SM Prime's Hans Sy speaks about disaster risk reduction at UN forum

Investing in disaster risk reduction is good for business, says SM Prime Holdings, Inc. President Hans T. Sy at a global forum organized by the United Nations from May 20 to 21, 2013 in Geneva, Switzerland.

Mr. Sy represented the Private Sector Advisory Group (PSAG) in the Global Forum on Disaster Risk Reduction by the UN International Strategy for Disaster Risk Reduction (UNISDR). The PSAG is attended by members by invitation-only and represents a wider private sector that works with UNISDR to address disaster risk reduction.

In the past decade, SM Prime has taken great strides in reducing the company's environmental impact through sustainable designs of its malls, notably, SM Marikina, SM Masinag, SM Muntinlupa and also the SM Mall of Asia Complex.

"SM Prime takes steps to ensure the longevity of our establishments, and safeguard the communities in which we operate. Partly through prioritizing disaster resilience, SM Prime has managed to both increase profitability, and implement an aggressive expansion strategy," Mr. Sy said.

Mr. Sy shared the experiences of SM Prime when tropical storms Ondoy and Pepeng hit in 2009. He highlighted SM City Marikina and SM City Muntinlupa, two of the company's 47 malls which were located in high risk areas.

In the case of SM City Marikina, the mall was built on a six-hectare property in 2008 within the Marikina River Watershed. The Marikina River Watershed was identified by the World Bank as a high risk-zone in 1977 that should prepare for flooding and topographical changes. SM Marikina is also located within a high traffic, densely populated residential area. SM Prime considered the longer term flood cycles of 100 years of the Marikina Watershed in designing the mall. Working alongside specialists and local authorities, SM Prime built the mall 90 meters farther from the Marikina River on concrete stilts. This reduces the risk of damage to the property and ensures the safety of the mall goers considering historical flood levels.

Since the roads surrounding the mall are at the natural ground level, SM Prime constructed the first floor of SM Marikina as parking areas without wall enclosures. The upper parking level was constructed at an elevation of 20.5 meters. During extreme floods, the parking floors are vacated and the supportive stilts allow for the free flow of water through the lower levels, while the business units continue to operate safely as was seen at the onset of typhoon Ondoy when a huge part of Marikina was flooded. The mall became a refuge for stranded people and food seekers. It also became a re-packing center for relief goods.

"The safety of the communities, employees, customers, and the facility structure remain top priorities in all SM Prime developments. As I tell my design teams ever so frequently, ensuring safety is the only way I can sleep well," Mr. Sy said.

In 2009, Typhoon Ondoy affected over 4.8 million people, caused over Php11 billion in damages, and submerged nearly 50% of the Marikina area. Due to SM Prime's investments in resilience, SM Marikina averted the loss of almost Php1 billion from business sales alone, already giving back more than what had been spent for superior engineering and architecture.

"This shows that the costs from the disaster resilient facets of our facility were more than recouped by avoiding losses for the company. SM Marikina also served as a refuge area for around 1,400 people stranded in the flood waters during the storm. The successful implementation of our business continuity plan enabled all tenants to operate and serve the needs of those seeking shelter in the mall until the flood subsided," Mr. Sy recounted.

Another classic example of investing properly in measures for disaster risk reduction is SM Muntinlupa which opened in 2007 on a 3.7 hectare property south of Metro Manila. SM Prime was warned of seismic activity, given that the site was located within one of the country's major faults, the Marikina Fault Line - a possible generator of large earthquakes. The Philippines as a nation is susceptible to seismic activity and has experienced six serious earthquakes, and nine volcanic eruptions since the year 2000. Given the history of the location, SM Prime treated this warning surrounding the West Marikina fault line very seriously.

Mr. Sy recalled that during the initial phases of constructing SM Muntinlupa, SM Prime surveyed the area with local partners who witnessed soil subsidence but due mainly to the withdrawal of water from local deep well sources. SM Prime initiated a more thorough excavation of the site and discovered a portion of a discontinued fault line running through the property. With this knowledge, SM Prime took further steps towards designing a mall that minimizes the effects of earthquakes up to a magnitude of 7.

"Considering the future of the business and of the stakeholders surrounding this project, we worked to ensure the fullest level of safety for this project," Mr. Sy said.

SM Prime commissioned a team of local and international specialists to enhance the structural design of the mall considering the potential effects of the ground fissure. The team enacted a geotechnical evaluation, and developed a full site response capability to secure the foundation for the mall structure. This resulted in the suspended two-way slab system; as well as the placement of the mall further outside the recommended distance from the fissure line.

Mr. Sy said, "It is evident that the global private sector is becoming increasingly aware of the importance of disaster resilience. My experience has proven that investing in the resilience of company assets simply makes good business sense. We are all aware that disaster resilience is not just the private sector's business. It is everybody's business. As a member of the UNISDR Private Sector Advisory Group, I believe we can make a call to foster more resilient cities around the world. Collaboration and investments in disaster resilience are crucial ingredients to success."

SM Prime has also continued to incorporate efforts to reduce the company's environmental impact. The company made significant inroads with regard to sustainable design in the past decade. Some of the company's earliest projects in this tradition include SM Naga, SM City Rosales in Pangasinan, SM Baliwag in Bulacan to name a few. These malls feature numerous eco-friendly features that SM Prime has continued to employ across the company's newly constructed malls.

Some of these unique design features include high windows above eye level that use natural light to illuminate the malls facilities; the use of LED and CFL light bulbs to further reduce electricity consumption; environmentally-friendly materials and technology for all heating and cooling processes; water-efficient fixtures systems to reduce potable water consumption such as waterless urinals and faucet aerators; and prudently-selected construction materials that minimize the impact of certain structures, promote healthier indoor environments and enhance performance of all company facilities.

SM Prime's state-of-the-art civic center, SM Aura Premier in Taguig City aims to be one of the first civic centers in the country to be certified Gold under the US Green Building Council Leadership in Energy and Environmental Design (LEED) program, an internationally-recognized green building program established in 135 countries. The civic center adheres to a very high standard of environmental responsibility.

Pollution and waste are reduced from construction activities by controlling soil erosion, waterway sedimentation and airborne dust generation. A large green roof will reduce the structure's heat island effect, as well as provide occupants with landscaped recreational areas consisting of various plant species. All waste water will be treated on site and can be reused for non-potable purposes.

A third of the construction materials budget is allocated for building products that are either locally sourced or have high recycled content. The building will maintain superior indoor environmental quality through enhanced ventilation and the use of low emitting materials.

Energy and water use will be reduced by as much as 19% and 30% respectively compared with conventional buildings through a high performance building enclosure, and efficient equipment and fixtures.

The renovation of SM City Baguio is also in consideration for LEED certification. The new plans will incorporate multiple sustainable features that will reduce the structure's environmental impact, optimize energy efficiency, mitigate carbon emissions.

"SM Prime places crucial importance on disaster resilience, not as an additional cost, but as part of our core business strategy. It allows us to serve our communities better, to be competitive, to increase our value and to make us more profitable. But most of all, disaster resilience ensures the safety of our customers and the communities where we operate," Mr. Sy said.

SM Prime operates 47 malls all over the country with a combined GFA of 5.9 million square meters. For the rest of 2013, SM Prime is scheduled to launch SM City BF Paranaque. SM Megamall will be expanded with the opening of Building D. By year-end, SM Prime will have 48 malls in the Philippines and five in China with an estimated combined gross floor area of 6.9 million square meters.