Audit of Sonae Sierra s 2016 sustainability targets Final Progress Report for Sustainability Targets
Contents 1 Introduction... 2 2 Methodology... 3 3 Summary of progress... 4 4 Sustainability targets by level of attainment... 5 1
1 Introduction In December 2015, Sonae Sierra committed to work towards the accomplishment of 31 sustainability targets by the end of 2016 1. This report, which has been prepared by JLL s (Jones Lang LaSalle) Upstream Sustainability Services team, is intended to provide an external review of Sonae Sierra s progress towards meeting these sustainability targets. The report is divided into three sections: 1. Methodology. 2. Summary of progress. 3. Targets by level of attainment. By providing further information and explanations about the target evaluation process and its outcomes, this document is intended to be a point of reference for Sonae Sierra s stakeholders, to provide further clarity on statements made in the 2016 Environmental, Economic and Social Report. In addition, a further 39 actions were also reviewed and a report into progress against these is available on Sonae Sierra s website. 1 Scope: 2016 sustainability targets cover Sonae Sierra s operations in Portugal, Brazil, Germany, Italy, Romania and Spain, but exclude Greece, with the exception of the target C&V5 (Organize a Sonae Sierra Community Day), the scope of which was extended to Morocco and Greece. 2
2 Methodology The level of progress achieved towards each target has been established by analysing documented evidence provided by Sonae Sierra. In cases where targets were applicable to five or more different sites or other entities, a sampling approach was used, whereby random samples of evidence were requested from a summary list of sites. Where further explanations were deemed necessary, direct contact was made with individuals within Sonae Sierra who were responsible for meeting the target. The level of completeness for each target is represented as a percentage. Performance targets A performance target is a target which relates to achieving performance against a standard (e.g. ISO 14001, or relevant government standards) or a threshold of performance (e.g. a recycling rate). Of the sustainability targets set for completion in 2016, 26 out of 31 targets were considered to be performance targets. Performance target evaluation worked example Target: Attain a minimum average recycling rate of 63.6% across our owned shopping centres. Evaluation: Verified data from Deloitte shows that the recycling rate across Sonae Sierra owned shopping centres for 2016 was 65%. As a result, JLL determine that this target should be assessed as achieved Management targets Management targets relate to a management process or procedure. Management targets may contain quantifiable elements, but do not measure actual performance relative to a threshold or standard. Upon setting management targets, Sonae Sierra identifies the steps that are required to achieve each target. For each step, a weighting (%) is set on an effort basis by applying professional judgement. Management targets have therefore been awarded a percentage of achievement in based on evidence received by JLL in relation to each step necessary for the whole target to be completed, and in accordance with the weighting (%) attributed to each step. In cases where management targets are applicable to more than one site, the extent of completion of each step by each site is considered in order to establish the overall rate of achievement, as in the example below. Of the targets set for completion in 2016, 5 out of 31 targets were considered to be management targets. Management target evaluation worked example Target: Implement wastewater/grey water reuse or rainwater harvesting systems according to studies previously done. Evaluation: Sonae Sierra assigned the following steps and weightings to achieve this target: Step 1: Commission an external supplier to complete the works (20%). Step 2: Ensure that the measures have been installed and that system's water consumption can be metered (80%). This target was set for three shopping centres across Sonae Sierra s Portuguese portfolio; Albufeira Shopping, Centro Colombo, Leiria Shopping, and one shopping centre in Germany; Alexa. All applicable shopping centres provided evidence for the first step which included accepted quotes from the selected suppliers. For step two, three centres (Centro Colombo, Leiria Shopping and Alexa) provided a final invoice from their selected suppliers and/or a photograph of the infrastructure in place. For step two Albufeira Shopping provided a copy of the 2017 investment plan which confirms that the installation of infrastructure is included in the 2017 budget. As a result JLL determined that this target should be assessed as 80% achieved. 3
3 Summary of progress Status of 2016 sustainability targets (31 Targets) Table 1: Status of 2016 sustainability targets by focus area Priority Area Number of targets 0% 1-25% 26-50% 51-75% 76-99% N/A Environment 11 1 - - - - 10 - Energy & Climate 2 - - - - - 2 - Water 1 1 - - - - - - Waste 7 - - - - - 7 - Biodiversity & Habitats 1 - - - - - 1 - Safety & Health 8 - - - - - 8 - SHEMS 2 - - - - - 2 - Resource Resilience 3 - - - - 1 1 1 Prosperous Retailers - - - - - - - - Communities & Visitors 3 - - - - - 3 - Risk Management 1-1 - - - - - Leveraging Knowledge 2 - - 1 1 - - - Sustainable Lifestyles 1 - - - - - 1 - TOTAL 31 1 1 1 1 1 25 1 4
4 Sustainability targets by level of attainment Table 2 lists sustainability targets and their overall attainment status. Where appropriate, comments about the assessment process are included. Table 2 2016 Sustainability target % of attainment Comments Environment Water Attain a level of water consumption at or below 3.34 litres per visit. Waste 0% Reported water consumption for Sonae Sierra's owned portfolio was 3.37 litres per visit. Attain a minimum average recycling rate of 63.6% across our owned shopping centres. Sonae Sierra owned shopping centres achieved a recycling rate of 65.0% in 2016. Guarantee that the proportion of waste (by weight) sent to landfill, across Sonae Sierra owned shopping centres does not exceed 19.0%. The proportion of waste sent to landfill across Sonae Sierra owned shopping centres for 2016 was 17.0%. Attain a minimum average recycling rate of 88.1% in our Lisbon, Maia and S. Paulo offices. The recycling rate for Sonae Sierra s corporate offices in 2016 was 91.0%. Attain a maximum average landfill rate of 10.2% in our Lisbon, Maia and S. Paulo offices. The average rate of waste sent to landfill from Sonae Sierra s corporate offices in 2016 was 8%. Maintain the total amount of paper consumed per worker as for 2015 (11.80 reams per worker), in Lisbon, Maia and S. Paulo Offices. The average amount of paper consumed per worker in 2016 was 9.04 reams per worker. Achieve an overall recycling rate of 85% on all construction projects completed in 2016 (including refurbishments and expansions). Total waste recycled as a proportion of waste produced (% by weight, on completed projects) is 85% for the ParkLake construction. Organise four follow-ups with Development projects. Based on the email communication provided as evidence, four follow-ups were organised with Development projects. 5
2016 Sustainability target % of attainment Comments Energy & Climate Attain a maximum value of 0.0152 tonnes of GHG emissions per square metre of GLA (GHG Protocol scopes 1 and 2, plus business air travel). The average GHG emissions for all shopping centres was 0.013 tonnes per square meter of GLA. Attain a maximum value of electricity consumption of 414 kwh/m 2 (mall + toilet area) across Sonae Sierra owned shopping centres. Electricity consumption across Sonae Sierra owned shopping centres in 2016 was 397 kwh/m 2 of mall and toilet area. Biodiversity & Habitats Achieve compliance with the approved recommendations of the Preliminary Environmental Evaluations (or equivalent study) on completed projects. Safety & Health Reduce the number of work accidents (per million hours worked) which result in workforce absence to not more than 1.83. A list of minimisation measures resulting from a Preliminary Environmental Evaluation and an Environmental Due Diligence Study was provided for ParkLake. All measures were reported as implemented. The number of work accidents (per million hours worked) that resulted in an absence in 2016 was 1.47. Reduce the severity of work accidents and occupational diseases which result in workforce absence to not more than 10.06. In 2016 Sonae Sierra s lost day rate was 6.35. Achieve zero fatalities due to accidents within Sonae Sierra's workforce. There were no fatalities amongst Sonae Sierra s workforce in 2016. Attain a maximum of 8.7 Lost Workday Case Accidents Frequency Rate (LWCAFR) for all projects completed in 2016 (over the entire project duration). Lost Workday Case Accidents Frequency Rate (LWCAFR) for ParkLake was 1.62. Achieve zero fatalities due to accidents on Sonae Sierra construction works. There were no fatalities in 2016 on Sonae Sierra s construction sites. Achieve accomplishment of SPI hours across all development projects completed in 2016 (over the entire project duration). Reduce the LWCAFR of shopping centres' service suppliers by at least 20% in comparison with 2015. Achieve zero fatalities due to accidents in Sonae Sierra shopping centres. This target was achieved with over 60% additional SPI hours undertaken. Global LWCAFR among service suppliers in shopping centres was 4.86 in 2016 which is a 40% reduction in relation to 2015. There were no fatalities due to accidents in Sonae Sierra shopping centres. 6
2016 Sustainability target % of attainment Comments Safety, Health and Environment Management System Achieve ISO 14001 and OHSAS 18001 certifications for the SHEMS of one further shopping centre in operation. CCC Portimão achieved ISO 14001 and OHSAS 18001 certifications. Achieve OHSAS 18001 certifications for the SHEMS of two further shopping centres in operation. Resource Resilience Implement wastewater/grey water reuse or rainwater harvesting systems according to feasibility studies previously undertaken. Study the feasibility of reusing grey water in nonpotable applications or harvesting rainwater for use in shopping centres. 80% Leiria Shopping and Madeira Shopping both achieved OHSAS 18001 certification. Centro Colombo, Leiria Shopping and Alexa had the systems implemented. Albufeira Shopping commissioned implementation work which has been included in the 2017 investment plan. A feasibility study has been conducted for Coimbra Shopping and grey water reutilisation works have been approved in the budget for 2017. Implement borehole water harvesting systems according to feasibility studies previously undertaken. Risk Management Not applicable Review the Company s Risk Matrix. 10% Communities & Visitors Promote at least three actions/ initiatives with local communities. Invest a proportion of the promotional variable marketing fund of every operational shopping centre and project under development in community related initiatives (at least 2% for sites in Europe and 1% for sites in Brazil including the Prosperous Retailers project). Organise a Sonae Sierra community day. Leveraging Knowledge Develop at least five case studies/ thesis/ research & developed experiments. 40% Feasibility studies showed that it was not possible to implement borehole water harvesting systems. Sonae Sierra s risk management working group was appointed to be responsible for the review. However, the completion of the Risk Matrix review was still outstanding as of 31/12/2016. Based on externally verified data provided by Deloitte, Sonae Sierra promoted at least three actions or initiatives with local communities. All centres in Europe and Brazil met this target. Sonae Sierra held a community day in Brazil, Italy, Spain, Portugal, Romania, Germany, Greece and Morocco. Two initiatives have been undertaken: the nearly-zero emission buildings study with Minho University and the challenge academy with ISCTE. 7
2016 Sustainability target % of attainment Comments Develop three engagement actions. 66% Two initiatives have been undertaken: Best Window Contest in Hofgarten and Outsourcing people in Brazil. Sustainable Lifestyles Inform our visitors of sustainable lifestyle experiences, using our Agenda digital platform, thought the communication of sustainable products and services; by supporting healthy, wellbeing and environmentally-conscious behaviours or by informing consumers on events, activities or workshops with focus on culture, health or environment. Sonae Sierra effectively used their Agenda digital platform to promote sustainable lifestyles through regular posting of content on health, wellbeing and environmentally conscious behaviour. 8
JLL offices London 30 Warwick Street W1B 5NH Lewis Claxton-Teagle Senior Consultant Upstream Sustainability Services London +44 (0)207 399 5487 Lewis.Claxton-Teagle@eu.jll.com JLL offices London 30 Warwick Street W1B 5NH Aleksandra Kozlowska Analyst Upstream Sustainability Services London +44 (0)207 852 4917 Aleksandra.Kozlowska@eu.jll.com jll.com Jones Lang LaSalle 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of Jones Lang LaSalle and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of Jones Lang LaSalle. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof.