 Sonae Sierra is an international shopping centre specialist owning 52 shopping centres across Portugal, Spain, Italy, Germany, Greece, and Romania. 10 of these are in Brazil (8 in the state of São Paulo, 1 in Brazilia and 1 in Manaus), with a further 3 projects under development. Sonae Sierra Brazil is a 50/50 partnership with Developers Diversified Realty (DDR), one of the USA’s largest Real Estate Investment Trusts, focused on the shopping centre sector. Sonae Sierra Brazil’s business is concerned with investing in, developing and managing shopping centres, and performing all business functions carried out by other individual subsidiarie. Since 2004, Jones Lang LaSalle’s Upstream Sustainability Services team has provided ongoing support to Sonae Sierra, including developing a comprehensive CR strategy; developing an annual strategy review, including peer benchmarking and target-setting; developing annual CR Reports and website content ; and sustainability benchmarking for all shopping centres in Europe and Brazil.s in Europe. |
We asked Elsa Monteiro, Head of Sustainability at Sonae Sierra to explain how their deep commitment to sustainable shopping centre development is progressing in Brazil.
Jones Lang LaSalle: What do you consider to be the main drivers for implementing a sustainability strategy across your shopping centres in Brazil?
Elsa Monteiro: We have a global Corporate Responsibility (CR) strategy that is implemented consistently across all countries in which we operate. In Brazil specifically, there isn’t as yet a strong business case for sustainable development in the shopping centre market: our tenants are not demanding more sustainable space and investors are not willing to pay for additional costs associated with sustainability improvements. However, the concept is gaining momentum in the real estate industry here: there is now a Green Building Council in Brazil promoting LEED certification. It’s also increasingly important to consumers. Visitors to our shopping centres are very aware about environmental and social responsibility and they participate in a lot of events. The Green Sales campaign we held last year was very successful. Our staff members are also very pro-active in campaigning and practicing responsible behaviour.
Jones Lang LaSalle: What about your competitors?
Elsa Monteiro: Our competitors are starting to talk about sustainability issues; they make some statements about this in their corporate communications but don’t appear to have strategies in place. There isn’t any evidence to suggest that they are monitoring and improving the environmental performance of their buildings in the way that we are.
Jones Lang LaSalle: What is the regulatory environment like and how does it compare with the European countries in which you operate?
Elsa Monteiro: In some regards, the legislation is a lot more stringent in Brazil. For example, as shopping centre developers, we were obliged to perform Environmental Impact Assessments here in Brazil before this became mandatory in European countries. There is a lot of regulation around wastewater, water quality and noise pollution, although there isn’t so much enforcement. We strive to comply with all the applicable legislation because it is our policy to do so. This can be costly, but it means we have built up a stronger reputation among local institutions and public opinion.
Jones Lang LaSalle: What about energy efficiency?
Elsa Monteiro: Energy efficiency isn’t as an important issue here as it is in the European Union Member States. In Brazil, a high proportion of energy is generated through hydropower, which has a very low emissions factor, so there isn’t pressure to reduce carbon emissions through energy efficiency measures. We also use ethanol as the fuel for our company car fleet. Power cuts used to be a problem in Brazil, but the energy supply network has been redeveloped and the supply is now very reliable.
Jones Lang LaSalle: It’s clear that the most significant contribution that Brazil could make to mitigating climate change is halting the deforestation of the Amazon, but your company doesn’t have a direct impact on this. Given that you develop in urbanised areas, what environmental sustainability issues are most important for Sonae Sierra Brazil?
Elsa Monteiro: Well, energy isn’t as important, and water supply isn’t a concern in any of the locations where we operate. Land use presents more of a challenge: in the cities where we are developing, there aren’t good urban planning systems and developers can build where they choose. This means that green spaces within and around the cities are purchased for real estate development and that has ecological impacts. For consumers, preserving forests and ecosystems is important, and we’ve had a very good response from consumers on campaigns and events we have held in relation to these issues.
Jones Lang LaSalle: What socio-economic issues present the biggest challenges in Brazil?
Elsa Monteiro: Poverty and education … crime… a lot of the social problems that stem from the large social class difference in Brazil. Around our shopping centres, security is an important aspect we have to manage carefully. We have developed educational programmes at some of our shopping centres, channelling community investment into education initiatives.
Jones Lang LaSalle: Are there key differences between different cities and states with respect to sustainability challenges?
Elsa Monteiro: Yes, certainly. In some states poverty and class divide is exacerbated. There are differences in terms of environmental management, such as the availability of recycling facilities. And in some locations it is difficult for us to find local suppliers who can meet our environmental standards – the market for some of the services we want hasn’t yet been developed. On the other hand, there are also some cities that do have a very strong local sustainability agenda; Curitiba is one example where the local authorities are very aware of sustainable development issues and seek to attract socially responsible investment by implementing sustainability policies.
Sonae Sierra: achievements in sustainability and CR
The company’s mission statement strongly recognises the needs not only of its shareholders, but of all stakeholders as well as the environment. To help bring these commitments to life, Sonae Sierra has researched, created and pursued a number of new systems, standards and techniques to enable and promote sustainable development.
These include:
• Implementing the Corporate Environmental Management System (EMS)
since 1999, now certified as ISO14001.
• Introducing the Environmental Standards for Retail Development (ESRD),
a set of 190 standards that were developed on the basis of the company’s
own experience as well as international tools like BREEAM and LEED.
• Installing environmental, safety and health management systems across
the operational portfolio and on construction projects.
• Creating incentives for waste recycling. Sonae Sierra Brasil’s shopping
centres recycled 46% of their total waste in 2009.
• Setting annual CR targets and reviews, rigorous performance measurement,
and corporate reporting in line with GRI (Global Reporting Initiative).
• Establishing a wastewater treatment plant, reusing around 50% of the total
volume of water consumed at Parque D. Pedro shopping centre.
For further information please refer to Sonae Sierra CR Report
Between 2005 and 2009, the company achieved a 20% reduction in Greenhouse Gas emissions (tonnes per square metre of GLA), as well as significant improvements in energy efficiency, water efficiency, waste recycling and tenant satisfaction. Sonae Sierra’s CR strategy and performance has been acknowledged and awarded by achieving numerous awards including The inaugural Green Thinker Award for Best Sustainability Strategy in 2008.