q4 respectively. With GDP finally on the increase
in these countries, and debt availability improving, we are
witnessing a gradual revival of investor appetite for retail
investments in the region. When viewed alongside the strength
of Germany’s economy, and continuing rates of robust growth
in Brazil, there is no doubt that prospects for our business are
looking more encouraging at year end than they did at the start.
This does not guarantee that the positive signs we have
observed in the second half of the year are sustainable as there
are a number of variables that remain outside of our control.
We do, however, find ourselves in a favourable situation as the
macro-economic conditions improve.
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Steady growth in brazil, and evidence of ‘green shoots’
emerging in Southern Europe
In Brazil we have continued to benefit from robust economic
growth, albeit at a slightly slower pace than in the previous few
years. GDP grew by 2.3% in 2013 driven by income growth and
low unemployment, and the retail industry continued to show
strong performance overall. Government interventions aimed
at containing inflation levels have led to a slight rise in interest
rates, with rates reaching almost 10% by the end of the year.
As a result of this buoyant economy, we continued to enjoy a
strong growth in tenant sales across our Brazilian shopping
centres, and we presented one of the highest EBITDA and
Funds from Operations margins in the listed sector.
In Portugal and Spain, which together represent 55% of the
Open Market Value of our global portfolio, GDP is predicted
to grow by 0.6% and 0.2% respectively during 2014. Family
incomes have not fully recovered from the Government
austerity measures imposed in 2012 and 2013, but we finally
witnessed some growth in tenant sales as the macroeconomic
conditions improved. Although year-on-year sales decreased in
Portugal and Spain, we ended the year performing better than
anticipated due to a significant increase in tenant sales in both
markets in the second half of the year, and several shopping
centres experienced positive growth by the end of the year.
Despite the upturn, scarcity of debt remains a fundamental
constraint to our development pipeline in these markets.
Nonetheless we were able to proceed with substantial
renovation and expansion works at two of our centres, and to
increase our ownership stake in another.
Within the rest of Europe, excluding Greece, we enjoyed
stronger market conditions and built on our existing operations
to further grow the business. Particularly noteworthy were the
inauguration of a 25,100m2 centre in Germany (Hofgarten
Solingen), and the commencement of a new important
development of 70,000m2 in Romania (ParkLake).
As a reflection of these regional macro-economic trends, the
Net Asset Value (NAV) of our portfolios has continued to
fluctuate during 2013. In Brazil, our NAV in Reais increased
whereas in Europe we still experienced some yields expansion
in Portugal, Spain and Italy, albeit with a trend towards
stabilisation particularly for prime retail assets. To counter and
mitigate such adverse results, we continued to focus our
attention on generating operational efficiencies and introduced
even tighter asset management controls to reduce our direct
costs. We continue to strive for high levels of service quality at
lower costs wherever feasible, thereby contributing to overall
asset performance.
Strong financial position
Our loan-to-value ratio (maintained below our target of 45%)
and debt maturity demonstrates our conservative long-term
funding strategy. We find ourselves in a strong financial position
for the recovery, and this is supported by the efforts we have
made to maintain occupancy rates and cut costs in our
corporate operations.
Sustaining high occupancy rates continues to be a key priority
for Sonae Sierra: we believe it is better to support viable
tenants that have been adversely affected by the current
economic cycle than to lose them. Over the past few years, we
have made considerable efforts to maintain the vibrancy of our
shopping centres, as we are convinced that below a certain level
of occupancy, the viability of a centre is harder to maintain and
more costly to restore. Active management initiatives taken to
improve tenants’ resilience include temporary rent discounts;
financial advice; marketing support and a drive to maintain low
service charges through increased operational efficiency –
including proactive eco-efficiency measures.
Within our own back office, we have undertaken some
restructuring efforts and tightened up management processes
and procedures, where practical, in order to maximise
productivity.
Sticking to our capital recycling goal builds
development capacity
In a relatively debt constrained context, our capital recycling
strategy is all the more important. We are therefore particularly
pleased to report the successful disposal of three assets in 2013
by the Sierra Fund: Parque Principado in Spain, and Valecenter
and Airone (both in Italy), for a combined value of €286 million.
These sales enable us to release capital for deployment in new
opportunities, with particular focus on emerging markets and
some mature markets which present solid growth prospects.
2013 already saw results of that strategy bear fruit, with the
successful inauguration of three new shopping centres:
Hofgarten Solingen in Germany and Boulevard Londrina
Shopping and Passeio das Águas Shopping in Brazil. Moreover,
we announced the start of a key new development in Bucharest,
Romania (ParkLake). Capital recycling also enables us to increase
our investments into existing schemes, and in 2013 we can
highlight the acquisition, through a majority-owned subsidiary,
of an additional 50% stake in CascaiShopping, a prime retail
asset with solid performance in greater Lisbon (Portugal).
The extension of the Sierra Fund operations to 2018 marks
another key success given the importance of the Fund within
our portfolio. With this extension, we avoid having to terminate
the Fund at a low point in the cycle of the real estate market,
meaning that the Fund is now also better positioned to take
advantage of improving economic conditions in Europe.
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Slow but steady recovery from now,
with sights firmly set on growth
growing investor momentum supports our focus on
sustainable real estate
On the whole, the world economy is showing signs of
strengthening. In terms of global real estate investment,
virtually all major markets were recording sales volume growth
at the end of 2013 and liquidity was improving across a range
of markets and sectors, indicating a positive outlook for the
year ahead. New opportunities appear to be opening up for the
financing of real estate, especially in prime operating shopping
centres, with interest from insurance companies and sovereign
wealth funds as well as core and long-term institutional investors.
With the built environment contributing to approximately half
of man-made greenhouse gas (GHG) emissions, increasing
regulation coupled with pressure from a plethora of stakeholder
groups to mitigate climate change impacts means that
implementing alternative energy strategies and increasing the
energy efficiency of assets is becoming increasingly important
for successful long-term real estate investment. In this context,
water security is also moving up the agenda for corporates and
international institutions alike. In the long term, carbon
intensive investments are likely to lose their value.
We anticipate that the gradual improvements witnessed in the
final months of 2013 in Portugal and Spain will be carried
forward into 2014. Whilst we expect that the European recovery
will be a slow and cautious one, we nevertheless expect to see
improvements in 2014, and some recovery of Open Market Values.
With growing consumer confidence sending positive signals
to the market, we foresee that investor appetite will again
increase in Southern Europe in 2014, and that yields will
continue to stabilise, particularly for prime assets. It is possible
that demand for prime assets will overheat – pricing out all but a
select few investors – but this could lead more investors to turn
to secondary stock, helping to rebalance the real estate market.
We continue to be optimistic about economic conditions and
growth opportunities in other European markets, including
Germany, Italy and Romania. In Germany, we expect to see
continuing investor interest in retail assets and GDP growth
close to 2% per year. In Italy, GDP is forecast to increase
gradually by 0.7%. Whilst the Romanian economy has been
impacted upon by the weak Eurozone, expectations are for
around 1% growth in 2014.
In Brazil, the market remains strong and growth is set to
continue in 2014, albeit at a more moderate pace. The FIFA
World Cup and the Rio 2016™ Olympic and Paralympic Games
are infusing great confidence into the market and potential
investors. We will continue to focus on developing new projects
and target acquisitions with expansion and renovation
potential, and actively recycle capital from the sale of assets
we consider to be non-core.
The success of our professional services business in 2013
illustrates the significant growth potential we see continuing
into 2014. We are optimistic that our recently formed joint
venture partnerships in Turkey and China will convert into
revenue growth and expect to realise further opportunities as
we enter into more emerging markets in the coming year. We
are actively investigating opportunities within South America,
Northern Africa and Asia.
We continue to believe that sustainable real estate will deliver
above average returns and outperformed non-sustainable real
estate in the medium to long term. From our experience,
investors are increasingly aware of the importance that
sustainability features represent when making investment
decisions and the sustainability agenda has continued to gain
momentum in the global real estate industry. Investor tools
such as the Global Real Estate Sustainability Benchmark
(GRESB) are playing an important role in driving change in this
area. Our performance in the 2013 survey puts us in the Green
Star category, the highest rating achievable under this
benchmark. The 2013 survey demonstrated a clear upward
trend in sustainability performance across the sector and
highlighted the fact that environmental and social
considerations are now integrated into the daily management
practices of most companies and funds. While the translation
of such features into a value premium has yet to be seen, what
is becoming more evident is that investors will tend to penalise,
or not even invest in, properties lacking such features because
they are at greater risk of obsolescence.
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thE WidEr contExt (CONTINuED)
new goals to deliver long-term value for our business
In 2013, we launched our revised Sustainability Strategy, with
a continued commitment to effective Risk Management and
Safe People and Eco-Efficiency, and a focus on four long-term
themes: Prosperous Retailers, Sustainable Lifestyles,
Leveraging Knowledge and Resource Resilience. We proceeded
immediately with actions on those themes which present the
most pressing issues for our business.
In the context of diminishing household incomes and reduced
public spending that is affecting Southern Europe in particular,
leading companies are increasingly looking at strengthening
the socio-economic value of their developments as a new
source of competitive advantage, evaluating how their projects
can most effectively inject wealth into the local economy. As
our own research shows, supporting local businesses and other
more sustainable forms of consumption is also becoming more
important to shopping centre visitors. Consequently, we have
initiated several projects to support entrepreneurship in our
shopping centres within the scope of the ‘Prosperous Retailers’
theme of our strategy. These included the successful piloting of
Coop Stores in Portugal with a broader rollout planned in 2014.
On the theme of ‘Resource Resilience’, we undertook research
into new technology; feasibility studies and pilot projects with
a view to supporting the long-term resilience of our shopping
centre portfolio in the context of costlier and scarcer energy
and water resources. We can highlight our decision to proceed
with our research into the roll-out of water reuse and rainwater
harvesting systems across our portfolio: indeed, 34% of our
centres already have such systems in place, and a further five
have been identified for this investment to be made in 2014.
We continued to strengthen skills and educational development
among our direct employees and within the communities where
we operate. Contributing to our focus on ‘Leveraging Knowledge’,
we are exploring how to implement this at a practical level.
A key focus is on how we can transfer know-how in the company
while supporting education in our communities. We aim to set
specific actions in the year ahead and are exploring a number
of opportunities including working with outside organisations
such as universities.
Freccia rossa, Italy
parque d. pedro Shopping, Brazil
grancasa, Spain
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Successful development activity leads market expansion
With Southern Europe still bearing the brunt of the economic crisis,
our development activity in 2013 focused on Germany and Brazil
where we have continued to deliver positive results in recent years:
l
l
l
May 2013 saw the inauguration of Boulevard Londrina
Shopping in the Paraná state in southern Brazil.
Developed as a joint venture with Marco Zero – Shopping
Empreendimentos Imobiliários, Boulevard Londrina Shopping
represents an investment of €122 million and is our first
shopping centre in the region. With 48,400m2 of GLA it
houses 224 shops, an entertainment and leisure area and
34 restaurants. With an occupancy rate of 87%, Boulevard
Londrina Shopping created some 1,621 new jobs by the end
of 2013. It is estimated that the centre will create a total
of more than 3,000 jobs when fully occupied. Boulevard
Londrina Shopping is a part of the Marco Zero Complex,
a redeveloped area located in a strategic area of the city.
The shopping centre brings new national and international
brands to a catchment area of more than 800,000 people
and received 3.3 million visits by the end of the year.
In October 2013, Passeio das Águas Shopping opened its
doors in the city of Goiânia (Goiás state) in Brazil.
Representing an investment of €150 million, Passeio das
Águas Shopping is the largest shopping centre in the
Central-Western region of Brazil, comprising 77,900m2
of GLA. The centre has a total of 267 shops, ten of which
are large units, including a supermarket, seven cinemas,
36 restaurants and additional leisure and entertainment
facilities. The shopping centre achieved a national accessibility
certification for measures to improve mobility in and around
the centre. Passeio das Águas Shopping has also had a
positive impact on the local economy. Approximately 44%
of tenants are local businesses and, with an occupancy rate
of 77%, Passeio das Águas Shopping created some 1,517 new
jobs by the end of 2013. The centre offers international and
local brands to the 1.6 million inhabitants of Goiânia and
received 1.1 million visits in its first two months, making it an
important shopping and leisure destination for the region.
Also in October, we inaugurated Hofgarten Solingen which was
developed as a 50/50 joint venture with MAB Development in
the city of Solingen, Germany. The centre represents an
investment of €120 million and its 25,100m2 of GLA offers
86 shops and 16 restaurants with a high quality tenant mix
including health-conscious concepts and local tenants. With
an occupancy rate of 88.2%, Hofgarten Solingen had created
597 new jobs in retail, shopping centre management and
services by the end of 2013, exceeding expectations. It
strengthens our presence in a European market which
demonstrates strong retail potential in spite of the impacts of
the economic downturn on the Eurozone. With approximately
1.4 million visits made to the centre by the end of 2013, we are
enthusiastic about Hofgarten Solingen’s success.
WE CONTINUE TO SEEK
OPPORTUNITIES FOR DEVELOPMENT
THAT WILL DELIVER THE RIGHT
LEVEL OF RETURN, BOTH IN MATURE
MARKETS AND EMERGING MARKETS,
ALWAYS IN ACCORDANCE WITH OUR
CAPITAL LIGHT APPROACH.
Ana Guedes Oliveira
Director, Developments
Our Safety, Health and Environment Development Standards
(SHEDS) have a significant impact on our development activity
as we strive to deliver assets that provide a safe environment and
prove more resilient in terms of resource consumption, waste
management and other challenges associated with climate change.
The construction works for all three developments achieved dual
certification in accordance with ISO 14001 and OHSAS 18001
standards in line with our long-term objective. Hofgarten Solingen
was the first development of its kind in Germany to do so.
Waste and safety are two performance measures that we monitor
closely during construction works (including refurbishments and
expansions). In 2013 we achieved a waste recycling rate of at least
95%, exceeding our target of 85%. We aim to anticipate and
prevent all safety risks to onsite workers and use a number of
indicators to measure our progress. The Safe Practice Index (SPI)
measures adherence to Sonae Sierra safety and health
requirements and in 2013 the average score across all
construction sites was 94%. We also attained a Lost Workday
Case Accidents Frequency Rate (LWCAFR) of 4.3%, a 13.5% fall
from 2012 and exceeding our target of 12.0. Finally, we managed
to reduce the severity of construction site accidents with our
accident severity rate decreasing by 22% from 2012 to 113.79.
We have been revising our Environmental Accounting
Model so that we can better capture the value of
eco-efficiency investments made during the
development phase.
Further references:
You can read more about the progress we have made
on our website.
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Incorporating low environmental impact technologies during the
design phase is cheaper and more effective than interventions
made post-development, and with this in mind we have been
actively investigating how the latest available technologies for
on-site energy generation, water re-use and waste mitigation
can be introduced on our new projects to enhance their operational
cost efficiency and profitability, ultimately benefitting Sonae
Sierra, our tenants and increasing visitor comfort. For example,
Passeio das Águas Shopping features high energy-efficiency
equipment and lighting and a rainwater harvesting system,
besides innovative eco-friendly transport solutions including
two indoor bicycle parking lots for more than 200 bicycles and
parking spaces reserved for electrical cars, with charging stations.
pursuing growth opportunities in mature
and emerging markets
l
Also in Brazil, we completed the refurbishment of Shopping
Plaza Sul in São Paulo which has revitalised the tenant mix
and reenergised the shopping centre.
l
In May 2013, we completed the €4.5 million expansion and
refurbishment of AlgarveShopping in Albufeira, Portugal.
The refurbishment strengthened the tenant mix and
improved the food court and mall area. Significantly, it added
3,000m² of GLA enabling the entry of the largest C&A
and H&M shops in the Algarve region. Tenant sales have
increased and the improvements reinforce the centre’s
anchoring within the Algarve region and bring an important
contribution to the local economy, creating around 100 new
jobs in the shopping centre and helping to draw more
tourists to the local area.
l
Another highlight was the completion of works to enhance
the commercial and leisure offer at Centro Colombo in
Lisbon. In keeping with our drive to bring innovative concepts
to consumers, the IMAX® cinema marked the introduction
of digital 3D cinema in Portugal. Visitors to Centro Colombo
were the first in the country to engage with this unique
cinematic experience, which generated positive press
coverage. Moreover, the opening of Primark in October had
an overwhelmingly positive impact on traffic and sales,
highlighting once again the pull of rising international brands
and their importance in anchoring our centres. In all, the
refurbishment created an additional 431 jobs in retail and
services and by the end of the year Centro Colombo saw a
7.9% increase in footfall with tenant sales also up.
l
A Primark store is also scheduled to open in NorteShopping
in Porto, where in September we announced the second
phase of the refurbishment works which began in 2012.
With an estimated €5 million investment, this project aims
to increase visitors’ comfort and create an ambiance that is
better adapted to the modern consumer, whilst preserving
the unique design and architecture of the shopping centre.
The works are proceeding with a phased approach, so as not
to impact on the regular operation of the shopping centre,
and are expected to be completed in 2014.
l
Other smaller works either planned or underway in 2013
included investments at GranCasa and Max Center (both in
Spain) to accommodate the expansion of the existing stores
and some changes to enhance the tenant mix, as well as
the continuation of the phased refurbishment at Centro
Vasco da Gama in Portugal to upgrade parts of the mall area.
While many projects in our development pipeline remain on
hold, we nonetheless continue to seek opportunities that will
deliver the right level of return, both in mature markets and
emerging markets.
In Europe, we started the development of ParkLake in Bucharest,
Romania, in November, along with our joint venture partner Caelum
Development. Representing an investment of €180 million, this
shopping centre will host around 200 shops within 70,000m²
of GLA and offer leisure and sports facilities connected with
the adjoining Titan Park. Scheduled for inauguration in 2016,
ParkLake will incorporate solutions to reduce energy and water
consumption and maximise waste recycling. With an excellent
location, transport links and a primary catchment area of over
500,000 people, we are confident that ParkLake will offer
residents a compelling shopping and leisure venue and become
a key attraction in Bucharest.
We are also excited to announce our first development project
in North Africa. Zenata shopping centre, located in Mohamedia,
a city close to Casablanca, Morocco, represents a €125 million
joint venture partnership with Marjane, Al Futtaim and Société
d’Amenagement de Zenata (Groupe CDG). The centre will have
a GLA of 90,000m² with 245 shops serving a catchment area
of 5.8 million inhabitants. Due to open in 2017, it will create an
estimated 4,500 direct jobs for the local community.
Expansion and refurbishment activity
adds value to existing assets
We remain focused on maintaining and improving the quality
of our existing assets and in 2013, we completed or commenced
refurbishment and expansion works at several assets in
our portfolio:
l
In September, we announced the expansion and
refurbishment of Franca Shopping, located in the state of
São Paulo, Brazil. The 20 year old centre is one of the best
performing assets in Sonae Sierra Brasil’s portfolio. The
investment of €31 million will enable the shopping centre
to increase its capacity by almost two-fold to 30,000m²
improving its commercial and leisure offer with 66 new
shops (including five anchors) and 649 new parking spaces.
Works are scheduled to be completed in the first half of 2015.
Our investment plans for expansions and refurbishments
include initiatives to improve the safety and the eco-efficiency
of centres in line with our Safety, Health and Environment
Management System and the requirements of ISO 14001 and
OHSAS 18001 certification.
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new service mandates in Europe, north africa and asia
Providing professional services continues to be a key aspect
of our strategy to grow new income streams and increase
know-how and experience in new and emerging markets. Our
track record in property management has enabled us to secure
a number of new mandates across a range of geographies. By
the end of 2013, we had 56 active contracts in place to deliver
development, management and leasing services to clients, in
countries as diverse as Morocco, Algeria, Georgia, Turkey and
Azerbaijan. Our professional services business as a whole
(including property development, management and leasing
services) is now valued at €20 million, representing an increase
of 30% in comparison with 2012. Whilst the market for these
services has become more crowded, Sonae Sierra’s competitive
advantage lies in the breadth of services we can deliver across
the whole property lifecycle.
l
Two contracts for the provision of leasing services in
Morocco; one with ALDAR (Marjane/Foncière Chellah) and
one with Facenor, for their respective shopping centres
Centre Commercial Marina (Casablanca) and Centre
Commercial IBN Batouta (Tangier).
l
One contract, via Sierra Cevital, with the Algerian group
Prombati for the leasing and management services of Park
Mall, a new development located in Sétif that is scheduled
to open in 2014.
boulevard londrina Shopping, Brazil
Some of the most significant mandates won in 2013 included:
l
A contract with The Edge Group for the leasing and
management of two shopping centres in Portugal, Forte
Center in Carnaxide and Setúbal Center, the construction
of which is expected to begin in 2014.
l
Two leasing service contracts in Italy; one with Helios
Immobiliare for a retail development on a former refinery in
Fontevivo district in La Spezia, and another for the Meduna
shopping centre expansion located in Pordenone.
plaza mayor, Spain
algarveShopping, Portugal
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portfolio under management
GLA (000 m2)
Number of contracts
2013
2,303 / 8,288
2012
2,261 / 8,428
2011
2,234 / 8,495
2010
2,220 / 8,521
2009
2,284 / 8,924
2008
2,163 / 8,455
2007
2,183 / 8,162
2006
2,001 / 7,293
2005
2,455 / 7,189
In 2013 we entered the Turkish market with the creation of
Sierra Reval, a service provider in the shopping centre sector
covering development, management and letting activities.
Sierra Reval combines Sonae Sierra’s international shopping
centre know-how with the local market insight of Reval, which
has been providing services for over 20 years in the country.
With contracts in place in eight shopping centres country wide
– from development to property management and leasing
services – Sierra Reval is responsible for a portfolio with a GLA
of over 215,000m2. We are confident that this joint-venture will
bring continuous growth to our successful professional services
business over the next few years. Entry into the Turkish market
consolidates our geographical diversification, enabling us to
become active in a market which continues to expand and
offers significant potential for retail investment. Furthermore,
Sierra Reval also supports our broader expansion in the wider
region by providing service contracts for two shopping centres
in Azerbaijan and Georgia.
Together, this activity reinforces our presence in Europe,
North Africa and Asia, and demonstrates the confidence that
international and local operators have in the added value that
Sonae Sierra’s expertise and insight can bring to their projects.
Delivering shopping centre services in Algeria and Morocco also
presents an opportunity for us to introduce new brands,
concepts and trends into these North African markets which
offer solid growth prospects for Moroccan and international
tenants alike.
The delivery of professional services allows us to ‘test’ new
markets and garner knowledge and experience that can support
direct investments in the future. Proof that this strategy is
starting to materialise is the recent announcement of a
development project in Morocco following our first entry into
this country as a service provider in 2011.
In 2014 we will aim to expand our professional services business
in current markets and enter new ones. Indeed, the beginning
of 2014 saw an agreement reached with Citic Capital to provide
property management services in China, with a view to offering
joint venture services in the future, which offers a launch pad
for our business in a market with great potential.
We are aware of the risks associated with emerging markets
where regulation is weak, and have a strategy and procedures in
place to identify and mitigate such risks, including governance
and political risks building on the experience we have gained to
date. We also ensure that at least the key requirements of our
Safety, Health and Environment Management System are
deployed when working in joint venture partnerships and
delivering professional services. This helps us to offer our clients
a higher quality, environmentally- and socially-conscious
service whilst contributing to raising the standards for SHE
(Safety, Health and Environment) practices in markets where
these aspects are not well regulated. Indeed, our track record
in SHE and our broader sustainability performance represents
a differentiator for our Company offering added value on our
services provided.
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OUR PERFORMANCE IN 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
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OPERATIONAL PERFORMANCE (cONTINuED)
OUR DYNAMIC MANAGEMENT
APPROACH CONTINUES TO
SHIELD OUR BUSINESS
THROUGH THE ECONOMIC CRISIS
AND STANDS US IN GOOD STEAD
AS WE BEGIN TO SEE SOME
PROMISING SIGNS OF RECOVERY
IN OUR KEY MARKETS
Expert property management delivers solid results
The macro-economic conditions in the Eurozone as a whole,
and Portugal and Spain in particular, have presented ongoing
challenges for our shopping centre management business in
2013. However, whilst rents fell by 4.1% and tenant sales saw
a 3.6% decline on a like-for-like basis between 2012 and 2013,
we outperformed the sector in all countries except Spain and
maintained occupancy levels at 95.2% across the region.
Together, the quality of our assets and our dynamic
management approach continue to shield our business through
the economic crisis and stand us in good stead as we begin to
see some promising signs of recovery in our key markets.
In Portugal, sales declined in the first half of 2013 but did show
a surprising pick-up in the second half of the year with
encouraging figures for November and December. Sales for
these months were up by 4.9% and 1.8% respectively compared
to the same period in 2012. Overall, across our owned portfolio,
tenant sales in Portugal outperformed the retail index by 4.4
percentage points, and declined by just 0.6% compared with
2012, demonstrating particularly strong performance that has
exceeded our expectations in the context of austerity measures
in the country. Rents meanwhile fell by 5.7%. Moreover, the
occupancy rate of our Portuguese portfolio increased to 97.4%
(up two percentage points compared with 2012), supported by
the reopening of multiplex cinemas following a contract with a
new cinema operator, Grupo Oriente.
By the end of the year we also saw signs of optimism in the
Spanish market, with growing consumer confidence and
renewed investor interest. Overall, sales decreased by 6.2%
compared with 2012, although the overall performance of our
portfolio was affected by two shopping centres in particular
which saw more significant declines in sales owing to
particularly acute economic headwinds in one location and
increasing competition at both. Occupancy rates across our
Spanish portfolio decreased from 93.7% in 2012 to 92.4% in
2013 and rents fell by 5.9%.
Sales
Portugal
Spain
Italy
Greece
Germany
Romania
Europe
Brazil (€)
Brazil (R$)
Total
Sales in € million
João Correia de Sampaio
Director, Property Management
and Leasing
Across Italy and Germany, where we own a smaller number of
assets, broader market comparisons are less meaningful. We can
highlight as key achievements the performance of Hofgarten
Solingen in Germany following its opening in October, which has
seen daily traffic of around 15,000 – 20,000 visits. This is
significant for a catchment area of 270,000 inhabitants, and is
testament to the successful integration of the centre as a focal
point within the local community. On a like-for-like basis, overall
tenant sales in Germany were up 0.3% compared with 2012. Our
occupancy rates averaged 94.5% and rents were down by 0.9%.
In Italy, tenant sales fell by 1.2%, influenced by the broader
macroeconomic climate. Despite this, tenant sales outperformed
the market benchmark and some shopping centres experienced
growth towards the end of the year. We also achieved an average
occupancy rate of 96.1% and rents rose by 6%.
In Romania, where we own one shopping centre, sales increased
by 1.7% and rents fell by 1.3%. While in Greece, where we also own
one shopping centre, sales continue to be weak and we do not yet
see signs for optimism in this particularly distressed market.
Visits
2013
2012
1,951.6
689.9
368.4
10.2
505.3
13.3
3,538.8
1,619.2
4,616.5
5,158.1
2,015.8
771.1
380.6
12.5
501.6
18.6
3,700.2
1,780.3
4,524.5
5,480.5
% 13/12
total like-for-like
-3.2%
-10.5%
-3.2%
-18.1%
0.7%
-28.6%
-4.4%
-9.0%
2.0%
-5.9%
-0.6%
-6.2%
-1.2%
-18.1%
0.3%
1.7%
-1.8%
-7.5%
5.5%
-3.6%
Portugal
Spain
Italy
Greece
Germany
Romania
Europe
Brazil
Total
Visits in million
2013
2012
171.8
67.0
27.2
1.6
32.3
3.4
303.3
102.3
405.6
176.1
71.4
28.0
1.7
34.9
6.2
318.3
107.3
425.6
% 13/12
total like-for-like
-2.4%
-6.2%
-3.0%
-6.8%
-7.2%
-45.7%
-4.7%
-4.6%
-4.7%
-0.5%
-2.9%
2.4%
-6.8%
-1.5%
-2.9%
-1.0%
-0.2%
-0.9%
< >
III
.....
OUR PERFORMANCE IN 2013
SOnAE SIERRA
2013 Economic, Environmental and Social Report
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OPERATIONAL PERFORMANCE (COnTInuED)
2013 saw robust growth in Brazil, albeit at a slower pace than in
2012. With a large proportion of the population in this country
now having sufficient disposable income to enter the consumer
market for the first time, retail sales increased by 4.3% in 2013.
Across our own portfolio, we saw tenant sales increase by 5.5%
compared to 2012. Rents in Reais and on a like-for-like basis rose
by 8.6% during the same period, allowing us to maintain the
biggest margins on rents in the market. Occupancy rates across
our portfolio were down at 92.1% compared with 97% in
December 2012, and this was largely due to the inauguration of
Boulevard Londrina Shopping and Passeio das Águas Shopping.
The inauguration of these centres has coincided with the rapid
growth in retail space across Brazil which many retailers have
not been able to keep pace with. However, these centres have
strengthened our presence in two strategically important regions
and we are confident that occupancy rates will return to our longterm average, influenced not only by macro-economic conditions,
but also by the quality of our property and asset management.
Examples of such initiatives carried out in 2013 include the
delivery of training to tenants’ employees to enable them to
increase sales and enhance customer service, and a series of
activities using digital media to create greater proximity between
retailers and consumers.
OUR TWO INAUGURATIONS IN
BRAZIL SIGNIFICANTLY ADDED
TO OUR GLA UNDER MANAGEMENT
AND ESTABLISH OUR PRESENCE
IN TWO IMPORTANT AREAS
WHERE WE AIM TO BECOME THE
DOMINANT PLAYER
José Baeta Tomás
Director, Chief Executive Officer,
Sonae Sierra Brasil
Occupancy Rate
Portugal
Spain
Italy
Greece
Germany
Romania
Europe
Brazil
Sonae Sierra
2013
2012
97%
92%
96%
61%
95%
75%
95%
92%
94%
97%
94%
97%
63%
98%
81%
96%
97%
96%
Rents
Portugal
Spain
Italy
Greece
Germany
Romania
Europe
Brazil (€)
Brazil (R$)
Total
Rents in € million
2013
Fixed Rents
2012
169.5
55.0
35.3
1.7
38.3
1.5
301.4
73.4
209.2
374.8
180.5
60.2
31.7
1.5
46.4
1.5
321.9
94.5
236.2
416.4
Variable Rents
2013
2012
3.9
0.7
1.5
0.1
2.0
0.0
8.2
8.8
25.1
17.0
3.4
1.3
1.3
0.1
2.5
0.0
8.7
10.2
25.4
18.8
2013
Total Rents
2012
173.4
55.7
36.7
1.8
40.3
1.6
309.6
82.2
234.3
391.8
184.0
61.5
33.0
1.6
48.9
1.6
330.6
104.6
261.6
435.2
% 13/12 Rents
total
like-for-like
-5.7%
-9.4%
11.5%
12.1%
-17.5%
-1.3%
-6.4%
-21.5%
-10.4%
-10.0%
-5.7%
-5.9%
6.0%
12.1%
-0.9%
-1.3%
-4.0%
-4.8%
8.6%
-4.1%
< >
III
.....
our pErFormancE in 2013
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< >
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opErational pErFormancE (CONTINuED)
cost-cutting efforts support tenant retention in a
challenging economic climate
In the context of ongoing economic challenges, sustaining high
occupancy rates is a priority for our property management
business. Indeed, the sustained results we have achieved in
terms of tenant sales, rent collection and occupancy in Southern
Europe over the past few years owe much to our efforts to reduce
costs for our tenants whilst maintaining footfall and promoting
sales activation. Besides supporting tenants on a case-by-case
basis – providing advice and, in some cases, discounts in rent –
we have relentlessly endeavoured to reduce service charges in
our shopping centres so that our tenants ‘effort ratio’ (the ratio
of rents plus common charges paid by the tenant to the sales
they achieve) remains stable.
This strategy has involved working with service suppliers to
improve efficiency and, importantly, reducing operational costs
through eco-efficiency measures. In 2013, it allowed us to reduce
the service charge by an average 2.6% across our European
shopping centres. Increasing the eco-efficiency of our shopping
centres is particularly relevant because it not only allows us to
cut costs but also reduce our environmental impact, support the
long-term resilience of our assets in the context of climate
change and tightening environmental regulation, and deliver
greater comfort to tenants and visitors alike. On this front, 2013
saw good progress towards our long term goals covering GHG
emissions, energy use, water use and waste:
l
We achieved a GHG emissions rate of 0.021 tonnes per m2
of GLA, a 51% reduction compared to 2012, meaning we
achieved our target of 0.044 tonnes per m2. Overall, we have
achieved a reduction of 75% since 2005, our baseline year,
meaning we have surpassed our long-term goal of a 70%
reduction by 2020. Consequently, we have since set a new
long-term goal for an 80% reduction by 2020.
ghg emissions of our
owned portfolio and
corporate offices – ghg
protocol scopes 1 and 2,
plus business air travel
l
We achieved an average electricity consumption of 444kWh
per m2 of mall and toilet area, a 7% reduction compared to 2012.
We achieved our 2013 target of 488kWh per m2 and remain
on track to meet our long-term goal to attain a maximum
electricity consumption of 400kWh per m2 by 2020.
l
Our shopping centres consumed 3.7 litres of water per visit.
We exceeded our 2013 target of 3.82 litres per visit and remain
on track to meet our long term objective to achieve a level of
water consumption at or below three litres per visit by 2020.
Water efficiency
(excluding tenants) of
the owned portfolio
(litres/visit)8
l
2020
3.0
2013
3.7
2012
3.6
2011
3.7
2010
3.7
We generated 41,595 tonnes of waste9, of which 59% was
recycled and 20% was sent to landfill. The increase in
recycling rates – up 5.9% since 2012 – has enabled us to
divert 1,361 tonnes of waste from landfill or incineration.
We exceeded our 2013 target to attain a minimum recycling
rate of 55.1% across our owned shopping centres and
guarantee the proportion of waste (by weight) sent to landfill
does not exceed 28.6%. Our long-term objective is to ensure
that we maintain a recycling rate of at least 60% by 2020.
Electricity efficiency
(excluding tenants) of
our owned portfolio
total waste recycled
as a proportion of
waste produced
(kWh/m2 mall and toilet
area)7
(% by weight, across our
owned portfolio)10
proportion of waste
that is sent to landfill
(% by weight, across our
owned portfolio)10
(tCO2e/m2 gLA)6
6
2020
0.017
2020
400
2020
60%
2020
20%
2013
0.021
2013
444
2013
59%
2013
20%
2012
0.043
2012
479
2012
55%
2012
29%
2011
0.028
2011
514
2011
53%
2011
36%
2010
0.034
2010
514
2010
51%
2010
39%
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the full reporting year and all corporate offices with a SHEMS (Lisbon, Maia and
São Paulo). Fuel consumption was considered for all corporate offices (Lisbon, Maia, São Paulo, Milan, Madrid, Düsseldorf and Bucharest). The numerator in this calculation
includes the scope 1 and 2 emissions of shopping centres and corporate offices according to GHG protocol methodology plus shopping centres’ scope 3 emissions from air
travel. The denominator is the GLA of applicable shopping centres. Emissions associated with energy purchased on behalf of tenants are not included. As a result, the scope
of Sonae Sierra’s long term target is unchanged. Sonae Sierra has defined this specific sector indicator to monitor performance in relation to GHG emissions that are
intended to measure emissions intensity.
7 This indicator includes all shopping centres owned by Sonae Sierra and in operation during the reporting period. There is a slight mismatch between the numerator and the
denominator since electricity consumption used in technical areas and electricity used for chilled and hot water that is supplied to some tenants, are considered, but the
floor area in the tenant and technical areas are not.
8 This indicator includes all shopping centres owned by Sonae Sierra and in operation during the reporting period. It refers to the water consumed at our shopping centres
(excluding tenants), divided by the number of visits made during the reporting period.
9 Includes shopping centres and corporate offices with a safety, health and environment management system (Lisbon, Maia and São Paulo).
10 These indicators include all shopping centres owned by Sonae Sierra and in operation during the reporting year. Waste recycled includes waste sent for recycling, anaerobic
digestion and composting.
III
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our pErFormancE in 2013
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opErational pErFormancE (CONTINuED)
Altogether, we have managed to avoid combined costs of
€18.2 million in 2013 as a result of eco-efficiency improvements
introduced since 2002 (for electricity and waste) and 2003
(for water). At the same time, this has enabled us to reduce water
consumption by 14% (since 2003), electricity consumption by
40% (since 2002) and increase recycling rates by an impressive
214% (also since 2002).
For more detailed information covering our safety, health and
environmental management performance, including greenhouse
gas emissions, energy, water, waste, biodiversity and safety and
health, see pages 74 to 112.
We continue to pro-actively engage with our tenants and
consumers in order to obtain feedback on our services and to
understand their priorities and anticipate their evolving needs.
In 2013, 100% of our shopping centres achieved a tenant
satisfaction rating of four or above on a scale of 1 to 6. Feedback
from our tenants reinforced the importance of our strategy to cut
costs and maximise footfall and confirmed tenants’ support for
the actions we have taken so far. The findings of our visitor survey
highlighted the importance of getting the right balance between
services and technology, quality entertainment and affordable
prices. Visitors also feel strongly that shopping centres should
support the local community: indeed, half of visitors surveyed
stated that they preferred to visit ‘more sustainable shopping
centres’ and 75% feel more satisfied when they visit centres
which demonstrate greater stewardship of aspects such as
eco-efficiency, safety and the promotion of local and/or ethical
businesses and products.
We carried out a pilot project to improve energy
performance at LeiriaShopping which has had impressive
results: a 29% saving on our energy bill since 2011.
Further references:
You can read more about this on our website.
In Spain, we launched a campaign to raise awareness
about Sonae Sierra’s environmental and social
responsibility efforts and make a ‘call to action’ to the
younger generation to change their own behaviour.
uncompromised high-quality service
delivered to tenants and visitors
Further references:
In spite of our cost-cutting drive, we have not compromised on
our commitment to deliver a consistently high-quality service to
our tenants and visitors. Our pledge to achieve zero-accidents
across our sites is still of utmost importance to us, and in 2013
we continued our efforts to increase the safety conditions of
our shopping centres. We set annual targets to drive continual
improvement in our safety performance targeting service
suppliers and visitors. In 2013 we achieved a LWCAFR of 2.17
among our service suppliers, a 31% reduction from 2012 and
exceeding our target of an 3% reduction. In total, the global
frequency rate of level 3, 4 and 5 category accidents11 per million
visits was 1.73, an 13.8% increase from 2012.
global lost Workday
case accidents
Frequency rate
(lWcaFr) among
suppliers in shopping
centres
11
You can read more about this on our website.
global frequency rate
of level 3, 4 and 5
category accidents
per million visits in
shopping centres
2013
2.17
2013
2012
3.16
2012
1.52
2011
2.88
2011
1.48
2010
3.88
2010
1.02
1.73
In accordance with Sonae Sierra SHE procedures, we identify the following levels of incidents in shopping centres according to their severity: Level 1: Critical ‘near miss’ (an
S&H incident that nearly caused personal damage); Level 2: S&H accident requiring first aid attention; Level 3: S&H accident requiring medical treatment; Level 4: S&H
accident with lost work-day or life disrupting case, temporary or partial incapacity or minor occupational disease; Level 5: Fatality or permanent disability or serious
occupational disease.
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our pErFormancE in 2013
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opErational pErFormancE (CONTINuED)
Correspondingly, 2013 saw us reinforce efforts to reduce the
impact of our shopping centres on the natural environment,
increase the safety of people in and around our buildings and
promote activities which support local community members
and businesses. For example, we:
l
Implemented a range of energy saving measures at our
shopping centres, corresponding to a total investment of
around €730,000. Initiatives such as the installation of LED
lighting have achieved a saving of more than 14 million kWh.
l
Invested around €65,200 in water efficiency improvements.
Measures to reduce water consumption focused on more
efficient fittings and fixtures in shopping centre WCs and
the installation of water meters in common areas and food
courts. Together, these have achieved savings of more
than 66,800m3.
l
Worked with tenants to reduce waste and improve recycling
rates through initiatives including the upgrading of tenant
waste segregation areas and more accurate monitoring of
tenant waste.
l
Performed 9,697 hours of Safety, Health and Environment
Preventive Observations (SPO) that allow us to identify and
correct behaviour which could potentially lead to incidents
and performed an average of 2.2 emergency practice drills
per shopping centre.
l
Invested a total of €1.1 million in local community initiatives,
including more than €890,000 through our shopping
centres’ marketing budgets, €157,000 in corporate
donations and sponsorships and €15,000 through the
marketing budgets of our projects under development.
At NorteShopping in Portugal, we implemented a
project to improve the productivity and quality of work
delivered by our shopping centre service suppliers,
including the reorganisation of waste management.
The results of this work enabled us to save €80,000
in annual operating costs, as well as helping us to
reduce our environmental impact through the 2%
increase in the recycling rate.
As part of our ongoing efforts to encourage our tenants to
adopt more eco-efficient practices themselves, 2013 also saw
the presentation of the second edition of the ‘Planet Sierra
Tenant Award’, an accolade designed to distinguish tenants
demonstrating best environmental practices. The Awards
consider tenants that demonstrate both sound environmental
management practices (covering criteria such as air quality,
energy, water and waste), and also efforts made by retailers
to encourage their employees and customers to adopt
environmentally responsible behaviour. We recognised the
efforts of 15 retailers in three categories12 across all seven
countries where we own and manage shopping centres. You can
read more about the results of the ‘Planet Sierra Tenant Award’
on our website.
pioneering retail concepts increase sales and
diversify our tenant mix
In 2013, we witnessed consumers seeking an integrated
shopping experience combining virtual and physical spaces.
Delivering a timely, tailored and seamless customer experience
across all channels has become a vital part of retailers’ sales
activation strategies. Moreover, the dynamism of modern retail
presents opportunities for businesses to better connect with
consumers; to understand their evolving profiles and respond to
their changing behaviour. In this context, investment in digital
technology is a current priority for Sonae Sierra, and is one that
has already borne fruit for our property management business.
Indeed, a large part of our success in sustaining occupancy
levels and improving tenant sales in Portugal in particular can
be attributed to these efforts.
We continued to rollout our digital strategy in Europe and
Brazil building on the success of initiatives such PromoFans®
– a multi-channel promotions platform launched in Portugal
in late 2012 that enables tenants to build customer-loyalty
and brand awareness by offering promotions via our shopping
centres using a digital platform. Since launch, the success of
this platform has been confirmed – 902 tenants, representing
90% of our sales, now regularly use PromoFans® to promote
their products and services to around 300,000 people who are
subscribed to the platform in Portugal. In November we
extended PromoFans® to our Spanish shopping centres,
where it already achieved around 60,000 registrations among
consumers within 10 days of its launch. We are now working
on PromoFans® integration into other markets and will
continue to develop new digital marketing concepts for the
benefit of our tenants and visitors.
Further references:
You can read more about this on our website.
12
The three categories are: (A) shops of 1,000m2 or larger or belonging to chains of ten or more shops worldwide; (B) shops under 1,000 in size or belonging to chains of less
than ten shops; (C) an international distinction covering hypermarkets and supermarkets across all Sonae Sierra owned shopping centres.
< >
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
< >
.34
opErational pErFormancE (CONTINuED)
passeio das Águas Shopping, Brazil
November 2013 saw the launch of a Digital Lounge in
Hofgarten Solingen in Germany. This pioneering project, the
first of its kind in our portfolio, responds to consumer demands
for a social venue integrated into their shopping experience.
Combining modern design with digital features such as
interactive news and information platforms, games and wi-fi,
this pilot project will be fine-tuned and rolled out across other
Sonae Sierra shopping centres in 2014.
In keeping with our commitment to offer unique experiences
to consumers, and as a part of our drive to keep our shopping
centres vibrant in the context of economic crisis, 2013 saw us
build upon our ‘Flash Store’ project with the Coop Store, a
shared retail space run by individuals and small businesses as a
cooperative. This new store format supports entrepreneurship
among local businesses and entices visitors with innovative
retail concepts. Feedback on the pilot has been overwhelmingly
positive and has generated valuable publicity in local and
national press and television across Portugal.
Indeed, our ‘Flash Store’ project as a whole has enjoyed great
success, attracting about 90 retail operators in Portugal and
enabling us to introduce new brands and concepts in our
shopping centres. ‘Lab Stores’, which are another offshoot,
provide a testing ground for new brands, and over 30% of
brands have used the concept since becoming long-term
tenants. First rolled out in 2012, ‘Flash Store’ aims to support
innovation by enabling retailers to test the market’s
receptiveness to their product(s) by offering the use of a shop
unit for a maximum period of six months under more flexible
conditions. The Flash Store concept has now been introduced
in Spain and will soon be launched in Germany and Romania.
Coop Stores support local sustainable businesses
by allowing them to share the same shop unit –
and associated operating costs – in a flexible regime
of cooperation.
Further references:
You can read more about this initiative on our website and
www.mallactivation.com
le terrazze, Italy
Favourable acquisition and disposals concluded in
portugal, Spain and italy
Yields in our European markets continued to fluctuate in 2013.
We saw a 7% reduction in the value of our European portfolio,
although the portfolio changes and the yields fluctuate to
different degrees between geographies and assets. In Spain,
we witnessed a return of investor activity towards the end of
the year and, as a result, yields have started to compress for
prime properties. In Portugal, we are starting to see some
stabilisation and we also expect yields for prime properties
to compress if the economic uptake experienced during the
second half of the year continues into 2014. In Italy, asset
values decreased and, mirroring Spain, we experienced a return
of investor demand for prime assets. In Germany and Romania,
meanwhile, valuations remained flat.
In March we acquired an additional stake in CascaiShopping
in Portugal. Through a majority-owned subsidiary, we reached
an agreement with a fund managed by Rockspring Property
Investment Managers for the acquisition of its 50% stake in
this centre. CascaiShopping was developed by Sonae Sierra
and has undergone several expansions and refurbishments
since its inauguration in 1991, supporting its ongoing success.
III
.....
OUR PERFORMANCE IN 2013
SONAE SIERRA
OPERATIONAL PERFORMANCE (CONTINUED)
In Italy, the Sierra Fund sold Valecenter and Airone shopping
centres to Blackstone Real Estate Partners IV and Blackstone
Real Estate Partners VII for €144.5 million, a value in line with
the latest independent valuation of the properties. These two
centres were acquired by the Sierra Fund in 2005. Over the
past eight years, we have identified and deployed actions to
add value to these assets, including substantive changes to
the tenant mix.
As we move into 2014, we will continue to develop our digital
strategy and expand on our pilot programmes to support the
latest consumer trends and further embed our shopping
centres within the local communities where they operate.
.35
THE SALE OF THREE ASSETS
IN SPAIN AND ITALY REFLECT
SONAE SIERRA’S CAPACITY
TO CREATE LONG-TERM VALUE
FOR INVESTORS THROUGH
OUR ASSET MANAGEMENT
STRATEGY, AND OUR ABILITY
TO RECYCLE CAPITAL TO
SUPPORT OUR EXPANSION
IN NEW AND EXISTING
MARKETS
With a varied and high quality retail and leisure offer within
73,800m2 of GLA, CascaiShopping is still regarded as one of the
main retail destinations in greater Lisbon. In 2013 the centre
welcomed more than 11.6 million visitors and has an occupancy
rate of nearly 100%. By increasing our investment to obtain a
majority stake in CascaiShopping, we will be able to leverage the
value of the asset, exploiting its sustained commercial potential.
The quality of our shopping centres and effectiveness of our
management practices, which together offer increased value of
our assets to investors, meant we were able to take advantage
of the returning investor demand in Spain and Italy where we
completed three disposals by year end. In Spain, the Sierra
Fund (the pan-European retail fund in which Sonae Sierra has
a stake of 50.1%) and CBRE Iberian Value Added Fund sold
Parque Principado in Asturias to a company owned by INTU
Properties PLC and Canada Pension Plan (CPP) for €141.5 million.
This sale demonstrates the liquidity of a first class asset in the
context of improving market sentiment and growing interest
from leading institutional investors.
2013 Economic, Environmental and Social Report
Pedro Caupers
Director, Investment and
Asset Management
Extension of the Sierra Fund
In 2013 we reached a consensus with investors to extend
the Sierra Fund operations for an additional five year period.
Given the importance of the Sierra Fund within our portfolio,
the extension of the Sierra Fund’s life to October 2018 is a
significant achievement. Following the sale of Münster Arkaden
in Germany in 2012 and the sales of Valecenter and Airone in
Italy at the end of 2013, the Sierra Fund’s portfolio is now
concentrated exclusively on the Iberian market.
With respect to the Sierra Portugal Fund – which encompasses
nine properties in Portugal and is due to terminate in 2018 – we
will wait for market recovery before considering any asset sales.
In the meantime, we will continue to focus on increasing tenant
sales and reducing operational costs in the assets within this Fund.
Open Market Value of Centres in Operation
Total Value
Sonae Sierra share
OMV in € million
5,638
2013
2,996
5,789
2012
3,046
6,320
2011
In Portugal, measures to improve the environmental
performance at ten shopping centres, such as the use
of renewable energy and water reuse and recycling,
have delivered tax savings totalling €88,000 as well
as helping us to reduce our environmental impact.
3,328
6,481
2010
3,504
6,340
2009
3,595
6,166
2008
3,598
6,147
2007
3,786
4,741
2006
Further references:
You can read more about this on our website.
2,745
4,096
2005
2,498
< >
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
.36
conSolidatEd accountS
the following Financial Statements consolidate all Sonae Sierra companies
by the proportional method.
Sonae Sierra consolidated accounts
profit & loss accounts
Sonae Sierra recorded a Net Profit of €3.6 million in 2013, compared to -€45.9 million in 2012.
The difference is mainly due to lower indirect losses in 2013 as a consequence of lower yields expansion in Europe and lower
impairments/provisions compared to 2012, as all properties under development were recorded at fair value.
In December 2013, our Direct Net Profit reached €57.6 million, an 8% decrease from December 2012. This was mainly due to
changes in our portfolio following disposals in 2012 and 2013 and adverse foreign exchange (FX) fluctuations which were not totally
compensated by our inaugurations in 2013, the first full year of results at shopping centres inaugurated in 2012 and cost cutting
efforts across all parts of Sonae Sierra.
balance Sheet
The value of our assets reached €2.3 billion in December 2013, of which €2 billion corresponds to Investment Properties and
€131 million corresponds to Properties under Development and Concessions.
The increase in Investment Properties compared to 2012 is explained by the openings of Boulevard Londrina Shopping, Passeio
das Águas Shopping and Hofgarten Solingen, the acquisition of an additional 50% stake in CascaiShopping which were partially
compensated by our disposals and adverse FX fluctuations affecting our Brazilian portfolio.
Properties under Development is lower than 2012, largely due to the openings of Boulevard Londrina Shopping, Passeio das Águas
Shopping and Hofgarten Solingen.
The lower Net Worth compared to 2012 is mainly explained by adverse variances in translation reserves as a consequence of the
depreciation of the Brazilian Real (down 17% in 2013).
Bank Loans are also lower compared to 2012 and this is mainly due to the disposals carried out by the end of year.
< >
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
< >
.37
conSolidatEd accountS (CONTINuED)
consolidated profit and loss account
(€000)
2013
2012
% 13/12
228,087
114,636
113,451
227,326
111,015
116,311
0%
3%
-2%
Net financial costs
Other non-recurrent income/cost
direct profit before taxes
corporate tax
38,141
-2,699
72,612
14,974
38,171
-2,552
75,589
13,005
0%
-6%
-4%
15%
direct net profit
57,637
62,584
-8%
-3,828
-9,322
-39,102
-52,251
1,749
-54,000
6,991
-34,965
-84,382
-112,356
-3,891
-108,466
-155%
–
54%
53%
–
50%
3,637
-45,882
–
31 dec 2013
31 Dec 2012
Var. 13/12
1,952,413
130,771
117,153
124,609
1,933,026
218,511
125,602
153,260
19,387
-87,740
-8,449
-28,651
total assets
2,324,947
2,430,399
-105,453
net worth
Bank loans
Deferred taxes
Other liabilities
total liabilities
794,410
1,031,267
252,887
246,382
1,530,536
840,809
1,059,613
261,438
268,538
1,589,590
-46,399
-28,346
-8,551
-22,156
-59,053
net worth and liabilities
2,324,947
2,430,399
-105,453
Direct income from investments
Direct costs from investments
Ebitda
Gains realised on sale of investments
Impairment
Value created on investments
indirect income
Deferred tax
indirect net profit
net profit
consolidated balance Sheet
(€000)
Investment properties
Properties under development and others
Other assets
Cash & equivalents
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
< >
.38
conSolidatEd accountS (CONTINuED)
Financial resources
debt breakdown and maturity
cost of debt
Sonae Sierra has maintained its conservative long-term
funding strategy. The capital structure is supported by a long
average debt maturity of 4.77 years, 71% of debt with fixed
interest costs showing the prudent hedging of interest rate
risk and a balanced debt maturity profile.
Sonae Sierra continues to demonstrate good access to low
cost financing from banks and capital markets. The average
cost of debt for Sonae Sierra is 30 basis points above 2012 and
currently stands at 4.3%. Excluding Brazil, the average cost of
debt is 3.6%, which supports the interest coverage ratio and
remains relatively low versus our European peers.
The following chart illustrates Sonae Sierra’s debt as of
31 December 2013.
average cost of debt –
Europe
debt Structure
Commercial Paper
€5m
Bank Loans
€926m
Bond Loans
€106m
debt maturity
% Fixed interest –
Europe
2013
3.6%
2013
71%
>2018
31%
2012
3.5%
2012
78%
2018
7%
2011
3.8%
2011
70%
2017
19%
2010
3.4%
2010
74%
2016
25%
2015
9%
2014
10%
Financial ratios
As of 31 December 2013, Sonae Sierra’s financial ratios show
a prudent and solid approach.
ratios
31 dec 2013 31 Dec 2012
Loan-to-value 43.9% 42.9%
Interest cover 2.54 2.60
Development ratio 9.4% 12.4%
The Loan-to-Value (LTV) is 43.9% which compares unfavourably
with 42.9% in 2012. The increase derives mostly from the
reduction in the value of our assets due to the yields expansion
in Europe and adverse FX fluctuations affecting our Brazilian
portfolio. Although higher compared to 2012, the LTV presents
a noticeable reduction since 2009.
loan-to-value
2013
43.9%
2012
42.9%
2011
43.7%
2010
46.4%
2009
50.1%
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
.39
conSolidatEd accountS (CONTINuED)
The Interest Cover in December 2013 was 2.54, well above our
target of 2, thanks to the currently low average cost of debt.
Sonae Sierra also measures its exposure to retail real estate
development risk through the Development Ratio. This monitors
the weight of the funds already spent in all committed and
non-committed developments and those still to be spend
in all committed developments in relation to our total real
estate portfolio (again, including the funds still to be spent
on committed projects).
We monitor our ability to control the development pipeline in
order to stabilise debt leverage while portfolio asset values are
volatile. The Development Ratio is lower than December 2012
which is mainly due to the opening of Boulevard Londrina
Shopping, Passeio das Águas Shopping and Hofgarten Solingen.
net asset value
Sonae Sierra measures its performance, in a first instance,
on the basis of changes to the Net Asset Value (NAV) plus
dividends distributed. We calculate our NAV according to the
guidelines published in 2007 by INREV (European Association
for Investors in Non-listed Real Estate Vehicles), an association
of which Sonae Sierra is a member. On the basis of this methodology, the NAV of Sonae Sierra,
as of 31 December 2013, was €1,000 million compared to
€1,050 million on 31 December 2012. The NAV per share of
the properties attributed to Sonae Sierra is €30.76 against
€32.29 recorded on 31 December 2012. The NAV reduction
results mainly from the effects of adverse FX fluctuations
(a Real depreciation of 17%).
net asset value (nav)
amount in €000
31 dec 2013 31 Dec 2012
NAV as per the financial statements 794,410 840,809
Revaluation to fair value of developments 5,350 9,841
Deferred tax for properties 203,758 217,382
Goodwill related to deferred tax -16,459 -34,503
Gross-up of assets 13,176 16,443
nav 1,000,236 1,049,972
net asset value (nav)
NAV (€000)
NAV per share (€)
dec 2013
1,000 / 31
Dec 2012
1,050 / 32
Dec 2011
1,173 / 36
Dec 2010
1,251 / 38
Dec 2009
1,228 / 38
Dec 2008
1,416 / 44
Dec 2007
1,713 / 53
Dec 2006
1,490 / 46
Dec 2005
1,265 / 39
Dec 2004
1,060 / 33
Dec 2003
948 / 29
Dec 2002
1,037 / 28
Dec 2001
934 / 25
Sierra investments
Sierra Investments made a negative contribution of
-€29.4 million to the Consolidated Net Profit of Sonae Sierra.
The Direct Net Profit of Sierra Investments is derived from the
operation of shopping and leisure centres that are part of its
portfolio, including those assets that are in the Sierra Fund and
the Sierra Portugal Fund. Direct Profits also include the asset
management services provided to the properties by Sierra
Asset Management.
Net Operating Income decreased by 3% compared to last year,
mainly due to the disposals of Münster Arkaden in 2012 and
Parque Principado in 2013. This was despite the acquisition,
through a majority-owned subsidiary of an additional 50%
stake in CascaiShopping and the opening of Hofgarten Solingen.
Indirect Net Profits arise either from the change in value of the
Investment Properties or the realisation of capital gains from
the sale of assets and/or shareholding positions.
The Indirect Result is €18.3 million higher than last year due to
a lower decrease in the value of the existing portfolio, explained
by lower yield expansion in Portugal, Spain and Italy.
In 2012, Value Created in Investment Properties was heavily
penalised by the yield expansion in Portugal, Spain and Italy
as a consequence of the economic crisis and the write-off of
Pantheon Plaza. This was despite a gain from the disposal of
Münster Arkaden.
Investment Properties decreased by €43 million compared to
2012. This is explained by the disposals of Parque Principado,
Valecenter and Airone and a decrease in the value of the
portfolio in 2012, which was partially compensated by the
opening of Hofgarten Solingen.
Bank Loans are below those at December 2012 mainly due
to the disposals.
< >
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
.40
conSolidatEd accountS (CONTINuED)
profit and loss account
(€000)
2013
2012
% 13/12
Retail net operating margin
Parking net operating margin
Cogeneration net operating margin
Shopping centre net operating income
Asset management net operating income
net operating income (noi)
87,771
1,499
246
89,515
5,640
95,155
90,329
1,522
220
92,071
5,603
97,674
-3%
-1%
12%
-3%
1%
-3%
Net financial costs
Other non-recurrent income/cost
direct profit before taxes
corporate tax
31,851
62
63,366
12,699
37,403
-101
60,170
8,720
-15%
162%
5%
46%
direct net profit
50,667
51,449
-2%
Gains realised on sale of investments
Value created on investments
indirect income
Deferred tax
indirect net profit
-3,828
-95,281
-99,109
-19,042
-80,066
3,627
-117,822
-114,195
-15,849
-98,347
-206%
19%
13%
-20%
19%
net profit
-29,399
-46,897
37%
31 dec 2013
31 Dec 2012
Var. 13/12
Investment properties & others
Other assets
Cash & equivalents
1,565,202
154,665
94,196
1,608,381
174,734
81,635
-43,179
-20,070
12,562
total assets
1,814,063
1,864,749
-50,687
568,448
863,201
197,743
184,671
596,373
881,214
213,541
173,621
-27,925
-18,014
-15,799
11,050
1,814,063
1,864,749
-50,687
consolidated balance Sheet
(€000)
Net worth
Bank loans
Deferred taxes
Other liabilities
net worth and liabilities
< >
III
.....
our pErFormancE in 2013
SONAE SIERRA
2013 Economic, Environmental and Social Report
.41
conSolidatEd accountS (CONTINuED)
Sierra developments
Sierra Developments made a negative contribution of -€5.6 million to the Consolidated Net Profit of Sonae Sierra.
The Development Services rendered are 23% higher than those provided during same period of last year, mainly due to higher
Professional Services Rendered to Third Parties in China, ukraine and Morocco.
The figure presented in Value Created in Projects reflects the opening of Hofgarten Solingen in 2013 and the [email protected] provision
booked in the Greek and Romanian projects in 2012.
profit and loss account
(€000)
2013
2012
% 13/12
6,949
9,927
16,876
18,383
-1,507
5,628
-25,542
-19,914
19,029
-38,942
23%
139%
–
-3%
96%
3,013
-5
1,061
283
-196
642
966%
98%
65%
-5,585
-40,063
86%
31 dec 2013
31 Dec 2012
Var. 13/12
Properties under development
Other assets
Cash & equivalents
121,959
103,487
1,049
148,748
85,019
8,127
-26,790
18,468
-7,078
total assets
226,495
241,895
-15,400
Shareholder funds
Bank loans
Deferred taxes
Other liabilities
80,007
7,997
244
138,246
88,540
17,334
159
135,862
-8,534
-9,336
85
2,385
net worth and liabilities
226,495
241,895
-15,400
Project development services rendered
Value created in projects
operating income
operating costs
net operating income (noi)
Net financial costs
Other non-recurrent income/cost
Income tax
net profit
consolidated balance Sheet
(€000)
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conSolidatEd accountS (CONTINuED)
Sierra management
Sierra Management made a positive contribution of €4.4 million to the Consolidated Net Profit of Sonae Sierra.
The Net Operating Income (NOI) increased by 26% as a consequence of higher Professional Services Rendered to Third Parties
and efficiency gains due to the centralisation of management teams.
The Total Assets of €69.2 million corresponds to short term loans to group companies and to rents not yet received.
profit and loss account
(€000)
2013
2012
% 13/12
41,450
34,378
7,071
34,268
28,660
5,608
21%
20%
26%
Net financial costs
Other non-recurrent income/cost
Income tax
-698
-534
2,843
-1,265
-369
1,979
45%
-45%
44%
net profit
4,392
4,524
-3%
31 dec 2013
31 Dec 2012
Var. 13/12
Other assets
Cash & equivalents
24,383
44,772
32,626
32,595
-8,242
12,178
total assets
69,156
65,220
3,935
net worth
Other liabilities
total liabilities
22,943
46,212
46,212
18,551
46,669
46,669
4,392
-457
-457
net worth and liabilities
69,156
65,220
3,935
Total income from management services
Operating costs
net operating income (noi)
consolidated balance Sheet
(€000)
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conSolidatEd accountS (CONTINuED)
Sonae Sierra brasil
Sonae Sierra Brasil made a positive contribution of €34.2 million to the Consolidated Net Profit of Sonae Sierra. Net Operating Income has decreased by 15% compared with 2012. This is explained by the disposals of 2012 which were not totally
compensated by the openings of 2013, and by higher other non-recurrent costs related to corporate restructuring implemented in 2013.
The lower Financial Result is a consequence of lower cash and bank deposits and the non-capitalisation of Boulevard Londrina
Shopping, Passeio das Águas Shopping and uberlândia Shopping since opening.
The Indirect Net Profit is higher than 2012 due to yields compression at core shopping centres and the opening of Passeio das
Águas Shopping.
The Investment Properties reached €391 million in December 2013, an increase of €3 million compared to 2012. This is explained
by the opening of Boulevard Londrina Shopping and Passeio das Águas Shopping, and an increase in the value of existing properties
that almost fully offset the adverse FX fluctuations.
profit and loss account
(€000)
2013
2012
% 13/12
Retail net operating margin
Parking net operating margin
Shopping centre net operating income
Total income from services rendered
Overheads
Net Operating Income (NOI)
Net financial costs/(income)
Other non-recurrent income/cost
direct profit before taxes
corporate tax
19,839
3,111
22,950
5,822
7,686
21,085
3,976
-596
16,513
4,024
23,615
3,237
26,852
6,280
8,338
24,794
1,750
-237
22,806
4,626
-16%
-4%
-15%
-7%
-8%
-15%
–
-151%
-28%
-13%
direct profit
12,489
18,180
-31%
Gains realised on sale of investments
Value created on investments
Deferred tax
indirect net profit
–
36,878
15,138
21,740
3,251
24,752
9,636
18,368
–
49%
57%
18%
net profit
34,229
36,548
-6%
31 dec 2013
31 Dec 2012
Var. 13/12
Properties
Other assets
Cash & equivalents
391,290
18,390
44,789
388,473
16,836
85,255
2,817
1,554
-40,465
total assets
454,469
490,564
-36,094
Net worth
Bank loans
Deferred taxes
Other liabilities
287,303
85,069
57,347
24,750
316,526
86,066
51,720
36,252
-29,223
-996
5,627
-11,502
net worth and liabilities
454,469
490,564
-36,094
consolidated balance Sheet
(€000)
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FuturE outlooK
We have identified four trends as being among the most important for our sector
throughout the rest of this decade. Our business strategy puts us in a strong position
to exploit each of these trends, with our sights set on being the leading international
shopping centre specialist in the industry.
global retail investment will continue to shift towards ‘growth’
and ‘emerging’ markets as internationalisation accelerates
Key cities and locations will dominate a marketplace that
values quality above all
The rapid expansion of retail into ‘transitional’, ‘growth’ and
‘emerging’ markets is set to continue through to 2020, by which
time these markets may attract as much as 40% of total global
retail investment. Driving this trend is the rise of the middle-class
population and its strong demand for modern retail space. Within
Europe, Turkey and Russia are expected to account for 10-15%
of the continent’s investment activity by 2020; whilst worldwide,
China is set to become the single largest consumer market by
2015. Expansion into ‘growth’ and ‘emerging’ markets presents
a compelling opportunity for shopping centre developers, where
the absence of existing stock facilitates the potential to create
new high quality destinations tailored to the modern retailer
and consumer. The fast-paced international expansion of retail
groups, particularly in the fashion sector, further supports the
demand for new stock. Nonetheless, a lack of transparency,
the difficulties in assessing product that is controlled by domestic
groups and the challenges of finding local partners can constitute
barriers for new market entrants.
Across mature markets, polarisation is already in motion,
with financial capital becoming concentrated in key cities and
regional centres. Within these, assets which offer the best
quality and convenience will dominate their catchment areas.
The ability to sign on key retailers will ‘make or break’ new
shopping centre schemes, as big brands continue to hold sway
over a large proportion of the consumer classes. Secondary
assets will need to diversify in order to succeed; offering the
consumer a unique experience that differentiates them from
the competition. There will be opportunities to revitalise
existing stock, as demand for quality remains strong. All in all,
a flexible approach to property and asset management, coupled
with the relentless pursuit of quality and efficiency, will be
critical to success.
We will capitalise on our development know-how in order to
gain entry into new markets on a capital-light basis and via
our professional services business. We will continue to forge
effective partnerships with local operators, following our recent
successes with Sierra Cevital in Algeria, Sierra Reval in Turkey
and our joint venture agreement with Citic in China. We will take
a pro-active approach to risk identification and management
in markets which present political, governance and/or ethical
risks and we will hedge against market volatility through a
capital-light approach to investment. Our sustainability
strategy sets a consistent direction of travel wherever we
operate, both in respect to running a best in class safety, health
and environment management system, but also by ensuring
we remain resilient to, and capture value from, the social and
environmental challenges shared across our geographies.
Our development business will seek opportunities to develop
new projects which will have the capacity to achieve and
maintain a strong competitive position in their catchment area.
We will continue to take a capital light approach to investment
both in mature and emerging markets and in prime and
secondary locations.
Within our investment portfolio, we will maintain an active
investment/divestment strategy, and on our operating assets,
we will pursue opportunities for value creation through
expansions, refurbishments and tenant-mix improvements.
Our property management business will aim to maximise value
for money on behalf of both tenants and investors, focusing
on achieving high occupancy levels; tenant sales growth; effort
rate optimisation; service charge reductions and stable rent
collection. Anticipating the latest trends in retail, we will
continue to focus on providing ultimate experiences to visitors;
offering premium space and unique shopping centre concepts
so that our centres remain the destinations of choice for
consumers. As a part of this activity, we will seek to support
tenants in maximising sales; offering flexible retail formats and
ensuring a diverse tenant mix by promoting the integration of
small-scale, unique and local businesses.
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FUTURE OUTLOOK (CONTINUED)
A new generation of consumers will require an integrated
virtual and physical retail space and expect shopping centres
to provide experiences, not just ‘shopping’
A revolution is occurring in the global retail industry. Spurred
by the fast-growing use of mobile internet devices, modern
consumers are creating new challenges and opportunities for
shopping centres as they increasingly rely on a combination
of digital platforms and new communication channels to define
their physical shopping experience. Whereas the digital revolution
and subsequent growth in on-line consumption was once seen
as a threat to shopping centres, it is now clear that physical
retail space is still in demand. Moreover, successful retailers will
be those which allow consumers to move seamlessly between
virtual and physical retail space. At the same time, consumers
will continue to challenge retailers and shopping centre operators
alike as they seek sensational and emotional experiences that
go beyond merely acquiring ‘more goods’. Shopping centre
visitors want to engage more actively in the consumption
process; and increasing sales in ethical, eco-friendly and artisan
products as well as growing interest in hands-on experiences
(such as craft workshops and fashion shows) all point to a move
in this direction.
We will continue to invest in digital technology to support both
our tenants and our own business. Following the success of
PromoFans®, we will dedicate significant resources to exploring
other innovative ways of connecting consumers and retailers
to increase footfall and promote sales activation. We will also
proceed with our strategy to promote more sustainable lifestyles,
promoting the consumption of products and services that are
‘green’, ‘ethical’ and/or ‘healthy’. Over the next couple of years,
our marketing team will focus on influencing consumers’
behaviour in and outside of our shopping centres. Building on
our Coop Store concept, our property management teams will
pioneer further projects to support local businesses and
diversify our offer to shopping centre visitors, testing formats
such as local markets and the use of vacant or pop-up stores to
sell regional crafts and gourmet products and promote tourism,
sports and cultural activities. More specifically, our next steps
will be to: proceed with the roll-out of an initiative to support
small local businesses that offer regional products in Portugal,
Spain, Germany and Brazil and to provide mentoring and
support, including business planning, project development
and funding, for young entrepreneurs looking to establish
their own retail businesses.
Environmental regulation, extreme weather events and
pressure on natural resources will make eco-efficiency
imperative for shopping centre owners and operators
In its most recent report, the Intergovernmental Panel on
Climate Change (IPCC) states that ‘atmospheric concentrations
of carbon dioxide, methane and nitrous oxide have increased
to unprecedented levels in at least the last 800,000 years13.
13
Global atmospheric and ocean temperatures are projected to
continue rising in the 21st century, with a disrupting effect on
overall climate stability. Whilst the impacts of climate change
are already influencing the availability of freshwater and
increasing incidents of drought, world population growth,
urbanisation and the rising demand for consumer goods are
all putting pressure on natural resources. With international
climate change agreements, local environmental regulations
and market norms becoming more stringent in response,
achieving a high standard of eco-efficiency is set to become
imperative for shopping centre owners and operators. In some
countries where Sonae Sierra operates, investors are already
demanding assets with a good environmental performance,
expecting these to sustain their value in the longer-term.
We are proud of the results delivered by our eco-efficiency
strategy over the past twelve years. However, we know that
our business is too reliant on limited supplies of natural capital
as we require mainly fossil-fuel based energy, water and
non-renewable raw materials in order to build and operate
shopping centres, which in turn generate GHG emissions,
waste and wastewater. In the long-term, this poses a risk to
our business: to protect our assets against higher costs and
penalties associated with natural resource consumption and
environmental pollution, as well as the risk of water and energy
shortages, we need to strive towards true resource resilience:
on-site energy generation; water reuse systems and waste
minimisation and/or a closed loop waste management
approach. In 2013, we investigated the potential for different
solutions through our Resource Resilience strategy, and in
2014 and beyond we will begin to test some of these solutions,
aiming to roll them out across our whole portfolio. More
specifically, our next steps will be to: proceed with the roll-out
of water reuse and rainwater harvesting systems; trial the
introduction of a polluter-pays system for tenants’ waste and
reduce or eliminate plastic waste in food courts. Due to market
and regulatory constraints, we cannot progress as quickly as
possible with the on-site energy generation solutions identified,
but will continue to endeavour to find a way to make these viable.
With the retail sector undergoing a period of rapid change, we
need to ensure that our Company has the talent, agility and
flexibility required to remain ahead of the game. In recent
years, we have prioritised the well-being and development of
our employees, aiming to ensure high levels of staff satisfaction
and productivity and reduce costs and risks associated with
high staff turnover and absence. We have developed our
capacity to deliver training in-house to meet our staff
development needs. Whilst this strategy has been effective,
in the future we will aim to enhance our capacity for leveraging
knowledge by exploring partnerships with universities as a way
to promote ongoing skills development and innovative thinking
across our Company and with our local communities.
‘Climate Change 2013: The Physical Science Basis, Summary For Policymakers’, Working Group 1 Contribution to the Fifth Assessment Report of the Intergovernmental Panel
on Climate Change.
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< >
govErnancE
Sonae Sierra’s corporate governance policies were adopted by the company based
on the models of its shareholders, Sonae and grosvenor. the shareholders’ corporate
governance policies impose levels of transparency, independence, remuneration
compliance rules and sustainability policies which have contributed to shaping Sonae
Sierra’s own management model, corporate values, business strategy, sustainability
policies and transparency in public reporting.
The top corporate body of the Sonae Sierra group of companies
is the General Shareholders Assembly which, among other
prerogatives, appoints the Board of the General Shareholders
Assembly, the Fiscal Board, the Compensation Committee and
the Board of Directors of the Company. Sonae Sierra’s Board of
Directors takes responsibility for the Company’s strategy, longterm business plan, finance and reporting. It consists of eleven
members, five of them being executives and six non-executives.
The Executive Committee is responsible for the day-to-day
operations of the Company, which encompasses sustainability
activities. The Executive Committee meets eleven times a
year and may invite other Company executives to attend its
meetings. The Board of Directors and the Executive Committee
are supported by three specialised Committees: the Investment,
Finance and Audit & Compliance Committees. The Investment
Committee and the Finance Committee are chaired by the CEO.
The Audit & Compliance Committee is chaired by an independent,
external person chosen by the Board of Directors.
GENERAL SHAREHOLDER’S ASSEMBLY
BOARD OF DIRECTORS
NON-EXECuTIVE: Paulo Azevedo (Chairman), Mark Preston, Neil Jones,
Nicholas Scarles, Ângelo Paupério
EXECuTIVE: Fernando Guedes Oliveira (CEO), Edmundo Figueiredo, Pedro Caupers, Ana Guedes Oliveira, João Correia de Sampaio, José Baeta Tomás
COMPANY SECRETARY: Joaquim Pereira Mendes
COMPENSATION COMMITTEE
Paulo Azevedo, Mark Preston
INVESTMENT COMMITTEE
FINANCE COMMITTEE
FISCAL BOARD
Fernando Guedes Oliveira (Chairman), Neil Jones,
Ângelo Paupério, Edmundo Figueiredo, Nicholas
Scarles, Pedro Caupers, Ana Guedes Oliveira
SECRETARY: Joaquim Pereira Mendes
Fernando Guedes Oliveira (Chairman), Neil Jones,
Nicholas Scarles, Ângelo Paupério,
Edmundo Figueiredo
SECRETARY: Joaquim Pereira Mendes David Jenkins (Chairman)
EFFECTIVE MEMBERS: Jorge Felizes Morgado,
António Barbosa Santos
Alternate: Oscar Alçada Quinta
SROC: Deloitte & Associates
AuDIT & COMPLIANCE COMMITTEE
David Jenkins (Chairman),
Ângelo Paupério, Nicholas Scarles
SECRETARY: António Pedrosa Duarte
OMBuDSMAN
Danilo Picolo
SuSTAINABILITY STEERING COMMITTEE
EXECuTIVE COMMITTEE
Fernando Guedes Oliveira (CEO), José Baeta Tomás,
Pedro Caupers, Ana Guedes Oliveira, João Correia de
Sampaio, Pedro Soveral Rodrigues, Manuela Calhau,
Joaquim Ribeiro, Elsa Monteiro, Sandra Dias, Nuno Alves
Fernando Guedes Oliveira (Chairman), Edmundo Figueiredo, Pedro Caupers, Ana Guedes Oliveira, João Correia de Sampaio
INNOVATION STEERING COMMITTEE
Fernando Guedes Oliveira (CEO), Pedro Soveral
Rodrigues, João Correia Sampaio, Manuela Calhau,
Ana Guedes Oliveira, Pedro José Caupers,
Carlos Alberto Jesus
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govErnancE (CONTINuED)
Each Executive Member of the Board has responsibility for
certain businesses or areas of the Company, as well as Sonae
Sierra’s long-term sustainability priorities. We operate a
Sustainability Steering Committee (SSC) which is responsible
for overseeing the delivery of work under our four long-term
sustainability priorities as well as Safety, Health and
Environment (SHE) and Risk Management. The SSC reports
directly to the Executive Committee and is chaired by our CEO.
The Committee meets regularly to: discuss decisions that need
to be taken collectively, inform the Executive Committee of
any issues related to the implementation of the Sustainability
Strategy and to provide the overall vision for the company’s
SHE Strategy, including setting and periodically reviewing SHE
Policy and long-term objectives. The senior-level employees
who champion each of our long-term sustainability priorities
are required to report three times a year to the Sustainability
Steering Committee on progress made with respect to their
area of priority. Our Sustainability Office supports the SSC
around the definition and implementation of the Sustainability
Strategy in each long-term priority and SHE Management.
The Sustainability Office also supports the champions and
provides relevant advice and guidance as and when required
around the implementation of each priority area.
This governance model enables our executives and their teams
to focus on creating and sustaining value for the Company and
key stakeholders through each specific business activity, with
attention paid to the long-term challenges which our Company
faces and with expert support on economic, environmental and
social issues. Moreover, individual members of staff across all
business activities and functions have responsibility for
implementing specific aspects of our sustainability strategy.
SHE objectives form part of all employees’ performance
appraisals (including Executive Committee members’ appraisals)
which link through to remuneration and bonus schemes.
Ethical conduct
Our Code of Conduct includes a set of ethical principles which
apply to everything we do and outline our commitment to
success whilst operating with integrity, openness and honesty.
The Code also promotes ethical and responsible decisionmaking by providing guidance on dealing with issues such as
bribery, corruption, legal compliance, equality and human rights.
Whilst the Executive Committee is ultimately responsible
for managing these issues, ethical conduct is a personal
responsibility and every employee is held accountable for his
or her behaviour. The Sierra Ombudsman promotes compliance
with our Code of Conduct and encourages behaviour aligned
with our ethical principles. The Ombudsman is an independent
facilitator to whom all stakeholders can present their complaints
with an assurance that they will be processed, investigated,
and responded to in a timely and sensitive manner. For more
information on the Ombudsman, see our website.
Safety, health and Environment management System
Our Safety, Health and Environment Management System
(SHEMS) is the framework we use to manage our impacts
and improve our performance in relation to safe people and
eco-efficiency. The SHEMS is based on a cyclical approach
that involves planning, implementation, monitoring and review
to ensure continuous improvement. It is regularly updated,
most recently in 2013 with reference to the increasing focus on
professional services and capital light approach that forms part
of our business strategy. Our Safety, Health and Environment
(SHE) Policy, which can be downloaded here on our website,
sets out the SHE principles and over-arching objectives which
govern the system.
Our Company first developed an Environment Management
System (EMS) in 1999 and in 2005 we were the first company
in our sector in Europe to obtain ISO 14001 certification for our
corporate EMS, which covered all our business activities. In
2004, we launched our Safety and Health (S&H) Policy and in
2008 became the first company in Europe to achieve OHSAS
18001 certification for our corporate S&H Management System.
In 2010, we began working on the integration of these two
management systems with an aim to exploit the synergies
between them and increase our operational efficiency. In 2011
our integrated Safety, Health and Environment Management
System (SHEMS) became fully operational. It is based on the
international standards ISO 14001:2004 and OHSAS
18001:2007 and was recertified by Lloyds Quality Register
Assurance according to both of these standards in 2011. We
deliver SHE training to our staff and other key stakeholders
on an ongoing basis, and in 2013 we delivered a total of
31,680 man hours of training (including meetings) on SHE
to staff, suppliers and tenants across our shopping centres,
development projects and in our corporate offices.
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Sonae Sierra’s Safety, health and Environment management System
Continuous Improvement
Management Review
Policy: Safety, Health and Environment
Planning
• Assessment and control of S&H Risks and
Environmental Impacts
• Legal requirements and others
• Objectives and Targets Program
Checking and Corrective Actions
•
•
•
•
•
•
Monitoring and measurement
Conformity evaluation
Incident investigation
Non conformities, Corrective and Preventive Actions
Records control
Internal Audits
Implementing and Operating
•
•
•
•
•
•
Our SHEMS covers all safety, health and environmental impacts
across all stages of our business cycle for assets which Sonae
Sierra owns or occupies. As our business strategy evolves, we
are adapting our safety, health and environment strategy to
reflect the degree of control that we have over the assets that
we manage. In particular, when we have no direct control, it is
important for us to discuss with our partners and clients the
best approach and strategy to meet their needs and the local
market standards. We have developed guidelines to ensure that
we apply a consistent approach across all our activities to
address all possible situations.
Resources, Roles, Responsibility, Accountability and Authority
Competence, training and awareness
Communication, Participation and Consultation
Documents control
Operational control
Emergency Preparedness and response
pre-development
During the New Business phase of our own projects,
Environmental Due Diligence and an Environmental Impact
Study are undertaken so that we can understand the potential
environmental liabilities that sites may contain (such as
contaminated land or materials) and therefore guarantee
sufficient budget in our Investment Plans to adequately deal
with these issues. Environmental Due Diligence is also
implemented upon the acquisition of existing shopping centres.
It is reinforced by the execution of S&H Due Diligence, which
complements the Technical Due Diligence recommendations
and provides Sonae Sierra with information on the capability
of the existing shopping centre’s systems to perform according
to Sonae Sierra’s expectations.
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development
property management
We aim for all our new development projects, major expansions
and refurbishments where we have direct control to target,
as a minimum, BREEAM Good, LEED Silver or DGNB Bronze.
We continue to apply our own Safety, Health and Environment
Development Standards (SHEDS) to guarantee effective risk
management and good shopping centre performance, targeting
our long-term priorities and critical impacts.
We monitor the performance of our owned operational shopping
centres with respect to energy; water; waste and safety and
health, and identify further improvements that need to be
made to optimise the buildings’ environmental performance
and reduce S&H risks. Across our operational portfolio, we have
been measuring, monitoring and targeting energy use and
waste management since 2000, water use since 2003 and
S&H since 2004.
Whilst our development teams select the BREEAM, LEED or
DGNB credits that best help them achieve their certification
goals, each of our projects under development is required to
ensure that SHE risks and characteristics unique to each site
are managed adequately. To this end, since 2004, 25 Sonae
Sierra construction sites have achieved ISO 14001 certification
and nine have achieved OHSAS 18001 certification. Of our
shopping centres inaugurated over the past two years –
Le Terrazze in Italy was the first in the world to achieve joint
ISO 14001 and OHSAS 18001 certifications for the SHEMS of
their construction works, uberlândia Shopping (inaugurated
in 2012) was the first to achieve both in the Americas, and
in 2013, Hofgarten Solingen was the first development of its
kind in Germany to do so.
On developments managed through a joint venture agreement
without our direct control, we engage with our partners to
decide whether to implement our full SHEMS system beyond
the minimum legal requirements and compliance audits that
we implement. In the event that our partner does not wish for
us to implement our full certified SHEMS, we still make sure
that we comply with legislation in relation to both construction
work and building regulations of the relevant country. We also
implement critical SHE procedures (including accident
investigation and emergency response) and best practice, run
data reports and carry out data audits in relation to safety,
health and environmental issues.
Our energy and water metering strategy is designed to ensure
effective sub-metering with connection to each centre’s BMS,
which allows us to have a better control of these utilities’ use. In
2012, we launched a new online management system, called the
SHE Portal. This tool allows us to streamline our SHE
management processes and improve the accuracy of data and
information reported by holding all data in one central platform
which is accessible to all our staff. Data collection and monitoring
for energy, water, waste and safety and health is managed
through this database which allows each of our shopping centre
management teams to input SHE performance data and
generate reports that can be used to compare performance
across Sonae Sierra’s portfolio and to set annual targets to
improve performance and increase staff and tenant awareness
of all issues. We also monitor and evaluate safety and health
performance on a regular basis using tools such as SHE
Preventive Observations (SPO), emergency drills and SHE
inspections (covering safety-related equipment and installations
in tenant units and warehouses). As of 31 December 2013,
ISO 14001 certifications had been achieved in 87% of our
shopping centres in operation and OHSAS 18001 certification
had been achieved in 59.6%.
In cases where we provide shopping centre management
services to clients, we do not systematically apply our certified
SHEMS because this falls outside the boundaries of our
responsibility. However, we make sure that we monitor and
comply with applicable legislation. With our long-term
experience in managing safety, health and environmental
impacts, we are also very well placed to provide additional
services, such as alignment with ISO 14001 and OHSAS 18001,
when these services are specifically requested by our clients.
asset management
The annual capital expenditure budget allocated to each of
our owned shopping centres includes investments to improve
the centres’ SHE performance. For a detailed account of
environmental investments made in 2013, see page 76
of this report.
< >
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BOARD MEMBERS AND EXECUTIVES
Non-Executive Directors
Paulo Azevedo
Mark Preston
Chairman
Non-Executive Director
Non-Executive Director
Paulo Azevedo joined Sonae in 1988 as
New Investments Analyst and Project
Manager. Subsequently, he held different
management positions in several group
companies. From 1996 to 1998 was
Executive Director at Modelo Continente
Hypermarkets and in 1998 was appointed
CEO of Optimus. From 2000 to 2007,
was Sonaecom CEO. In 2007 was elected
Sonae CEO.
Mark Preston joined Grosvenor in the UK
in 1989. Seconded to Hong Kong in 1995,
he returned to lead Grosvenor’s fund
management operations in 1997, spent four
years in San Francisco from 2002, became
Chief Executive of Grosvenor Britain & Ireland
in 2006 and Group Chief Executive in 2008.
He is a Trustee of the Westminster
Foundation and also a member of the Board
of The Association of Foreign Investors in
Real Estate, the ULI Greenprint Advisory
Board and the (University of) Cambridge
Land Economy Advisory Board.
Ângelo Paupério has been a Non- Executive
Director of Sonae Sierra since 2000. He is
also Chairman of Sonaecom’s Executive
Committee, Executive Vice-Chairman of
Sonae SGPS and sits on the Board of Sonae
Distribuição, all of which are companies in
the Sonae Group.
Academic achievements
Degree in Chemical Engineering, École
Politechnique Federal de Lausanne; MBA,
ISEE, University of Porto.
Academic achievements
BSc (Hons) Degree in Land Management,
Reading University; member of the RICS;
International Executive Programme
at INSEAD.
Nicholas Scarles
Neil Jones
Non-Executive Director
Non-Executive Director
Nicholas Scarles (FCA, Attorney at Law),
joined Grosvenor in 2004 where currently
is Group Finance Director. He was previously
at Centrica, Price Waterhouse and Coopers
and Lybrand in London, New York and
Toronto. He is a Governor of the
Haberdashers’ Elstree Schools, Member
of the Court of Assistants of the
Haberdashers Livery Company.
Neil Jones has been a Non-Executive
Director of Sonae Sierra since 1999 and is a
member of both the Investment and Finance
Committees. He is an advisor to Grosvenor,
and a Non- Executive director of both Majid
Al Futtaim Properties and of the Leducq
Foundation. He is also Founder and
shareholder of both Almacantar and
Temprano Capital Partners. He was CEO of
Grosvenor Continental Europe from 1997 to
2009 and an Executive Director of Grosvenor
Group Ltd. Based in Paris since 1998; he has
also lived and worked in London, Brussels
and Hong Kong.
Academic achievements
Degree in law from Trinity College, Cambridge;
Masters of Law from the University of
Virginia; Fellow of the Institute of Chartered
Accountants in England and Wales; Member
of the Institute of Taxation (UK); Certified
Public Accountant (Colorado, USA).
Academic achievements
BSc (Hons) Degree in Estate Management;
RICS; General Management Programme,
Harvard Business School.
Ângelo Paupério
Academic achievements
Degree in Civil Engineering, University
of Porto; MBA, ISEE, University of Porto.
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< >
BOARD MEMBERS AND EXECUTIVES (CONTINUED)
Executive Directors
Fernando Guedes Oliveira
Edmundo Figueiredo
Chief Executive Officer
Director, Chief Financial Officer
Pedro Caupers
Director, Investment and Asset Management
Fernando Guedes Oliveira joined Sonae
Sierra in 1991, as Development Manager of
the Company’s ViaCatarina Shopping and
Centro Vasco de Gama shopping centres.
He had previously spent seven years in other
management roles with the Sonae Group.
In 1999 he took responsibility for all Sonae
Sierra’s development operations in Europe
and was appointed CEO of Sonae Sierra
in April 2010 with direct responsibilities
over the Human Resources, Corporate
Communication, Marketing and Innovation
and Sustainability. He is the chair of the
Sustainability Steering Committee.
Edmundo Figueiredo joined the Sonae
Group in 1989, as Financial Controller of the
company’s real estate activities. As Sonae
Sierra’s Chief Financial Officer and a member
of the Sonae Group Finance Committee,
Edmundo’s responsibilities include Internal
Audit; Legal, Fiscal and Mergers &
Acquisitions; Finance, Planning & Control,
Information Systems and Back-Office.
Pedro Caupers joined Sonae Sierra in 1997.
In 1999 he was appointed Board Director,
with responsibilities for all the Company’s
European property management and leasing
activities. Since 2009 he has been in charge
of the investment division and its European
portfolio. He is also manager of the Sonae
Sierra Funds. He is a member of the
Sustainability Steering Committee.
Academic achievements
Degree in Finance, Lisbon School of
Economics (ISCEF).
Academic achievements
Degree in Electrical Engineering, Instituto
Superior Técnico; PhD, Paris University;
MBA, INSEAD.
Ana Guedes Oliveira
João Correia de Sampaio
José Baeta Tomás
Director, Developments
Director, Property Management and Leasing
Director, Chief Executive Officer, Sonae Sierra Brasil
Ana Guedes Oliveira has been with
Sonae Sierra since 1987. Having managed
the development of two major centres
in Portugal, she moved to portfolio
management in 1999. In 2008 she took
over responsibilities for all Sonae Sierra’s
European investment activities. Since
2009 she has overseen all aspects of
the Company’s development programme
(outside of Brazil). She is a member of
the Sustainability Steering Committee.
João Correia de Sampaio joined Sonae Sierra
in 1992, since when among other duties in
the property management area he was
Managing Director of Sierra Management
Portugal and Sierra Management Spain.
Since 2009 he has been responsible for
all Sonae Sierra’s property management
and leasing activities (outside of Brazil).
He is a member of the Sustainability
Steering Committee.
Having joined the Sonae Group in 1982,
José Baeta Tomás was appointed General
Manager of Sonae Distribuição in 1983. He
joined the Executive Committee in 1985
and, in 1995, created Sonae Distribuição
in Brazil. From 2003 to 2009 he managed
Tafisa Brazil and supervised the Sonae Group
activities in Brazil. In 2010 he was appointed
CEO of Sonae Sierra Brasil. He is a member
of the Sustainability Steering Committee.
Academic achievements
Degree in Military Sciences, Academia Militar,
Lisbon; MBA, Nova University of Lisbon.
Academic achievements
Degrees in Finance, ISE, Lisbon, and Retail
Marketing, Management Centre Europe,
Oxford. Executive Program Michigan
University USA.
Academic achievements
Degree in Civil Engineering, University
of Porto; MBA, ISEE, University of Porto;
AMP, Harvard Business School.
Academic achievements
Degree in Civil Engineering, Porto
University; MBA, ISEE, University of Porto;
AMP, INSEAD.
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BOARD MEMBERS AND EXECUTIVES (CONTINUED)
Other Executives
João Pessoa Jorge
Joaquim Pereira Mendes
José Falcão Mena
Services, Asia
Legal, Tax, Mergers & Acquisitions
EMEA Sierra Services
João Pessoa Jorge joined the Sonae Group in 1983
as one of the executives involved in starting the
Group’s real estate business. From 1998 until 2010,
he was CEO of Sonae Sierra Brasil. In 2010, João
took responsibility for promoting the Company’s
professional services business in Asia.
Joaquim Pereira Mendes joined Sonae Sierra in
1989 and is responsible for the Company’s Legal,
Tax and Mergers & Acquisitions activities.
José Falcão Mena joined Sonae Sierra in 1989. He
has overseen the Company’s expansion in Iberia
since 1998 and been responsible for shopping
centre development in the same region since 2004.
In 2010 he became responsible for the expansion of
professional services to clients in the EMEA region.
Academic achievements
Degree in Law, Coimbra University; Visiting
Professor, Portucalense University, Porto.
Academic achievements
Degree in Civil Engineering, Instituto Superior
Técnico, Lisbon; Management Graduated, ISCTE,
Lisbon; Advanced Marketing Studies, Católica
Lisbon – School of Business and Economics.
Academic achievements
Degree in Civil Engineering, University of Porto;
MBA, Kent State University, Ohio.
Joaquim Ribeiro
Ingo Nissen
Thomas Binder
Finance, Planning and Control
Development, Romania
Development, Germany
Joaquim Ribeiro joined the Sonae Group’s holding
company in 1985, before transferring to Sonae
Indústria. He then moved to London for six years,
where he worked for Sonae International. In 1995
he joined Sonae Sierra’s financial department,
where – since 2008 – he has been responsible for
Finance, Control, Back Office and Information
Systems. He is a member of the Sustainability
Steering Committee and responsible for the
Risk Management Working Group.
Ingo Nissen joined Sonae Sierra in 2000, when
the Company began operations in Germany. Since
2007 he has responsibilities for the Company’s
shopping centre developments in Romania.
Thomas Binder has more than 30 years’
experience of project and lease management in
the German shopping centre, business parks and
commercial property sector. He joined Sonae Sierra
in 2006, and has responsibilities for the Company’s
shopping centre developments in Germany.
Academic achievements
Degree in Civil Engineering, Technical University,
Braunschweig; PhD, Technical University, Munich.
Academic achievements
Degree in Real Estate Management,
Wirtschaftsakademie, Kiel; studied Law in Bochum
and Kiel.
Academic achievements
Degree in Economics, Faculdade de Economia do
Porto; MBA, Nova University of Lisbon; MSc in
Property Investment, City University, London.
Vitor Nogueira
Manuela Calhau
Cristina Santos
Property Management North Africa
and Eastern Europe
Marketing and Innovation
Property Management, Portugal
Having overseen the inauguration of more
than 10 new shopping centres in Iberia, Vitor
Nogueira previously led the Sierra Management
support team responsible for 17 shopping centres
in Spain. Since 2007, his responsibilities have been
focused on the Company’s non-Iberian operations,
particularly those in Italy, Greece and Romania.
Since 2012 he became responsible for property
management in North Africa and Eastern Europe.
Manuela Calhau joined Sonae Sierra in 2008,
following senior positions in the telecommunications
sector, where she was a board member at several
Sonaecom companies and a consultant at
McKinsey & Co. Manuela was the first Portuguese
woman to join McKinsey at management level.
At Sonae Sierra, she is responsible for marketing
all the Company’s European operating shopping
centres and development projects. She is a
member of the Sustainability Steering Committee.
Cristina Santos joined Sonae Sierra in 1995,
as Assistant Director of GaiaShopping, where
she later became the centre’s Director. She
subsequently transferred to the Company’s central
Property Management division and is now the
Managing Director of Sierra Management Portugal,
with special responsibilities for property
management and letting.
Academic achievements
Degree in Management Administration, UL/UM,
Lisbon; MBA, IEDE, Madrid; Master of Science in
Finance, Central Western University, Texas;
Leadership, London Business School; Global
Strategic Management at Harvard Business School.
Academic achievements
Degree in Economics, Católica Lisbon – School of
Business and Economics; MBA, Nova University of
Lisbon; Visiting Professor on the joint UCP/UNL/MIT
MBA programme.
Academic achievements
Degree in Food Engineering, Católica Lisbon –
School of Business and Economics.
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BOARD MEMBERS AND EXECUTIVES (CONTINUED)
Other Executives (continued)
Alexandre Fernandes
Alberto Bravo
Carlos Alberto Correa
Asset Management, Portugal and Spain
Property Management, Spain, Romania
and Greece
CFO & IR Officer, Sonae Sierra Brasil
Alexandre Fernandes joined Sonae Sierra in 1997
as Development Manager of NorteShopping, later
becoming the centre’s General Manager. In 2000 he
was appointed Asset Manager for Portugal and in
2002 he added Greece and Romania to his portfolio.
Since 2008, Alexandre has overseen all Sonae Sierra’s
real estate investments in Portugal and Spain.
Alberto Bravo spent four years in charge of the
property management activities of Spanish
consultancy CCC before joining Sonae Sierra in
2000. Since then, he has held various positions
within Sonae Sierra, ranging from regional
operations manager for southern Spain to Head
of Property Management for the whole of Spain, a
responsibility he took up in 2009. In 2013 he added
the Romanian market to his specific responsibilities.
Carlos Alberto Correa joined Sonae Sierra Brasil
as Deputy CFO in 2007, having spent a number of
years with some of Brazil’s larger companies, where
he acquired extensive experience in the financial field.
In February 2009 he was appointed CFO of Sonae
Sierra Brasil, with overall responsibility for the
Company’s financial area. In 2011 he also took
responsibility over the investors' relations department.
Academic achievements
Degree in Electronics Engineering, Minho University;
MSc in Management, University of Porto; MBA, ISEE
University of Porto; MSc in Management, University
of Porto; AMP, IE Madrid.
Academic achievements
Degree in Law, UNED, Madrid; Studied General
Management, London Business School.
Academic achievements
Degree in Accounting & MBA, Universidade
Presbiteriana Mackenzie, São Paulo; AMP, Harvard
Business School.
Pedro Soveral Rodrigues
Waldir Chao
Jorge Morgadinho
Human Resources
Property Management and Leasing, Sonae Sierra Brasil
Conceptual Design & Architecture
Pedro Soveral Rodrigues joined Sonae Sierra in 1998 as
Deputy Manager of Centro Colombo. Since then he
assumed different responsibilities at the company
including the Expansion role in Iberia, the leadership of
the Safety & Health area, as well as the responsibility of
Property Management in Italy. In 2010 he was
appointed as Head of Human Resources. He is a
member of the Sustainability Steering Committee.
Waldir Chao joined Sonae Sierra Brasil in 2011 after
17 years in the Brazilian retail and real estate
business. He has wide ranging responsibilities for
the management, marketing and leasing of Sonae
Sierra Brasil's shopping centres, with a particular
emphasis on the evolution of the day-to-day
management aspects of each asset.aspects of
each asset.
Academic achievements
Degree in Mechanical Engineering, IST, Lisbon; MBA,
Nova University of Lisbon; PED, IMD, Lausanne.
Academic achievements
Degree in Industrial and Management Engineering, –
U.S.P., São Paulo; MBA, California State University,
San Diego.
Jorge Morgadinho has been with Sonae Sierra since
1994. He started his activity as an architect for
Centro Colombo. Following that he was appointed
Deputy Development Manager for Centro Vasco
da Gama. From 1999 to 2005 he was responsible
for the development of three shopping centres in
Spain. In 2006 he started his activity as Expansion
Manager for New Markets. Since 2010 he returned
to the architecture department as Head of the
Conceptual Design & Architecture.
Manuel Guerra
Thanos Efthymiopoulos
Development and Engineering Services
Finance and Back-Office, Greece and Romania and
Development and Asset Management, Greece
Manuel Guerra joined Sonae Sierra in 1989 as
Development Manager. Following several roles
in the Developments business with responsibility
for a large number of Sonae Sierra’s projects in
Iberia, in 2011 he was appointed General Manager
of Developments Iberia with responsibility for
engineering services, and in 2012 he was promoted
to General Manager for Developments and
Engineering Services.
Thanos Efthymiopoulos joined Sonae Sierra in Greece as Head of Finance and
Back Office in March 2010. Since July 2011 he assumed also the responsibilities
for the Development and Asset management business and that of Country’s
representative for Greece and in October 2013 he took also the charge of the
Finance and Back Office functions in Romania. Prior to joining Sierra, Thanos
was the CIO of a real estate private equity firm, specialising in South- East
Europe. Before this he was an Executive Director and the CFO of a leading real
estate development group in Athens, Greece. His professional experience
started in 1994 at Athens Office of Arthur Andersen.
Academic achievements
Degree in Civil Engineering from Instituto Superior
Tecnico, Technical University in Lisbon. Post –
graduate qualifications in Real Estate Management
from IST and general management from Catholic
University, Lisbon.
Academic achievements
Thanos holds an MSc in International Economics Banking and Finance from
the University of Wales, College of Cardiff and a BA in Economics from the
National University of Athens. He is a member of the Royal Institution of
Chartered Surveyors.
Academic achievements
Degree in Architecture at Faculdade de
Arquitectura, Lisbon. MBA at IESE, Universidad
de Navarra, Barcelona.
III
annEx: global rEporting initiativE
Introduction
General Standard Disclosures
Economic Aspects
Environmental Aspects
Labour Practices and Decent Work Aspects
Society Aspects
Product Responsibility Aspects
SONAE SIERRA
2013 Economic, Environmental and Social Report
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55
68
74
105
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uberlândia Shopping, Brazil
parque d. pedro Shopping, Brazil
ANNEX:
global rEporting
initiativE
transparency about the sustainability of a company’s activities is of interest to a diverse
range of stakeholders. the global Reporting Initiative (gRI) has collaborated with large
networks of experts representing different stakeholder groups in order to develop a
comprehensive framework for sustainability reporting that can be used by organisations
of any size, sector or location. the gRI’s Sustainability Reporting guidelines are the
world’s most widely used sustainability reporting framework.
Since 2004 we have published reports which comply with the
GRI. In May 2013, the GRI released the fourth update of its
Sustainability Reporting Guidelines, the G4. The G4 was
developed to increase emphasis on the need for organisations
to focus their reporting process and final report on those topics
that are material to their business and key stakeholders. This
report has been developed in accordance with the ‘Core’ GRI
G4 Guidelines. Where applicable, it also follows the GRI G3.1
Construction and Real Estate Sector Supplement (CRESS)
guidance which was released in 2011 (the updated G4
Construction and Real Estate Sector Disclosure, published
in February 2014, was not available at the time of writing).
This chapter follows the structure of the GRI G4 Guidelines, and
includes our responses to the Profile Disclosures, Disclosures
on Management Approach and Performance Indicators, or
references where these can be found in other sections of this
report. As such, it replaces the need for a separate content
index based on the recommended format outlined in the G4
Sustainability Reporting Guidelines Implementation Manual.
We have reported against all material indicators for each Aspect
identified in our materiality review, and any omissions are
detailed in each section. All GRI General Standard and Specific
Standard Disclosures have been externally assured by an
independent auditor to ensure that data and information is
accurate and complies with the applicable guidelines.
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Strategy and analysis
g4.1
Statement from the most senior
decision-maker of the organisation.
‘CEO’s Statement’, pages 3 to 4.
organisational profile
g4.3
Name of the organisation.
‘Our Company’, page 8.
g4.4
Primary brands, products and services. ‘Our Company’, page 8.
g4.5
Location of the organisation’s
headquarters.
g4.6
‘Our Company, Where we operate’, page 11.
Number of countries where the
organisation operates, and names of
countries where either the organisation
has significant operations or that are
specifically relevant to the sustainability
topics covered in the report.
g4.7
Nature of ownership and legal form.
g4.8
Markets served (including geographic ‘Our Company, Where we operate’, page 11.
breakdown, sectors served, and types
of customers/beneficiaries).
g4.9
Scale of the reporting organisation.
‘Our Company, Where we operate’, page 11.
g4.10
Characteristics of the workforce.
We consider our workforce to be the 1,144 employees that we directly employ, and the ten people
who are employed by other companies but are supervised by Sonae Sierra. We also employed
20 independent contractors during the reporting period. The vast majority (98%) of our direct
employees are employed on a full time basis. Nineteen are employed on part time contracts, and
three are temporary employees. They are located across 11 countries with more than 76% based
in our two largest markets, Portugal (35%) and Brazil (41%). Other significant locations include
Spain (9%). During 2013, 198 employees left the company (a male/female turnover rate of 10%
and 7.8% respectively), and we hired 219 new employees (a male/female new hire ratio of 10.9%
and 8.2% respectively).
For more information on our workforce see the tables below and G4-LA12 (page 119).
Our headquarters are located in Maia, Portugal.
‘Governance’, page 46.
Direct Employees
Direct Employees
Country Female Male Total
Employment contract Female Male
Portugal 233 169 402
Spain 59 42 101
Italy 28 19 47
Germany 28 30 58
Greece 5 2 7
Romania 10 7 17
The Netherlands 2 2 4
Turkey 4 9 13
Morocco 3 4 7
Algeria 6 13 19
Brazil 200 269 469
Permanent 550 552
Temporary 28 14
total
578
566
1,144
total
578
566
Supervised Workers
Country Female Male Total
Portugal 3 – 3
Spain 1 – 1
Italy – 1 1
Germany 3 1 4
Greece – 1 1
total
7
3
10
Direct Employees
Employment type Female Male
Full Time 557 565
Permanent Part Time 18 1
Temporary Part Time 3 –
total
578
566
Independent Workers
Country Female Male Total
Portugal 10 6 16
Spain 2 – 2
Italy 1 – 1
Germany – 1 1
total
13
7
20
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organisational profile (continued)
g4.11
Percentage of total employees
covered by collective bargaining
agreements.
Sonae Sierra does not have any collective bargaining agreements, so 0% of employees are covered.
g4.12
Describe the organisation’s
supply chain.
In 2013, we had contracts in place with suppliers totalling €1,181 million. Our suppliers can be
divided into two broad groups: service suppliers who provide maintenance, security, cleaning and
waste management services in our shopping centres; and development suppliers who provide
the goods and materials (such building materials, metals, stone and timber) that we use during
the development of new shopping centres and refurbishments and expansions of existing
centres. In many cases, development services are provided by contractors who in turn manage
their own supply chain to source the goods and materials we use. We also procure a small
amount of office supplies for use in our shopping centres and corporate offices, such as paper,
envelopes, pens and folders.
The appointment of suppliers is governed by our supplier procurement procedures. Our
Responsible Procurement Policy, adopted in 2007, is integrated into our Service Suppliers’
Management Procedures. All contracts with critical suppliers must include safety, health and
environmental clauses, and sub-contractors have the same level of requirements in this area as
contractors. We promote high environmental standards and in 2013, 38%14 of our suppliers had
an environment management system certified to ISO 14001.
The performance of critical development suppliers (contracts over €2.5 million) is assessed
through questionnaires that collect information on their policies and practices regarding a range
of CR issues including ethics, anti-corruption, human rights, environmental compliance, equal
opportunities, safety and health and community investments.
There is no policy that guarantees preference to locally-based suppliers. However, the nature
of the work carried out by our service and development suppliers means that a large proportion
may be located close to our shopping centres. In 2013, 98% of our procurement spend was with
national suppliers (aggregated across all countries).
g4.13
Significant changes during the
reporting period regarding the
organisation’s size, structure,
ownership, or its supply chain.
’The Year At a Glance, Key Achievements’, page 5.
g4.14
Report whether and how the
precautionary approach or principle
is addressed by the organisation.
The precautionary principle is addressed through our approach to Safety, Health and Environmental (SHE) issues. We operate a Safety, Health and Environment Management System (SHEMS) certified in accordance with ISO 14001 and OHSAS 18001 standards at a
corporate level and local SHEMS on all our shopping centre and development sites, which require
us to identify SHE aspects and impacts associated with our activities (see pages 19 to 20 for
further details, including the number of our local SHEMS which are certified). We apply our
Environmental Due Diligence procedure on new projects and acquisitions and our Safety and
Health Due Diligence procedure on acquisitions.
Our Safety, Health and Environment Development Standards (SHEDS), also described on page 25,
enable us to minimise SHE risks and enhance the eco-efficiency of our shopping centres in
operation during the design phase. We also demonstrate a precautionary approach to climate
change risks; see pages 69 to 70 for further details.
14
This includes all Sonae Sierra suppliers with a total transaction value above € 50.000 (317 suppliers in 2013). It is calculated as the total number of suppliers with ISO 14001
certification (47), divided by the total number of applicable suppliers who responded to this question (124).
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organisational profile (continued)
g4.15
List of externally developed economic,
environmental and social charters,
principles, or other initiatives to which
the organisation subscribes or which
it endorses.
global compact
Sonae is a signatory of the Global Compact, a voluntary contract between the united Nations and the worldwide business community. It is designed to encourage companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards; the environment, and anti-corruption. As we are partially owned by Sonae, we must
provide this shareholder with an outline of how we comply with these principles, so it can fully
report to the united Nations.
uli greenprint centre for building performance
In 2009, Sonae Sierra became a Founding Member of the Greenprint Foundation, a global industry
initiative supported by key players in the property sector. In 2013, Sonae Sierra participated
in the ‘Greenprint Performance Report Volume 4’ (previously called Greenprint Carbon Index).
We submitted energy consumption and Greenhouse Gas (GHG) emissions data from 45 shopping
centres, which were analysed and compared to other Greenprint members’ portfolios. We are a
member of the Advisory Board and sit on its Performance Committee. In 2013 we also joined
its Valuation and Portfolio Management Committee and Sustainability Council.
inrEv Sustainability Working group
INREV, the European Association for Investors in Non-listed Real Estate Vehicles, launched a
Sustainability Working Group in 2009 to inform and educate members of fund-level sustainability
issues. INREV’s initial work focused on improving members’ access to information on sustainability
issues such as regulation and industry benchmarks, understanding market practices in the
industry and supporting other initiatives across INREV’s committees such as reporting and due
diligence. Sonae Sierra is a member of the Working Group and has contributed to the INREV Best
Practice Recommendations (BPR) for Sustainability Reporting in 2012 and in 2013 was involved in
the revision of the due diligence questionnaire.
Sustainable Energy Europe campaign
In 2008, Sonae Sierra was selected to be a partner of the Sustainable Energy Europe Campaign,
due to the Company’s strong commitment to sustainability and potential to contribute to the
Campaign’s objectives. The Sustainable Energy Europe Campaign is an initiative of the European
Commission’s Directorate-General for Energy and Transport, which aims to raise public awareness
and promote sustainable energy production and use among individuals, organisations, private
companies, public authorities, energy agencies, industry associations and NGOs across Europe.
the 2°c challenge communiqué
In 2011 Sonae Sierra signed The 2°C Challenge Communiqué that calls on governments to
break the deadlock in the international negotiations and take action at a national level to tackle
climate change.
World business council for Sustainable development
In previous years we have participated in the core group of the WBCSD’s Energy Efficiency in
Buildings (EBB) project and signed up to the WBCSD’s Manifesto for Energy Efficiency in Buildings.
World Safety declaration
The World Safety Declaration is a charter which forms a global commitment to improve workplace
safety. Sonae, one of our two shareholders, and became a signatory to this agreement in
November 2005.
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organisational profile (continued)
g4.16
Memberships of associations (such as
industry associations) and national or
international advocacy organisations in
which the organisation: holds a position
on the governance body; participates
in projects or committees; provides
substantive funding beyond routine
membership dues and/or views
membership as strategic.
memberships in industry associations
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
ALSHOP – Associação Brasileira de Lojistas de Shopping (Brazilian Association of Shopping Tenants)*
Asociación Española de Centros Comerciales – AECC (Spanish Council of Shopping Centres)
Associação Portuguesa de Centros Comerciais – APCC (Portuguese Council of Shopping Centres)*
Associação Portuguesa de Promotores e Investidores Imobiliários – APII (Portuguese Property Investor and Developer Council)**
Associação Brasileira de Shopping Centers – ABRASCE (Brazilian Council of Shopping Centres)
Assoimmobiliare (Italian Real Estate Industry Association)*
CSP – Confederação de Serviços de Portugal (Confederation of Services of Portugal)
CCILC – Câmara de Comércio e Indústria Luso-Colombiana (Luso-Colombian Chamber
of Commerce and Industry)
Consiglio Nazionale dei Centri Commerciali Italia – CNCC (Italian Council of Shopping Centres)*
EIRE – Expo Italia Real Estate**
European Association for Investors in Non-Listed Estate Vehicles – INREV**
European Property Federation*
Federimmobiliare (Italian Federation of Real Estate Associations)*
German Council of Shopping Centres*
Greek Council of Shopping Centres*
International Council of Shopping Centres (ICSC)**
IBEVAR – Instituto Brasileiro de Executivos de Varejo (Brazilian Institute of Retail Executives)
Romanian Council of Shopping Centres*
urban Land Institute – uLI
* Denotes organisations where Sonae Sierra has significant influence either as president, a
trustee or a member of the Board or Council.
** Denotes organisations where Sonae Sierra is a member of a working group, taskforce or committee.
identified material aspects and boundaries
g4.17
List of all entities included in the
organisation’s consolidated financial
statements or equivalent documents
and identification of any entity
included in the organisation’s
consolidated financial statements
or equivalent documents that are
not covered by the report.
Please see Note 3 in our Consolidated Report and Accounts 2013 for a full list of Group companies
included in our financial statements.
This report provides an account of our performance across all Sonae Sierra businesses including
Sierra Investments, Sierra Developments, Sierra Management and Sonae Sierra Brasil.
The Safety, Health and Environment (SHE) information covers all our owned subsidiary holding
companies, regardless of our ownership stake in these. The financial information is reported
on the financial value derived directly by Sonae Sierra, which is proportionate to our
ownership stake.
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identified material aspects and boundaries (continued)
g4.18
Explain the process for defining the
report content and Aspect Boundaries,
and explain how the organisation has
implemented the Reporting Principles
for Defining Report Content.
With reference to the new guidance issued within the GRI’s G4 Sustainability Reporting Guidelines, in 2013 Sonae Sierra commissioned a new Materiality Review. This Review drew upon the findings of Sonae Sierra’s last comprehensive materiality assessment and the sustainability strategy review, both performed in 2011, as well as the findings of the Company’s latest stakeholder surveys and activities of the Risk Management Working Group. The review incorporated elements
of the materiality approach developed by the sustainability think-tank AccountAbility with
modifications introduced by the Hauser Centre at Harvard university and the Initiative for
Responsible Investment15.
The 2013 Materiality Review process was based upon the four-stage approach recommended
by the GRI. This involved:
•
Step 1: identification of topics “that may reasonably be considered important for reflecting
the organisation’s impacts or influencing stakeholders” and whether the impacts related to
each relevant topic occur within the organisation or outside of the organisation, or both. To do
this, all 46 aspects defined by the G4 were tested against five weighted criteria to assess their
importance to Sonae Sierra and five weighted criteria to assess their importance to Sonae
Sierra’s stakeholders. Material used to assess the importance of each aspect to our Company
included, for example, the revised sustainability strategy, risk assessments, legislation reviews
and peer reviews. Materials used to assess the importance of each aspect to our stakeholders
included employee, tenant, community and consumer surveys, and annual investor
information requests. The overall importance of each issue was then calculated using an
average score across each criterion.
•
Step 2: prioritisation of aspects that “reflect the organisation’s significant economic,
environmental and social impacts” and the aspects that “substantively influence the
assessments and decisions of stakeholders”. Based on the outcomes of step 1, we developed
a Materiality Matrix (see figure below) to map each aspect in terms of its importance to
Sonae Sierra and its importance to our stakeholders. This was based on the aspects which
were ranked above a certain threshold and were deemed to be material. In keeping with the
GRI’s advice, the threshold for stakeholder importance was lower (2 or above) than the one
for importance to Sonae Sierra (3 or above).
materiality matrix showing material issues to Sonae Sierra
5
Customer Health and Safety
4
Water
Energy
Health and Safety
Importance to Sonae Sierra
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Waste
Products and Services
Emmissions
Training and Education
3
Indirect Economic impacts
Supplier Assessment of Labour Practices
Biodiversity
Local Communities
2
Materials
Diversity and Equal Opportunity
Equal Remuneration for Men and Women
1
0
0
1
2
3
4
5
Importance to stakeholders
15
From Transparency to Performance: Industry-Based Sustainability Reporting on Key Issues, Steve Lyndenberg, Jean Rogers, David Wood. (The Hauser Center for non-profit
organisations at Harvard university and Initiative for Responsible Investment, 2010).
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identified material aspects and boundaries (continued)
•
Step 3: validation of material aspects prior to reporting to ensure that the report provides
a reasonable and balanced presentation of an organisation’s sustainability performance.
We reviewed the aspects deemed to be material according to the Materiality Matrix, and
decided to remove one aspect and introduce eleven additional aspects based on our
business and sustainability performance.
– The one aspect removed was ‘Supplier Assessment of Labour Practices’, due to the fact
that the vast majority of our suppliers provide services rather than manufactured goods,
and are based in the core countries of operation (Western Europe and Brazil).
Furthermore, we already address what we consider to be the most significant risk area in
terms of supplier labour practices – supplier safety – through the operational procedures
within our Safety, Health and Environment Management System (SHEMS). Supplier
safety therefore falls within the scope and boundary of the material aspect ‘Occupational
Health and Safety’ (see page 105 for further details).
– The eleven additional aspects added were: Environmental Grievance Mechanisms; Labour
Practice Grievance Mechanisms; Public Policy and Grievance Mechanisms for Impacts on
Society (based on importance to key stakeholder groups), and Economic Performance;
(Environmental) Compliance; Environment Overall; Anti-Competitive Behaviour;
(Society) Compliance; Product and Service Labelling and (Product Responsibility)
Compliance (all based on importance to Sonae Sierra). The specific rationale for deeming
each of these aspects to be material is explained in the Disclosures on Management
Approach for each aspect.
•
Step 4: review of material aspects after the report has been published. This step is due to
be carried out during the summer of 2014.
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SONAE SIERRA
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.61
gEnEral Standard diScloSurES (CONTINuED)
identified material aspects and boundaries (continued)
g4.19
List all the material Aspects identified in the process for defining report content; and
g4.20
For each material Aspect, report the Aspect Boundary within the organisation; and
g4.21
For each material Aspect, report the Aspect Boundary outside the organisation.
Material boundaries within our Company (Sonae Sierra’s business activities)
Material aspect
Property
Management
Asset
Management
√
√
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√
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√
√
√
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√
Development
Economic Performance
Indirect Economic Impacts
Materials
Energy
Water
Biodiversity
Emissions
Effluents and Waste
Products and Services
(Environment) Compliance
(Environment) Overall
Environmental Grievance Mechanisms
Occupational Health and Safety
Training and Education
Diversity and Equal Opportunity
Equal Remuneration for Men and Women
Labour Practices Grievance Mechanisms
Local Communities
Public Policy
Anti-Competitive Behaviour
(Social) Compliance
Grievance Mechanisms for Impacts
on Society
Customer Health and Safety
Product and Service Labelling
(Product Responsibility) Compliance
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Corporate
√
√
√
√
√
Professional
Services
√
√
Material boundaries
outside of our
Company (business chain upstream
& downstream)
Suppliers
Tenants
√
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The above table identifies the material boundaries for each aspect, broadly spilt between impacts under our direct operational control, those related
to professional services and those related to the activities of our suppliers and tenants. In some cases, there is a mismatch between the material
boundary and the scope of this report. For example, we do not include the sustainability impacts of our tenants, or shopping centres that we
manage but do not own. For specific limitations regarding the boundary and level of coverage for each of the above aspects, see G4.23, the relevant
Disclosure on Management Approach for each material aspect and Data Qualifying Notes for individual indicators.
We have not provided a further analysis of material boundaries according to geography/region as the nature of our operations that fall within the
scope of this report are located in regions which typically possess significant bodies of legislation covering each aspect, meaning there are no
dramatic differences in the materiality of each aspect. Furthermore, we apply a consistent approach to managing these impacts across our owned
shopping centres. Where differences do occur, for example in relation to the localised impacts of climate change and water availability, these are
often felt at an individual asset level, and not at a broader country or regional level. In these instances, our management approach allows for a more
tailored approach (see G4-EC2 and the DMA for water).
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identified material aspects and boundaries (continued)
g4.22
Report the effect of any
restatements of information
provided in previous reports,
and the reasons for such
restatements.
Any re-statements of previously reported values are explained using data qualifying notes beside each performance indicator. g4.23
Report significant changes from
previous reporting periods in the
Scope and Aspect Boundaries.
unless otherwise stated, all performance data contained in this report:
• Includes all of Sonae Sierra’s direct operations in Europe and Brazil, but excludes our
activities in Turkey, Azerbaijan, Morocco, Algeria, Colombia and China where we do not own
shopping centres. The exception is data for tenant contracts under management and GLA
under management, where we succeeded in obtaining information for Algeria and Turkey.
•
Excludes our corporate offices in Colombia; Morocco; Algeria; The Netherlands and
Luxembourg.
•
Excludes shopping centres that are managed but not owned by Sonae Sierra (i.e. shopping
centres that we do not hold any shares in). Shopping centres which are not owned by Sonae
Sierra are not fully covered by our SHEMS, and are not included within the scope of SHE
targets related with shopping centres.
•
Excludes the sustainability impact of our tenants (all our owned shopping centres contain
units/facilities which are leased to our tenants; the impacts of these facilities, which are the
impact of our tenants, are not quantified in this report).
•
Excludes development projects that are managed but not owned by Sonae Sierra.
•
Excludes the sustainability impact of our joint venture partners on development projects
and our construction contractors. However, we have included figures for the energy, water
consumption and waste management of our significant development projects completed in
2013. These include the expansion and refurbishment of Shopping Plaza Sul in Brazil and
AlgarveShopping and Centro Colombo in Portugal.
The most significant changes in terms of scope in comparison with the previous reporting period
are the sale of Parque Principado in Spain and Airone and Valecenter in Italy. Parque Principado
was sold in October 2013, thus we have included its performance until that date for all
indicators. For mainly environmental indicators (and related indicators that use the same basis,
such as water efficiency and total water withdrawal) that are linked to our long-term objectives
we have also estimated, when no real data was available, performance for October, November
and December based on historical trends to provide full calendar year data. Airone and
Valecenter were sold at the end of December 2013 and we have included full year data across
all indicators. All three centres are not included in the total number of shopping centres owned,
since as of 31st December they do not belong to us. Airone and Valecenter are included on the
GLA under management since we have kept their management until March 2014.
Key changes from previous reporting periods in terms of material aspects are:
•
Removal of human rights associated impacts related to professional services following
confirmation over the proportion of total revenue generated from this business area. This
confirms that in 2013, in terms of revenue, the activities associated with Sonae Sierra’s
professional services business are not material to the Company as a whole.
•
Removal of aspects associated with supplier impacts covering the environment, society and
labour practices, due to the nature of our Company’s supply chain in relation to other
material aspects.
•
•
•
•
•
•
•
Investors and financiers
Employees
Tenants
Suppliers
Shopping centre visitors
Local communities & authorities
The media
Stakeholder Engagement
g4.24
Provide a list of stakeholder
groups engaged by the
organisation.
< >
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ANNEX: GLOBAL REPORTING INITIATIVE
SONAE SIERRA
2013 Economic, Environmental and Social Report
.63
GENERAL STANDARD DISCLOSURES (CONTINUED)
Stakeholder Engagement (continued)
G4.25
Report the basis for identification
and selection of stakeholders
with whom to engage.
The stakeholder groups with whom we engage have been identified based on our considerable
experience of developing and managing shopping centres.
G4.26
Report the organisation’s approach
In the tables below we have provided a summary of the stakeholder engagement techniques
to stakeholder engagement, including we employed in 2013 and key feedback received.
frequency of engagement by type and
by stakeholder group, and an indication
of whether any of the engagement was
undertaken specifically as part of the
report preparation process; and G4.27
Report key topics and concerns that
have been raised through stakeholder
engagement, and how the organisation
has responded to those key topics and
concerns, including through its reporting.
Report the stakeholder groups that raised
each of the key topics and concerns.
Our Investors
How we engaged and informed
Key topics raised in 2013
How we responded
•
General Shareholders Assembly
•
Annual Reports and Quarterly Reports
•
Regular meetings and presentations
about our financial performance and risk
management practices
The results of this year’s GRESB survey
highlighted our strong performance in policy
& disclosure; management; performance
monitoring and stakeholder engagement.
Overall Sonae Sierra maintained its position
as a ‘Green Star’.
Up until 2012, we were using international
certification standards such as BREEAM and
LEED to inform the best practice guidelines
within our Safety, Health and Environment
Development Standards, but did not pursue
certification against these schemes per se.
•
INREV Sustainability Working Group
•
Annual participation in the Global Real
Estate Sustainability Benchmark
(GRESB)
On the other hand, we were ranked lower
than our peers with respect to ‘Building
Certification & Benchmarking’.
However, we recognise that delivering
buildings that are certified to internationally
recognised standards is increasingly
expected from our stakeholders. For this
reason, all our new developments are now
targeting BREEAM Good, LEED Silver or
DGNB Bronze as a minimum.
How we engaged and informed
Key topics raised in 2013
How we responded
•
Quarterly Horizons magazine
•
Intranet
•
Bi-Annual Corporate Climate Survey
•
Regular Safety, Health and Environment
(SHE) Meetings
•
Regular SHE Meetings
•
SHE ‘Tips’ and Alerts; SHE training
and SPO
•
Involvement of employees in the
definition of the SHE targets and the
development of our Sustainability
Strategy
According to feedback from our bi-annual
Corporate Climate Survey, employees are
satisfied with most aspects of their work at
Sonae Sierra, in particular the Company’s
mission and values; impact on society, work
conditions and trust. A record number of
employees (84%) said they felt well informed
about our sustainability strategy and that
they understand their role in making it come
true. However, the survey highlighted work
life balance and compensation as aspects
which employees have concerns about,
particularly in Portugal and Spain.
We have made considerable efforts to
improve our employees’ work life balance,
such as introducing flexible work
arrangements for those whose job function
enables them to take up these options. Due
to the nature of our industry, it isn’t possible
for all of our employees to access flexible
work arrangements and longer work hours
are sometimes inevitable. We seek to offer
our employees a range of other benefits to
compensate for this.
Our Employees
•
Specific surveys (e.g. on training needs,
our sustainability strategy, SHE
initiatives and reporting practices)
•
World Day for Safety and Health at Work
We also invited our employees to participate
in a quiz to test their understanding of our
sustainability strategy. 74% of employees
who took part in the quiz thought that the
strategy will “deliver significant benefits to
Sonae Sierra”.
We are pleased to observe how employees’
assessment of their work conditions has
improved following our office move in Lisbon
and the refurbishment of our offices in
Maia and Madrid, which have all resulted in
a more pleasant work environment for staff
in these locations.
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Stakeholder Engagement (continued)
our tenants
how we engaged and informed
Key topics raised in 2013
how we responded
According to our 2013 Tenant Survey, 100%
of our shopping centres achieved a tenant
satisfaction rating of 4 or above on a scale of
1 to 6. In general, factors such as cleanliness,
ambience, signage and car parking were
evaluated favourably across our shopping
centres. Factors such as temperature and
WCs showed room for improvement in
some centres.
We continue to target reductions in service
charges through our focus on Safe People
and Eco-efficiency, which aims to deliver
continuous improvements in energy and
water consumption and waste management
(among other issues). For example, we
worked with some tenants to provide energy
audits and discuss ways to reduce their
energy consumption. In 2013 we also
conducted a viability study to install a
polluter pays scheme with the aim of
reducing waste disposal costs for tenants
with effective waste reduction strategies.
•
SierraCentres network and newsletter
•
Tenant Satisfaction Surveys
•
Top Tenant Survey
•
Management meetings
•
Safety, Health and Environment (SHE)
Open Committees
•
SHE training, SHE Preventive
Observations (SPO) and emergency
practice drills
• Energy reduction programme with
tenants that consume the most energy
•
Personæ Tenant Award and Planet Sierra
Tenant Award to acknowledge tenants
with the best safety and health and
environmental practices
Feedback received from our Top Tenant
Survey revealed that the most important
sustainability issues for tenants are those
that can lead to a reduction in operating
costs (such as energy, water and waste
management) and improvements in safety
and health, namely the prevention of
workplace accidents.
In recent years we have also experimented
new store formats that aim to support
tenants and local businesses. For example,
Flash Stores give new and existing tenants
an opportunity to try new ideas by offering
low-rent six month contracts for empty retail
units. Coop Stores support small businesses
by allowing them to pool resources and
share operating costs. For more information,
see page 34.
our Suppliers
how we engaged and informed
Key topics raised in 2013
how we responded
• CR Questionnaire for critical, repeat
development suppliers
In 2013 we held regular SHE meetings with
our security, maintenance, cleaning and
waste suppliers, to discuss the most
common incidents experienced by these
service providers. These meetings
highlighted the importance of basic
housekeeping procedures that help to
prevent incidents such as electrical fires and
injuries from falling equipment.
Since 2010 we have been working closely
with our service suppliers as we strive to be
a zero accident business. A key objective is
aligning suppliers’ safety standards with our
own. During this time we have provided more
than 25,000 hours of training to almost
13,000 suppliers to ensure that our suppliers
were up to date with our required safe
behaviours. We have also agreed on a set
of ‘Simple Safety Rules’ which have been
printed and placed in prominent places as
a constant reminder.
• Service Suppliers’ Evaluation Procedure
• Regular SHE meetings
• SHE training, SPO and Safe Practice
Index
For more information:
See our website.
< >
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Stakeholder Engagement (continued)
Shopping centre visitors
how we engaged and informed
Key topics raised in 2013
how we responded
•
Visitor surveys (including sustainability
surveys)
•
Customer Contact Management System
for visitors to present suggestions and
complaints
Respondents to our Visitor survey
highlighted that the ideal shopping centre
should combine excellent delivery in
services, technology and entertainment.
In Spain we launched a communications
campaign to promote sustainable lifestyles
among our shopping centre visitors. The
campaign highlighted our environmental
progress with the tag line “Now it’s your turn”.
Customers were directed to our Facebook
page where they were encouraged to take
a quiz regarding our environmental
performance in exchange for vouchers to
spend at our shopping centres. More than
12,000 customers completed the quiz with
over 19,700 becoming new fans of Sonae
Sierra, helping us to get our sustainable
lifestyle message across to a greater number
of our customers.
•
Email and SMS updates on services and
events at local shopping centres
•
Awareness-raising events with SHE
themes, including the celebration of
World Environment Day and World Day
for S&H at Work
Half of visitors surveyed prefer to visit more
‘sustainable’ shopping centres.
Transparency, eco-efficiency and supporting
local businesses and communities are topics
visitors feel most strongly about.
For more information:
See our website.
local communities & authorities
how we engaged and informed
Key topics raised in 2013
how we responded
• Community Advisory Panels (CAPs)
At CAP meetings community
representatives are invited to raise ideas and
concerns. For example, in 2013 the CAP at
MaiaShopping asked us to support the local
fire brigade’s fundraising and educational
activities following local wildfires.
The management team at MaiaShopping
worked in partnership with the fire brigade
to put on an exhibition based around the
central message: “They help throughout the
year, now it’s time to help them”. It featured
a history of the fire brigade and provided an
insight into the work they do. Visitors learnt
about fire risks and were able to attend a
first aid workshop, as well as donate money.
•
Community surveys
•
Community Day
•
Email and SMS updates on services and
events at local shopping centres
•
School liaison and staff volunteering
activities
•
Engagement at the shopping centre level
during the planning, development and
operations phases
For more information:
See our website.
< >
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Stakeholder Engagement (continued)
the media
how we engaged and informed
•
•
Conferences, presentations and
interviews
Publication of articles in press covering
economic, social and environmental
issues
general feedback received and how we
responded
In 2013, we received 5,858 cases of press
coverage covering the economic,
environmental and social aspects of our
performance. Of these 94% were positive
or neutral.
The advertising equivalent value (the
net value of the editorial space occupied
at current advertising rates and based
on the difference between favourable
and unfavourable coverage) generated
from sustainability related stories was
€4.6 million. Example in focus
During the year, a significant proportion of
media articles focused on our approach to
safety and health. For example, in Brazil
just under 200 news items mentioned the
OHSAS 18001 certifications received at
uberlândia Shopping, Boulevard Londrina
Shopping, Franca Shopping, Passeio das
Águas Shopping, Shopping Metrópole and
Shopping Plaza Sul. Similar articles were
published in Italy and Spain. Our
environmental performance also generated
interest, for example in Spain a number of
stories focused on our energy saving
initiatives such as the installation of LED
lighting in shopping centre car parks. In addition to the specific feedback received from different stakeholder groups above, we also requested feedback from individual stakeholders in
our 2012 Economic, Environmental and Social Report, through our report feedback form. We only received a small number of completed feedback
forms with qualitative comments to help us improve our reporting. However, the comments we did receive – that Sonae Sierra should place a
stronger focus on the use of alternative energy and water re-use technologies – have been taken into account in our reporting on the ‘Resource
Resilience’ long-term focus area (see page 18).
The Sierra Ombudsman is available for all stakeholders to present their complaints with the guarantee that these will be responded to. In 2013, the
Sierra Ombudsman received 515 complaints from employees, tenants and visitors. The majority of complaints focused around tenant sales, rents,
the location of kiosks, the quality and efficiency of services such as cleaning and security, lack of information in the mall, car parking, complications
with gift vouchers and promotions and noise due to construction works. All complaints were responded to by email or letter and, in some cases, a
meeting was held. The necessary actions were taken in order to address the situation and prevent their reoccurrence. There were no reported
incidences of discrimination, and no grievances related to human rights impacts were filed, addressed or resolved during the year.
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report profile
g4.28
Reporting period (e.g., fiscal or
calendar year) for information
provided.
The information in this report relates to the calendar year ending on 31 December 2013.
g4.29
Date of the most recent previous
report (if any).
This report succeeds our 2012 In Review: Economic, Environmental and Social Performance
Report and our 2012 Economic, Environmental and Social Report, both published in April 2013.
g4.30
Reporting cycle (annual, biennial, etc.). We report on a calendar year cycle.
g4.31
Contact point for questions regarding
the report or its contents.
g4.32
Report the ‘in accordance’ option the
organisation has chosen; report the
GRI Content Index for the chosen
option, and report the reference to
the External Assurance Report, if the
report has been externally assured; and
g4.33 Report the organisation’s policy
and current practice with regard to
seeking external assurance for the
report; report the relationship between
the organization and the assurance
providers and report whether the
highest governance body or senior
executives are involved in seeking
assurance for the organisation’s
sustainability report.
Nuno Rafael Alves
Corporate Responsibility Reporting Coordinator
Email: [email protected]
This report has been developed in accordance with the ‘Core’ G4 GRI Reporting Guidelines.
This GRI Annex is designed to act as our full GRI G4 disclosure, and therefore replaces the need
for a separate content index that follows the recommended format in the G4 Sustainability
Reporting Guidelines Implementation Manual (see page 54). The report (including all GRI
General Standard and Specific Standard Disclosures) has been externally assured by an
independent auditor to ensure that data and information is accurate and complies with GRI G4
guidelines, including the G3.1 Construction and Real Estate Sector Supplement(the updated
G4 Construction and Real Estate Sector Disclosure was published at the time of writing).
The independent auditor’s review can be found on pages 140 to 141.
governance
g4.34
Report the governance structure
of the organisation, including
committees of the highest
governance body. Identify any
committees responsible for
decision-making on economic,
environmental and social impacts.
‘Governance’, page 46 and ‘Governance, Safety, Health and Environment Management System’, page 47.
Ethics and integrity
g4.56
Describe the organization’s values,
principles, standards and norms of
behaviour such as codes of conduct
and codes of ethics. Our Code of Conduct includes a set of ethical principles which apply to everything we do and
outline our commitment to success whilst operating with integrity, openness and honesty.
Regular training on ethics, including the Code, is mandatory for all our employees, during which
they are required to sign and return the Sonae Sierra Code of Conduct Acknowledgement,
confirming that they have received the Code of Conduct and agree to comply with its
provisions. The Code is also included in the Welcome Kit that is sent to all new employees as
part of their induction.
For more, see ‘Our Company’, page 8 ‘Governance’, page 46, ‘Training and Education’ page 113
and ‘Anti-Competitive Behaviour and Compliance’ page 128.
Click here to download Sonae Sierra’s Code of Conduct in full, including a description
of our Ethical Principles.
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Economic aSpEctS
Shopping metrópole, Brazil
Economic pErFormancE
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
The ability of an organisation to deliver financial value for its shareholders is fundamental for a company such as Sonae Sierra and links
closely to the value driven approach embedded in our revised Sustainability Strategy. Our business has the following positive impacts in
relation to this Aspect:
•
Creation of financial value for suppliers and the local economy through development activity.
•
Generating tenant sales through our property management activity.
•
Increasing Net Asset Value and delivering returns from the sales of assets for investors in our Funds.
•
Generating profit for our Company and our investors through all our activities.
One indirect impact which could be viewed as negative is that our business has the potential to contribute to household debt by
promoting consumerism.
The key indicator for Sonae Sierra in this aspect covers direct economic value generated and distributed. Also material for Sonae Sierra given
its geographic scope are financial implications and other risks due to climate change. For more information on our approach to materiality,
including the results of our materiality assessments, see our response to ‘Identified Material Aspects and Boundaries’ on pages 61 to 62.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
Our policies and practices in relation to economic performance aspects are explained in ‘Our business model and strategy’ on page 14, and
‘Risk management’, page 19.
Goals and Targets
‘Our business model and strategy’, page 14.
Responsibilities
‘Governance’, page 46 and ‘Board Members, Executive Directors and Other Executives’, pages 50 to 53.
Resources and Specific Actions
‘Our performance’, pages 21 to 53.
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disclosures on management approach (continued)
c)
report the evaluation of the management approach, including:
• The mechanisms for evaluating the effectiveness of the management approach.
• The results of the evaluation of the management approach.
• Any related adjustments to the management approach.
Monitoring
Sonae Sierra adopted the International Accounting Standards (IAS) in its Consolidated Accounts in 2001, becoming the first real estate
company in Iberia to adopt IAS. We issue financial reports on a quarterly basis, which are made publicly available on our website.
Results and Adjustments
• ‘Our performance’, pages 25 to 35 and ‘Consolidated Accounts’, pages 36 to 43.
• GRI Performance Indicators G4-EC1, G4-EC2 and G4-EC4 presented on pages 69 to 70.
performance indicators
Indicator
g4-Ec1
Direct economic value generated and distributed.
(€ millions)
direct economic value generated
224.3
Economic value distributed
227.0
Operating Costs
Employee wages and benefits
Payment to capital providers
Community Investment
Payments to Government
71.3
58.6
43.5
0.02
53.5
Economic value retained
g4-Ec2
224.3
Revenues and sales of assets
-3
data Qualifying note:
This indicator covers all Company
activities. Payments to Government
include €5.3 million in taxes paid to
government but recharged to tenants
(e.g. property tax).
Financial implications and other risks and opportunities for the organisation’s activities due to climate change.
The impacts of climate change in the form of extreme weather events – flooding, heat waves, weathering, subsidence etc. could cause physical and
local depreciation to assets, and those with unreliable energy supplies could also depreciate faster than others. On the other hand, adapting existing
buildings and developing and acquiring new buildings which perform better in predicted climate change scenarios could help to maintain and
enhance asset and portfolio value in the long term.
In 2009, we commissioned a study to investigate the financial risks associated with climate change on a sample of our Portuguese assets, focusing
on three components: energy (mainly electricity), water and insurance costs. This was done by identifying potential changes in energy use resulting
from climate change under different scenarios and calculating the costs of these changes based on two main assumptions: firstly, that the price of
electricity would be unchanged relative to what it was in 1990 and secondly, that the price will change as a result of climate-related policies. In order
to estimate the impact on the profitability of operations at the selected assets, two approaches were taken. The first was an accounting approach,
in which it was assumed that the cost structure would remain unaltered and reductions in profitability were calculated based on existing publicly
available financial data for each shopping centre. The second involved estimating the relationship between profitability and electricity prices using
an econometric approach. The econometric approach allows for the adjustment of operations in the centres to changing prices of inputs such as
electricity and accounts for other indirect effects on profits such as increased visitors during periods of higher temperatures. The results of this
study revealed that:
• The increased demand for energy and the anticipated increase in the price of energy is expected to reduce profitability by a maximum of
between 2% and 5% in 2030 and between 3% and 6% in 2050, with variations between different shopping centres.
• In the case of water it was not possible to estimate the potential increase in demand due to climate change but the impact of increases in water
costs was examined, with the conclusion that these could reduce profitability by between 0.15% and 2%.
• The likely increase in insurance costs was estimated at 21%. This could affect profitability between 0.1% and 0.7%.
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performance indicators (continued)
Indicator
g4-Ec2
Financial implications and other risks and opportunities for the organisation’s activities due to climate change. (continued)
In Portugal, AlgarveShopping and NorteShopping were selected for a more detailed asset-level study. The results of the study revealed that:
• Increased demand for energy due to higher temperatures combined with projected price increases are likely to impact on operational
shopping centres’ profitability in the long term: for example, at NorteShopping, an estimated reduction of profits between 2% and 5.7% could
occur in 2030.
• Water costs are also expected to rise, but estimates vary significantly and the impact on profitability would be less significant; for example,
between 0.05% and 0.14% at NorteShopping and slightly more at AlgarveShopping due to higher water costs in this region.
• Insurance costs are likely to increase by around 21% due to the increased frequency of extreme weather events and other risks associated with
climate change. The impact on profitability is likely to be around 0.1% at NorteShopping and 0.7% at AlgarveShopping.
In 2013, we commissioned a high-level review building on the 2009 study to explore the business case for climate change adaptation. It reviewed
the following key business drivers as a consequence of climate change: physical damage to property assets; evidence of climate change risks
affecting operational and asset value based on Sonae Sierra management, acquisition and disposal activities; evidence of climate change risks
affecting insurance premiums and policy developments since 2010.
The findings highlighted that the strongest driver related to climate change adaptation relates to the possible transfer of risks usually absorbed by
the public sector to the insurance industry, or directly to the private sector. Other drivers include physical damage to Sonae Sierra assets from
extreme weather related events. Conversely, there was no evidence that climate change risks have had an impact on disposal activities for Sonae
Sierra, but there is increasing awareness amongst valuers. At present there is a limited business case for adaptation measures based on legislative
and policy drivers as there are no plans for introducing legally binding directives requiring property companies to adapt to climate change, and it is
unclear how the costs of planning for climate change adaptation at a national level will be absorbed.
At an operational level, insurance premiums for Sonae Sierra assets are unlikely to be immediately affected. However, if insurance products were
to become unavailable in the future due to an increase in the severity and frequency of extreme weather events, this would impose a significant
burden on the state. If this scenario were to happen, then the private sector may need to absorb the costs directly, and the risks to asset and
operational value would substantially increase.
The potential impact of physical damage to Sonae Sierra assets is illustrated by the recent damage to four Sonae Sierra shopping centres in
Portugal and Brazil as a result of weather-related events. Although the overall impact was limited, in the most extreme case a shopping centre was
forced to close for a short period and significant investment was required for fit-outs to repair several shops.
In the context of this study, Sonae Sierra will pursue a number of soft adaptation measures which do not require large levels of capital investment.
These include:
•
•
•
•
Integrating climate change adaptation into the risk management process of our business activities through the Risk Management Working Group.
Maintaining a register of relevant climate change adaptation policies in all countries of operation.
updating our acquisition checklist to ensure key risks related to weather related events are evaluated.
updating our building standards based on lessons learnt from weather damaged assets and to anticipate potential requirements for hard
adaptation measures in the future.
• Monitoring of the impact of climate change risks on insurance premiums and asset values.
Furthermore, we will continue to review the relative materiality of other environmental impact areas in terms of the risk and opportunity they might
present to the business as part of our Risk Management Working Group. We use a standard risk management framework to evaluate environmental
issues according to the likelihood/frequency of occurrence and the scale of impact should they arise. As well as energy and climate change, other
potential risks and opportunities include water and waste (see pages 19 to 20). The issues identified are addressed through the Resource Resilience
and Safe People and Eco-Efficiency focus areas which form part of our Sustainability Strategy.
g4-Ec4
Financial assistance received from government16.
In 2013, Sonae Sierra did not receive any financial assistance from the government.
16
Whilst this indicator was deemed to not be material to Sonae Sierra, we have maintained it in our reporting for the sake of transparency.
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ECONOMIC ASPECTS (CONTINUED)
ASPECT:
INDIRECT ECONOMIC IMPACTS
Disclosures on Management Approach
a)
Report the impacts that make this Aspect material and describe work undertaken to understand indirect economic impacts at national,
regional or local level
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62.
As a part of our Sustainability Strategy Review performed in 2011/2012, we analysed the impacts of our business activities according to the
Five Capitals Model17, which enabled us to identify several indirect impacts that our Company has on financial, social and human capital
stocks, including:
•
Job creation and skills development.
•
Impacts on local businesses, including suppliers, from our activities.
•
Impacts on our tenants’ businesses.
It is difficult for us to measure the significance of these indirect economic impacts in the context of external benchmarks and stakeholder
priorities, although feedback we have received from tenants and local community members has further highlighted to us the importance of
these issues to some key stakeholder groups.
b)
Report how the organisation manages the material Aspect or its impacts and explain whether the organisation conducted a community
needs assessment to determine the need for infrastructure and other services
Policies and Commitments
Through our focus on the long-term sustainability priorities ‘Prosperous Retailers’ and ‘Leveraging Knowledge’ we are committed to:
•
Helping our tenants to strengthen their businesses.
•
Encouraging small, local and sustainable businesses to thrive.
•
Empowering people through knowledge and skills, focusing not only on our own workforce but also supporting tenants and local
communities.
Goals and Targets
‘Our business model and strategy’, page 14.
Responsibilities and Resources
‘Governance’, page 46.
During the development and operations phases of our centres we carry out feasibility studies to identify consumers’ needs in retail, services
and leisure activities, in order to design and adapt shopping centres to match market needs and the existing retail offer. These studies
consider factors such as demographics within the catchment area and socio-economic indicators, and constitute a form of ‘community needs
assessment’ for our business activity.
Specific Actions
‘Our performance’, pages 25 to 35.
Specifically, we are developing several projects with reference to ‘Prosperous Retailers’ which are designed to create economic benefits
for local people in the locations where we operate shopping centres. In 2013 these included the ‘Coop Store’ project that supports small
businesses by exploring the idea of ‘cooperative’ business models to reduce the level of investment risk for new start-up businesses,
products and brands. It is specifically targeted at artists, designers and other creative entrepreneurs.
In Brazil, we introduced the ‘Qualifica Programme’ in 2012 which aims to provide training to tenants on sales, customer service, visual
marketing and leadership. This programme was ongoing in 2013. Furthermore, Shopping Metrópole in Brazil has a successful community
education project in place offering free classes to adults who did not have the opportunity to graduate from high school and wish to do so.
The funding for this project is provided by the shopping centre.
17
The Five Capitals Model was developed by UK-based sustainability NGO Forum for the Future. It identifies five different types of sustainable capital from where we derive
the goods and services we need to improve the quality of our lives. Natural Capital; Human Capital; Social Capital; Manufactured Capital and Financial Capital. For more
information, see http://wwwforumforthefuture.org/project/five-capitals/overview.
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disclosures on management approach (continued)
c)
report the evaluation of the management approach, including:
• The mechanisms for evaluating the effectiveness of the management approach.
• The results of the evaluation of the management approach.
• Any related adjustments to the management approach.
Monitoring
We monitor our tenants’ sales on a continuous basis and work with tenants to improve their economic performance where necessary. We also
monitor jobs created as a result of new completed development and expansion projects and report these figures on an annual basis.
Results and Adjustments
For tenants’ sales and for further information about our performance in relation to ‘Prosperous Retailers’ see ‘Our performance’, pages 25 to 35.
In 2013, approximately 3,735 jobs were created as a result of the inaugurations of Boulevard Londrina Shopping and Passeio das Águas
Shopping in Brazil, and Hofgarten Solingen in Germany. These include jobs within Sonae Sierra itself and jobs created by our service suppliers
and tenants who recruit local people to work in new stores.
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Economic aSpEctS (CONTINuED)
performance indicators
Indicator
g4-Ec7
Development and impact of infrastructure investments and services supported.
In 2013, there were no investments and services provided primarily for public benefit.
g4-Ec8
Significant indirect economic impacts, including the extent of impacts.
The following diagram illustrates the most significant indirect economic impacts we have identified as being generated by our Company through
each core business activity.
+ generates returns for investors
in our funds
g
g
+ Stimulates investment in developing
regions (e.g. brazil)
g
g
INVESTMENT
MANAGEMENT
DEVELOPMENT
g
g
+ creates economic value for direct and
indirect suppliers, most of which are
locally–based companies
g
g
- may have negative impact on local
businesses not present within the
shopping centre
g
g
+ can include the provision of infrastructure
for public benefit (roads, green space, etc.)
+ generates sales for our tenants
+ create jobs for the local community
+ create profit for Joint venture partners
+ increase skills base in development,
construction & retail services
+ Support the development of new
business, including small
and locally–owned business
+ increase awareness and
adoption eco–efficiency
through sustainability initiatives
We have not undertaken specific studies which would enable us to evaluate the significance of these impacts in the context of external benchmarks
and stakeholder priorities, but we are able to point to some quantitative indirect economic impacts generated by our Company in 2013, namely:
•
•
•
•
€5,158 million tenant sales at managed owned shopping centres.
32% of shop units in our European shopping centres and 24% of units in our Brazilian shopping centres are occupied by local businesses.
€1,181 million spent on suppliers, of which 98% are national businesses.
3,735 new jobs created as a result of new shopping centre inaugurations.
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ENVIRONMENTAL ASPECTS
Parque D. Pedro Shopping, Brazil
ASPECT:
OVERALL
Disclosures on Management Approach
a)
Report the impacts that make this Aspect material
The development and operation of our shopping centres – as well as the delivery of our corporate activities – is dependent upon the
availability of a range of natural resources (including land, metals, stone, timber, water, renewable and non-renewable sources of energy)
and systems (such as natural climate regulation and ecosystems services). Our activities in turn have adverse impacts on these resources
through the production of greenhouse gas emissions, waste and wastewater, and, in some cases, through the urbanisation of previously
undeveloped land.
In 2013, Sonae Sierra invested more than €16.4 million in environmental initiatives, equivalent to 28% of Direct Net Profit. Environmental
aspects are clearly important to Sonae Sierra and to the Company’s stakeholders. This is demonstrated through the Materiality Review
performed by Sonae Sierra in 2013, which highlighted aspects such as water, energy, waste, emissions and materials as among the top five
most material to Sonae Sierra’s business. For further details, see our response to ‘Identified Material Aspects and Boundaries’ on pages 61
to 62 above.
b)
Report how the organisation manages the material Aspect or its impacts
Policies and Commitments
Our Safety, Health and Environment Policy establishes our responsibility to conduct our activities so that risks towards people, assets
and ecosystems are minimised, and benefits enhanced.
Further references:
Click here to read our Safety, Health and Environment Policy, which is available on our corporate website.
Goals and Targets
‘Our Business model and strategy’, page 14.
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disclosures on management approach
Responsibilities and Resources
ultimate responsibility for environmental aspects lies with Sonae Sierra’s CEO and Executive Committee. The Sustainability Steering
Committee constitutes the senior level of decision making and establishes the Safety, Health and Environment policy, lines of action and
objectives and monitors progress in respect of these. The Sustainability Office actively supports the Sustainability Steering Committee and
advises on SHE Policy and standards. Responsibility for the implementation of Safety, Health and Environment Development Standards
(SHEDS) and Safety, Health and Environment Management System (SHEMS) procedures is assigned to all leaders and managers in the line
organisation, who are also required to demonstrate a strong visible management commitment. Finally, our organisation as a whole is
supported by the SHE network, which provides advice on SHE management and technical issues.
An online training video introducing our approach and policy regarding safety, health and environment is available to all employees. Within
the framework of our SHEMS, we operate a Competence, Training and Awareness Procedure. In accordance with this procedure, the
Sustainability Office and Human Resources (HR) Department use a competence matrix to define the skills and knowledge required for each
aspect of the SHEMS to be effectively implemented by Sonae Sierra’s employees.
Each year, our HR Department identifies SHE training and awareness needs with reference to the staff assessment process, with a particular
focus on those employees whose job role impacts on SHE issues, or who have responsibilities for SHE management. General training needs
are also identified by the Sustainability Office with support from the Country SHE Coordinator.
All training needs are recorded in the Training and Awareness Plan and communicated to all employees involved and their line managers. Site
Training and Awareness Plans are also developed based on the Corporate Plan, and cover initial and continuous training and awareness for
personnel such as new employees, service suppliers’ workers and tenants. An evaluation process is performed based on each training session,
allowing us to monitor the effectiveness of training delivered.
Specific Actions
For specific actions in relation to environmental aspects, see ‘Our performance’, pages 25 to 35 and the GRI Disclosures on Management
Approach in relation to other material environmental aspects on pages 79 to 104 below.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
For an introduction to our SHEMS, see ‘Governance, Safety, Health and Environment Management System’, pages 47 to 48.
Our SHEMS includes a Report, Performance Measurement and Monitoring procedure to monitor, evaluate and report SHE performance on a
regular basis. A series of tools and applications exist to assist the monitoring and reporting tasks, such as the SHE Portal and the CR Portal.
Performance results are evaluated on a timely basis by the Sustainability Steering Committee, Executive Committee and Board of Directors.
We have established an Incident Report and Investigation procedure to report, investigate, communicate and act to prevent environmental
incidents. Its main purpose is to implement corrective and preventive measures that are effective in avoiding similar situations that can lead
to further accidents. Relevant importance is given to the communication of incidents; their investigation; the determination of their root
cause; the definition of proper corrective and preventive measures, and also the communication of learning points throughout the organisation.
We also have a Non-conformities, Preventive and Corrective Actions procedure in place to:
•
Identify and record actual and potential non-conformities.
•
Implement correction measures to minimise their consequences.
•
Analyse non-conformity causes.
•
Define corrective or preventive actions and review their effectiveness.
We operate an annual Audit Programme to systematically audit our SHEMS at corporate and at site levels, covering all our shopping centres
in operation and projects under development.
We integrate specific investment initiatives into each shopping centre’s Investment Plan to ensure that we improve the centre’s
environmental performance. These investment initiatives include environmental protection measures at our existing shopping centres,
corporate offices and development projects, in particular investments in environmental management and waste disposal, emissions
treatment, and remediation costs. See indicator G4-EN31 for full details of these expenditures.
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disclosures on management approach (continued)
Results and Adjustments
For results in relation to environmental aspects, see ‘Our performance’, pages 25 to 35 and the GRI Disclosures on Management Approach
in relation to other material Environmental Aspects on pages 79 to 104 below.
Summary of environmental costs and associated measurable benefits, by environmental category (2013)
In 2008 Sonae Sierra developed a tool to account for environmental expenditures and benefits, both physical and economic, from the
implementation of the company’s SHEMS. Sonae Sierra’s Environmental Accounting aims to:
•
Identify expenditures of environmental conservation activities;
•
Identify benefits gained from such activities;
•
Provide means of quantitative measurement: physical and monetary;
•
Support the communication of results.
Environmental accounting – property management 2013
Capital Current Benefits of Benefits
Environmental Expenditure Costs Significant Actions Benefits of Significant of the
Domain (€) (€) of Previous Periods Actions of the Period Period
Benefits
Indicators
Air – 29,191 1,027.48 63.66 807.35
Reduction of CO2
Emissions (tonnes)
6.42
Reduction of NOx
Emissions (tonnes)
0.09
Reduction of SOx
Emissions (tonnes)
0.24
Reduction of PM
Emissions (tonnes)
Health and well being 162,190 586,101 Compliance with indoor air quality and water quality thresholds –
(legal and company standards)
Energy 731,215 22,183 531,346.29 206,303.79 7,125,015.20
Economic Benefit (€)
4,029,929.47 1,462,750.59 14,148,443.26
Reduction of electricity
consumption (kWh)
27,281.19
Reduction of natural gas
consumption (GJ)
Water 65,256 35,737 58,222.16 3,788.45 278,946.08
Economic Benefit (€)
36,436.46 2,930.38 66,851.37
Reduction of water
consumption (m3)
Ecosystem – – Emergencies – – Noise – – Compliance with legal noise emission limits
Wastewater 2,333 769,401 146,805.62
Economic Benefit (€)
52,187.48
Reduction of wastewater
discharged (m3)
Compliance with wastewater quality thresholds (legal and company standards)
Waste 96,375 917,250 299,250.75
Economic Benefit (€)
211.20 1,523.71
Increase of waste sent
to recycling (tonnes)
1,116.51
Reduction of waste sent
to final disposal (tonnes)
Environmental 2,764 1,953,740 10,744.00
management activities
Economic Benefit (€)
Social activities – 3,270 total Economic (€)
1,060,133
4,316,873
589,568
210,092
7,860,762
Economic benefit (€)
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Results and Adjustments (continued)
data Qualifying note:
The company’s Environmental Accounting (EA) model details the current costs, capital expenditure, and economic and environmental benefits resulting from the
implementation of company’s Safety, Health and Environment Management System. The model allows us to break down expenditure according to baseline expenditure
(e.g. what is legally mandated), and extra-baseline expenditures (e.g. legionella monitoring in countries where no legal requirements exist). In this way we can calculate the
economic effort required to go beyond minimum legal requirements. The EA is structured by environmental domain and specific activities, and the presented figures include
all shopping centres owned by Sonae Sierra in operation for the current reporting year, except Parque Principado. ‘Benefits of the Period’ also excludes Le Terrazze and
uberlândia Shopping as this is based on both 2013 and 2012 data and these shopping centres were not operational for the whole of 2012.
Capital expenditure and current costs are calculated from the company’s financial controlling statements, classifying them by assigning one or several environmental
activities along with their related percentages and legally non mandatory fractions. Current costs include the human resource effort and corporate environmental expenditure.
Benefits can be physical or economic and are calculated as differences of performance between 2013 and 2012. They are based on validated data also presented throughout
this report. Economic benefits can be revenues (monetary inflows from environmental conservation activities, for example from waste recycling) or savings (avoided
consumption, pollutant disposal or costs compared to the previous year).
Significant actions are capital expenditure items corresponding to a cost higher than €3,500 for which environmental criteria were considered (efficiency of resource use) and
have an associated quantifiable physical and/or economic saving (when compared with basic technology or the situation before investment). These actions produce effects
throughout the asset/equipment’s operating period. The effects of actions from previous years and those for this period are shown in the table. The implementation date of
the Significant Actions of 2013 was on average 31st October, meaning that the benefits (physical and economic) of Significant Actions of the period for a full year are six times
larger than the shown figures. The ‘Benefits of Significant Actions of Previous Periods’ are likely to be underestimated since data only started to be regularly reported in 2010
and data reported prior to 2011 was not exhaustively checked or validated. Nevertheless, over the years the contribution of unreported Significant Actions from the previous
years will tend to decrease.
Because the EA excludes legally mandatory expenditure, the presented figures regarding capital expenditure and current costs differs from the table detailing expenditure in
G4-EN31. Benefits can eventually include items resulting from the compliance with legally mandated requirements (e.g. implemented actions from building energy
certifications may impact the benefit ‘Reduction of electricity consumption’). On the other hand, since benefits are calculated from differences in a centres’ performance over
two years, some current costs associated with benefits may be excluded (‘Benefit of the Period’ from previous years).
Revenues resulting from the sale of energy (electricity, hot and chilled water) regard to NorteShopping in Portugal, the only shopping centre with cogeneration. The volume
of wastewater is estimated from the water consumption (80%).
Benefits figures were normalized taking into account some shopping centres operational data between years, such as opening hours and number of visits. Therefore, the
presented values may vary significantly from GRI/CRESS indicators shown in this report.
In 2013 we piloted our Environmental Accounting Model for Development for the first time at Passeio das Águas Shopping in Brazil. The model is still in development and at
the time of writing we are only able to present the results for four of our SHEDS, but we aim to more accurately capture and report against the full range of costs and benefits
as we refine the model. In additional to the financial savings detailed in the table below, potential physical benefits identified from implementing the SHEDS included a
reduction of 511 tonnes of CO2 emissions and energy savings of 1.247 million kWh. Furthermore, the construction work’s EMS diverted 12,647 tonnes of waste from landfill.
passeio das Águas Shopping – Summary of environmental costs and associated economic benefits(€)
Project Total costs (€)
Minimum costs
required to meet
market/legal
requirements (€)
Costs SHEDS Total environmental capital expenditure 108,389
108,389
Construction works EMS Total environmental capital expenditure 133,596
90,817
EMS (other activities) Total environmental capital expenditure 161,621
84,638
Total benefits (€)
Benefits Total potential savings for the management activity resulting from the 170,816
project’s development options
Total savings from the construction works of the project associated 157,719
to EMS implementation
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performance indicators
Indicator
g4-En31
Total environmental protection expenditures and investments by type.
corporate offices
Type
Prevention and environmental management costs
Waste disposal, emissions treatment, and remediation costs
total
Expenditure (€)
9,655
–
9,655
developments
Type
Prevention and environmental management costs
Waste disposal, emissions treatment, and remediation costs
total
Expenditure (€)
2,287,496
124,127
2,411,623
operations
Type
Expenditure (€)
Prevention and environmental management costs
6,774,213
Waste disposal, emissions treatment, and remediation costs
7,251,842
total
14,026,055
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the full reporting year (excluding Parque Principado), all corporate offices (Lisbon, Maia,
São Paulo, Milan, Madrid, Düsseldorf and Bucharest) and all projects under development during the reporting year. The environmental expenditure for shopping centres is based
on data from the company’s Environmental Accounting (EA) model which details the current costs and capital expenditure made in several environmental activities and is available
for each shopping centre. The data from the EA was rearranged by matching each EA activity to a G4-EN31 category as defined by the GRI guidelines. Environmental investments
for offices include costs related to internal audits and services for legislative updates. Environmental investments for projects under development cover the Centro Colombo
refurbishment, Boulevard Londrina Shopping, Hofgarten Solingen and Passeio das Águas Shopping. Among others, it includes costs related to waste management activities,
wastewater monitoring, noise measurements and internal audits. The final values related to Hofgarten Solingen and Passeio das Águas Shopping are not accurate, since there
are still some invoices missing.
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matErialS
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Although the sourcing of materials used in shopping centre development and operations is controlled by our contractors, we are aware that our
business activity does entail a significant impact in terms of the extraction of raw materials (including timber, stone and metals), principally
through the use of semi-manufactured goods and parts which are derived from raw materials. Whilst the extraction of raw materials adversely
impacts on the natural environment, the reuse of existing materials (for example from demolition waste) and the use of manufactured goods
fabricated from recycled materials can help to promote a more sustainable, closed loop approach to waste management and materials use.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
We engage with our suppliers with the aim of encouraging them to adopt more responsible business practices. In 2007, we formally approved
our Responsible Procurement Policy, which commits us to, among other things: Privileging the use of materials which are locally-sourced;
have a recycled content; have a low-toxic content; have a long life and can be recycled or reused, and/or are sourced from companies which
adhere to ethical and/or environmental standards.
Goals and Targets
‘Our business model and strategy’, page 14.
Responsibilities and Resources
Responsibilities and resources for managing the materials aspect are covered by our SHEMS. See Disclosures on Management Approach for
the Environmental Aspect ‘Overall’ on page 74 above.
For Sonae Sierra, it is difficult to control the selection of raw materials used in shopping centre development projects as our development
contractor’s source materials (generally pre-manufactured goods) on our behalf. This compromises our ability to gauge a clear understanding
of the scale of our impacts in terms of raw material consumption. Nonetheless, through our SHEDS and our Service Suppliers Management
Procedures we encourage our suppliers to favour materials that are non-toxic, have a recycled content and/or are sourced from companies
that adhere to ethical and environmental standards. The SHEDS prohibit the use of materials which are known to have negative impacts on
the environment and on the health and well-being of building occupants and timber products derived from non-sustainable forestry.
Specific Actions
In 2012, a study was performed to quantify the most significant materials consumed during the construction of new projects. The defined
methodology will be applied to the next construction project which is estimated to be completed in 2015.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the materials aspect is covered by our SHEMS. See Disclosures on Management Approach
for the Environmental Aspect ‘Overall’ on page 74 above.
Results and Adjustments
For results in relation to materials aspects, see GRI Performance Indicators G4-EN1 and G4-EN2 on page 80.
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performance indicators
Indicator
g4-En1
Materials used by weight or volume.
Having carried out research into the impacts of our activities in terms of materials use, we have considered that the volume of materials purchased
directly by our business for use in our corporate and shopping centre offices is immaterial in comparison with the volume of materials used on our
development projects. In 2013 we planned to carry out a pilot study to assess the weight, value or volume of materials used and the percentage of
materials used that were recycled materials at ParkLake in Romania. However, the start of this development was delayed, meaning that we were
not able to complete this study. We will therefore aim to report this information for the next construction project which is estimated to be completed
in 2015.
g4-En2
Percentage of materials used that are recycled input materials.
Not reported in 2013. See response to EN1 above.
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EnErgy
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
According to the International Energy Agency (IEA), the built environment is responsible for around 40% of the world’s total primary energy
consumption and 24% of carbon dioxide (CO2) emissions. In 2013, our shopping centres consumed a total of 1.3 million GJ of energy and
generated 37,51018 tonnes of CO2e. As governments proceed to mitigate the impacts on global climate change and as pressure on nonrenewable energy sources grows, regulations on the energy consumption and GHG emissions of buildings are becoming more stringent.
Consequently, high-energy consuming and carbon-emitting buildings are likely to become less attractive to investors and occupiers in the
future. On the contrary, more eco-efficient, low-carbon assets and ones which generate their own energy on–site from renewable sources are
likely to sustain their value in the long-term.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts and describe whether the organisation is subject to any
country, regional or industry regulations and policies for energy
Policies and Commitments
We are committed to increasing the energy efficiency of our activities both within the scope of our Safety, Health and Environment (SHE)
Policy and procedures (see page 47 to 48 above) and our long-term priority of ‘Resource Resilience’.
Goals and Targets
‘Our business model and strategy’, page 14.
Specifically, we have a long-term objective to strive to increase the energy efficiency of our operations, aiming to attain a maximum average
electricity consumption of 400kWh/m2 (mall and toilet area) per year across Sonae Sierra owned shopping centres, by 2020.
Responsibilities and Resources
Responsibilities and resources for managing the energy aspect are covered by our SHEMS. See Disclosures on Management Approach for the
Environmental Aspect ‘Overall’ on page 74 above.
Specific Actions
Energy efficient designs, including energy performance targets and innovative engineering solutions, are included in our Safety, Health and
Environment Development Standards (SHEDS). Within the SHEDS, we specify the use of energy efficient boilers, air conditioning units and
other fit out equipment such as lighting and appliances. We also require Development Managers to explore possible renewable and low-carbon
technologies during design, such as passive solar design or natural ventilation. We are especially committed to designing buildings that will
achieve high energy efficiency ratings under the European union’s Energy Performance of Buildings Directive.
Our construction contractors, too, can be big energy users. During initial construction, major refurbishments, or expansions, we make sure
contractors strictly adhere to our Safety, Health and Environment Management System, which includes guidelines for monitoring energy
consumption and achieving greater energy efficiency. We give preference to the use of demolition materials in construction, as well as
materials sourced within a 500km distance of the site in question.
Alongside our efforts to manage our shopping centres’ energy use as efficiently as possible during the operations phase (see the Disclosure
on Management Approach for the Environmental Aspect ‘Overall’ on page 74 above), we investigate opportunities for on-site generation of
renewable energy and procurement of green electricity through the grid.
For details of specific projects in 2013 to increase energy efficiency and switch to the use of more renewable forms of energy, see ‘Our
performance’, pages 25 to 35.
18
GHG Protocol scope 1 and 2 emissions (excluding tenants).
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Country, regional and industry regulations and policies for energy and emissions
Our organisation is subject to regional and national regulations and policies concerning energy and emissions. At the regional level,
these include:
•
The European union’s Energy Performance of Buildings Directive: 2002/91/CE and the 2010 Recast of the same Directive, which
mandates, among other things, that buildings undergoing major renovations must upgrade to meet minimum energy performance
requirements; that Energy Performance Certificates (EPCs) must be shared with prospective buyers and tenants of a building and that
from 2020 (or 2018 for public buildings) all new buildings should be “nearly zero energy”.
•
European union Regulation (EC) No 1005 of September 16, 2009 (that starting from the 1st of January 2010 replaces the Regulation (EC)
2037/2000) on the management of Ozone Depleting Substances for general protection of stratospheric ozone. This includes obligations
for operators of refrigeration, air conditioning or heat pump equipment and fire protection systems.
At the national level, these include:
•
Building regulations in countries where we develop new shopping centres. For example, in Germany, all properties where a building permit
was issued after the 1st October 2009 were required to meet the revised 2009 Building Regulations which demanded a 30% increase in
energy efficiency of HVAC and lighting systems and a 15% increase in thermal insulation compared to the 2007 Regulations.
•
Energy efficiency requirements for operational buildings in countries where we own and manage shopping centres. For example, in Spain,
from 2010 the use of heating and cooling in new and existing non-residential spaces was limited in accordance with a maximum
temperature of 21°C in winter and a minimum temperature of 26°C in summer.
At an industry level, we are subscribed to several voluntary commitments to reduce energy consumption and GHG emissions associated
with our activities; these are reported under G4-16 on page 58 above.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the energy aspect is covered by our SHEMS. See ‘Governance, Safety, Health and
Environment Management System’, pages 47 to 48 and Disclosures on Management Approach for the Environmental Aspect ‘Overall’
on page 74 above.
Results and Adjustments
In addition to indicators G4-EN3, G4-EN5, CRE-1, G4-EN6 and G4-EN7 below, we monitor the electricity efficiency (excluding tenants)
of our owned portfolio which in 2013 decreased by 7% compared to 2012 (see Our Performance, page 31).
Electricity efficiency in corporate offices (kWh/m2)
As well as our owned portfolio, we monitor the energy efficiency of our corporate offices which decreased by 26% compared to 2012.
Electricity efficiency
(kWh/m2)
2013
102
2012
137
2011
166
2010
153
data Qualifying note:
This indicator includes all corporate
offices with a SHEMS, except the Maia
Office which is excluded from this
indicator because Sonae Sierra shares
the office with other Sonae companies;
therefore no separate meter reading is
available to record its consumption.
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construction electricity indicator (kWh/€000 construction cost) on completed projects
We also monitor the electricity efficiency of our construction projects, although we have less direct control over the measures that can
be implemented to improve energy efficiency on these sites. Our performance is consistent with construction projects in previous years;
however electricity use at Passeio das Águas Shopping is underrepresented as the indicator only refers to electricity purchased whereas
a large amount of electricity was supplied by on-site generators at this project.
construction electricity indicator
(KWh/€000)
Centro Colombo (Primark)
8.8
Boulevard Londrina Shopping
14.8
Passeio das Águas Shopping
8.7
Hofgarten Solingen
12.2
data Qualifying note:
This indicator includes all Sonae Sierra development projects completed
in the reporting period. The values reported for this indicator are
indicative of the quantity of electricity consumed during construction on
projects that were completed in 2013. This indicator is calculated for
each project by dividing the total electricity consumed at the
construction site by the total construction cost of the project. Electricity
consumption is monitored and recorded on a monthly basis at each
project, from the start to the completion of the development works.
performance indicators
Indicator
g4-En3
Energy consumption within the organisation.
Energy Type
GJ
operations
Total fuel consumption from non-renewable sources (Natural gas and LPG consumption)
Total electricity consumption
Total heating consumption
Total cooling consumption
Total electricity sold
total
305,737
941,936
17,996
124,427
(72,373)
1,317,723
offices
Total fuel consumption from non-renewable sources (Petrol and diesel for car fleet)
Total fuel consumption from renewable sources (Ethanol for car fleet)
Total electricity consumption
Total
total
12,808
849
2,055
15,712
1,333,435
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the reporting period and all corporate offices with a SHEMS (Lisbon, Maia and São Paulo).
Fuel consumptions were considered for all Corporate Offices (Lisbon, Maia, São Paulo, Milan, Madrid, Düsseldorf and Bucharest Offices). The conversion factors used to convert
fuel to Gigajoules are taken from the GRI CRESS Guidelines, except for Ethanol and Liquefied Petroleum Gas (LPG), which are not available in the Guidelines. Since ethanol is only
consumed in Brazil we have used a specific conversion factor for that country. For LPG we have used the conversion factor available on the International Energy Agency (IEA)
Oil information publication (2012 edition). The conversion factor used to convert kWh to GJ is 0.0036, as defined by the GRI CRESS Guidelines.
g4 – En5
Energy intensity.
Country
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
global intensity
kWh/(m2 of mall and toilet area)
729
314
691
698
1,048
1,105
1,048
725
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in
operation during the reporting period. It is calculated as the ratio between
energy consumption (natural gas, liquefied petroleum gas (LPG),
electricity, chilled and hot water consumptions) divided by the mall and
toilet area. Energy consumed outside of the shopping centres is not
considered and therefore, for NorteShopping in Portugal, natural gas
consumption for the cogeneration system is not included (as most of the
energy produced is electricity sold to the grid) but chilled and hot water
produced by cogeneration and consumed in the shopping centre is
included. For this indicator there is a mismatch between the numerator
and the denominator since energy purchased on behalf of tenants is
considered, however tenant’s areas are not included in the total mall and
toilet area.
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Indicator
crE-1
Building energy intensity.
Building Energy Intensity,
Shopping Centres
(kWh/m2 of mall and toilet area)
Country
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
662
311
691
692
616
584
495
global intensity
561
Building Energy Intensity,
Corporate Offices (kWh/m2)
Country
Portugal
Brazil
53
204
global intensity
102
g4 – En6
data Qualifying note:
This indicator includes all shopping
centres owned by Sonae Sierra and in
operation during the reporting year and
two out of three corporate offices with
a SHEMS (Lisbon, Maia and São Paulo).
The Maia office in Portugal was excluded
since electricity consumption isn’t known
due to the fact that it is in a shared
floor/building, with no individual meters.
For this indicator there is a slight
mismatch between the numerator and
the denominator since energy
consumption in technical areas and
chilled and hot water that is supplied
to some tenants are being considered
but those areas are not.
Reduction of energy consumption.
Reduction in
energy consumption,
shopping centres
2012 energy
consumption (GJ)
2013 energy
consumption (GJ)
Energy reduction
achieved GJ
Reduction of GHG emission (tonnes CO2e)
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
360,572
90,579
56,163
54,589
22,147
14,894
313,736
344,028
92,735
54,278
54,552
16,502
13,683
309,920
16,545
-2,156
1,884
37
5,645
1,211
3,816
144
-594
146
–
1,850
79
102
total
912,680
885,698
26,982
1,727
2012 energy
consumption (GJ)
2013 energy
consumption (GJ)
Energy reduction
achieved GJ
Reduction of GHG emission (tonnes CO2e)
Total Portugal
Total Brazil
1,645
1,527
712
1,343
933
184
91
5
total
3,172
2,055
1,117
96
Reduction in
energy consumption,
corporate offices
data Qualifying note:
This indicator includes 45 out of 47 shopping centres owned by Sonae Sierra and in operation during the full reporting year and two out of three corporate offices with a SHEMS
(Lisbon, Maia and São Paulo). Since this is a like-for-like indicator, shopping centres contributing to this indicator are the same for 2012 and 2013, therefore uberlândia Shopping
in Brazil and Le Terrazze, in Italy are excluded. The Maia Office is also excluded since electricity consumption isn’t known due to the fact that it is in a shared floor/building, with
no individual meters. This indicator is calculated as the difference between electricity consumption between reporting years as other types of energy consumption are more
dependent on weather conditions.
The reductions of GHG emissions were calculated considering the difference regarding electricity consumption between the previous and the reporting year, and the electricity
emission factors (gCO2e/kWh) of our electricity suppliers in each country (except for Brazil where we used the value provided by the Environment Ministry associated with the
national grid). Since all shopping centres in Germany, Portugal and Spain (except for three shopping centres in Portugal and one in Spain) contracted green electricity (energy from
renewable sources with a 0 gCO2e/kWh emission factor) the GHG emissions reduction doesn’t provide the dimension of the reductions achieved as a result of the initiatives implemented.
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performance indicators (continued)
Indicator
g4-En7
Reductions in energy requirements of products and services.
Reduction in energy requirements, shopping centres
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
global intensity
2012 (GJ)
2013 (GJ)
Variation (%)
754
347
816
704
1,428
1,195
1,035
729
314
805
698
1,048
1,105
1,047
-3%
-10%
-1%
-1%
-27%
-8%
1%
749
725
-3%
data Qualifying note:
This indicator includes 45 out of 47 shopping centres owned by Sonae Sierra and in operation during the full reporting year. Since this is a like-for-like indicator, uberlândia
Shopping (Brazil) and Le Terrazze (Italy) are excluded. The indicator is calculated as the variation in energy intensity between the reporting year and the previous year. It is
therefore also presented as a percentage.
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WatEr
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
As demand for fresh water becomes ever greater around the world due to population growth, urbanisation, increased economic activity and
climate change, we need to ensure we have adequate supplies for all our shopping centres, particularly those in areas that are vulnerable
to shortages, such as Portugal, Spain and Greece. By improving the water efficiency of our portfolio and integrating systems for rainwater
harvesting and water reuse on our sites, we can reduce our exposure to water scarcity risks and minimise our water footprint, which prepares
us for potential future legislation and avoids costs.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
We are committed to increasing the water efficiency of our activities within the scope of our Safety, Health and Environment (SHE) Policy
and procedures (see page 47 above) and exploring ways to reuse water under our long-term priority of ‘Resource Resilience’.
Goals and Targets
Our ‘Business model and strategy’, page 14. Specifically, we have long-term objectives to:
•
Attain a level of water consumption at or below 3 litres per visit (aggregated across all Sonae Sierra owned shopping centres), by 2020.
•
At least 10% of total water consumed at Sonae Sierra owned shopping centres to be reused “grey water” or harvested rainwater, by 2020.
•
Develop and implement a long-term strategy to ensure a secure water supply at our owned shopping centres, with a particular focus on
locations that are vulnerable to water shortages, by 2020.
Responsibilities and Resources
Responsibilities and resources for managing the water aspect are covered by our SHEMS. See Disclosures on Management Approach for the
Environmental Aspect ‘Overall’ on page 74 above.
Specific Actions
We aim to ensure a secure water supply at all of our shopping centres, with a particular focus on locations that are vulnerable to water
shortages. We use the World Business Council for Sustainable Development (WBCSD) Global Water Tool to identify the areas in which we
are developing new centres that are at risk of water stress or scarcity. When these projects go forward, the Company’s Safety, Health and
Environment Development Standards (SHEDS) define that specific equipment (like water chillers) must be avoided in order to minimise
our vulnerability to water shortages. We also ensure that water efficient design, including equipment specifications and water recycling
engineering solutions, is maximised.
Where feasible, we integrate rainwater harvesting and grey water recycling systems on new projects and refurbishments to reduce the
need for freshwater or municipal water consumption. During the fit out process, we set requirements for water efficient sanitary equipment
(such as sensor spray taps, waterless urinals and low flush toilets). Our water metering strategy allows us to optimise shopping centres’
water consumption by enabling us to identify unusually high usage patterns and to define new management measures for tighter control
of water usage.
For shopping centres’ exterior areas and when landscape projects are defined, we specify efficient irrigation systems and minimise the
planting of species with high water demands.
For details of specific projects in 2013 to increase water efficiency and increase the reuse of water on our sites, see ‘Our performance’,
pages 25 to 35.
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c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the water aspect is covered by our SHEMS. See ‘Governance, Safety, Health and
Environment Management System’, pages 47 to 48 and Disclosures on Management Approach for the Environmental Aspect ‘Overall’
on page 74 above.
Results and Adjustments
In addition to GRI indicators G4-EN8, G4-EN10 and CRE2 below, we monitor the water efficiency (excluding tenants) of our owned portfolio
which in 2013 was 3.7 litres of water per visit (see Our Performance, page 31).
construction water indicator (m3/€000 construction cost) on completed projects
We also monitor the water efficiency of our construction projects, although we have less direct control over water efficiency improvements
at these sites. Our performance is largely consistent with previous construction projects. Variations between projects are due to a number
of factors, such as the stage of construction works, landscaping requirements and the number of, and size of, retail units.
construction water indicator
(m3/€000)
Centro Colombo (Primark)
0.01
Boulevard Londrina Shopping
0.18
Passeio das Águas Shopping
0.29
Hofgarten Solingen
0.1 1
data Qualifying note:
This indicator includes all Sonae Sierra development projects completed
in the reporting period. The values reported for this indicator are
indicative of the quantity of water consumed during construction on
projects that were completed in 2013. This indicator is calculated for
each project by dividing the total water consumed at the construction
site by the total construction cost of the project. Water consumption is
monitored and recorded on a monthly basis at each project, from the
start to the completion of the development works.
performance indicators
Indicator
g4-En8
Total water withdrawal by source.
total water withdrawal by source (m3)
Water Source
Ground water
Rainwater collected directly and stored by the reporting organization
Municipal water supplies
Other water sources
Mixture of water sources
Grey water
Treated waste water
total
Excluding tenants
Water reallocated to tenants
290,144
14,013
826,159
307
38,715
10,091
38,914
165,179
–
709,685
–
32,858
–
–
1,218,343
907,722
total water withdrawal by country
(including water reallocated to tenants) (m3)
Country
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
total
809,311
310,400
201,670
116,269
–
12,007
676,407
2,126,064
data Qualifying note:
This indicator includes 45 out of 47 shopping centres owned by Sonae
Sierra and in operation during the full reporting year. Pantheon Plaza, in
Greece and uberlândia Shopping in Brazil, are excluded. Pantheon Plaza
has unknown partial consumption and in uberlândia Shopping water
reallocated to tenants is unknown.
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ENVIRONMENTAL ASPECTS (CONTINUED)
Performance Indicators (continued)
Indicator
G4-EN10
Percentage and total volume of water recycled and reused.
Percentage and total volume of water recycled
and reused (including water reallocated to tenants)
Volume (m3)
Percentage
Recycled or reused
Not recycled or reused
63,325
2,062,739
3.0%
97.0%
Total
2,126,064
100.0%
Water Type
Percentage and total volume of water recycled
and reused (excluding water reallocated to tenants)
Water Type
Volume (m3)
Percentage
63,325
1,231,714
4.9%
95.1%
1,295,039
100.0%
Recycled or reused
Not recycled or reused
Total
CRE2
Data Qualifying Note:
The shopping centres that are contributing to water recycled/reused (including water reallocated to
tenants) are: ArrábidaShopping, CascaiShopping, Centro Colombo, CoimbraShopping, GaiaShopping
and LoureShopping (Portugal); Dos Mares (Spain); Gli Orsi and Freccia Rosa (Italy); Alexa (Germany);
and Parque D. Pedro Shopping (Brazil). Pantheon Plaza, in Greece and Uberlândia Shopping in
Brazil, are excluded because total water withdrawal by source is unknown. This indicator includes
45 out of 47 shopping centres owned by Sonae Sierra and in operation during the full reporting
year. This indicator is determined by the following formula: (Water reused/recycled (m3)/Total
water withdrawal (m3)*100). Besides Pantheon Plaza and Uberlândia Shopping that harvest
rainwater but are excluded from this indicator, Valecenter in Italy, 8ª Avenida and LeiriaShopping
in Portugal have water reuse systems in place but are not able to measure the actual amount of
water reused. Centro Colombo consumes grey water but also harvests rainwater not accounted for,
since it is unable to measure this consumption individually as it is mixed with other water sources.
Data Qualifying Note:
The shopping centres that are contributing to water recycled/reused (excluding water reallocated to
tenants) are: ArrábidaShopping, CascaiShopping, Centro Colombo, CoimbraShopping, GaiaShopping
and LoureShopping (Portugal); Dos Mares, (Spain); Gli Orsi and Freccia Rossa (Italy); Alexa
(Germany); and Parque D. Pedro Shopping (Brazil). This indicator includes 46 out of 47 shopping
centres owned by Sonae Sierra and in operation during the full reporting year. Pantheon Plaza,
in Greece is excluded since this shopping centre has unknown partial consumptions. This indicator
is determined by the following formula: (Water reused/recycled (m3)/Total water withdrawal
(excluding tenants) (m3)*100). Besides Pantheon Plaza that harvests rainwater but is excluded
from this indicator, Valecenter in Italy, Uberlândia Shopping in Brazil and 8ª Avenida and
LeiriaShopping in Portugal have water reuse systems in place but are not able to measure the
actual amount of water reused. Centro Colombo consumes grey water but also harvests rainwater
that is not accounted for, since it is unable to measure this consumption individually as it is mixed
with other water sources.
Building water intensity.
Country
Building water Intensity (litres/visit)
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
4.8
5.5
7.4
5.9
6.0
3.5
9.3
Global intensity
6.1
Data Qualifying Note:
This indicator includes 46 out of 47 shopping centres owned by Sonae Sierra
and in operation during the reporting period. Uberlândia Shopping, in Brazil,
was excluded since the water reallocated to tenants is not known. The formula
used to calculate the indicator is: Building Water Intensity = (Total Water
Consumption (excluding tenants) (m3) + Total Water Consumption purchased
on behalf of tenants) (m3)*1,000)/‘Number of visits in the reporting year
(Owned Portfolio)’.
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2013 Economic, Environmental and Social Report
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ENVIRONMENTAL ASPECTS (CONTINUED)
ASPECT:
BIODIVERSITY
Disclosures on Management Approach
a)
Report the impacts that make this Aspect material
By far the most important reason for the unprecedented loss of biodiversity around the world in recent decades has been the destruction
and alteration of habitats. Our main impact on biodiversity results from the development of land, particularly when projects are built on
un-developed ‘greenfield’ sites that are most likely to be rich in biodiversity or to perform valuable ecosystem services and functions. As well
as causing damage to biodiversity and habitats, development on ecologically sensitive sites can increase the likelihood of opposition from
local communities to our shopping centres, resulting in expensive delays to, or rejections of, planning applications. It also increases the risk
of fines due to pollution or litigation through environmental liability laws. On the other hand, constructing on previously developed land and
enhancing the ecological value of contaminated sites can bring benefits to the local economy, environment and community. This can
increase support for new projects and enhance our reputation.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
Report how the organisation manages the material Aspect or its impacts and describe the organisation’s strategy for achieving its policy
on biodiversity management
Policies and Commitments
We are committed to preserving biodiversity within the scope of our Safety, Health and Environment (SHE) Policy and procedures
(see page 47 above).
Goals and Targets
We have set long-term objectives to:
•
Promote the use of previously developed land or brownfield land for new Sonae Sierra shopping centre projects and protect and enhance
biodiversity wherever possible.
•
Strive to protect and enhance biodiversity on both existing Sonae Sierra sites and new projects and add value to new projects by actively
integrating biodiversity whenever possible, taking into account the regional context.
Responsibilities and Resources
Responsibilities and resources for managing the biodiversity aspect are covered by our SHEMS. See Disclosures on Management Approach
for the Environmental Aspect ‘Overall’ on page 74 above.
Specific Actions
Environmental Due Diligence, Environmental Impact Studies (EIS), Safety, Health and Environment Development Standards (SHEDS) and
a site specific Safety, Health and Environment Management System (SHEMS) are applied to all our new developments. EIS are performed
when required by legislation and, in all other cases, Preliminary Environmental Evaluations (PEE) are performed, according to Sonae Sierra’s
specifications. The EIS identifies potential environmental impacts of each project’s design, construction and operation on the site’s
biodiversity and specifies mitigation measures.
The SHEDS also establish requirements in relation to biodiversity, namely:
•
Ecological features classified by the EIS must be preserved throughout construction and integrated in the landscape design, to the
greatest extent possible.
•
Native flora should be specified for use on all of the development’s outdoor ‘soft’ landscaping works. Exotic, allochthonous, invasive or
non-indigenous plant or tree species are not specified for any of our new shopping centre’s landscape projects.
We have ongoing projects at LoureShopping in Portugal, and at Parque D. Pedro Shopping and Manauara Shopping in Brazil, to protect
existing habitats and we also seek to raise awareness of biodiversity through marketing events and other initiatives among shopping centre
staff and/or visitors.
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disclosures on management approach (continued)
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the biodiversity aspect is covered by our SHEMS. See ‘Governance, Safety, Health and
Environment Management System’, pages 47 to 48 and Disclosures on Management Approach for the Environmental Aspect ‘Overall’ on
page 74 above.
We monitor the implementation of the recommendations of EIS and PEEs performed to ensure that impacts on biodiversity are minimised
as far as possible. In cases where we are building a shopping centre on a greenfield or previously undeveloped site, we ensure that all
recommendations are implemented to compensate for any loss of biodiversity.
At our operational shopping centres and our corporate offices, biodiversity impacts that may result from day-to-day activities such as waste
disposal and water consumption are monitored through our SHEMS procedures.
Results and Adjustments
During 2013, 100% of new completed development projects occurred on previously developed land. This includes the three development
projects (Boulevard Londrina Shopping, Passeio das Águas Shopping in Brazil and Hofgarten Solingen, in Germany) completed in 2013, but
it does not include Centro Colombo because this project involved development inside the shopping centre’s existing boundaries.
See also GRI indicators G4-EN11, G4-EN12 and G4-EN13 below.
performance indicators
Indicator
g4-En11
Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected
areas & En12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high
biodiversity value outside protected areas.
In 2013, 100% of new completed developments occurred on previously developed land. We did not own, lease or manage any sites in or adjacent to
protected areas or areas of high biodiversity value outside protected areas and our activities had no significant impacts on biodiversity in protected
areas or areas of high biodiversity value outside protected areas.
g4-En13
Habitats protected or restored.
No habitats were protected or restored during 2013.
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the reporting period, all Sonae Sierra projects under development during the reporting
period, and all corporate offices with a SHEMS (Lisbon, Maia and São Paulo) and in operation during the reporting period.
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EmiSSionS
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
See also ‘Key non-controllable risks’ page 20, G4-EC2 page 70, and Energy on page 81.
b)
report how the organisation manages the material aspect or its impacts and explain whether the organisation is subject to any country,
regional, or industry regulations and policies for emissions. provide examples of such regulations and policies
Policies and Commitments
We are committed to reducing greenhouse gas (GHG) emissions within the scope of our Safety, Health and Environment (SHE) Policy and
procedures (see page 47 above). We also endorse several external policies/charters which commit us to reducing our impact on climate
change; for further details, see page 58 above.
Goals and Targets
We have set a long-term objective to:
•
Achieve an 80% reduction in GHG emissions per m2 of GLA, by 2020, compared to the 2005 level (GHG Protocol scopes 1 and 2, plus
business air travel).
•
Implement climate change adaption measures identified in our 2013 climate change study, by 2020.
Responsibilities and Resources
Responsibilities and resources for managing the emissions aspect are covered by our SHEMS. See Disclosures on Management Approach for
the Environmental Aspect ‘Overall’ on page 47 above.
Specific Actions
In 2006, we developed a Climate Change strategy to reduce our direct and indirect GHG emissions. This covers scopes 1, 2 and business air
travel (part of scope 3) according to the guidelines of the GHG protocol developed by the World Resources Institute and the World Business
Council for Sustainable Development.
Our primary strategy to achieve this is through energy efficiency initiatives. We have not established a policy with regards to carbon-offsetting
although we have compensated for carbon dioxide emissions in relation to some minor events. It is part of our strategy to advocate more
sustainable practices at an industry level and in 2011, we signed The 2°C Challenge Communiqué that supports a robust, equitable and
effective united Nations agreement on climate change.
Aside from the energy used by the buildings themselves, we also seek to reduce the energy consumption and GHG emissions generated by
associated activities, such as vehicle emissions produced by people visiting our shopping centres, or by staff travelling to and from work or
on business trips. Many of our centres display public transport timetables, and have cycle storage facilities for tenants and visitors. We have
Green Travel Plans in place at ten of our shopping centres, aimed at improving accessibility by public transport, bicycle and foot. Emissions
are also produced by tenants occupying our centres, and we make efforts to advise and educate our tenants about saving energy and
reducing GHG emissions from their activities.
During the construction phase, besides the energy efficiency measures described on page 81, we put in place a number of steps to reduce
emissions of diffuse particles such as dust. Guidelines cover the correct storage of pulverised material; regular spraying of site areas where
the production, accumulation and re-suspension of dust may occur; regular cleaning of site areas to clear waste materials; procedures
covering the transportation of construction waste; regular washing of truck and other machinery; loading and unloading procedures; the use
of dust traps for demolition waste crushers; and actions to be taken in the event of a cargo spill.
In 2013 we performed a materiality assessment to review our most material scope 3 GHG emissions based on the Corporate Value Chain
(Scope 3) Accounting and Reporting Standard published by WRI and WBCSD. By ranking all scope 3 emissions generate by our business
activities according to their significance and the level of influence we have over them, we can focus our reduction efforts where they are
more relevant.
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disclosures on management approach (continued)
Specific Actions (continued)
Currently, Sonae Sierra reports emissions from five of twelve applicable scope 3 categories19 (from an overall total of fifteen categories):
Category
Emission Source
Category 1: Purchased Goods and Services
• Staying in hotels
Category 5: Waste Generated
• Waste generated
• Wastewater treatment
Category 6: Business Travel
• Air travel
• Rail travel
Category 7: Employee Commuting
• Employees commuting
Category 9: Downstream Transportation and Distribution
• Visitor trips to shopping centres
In 2014 we will add an additional category ‘Category 13: Downstream Leased Assets’ by including GHG emissions from tenants’ electricity
consumption at shopping centres owned by Sonae Sierra (GHG emissions from consumption of electricity purchased on behalf of tenants
and GHG emissions from other energy consumption on behalf of tenants rather than electricity (e.g. natural gas) are currently reported
under G4-EN16). We also start to report GHG emissions from at least five types of materials from new developments or expansions: concrete,
brickwork, steel, glass and insulation under ‘Category 1: Purchased Goods and Services’. Further changes to the scope of our reporting will be
made to Waste Generated and Wastewater Treatment (Category 5).
For details of specific projects in 2013 to reduce our GHG emissions, see ‘Our performance’, pages 25 to 35 and GRI indicator G4-EN6, page 84.
Country, regional and industry regulations and policies for energy and emissions
See Aspect: Energy on page 81 above.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the emissions aspect is covered by our SHEMS. See Disclosures on Management Approach
for the Environmental Aspect ‘Overall’ on page 74 above.
Results and Adjustments
In addition to indicators G4-EN15, G4-EN16, G4-EN17, G4-EN18/CRE3, CRE4 and G4-EN19 below, we monitor the GHG emissions intensity
(excluding tenants) of our owned portfolio and corporate offices, which in 2013 was 0.021 tCO2e/m2 GLA (see Our Performance, page 31).
number and percentage of visits made by different types of transport in the owned portfolio (millions of visits and %)
The most significant contribution to our carbon footprint is from visitor travel to our shopping centres. In 2013, visitor travel accounted for
91% of our total carbon footprint and we saw an increase in the percentage of visits by private car. Whilst we neither control our visitors’
nor our employees’ travel to and from our shopping centres and offices, we can seek to influence it through, for example Green Travel plans
(see above).
number and percentage of visits made
by private car and other modes of transport,
to and from our shopping centres
(millions of visits and %)
Private car
19
Other modes of transport
2013
235 (67%) / 116 (33%)
2012
251 (64%) / 139 (36%)
2011
256 (64%) / 141 (36%)
2010
269 (65%) / 146 (35%)
data Qualifying note:
This includes all shopping centres owned by Sonae Sierra and in
operation during the reporting period. Not all of our shopping centres
performed Mall Tracking studies (which allow us to identify the number
of visits made by private car) in 2013. In these cases, data from previous
years’ studies has been used. Hofgarten Solingen, Passeio das Águas
Shopping and Boulevard Londrina Shopping have been excluded from
this indicator since they have not yet performed these studies since
they opened in 2013.
Excluding emissions from ‘Category 2: Capital Goods – Acquisition of Properties’ and ‘Category 5: Waste Generated – Wastewater Treatment’.
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performance indicators
Indicator
g4-En15
Direct greenhouse gas (GHG) emissions (Scope 1).
Including tenants
GHG Emissions (tCO2e)
Scope 1
Natural Gas
435
Fleet fuels
943
Fugitive emissions
265
total
Excluding tenants
GHG Emissions (tCO2e)
Scope 1
Natural Gas
Liquefied Petroleum Gas
Fleet fuels
Fugitive emissions
total
g4-En16
18,599
14,971
2
943
265
16,181
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra
and in operation during the reporting period and all corporate
offices (Lisbon, Maia, São Paulo, Milan, Madrid, Düsseldorf and
Bucharest). Scope 1 emissions are direct emissions from sources
that are owned or controlled by Sonae Sierra, e.g., the company car
fleet, air-conditioning equipment, boilers and cogeneration plants.
The emissions in tonnes of CO2 equivalent (tCO2e) have been
calculated in accordance with the GHG protocol methodology and
relate to the emissions from energy sources over which Sonae
Sierra has financial control.
Indirect greenhouse gas (GHG) emissions (Scope 2).
Including tenants
GHG Emissions (tCO2e)
Scope 2
Electricity
Chilled and Hot Water
total
Excluding tenants
GHG Emissions (tCO2e)
Scope 2
Electricity
Chilled and Hot Water
total
g4-En17
16,956
Liquefied Petroleum Gas
27,127
3,791
30,918
18,354
2,975
21,329
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra
and in operation during the reporting year and all corporate offices
with a SHEMS (Lisbon, Maia and São Paulo). Scope 2 includes
indirect emissions that result from Sonae Sierra’s activities but
are owned or controlled by another organisation, e.g. purchased
electricity, heating and cooling. The emissions in tonnes of CO2
equivalent (tCO2e) have been calculated in accordance with the
GHG protocol methodology and adapted, if data was available,
to the specific national circumstances of the various countries in
which Sonae Sierra operates. Emissions included in this indicator
are from energy sources over which Sonae Sierra has financial
control. Electricity consumption in Maia office, in Portugal is not
known due to the fact that it is in a shared floor/building, with no
individual energy meters and therefore an estimate was made.
Other indirect greenhouse gas (GHG) emissions (Scope 3).
GHG Emissions (tCO2e)
Scope 3
Business train travels
20
Business air travels
2,234
Employee commuting
1,089
Visitor trips to and from
our shopping centres
Hotel Stays
Waste water treatment
(co-workers + visitors)
Waste treatment
total
598,707
115
8,597
10,035
620,797
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra
and in operation during the full reporting year and all corporate
offices (Lisbon, Maia, São Paulo, Milan, Madrid, Düsseldorf and
Bucharest). For emissions regarding waste disposal the data only
covers waste produced in corporate offices with a SHEMS (Lisbon,
Maia and São Paulo).
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performance indicators (continued)
Indicator
g4-En17
Other indirect greenhouse gas (GHG) emissions (Scope 3). (continued)
The emissions in tonnes of CO2 equivalent (tCO2e) have been calculated in accordance with the GHG protocol methodology, which was adapted,
if data was available, to the specific national circumstances of the various countries in which Sonae Sierra operates in Europe and in Brazil. This
indicator includes emissions from:
• Business air travel and train travel: For train travel the emissions factors used for 2013 come from Defra (National Rail and International Rail),
which are lower than the emissions factors used in previous years. For Brazil and Romania there was no business train travel in 2013. For air travel,
the source of emissions factors is the Defra Act on CO2 calculator, and the Radiative Forcing Factor (RFI) is from Jardine (2005) Oxford ECI.
• Employee commuting: This was updated based on results from the Company’s 2013 survey regarding commuting patterns. The emissions
factors were updated and are according to values referenced in: 2013 Guidelines to Defra/DECC’s GHG Conversion Factors for Company Reporting.
• Visitor trips to and from our shopping centres: This was updated for visitor patterns based on the same methodology applied in previous years
and in accordance with 2013 visitor numbers. The emissions factors were updated and are according to values referenced in: 2013 Guidelines to
Defra/DECC’s GHG Conversion Factors for Company Reporting.
• Wastewater treatment: We applied the same methodology as in previous years updated in accordance with 2013 employee and visitor numbers.
• Waste Treatment: We considered emissions associated with all disposal methods (anaerobic digestion, composting, incineration (with and
without energy recovery), landfill, recycling, elimination/treatment and reuse off-site). For anaerobic digestion and composting the emissions
factors are based on values published in: Emissions Factor Guide – Version 6.1 – Bilan Carbone – Agence de l’Environnement et de la Maîtrise de
l’Energie. June 2010. For disposal by incineration without energy recovery and by landfill, emissions factors are based on values published in:
Company certified by Carbon Disclosure Project:Ecometrica – 2011 (http://emissionfactors.com/). For the remaining disposal methods emissions
factors were taken from Defra.
• Hotels: emissions were calculated based on emissions factors published by InterContinental Hotels Group/Best Foot Forward.
g4-En18/crE3
Greenhouse gas emissions (GHG) intensity.
greenhouse gas emissions intensity
(including tenants)
GHG emissions intensity (tCO2e/m2)
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
0.077
0.076
0.213
0.051
0.810
0.396
0.175
global intensity
0.124
greenhouse gas emissions intensity
(excluding tenants)
GHG emissions intensity (tCO2e/m2)
Portugal
Spain
Italy
Germany
Greece
Romania
Brazil
0.073
0.076
0.213
0.050
0.323
0.275
0.110
global intensity
0.099
crE4
data Qualifying note:
This indicator covers all shopping centres owned by Sonae Sierra in operation
during the full reporting year. In calculating this indicator, the numerator
includes the scope 1 and scope 2 emissions according to GHG protocol
methodology, plus shopping centres’ scope 3 emissions regarding waste and
wastewater. The denominator includes the mall and toilet areas of the shopping
centres. For this indicator there is a slight mismatch between the numerator
and the denominator since energy consumption in technical areas and chilled
and hot water that is supplied to some tenants is considered, but the floor areas
are not. Greenhouse gas emissions intensity from new construction and redevelopment activity.
Not reported in 2013.
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performance indicators (continued)
Indicator
En19
Reduction of greenhouse gas (GHG) emissions.
Reported under EN6 on page 84 above.
En21
NOx, SOx, and other significant air emissions.
Air emissions by type (kg)
NOx
44,532
Non Methane Volatile Organic Compounds (NMVOC)
7,615
Particulate Matter (PM)
359
SOx
475
Volatile Organic Compounds (VOC)
104,436
total
157,417
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during
the full reporting year and all corporate offices with a SHEMS (Lisbon, Maia and São Paulo).
The information reported covers NOx, SOx and other significant air emissions from shopping
centres’ boilers and from the on-site cogeneration system of NorteShopping in Portugal.
Emissions from mobile sources such as the company car fleet and the emergency generators
have not been included. The calculation of emissions from boilers has been made using the
figures for natural gas consumption and associated emission factors. The methodology used is
consistent with the IPCC – Intergovernmental Panel on Climate Change and APA – Portuguese
Environment Agency (Agência Portuguesa do Ambiente). The calculation of emissions from
cogeneration has been made based on direct measurements of the NOx, SOx and other
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EFFluEntS and WaStE
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
The construction and management of shopping centres can generate large volumes of waste that, if not managed properly, ends up in
landfill. Landfilled waste is not only an inefficient use of resources (the waste and the land): it can generate damaging greenhouse gas
emissions such as methane and carbon dioxide, as well as pollutants that can leach into the soil and groundwater. Consequently, disposal of
waste in landfill is becoming more tightly regulated and more costly in most locations where we operate.
On the other hand, good waste management can reduce environment impacts and be more cost effective for businesses as it avoids landfill
tax and waste disposal costs. A closed-loop approach to waste management can also cut costs and environmental impacts associated with
the consumption of raw materials.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
Within the scope of our Safety, Health and Environment (SHE) Policy and procedures, we are committed to reducing the quantity of waste
generated by our activities and to achieving high levels of waste recycling. We are also committed to reducing our impacts in relation to
wastewater production.
Goals and Targets
We have set long-term objectives to:
•
Ensure that all discharges to local water courses comply with Sonae Sierra’s wastewater quality standards and pollutant limits, by 2020.
•
Increase the proportion of total waste (by weight) that is recycled, recovered or reused and obtain a minimum recycling rate of 60%
across our Sonae Sierra owned shopping centres, by 2020.
•
Reduce the proportion of waste (by weight) that is sent to landfill below a maximum limit of 20% across Sonae Sierra owned shopping
centres, by 2020.
•
Increase the proportion of total waste (by weight) that is recycled, recovered or reused and obtain a minimum recycling rate of 85% across
our main corporate offices, by 2020.
•
Maintain a high level of performance in terms of waste recycling in construction projects and aim to increase the proportion of
construction materials with recycled content.
Responsibilities and Resources
Responsibilities and resources for managing the effluents and waste aspect are covered by our SHEMS. See Disclosures on Management
Approach for the Environmental Aspect ‘Overall’ on page 74 above.
Our Site Managers at each shopping centre are responsible for ensuring that waste is managed efficiently. This includes providing appropriate
storage areas and equipment that are well maintained, preventing spillage and scattering during transportation, and producing monthly
reports of waste volumes. We also provide staff with detailed instructions on waste codes, rules for waste storage and final destination,
waste separation rules for non-hazardous waste and hazardous waste, and waste transportation in each country, particularly the
documentation required.
Specific Actions – Effluents
During the design phase, we are committed to incorporating solutions that reduce pollution to local water sources. For instance, to prevent
pollution from rainwater run-off we specify filter drains and porous paving in external paved areas and stormwater management plans are
implemented to contain or decrease stormwater run-off, according to the site’s characteristics. Additionally, our SHEDS guarantee that
equipment like grease and hydrocarbon separators or wastewater treatment plants are installed, minimising pollution through the
pre-treatment of these effluents before they are discharged. Our shopping centres may have up to five separate wastewater collection
systems, which enable different types of wastewater to be reused and/or treated, according to their characteristics.
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disclosures on management approach (continued)
Specific Actions – Waste
Our Safety, Health and Environment Development Standards (SHEDS) include a series of design requirements to maximise the waste
separation potential of every shopping centre we develop, so that once the shopping centre is in operation waste can be effectively sorted
and sent for recycling and recovery. A site specific Waste Strategy Study is undertaken during construction to establish adequate provision
of space for waste segregation bins and compactors, temporary storage and internal preferential routes for disposal.
We take a progressive approach to waste management during construction works, encouraging contractors to operate Waste Management
Plans. Aware of the difficulty that arises from the construction process being directly controlled by construction companies, we are
committed to gradually designing-out waste produced during construction (for example through off-site pre-fabrication). Where possible, we
specify end of life recycling for building components, which is particularly relevant for our refurbishment activities. In addition, construction
companies are required to report back to us the results of their waste management.
During the operations phase, the waste handled by Sonae Sierra is largely generated by tenants’ activities. Aside from seeking to influence
tenants’ practices, there is little that we can do to reduce waste production in our centres. Therefore, our waste management efforts are
focused on waste segregation, management and disposal. Beyond legal requirements, we aim to progressively improve each shopping
centre’s waste recycling rate.
For details of specific projects in 2013 to improve our management of wastewater and waste, see ‘Our performance’, pages 25 to 35.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the effluents and waste aspect is covered by our SHEMS. See Disclosures on Management
Approach for the Environmental Aspect ‘Overall’ on page 74 above.
Specifically with respect to effluents, our wastewater quality standard controls wastewater quality beyond existing legal requirements. These
are set out in our Wastewater Management procedure and include identifying all wastewater discharges into the municipal drainage systems
and/or wastewater systems, and monitoring wastewater quality in accordance with the Technical Instruction for Wastewater Management.
We analyse the results and in any cases of nonconformity we produce a report setting out corrective actions.
Wastewater discharges are analysed regularly by externally certified laboratories, in order to control the contamination levels of our water
discharges to municipal sewers, streams, etc. Among the main bio-chemical parameters usually analysed are Biological Oxygen Demand
(BOD5), Chemical Oxygen Demand (COD), Fats and oils, Total Hydrocarbons, Total Suspend Solids (TSS), pH, Detergents and Sulphides.
Through this control it is possible to prevent and to correct pollution to water sources.
Results and Adjustments
In addition to indicators G4-EN23 and G4-EN24 below, we also record the total waste recycled as a proportion of waste produced, and the
proportion of waste that is sent to landfill across our owned portfolio (see Our Performance, page 31). In 2013 our shopping centres achieved a
global recycling rate of 59% compared with 55% in 2012. The overall increase in our recycling rate was mainly due to the strong performance
of Portugal, Italy and Germany who all achieved over 60%. We also reduced the proportion of waste sent to landfill, from 29% in 2012 to 20%
in 2013. Our strong performance in this area was due to the performance of Portugal, Italy and Germany.
We also record the total waste recycled and proportion of waste sent to landfill in our corporate offices.
total waste recycled in
our corporate offices
proportion of waste
that is sent to landfill
in our corporate offices
(% by weight)
2020
85
(% by weight)
15
2013
82
2013
2012
86
2012
4
2011
80
2011
11
70
2010
13
2010
data Qualifying note:
These indicators include all corporate offices with a SHEMS (Lisbon,
Maia and São Paulo). Waste recycled includes waste sent for recycling,
anaerobic digestion and composting.
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disclosures on management approach (continued)
construction recycling indicator (% of total waste sent to recycling or recovery) on completed projects
In 2013 we applied our waste management practices to all projects under construction and achieved a recycling rate of at least 95% for our
completed projects. This performance is in line with construction projects in previous years and we met our target of 85%.
total waste recycled on completed projects
(% by weight)
Centro Colombo (Primark)
100%
Boulevard Londrina Shopping
100%
Passeio das Águas Shopping
95%
Hofgarten Solingen
100%
data Qualifying note:
This indicator includes all Sonae Sierra development projects completed
in the reporting period.
performance indicators
Indicator
g4-En23
Total weight of waste by type and disposal method.
Shopping centre and corporate office waste (tonnes)
Disposal Method
Hazardous waste
Non-hazardous waste
Total
%
Anaerobic Digestion
Composting
Incineration with energy recovery
Incineration without energy recovery
Landfill
Recycling
Reuse
Treatment/Elimination
–
–
–
–
–
110
–
22
1,531
4,839
8,482
–
8,454
17,918
93
146
1,531
4,839
8,482
–
8,454
18,028
93
168
3.7%
11.7%
20.4%
0.0%
20.3%
43.3%
0.2%
0.4%
total
132
41,463
41,595
100.0%
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the full reporting period and all corporate offices with a SHEMS (Lisbon, Maia and São Paulo).
The disposal method of the waste produced is provided by the waste disposal contractors.
g4-En24
Total number and volume of significant spills.
Sonae Sierra reports only significant spills with severe damage or very severe damage to the environment and requiring extensive effort to correct
and recover. There were no such spills in 2013. This includes all chemical, oil, fuel, waste and other spill types at shopping centres owned by Sonae
Sierra and in operation during the reporting year, all corporate offices with a SHEMS (Lisbon, Maia and São Paulo), and all Sonae Sierra projects
under development.
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productS and SErvicES
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Regulations and industry expectations concerning the sustainability performance of buildings have developed rapidly over the past few
years. By applying sustainable design standards on new projects and significant expansions/refurbishments, we can prepare for new and
emerging regulations whilst ensuring that our shopping centres are more attractive to investors and occupiers.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
Within the scope of our Safety, Health and Environment (SHE) Policy and procedures (see page 47 above), we are committed to ensuring
that our shopping centres (as our ‘products’) comply with high environmental standards. This includes standards for environmental design
and operation.
Goals and Targets
We have set a long-term objective to obtain ISO 14001 and OHSAS 18001 certifications for the SHEMS of our construction projects and
owned assets that we have managed for two or more years, by 2015.
Responsibilities and Resources
Responsibilities and resources for managing the products and services aspect are covered by our SHEMS. See Disclosures on Management
Approach for the Environmental Aspect ‘Overall’ on page 74 above.
Specific Actions – Environmental Standards for Development and Management of Shopping Centres
Through our years of experience in designing, constructing, owning and managing shopping centres we identified the sustainability features
which are most important for our operations. Our Safety, Health and Environment Development Standards (SHEDS) have been developed
with reference to our own experience; best available techniques; international certification schemes such as LEED® and BREEAM and
internationally recognised safety standards such as the National Fire Protection Association (NFPA) and European safety standards.
During the construction and operations phases, we operate Safety, Health and Environment (SHE) Management Systems in all our
construction sites and owned shopping centres which are based on ISO 14001 and OHSAS 18001 standards. Applying these standards
enables us to guarantee that all SHE risks are identified and controlled. It is also part of our policy to seek third party audit and certification
of the SHE Management Systems across all our sites. By obtaining ISO 14001 and OHSAS 18001 certification, shopping centres ensure
that their management systems are aligned with Sonae Sierra’s corporate policy and that SHE procedures have been fully implemented.
Certification demonstrates to our stakeholders our visible commitment to managing our SHE impacts and helps us to reduce the costs
associated with those impacts.
For further information about our SHEDS and SHEMS, see ‘Governance, Safety, Health and Environment Management System’, page 47.
For examples of specific projects in 2013 concerning environmental design and management of shopping centres, see ‘Our performance’,
pages 25 to 35.
GRI G3.1 CRESS Specific Actions – Indoor Air Quality
We have a corporate procedure applicable to all shopping centres (and a similar one for offices) to guarantee that acceptable indoor air
quality is maintained. This involves conducting regular monitoring of critical air quality indicators, including Volatile Organic Compounds (VOC)
emissions; periodic indoor air quality audits which cover a range of different parameters; and Legionella monitoring. Four of our air quality
parameters (air temperature; relative humidity; CO2 and carbon monoxide (CO)) are monitored on-line and transmitted to the public who
visit our shopping centres through television screens in the mall areas.
During the design phase, the SHEDS include standards which guarantee the use of the best equipment for Legionella control and the
ongoing monitoring of indoor air quality parameters. For example, cooling towers must be made from materials that are corrosion resistant;
must not contribute to microbiological growth; must be easy to clean and should entail drift eliminator devices.
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ANNEX: GLOBAL REPORTING INITIATIVE
SONAE SIERRA
2013 Economic, Environmental and Social Report
.100
ENVIRONMENTAL ASPECTS (CONTINUED)
Disclosures on Management Approach (continued)
c)
Report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The extent of implementation of the SHEDS on each of our projects is assessed by an external advisor. Our local SHEMS are assessed by
a third party certifier as part of the process for achieving ISO 14001 and OHSAS 18001 certifications.
Results and Adjustments
See ‘Our performance’, pages 25 to 35, GRI Indicator G4-EN27 (see below), and CRE 8 reported under the aspect ‘Product and Service
Labelling’ on page 135 below.
Performance Indicators
Indicator
G4-EN27
Extent of impact mitigation of environmental impacts of products and services.
Shopping centres and corporate offices
2013 (since the
implementation date)
Whole Year
Extent of impact mitigation
Site
Initiative Description
Centro Vasco
da Gama
Improvement to groundwater withdrawal system to
increase groundwater consumption and decrease water
from mains.
7,966m3
12,745m3
Parque Atlântico
New green area in place of an external fountain.
173m3
276m3
Shopping Campo
Limpo
Installation of waterless urinals.
180m3
4,320m3
RioSul Shopping
Installation of waterless urinals.
121m3
241m3
Luz del Tajo
Installation of an on-site composting facility.
32.7 tonnes of waste sent
to composting
43.6 tonnes of waste sent
to composting
Shopping Plaza Sul
Implementation of several measures to reduce water
consumption: daily control of water flow in taps; tenants,
staff and visitors awareness raising regarding ways to
reduce water consumption and installation of water flow
reducers in taps.
7,187m3
7,187m3
CascaiShopping
Improvement of wastewater network with installation
of oil/water separators.
Hydrocarbons value
decreased from 86 mg/L
to 30mg/L
Hydrocarbons value
decreased from 86 mg/L
to 30mg/L
Boavista Shopping
Implementation of water monitoring measures for water
consumption such as daily meter control, and installation
of water flow reducers in toilets.
6,052m3
6,304m3
All Portuguese and Green energy contracts to procure energy from renewable 25,000 tonnes of CO2e
Spanish owned
sources (e.g. solar).
shopping centres
except
– AlbufeiraShopping,
MadeiraShopping
and Parque Atlântico
(Portugal);
– GranCasa (Spain)
25,000 tonnes of CO2e
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EnvironmEntal aSpEctS (CONTINuED)
performance indicators (continued)
Indicator
g4-En27
Extent of impact mitigation of environmental impacts of products and services. (continued)
development
Development
Project
Centro Colombo
Primark
Extent of impact mitigation
An 88% rate for off-site materials integration was achieved.
Boulevard Londrina
Installed taps have an automatic shut off valve and 6 L/min flow rate at 2Bar.
Shopping
Toilet cisterns are dual flush with a selective water discharge of 6 or 3 litres. urinal valves are electronically activated by
an infrared body sensor, which discharges a maximum of 1L per use.
The water distribution network allowed the isolation of different sectors as well as easy access for maintenance and
inspection purposes. Rainwater is collected from the roofs and stored in a tank reservoir.
Materials with recycled content represented 44% of the total material Cost.
A total of 97,490,197Kg of local/regionally sourced heavy materials were used, representing 97% of the total heavy materials
cost. A total of R$ 433,417 of local/regionally sourced light materials were used, representing 34% of the total light
materials cost. Approximately 90% (by cost) of the installed wood is FSC certified. All paint used is lead compound-free.
None of the insulation products contains CFC or HCFC.
The green areas represent 20% of the total site area. All species are native or well adapted to local conditions. All
external lights with power above 100W comply with light pollution requirements.
The development management team consulted all significant stakeholder organisations, including the Municipality of
Londrina, to improve local public transport. As a result, a bus stop, taxi point and a cycle lane were created inside the
shopping centre’s boundaries. Information regarding bus services was provided at the public information display inside
the mall along with a map of where bus stops are located.
Additionally, the operational management team assumed responsibility to conduct a survey to check if there was a
need to create additional parking spaces for car sharing. The pedestrian pathways were designed in a way which
minimises road crossing, following straight lines between destinations and are surrounded by landscaped areas. The
shopping centre provided approximately 148 spaces for motorcycle parking at a clearly marked and isolated area of the
parking lot with additional signage at the car park entrance.
Passeio das Águas Shopping
An estimated 1.866m3 of rainwater will be used each year.
Premium ecological features were protected, namely a large tree in front of one of the southeast building entrances and
a preservation area northwest of the building. 83% of the tree specimens used after construction works were native or
adapted to local conditions.
The pedestrian pathways were designed to minimise road crossings, following straight lines between destinations and
surrounded by landscaped areas.
Hofgarten Solingen
Vegetation with a low water demand was used. Additionally, a programmable drip irrigation system was installed further promoting water conservation. The water distribution network allows for the isolation of different sectors to optimise
operational water use and minimise leakage problems.
All paints and other decorative finishings are lead compound-free.
The pedestrian pathways were designed to minimise road crossings, following straight lines between destinations and
surrounded by landscaped areas.
The shopping centre provides bus waiting areas and taxi stands. Information regarding available bus services is provided
via an electronic public information display outside the centre.
The centre is surrounded by residential buildings and infrastructure that is regularly occupied but minimum distances
required to avoid impacts on neighbouring buildings were kept.
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the full reporting year, all corporate offices with a SHEMS (Lisbon, Maia and São Paulo),
and all development projects completed within the reporting year.
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2013 Economic, Environmental and Social Report
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ENVIRONMENTAL ASPECTS (CONTINUED)
ASPECT:
COMPLIANCE
Disclosures on Management Approach
a)
Report the impacts that make this Aspect material
As observed with regards to energy, emissions and waste aspects, regulation on environmental impacts is becoming more stringent across
the globe. Furthermore, our Safety, Health and Environment (SHE) Policy iterates our commitment to adopt appropriate practices with
reference to international standards that go beyond compliance with SHE legislation. It is therefore essential that we guarantee compliance,
as a very minimum, with all environmental legislation applicable to our business activities.
b)
Report how the organisation manages the material Aspect or its impacts
Policies and Commitments
Our SHEMS ensures that, as a minimum, Sonae Sierra complies with all SHE legislation and regulations in the countries where it operates.
Goals and Targets
Compliance, for us, is the very minimum standard for SHE performance. We have established a range of objectives and targets whereby we
seek to improve our performance beyond compliance. See the Disclosures on Management Approach for other environmental aspects on
page 74 above.
Responsibilities and Resources
Responsibilities and resources for managing the compliance aspect are covered by our SHEMS. See Disclosures on Management Approach for
the Environmental Aspect ‘Overall’ on page 74 above.
c)
Report the evaluation of the management approach, including:
• The mechanisms for evaluating the effectiveness of the management approach.
• The results of the evaluation of the management approach.
• Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the compliance aspect is covered by our SHEMS. See Disclosures on Management Approach
for the Environmental Aspect ‘Overall’ on page 74 above.
Results and Adjustments
We aim to achieve levels of environmental performance beyond compliance. See the results reported in the Disclosures on Management
Approach for other environmental aspects on pages 79 to 104 above, ‘Our performance’, pages 25 to 35, and GRI indicator G4-EN29 below.
Performance Indicators
Indicator
G4-EN29
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.
In 2013 Sonae Sierra did not receive any significant fines or non-monetary sanctions for non-compliance with environmental laws and regulations.
This includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all corporate offices with a Safety, Health and
Environment Management system in place (Lisbon, Maia and São Paulo) and all projects that were under development during the reporting year.
Sonae Sierra does not have a threshold of significance in terms of fines. All fines are reported regardless of their value.
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EnvironmEntal aSpEctS (CONTINuED)
EnvironmEntal griEvancE mEchaniSmS
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Effective grievance mechanisms play an important role in remediating impacts that may be material to stakeholders. Therefore, we consider
it cautious to consider this to be a material impact within the scope of our reporting on environmental performance.
b)
report how the organisation manages the material aspect or its impacts. describe the availability and accessibility of grievance
mechanisms and remediation processes for environmental impacts, including along the organisation’s supply chain, and the involvement
of stakeholders in monitoring their effectiveness
Policies and Commitments
Within the scope of our SHE Policy, we are committed to ensuring that risks to people, assets and ecosystems are minimised. As a business,
we are also committed to being open to and responding to feedback received from our stakeholders, including complaints brought against
our organisation.
Goals and Targets
We do not set specific objectives and targets in relation to Environmental Grievance Mechanisms.
Responsibilities and Resources
Responsibilities and resources for managing the environmental grievance mechanisms aspect are covered by our SHEMS. See Disclosures on
Management Approach for the Environmental Aspect ‘Overall’ on page 74 above.
Furthermore, the Sierra Ombudsman, described on page 121, constitutes a formal grievance mechanism to which all stakeholders may
present complaints of any kind with an assurance that they will be processed, investigated, and responded to in a timely and sensitive manner.
Specific Actions
Not applicable.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
We monitor the number and proportion of complaints we receive about environmental concerns, as well as articles released by the media that
are positive or neutral related to environmental aspects.
We also monitor complaints made through the Sierra Ombudsman, according to type of complaint as well as a range of other factors such as
location and eventual resolution.
Results and Adjustments
See GRI indicator G4-EN34.
We also monitor the number of articles released by the media covering environmental aspects of our performance. In 2013, we recorded
896 such articles, of which only one was negative. This includes all countries where Sonae Sierra operated during the reporting year, except
Greece which did not monitor media coverage.
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EnvironmEntal aSpEctS (CONTINuED)
performance indicators
Indicator
g4-En34
Number of grievances about environmental impacts filed, addressed and resolved through formal grievance mechanisms.
Country
Number of grievances
Portugal
Germany
Brazil
Corporate
52
2
25
1
total
80
Number of grievances addressed by external stakeholders
(visitors, neighbours, tenants etc.)
79
Number of grievances addressed by individuals or groups identified
as underrepresented social groups or other indicators of diversity
1
Number of grievances resolved during the reporting year
77
Total number of grievances addressed in the previous
reporting year, which were resolved during 2013
53
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra
and in operation during the reporting period; all Sonae Sierra
development projects completed within the reporting period; all
corporate offices with a SHEMS (Lisbon, Maia and São Paulo); and
grievances addressed directly to Sonae Sierra at a corporate level. < >
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parque d. pedro Shopping, Brazil
.....
labour practicES and
dEcEnt WorK aSpEctS
occupational hEalth and SaFEty
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Safety and Health (S&H) incidents occurring in the workplace can cause harm to workers and expose companies to risks such as reputational
damage, fines and, in the case of construction and building works, delays on projects. On the other hand, a progressive approach to S&H can
help to protect people, reduce insurance costs, reduce staff absence and enhance a company’s reputation.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts and describe programmes related to assisting workforce
members, their families, or community members regarding serious diseases, including whether such programs involve education and
training, counselling, prevention and risk control measures, or treatment
Policies and Commitments
Our Safety, Health and Environment Policy establishes our responsibility to conduct our activities so that risks towards people, assets
and ecosystems are minimised, and benefits enhanced.
Further references:
Click here to read our Safety, Health and Environment Policy, which is available on our corporate website. Goals and Targets
We have set long-term objectives to:
•
Enhance the well-being of our workforce and reduce the rate and severity of workplace accidents and occupational
diseases, aiming towards zero.
•
Anticipate and prevent all safety risks on Sonae Sierra construction sites, minimising the number of accidents and
their severity, aiming towards zero.
•
Provide a safe environment for everyone who visits or works within Sonae Sierra shopping centres, aiming towards
zero accidents, and promote safe and healthy behaviour among our tenants, suppliers and visitors.
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labour practicES and dEcEnt WorK aSpEctS (CONTINuED)
disclosures on management approach (continued)
Responsibilities and Resources
ultimate responsibility for S&H aspects lies with Sonae Sierra’s CEO and Executive Committee. The Sustainability Steering Committee
constitutes the senior level of decision making; this Committee establishes the SHE Policy, goals and objectives and monitors progress with
respect to these objectives. The Sustainability Office actively supports the Sustainability Steering Committee and advises on SHE Policy
and standards. Responsibility for the implementation of our Safety, Health and Environment Development Standards (SHEDS) and Safety,
Health and Environment Management System (SHEMS) procedures is assigned to all leaders and managers in the organisation, who are also
required to demonstrate a strong visible management commitment. Our organisation as a whole is supported by the SHE network, which
provides advice on S&H.
Our SHE Policy commits us to promoting safety training among our stakeholders. Our SHEMS includes a competence, training and awareness
procedure, whereby a competence matrix is used to identify the level of training required for each role and function during the annual
personal assessment process. For example, all new Sonae Sierra employees must receive S&H induction training, and all Site Managers,
Site Correspondents and Country SHE Coordinators must attend training on all the SHE procedures within our SHEMS, as well as on legal
S&H issues specific to the country where they coordinate SHE management. We collaborate closely with our critical suppliers on specific
issues relating to SHE through our SHEMS procedures. Our SHE training plans for each site include the identification of training needs for
service suppliers.
GRI G3.1 CRESS Specific Actions – Development and Service Supplier Safety
Our Service Suppliers Management Procedures for Development and Property Management define the various steps that should be followed
from the pre-selection and bidding process through to contract closure and post-contract evaluation. Both our Development and Property
Management businesses have integrated the requirements of Sonae Sierra’s Safety, Health and Environment Management System
(SHEMS) into their Service Suppliers Management Procedures, so that these are set up in a way to ensure that our main suppliers’
performance meets with Sonae Sierra’s Safety, Health and Environment (SHE) requirements.
Within the scope of these procedures, all contracts with critical suppliers must include SHE clauses, and sub-contractors have the same level
of SHE requirements as contractors. If no formal contracts are signed, then the service supplier must sign a ‘Warranty Declaration’ to
guarantee that SHE requirements will be met. We have also established SHE regulations for service providers, which include, for example,
the obligation for suppliers to adopt protective measures to minimise risks that workers are exposed to.
Compliance with these regulations is checked during work supervision and for long-term contracts (including contractors from construction
sites) and S&H performance is evaluated during works execution.
All new shopping centre development projects must implement a site-specific SHEMS and achieve certification in accordance with the
OHSAS 18001 standard for the entire construction phase. Additionally, a Safety Plan is drawn up for each of our construction sites and
compliance with this plan is compulsory for all contractors. Contractors cannot begin any activity without the validation of this document by
the site’s S&H Coordinator and Sonae Sierra’s prior approval. Each of our development projects has a full time S&H Coordinator to validate
contractors’ risk assessments and, if necessary, establish additional control measures. The S&H Coordinators and outsourced project
management teams carry out permanent S&H supervision and planning on construction works identifying and correcting unsafe actions
wherever necessary. In respect to expansions and refurbishments a simplified SHEMS is also implemented (see page 47 for further details).
We investigate the cause of all incidents and communicate across the Company the lessons that can be learned to avoid a repeat occurrence.
This is done using ‘Alerts’, a communication tool that is also used during the construction phase. We also hold regular SHE Meetings and carry
out emergency practice drills on all construction sites.
GRI G3.1 CRESS Specific Actions – Procedures to identify and evaluate S&H risks to people
Prior to the commencement of construction or refurbishment works, all design teams consider our Safety, Health and Environment
Development Standards (SHEDS) during the concept and architectural development phase of all our new shopping centres, refurbishment
or expansion projects and minor works. The SHEDS aid us in minimising S&H risks from the outset of each shopping centre’s development
and into the operations phase. The implementation of the standards is mandatory for all projects and is checked through a final audit carried
out by a third party. Compliance with local S&H regulations is also verified by competent authorities prior to opening as part of the licensing
procedure for new shopping centres.
We also operate a corporate risk matrix that is used by centres to create a tailored risk matrix based on the safety and health risks to people
during the operational phase. This includes defined procedures for routine activities, non-routine activities, such as fit outs and improvements
to tenant units, and emergency procedures. For more information, see G4-LA7 (page 111).
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GRI G3.1 CRESS Specific Actions – Policies and procedures for the procurement, transport,
handling, use and disposal of hazardous materials
During the New Business phase of our own projects, Environmental Due Diligence and an Environmental Impact Study are undertaken so
that we can understand the potential environmental liabilities that sites may contain (such as contaminated land or materials) and therefore
guarantee sufficient budget in our Investment Plans to adequately deal with these issues.
During the design phase, within our SHEDS there is a specific requirement which is included within the design team and contractors’ service
agreements which prohibits the use of certain hazardous materials and substances (as defined by Sonae Sierra) throughout the
construction works.
For the construction phase, the use and disposal of hazardous materials is controlled by the implementation of our SHE procedures for
development; namely the SHEMS for new projects, the Safety, Health and Environment Monitoring Plan (SHEMP) for major refurbishments
and expansions, and the small works procedure for minor interventions. The on-site S&H Coordinators and Development teams maintain a
record of hazardous materials which come onto the site and are disposed of from the site.
During the operations phase and within corporate offices, we have a procedure in place that sets out the main safety recommendations for
handling hazardous products, including the hazard characteristics of products, the labelling rules, storage incompatibilities and recommended
protective measures. These are supported by posters to raise awareness among service suppliers around the correct storage and handling of
these products. Where possible, we work with service suppliers to replace hazardous products with less hazardous alternatives that share
similar characteristics.
Specific Actions – Programmes related to assisting workforce members, their families,
or community members regarding serious diseases
We provide education and training, counselling and prevention programmes for employees, their families and community members regarding
serious diseases or potential long-term damage to health.
Coverage of programmes
Education/Training
Counselling
Prevention
Treatment
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
n/a
n/a
n/a
Staff
Families of staff
Community members
During 2013, six specific education, training, counselling, prevention and risk-control programmes were in place to assist workforce members
and their families regarding serious diseases or potential long-term damage to health. These were:
1.
‘Safety Tips’ practice: ‘Safety Tips’ provide staff with guidance on how to best respond to different every-day situations covering a wide
range of issues, among them risk prevention measures on diseases or long-term damage to health. In 2013 Safety Tips delivered to
staff and their families included advice about:
– Walking safely on slippery surfaces.
– Noise.
– How to read the label.
– Are you well hydrated?
– Never Leave Children in Cars – a major risk of death through hyperthermia.
– Earthquake Procedures (Practice Drop, Cover and Hold).
2.
Shopping centres and offices campaigns: in 2013 Sonae Sierra undertook several campaigns to raise public awareness about serious
diseases. For example celebrating World Day for Safety & Health at Work on 28th April. The campaign called ‘Eyes On Risk’ aimed to
remind employees of the daily risks that they are exposed to, and encourage them to adopt the safest behaviour possible, not only for
their own sake, but for the safety of others as well.
We also help events related to S&H issues at shopping centres (for example the continuation of a campaign to promote safe escalator
use at all shopping centres in Europe). Our shopping centres in Portugal supported “A Terra Treme” (The earth is trembling), a nationwide initiative organised by the National Authority for Civil Protection to teach people how to respond in the event of an earthquake.
Awareness-raising events for shopping centre visitors, tenants and local schools featured information displays and practice drills
involving the emergency services and actors simulating an earth quake event.
3.
Induction training: safety & health and environment training for new staff, service suppliers and tenants (all countries).
4.
First aid courses: some members of our staff in Portugal (Lisbon office), Italy (Milan Office) and Germany (Düsseldorf Office) completed
a basic first aid course (provided in Portugal by the Portuguese Red Cross). This course included many practical skills required by a first
aider in the modern workplace such as treating patients who have experienced a heart attack, who are unconscious, or are suffering
from shock, chocking, poisoning, bleeding, burns or scalds.
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5.
Defibrillator: Some employees in Romania (Bucharest Office), Germany (Düsseldorf office) and Spain (Madrid Office) received specific
training on how and when to use an external automatic defibrillator.
6.
Training on the use of fire extinguishers in Portugal, Spain, Italy, Romania and Germany to staff, service suppliers and tenants.
Education and Training is provided in all local languages or in English.
Sonae Sierra has defined a transversal procedure in our Safety, Health and Environment Management System aimed at identifying and
evaluating S&H hazards and risks to Sonae Sierra’s stakeholders. This evaluation is made for all activities covering offices, shopping centres
in operation and development projects, and through which we identify the potential consequences to people, identifying both injuries
(e.g. cuts, burns etc.) and occupational diseases (e.g. musculoskeletal disorders, hearing loss etc.).
As we evaluate a hazard we have to consider existing control measures and deficiencies, the periodicity/probability of the hazard’s
occurrence and its potential severity. Any non–acceptable risks that are identified must result in the implementation of additional risk control
measures until the risk is classified as acceptable.
Examples include:
•
In our shopping centres, we identified that the inspection and testing of emergency generators could cause the loss of hearing capacity.
To avoid this, we implemented several controls such as short term worker exposure to noise, regular noise measurements and
communication of results, and the mandatory use of suitable hearing protectors.
•
In our offices, we identified the possibility of musculoskeletal disorders from handling air conditioning units for maintenance. To avoid this,
we provide mechanical transportation equipment, training on its functionality and regular inspections to ensure it is being used properly.
All matrices are validated by qualified technicians, either the Country Safety, Health and Environment Coordinators in offices and operational
centres, or S&H Coordinators in development sites, and then approved by the respective site manager. Additionally, in all countries where
this is demanded by law, an occupational doctor also provides follow-up and feedback to Sonae Sierra employees in regular consultations and
evaluates each employee’s workstation to avoid any future occupational disease.
Regarding shopping centres under development, we have acknowledged that the task of identifying the number of workers that are exposed
to a specific risk at a specific moment is extremely complex due to site specific factors, and that the time and effort required for this
identification will not produce relevant benefits to Sonae Sierra. We focus most of our efforts on ensuring that all existent risks in each
construction site have proper control measures in place. We have identified that workers on construction sites are more exposed to: noise,
vibration, dust and working with concrete. Knowing this, and to minimise the associated risks, worker rotation, awareness raising and the use
of personal protective equipment was implemented.
In shopping centre management activities the risks of serious occupational diseases are less extensive than in development. However, Sonae
Sierra has identified eleven occupational diseases, all relevant to service suppliers. Some examples include tendonitis, loss or reduction of
hearing capacity or Raynaud phenomenon. The stakeholders that are more exposed to risk of occupational diseases are maintenance and
cleaning service suppliers.
In corporate offices the only risk identified is the risk of tendonitis and Carpal tunnel syndrome. During 2013, there was one occupational
disease recorded in Portugal. It was a case of tendonitis, which is consistent with our risk analysis.
GRI G3.1 CRESS Specific Actions – Policies and procedures for assisting employees with mental health issues,
substance and alcohol addiction, and HIV/AIDS
Alcohol and drug use is prohibited during work shifts and inside all of our construction sites. This is strictly followed up by the site S&H
Coordinators and S&H Technicians throughout the entire construction process.
GRI G3.1 CRESS Specific Actions – Policy on compensation and benefits for employees for work-related injuries and fatalities
Compensation and benefits are provided in accordance with the law; i.e. through insurance policies. Specific clauses are added to service
agreements with contractors in order to ensure that, in cases of serious work-related injuries or fatalities, the fines that are paid to Sonae
Sierra revert to the families of injured workers.
GRI G3.1 CRESS Specific Actions – Policies and procedures for the commissioning, operation and decommissioning of equipment
Our contracts with service suppliers include requirements to make sure that pre-opening testing of the building and training on new
equipment is performed so as to make sure that teams are trained to deal with all systems’ capabilities and functionalities. Decommissioning
takes place within the scope of our SHE and maintenance procedures, which make sure that the efficiency of shopping centre systems is
closely reviewed and that investments are proposed to upgrade equipment where applicable.
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c)
Report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The monitoring of our performance in relation to the occupational health and safety aspect is covered by our SHEMS. See ‘Governance,
Safety, Health and Environment Management System’, pages 47 to 48 and Disclosures on Management Approach for the Environmental
Aspect ‘Overall’ on page 74.
Results and Adjustments
In addition to GRI indicators G4-LA6, G4-LA7 and CRE6 below, we record the Lost Workday Case Accidents Rate for development and service
suppliers. These both fell in 2013 to 4.3 and 2.17 respectively. The severity of construction site accidents measured as the Accident Severity
Rate also fell to 113.79. Despite these falls, we saw an increase in the global frequency rate of level 3, 4 and 5 category accidents per million
visits to 1.73 (see Our Performance, page 25 and 35).
Total number of man hours of Safety and Health training and awareness provided across all Sonae Sierra sites.
We maintained our strong focus on incident prevention and in 2013 we delivered a total of 22,544 man hours of Safety and Health (S&H)
training and awareness to our employees. The decrease from 2013 can be attributed to the fact that there were no significant changes to
our SHEMS and a number of development projects were completed during the year. A total of 1,218 training sessions were held, involving
18,791 participants. These sessions included training on issues such as Sonae Sierra’s SHEMS procedures; incident reporting and investigation;
emergency response procedures; the use of the SHE Portal; SHE Preventive Observations (SPO) and Safe Practice Index (SPI) audits.
Number of man hours
of S&H training provided
in all Sonae Sierra sites
(Number of hours)
2013
22,544
2012
31,680
2011
37,154
2010
41,495
Data Qualifying Note:
This indicator includes all shopping centres owned by
Sonae Sierra and in operation during the reporting period;
all shopping centres managed but not owned by Sonae
Sierra during the reporting period; all projects under
development during the reporting period; and all corporate
offices in operation during the reporting period.
Number of hours of Safety, Health and Environment Preventive Observation (SPO) performed in shopping centres and corporate offices.
In 2013 we performed 9,697 hours of SHE Preventive Observations (SPO) across our shopping centres (including some of those which we
manage on behalf of others). SPO allow us to identify and correct behaviour which could potentially lead to incidents, and are therefore an
important part of our incident prevention strategy. The number of hours of SPO performed in 2013 decreased by around 5% in comparison
to 2012. This was due to the sale of Parque Principado in October 2013, and the fact that the three shopping centres that opened in 2013
did not have specific targets to perform SPO actions. There was also a decrease in the number of hours of SPO actions at shopping centres
under management (but not owned by Sonae Sierra) as they are not a mandatory requirement.
Number of hours of SPO
performed in shopping
centres and corporate offices
(Number of hours)
2013
9,697
2012
10,187
2011
10,795
2010
12,880
Data Qualifying Note:
This indicator includes all shopping centres owned by
Sonae Sierra and in operation during the reporting period,
all shopping centres managed but not owned by Sonae
Sierra, all corporate offices with a SHEMS (Lisbon, Maia and
São Paulo Offices), and all corporate offices with a Safety
and Health Management System (Milan, Madrid, Düsseldorf
and Bucharest).
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Number of non-conformities detected per hour of reference SPO.
In 2013, we identified an average of 8.4 non-conformities per hour of reference SPO, a 14% increase compared to 2012.
Number of non-conformities
detected per hour of
reference SPO
(Number of non-conformities)
2013
8.4
2012
7.4
2011
7.8
2010
5.8
Data Qualifying Note:
This includes all shopping centres owned by Sonae Sierra and in operation during the
reporting period. It relates to the number of non-conformities per hour of SHE Preventive
Observations audited by the Sustainability Office team and CSHEC (Country S&H and
Environment Coordinators). The number of non-conformities per hour of SPO is
calculated as the total number of S&H and SHE non-conformities in all sites divided
by 80% of the total number of SPO hours performed in all sites. The value reported
for the indicator reflects the results obtained for the year to date (since the beginning
of the year).
Number of drills performed divided by total number of sites in operation.
In 2013 our shopping centres performed an average of 2.2 emergency practice drills covering evacuations, fire, gas leakages and earthquakes.
Number of drills performed
divided by total number of sites
(Number of drills per site)
2013
2.2
2012
2.6
2011
2.3
2010
2.0
Data Qualifying Note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation for
at least six weeks of the reporting period, and all corporate offices. This indicator is
calculated by dividing the total number of practice SHE emergency drills carried out
across all sites of operation and corporate offices by the number of sites.
Safe Practice Index (SPI).
We use the Safe Practice Index (SPI) audit tool to assess and improve safety conditions on our construction sites. The SPI measures the level
of adherence to Sonae Sierra’s S&H requirements as construction works evolve. The higher the index, the higher the level of safety
awareness amongst the construction workforce. In 2013, the average SPI score across all our construction sites was 94%, up from 85% in
2012. Where deviations or non-conformities are detected, various actions can be taken, such as correcting them, increasing worker
supervision, or providing further training or more resources.
Safe Practice Index
(%)
2013
94%
2012
85%
2011
94%
2010
92%
Data Qualifying Note:
This indicator includes all projects under development during the reporting period and all
development projects completed within the reporting period. The SPI is obtained by
assigning different weights to each of the observed unsafe acts and conditions, according
to their likelihood to generate an accident and its possible severity. The number of
observed persons and the duration of the audit are also taken into account.
One of our other successes in 2013 was the creation of a procedure to reduce risks for our staff travelling to countries where we are seeking
to develop new business. This ensures that all travellers receive an email on medical and security risks in the country they are going to visit.
We also increased the provision of travel insurance for employees and began training staff on precautionary procedures they should follow
when travelling abroad for business purposes according to the country’s specific level of risk.
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performance indicators
Indicator
g4-la6
Type of injury and rates of injury, occupational diseases, lost days and absenteeism, and total number of work-related fatalities, by
region and by gender.
Sonae Sierra Workforce (direct employees and
supervised workers)
Injury Rate
Occupational disease rate
Lost day rate
Absentee rate
Fatalities
5.79
0.48
51.14
0.02
–
data Qualifying note:
This indicator includes all Sonae Sierra direct employees (i.e. employees on Sonae Sierra payroll); all Sonae Sierra supervised workers during the reporting period; and all
independent contractors working on-site during the reporting period. Regarding independent contractors and trainees, there are no injuries, occupational diseases, lost days,
absentee and fatalities to be reported. The formulas used to calculate the presented rates are:
• Injury rate = (Number of injury * 1,000,000)/Total time worked.
• Occupational disease rate = (Number of occupational diseases * 1,000,000)/Total time worked.
• Lost day rate = (Number of lost days * 1,000,000)/Total time worked.
• Absentee rate = Absentee in period (hours)/Total time worked.
The Total time worked equals the total number of workable days (excluding vacation and holidays) multiplying by the average total workforce and multiplying by 8 hours (units in
hours). The Average total workforce equals the sum of the total number of employees (direct employees and supervised workers) at each month end divided by 12 months. Injuries
reported don’t include minor injuries (first-aid level). For Sonae Sierra ‘days’ means ‘scheduled work days’ and ‘lost days’ count begins in the immediate working shift (or day) after
the accident/occupational disease manifestation occurred. It was not possible to report the information broken down by gender, which we will try to report in our next Economic,
Environmental and Social Report.
g4-la7
Workers with high incidence or high risk of diseases related to their occupation.
Sonae Sierra has defined a transversal procedure in its SHEMS aimed at identifying and evaluating S&H hazards and risks to people.
An evaluation is made for every area in offices, centres in operation and development projects, and through this we identify the associated activities
that are developed, the periodicity of occurrence, the activity’s responsible and the potential consequences to people, identifying both injuries
(e.g. cuts, burns) and occupational diseases (e.g. musculoskeletal disorders, hearing loss).
This risk analysis includes all risks identified to Sonae Sierra’s workforce, external suppliers, tenants and visitors considering, whenever available,
the risk analysis provided by these stakeholders as a reference for our own risk assessment.
As we evaluate a hazard we have to consider the existent control measures and deficiencies, the periodicity/probability of the hazard’s occurrence,
and its potential severity. After considering all these issues, we classify hazards into four separate risk levels: two that are considered as acceptable
and two non-acceptable. Any non–acceptable risks that are identified must result in the implementation of additional risk control measures until
the risk is classified into one of the two acceptable risk categories.
Examples:
• In our shopping centres, we identified that the inspection and testing of emergency generators could lead to a loss of hearing capacity. To avoid
this we implemented several controls, like short term worker exposure to noise, regular noise measurements and the communication of the
results, mandatory personal protective equipment use, signage and the provision of suitable hearing protectors.
• In our offices, the possibility of air handling unit maintenance operations causing musculoskeletal disorders was recognized. To avoid this, we
provided mechanical transport equipment to ease the work, training on its functionality and regular inspections of the equipment.
• In development sites, we identified that workers involved in demolition activities are more susceptible to picking up respiratory problems due to
excessive dust conditions, so we set measures such as: humidifying all areas to be demolished and providing all involved workers with suitable
masks and training on their proper use.
All matrices are validated by qualified technicians, either the Country Safety, Health and Environment Coordinators in offices and operational
centres, or Safety & Health Coordinators in development sites, and then approved by the respective site manager.
In shopping centres, besides the previous validation, the matrices are also validated on site by a Safety and Health Technician that is dedicated to
concerns related to risks for staff.
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g4-la7
Workers with high incidence or high risk of diseases related to their occupation. (continued)
Additionally, in all countries where this is demanded by law, an occupational doctor also provides follow-up and feedback to Sonae Sierra staff in
regular consultations and evaluates each member of staff’s workstation to evaluate it and eliminate any possible future occupational health
complaints or problems.
Regarding shopping centres under development, we have acknowledged that the task of identifying the number of workers that are exposed to a
specific risk in a specific moment is extremely complex (due to site specific factors such as: the variation of construction processes; the multiplicity
of tasks that a worker may perform; or the previous training that workers have undertaken) and that the time and effort put into this identification
will not produce relevant benefits to Sonae Sierra.
Our posture focuses most of our efforts on ensuring that all existent risks in each construction site have proper control measures associated with
them and on continuously following up on the adequacy of these control measures throughout construction. We identified that workers on
construction sites are more exposed to: noise, vibration, dust and working with concrete. Knowing this, and to minimise the associated risks, the
following measures are implemented: worker rotation, awareness raising and the use of personal protective equipment (i.e. masks, glasses, gloves,
cleaning and use of specific uniforms).
All sites have to perform the risks and hazards assessment, to evaluate which are the risks that workers are exposed to, and then all assessments
are validated by qualified technicians, either the Country Safety, Health and Environment Coordinators in offices and operational centres, or Safety
& Health Coordinators on development sites, and then approved by the respective site manager.
In management activity the risks of serious occupational diseases are less extensive than in development. However Sonae Sierra was able to
identify eleven occupational diseases, all in service suppliers. Some examples are tendonitis, loss or reduction of hearing capacity or Raynaud
phenomenon. The stakeholders that are more exposed to risk of occupational diseases are maintenance and cleaning service suppliers.
In corporate offices the only risk identified is the risk of tendonitis and Carpal tunnel syndrome. During 2013 there was one occupational disease
recorded in Portugal. It was a case of tendonitis, which is consistent with our risk analysis.
crE6
Percentage of the organisation operating in verified compliance with an internationally recognised health and safety management system.
Direct
Employees
Supervised
Workers
Independent
Contractors
1,144
10
20
Total number of direct employees, supervised workers and independent contractors,
externally verified to be operating in compliance with OHSAS 18001
526
4
16
Percentage of direct employees, supervised workers and independent contractors,
externally verified to be operating in compliance with OHSAS 18001 (%)
46%
40%
80%
Total number of direct employees, supervised workers and independent contractors, internally
verified to be operating in compliance with the safety and health management system (S&HMS)
992
9
20
Percentage of direct employees, supervised workers and independent contractors, internally verified
to be operating in compliance with the safety and health management system (S&HMS) (%)
87%
90%
100%
total workforce and independent contractors
data Qualifying note:
This indicator includes all Sonae Sierra direct employees, supervised workers and independent contractors at the end of the reporting period. Some employees are covered by an
internally verified S&HMS as well as an externally verified S&HMS, therefore the figures in the table add up to more than the total number of direct employees, supervised workers
and independent contractors.
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training and Education
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Developing and retaining talent can increase a company’s competitiveness: talent developed and retained enhances know-how, increases
the potential for innovation and supports a strong reputation. In turn, a strong reputation helps to attract new talent, thus perpetuating
the cycle.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
Within the scope of our long-term priority ‘Leveraging Knowledge’ we are committed to empowering people through skills and knowledge.
Our Code of Conduct includes principles to identify our employees’ training needs; encouraging our employees to identify their own
training needs and providing the most suitable training to all staff.
Further references:
Click here to read our Code of Conduct, which is available on our corporate website.
Goals and Targets
‘Our Business model and strategy’, page 14.
Responsibilities and Resources
ultimate responsibility for employment aspects, including training and education, lies with Sonae Sierra’s CEO and the Executive Committee.
Operational responsibility is divided among line managers within each of our business divisions, from senior management downwards. The
Human Resources (HR) Department lends a supporting role by proactively intervening in the development and execution of the HR strategy
and policies and providing quality HR advice to business leaders.
In terms of resources, we have a HR team covering different areas, including local support (Country Coordinators) and specific activities such
as compensation and benefits; training and development; recruitment, selection and talent; performance management and communications.
We outsource payroll management (except in Portugal) and legal support.
We use a number of IT tools based around SAP, including our Improving Our People (IOP) Performance Management Tool, which can be
accessed by all employees through our HR portal.
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disclosures on management approach (continued)
Specific Actions – Training
Our internal training programmes include, in Europe:
•
‘We Share’, which aims to aggregate and share the professional expertise of our employees by bringing together the different knowledge
sharing initiatives that we have:
– Sierra Internal Learning focuses on developing the behavioural and technical capabilities of Sonae Sierra employees through training
events that last a day or longer. Examples include ‘Motive for Action’, which aims to build the skills of our employees to help them adapt
and respond to challenging market and economic conditions, and ‘SIGHT’, which is designed for our property management business
area and involves training employees on the strategy levers for a company like Sonae Sierra. This enables our staff to better
understand the factors which influence the value chain as a whole for our tenants and thereby better anticipate tenants’ needs.
– Sierra Shots typically last one to two hours and are opportunities for employees to share insights that are deemed relevant and useful
with their colleagues. In 2013 we organised Sierra Shots on topics such as continuous improvement, property valuations, public art,
sustainability, leadership and retail trends in Morocco.
•
‘HR Knowledge Pills’ training sessions which focus on specific HR issues (e.g. information on legal requirements and Sonae Sierra HR
procedures).
And in Brazil:
•
The ‘Superintendent Trainee’ project, developed three years ago by our property management department. We are currently enhancing
the content of this project to include people management and a more active supervision of the trainees’ development. It will officially be
relaunched in 2014.
•
The ‘Educational Subsidiary’ programme which helps our employees to get a degree and also improves their chances of career
development.
Across the firm as a whole we operate an Integration Programme for new employees and have continued to roll out BEST (Behaviour with
Ethics Sierra Training) to increase knowledge of our Code of Conduct and raise awareness of the different types of corruption employees
may be confronted with.
In the past we have also invested in external training programmes, but we have found that these internal training programmes better meet
the specific needs of our organisation.
Specific Actions – Career Development
The Sonae Academy for Management and Leadership aims to create a Group-wide learning solution for all Sonae Sierra companies across
all businesses areas and geographies by:
•
Developing a unique learning model.
•
Supporting career development.
•
Reinforcing the alignment between our employees and Sonae Sierra’s business strategy and culture.
•
Supporting internal mobility (between geographies and companies).
The Academy programme has been developed together with external business schools, and the courses are held in those schools. There is
a curriculum based on theoretical career progression, designed for people of different levels of seniority who we have identified, based on
annual performance appraisals, as having management and leadership potential.
Specific Actions – Leveraging Knowledge
‘Leveraging Knowledge’ is one of our long-term sustainability priorities and through this we aim to empower our employees by building their
skills and knowledge, unleashing their potential on an individual basis and raising the standard of education at a collective level in the
communities where we operate. We are exploring how we can transfer know-how in the company while supporting education in our
communities. We aim to set specific actions in the year ahead and are exploring a number of opportunities including working with outside
organisations such as universities.
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Disclosures on Management Approach (continued)
c)
Report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
On an individual level, all our employees receive annual performance and career development reviews. On a collective level, we monitor
employee satisfaction once every two years through our Corporate Climate and Employee Satisfaction Survey, which asks our employees
to rate their satisfaction with a range of factors including training and development.
Results and Adjustments
Proportion of training undertaken by type.
In addition to GRI indicators G4-LA9 and G4-LA11 below, we record the number of hours and proportion of training undertaken by type.
In 2013, just under three quarters of all training was devoted to building up our employees’ technical capabilities.
Type of training
Number of hours
Proportion of total
training hours (%)
27,122
924
8,761
74%
2%
24%
36,807
100%
Technical
Behavioural
Languages
Total
Data Qualifying Note:
Includes all Sonae Sierra direct employees at the
end of the reporting period.
Investment in staff training and development.
In 2013, we invested €483 per capita in staff training and development, a 3% decrease from 2012. Despite the lower amount, we succeeded
in providing employees with an average 32.2 hours of internal and external training during the course of the year. For more information,
see G4-LA9.
Investment in staff training
and development
(€ per capita)
2013
483
2012
499
2011
528
2010
776
Data Qualifying Note:
This includes all Sonae Sierra direct employees and the cost of training and development
provided during the reporting period. It is calculated using the following formula:
investments in employee training and development in each country/number of direct
employees in each country (G4.10).
In Europe, we were not able to sustain the level of investment in external employee training due to cuts in the HR budget in the context of
ongoing austerity measures in the main countries where we operate. Nonetheless, we continued to work on our action plan for high potential
employees and to push hard for training for these employees through the Sonae Academy described on page 114.
In Brazil, 168 employees took part in our Educational Subsidiary Programme. We granted a total of 57 promotions; 38 in shopping centre
operations and 19 for job functions based at our head office. Our biggest challenge concerning employee development is to educate leaders
on how to evaluate their teams effectively using Sonae Sierra’s corporate tool (IOP – Performance and Potential Appraisal) and how to
provide appropriate feedback.
Another challenge which we faced in 2013 was related to our entry into emerging markets where we need to train employees quickly in order
to understand the retail industry potential there. As international companies move into these markets, there is high demand for experienced
employees and the turnover rate for successful recruits is high. It is therefore important for us to work on a fast integration and training
programme for new employees in these markets so that they are quickly able to deliver their work.
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Disclosures on Management Approach (continued)
Communication and training on anti-corruption policies and procedures.
In 2013, 85% of employees in Europe, Brazil and North Africa completed training on our anti-corruption policies and procedures. This means
that, combined with training already conducted in 2012, we completed our two-year goal for all employees to receive this training. Turkey was
not included in this goal because Sonae Sierra only entered the Turkish market in November 2013.
Country
Percentage of employees
and Board Members that
received anti-corruption
training by country
Portugal
Spain
Italy
Germany
Greece
Romania
The Netherlands
Algeria
Morocco
Turkey
Brazil
Global percentage
99%
96%
94%
91%
100%
100%
100%
79%
0%
0%
71%
85%
There is an internal procedure of sending an e-mail to every
employee containing a welcome message, including in attachment
the Code of Conduct of Sonae Sierra, called Welcome kit.
This "Welcome Kit" is also available on the intranet of Sonae Sierra,
to be consulted by every employee who wants to access it.
So it's assumed that it is communicated to all new employees
admitted in the organization, its anti-corruption policies and procedures.
As the new GRI guidelines were issued in mid-year 2013, Sonae Sierra didn't had sufficient time to organise the process that would allow us
to communicate, measure and report the number of business partners to whom the organisation's anti-corruption policies and procedures
would be communicated, until the end of 2013.
Performance Indicators
Indicator
G4-LA9
Average hours of training per year per employee by gender, and by employee category.
Employee Category
Global Senior Executive, Senior Executive, Executive
Senior Manager
Manager
Team Leader
Project Team Specialist
Team Member/Team Contributor
Total
Number of employees
Number of hours
Average hours
of training
per employee by
employee category
24
63
94
150
173
640
236
2,521
3,191
3,993
5,482
21,385
9.8
40.0
33.9
26.6
31.7
33.4
1,144
36,807
32.2
Gender
Number of employees
Number of hours
Average hours
of training
by gender
Female
Male
578
566
16,895
19,912
29.2
35.2
1,144
36,807
32.2
Total
Data Qualifying Note:
This indicator includes all Sonae Sierra direct employees at the end of the reporting period. To obtain the average number of hours per employee (AHE), by employee category,
the following formula was applied: AHE (by employee category) = total hours of training per employee category, divided by total employees per employee category. To obtain
the average hours of training per gender (AHG), the following formula was applied: AHG = total number of hours by gender, divided by total number of employees by gender.
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performance indicators (continued)
Indicator
g4-la11
Percentage of employees receiving regular performance and career development reviews, by gender and by employee category.
Female
Male
Number of employees receiving
regular performance and career
development reviews
545
514
Percentage of employees
receiving regular performance
and career development reviews
100%
100%
Female
Male
Total
Global Senior Executive,
Senior Executive and Executive
Senior Manager
Manager
Team Leader
Project/Team Specialist
Team Member/Team Contributor
3
77
25
58
67
315
17
104
45
63
59
226
20
181
70
121
126
541
total
545
514
1,059
Employee category
data Qualifying note:
This includes all Sonae Sierra direct employees (i.e. employees on Sonae
Sierra’s payroll) at the end of the reporting period that have a contract
established for at least six consecutive months with Sonae Sierra. This
is an eligibility condition to enter the annual evaluation programme.
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divErSity and EQual opportunity and
EQual rEmunEration For mEn and WomEn
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Companies where unfair treatment is present are at risk from law-suits and fines for discrimination and are more likely to experience
high-levels of staff turnover, absence and poor team work. On the contrary, by applying the principles of equality and diversity and ensuring
a meritocratic culture, companies can attract a wider range of potential candidates, increase levels of employee satisfaction, retention and
collaboration and prepare for emerging regulations concerning gender equality and non-discrimination.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62.
b)
report how the organisation manages the material aspects or its impacts. With respect to Equal remuneration, describe the legal and
socio-economic environment that provides opportunities for, and barriers to, gender equity in the workforce. this may include women’s
workforce participation rates, their participation at highest governance level, and equal remuneration
Policies and Commitments
We have a non-discrimination and diversity policy that states our commitment to a meritocracy culture. This is reinforced by our Code of
Conduct, which outlines our commitment to creating a workplace where each individual is treated fairly, and where we recruit, select, train
and remunerate based on merit, experience and other professional criteria.
Further references:
Click here to read our Code of Conduct, which is available on our corporate website.
until now, our Company has not encountered barriers to gender equality in the workforce in the core countries where we operate. However,
we acknowledge that this could become a more significant issue as we move into new markets, such as North Africa, where the socioeconomic environment may inhibit equal opportunities in terms of education and by extension access to employment. In Sonae Sierra
Brasil, gender equality has not been an issue, although the number of men in managerial positions is higher. Technical and management
skills have been considered relevant to take these positions, not gender, and this has been acknowledged internally.
Goals and Targets
As stated above, Sonae Sierra has a commitment to a meritocracy culture, although we do not set specific quantitative objectives or targets
relating to this aspect.
Responsibilities and Resources
Responsibilities and resources for employment aspects, including diversity and equal opportunity and equal remuneration, are described
under the Disclosure on Management Approach for ‘Training end Education’ on page 113.
Specific Actions
We have some policies in place which, among other objectives, can support diversity by promoting a more flexible workplace, namely:
•
Part-Time Working Policy.
•
Working From Home Policy.
•
Flexible Work Schedule Policy.
Within the framework of these policies, we have made particular efforts over the past couple of years to introduce more flexible work
arrangements for employees whose job function enables them to take up these options.
In Brazil specifically, in 2013 we implemented salary readjustments in accordance with collective labour conventions. The HR department has
worked consistently with line managers to help them to better understand the most important labour laws which have an impact on the daily
management of employees.
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disclosures on management approach (continued)
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
Sonae Sierra demonstrates its commitment to non-discrimination in recruitment and treatment of staff in the workplace by monitoring
workforce diversity according to a range of different characteristics. Within our Code of Conduct, we pledge to treat each individual fairly and
recruit, select and train and remunerate based on merit, experience and other professional criteria. It is in our interest to ensure that the
human resources, talents and skills available throughout the community are considered when employment opportunities arise, thereby
selecting the most suitable person for the job, based on their qualifications and experience.
We monitor employee satisfaction once every two years through our Corporate Climate and Employee Satisfaction Survey, which asks our
employees to rate their satisfaction with a range of factors including equal opportunities and compensation.
The Sierra Ombudsman, which is described on page 121, constitutes a formal procedure which employees (as well as other stakeholders) can
use to report work-related concerns including any breaches in our Code of Conduct.
Results and Adjustments
We achieved an Equal Opportunities and Diversity Rate of 61% in our 2013 Corporate Climate Survey. This is our highest ever score for this
measure and indicates that 61% of employees feel that our Company respects equal opportunities and diversity.
See also GRI indicators G4-LA12 and G4-LA13.
performance indicators
Indicator
g4-la12
Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group
membership, and other indicators of diversity.
number and percentage of employees
by gender, per employee category
Female
Male
Total
Global Senior Executive, Senior
Executive and Executive
Senior Manager
Manager
Team Leader
Project Team Specialist
Team Member/Team Contributor
3
17
29
66
88
375
21
46
65
84
85
265
24
63
94
150
173
640
total
578
566
1,144
percentage (%)
51%
49%
100%
Disabled people
Male
Total
number of disabled employees,
per employee category
Female
Senior Manager
Team Leader
Project Team Specialist
Team Member/Team Contributor
–
1
–
4
3
1
1
–
3
2
1
4
total
5
5
10
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performance indicators (continued)
Indicator
g4-la12
Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group
membership, and other indicators of diversity. (continued)
number and percentage of employees by age group, per employee category
<35 35-44 45-54 55-64 >64
Female Male Female Male Female Male Female Male Female Male
Global Senior Executive,
Senior Executive and Executive – – – 2 2 9 1 9 – 1
Senior Manager – – 9 16 6 20 2 10 – –
Manager 4 7 18 32 6 20 1 6 – –
Team Leader 14 24 39 42 13 14 – 4 – –
Project Team Specialist 36 31 42 36 10 16 – 2 – –
Team Member/Team Contributor 198 133 123 91 42 32 8 8 4 1
total
252
195
231
219
79
111
12
39
4
2
1,144
Percentage (%) 22.0% 17.0% 20.2% 19.1% 6.9% 9.7% 1.0% 3.4% 0.3% 0.2% 100%
data Qualifying note:
This indicator includes all Sonae Sierra direct employees at the end of the reporting period. The last category has two different designations: Team Member and Team Contributor.
Team Contributor will be a new designation in 2014, but has already been adopted by Brazil in 2013.
g4-la13
Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation.
Remuneration Ratio (%)
Global Senior Executive, Senior Executive
and Executive
Senior Manager
Manager
Team Leader
Project/Team Specialist
Team Member/Team Contributor
103
98
80
95
92
137
Basic Salary Ratio (%)
Global Senior Executive, Senior Executive
and Executive
Senior Manager
Manager
Team Leader
Project/Team Specialist
Team Member/Team Contributor
93
96
80
95
92
133
data Qualifying note:
This indicator includes all Sonae Sierra direct employees at the end of the reporting period. Both ratios are calculated by dividing the total remuneration received by men and by
women in each employee category by the total number of employees in that category. The average female salary is then divided by the average male salary in order to generate a
ratio. The remuneration ratio includes the annual basic salary plus the variable remuneration received by employees. In the case of Sonae Sierra, variable remuneration represents
the bonuses fraction, which is considered to be most significant (over 90% of the total benefits received by the employees). The basic salary ratio considers only the annual basic
salary received by direct employees.
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labour practicES griEvancE mEchaniSmS
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Effective grievance mechanisms play an important role in remediating impacts that may be material stakeholders. Therefore, we consider
it cautious to consider this to be a material impact within the scope of our reporting on our social performance.
b)
report how the organisation manages the material aspect or its impacts. describe the availability and accessibility of grievance
mechanisms and remediation processes for impacts on labour practices, including along the organisation’s supply chain, and the
involvement of stakeholders in monitoring their effectiveness
Policies and Commitments
Within the scope of our Code of Conduct, we are committed to respecting the dignity and rights of each individual and to upholding strict
compliance with the law. As a business, we are also committed to being open to and responding to feedback received from our stakeholders,
including complaints brought against our organisation.
Goals and Targets
We do not set specific objectives and targets in relation to Labour Practices Grievance Mechanisms.
Responsibilities and Resources
The Sierra Ombudsman promotes compliance with our Code of Conduct and encourages behaviour aligned with our ethical principles.
The Ombudsman is an independent facilitator to whom all stakeholders can present their complaints with an assurance that they will be
processed, investigated, and responded to in a timely and sensitive manner. We conduct regular training on our Code of Conduct that is
mandatory for all our employees.
Specifically with respect to labour practices, we act in accordance with local labour laws in all countries where we operate. According to our
HR procedures, grievances should be addressed to line managers, directors and/or the HR department. Employees can also contact the
Ombudsman directly if they prefer.
Specific Actions
Not applicable.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The Sierra Ombudsman, described above, constitutes a formal procedure which employees (as well as other stakeholders) can use to report
work-related concerns including any breaches in our Code of Conduct.
Results and Adjustments
See GRI indicator G4-LA16.
performance indicators
Indicator
g4-la16
Number of grievances about labour practices filed, addressed, and resolved through formal grievance mechanisms.
No grievances related to labour practices were registered within the Company during 2013.
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valecenter, Italy
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le terrazze, Italy
local communitiES
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Attending to the needs and views of the local community is particularly important for shopping centre developers and operators.
Shopping centre developers which do not build relationships with local communities or assess community needs risk having their planning
applications blocked and their ‘license to operate’ thwarted; on the other hand, shopping centres which build strong relationships with
local community stakeholders and effectively listen to community concerns are more likely to maintain high levels of footfall and
commercial activity.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts. describe references and statements regarding the collective
rights of local communities; how both women and men are engaged in local communities and how work councils, occupational health
and safety committees or other independent employee representation bodies are empowered to deal with, and have dealt with,
impacts on local communities
Policies and Commitments
Our policy towards the community is based on values and principles such as Environmental Awareness; Community Involvement;
Openness to Society, Confidence and Ethics.
Our Corporate Responsibility (CR) Policy states our commitment to play an active role in changing society through education and
awareness-raising campaigns, and by capitalising on our ability to communicate with the public who visit our shopping centres.
Our Public Art Policy (introduced in 2013) promotes the use of public art in our shopping centres. The aim is to strengthen our shopping
centres’ relationships with the local community, while at the same improving the visitor experience, encouraging their interaction and
contributing to improved public space.
Further references:
Click here to read our CR and Public Art Policies, which are available on our corporate website.
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Goals and Targets
‘Our Business model and strategy’, page 14.
Responsibilities and Resources
ultimate responsibility for community aspects lies with Sonae Sierra’s CEO and the Executive Committee. During the shopping centre
development phase, the Country Marketing Manager is responsible for all issues concerning public relations and community activation
marketing programmes; all other local community issues are managed by the Development Project Manager. Guidelines and a macro
Activity Plan are approved by the Board Members of the Company responsible for the project. Operational responsibility for local
communities and visitor satisfaction aspects during the shopping centre operations phase lies with our Shopping Centre Managers,
supported by the central Marketing Department.
We dedicate at least two per cent (1 per cent in Brazil) of each of our shopping centres’ marketing budget to local community investment, and
we deploy several people within the marketing team to focus specifically on this aspect as a part of their job function, including the Corporate
Marketing Managers (Europe and Brazil) for CR issues, Country Marketing Managers, Cluster Managers and Marketing Assistants in each
shopping centre. All Sonae Sierra employees are entitled to take one day’s leave as a volunteering day, and most use this opportunity to
participate in the annual Sonae Sierra Community Day, which is held across all countries where we operate. Shopping centres organise a
variety of events from supporting local charities to organising school and higher education visits.
Specific Actions – Supporting local businesses
We are committed to providing attractive shopping centres that serve the needs of the local population. We seek to generate economic
benefits for local communities by creating local employment, inviting local businesses to rent space in our shopping centres and investing in
initiatives that improve the well-being of local people. In 2013, on average 32% of tenants across our European portfolio and 24% of tenants
across our Brazilian portfolio were local businesses. As well as benefiting the community, this strategy can also help us enhance our
reputation and increase visitor numbers.
Specific Actions – Community Advisory Panels
We operate a Community Advisory Panels (CAPs) programme to make sure that local communities are consulted on, and involved in, the
development and operation of our shopping centres in a way that creates long-term relationships and is sensitive to local cultural
considerations. In order to select CAP members, we identify local stakeholder groups and invite them to participate based on the issues that
are relevant to them. Our local shopping centre teams are empowered to develop actions in response to issues raised through the CAPs,
using the part of the shopping centre marketing budget which is available for community projects. Both men and women are involved in the
CAPs and there is no differentiation made in terms of the gender of CAP members.
Specific Actions – Sustainable Lifestyles
‘Sustainable Lifestyles’ is one of our long-term sustainability priorities and this involves using our reach and public influence to encourage
our visitors to make healthier and more eco-friendly choices.
Our plans for Sustainable Lifestyles are at an early stage of development. We are exploring how we can implement our strategy at a practical
level to promote more sustainable lifestyles, promoting the consumption of products and services that are ‘green’, ‘ethical’ and/or ‘healthy’.
We have made solid progress communicating our own sustainability achievements to shopping centre visitors and in 2013, we began to tackle
consumer behaviour in our shopping centres. Over the next couple of years our marketing team will focus on influencing consumers’
behaviour in and outside of our shopping centres.
For more information:
See our website.
GRI G3.1 CRESS Specific Actions – Displacement and relocation of local communities
Apart from GaiaShopping in Portugal, which was completed in 1989, none of our projects have ever involved the displacement of local
community members. In the case of GaiaShopping, we constructed new houses in order to resettle the people who used to live in the area.
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disclosures on management approach (continued)
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
During the development stage we carry out feasibility studies to identify consumers’ needs in retail, services and leisure activities, in order to
design shopping centres that match market needs and the existing retail offer. These studies consider factors such as demographics within
the catchment area and socio-economic indicators.
In Europe, we carry out annual community (‘Geo Tracking’) surveys to help us understand the impact of our shopping centres on local
consumer habits. These studies assess among other things the degree and quality of the existing commercial supply and the shopping
facilities used by local residents. Information is collected through telephone interviews and structured questionnaires, and results are used to
define the centre’s marketing strategy to ensure that it is tailored to the catchment area. Geo Tracking surveys also include questions about
social and environmental aspects of our shopping centres.
Our CAPs, described on page 123 above, also enable us to obtain useful feedback from local community representatives and in this way
monitor and respond to our impacts on local communities.
Results and Adjustments
For information about how we promoted local businesses and sustainable lifestyles in 2013, see ‘Our performance’, pages 25 to 35.
In 2013, our employees dedicated a total of 3,160 hours of time to community volunteering. Our total global marketing investments in
Corporate Responsibility and other community contributions equalled €1.116 million. This included:
•
€108,417 in corporate donations to charitable causes and sponsorships.
•
€889,749 in investments in charitable causes and specific activities, events and campaigns with social responsibility themes, made
through our shopping centres’ marketing budgets.
•
€59,831 in shopping centre-level community investment in cash (which includes donations of €54,118 collected from shopping centres’
visitors on behalf of charitable causes).
•
€42,836 in shopping centre-level sponsorships.
•
€15,000 in investments in charitable causes and specific activities, events and campaigns with social responsibility themes, made
through the marketing budgets of our projects under development.
We also collected 14,337kg of food contributions and 3,134 other items such as clothing and books from shopping centre visitors.
Additionally, we welcomed 143 school and higher education institution visits to our shopping centres, which involved educating children about
environmental, safety and health and cultural issues linked to our sustainability activities, as well as more technical visits for older students.
global marketing
investments in cr and
other community
contributions (€ million)
number of hours
spent by employees in
charity organisations
1.1 16
2013
2012
1.445
2012
3,365
2011
1.484
2011
3,059
2010
1.219
2010
2,746
2009
1.143
2009
3,001
2013
3,160
data Qualifying note:
This indicator includes all Sonae Sierra
direct employees at the end of the
reporting period. The number of volunteer
hours made available by Sonae Sierra for
volunteering activities during work time is
eight hours. The number of hours spent
by employees in charity organisations is
the sum of all hours spent by employees
who volunteered.
In 2013 we continued to operate our CAPs programme, but found it challenging to maintain momentum in some locations as not all local
communities are keen to participate in CAP meetings. We do however, continue to promote these meetings and mandate two meetings
a year.
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performance indicators
Indicator
g4-So1
Percentage of operations with implemented local community engagement, impact assessments, and development programmes.
On 31 December 2013, Sonae Sierra owned 47 shopping centres and had six projects under development, including four on behalf of clients.
We have one significant local community engagement programme in place, our Community Advisory Panels (CAPs), which are described on page 123
above and are in place across 17 (36%) of our operational shopping centres and one project under development.
Environmental Impact Studies (EIS) or Preliminary Environmental Evaluations (PEE) are carried out on 100% of new development projects and on
major expansions. They include specifications such as the identification of locations of historical, architectural and archaeological value and data on
important socio-economic indicators within the study area. When we begin new projects, we perform a feasibility analysis which involves analysing
the competition and impact of our activities on competitors’ performance.
Our Geo Tracking studies evaluate the impact of our shopping centres on local consumer habits on an annual basis. In 2013, Geo Tracking studies
were performed at 37 (74%) of our shopping centres20.
Aside from these, we do not have any local community impact assessment programmes in place across our portfolio. We have community education
projects in place at Shopping Metrópole in Brazil, but these are the only local community development projects in place across our portfolio.
However, during the commercial licensing phase of new shopping centre projects, we are obliged to comply with the planning obligations defined
in each country and by each local authority. For example, in some locations we must set aside part of the site for the creation of green spaces and,
if this is not possible on the site in question, we must pay a compensatory fee so that green spaces can be created in alternative areas. The
development of transport infrastructure around new shopping centre sites (including roads, bicycle paths and parking spaces, footpaths, etc.) is
another example of infrastructure developed for community benefit, in some instances to meet with mandatory requirements of local authorities
and in others to meet with our own Safety, Health and Environment Development Standards (e.g., regarding the promotion of sustainable travel).
Many of our shopping centres also offer play areas for children, crèche services, sports and waste recycling facilities which are available for the
local community.
20
This includes Parque Principado which was sold in October 2013.
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public policy
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Government was not represented in the stakeholder feedback reviewed as part of our 2013 Materiality Review. Nonetheless, Sonae Sierra
undertakes lobbying activities under its own initiative and through industry organisations targeting local, national and regional government.
We engage with local municipalities and meet with government members to discuss issues related to shopping centre activities that can have
a significant impact on our business activities, from planning regulations to infrastructure development and trading hours. For this reason,
this aspect was deemed to be material to our business.
b)
report how the organisation manages the material aspect or its impacts. describe the significant issues that are the focus of the
organisation’s participation in public policy development and lobbying. provide the organisation’s core position for each of the identified
issues, and describe any significant differences between lobbying positions and stated policies, sustainability goals, or other public positions
Policies and Commitments
We do not have a specific policy covering Public Policy. Our approach is underpinned by our values which represent the principles through
which we set all our activities and relationships with our partners. Furthermore, our Code of Conduct sets out our ethical principles which
include strict compliance with the law and acting with honesty and integrity in all we do. Specifically, this includes our commitment to
political neutrality.
Further references:
Click here to read our Code of Conduct, which is available on our corporate website.
Goals and Targets
We do not set specific objectives and targets in relation to Public Policy.
Responsibilities and Resources
Interaction with local authorities is primarily dealt with at a local level by national development managers. The exception is Portugal where
we do not currently have a development pipeline. In this instance, national and international activities at the Eu level fall under the
responsibility of our Institutional Relations Manager who is part of the Asset Management business.
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Specific Actions – Significant issues that are the focus of public policy development and core position
We participate in lobbying activities under our own initiatives with local authorities and national governments covering issues such as:
•
Working with the local municipality to include the expansion of RioSul Shopping as part of the broader Seixal Master Plan redevelopment
in Portugal.
•
Contributing to a public consultation over changes to the Maia Advertising and Public Domain Municipal Regulation – also in Portugal.
•
We also provided feedback on two pieces of draft legislation at a national level in 2013. The first was in response to a draft licensing
legislation that could affect our tenants. We argued that it should be transparent and applied consistently across municipalities to reduce
compliance costs and uncertainty. The second was in response to proposed legislation relating to the approval of new shopping centres and
the expansion of existing ones. Again, we argued for transparency concerning the criteria used to judge whether approval should be granted.
We also support or are involved in defining policy positions led by industry organisations, including the European Property Federation’s (EPF)
responses to a range of European union-level Directives and legislative initiatives, such as:
•
The 2030 Framework for Climate and Energy Policies: responses to the Green Paper were prepared and sent to the Commission.
•
The Anti-Money Laundering Directive: recommendations were prepared in response to the Directive covering real estate agents, including
the exclusion of shopping centre companies from its scope.
•
Environmental Impact Assessment Directive: recommendations were prepared in response to the Draft Amendments.
•
The European Retail Action Plan: a response to the draft report was prepared and sent to the European Parliament supporting shop
diversity by removing barriers to free movement and opening up markets.
•
Energy Efficiency Directive: we presented to the European Commission as part of discussions covering the Voluntary Common Eu
Certification Scheme for the Energy Performance of Non-residential Buildings.
•
The Eu Economic Governance Planning Law Reform Committee: Sonae Sierra prepared a paper outlining constraints in the Portuguese
planning system as part of the EPF’s response to the Commission.
•
The EPF also participated in a public consultation on issues including sustainable buildings, arguing for greater consolidation and
comparison of existing energy performance requirements before expanding requirements to broader sustainability requirements.
In 2013, we also participated in a public consultation on the new European union occupational safety and health policy framework. We agreed
with the proposed strategy and voiced our support for coordination to remain at Eu level to ensure its consistent application across our
European markets.
In Brazil, we are supporting ABRASCE (Brazilian Council of Shopping Centres) to challenge a law that requires shopping centres to employ
a full time on-site doctor or nurse. We are not against the principle that full-time medical care should be available to shopping centre users,
our view is that the responsibility and associated costs for providing such care should rest with governmental authorities as the provision
of medical care falls outside our core business activities.
Specific Actions – Significant differences between lobbying positions and stated policies, sustainability goals, or other public positions
Sonae Sierra supports political endeavours to encourage greater social cohesion and environmental responsibility in line with our business
and sustainability strategies, although we resist changes in legislation that are likely to significantly and adversely affect our business. c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
Lobbying activities are recorded and monitored according to the roles and responsibilities outlined above. All our activities are governed by
our Code of Conduct and any breaches of the Code can be reported to the Sierra Ombudsman which is described on page 121.
Results and Adjustments
See ‘Specific Actions – Significant issues that are the focus of public policy development and core position’ above.
performance indicators
Indicator
g4-So6
Total value of political contributions by country and recipient/beneficiary.
No financial and in-kind contributions were made by Sonae Sierra to political parties, politicians, and related institutions in 2013.
data Qualifying note:
Includes all Sonae Sierra activities.
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ASPECTS: disclosures on management approach
a)
report the impacts that make this aspect material
Our Code of Conduct iterates our commitments to act with honesty and integrity and in strict compliance with the law. It is therefore
essential that we guarantee compliance, as a very minimum, with all social legislation applicable to our business activities.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
Sonae Sierra’s Code of Conduct promotes the fundamental aspects of ethical behaviour that Sonae Sierra’s Board believes should be
adopted in Company business and activities, and lists the Ethical Principles that include the duties of strict compliance with the Law
and acting with honesty and integrity. The Code of Conduct includes one specific guideline on the avoidance of Bribery and Corruption,
by stating that it is forbidden to give or accept any reward or benefit with the purpose of influencing someone’s behaviour to obtain a
commercial advantage.
The Code also promotes ethical and responsible decision-making by providing guidance on dealing with issues such as bribery, corruption,
legal compliance, equality and human rights.
Goals and Targets
Not applicable.
Responsibilities and Resources
Whilst the Executive Committee is ultimately responsible for managing these issues, ethical conduct is a personal responsibility and every
employee is held accountable for his or her behaviour.
Specific Actions – Ethics Training
Regular ethics training is mandatory for all our employees. In 2013, we continued to roll out the BEST training programme (Behaviour with
Ethics Sierra Training) for Sonae Sierra employees, including those based in new markets which we entered. The BEST training content is
based on our Code of Conduct and Anti-Corruption Guidelines. Participation was compulsory and at the end of each session, employees were
required to sign and return the Sonae Sierra Code of Conduct Acknowledgement, confirming that they had received the Code of Conduct and
agreed to comply with its provisions.
GRI G3.1 CRESS Specific Actions – Real Estate Valuations and Transactions
In relation to specific policies and practices followed by Sonae Sierra to mitigate corruption risk with respect to real estate valuations and
transactions, our Asset Management and Development businesses follow the RICS guidelines. Transactions are subject to approval by the
Board of Directors of the Special Purpose Vehicles (SPVs), the Board of Directors of Sonae Sierra and (in many cases) by the Investment
Companies of the funds. Whilst there are no specific guidelines to mitigate risks with respect to valuations, the entity that carries out most
valuations for Sonae Sierra indicates in its report that the fees collected from Sonae Sierra represent less than 5% of its revenue, on a global
basis. Within the context of our Property Management activities, the procedure of getting bids for the services we contract out to suppliers
minimises the risk of anti-competitive behaviour in the supply chain. Taking into consideration the strong involvement of several corporate
organisational structures related to this process (shopping centre management and central operation departments), this procedure also
ensures a clear, coherent and accepted recommendation, thus supporting the final award decision.
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c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The Sierra Ombudsman promotes compliance with our Code of Conduct and encourages behaviour aligned with our ethical principles.
The Ombudsman is an independent facilitator to whom all stakeholders can present their complaints with an assurance that they will be
processed, investigated, and responded to in a timely and sensitive manner.
We ensure that compliance with the avoidance of Bribery and Corruption is upheld by incorporating corruption risk into the annual Internal
Audit plan of activities, which is aligned with the Sonae Sierra Risk Matrix through the audit work carried out by business process areas.
Results and Adjustments
Our Code of Conduct states that is forbidden to give or accept any reward (or ‘benefit’) with the purpose of influencing someone´s behaviour
to obtain a commercial advantage. We ensure compliance with this obligation by incorporating corruption risk into the annual Internal Audit
Plan of activities, which is aligned with Sonae Sierra’s Risk Matrix through the audit work carried out by business process areas. During 2013,
the Internal Audit Activities covered all the core business risks included in the Risk Matrix and 54% of the corresponding business processes.
The Anti-Corruption Guidelines have enabled the development of anti-corruption awareness through the provision of staff training, carried
out under the BEST (Behaviour with Ethics Sierra Training) programme.
No incidents of corruption were registered within the Company during 2013. See also GRI indicators G4-SO7 and G4-SO8 below.
performance indicators
Indicator
g4-So7
Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes.
There were no legal actions for anti-competitive behaviour, anti-trust, and monopoly practices during 2013.
g4-So8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.
Country
Significant fines paid (€)
Portugal
Spain
Italy
10,140
1,088
22,330
total
33,558
data Qualifying note:
This indicator includes all Sonae Sierra
activities. We did not receive any nonmonetary sanctions and there were no
cases brought through dispute
mechanisms. There are two pending
cases, one in Greece and other in Italy
that occurred in previous years and are
still waiting for a court decision.
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ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Effective grievance mechanisms play an important role in remediating impacts that may be material to stakeholders. Therefore, we consider
it cautious to consider this to be a material impact within the scope of our reporting on our social performance.
b)
report how the organisation manages the material aspect or its impacts. describe the availability and accessibility of grievance
mechanisms and remediation processes for impacts on society, including along the organisation’s supply chain, and the involvement
of stakeholders in monitoring their effectiveness
Policies and Commitments
Within the scope of our Code of Conduct, we are committed to respecting the dignity and rights of each individual and to upholding strict
compliance with the law. As a business, we are also committed to being open to and responding to feedback received from our stakeholders,
including complaints brought against our organisation.
Goals and Targets
We do not set specific objectives and targets in relation to Grievance Mechanisms for Impacts on Society.
Responsibilities and Resources
The Sierra Ombudsman, described on page 121, constitutes a formal grievance mechanism to which all stakeholders may present complaints
of any kind with an assurance that they will be processed, investigated, and responded to in a timely and sensitive manner.
Specific Actions
Not applicable.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
We monitor complaints made through the Sierra Ombudsman, according to type of complaint as well as a range of other factors such as
location and final resolution.
Results and Adjustments
See GRI indicator G4-SO11 below.
performance indicators
Indicator
g4-So11
Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms.
Total number
of grievances
addressed in 2013
Cases not
closed
in 2013
Portugal
Spain
Italy
Germany
Brazil
1,211
239
103
158
1,586
51
2
–
–
3
total
3,297
56
Country
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the
reporting period and all corporate offices with a SHEMS (Lisbon, Maia and São Paulo). Sonae Sierra
has two different channels for grievance management:
• The Customer Contact Management System is a claims system that exists in shopping centres
owned by Sonae Sierra and receives claims mainly from shopping centres users (including visitors,
tenants, suppliers and others).
• The Ombudsman receives claims from any stakeholder who wants to register a complaint with
Sonae Sierra. The claims received through this channel are addressed and solved directly by the
Ombudsman.
The values presented in the table refer to the Customer Contact Management System results.
For information on complaints received by the Ombudsman, please see page 66. As this is the
first time we have reported this indicator, we are not able to provide reliable data about the total
number of grievances filed prior to the reporting period and that were resolved during the
reporting period (as required by GRI G4).
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PRODUCT RESPONSIBILITY ASPECTS
ASPECT:
CUSTOMER HEALTH AND SAFETY
Disclosures on Management Approach
a)
Report the impacts that make this Aspect material
Accidents occurring in shopping centres could put large numbers of people at risk, incur loss of business and damage our assets and
reputation. By anticipating and managing S&H risks appropriately and raising awareness about S&H among shopping centre staff, tenants,
service suppliers and visitors, we can reduce the risk of accidents occurring and the severity of their consequences, add value to our property
management service and strengthen our relationships with these key stakeholder groups.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
Report how the organisation manages the material Aspect or its impacts. In each of the following life cycle stages, describe whether the
health and safety impacts of products and services are assessed for improvement: Development of product concept; Research and
development; Certification; Manufacturing and production; Marketing and promotion; Storage distribution and supply; Use and service
and Disposal, reuse, or recycling
Policies and Commitments
Our Safety, Health and Environment Policy establishes our responsibility to conduct our activities so that risks towards people, assets
and ecosystems are minimised, and benefits enhanced.
Further references:
Click here to read our Safety, Health and Environment Policy, which is available on our corporate website.
Goals and Targets
We have set a long-term objective to provide a safe environment for everyone who visits or works within Sonae Sierra shopping centres,
aiming towards zero accidents, and promote safety and health conscious behaviour among our tenants and visitors.
Responsibilities and Resources
See the Disclosure on Management Approach for ‘Occupational Health and Safety’ on page 105 above.
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Specific Actions – Addressing health and safety impacts throughout the shopping centre lifecycle
Our Safety, Health and Environment Development Standards (SHEDS) are considered by all design teams during the concept and
architectural development phase of all our new shopping centres, refurbishment or expansion projects and minor works. For further
information, see ‘Governance, Safety, Health and Environment Management System’, pages 47 to 48.
During the construction phase, we aim to achieve excellent safety standards by defining strict procedures that exceed those which are
required by law. All new shopping centre development projects must implement a site-specific Safety, Health and Environment Management
System (SHEMS) and achieve certification in accordance with the OHSAS 18001 standard for the entire construction phase. For further
information, see page 19.
During the operations phase, all Sonae Sierra shopping centres implement the procedures defined by our corporate SHEMS with the aim
of guaranteeing the safety of all building users. We provide training on Safety, Health and Environment (SHE) issues and invite tenants to
actively participate in Open SHE Committees during which S&H issues are discussed and tenants are asked to actively participate in the
shopping centres’ SHE management. Any issues identified by these procedures are followed-up and corrective actions are taken.
Within the scope of our SHEMS, we monitor tenants’ compliance with our SHE requirements for shopping centres by performing inspections
on tenant units and following-up on any non-conformances detected. We monitor and evaluate S&H performance on a regular basis using
tools such as SHE Preventive Observations (SPO), emergency drills and SHE inspections (covering safety-related equipment and
installations in tenant units and technical areas). SPO are a form of audit carried out in our shopping centres and corporate offices to observe
workers, detect any instances of behaviours that present safety and health risks or environmental impacts and engage with the person(s)
involved to make them more aware of SHE risks. We also invite tenants to compete for our Best Tenant Awards; the Personæ Tenant Award
for best practice in S&H and the Planet Sierra Tenant Award for best practice in environmental management. Each of these Awards is
presented bi-annually, meaning that each year there is one competition, focused either on environment or S&H performance.
Specific Actions – Addressing health and safety risks for visitors
We regularly monitor visitor safety risks and organise awareness campaigns to promote safe behaviour in our shopping centres. Examples
include Safety and Health Days, school visits and shopping centre tours. The majority of incidents involving visitors include falls at the same
level, playground and escalator accidents. In 2013, a study at LeiriaShopping in Portugal into the causes of visitor slips identified several high
risk areas. As a result, we are piloting a range of anti-slip solutions prior to a broader rollout across our portfolio. The findings will also be
presented to our architectural department for consideration in future developments. To tackle playground accidents, the Sustainability Office
has evaluated all playground proposals since 2013 to identify potential safety hazards. New standards that incorporate the findings of this
review will be developed in 2014 for future playground projects. A similar study into the most common types of accidents on escalators was
also conducted by the Sustainability Office and the findings have been developed into an action plan due to be rolled out from 2014. This
follows a communications campaign across Portugal and Spain in 2012 to raise awareness of the most common safety risks posed by
escalators and travelators. Continuous monitoring of new and emerging risks ensures we can put in place the necessary preventative
measures either by working directly with escalator manufactures or by updating our SHEDS. Finally, we have invested heavily in new sensors
for our automatic entrance doors following a visitor fatality in 2012.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
See the Disclosure on Management Approach for Environmental Aspect ‘Overall’ on page 74.
Results and Adjustments
See the Disclosure on Management Approach for ‘Occupational Health and Safety’ on page 105.
See also GRI indicators G4-PR1 and G4-PR2 below.
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performance indicators
Indicator
g4-pr1
Percentage of significant product and service categories for which health and safety impacts are assessed for improvement.
Life cycle stages
Percentage of service
categories covered
New construction
100%
Comments on assessment procedures
Our SHEDS are considered by all design teams during the concept and
architectural development phase of all our new shopping centres, refurbishment
or expansion projects and minor works. For further information, see page 49.
During the construction phase, we aim to achieve excellent safety standards by
defining strict procedures that exceed those which are required by law. All new
shopping centre development projects must implement a site-specific SHEMS
and achieve certification in accordance with the OHSAS 18001 standard for the
entire construction phase. For further information, see page 49.
Management
100%
During the operations phase, all Sonae Sierra owned shopping centres implement
the procedures defined by our corporate SHEMS with the aim of guaranteeing the
safety of all building users. We use some specific tools to assess the safety of our
shopping centres for building users, which are described on page 49. Audits are
performed to assess compliance with Sonae Sierra’s SHEMS at a corporate and
site level on an annual basis.
In shopping centres managed by Sonae Sierra, some critical procedures are also
implemented to guarantee the prevention of incidents and the wellbeing of the
workforce, as well as compliance with SHE legislation.
Development/redevelopment
100%
This covers expansion and refurbishment activities. The same procedures apply
as those described in relation to ‘New construction’ above.
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the reporting period, and all projects under development.
g4-pr2
Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products
and services during their lifecycle, by type of outcomes.
Incidents of
non-compliance with
regulations resulting
in a fine or penalty
Incidents of
non-compliance
with regulations
resulting in a warning
Incidents of
non-compliance with
voluntary codes
Portugal
Spain
Brazil
1
–
–
36
–
2
–
3
2
total
1
38
5
Country
Country
Number of dangerous occurrences,
reportable injuries and fatalities
to non-workers on or off a site or assets
as a result of non-compliance with
regulation and voluntary codes
Portugal
Spain
Italy
Germany
Romania
Brazil
298
87
22
11
1
243
total
662
data Qualifying note:
This indicator includes all shopping centres
owned by Sonae Sierra and in operation during
the reporting period and all shopping centres
managed, but not owned by Sonae Sierra,
during the reporting period.
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product and SErvicE labElling
ASPECT: Sustainable building Standards and certification
disclosures on management approach
a)
report the impacts that make this aspect material
Regulations and industry expectations concerning the sustainability performance of buildings have developed rapidly over the past few
years. By applying sustainable design standards on new projects and significant expansions/refurbishments, we can prepare for new and
emerging regulations whilst ensuring that our shopping centres are more attractive to investors and occupiers.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
It is part of our policy to seek third party audit and certification of the SHEMS across all our sites.
Goals and Targets
We have set a long-term objective to obtain ISO 14001 and OHSAS 18001 certifications for the SHEMS of our construction projects and the
Sonae Sierra owned assets that we have managed for two or more years, by 2015. As of 2013, we also aim for all our own new development
projects, major expansions and refurbishments where we have direct control to target, as a minimum, BREEAM Good, LEED Silver or DGNB
Bronze, see page 49.
Responsibilities and Resources
Responsibilities and resources for managing the products and services aspect are covered by our SHEMS. See Disclosures on Management
Approach for the Environmental Aspect ‘Overall’ on page 74.
Specific Actions
See Disclosures on Management Approach for the Environmental Aspect ‘Products and Services’ on page 99.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
The extent of implementation of the SHEDS on each of our projects is assessed by an external advisor. Our local SHEMS are assessed by
a third party certifier as part of the process for achieving ISO 14001 and OHSAS 18001 certifications.
Results and Adjustments
See ‘Our performance’, pages 21 to 53, and GRI Indicators G4-PR4 and CRE8.
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performance indicators
Indicator
g4-pr4
Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and
labelling, by type of outcomes.
Incidents of
non-compliance with
regulations resulting
in a fine or penalty
Incidents of
non-compliance
with regulations
resulting in a warning
Incidents of
non-compliance with
voluntary codes
Portugal
–
4
–
total
–
4
–
Country
data Qualifying note:
This indicator includes all shopping centres owned by Sonae Sierra and in operation during the reporting period and all shopping centres managed, but not owned by Sonae Sierra,
during the reporting period.
crE8
Type and number of sustainability certification, rating and labelling schemes for new construction, management, occupation and
redevelopment.
In 2013 Sonae Sierra achieved a total of nine new ISO 14001 and OHSAS 18001 certifications for construction sites and operational shopping centres.
ISO 14001 Certification
OHSAS 18001 Certification
Offices
Operations
Development
–
–
2
3
2
2
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customer Surveys
disclosures on management approach
a)
report the impacts that make this aspect material
Engagement with customers is vital for any business: anticipating and responding to customers’ needs is essential to sustained revenue
generation. In our business, this involves engagement with tenants, shopping centre visitors and our professional services clients. In the
context of our sustainability strategy, it entails not only seeking feedback on our current practices, but also proactively identifying trends
in tenants and visitors’ behaviour, including attitudes towards environmental and social concerns. By responding to feedback from these
stakeholders, we can improve the quality and efficiency of our services and ascertain how we can best promote more sustainable practices
in retail and consumerism, thereby supporting the long-term success of our tenants’ and our own businesses.
This aspect was identified as material according to the Materiality Review performed by Sonae Sierra in 2013, which was based on a number
of criteria covering both Sonae Sierra’s impacts and stakeholders’ opinions. For further details, see our response to ‘Identified Material
Aspects and Boundaries’ on pages 61 to 62 above.
b)
report how the organisation manages the material aspect or its impacts. describe organisation-wide practices in place to assess and
maintain customer satisfaction. these may include: the frequency of measuring customer satisfaction; Standard requirements
regarding methodologies of surveys; mechanisms for customers to provide feedback
Policies and Commitments
Our primary customers are our tenants. We are committed to delivering a high quality service to tenants and maintaining high levels of
tenant satisfaction.
Within the context of our long-term sustainability priority ‘Prosperous Retailers’, we are also committed to partnering with our tenants to
make their businesses more resilient. This includes the launch of new retail formats such as Flash Stores and Coop Stores that promote
entrepreneurism and support innovation. See page 34.
Goals and Targets
In 2013, our existing long-term objectives in relation to tenants’ satisfaction were fully embedded within existing business procedures, rather
than managed as part of our Sustainability Strategy. These objectives are:
•
Deliver a high quality service to tenants and maintain high levels of satisfaction, striving to achieve an average tenant satisfaction level
of 4 or above in all shopping centres.
•
Engage with our tenants with the aim of helping them to improve their safety, health and environmental performance.
For more information about our goals in relation to ‘Prosperous Retailers’ see ‘Our Business Model and Strategy’, page 14.
Responsibilities and Resources
Senior responsibility for tenant satisfaction and other aspects of tenant engagement and management is divided between the Sonae Sierra
Board Director responsible for Property Management and Leasing in Europe (including ultimate responsibility for Sonae Sierra’s 30 top
tenants) and the CEO of Sonae Sierra Brasil. Responsibility is divided at the management level between the Heads of Property Management
in each country of operation. Shopping Centre Managers take responsibility for managing the day to day relations with tenants, with support
from centralised leasing teams. We have an on-line Property Integrated Management System (PIMS) in place which supports all lettings
management processes in an integrated way.
Specific Actions
We help our tenants to improve their financial and CR performance through training and marketing, and our efforts to increase our shopping
centres’ operational efficiency (including reductions in energy, water and waste costs in line with our environmental strategy) help to deliver
cost reductions for tenants.
For details of specific actions undertaken in 2013 concerning ‘Prosperous Retailers’, see ‘Our performance’, pages 25 to 35.
Specific Actions – Visitors
In addition to the surveys described below, in 2013 we performed specific research into consumers’ attitudes towards sustainability. See
‘Our performance’, pages 25 to 35.
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c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
We regularly monitor the effort ratio of our tenants (the ratio of rents plus common charges paid by the tenant to the sales they achieve)
and compare the performance of different tenants with similar operations in the same centre or similar units in different shopping centres.
If we detect that a tenant has a very high effort ratio, we arrange a face-to-face meeting with the store management team to seek to
understand the reasons for this and if possible help the tenant to find a solution.
We undertake annual tenant satisfaction surveys in all our owned shopping centres, which allow us to gain general feedback on operational
aspects, marketing events, communications, our sustainability activities and satisfaction with our shopping centre management teams. Top
Tenant surveys in Portugal, Spain, Germany, Italy, Greece and Brazil obtain feedback from key tenant companies at the senior management
level. Survey results are used to develop action plans to address aspects which receive low scores and ultimately drive continuous
improvement in tenant satisfaction levels.
With respect to shopping centre visitors, we regularly undertake Mall Tracking surveys at our shopping centres to help us understand our
visitors’ profiles, their behaviour and requirements. These surveys monitor trends in visitor satisfaction, expectations, loyalty and behaviour.
Shopping centres develop action plans on the basis of the survey results, paying particular attention to critical success factors affecting
visitor numbers and short-term actions necessary to correct any negative results. In 2013 we also conducted a specific corporate
responsibility survey to better understand visitor attitudes towards sustainability and target our initiatives and communications accordingly.
See page 65 for more details.
We have a customer feedback system in place, called Customer Contact Management, which provides a unique source of learning for our
shopping centres. We encourage visitors to submit their suggestions and complaints in writing and we ensure that the Shopping Centre
Manager personally responds to all suggestions and complaints presented. In order to improve both the quality of our contact with customers
and our ability to learn from them, in 2010 we carried out a Contact Management project. This involved reviewing and systematising all the
procedures for written and verbal contacts with customers; creating new tools for reporting customer contacts and training all the internal
and external staff working in our shopping centres on how to handle customer questions and complaints. In Brazil, we provide training to our
Customer Contact Management team and evaluate their skills and compliance with our customer care standards using a ‘mystery shopper’
technique both within shopping centres and through calls made to the Call Centre. Shopping centre visitors may also present complaints to
the Sierra Ombudsman.
When customers offer their time to provide written feedback it is essential to show that we take it seriously. The first step is to ensure an
adequate answer in a short period of time. This timing is measured against a SLA (Service Level Agreement). The objective is to respond to
customers in three working days, but acknowledging that this is not always feasible, the SLA target is 70% answered in three days; 95% in
one week and 100% in two weeks. All employees working at our shopping centres are trained in how to manage verbal feedback through tools
including a training film, presentation and a pocket book summarising the correct procedures and behaviours.
Results and Adjustments
See ‘Our performance’, pages 25 to 35, and GRI indicator G4-PR5.
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Indicator
g4-pr5
Results of surveys measuring customer satisfaction.
tenant Satisfaction index
Year
2013
2012
2011
2010
Average score
4.6
4.5
4.6
4.6
data Qualifying note:
This indicator includes shopping centres owned by Sonae Sierra and in operation during the
reporting period (including Parque Principado in Spain which was sold during the last quarter
of 2013). It does not include Passeio das Águas Shopping and Boulevard Londrina Shopping
(both Brazil), and Hofgarten Solingen (Germany), because the surveys are only performed after
a shopping centre has been in operation for a minimum of six months. Sonae Sierra’s tenant
satisfaction index is derived from tenants’ responses to two questions: (1) Relationship with
the Sonae Sierra Management Team, and (2) Degree of satisfaction with Sonae Sierra. For
both questions, tenants can answer on a scale of 1 (‘not satisfied’) to 6 (‘very satisfied’) or 9
(‘no opinion’).
visitor Satisfaction index – ‘new methodology’
(for countries that report 0-100 indexes)
Year
2013
2012
2011
2010
Average score
74.3
73.4
72.8
72.2
data Qualifying note:
The ‘new methodology’ indicator includes all 29 shopping centres owned and in operation for the
full reporting year in Portugal and Spain (including Parque Principado in Spain which was sold
during the last quarter of 2013).
visitor Satisfaction index – ‘old methodology’
(for countries that report 0-4 indexes)
Year
2013
2012
2011
2010
Average score
3.2
3.1
3.2
3.2
data Qualifying note:
This indicator for the ‘old methodology’ includes 16 out of 20 shopping centres owned and in
operation for the full reporting year in Italy, Germany, Greece, Romania and Brazil. Boulevard
Londrina Shopping and Passeio das Águas Shopping (Brazil), and Hofgarten Solingen (Germany),
are not included for the same reason that they did not perform tenant satisfaction surveys.
Le Terrazze in Italy is also not included because it did not conduct a survey. Parque D. Pedro
Shopping in Brazil conducted market research to assess visitor satisfaction levels instead of
conducting standard interviews. Parque D. Pedro Shopping, Manauara Shopping and uberlândia
Shopping chose to rate their assessment on a scale of 1 to 100, instead of using the old
methodology. For this reason, their results were extrapolated to the 0-4 scale. < >
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compliancE
ASPECT: disclosures on management approach
a)
report the impacts that make this aspect material
Our Code of Conduct iterates our commitment to act with honesty and integrity and in strict compliance with the law. It is therefore essential
that we guarantee compliance, as a very minimum, with all legislation applicable to our business activities.
b)
report how the organisation manages the material aspect or its impacts
Policies and Commitments
Sonae Sierra’s Code of Conduct promotes the fundamental aspects of ethical behaviour that Sonae Sierra’s Board believes should be
adopted in Company business and activities, and lists the Ethical Principles that include the duties of strict compliance with the Law and
acting with honesty and integrity.
Goals and Targets
Not applicable.
Responsibilities and Resources
Responsibilities and resources for managing the product and services aspects are covered by our SHEMS. See Disclosure on Management
Approach for the Environmental Aspect ‘Overall’ on page 74.
Specific Actions
Not applicable.
c)
report the evaluation of the management approach, including:
•
The mechanisms for evaluating the effectiveness of the management approach.
•
The results of the evaluation of the management approach.
•
Any related adjustments to the management approach.
Monitoring
See Disclosure on Management Approach for the Product Responsibility Aspect ‘Sustainable Building Standards and Certification’ on page 134.
Results and Adjustments
See GRI indicator G4-PR9.
performance indicators
Indicator
g4-pr9
Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.
Sonae Sierra did not identify any non-compliance with laws or regulations in 2013. We consider significant fines or penalties to be ones for which the
amount (individual fine) is greater than €500.
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SONAE SIERRA
2013 Economic, Environmental and Social Report
INDEPENDENT AUDITOR’S REVIEW
REVIEW REPORT
To the Board of Directors of Sonae Sierra, SGPS, SA
Introduction
1. We have performed a review to the sustainability information included in the Economic, Environmental
and Social Report 2013 (“EESR 2013”) of Sonae Sierra, SGPS, SA (“Sonae Sierra”), that covered:
• Its accordance with the disclosure of information requirements defined by the Guidelines for
Sustainability Reporting of the Global Reporting Initiative, version v4 of 2013 (“GRI G4”), for the core
option, and additional contents and performance indicators required by the GRI’s G3.1 Construction
and Real Estate Sector Supplement (“GRI CRESS”) related with the sustainability material aspects,
including the reliability of the overall related information and 2013 data, as identified in “Annex: Global
Reporting Initiative”;
• Sonae Sierra’s own sustainability performance indicators disclosed in the EESR 2013, in accordance
with the therein mentioned criteria;
• The information on progress against the 2013 sustainability targets and management actions,
in accordance with criteria established by Sonae Sierra, disclosed in its internet site, as identified
in chapter “Our Business Model and Strategy” of the report; and
• The Sonae Sierra’s environmental accounting model information and results for the property
management activity, disclosed in “Disclosures on Management Approach” of the material aspect
“Environmental Overall” within “Annex: Global Reporting Initiative”, in accordance with the therein
mentioned criteria.
Responsibilities
2. Sonae Sierra’s Board of Directors is responsible for preparing the Economic, Environmental and Social
Report 2013, as well as defining, implementing and carrying out adequate processes, procedures, internal
control systems and criteria for collecting, processing, presenting and validating the information contained
therein. Our responsibility is to issue a report, based on the procedures referred to below, on the information
referred to above.
Scope
3. We conducted our review in accordance with the International Standard on Assurance Engagements 3000
– ISAE 3000, issued by the International Auditing and Assurance Standards Board, regarding assurance
engagements other than audit or reviews of historical financial information, for a limited level of assurance.
.140
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SONAE SIERRA
2013 Economic, Environmental and Social Report
INDEPENDENT AUDITOR’S REVIEW (CONTINUED)
4. This standard requires that we plan and perform procedures and apply audit skills and techniques, in order
to obtain an adequate understanding of the matters under review and, considering the circumstances,
to obtain sufficient appropriate evidence on which to base our conclusions. In a limited assurance
engagement, the procedures performed consist primarily of inquiries of Sonae Sierra’s responsible
and analytical procedures, including tests on a sample basis and therefore, less assurance is obtained
than in an engagement aimed at obtaining reasonable assurance.
5. The main procedures performed were:
• Interview of those responsible in Sonae Sierra for the preparation of the EESR 2013 and for the reported
data, so as to know and understand the management and report principles, systems and procedures
applied, as well as the associated control mechanisms;
• Review of the compliance and consistency of the EESR 2013 content, with the GRI G4 Guidelines
disclosure of information requirements for core option and whenever applicable with the GRI CRESS
requirements;
• Review of the processes, criteria and systems used to collect, consolidate, present and validate the data
for 2013, relating to the information reviewed by us;
• Review of the procedures and criteria in place to monitor and measure progress against 2013
sustainability targets and management actions;
• Analytical data review, and tests on a sample basis, of the calculations made by Sonae Sierra, relating to
the quantitative data, as well as tests to corroborate the quantitative and qualitative data included in the
scope of our work, by obtaining and reviewing related evidence thereof; and
• Review of the consistency of the sustainability information included in the EESR 2013 and related
publicly available reports, and that does not contradict any significant information included in the
Sonae Sierra’s Consolidated Financial Statements as of 31 December 2013.
Opinion
6. Based on the work performed, as described in paragraph 5 above, which was executed to obtain a moderate
level of assurance, nothing has come to our attention that causes us to believe that the sustainability
information included in, or publically available and related to the EESR 2013, referred to in paragraph 1
above, has not been reliable and consistently prepared and that it does not conform, in all material respects,
with the disclosure requirements of the GRI G4 Guidelines for the core option, and whenever applicable of
GRI CRESS, as well as with the criteria defined by Sonae Sierra.
Lisbon, 21 March 2014
Deloitte & Associados, SROC S.A.
Represented by João Carlos Frade
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SONAE SIERRA
2013 Economic, Environmental and Social Report
.142
FEEdbacK Form
At Sonae Sierra we aim to conduct our business in a way that is sensitive and responsive to our stakeholder’s needs and concerns.
We hope that you enjoyed reading our Economic, Environmental and Social Report and would be grateful if you could take a few
minutes to provide us with some feedback on this report.
Please complete the questions below and return your form either by email to [email protected] or by post to Rua Galileu Galilei, 2,
3º piso, 1500-392 Lisbon, Portugal.
can you tell us…
1. About you.
Which stakeholder group do you belong to?
Investor/ financier Local community member
Tenant NGO/ charitable organisation
Shopping centre visitor/customer Media
Sonae Sierra’s employee Government/ local authority
Supplier Student
Other, please specify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Which country do you reside in? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Please rate the extent to which you agree with the following statements: (Scale 1 = Strongly disagree; 6 = Strongly agree)
1
1
1
1
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
1
2
3
4
5
6
6
6
6
This report included information that is of interest to me
I liked the style and layout of this report
I was able to find the information I was looking for
The report integrated the information well on Sonae Sierra’s financial, economic, environmental
and social performance
6 The report presented an honest and accurate account of Sonae Sierra’s performance
3. using a scale of 1 to 6 (1 = Very Poor; 6 = Excellent), how do you rate:
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
6
6
6
1
1
1
1
1
1
2
2
2
2
2
2
3
3
3
3
3
3
4
4
4
4
4
4
5
5
5
5
5
5
6
6
6
6
6
6
Information about Sonae Sierra’s strategic direction? (Pages 14 to 19)
Information provided on Sonae Sierra’s business model and how we allocate resources? (Page 14)
Information on how Sonae Sierra uses resources (“capitals”) and impacts upon the availability and quality
of these resources? (Page 15)
Information about risks and opportunities faced by Sonae Sierra? (Pages 19 to 20)
Information about how the external environment affects Sonae Sierra? (Pages 21 to 24)
Information about the future outlook for Sonae Sierra? (Pages 44 to 45)
Information about the governance within Sonae Sierra? (Pages 46 to 49)
The connectivity of financial, economic, environmental and social information?
The extent to which information was provided on relevant (‘material’) topics? 4. Is there any information on Sonae Sierra’s economic, environmental and social performance which you felt was missing from this
report? If yes, please describe what this was.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Are there any particular aspects of economic, environmental and social performance which you feel that Sonae Sierra needs to
improve on? If yes, please explain which ones.
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
continued
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SONAE SIERRA
2013 Economic, Environmental and Social Report
.143
FEEdbacK Form (CONTINuED)
6. What do you see as being the main social, economic and/or environmental challenges for Sonae Sierra in the next five to ten years?
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Please use the space below to provide your own comments on this report or any other aspect of Sonae Sierra’s economic,
environmental and social performance.
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Do you give us permission to publish your comments in our future sustainability communications?
Yes, I do give permission. You can publish my comments under the name of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
No, I do not want my comments to be published.
thank you
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III
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SONAE SIERRA
2013 Economic, Environmental and Social Report
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2013 Economic, Environmental and Social Report