Sonae Sierra Sustainability Report 2011

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Content

2011
Economic, Environmental and Social Report

Specialists in creating…

sustainable shopping centres

SONAE SIERRA

Economic, Environmental and Social Report 2011

Contents
Corporate Overview
Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15

Social Performance
Suppliers Tenants Communities and Visitors Employees Safety and Health

71 72 78 83 91 96

Economic Performance
The Economic Context Operational Performance Consolidated Accounts

29 30 32 39

Board Members and Executives

104

Global Reporting Initiative
Profile Disclosures Economic Aspects

109 110 121 123 136 143 145 150 155

Environmental Performance
Energy and Climate Water Waste Biodiversity and Habitats

46 47 57 63 68

Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects Society Aspects Product Responsibility Aspects Independent Auditor’s Review

Feedback Form

157

Global Reporting Initiative (GRI) Self-Declaration Statement
This report provides a comprehensive review of Sonae Sierra’s economic, environmental and social strategy and the Company’s performance in 2011. We believe that this report complies with level A of the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (G3.1:2011), both in terms of the report contents and performance indicators. Our compliance with the GRI Guidelines has been independently verified by Deloitte, whose assurance statement enables us to self-declare to GRI level A+.

C Mandatory Optional Self declared Third party checked GRI checked

C+

B

B+

A

A+ 3 3

Two important developments took place concerning the GRI framework in 2011. In March, the GRI launched the G3.1 Sustainability Reporting Guidelines, which include expanded guidance for reporting on human rights, local community impacts and gender. In September, the GRI launched the Construction and Real Estate Sector Supplement (GRI CRESS). The GRI CRESS is a version of the GRI G3.1 Guidelines tailored for the construction and real estate sector. It encompasses some specific performance indicators and disclosure requirements, as well as general guidance, so as to ensure that companies in this sector report most effectively on the industry’s key economic, social and environmental sustainability issues. Sonae Sierra has developed this report in line with the GRI 3.1 guidelines and has also followed the GRI CRESS wherever possible. We have included a column in our GRI Content Index on pages 109 to 154 to show which of our GRI performance indicators have been reported in line with the GRI CRESS. However, since these guidelines were only released in September 2011, we have not been able to apply them fully in the 2011 reporting cycle. We aim to do this in time for our next Annual Report, which is scheduled for publication in April 2013.

Further reference:

For more information about the GRI G3 and G3.1 Sustainability Reporting Guidelines, please see: https://www.globalreporting.org/reporting/reporting-framework-overview/Pages/default.aspx For more information about the GRI CRESS, please see: https://www.globalreporting.org/reporting/sector-guidance/construction-and-real-estate/Pages/default.aspx

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

1

Centro Colombo, Portugal

Manauara Shopping, Brazil

Loop5, Germany

Who We Are…
Sonae Sierra is a specialist at the cutting edge of shopping centre development, ownership, management and the delivery of services to third parties in markets as diverse as Europe, South America and North Africa.
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 focused on the creation of unique shopping experiences. 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. We have long recognised that environmental and social performance affects our financial results, and we believe that our long-term business success is dependent on all three dimensions: economic, environmental and social. We have pioneered the integration of sustainability principles into the shopping centre business and we are already reaping the benefits of this forward-thinking approach. This year we have chosen not to publish a stand-alone Corporate Responsibility (CR) Report, but to develop a fully integrated Economic, Social and Environmental Performance Report. We consider that this approach provides our stakeholders with a more robust and engaging account of our current strategy and our performance in 2011, and demonstrates how we encompass all three dimensions of performance into our day-to-day business activities.

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

2

CEO’s Statement
A conversation with Fernando Guedes Oliveira, Sonae Sierra CEO Q: How has Sonae Sierra’s business fared overall during the past 12 months and has the year turned out as you expected? A: I’m really proud of the results we are able to report for the past 12 months, in spite of the challenging market conditions. We increased our net profit in 2011 by successfully sustaining income streams and reducing costs. Overall, global tenant rents are up on a like-for-like basis and our occupancy levels remained above 96% throughout the year – a significant achievement in some markets where tenant sales were affected by lower consumer purchasing power. We have also mitigated some of the market risks outside our direct control such as rising yields and capital constraints, so I would say we have emerged from a tough year relatively intact. Q: In the context of continued economic turmoil, what would you say have been your greatest achievements in 2011? A: Despite the increasing challenges of securing new capital and refinancing debt in Europe in particular, we have continued to sustain the growth of our business through new developments, with two new centres starting construction; one in Germany and one in Brazil. This has been made possible through our proactive capital recycling strategy, which in Brazil saw the successful Initial Public Offering (IPO) of our business generate significant funds, and in Europe included the sale of two shopping centres in Spain.
While the Government austerity measures in some European markets have undoubtedly affected consumer purchasing power and reduced tenant sales, we have succeeded in protecting our income streams and maintaining high levels of occupancy amongst our tenants. This has been achieved through the efficiency and attentiveness of our property management, as well as our willingness to work closely with tenants to protect their business viability. Finally, we continue to benefit from international expansion, and our growth in rapidly growing economies like Brazil hedges our risk in other markets where GDP is flatter. In 2011 we established a presence in Morocco and Algeria as a service provider to third parties, as well as delivering development services to a client in Croatia. The growth in our third party service provision is another success factor that has enabled us to retain talent, develop new income streams, and gain insights into new markets.

Q: What does 2012 look like for Sonae Sierra? Are business prospects likely to get worse before they can return to growth? A: The last couple of years have required us to focus on maintaining our financial stability, increasing operational efficiencies, controlling costs and retaining our core competencies. As a business, we have proven extremely resilient and we should emerge from the current financial crisis in a strong position to return to growth in the context of a new world reality.
2012 will be a year of recession, decisive for the European Union. There is no doubt that the economic conditions with particular impact in Portugal, Greece and, to a lesser extent, Spain and Italy, will inevitably affect our operational performance in Europe. However, we are confident that we will continue to show positive results, thanks in part to our geographical spread, which enables us to be present in countries where economic growth is a reality. For instance in Brazil, we have two inaugurations scheduled for 2012: Uberlândia Shopping and Boulevard Londrina Shopping. In mature markets, we will maintain our efforts to improve operational efficiency, and we will continue to search for new investment opportunities, with a focus on Germany and also Italy, where in March 2012 we will inaugurate Le Terrazze in La Spezia.

“I’M REALLY PROUD OF THE RESULTS WE ARE ABLE TO REPORT FOR THE PAST 12 MONTHS, IN SPITE OF THE CHALLENGING MARKET CONDITIONS. WE INCREASED OUR NET PROFIT IN 2011 BY SUCCESSFULLY SUSTAINING INCOME STREAMS AND REDUCING COSTS.”
Fernando Guedes Oliveira Chief Executive Officer

CORPORatE OvERvIEw
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

3

CEO’s Statement continued
I am privileged to lead an organisation which is highly regarded by our customers, partners, banks and suppliers; an organisation that acts responsibly towards local communities and the environment, and that is driven by dedicated employees who are always looking for better ways of doing business. This is why I am confident that we will maintain a good position in 2012 and continue to grow in the years ahead.

Q: Can you comment on Sonae Sierra’s overall environmental and social performance over the past year? What have been the key highlights and challenges, and how has CR contributed to your wider business objectives? a: We are already reaping financial benefits from increased ecoefficiency across our portfolio – for example, we have calculated that in 2011 we avoided costs of €7.3 million as a result of the energy efficiency measures we have implemented since 2002. With regards to social aspects we have also maintained a strong performance, sustaining levels of tenant and visitor satisfaction, our investment in local communities and reducing accidents among our workforce.
For Sonae Sierra, sustainability means the continuous evaluation of our economic, social and environmental performance, seeking to achieve a harmonious balance between all three areas. We continue to be viewed as an international benchmark of sustainability excellence in the shopping centre sector, as proven most recently by our funds being ranked as the most sustainable in Europe according to the Global Real Estate Sustainability Benchmark. We believe that sustainability will increasingly become a decisive factor in our relationship with our stakeholders. Society is becoming more and more aware of environmental and social questions and is rewarding those companies that have responsible and resilient business strategies. Legislation reflects this trend, and is progressively more demanding. Finally, through careful cost benefit analysis, we are able to prove that sustainability principles incorporated in all business areas can result in lower operational costs, which in turn lower our service charges for tenants and contribute to higher occupancy and satisfaction levels.

Q: Last year you highlighted a number of opportunities for expansion into new and emerging markets. Have these materialised, and do you plan to continue growing the business in new geographies? a: We believe we have the right combination of skills to tap into
the potential offered by new and emerging markets. We continue to actively explore opportunities to export our business model and have created a new department for this purpose. Some of the key principles underpinning our growth strategy into new and emerging markets include: • Delivering third party services prior to direct investment, to learn first-hand about the market characteristics and key risks and opportunities. • Disposing of some of our operational centres in established markets, to rebalance the weighting of our portfolio in favour of faster growing economies. • Entering into partnerships with like-minded shopping centre investors/operators, to share skills and capabilities as well as investment risks. Currently, we are actively exploring further opportunities in the Mediterranean Basin (Morocco and Algeria) and Colombia.

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

4

The Year at a Glance
Key Activities
INVESTMENT
• Successful Initial Public Offering (IPO) of Sonae Sierra Brasil • Sale of Plaza Éboli and El Rosal shopping centres in Spain to Doughty Hanson for €120 million • Acquisition of the remaining 25% of Plaza Mayor Shopping in Spain on behalf of the Sierra Fund, making it now the sole owner of the asset • Successful refinancing of AlgarveShopping in Portugal • Completion of the expansion and refurbishment of Shopping Metrópole and the expansion of Shopping Campo Limpo1 (both in Brazil)

DEVELOPMENT
• Commenced construction of a new project, Passeio das Águas Shopping, in Goiânia, Brazil • Announced a joint venture with MAB Development to develop a shopping centre in Solingen, Germany • Entered the final stage of construction of Le Terrazze in Italy and Uberlândia Shopping in Brazil • Proceeded with the development of Boulevard Londrina Shopping in Brazil

SERVICES TO THIRD PARTIES
• Entry into the Moroccan market with a contract to provide development services for a shopping centre project in Casablanca • Entered the Algerian market through a joint venture agreement with Cévital Group to provide development, property management and leasing services for shopping centres in this country • Signed property management and/or leasing contracts with third parties for a further nine shopping centres in Europe • Development management service agreement for a new shopping centre in Zagreb, Croatia

MANAGEMENT
• Proceeded with the letting of Le Terrazze (Italy); Uberlândia Shopping and Boulevard Londrina Shopping (Brazil) • Initiated the letting of Solingen in Germany

Entry into

key growth markets

AlgarveShopping, Portugal

1

Since we have a minority position in this shopping centre and the refurbishment process was controlled by the other centres owner, we did not implement our Safety, Health and Environment Management System (SHEMS) procedures for development on this project. Therefore, no information regarding this completed project’s energy and water consumption; waste recycling rates and safety and health performance is made available in the report. Nevertheless, it is a site managed by Sonae Sierra and we consider adequate reporting on the existence of these works.

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

5

The Year at a Glance continued
Economic Performance: Key Achievements and Performance Indicators
• Increased our direct net profit to €61.1 million, up by 6% in comparison with 2010. • Reduced our loan-to-value ratio from 46.4% to 43.7%. • Increased our global rental income to €431.8 million, up by 1% in comparison with 2010. • Distinguished as the Best Developer Overall and Best Retail Developer in Portugal; Best Retail Developer in Brazil and Best Retail Developer in Latin America in the seventh edition of the Euromoney magazine Real Estate Awards for Excellence.

Consolidated Net Profit – IAS (€ million)

€9.7m
2011 2010 2009 2008

EBITDA – IAS (€ million)

€112.8m
2011 2010 112.8 123.4 108.8 105.9

9.7 8.7 -111.0

2009 2008

-116.1

OMV of Assets under Management (€ million)

€6,320m
2011 2010

Real Estate NAV as of 31 Dec (€ million)

€1,173m
2011 2010 2009 2008

6,320 6,481 6,340 6,166

1,173 1,251 1,228 1,416

2009 2008

Average Occupancy Index (% by GLA, across our owned portfolio)
2011 2010 2009 2008 96.7 96.4 95.9 95.8

96.7%

8,495
2011 2010 2009 2008

Number of tenant contracts under management

8,495 8,521 8,924 8,455

GLA owned in operating centres (000’s m2)

1,924
2011 2010

2,234
1,924 2,017 2,059 1,963 2011 2010 2009 2008

GLA under management (000’s m2)

2,234 2,220 2,284 2,163

2009 2008

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

6

The Year at a Glance continued
Environmental Performance: Key Achievements and Performance Indicators
• Sonae Sierra property funds ranked as the most sustainable in Europe and third worldwide by the Global Real Estate Sustainability Benchmark (GRESB), which establishes a ranking of the property funds and companies of the real estate sector that are most committed to the environment. • Sonae Sierra ranked as the leader of the Corporate Climate Responsibility Index published by ACGE in Portugal for the sixth time. • ISO 14001 certifications achieved for a further three shopping centres and two construction works. Le Terrazze in Italy was the first shopping centre in the world to simultaneously achieve ISO 14001 and OHSAS 18001 certifications for the Safety, Health and Environment Management System (SHEMS) of its construction works.

0.028
2011 2010 2009 2008

Greenhouse gas (GHG) emissions of our owned portfolio and corporate offices (tCO2e/m2 GLA)
0.028 0.034 0.067 0.071

Electricity efficiency (excluding tenants) of our owned portfolio (kWh/m2 mall and toilet area)
2011 2010 2009 2008 514 514 527

514

553

3.7
2011 2010 2009 2008

Water efficiency (excluding tenants) of our owned portfolio (litres/visit)
3.7 3.7 3.8 3.6

Total waste recycled as a proportion of waste produced (% by weight, across our owned portfolio)
2011 2010 2009 2008 46 53 51

53%

42

Boavista Shopping, Brazil

Freccia Rossa, Italy

ArrábidaShopping, Portugal

CORPORatE OvERvIEw
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

7

the Year at a Glance continued
Social Performance: Key achievements and Performance Indicators
• Maintained high levels of satisfaction among our tenants, visitors and our employees. • Reduced the rate and severity of work accidents in our workforce in comparison with 2010. • Distinguished at the StrategicRISK European Risk Management Awards in the “Most Innovative Use of IT or other Technology” category for our Safety, Health and Environment Inspections System. • OHSAS 18001 certifications achieved for a further five shopping centres and two construction works (including Le Terrazze, highlighted on the previous page).

4.6
2011 2010 2009 2008

Tenant Satisfaction Index (scale of 1 (‘not satisfied’) to 6 (‘very satisfied’))
4.6 4.6 4.6 4.2

€1.484m
Marketing investments in CR and other community contributions (€ million)2
2011 2010 2009 2008 1.484 1.219 1.143 2.380

€528
2011 2010 2009 2008

Investment in staff training and development (€ per capita)
528 776 1,195

7.8
2011 2010 2009 2008

Number of non-conformities per hour of reference SPO3

7.8 5.8 5.7 7.9

900

passionate about

innovative, sustainable ideas for our industry
Click here to view the list of further awards and distinctions which we received in 2011

2

3

In 2011, this indicator included investments in CR made through development projects’ marketing budgets. This data was not included in previous years. It also includes donations collected from shopping centre visitors. Safety, Health and Environment Preventive Observations (SPOs) are a form of safe behaviour audit undertaken at our shopping centres in operation. For further details, please see page 102.

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

8

The Year at a Glance continued
Progress against Corporate Responsibility Targets
At the end of 2010 we defined 36 CR targets to be achieved by the end of 2011. The chart and table below summarise our performance against these targets. Our performance against each individual target is reported within each impact area chapter in this report. A comprehensive review of our performance against all CR targets, including details of the criteria used and procedures followed to evaluate target achievement can be downloaded from our website.

Summary of achievement against 2011 CR targets

3 6

Target achievement
1 3

0% 51-75% 76-99% 100% n.a.

23

Parque D. Pedro Shopping, Brazil 2011 CR target achievement by impact area CR Impact Area Environmental Management Energy and Climate Water Waste Biodiversity and Habitats Suppliers Tenants Communities and Visitors Employees Safety and Health Number of targets 0% – – 1 1 – – 1 – – 3 1-25% 26-50% – – – – – – – – – – 51-75% 76-99% – – 1 – – – 1 1 – – 100% N/A – – – – 1 1 – – – 1

TOTALS

3 2 2 5 2 3 4 2 2 11 36

6

– – – – – – – – – – –



– – – – – – 1 – – – 1

3

3 2 – 4 1 2 1 1 2 7 23

3

To ensure that we make progress towards our long-term CR objectives, we set 69 additional CR actions to be implemented in 2011 and commissioned an external review to check that they had been effectively implemented. A comprehensive review of the CR targets and actions we accomplished in 2011 can be downloaded from our website.
Further reference:

http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

CORPORatE OvERvIEw
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

9

Our Company
Sonae Sierra is the international shopping centre specialist that is passionate about bringing innovation and excitement to the shopping industry. Incorporated in Portugal in 1989, Sonae SGPS (Portugal) and Grosvenor (United Kingdom) each own 50% of the Company. We have an integrated business which encompasses owning, developing and managing shopping centres as well as the provision of services to third parties in markets as diverse as Europe, South America and North Africa. Our proactive approach to the 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 a unique know-how and has earned us international recognition for the development of innovative products and delivery of highquality property management services. This in turn has enabled us to develop our activity as a service provider to third parties. On 31 December 2011 we were operating in Portugal, Spain, Italy, Germany, Greece, Romania, Morocco, Algeria, Colombia and Brazil4. We were also providing services to third parties in Croatia. We owned 49 shopping centres with a total Gross Lettable Area (GLA) of 1,924,117m2. We had five projects under construction, with a combined total GLA of 237,800m2, and six new projects in different phases of development in Portugal, Italy, Germany, Greece, Romania and Brazil. We also managed and/or leased a further 22 shopping centres and two new projects on behalf of others. 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. In 2011 our total portfolio under management – including shopping centres owned by third parties – welcomed 428 million visits.

operations in

49 owned
shopping centres in operation

3 continents and 11 countries 1,090

22 contracts with third
parties for the provision of property management and/or leasing services

8,495
contracts with tenants

5 shopping centres
under construction

direct employees worldwide

4

Our countries of operation listed here include those where we have an established presence in the market and/or are actively pursuing new investment opportunities. We differentiate these from those markets where we are merely providing services to third parties with no immediate prospects of direct investment or growth, e.g. Croatia. However, in the environmental and social performance sections of this report, we restrict our performance reporting to direct operations only; none of our third party service contracts are included in impact measurements.

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

10

Our Company continued

Alexa, Germany

Centro Colombo, Portugal

Gli Orsi, Italy

Plaza Mayor, Spain

Our vision is to be the leading international shopping centre specialist. Our mission is for Sonae Sierra to be the international shopping centre specialist that provides ultimate shopping experiences to customers and creates 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 and local communities where we operate and independence from political power.
Further reference:

To read about our values and principles see: http://www.sonaesierra.com/en-gb/aboutus/visionmissionandvalues.aspx

CORPORatE OvERvIEw
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

11

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, with the exception of Sonae Sierra Brasil, also act as knowledge and service providers to third parties. Sierra Investments owns the Company’s shopping centres and is responsible for our investment activity. It contributes to the Company’s results through a combination of net operating income from shopping centres and, in the normal course of events, an increase 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 over the past, this business also acts as a knowledge provider to third parties. 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 development services to third parties. Sierra Management is responsible first of all for managing shopping centres for Sonae Sierra and co-owners, with a focus on maximising their long-term value. Secondly, 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 management and/or leasing services to 22 shopping centres that are owned by third parties. Sonae Sierra Brasil is a 50/50 partnership between Sonae Sierra and Developers Diversified Realty (DDR), one of the USA’s largest real estate investment trusts (REIT) focused on the shopping centre sector. Sonae Sierra Brasil’s business operates autonomously and is focused on investing in, developing and managing shopping centres in Brazil. The business aims to become one of Brazil’s leading companies in the shopping centre sector. Sonae Sierra Brasil is now listed in the IBovespa (the Brazilian Stock Exchange) with a 30% free float. All our businesses are supported by Corporate Services which includes: Finance, Legal, Taxes, Human Resources, Communication, Safety, Health and Environment, CR and our European Back-Office.

Corporate Services

SONAE SIERRA

Sierra Investments
Sierra Funds

Sierra Developments

Sierra Management

Sonae Sierra Brasil
Investment Development Management

CORPORATE OVERVIEW
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

12

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 Portugal, Spain, Italy, Germany, Greece, Romania, Morocco, Algeria, Brazil and Colombia. We are also providing services to third-parties in Croatia.
Germany Croatia Spain Romania Portugal Italy Greece

Morocco Colombia Algeria

Key Countries where we are present Other countries where we are providing services to third parties

Brazil

Key facts by country
(as on 31 December 2011)

Portugal Number of shopping centres owned5 21 GLA of owned shopping centres (m2)6 806,841 Number of shopping centres managed 12 on behalf of other owners GLA of shopping centres managed 126,830 on behalf of other owners (m2) Visits to owned shopping centres (millions) 176.0 Visits to all shopping centres 184.9 under management (millions)7 Rents received at all shopping centres 191.9 under management (€ million)8 Tenant sales at owned 2,010.1 shopping centres (€ million)9 Tenant sales at all shopping centres 2,170.9 under management (€ million) Costs by country (€ million)10 95.6 Number of direct employees11 409

Spain 9 415,650 4 130,810 61.6 73.9 64.9 676.3 839.6 18.9 111

Italy 4 146,308 1 21,765 18.9 22.1 25.5 284.9 309.6 13.5 55

Germany 3 149,289 2 26,506 32.6 38.1 46.2 480.4 501.0 12.1 50

Greece 1 21,058 – – 1.6 1.6 1.6 14.7 14.8 6.7 17

Romania 1 11,555 1 3,634 3.2 4.8 1.6 10.3 16.8 1.7 30

Brazil 10 373,416 – – 102.5 102.5 102.1 1,709.3 1,709.3 18.4 413

Total 49 1,924,117 20 309,545 396.3 428.0 433.8 5,186.0 5,562.0 170.6 1,090

5 6 7 8 9

10

11

These figures cover shopping centres that are 100% and co-owned by Sonae Sierra. GLA figures are periodically confirmed by technical specialists, sometimes leading to adjustments of these figures with respect to individual shopping centres. These figures cover the total number of visits welcomed by all Sonae Sierra owned shopping centres and shopping centres managed on behalf of other owners. Rents have been calculated based on account performance between 1 January 2011 and 31 December 2011. These figures do not include sales achieved by tenant owners (those who own individual units in our centres). These figures have been calculated based on account performance between 1 January 2011 and 31 December 2011. Costs by country include costs associated with external suppliers and services, costs with common charges, buy out costs and other operating expenses. The Netherlands is not included as a ‘country’ in this table, although it is within the value of total costs. Costs by country have been calculated based on account performance between 1 January 2011 and 31 December 2011. Sonae Sierra also has three employees based in The Netherlands, one employee based in Colombia and one employee based in Algeria. These five employees are included in the total number of employees reported in the end column of this table.

CORPORatE OvERvIEw
SONAE SIERRA Who We Are… CEO’s Statement The Year at a Glance Our Company Our Business Strategy 1 2 4 9 15 Back to main contents Economic, Environmental and Social Report 2011

13

Our Company continued
Corporate Governance
Sonae Sierra’s corporate governance policies were adopted by the Company benefiting from the models of its shareholders, Sonae and Grosvenor. The shareholders’ corporate governance policies impose levels of transparency, independence, remuneration compliance rules and CR policies which have contributed to shaping Sonae Sierra’s own management model, corporate values, business strategy, CR 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, long-term business plan, finance and reporting. It consists of eleven members, six of them being executives and five non-executives. Each executive member of the Board is given responsibility for certain businesses or areas of the Company, including the Sustainability Office. When appointing new Board members, shareholders take into consideration the qualifications and expertise of the candidates and their understanding of the economic, environmental, and social issues which are of relevance to our business. The Executive Committee is responsible for the day-to-day operations of the Company, which encompasses CR 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: 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 Shareholders Assembly

BOARD OF DIRECTORS Non-Executive: Paulo Azevedo (Chairman), Mark Preston, Neil Jones, Nicholas Scarles, Ângelo Paupério Executive: Fernando Guedes Oliveira (CEO), José Baeta Tomás, Edmundo Figueiredo, Pedro Caupers, Ana Guedes Oliveira, João Correia de Sampaio Secretary: Joaquim Pereira Mendes

COMPENSATION COMMITTEE Paulo Azevedo, Mark Preston

INVESTMENT COMMITTEE Fernando Guedes Oliveira (Chairman), Neil Jones, Ângelo Paupério, Edmundo Figueiredo, Nicholas Scarles, Pedro Caupers, Ana Guedes Oliveira Secretary: Joaquim Pereira Mendes

FINANCE COMMITTEE FISCAL BOARD 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 OMBUDSMAN David Jenkins (Chairman), Ângelo Paupério, Nicholas Scarles Secretary: Joaquim Ribeiro Danilo Picolo

EXECUTIVE BOARD Fernando Guedes Oliveira (Chairman), Edmundo Figueiredo, Pedro Caupers, Ana Guedes Oliveira, João Correia de Sampaio.

Click here to read our response to the GRI criteria on Governance and Commitments Click here to read the biographies of the Sonae Sierra Board Members and Executives

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Our Company continued
Corporate Governance (continued)
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 decision-making 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 assurance that they will be processed, investigated, and responded to in a timely and sensitive manner.

Click here to read our response to the GRI criteria on Corruption, Anti-Competitive Behaviour and Compliance Click here to read our response to the GRI criteria on Human Rights

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

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Our Business Strategy
How we Create value
With over two decades of experience and with operations in three continents, Sonae Sierra creates value for stakeholders throughout the entire lifecycle of each asset. The combination of our experience, our commitment to innovation and our long-term approach to business have created an integrated strategy that today embraces shopping centre development, ownership and management, as well as knowledge provision to our clients. Through this strategy we have developed a unique understanding of the business and markets we operate in, as it is applied to our own shopping centres as well as those owned by third parties. This unique set of skills has added to Sonae Sierra’s value chain and fuelled our passionate determination.

wE fuNd
We provide effective investment solutions that utilise capital while maximising returns.

wE fINd
With extensive knowledge of the shopping centre business, we perform market, cost, community and environmental studies to identify sustainable retail opportunities.

wE AcQuIRE
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.

PRE DEVELOPMENT

wE dESIgN
We create innovative schemes to offer exceptional retail experiences and bring vibrancy to the local area whilst sustaining environmental resources.

ASSET MANAGEMENT

INTEGRATED APPROACH

DEVELOPMENT

wE mANAgE
We manage our assets in a way that maximises returns for our clients, tenants and investors whilst also delivering value for communities and visitors and ensuring efficient use of natural resources.

wE dEvElop
Combining know-how and experience, we bring together exceptional construction and marketing support to develop and commercialise sustainable buildings.

PROPERTY MANAGEMENT

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Our Business Strategy continued
Our Relationships
Our stakeholders
We believe that conducting our activities in a way that is sensitive and responsive to our stakeholders’ needs and concerns is vital for the long-term success of our business. We employ a range of stakeholder engagement techniques and receive valuable feedback from our investors, tenants, clients, visitors, employees, suppliers and from local community members which can help us to refine our approach at a corporate level as well as allow us to identify and implement improvements on individual sites. The diagram below highlights our main stakeholder groups and examples of engagement and/or feedback received in 2011.

We were invited by one investor to participate in the Global Real Estate Sustainability Benchmark (GRESB), and as a result our funds were ranked as the most sustainable in Europe INVESTORS & FINANCIERS We received 5,082 cases of press coverage covering economic, environmental and social aspects of our performance, 96% were positive or neutral

98% of our shopping centres achieved a tenant satisfaction rating of 4 or above on a scale of 1 (‘not satisfied’) to 6 (‘very satisfied’)

We have received some positive feedback from our property management services’ clients

TENANTS

CLIENTS 12% of visitors say that a company’s environmental and social track record influences which shopping centre they visit and 23% say it influences what they buy

THE MEDIA OUR STAKEHOLDERS

SHOPPING CENTRE VISITORS

LOCAL AUTHORITIES We engaged with local authorities during the shopping centre planning, development and operations phases LOCAL COMMUNITY MEMBERS Community Advisory Panels were held across 29 of our shopping centres and new projects in 2011, giving us useful insights on community perspectives SUPPLIERS

EMPLOYEES 83% of staff responding to our Employee satisfaction survey agreed that Sonae Sierra is a good company to work for

Property management suppliers’ audits showed good team work and organisation but knowledge of our safety procedures could be improved

Click here to read about the stakeholder engagement techniques we employed in 2011 and key feedback received

More detailed commentary on feedback received from stakeholders in 2011 and the ways in which we responded to this feedback can be found in the Suppliers, Tenants, Communities and Visitors and Employees chapters of this report.

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Our Business Strategy continued
Our Partnerships & Clients – past and present
When it comes to shopping centres, we’re the partner of choice. Our business, quite simply, would not be what it is today without our partners ( P ) and services clients ( C ). With their backing, we can ensure we have financial strength, and also the ability to quickly gain an in-depth knowledge of markets, and create new opportunities.

PORTUGAL
P P P P P

THE NETHERLANDS
P P P P

Estevão Neves Bensaude Group Sonae Distribuição Estação Shopping CGD

ING Real Estate ING Developments APG Investments MAB Development

GREECE FRANCE
P P P P P

CNP Assurance CDC Foncière Euris

Charagionis Group Lamda Development

MOROCCO
C C C

GERMANY
P P C C

Deka Union Investment Commerzbank Balsa

Marjane Fonciere Chellah (CDG Group) AUDA – Agence d’urbanisation et de Developpement d’Auda

BRAZIL
P P

ITALY
P

Coimpredil

P P

ALGERIA
P

P

Multiplan Tivoli EP Enplanta Engenharia Marco Zero Credit Suisse HG

Cévital Group

USA UNITED KINGDOM
P P P P P P C P P P

Grosvenor Fund Management Miller Developments Rockspring Castle City Schroders Investment Management Aberdeen Property Investors Scottish Widows

AIG TIAA-CREF DDR

FINLAND
P P

KEVA Ilmarinen

COLOMBIA SPAIN
P P P P C P

Central Control

LAR Group Mall Group Iberdrola Eroski Group Banco Santander

GREECE / CROATIA
C

Bluehouse Capital

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Our Business Strategy continued
Our Medium- to Long-term Strategy
Research into social, consumer and technological trends suggests that we are likely to see a rapid transformation in the global retail industry over the next decade brought about by the fast-growing use of mobile internet devices, demographic changes; shifting consumer behaviour and preferences and growing segmentation between different customer groups. To succeed in this new era of retail, we will need to continue focusing on the ultimate experience of retail customers, and we aim to improve this by offering premium space and unique shopping centre concepts which remain a destination of choice for visitors. Our business strategy to achieve this is very clear. We continue to focus our attention on the five strategic axes that we identified as priorities in 2010.

• Maintain and enhance our shopping centre specialism, continuing to integrate our investment, development and property management business, and focusing on the highest quality product available in any given market. As part of this we will continue to pursue the delivery of property management services to third parties. • Continue to pursue international growth and to enter new and emerging markets where the retail industry is still evolving and consumer purchasing power is increasing. We expect to see further growth in our operations in the Mediterranean Basin and Latin America and to expand further in other emerging markets, based on third party services. • Improve our capital intelligence, by further developing our capital raising capabilities and pursuing our capital light approach. This includes the delivery of third party services and taking minority shareholding positions in new joint venture partnerships. We also anticipate reducing our capital involvement, and in some cases disposing of non-core operational centres in established markets, to free up capital to finance our development pipeline in growth markets. • Create the ultimate shopping centre experience by developing innovative shopping centre concepts that bring together the right tenant mix, architecture, ambience, services and customer experience. Our ultimate aim is to become the destination of choice and to provide customers with a venue where their needs, aspirations, desires and expectations come together. For us, each one of our centres is more than a building: it is a living space in continuous evolution. As a company we will continue to focus progressively on prime assets and team up with key tenants and selected partners from other industries to develop new and exciting customer experiences, in line with consumer trends. • Undertake dynamic portfolio management allowing us to shift the weighting of our portfolio. For mature markets, this means we are likely to see the sale of more properties and a reduction in our fund stakes; whilst emerging markets and geographical areas with growth potential will gain weight in Sonae Sierra’s portfolio. We are aware that the negative economic cycle we are presently experiencing brings with it important challenges, but we are confident in our ability to execute the defined strategy and, with rigour, efficiency and determination, to overcome those challenges.

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Our Business Strategy continued
Risk Management
We operate a Risk Management Working Group to serve as facilitator and promoter of risk management best practices in all parts of the Company. 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. In this context, the Risk Management Working Group may foster initiatives to improve the Company’s risk management information systems. In 2011 we reviewed our risk matrix and added two new risks (environmental and services provision risks) whilst the emphasis on some individual risks has changed due to the wider economic context. The Working Group analysed three risks in detail (sovereign and political risks, contract integrity and rents sustainability) and established a policy, monitoring procedures and mitigation actions for each one. Other activities included the development of a policy for Medium-term Liquidity Management and the commencement of the BEST12 training programme for Sonae Sierra employees on the Anti-Corruption Policy. Our Risk Management targets for 2012 are to update and approve the Sonae Sierra Risk Matrix and to deliver training on the Company's anti-corruption policy. The table below presents a summary of our key controllable and non-controllable financial risks and mitigation strategies.
Key controllable risks

Risks tenant Default Risk: The trading environment has been tough for tenants in Portugal, Spain and Greece and it has been increasingly difficult for us to collect rents in some areas in these countries. There are also potential risks in Italy. vacancy Risk: With many tenants facing financial challenges in some markets, we are at risk of having higher vacancy rates.

Mitigation strategy Our approach to property management has always involved close scrutiny of our tenants’ business performance. Over the past two 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 default can have on our business.

Key non-controllable risks

Risks Property valuations Risk: 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. Increased yields in many European markets have been adversely impacting on property values. Liquidity Risk: The lack of availability of bank debt in Europe at present constrains our ability to finance new developments and refinance loans which are maturing.

Mitigation strategy 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 and introducing tighter asset management controls. 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 43.7%). Our debt is quite long-term, relatively evenly spread throughout the years with almost 60% of it being repayable after 2015 only. We have mitigated exchange rate risk in Brazil through two actions: the Initial Public Offering (IPO) of Sonae Sierra Brasil and using local debt to finance not only our developments but also some of our operational shopping centres in this country. Sonae Sierra Brasil is a 50/50 joint venture with DDR, and this partnership arrangement also decreases our share of this risk.

Interest Rate Risk: Interest charged on borrowings can constitute a significant cost for our business. Exchange Rate Risk: Brazil is the main market where Sonae Sierra is exposed to exchange rate risk.

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BEST stands for ‘Behaviour with Ethics Sierra Training’.

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Our Business Strategy continued
Risk Management (continued)
As a separate but related exercise, Sonae Sierra continues to review the relative materiality of individual environmental and social impact areas in terms of both the risk and opportunity that they might represent to the business. We have used a standard risk management framework to evaluate environmental and social issues according to their likelihood/frequency of occurrence and the scale of impact should the issue arise13. The findings of our latest assessment conducted in 2011 are summarised in the table below. The main impact areas identified through this assessment form the basis of our CR strategy and are focused on in detail in the Environmental and Social Performance chapters of this report.
l Energy and Climate – Greenhouse gas emissions minimisation; efficient energy

use; sustainable energy supply; climate change adaptation
Risks • Non-compliance with more stringent regulations which have emerged under the European Union’s (EU) Energy Performance of Buildings Directive. • Increased demand for energy and anticipated increase in energy costs could reduce profitability by 2% - 5% maximum in 203014. Opportunities • Avoid costs and reduce environmental impact (€7.3 million costs avoided in 2011 due to energy efficiency measures implemented in shopping centres between 2002 and 2011). • Achieved recognition through awards, rankings and indices. • Increase competitiveness and sustain assets’ value by increasing energy efficiency and/or generating energy on site.

s water – Sustainable water supply; water efficiency and avoiding water pollution

Risks • Fines can be incurred for non-compliance with local wastewater regulations. • Increase in water costs could reduce profitability by between 0.15% and 2% maximum in 2030.

Opportunities • Avoid costs and reduce environmental impact (€0.8 million costs avoided in 2011 due to water efficiency measures implemented in shopping centres between 2003 and 2011). • Contribute to the recognition of Sonae Sierra as a ‘responsible’ company. • Increase competitiveness and sustain assets’ value by increasing water efficiency and/or reusing water on site.

t waste – Increasing recycling and reducing waste sent to landfill

Risks • Non-compliance with waste management regulations, including on construction sites.

Opportunities • Avoid costs and reduce environmental impact (€0.6 million costs saved in 2011 due to the increase in the proportion of waste recycled at shopping centres between 2002 and 2011). • Contribute to the recognition of Sonae Sierra as a ‘responsible’ company. • Be prepared for more stringent regulations which could be introduced in the future.

n Biodiversity and Habitats – Reducing negative impacts on biodiversity and enhancing it where possible

Risks • Non-compliance with EU and local legislation on biodiversity.

Opportunities • Integrate biodiversity on sites (such as green features that provide natural habitats) to demonstrate commitment; this also may result in visitors staying longer. • Biodiversity impacts in the supply chain could lead to commodity price increases, e.g., impact of deforestation on timber prices in China.

13

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In 2009 and in 2010, a single score from 1 to 5 (very low to high) was allocated to each issue based on an assessment of its likelihood/frequency of occurrence, with reference to likelihood/ frequency categories used by standard risk management frameworks. The ‘impact’ of each issue was assessed using a weighted average score of five factors which were based on AccountAbility’s five materiality tests established in ‘The Materiality Report – Aligning Strategy, Performance & Reporting’; Maya Forstater, Simon Zadek et al., AccountAbility, BT Group plc & LRQA, 2006. The CR risk matrix which was developed as a result of this analysis is presented on page 110. According to a pilot study commissioned on two of our assets in Portugal. See page 56 for further details.

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Our Business Strategy continued
Risk Management (continued)
l Suppliers – Environmental and social practices along our supply chain

Risks • Fines/ reputational damage if contractors do not comply with regulations. • Ineffective delivery of suppliers’ services in shopping centres can reduce tenant and visitor satisfaction. • Some supplier businesses may be impacted by commodity price increases.

Opportunities • Reduce costs through greater efficiencies in the supply chain.

n Tenants – Increasing tenant satisfaction; engaging with tenants on CR issues

Risks • Higher void rates leading to lower profitability. • Not meeting tenants’ expectations in the long-term if/when CR issues become more important.

Opportunities • Maintain tenant satisfaction (68% of our tenants say CR is an important factor that contributes to their overall satisfaction). • Maintain high occupancy rates and rental income.

l Communities and Visitors – Impact on local communities; community engagement and visitor satisfaction

Risks • Inability to obtain planning permission if cannot demonstrate added value to local communities. • Lack of buy-in from local community could reduce footfall. • Lack of attentiveness to visitors’ needs in the long-term decreases appeal and competitiveness of the centre.

Opportunities • Maintain good community relations; this is likely to result in higher footfall and sales. • Enhance our brand through projects that demonstrate 'corporate citizenship' (e.g., Volunteering Day, CR campaigns, educational projects). • Contribute to sustaining high footfall and sales by being attentive to changing visitor preferences.

l Employees – Employee satisfaction and retention; equal opportunities and diversity; talent management

Risks • Non-compliance with regulations on gender equality and non-discrimination. • Costs associated with employee turnover.

Opportunities • Increase staff motivation and retention through progressive policies such as offering flexible work arrangements. • Increase competitiveness by retaining talented employees (the estimated value of innovations implemented by Sonae Sierra as a result of employees’ suggestions is €6.9 million).

l Safety and Health – Safety and health of the workforce; construction site and shopping centre safety

Risks • Non-compliance with EU and national S&H regulations. • Fines associated with accidents; delays on construction projects.

Opportunities • Reduce insurance costs. • Future-proof assets (buildings need to comply with ever-tightening S&H regulations).

• Strong stakeholder expectations in relation to this issue, as serious accidents/ fatalities on sites can damage reputation. • Enhance reputation through awards and recognition by stakeholders for proactive attitude.

More detailed information about how we manage our environmental and social risks and maximise value generating opportunities is provided in the Environmental and Social sections of this report.

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Our Business Strategy continued
Corporate Responsibility (CR) Governance and Management System
Sonae Sierra operates six CR Working Groups which between them govern all CR impact areas. These are comprised of employees from across the Company, at different levels of seniority, who take responsibility for Sonae Sierra’s CR performance. One Working Group, Risk Management, is cross-cutting, addressing all impact areas. The Heads of each Working Group are represented on our CR Steering Committee which is chaired by our CEO, Fernando Guedes Oliveira. The CR Steering Committee is responsible for overseeing the organisation’s identification and management of material CR issues and ensuring that performance in these critical areas is monitored and improved. The Committee meets four times a year, although additional meetings are held if considered necessary.

SoNAE SIERRA opERAtES SIx cR woRkINg gRoupS whIch bEtwEEN thEm govERN All cR ImpAct AREAS. thESE ARE compRISEd of EmployEES fRom AcRoSS thE compANy, At dIffERENt lEvElS of SENIoRIty, who tAkE RESpoNSIbIlIty foR SoNAE SIERRA’S cR pERfoRmANcE.

Throughout the business, and across different functions and divisions, individual members of staff have responsibility for implementing specific aspects of CR in their daily activities. Safety, Health and Environment objectives form part of all employees’ performance appraisals (including Executive Committee members’ appraisals) which link through to remuneration and bonus schemes. We also carry out an annual evaluation of each Shopping Centre Manager, which takes into consideration results achieved in terms of tenant satisfaction and the corrective measures implemented in response to Tenant Surveys.

Reporting

Vision and mission

Environmental Policy, Safety and Health Policy etc.

Verification and Validation

Corporate Values and Key Principles

CR Policy

Management Review and Reporting Targets and KPIs

CR Objectives

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Our Business Strategy continued
Corporate Responsibility (CR) Governance and Management System (continued)
We operate a CR Management System in order to monitor our performance and improve it on an on-going basis across all the identified impact areas. The values and principles embodied in our vision are developed into policies and strategies which allow us to translate our commitments into practical actions. We track and evaluate our progress against key performance indicators and targets on an annual basis to ensure that we achieve our long-term objectives.

EXECUTIVE COMMITTEE OF SONAE SIERRA
CORPORATE RESPONSIBILITY STEERING COMMITTEE

Environment Working Group

Employees Working Group

Communities and Visitors Working Group

Safety and Health Working Group

Business Chain Working Group

Energy and Climate

Employees

Communities and Visitors

Safety and Health

Suppliers

Water

Tenants

Waste

All NINE IMPACT AREAS
Biodiversity and Habitats

Risk Management

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Our Business Strategy continued
Safety, Health and Environment Management System
Our Company first developed an Environmental 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. The SHEMS covers all of our business activities (development, investment and property management) and all assets which we own or occupy (shopping centres in development and in operation and our corporate offices), in all the countries where we operate.

Continuous Improvement

Review by the Management

Policy: S&H, Environment

Planning Checking and Corrective Actions • Monitoring and measurement • Conformity evaluation • Incident investigation • Non conformities, Corrective and Preventive Actions • Records control • Internal Audits • Assessment and control of S&H Risks and Environmental Impacts • Legal requirements and others • Objectives and Targets Program

Implementing and Operating • Resources, Roles, Responsibility, Accountability and Authority • Competence, training and awareness • Communication, Participation and Consultation • Documents control • Operational control • Emergency Preparedness and response

During the New Business phase of our projects, Environmental Due Diligence and an Environmental Impact Study are developed 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.

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.

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Our Business Strategy continued
Safety, Health and Environment Management System (continued)
During the design stage, we have introduced a ‘sustainable shopping centre’ concept, which is achieved through the implementation of our Safety, Health and Environment Development Standards (SHEDS). The SHEDS consist of 179 standards based on our experience, best available techniques and certification schemes such as LEED® and BREEAM as well as international safety standards. The SHEDS encompass the environmental standards which were previously known as the ESRD (Environmental Standards for Retail Development) prior to the integration of our Environmental and S&H Management Systems. The issues addressed by the SHEDS include: • Energy • Water • Waste • Transport • Health and well-being • Land and ecology • Fire prevention • Electrical risks • Site safety conditions • Emergency response • Hazardous products • Security

The SHEDS are revised periodically to ensure that they are kept up to date. All new development projects, major expansions and refurbishments15 are required to achieve 100% compliance with the ‘critical’ SHEDS standards, a threshold which would allow them to achieve a BREEAM ‘Good’ certification. Shopping Metrópole, the expansion project which we inaugurated in Brazil in 2011, introduced measures such as minimising the power of lighting in the mall, food-court and car park areas and controlling these areas remotely through a Building Management System (BMS), as well as installing energy efficient conveyors and escalators. Each of our projects under development and all of our operational shopping centres are required to have a specific SHEMS manual in place to ensure that risks and characteristics unique to each site are managed adequately16. As of 31 December 2011, ISO 14001 certifications had been achieved in 90% of our shopping centres in operation and OHSAS 18001 certification had been achieved in 55%. With regards to the development of new shopping centres, since 2004, 23 Sonae Sierra construction sites have achieved ISO 14001 certification and four have achieved OHSAS 18001 certification, the most recent being Le Terrazze in Italy, which became the first shopping centre in the world to achieve joint ISO 14001 and OHSAS 18001 certifications for the SHEMS of its construction works, and Uberlândia Shopping in Brazil, which was the second shopping centre to achieve both certifications. We recognise that creating sustainable buildings does not end once the development has been completed. We monitor the performance of new shopping centres with respect to energy; water; waste and safety, and identify further improvements that need to be made to optimise the buildings’ performance and reduce S&H risks. Across our operational portfolio, we have been measuring, monitoring and targeting energy use and waste management since the year 2000 and water use since 2003. 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. Data collection and monitoring for energy, water and waste is managed through a centralised online database which allows each of our shopping centre management teams to input environmental performance data and generate reports that can be used to compare performance across Sonae Sierra's portfolio. This information is also used to set annual targets to improve performance and increase staff and tenant awareness of all three issues. We 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 technical areas). Furthermore, the annual capital expenditure budget allocated to each of our shopping centres includes investments to improve the centres’ SHE performance. We deliver SHE training to our staff and other key stakeholders on an on-going basis, and in 2011 we delivered a total of 147,037 man hours of training (including meetings) on SHE to staff, suppliers and tenants across our shopping centres, development projects and in our corporate offices.

15

16

Sonae Sierra specifies three types of construction works interventions that may occur: (1) New shopping centres, which are managed by a Development Manager; (2) Expansion or refurbishment of existing centres, which may be managed by a Development Manager or Asset Manager, and (3) Small works, which may be managed by any person belonging to Sierra Developments, Sierra Asset or Sierra Property Management. Since each of these varies considerably in terms of environmental impact, S&H risks and intervention costs, criteria have been set to establish the most appropriate scheme for each case. All new shopping centres and expansions, refurbishments and other works with a construction cost over €10 million or a construction cost of more than 10% of the centre’s Open Market Value (OMV) must apply the standard SHEDS procedure. Expansions, refurbishments and other works with a construction cost of over €2.5 million but under €10 million or with a construction cost of less than 10% of the centre’s OMV should apply a simplified SHEDS procedure. Finally, expansions, refurbishments and other works with a construction cost of less than €2.5 million should instead apply the ‘Small Works’ procedure defined within our SHEMS. As explained before in Campo refurbishment SHEDS were not implemented. With reference to the three types of construction interventions described in the note above, all new shopping centres must apply the construction works SHEMS. All expansions, refurbishments and other works with a construction cost of more than €2.5 million must apply a Safety, Health and Environment Management Plan (SHEMP). Finally, expansions, refurbishments and other works with a construction cost of less than €2.5 million should instead apply the ‘Small Works’ procedure defined within our SHEMS. One exception to these procedures in 2011 was the expansion project of Shopping Campo Limpo: since we have a minority position in this shopping centre, we were not able to implement the entirety of our SHEMS procedures for development on this project. See page 4 for further details.

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Safety, Health and Environment Management System (continued)
In 2011 we also developed a new online management system, called the SHE Portal. This tool, which is expected to be fully operational in 2012, will allow 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. We performed audits across our entire portfolio in order to improve the accuracy and reliability of data reported through the SHEMS, and we delivered training to shopping centre management teams, development teams and staff in corporate offices on how to use the new SHE Portal.
taRGEtS FOR 2012

• Ensure that all projects applying the SHEDS (former ESRD version) achieve at least 45% of the available points for applicable Leadership Standards. • Ensure that all new shopping centre development projects have a valid ISO 14001 and OHSAS 18001 certificate upon opening. • Achieve ISO 14001 certifications for the SHEMS of one further shopping centre in operation and OHSAS 18001 for a further three shopping centres in operation.

Our CR Objectives
We have defined long-term objectives in relation to each of our material CR impact areas. These include our objectives relating to SHE. These are shown in the table below. Unless otherwise stated, our objectives cover all Sonae Sierra owned shopping centres. Energy and Climate • Achieve a 70% 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; also includes corporate offices). • Attain a maximum electricity consumption of 400kWh per m2 of mall and toilet area per year, by 2020. • Develop and implement a long-term Climate Change Adaptation strategy covering investment, development, management and corporate activities, by 2020.

water • Attain a level of water consumption at or below three litres per visit, by 2020. • At least 10% of total water consumed to be reused greywater or harvested rainwater by 2020. • Develop and implement a long-term strategy to ensure a secure water supply, with a particular focus on locations that are vulnerable to water shortages, by 2020. • Ensure that all discharges to local water courses comply with Sonae Sierra’s wastewater quality standards and pollutant limits, by 2020

wE hAvE dEfINEd loNgtERm objEctIvES IN RElAtIoN to EAch of ouR mAtERIAl cR ImpAct AREAS. thESE INcludE ouR objEctIvES RElAtINg to ShE.

CORPORatE OvERvIEw
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Our Business Strategy continued
Our CR Objectives (continued)
waste • Obtain a minimum recycling rate of 55%, by 2020. • Reduce the proportion of waste sent to landfill to a maximum limit of 30%, by 2020. • Obtain a minimum recycling rate of 80% across Sonae Sierra 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.

Biodiversity and Habitats • 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.

Suppliers • Engage with our development suppliers with the aim of encouraging them to adopt more responsible business practices. • Foster loyalty amongst frequently used property management suppliers, seeking to help and encourage them to adopt more responsible business practices themselves. • Increase the proportion of materials used in development, expansions and refurbishment projects that are sustainable materials, aiming for 100% of timber used to be certified sustainable timber17 and for the percentage of materials comprising recycled content to be increased, by 2020. tenants • Deliver a high quality service to tenants and maintain high levels of satisfaction, striving to achieve an average tenant satisfaction level of 4 or above18 in all shopping centres by 2015. • Engage with our tenants with the aim of helping them to improve their safety, health and environment performance.

Communities and visitors • Achieve full implementation of Community Advisory Panels (CAPs) across the whole Sonae Sierra operational and development portfolio, by 2014. • Devise and implement a strategy aimed at involving the largest number of shopping centres’ local communities’ members, in order to improve communities’ well-being, by 2012. • Enhance visitors´ recognition of Sonae Sierra’s shopping centres’ sustainability performance.

17 18

The proportion of timber products used that are from sustainable sources is calculated by value of spend. Tenant satisfaction is rated on a scale of 1 (‘not satisfied’) to 6 (‘very satisfied’).

CORPORatE OvERvIEw
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Our Business Strategy continued
Our CR Objectives (continued)
Employees • Offer our employees more flexible working arrangements with the aim of becoming a recognised leader in this area, by 2020. • Adopt and implement a strategy, with the aim of creating the best possible working conditions for all our staff, by 2015. • Improve workforce ergonomic conditions based on approved standards by the end of 2015. • Encourage our employees to develop their skills and expertise and foster innovation.

Safety and Health • 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 safety and health conscious behaviour among our tenants, suppliers and visitors.

Safety, Health and Environment Management System (SHEMS) • Obtain ISO 14001 and OHSAS 18001 certifications for the SHEMS of all our construction projects and the Sonae Sierra owned assets that we have managed for two or more years, by 2015.

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We have learned that it is only the creation

Our integrated approach to shopping centre development, ownership and management enables us to have an impact on the economy which reaches beyond our own direct financial performance and remuneration to our shareholders.
Our business creates employment, stimulates local markets and contributes to economic growth in the communities where we operate.

unique and exciting shopping
of and leisure venues that can deliver sustainable value

Freccia Rossa, Italy

NorteShopping, Portugal

Through our quest for excellence and our focus on specialisation, we have learned that it is only the creation of unique and exciting shopping and leisure venues that can deliver sustainable value. We sustain economic growth through capital recycling strategies, which allow us to exploit opportunities to develop new shopping centres in markets where we are already present and in new ones. Having established ourselves as a knowledge provider for third parties, we are generating revenue and building our experience in emerging markets where we aim to leverage partnerships with local companies to make our own investments in the future, thus contributing further to economic development in these regions.

Loop5, Germany

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the Economic Context
a challenging set of circumstances
The businesses we are involved in – namely the development, investment and management of shopping centres – inherently face a number of financial, operational and market risks. Last year many of these risks were aggravated by continued repercussions from the global banking crisis in 2008, and more recently by the sovereign debt crisis in Europe, especially since the month of July 2011. Fortunately, the outstanding quality of our portfolio and our international presence demonstrated strong resilience against such factors, but the conditions nevertheless made for a challenging growth environment.

Edmundo Figueiredo Director, Chief Financial Officer

a macro-economic tale of two regions
When reflecting on the challenges we faced in 2011, it is essential to differentiate between Europe and Brazil. In Brazil, despite a reduction in the GDP growth rate compared to 2010, we are still operating in one of the fastest growing emerging economies in the world. And despite the introduction of fiscal measures to control rising inflation levels, we do not yet see any significant curb on consumer purchasing patterns, so the retail industry continues to show very strong rates of growth. Our own performance as a business echoes this trend. Following the historic milestone of becoming a publicly listed company as a result of the IPO in February 2011, Sonae Sierra Brasil presented the second highest EBITDA figures in the listed sector, and the highest Funds from Operations margin of all our listed peers in the industry.

“wIth dIREct REfERENcE to ouR pRofIt ANd loSS AccouNtS, It IS ESpEcIAlly plEASINg to NotE thAt wE SuccEEdEd IN gRowINg ouR dIREct RESultS by 6% IN compARISoN wIth 2010. thIS REflEctS two kEy StRENgthS to ouR mANAgEmENt StRAtEgy, NAmEly ouR StRoNg opERAtIoNAl pERfoRmANcE ANd ouR RIgoRouS AppRoAch to coSt coNtRol.”

In Europe on the other hand, and particularly in Southern Europe, many of our key markets have been significantly affected by the austerity measures imposed as a result of the global financial crisis. Scarcity of debt remained a fundamental constraint to our development pipeline, much of which continues to be on hold for the time being. In Portugal and Spain, which together represent 58% of the Open Market Value (OMV) of our European portfolio, Government austerity measures introduced during the year worsened consumer confidence, in turn affecting retail sales, and increasing the probability of retail tenants defaulting on their rents. Having said this, even within Europe, our business benefits from geographical spread since we concentrated our growth in those markets that were not subject to strict austerity measures for at least part of 2011 (e.g. Italy and Germany), enabling us to compensate for those that were. Unsurprisingly, events in the real estate markets followed closely behind such macro-economic trends. So during 2011, our Net Asset Value (NAV) in Brazil increased on a comparable basis, and shopping centre yields suffered little fluctuation during the year. Unfortunately, yields suffered an increase in Portugal and Greece in line with these countries’ overall credit ratings and market perceptions, but fortunately and we are beginning to see some yield contraction taking place in Spain. As a counter-measure to mitigate the adverse effects of such yield shifts on asset values, we have focused our attention on operational efficiency and introduced even tighter asset management controls. Our aim is to deliver the same levels of service quality at lower costs wherever feasible, thereby contributing to overall asset performance.

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The Economic Context continued
Enhancing profit margins during times of austerity
With direct reference to our profit and loss accounts, it is especially pleasing to note that Sonae Sierra succeeded in growing our direct results by 6% in comparison with 2010. This reflects two key strengths to our management strategy, namely our strong operational performance and our rigorous approach to cost control. In fact, we succeeded in decreasing our direct corporate costs by 4% over the year. This was achieved by a continued focus on reducing variable costs (e.g. travel, IT, consultancy budgets, etc.) and a communication campaign targeted at staff emphasising the need for cost reduction measures. We have also implemented a series of rationalisation measures such as transferring staff from one business or geography to another, thereby retaining key skills within the firm and reallocating resources to growth areas where they are needed.

Extracting value from capital recycling
The prudent attitude employed by banks since 2008 changed little in the past 12 months. Risk continues to be highly priced so commercially favourable loan terms remain hard to secure. As such, at Sonae Sierra we continue to employ a capital-light approach and to focus on opportunities to recycle capital within our own business portfolio. In this context, the IPO of Sonae Sierra Brasil launched in February 2011 was a major highlight for our business. We successfully sold 30.4% of our business to retail investors, and generated R$465 million. This sum will enable us to satisfy the financing needs of our new development pipeline in Brazil over the next three years, including three developments that are currently underway. Indeed, we are now actively looking for new development opportunities in underserved Brazilian cities, which have the potential to accommodate further retail expansion. In Europe, our response to capital constraints has been more cautious, and we have put a number of our development projects on hold for the time being. Nonetheless, we commenced the development of Solingen in Germany and the construction of Le Terrazze in Italy continued apace, with opening scheduled for March 2012. We succeeded in selling two of our operational shopping centres in Spain during 2011, despite little investor appetite for major acquisitions, and we also refinanced a significant asset in Portugal at favourable rates. These steps will meet the great majority of our financing needs for 2012, so they place us in a strong position despite unfavourable market conditions.

Outlook for the future
Despite the successes we have achieved in 2011, we are under no illusion that 2012 will be any easier for our business. We will continue to face very challenging economic conditions, particularly as long as the credit situation in the Eurozone remains unclear, and the prospect of individual countries defaulting on their debt remains a possibility. Our strategy for the future is, therefore, to continue hedging our risk exposure to maximum effect:

• We will maintain our loan to value ratio at sensible rates (below 45%), also spreading our loan repayments over long timeperiods where feasible. • We will continue to focus our growth in new and emerging markets, with a view to re-weighting our portfolio towards rapidly growing economies. • We will boost our role as Knowledge Provider, increasing the sale of services to third parties. • Finally, we will maintain our unique shopping centre specialism, sharpening our skills to further differentiate us from other property developers. We will continue to foster a culture of innovation and to invest in talent so as to achieve the very best from our people who represent a very significant asset.

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Operational Performance
Growth in Spite of Capital Constraints
The shopping centre industry is a capital intensive one. To fund and deliver a healthy development pipeline, we are reliant on access to capital and debt structured at sensible commercial rates. Unfortunately, both these factors continued to be adversely affected in 2011 in many of the markets where we operate, partly owing to a re-evaluation of risk within the banking sector at large. The sovereign debt crisis and recent financial instability in Europe inevitably constrained the scale of our development pipeline during 2011, and resulted in some projects being put on hold. Despite such constraints, we had five shopping centres under construction during 2011, representing a total investment of about €522 million.

new retail schemes in Italy and Germany
We are on track to complete the final stages of development of Le Terrazze, our major new retail scheme in Italy, which is close to La Spezia’s city centre. This €125 million investment will deliver 38,600m2 of GLA with over 100 shops, including a hypermarket, a family entertainment centre, a fitness club and 2,000 parking spaces. We expect Le Terrazze to open with 100% of its GLA is already let, and anticipate that the shopping centre’s inauguration will create 700 new employment opportunities. Due to open in March 2012, Le Terrazze has been the first shopping centre in the world to simultaneously secure both ISO 14001 and OHSAS 18001 certification for its integrated Safety, Health and Environment Management System (SHEMS) during the construction phase. To date the project has also managed to recycle over 99% of the all waste generated on the site. During the second quarter of 2011 we announced the construction of a new shopping centre in Solingen, Germany, as a 50/50 joint venture with MAB Development, representing an investment of approximately €120 million. Solingen is a project with 30,000m2 of GLA in a catchment area of around 270,000 inhabitants. The demolition works have started and leasing is progressing with the large shops and tenants. The project is due to open in the fourth quarter of 2013. We believe in favourable market conditions in both Germany and Italy, so we will continue to actively explore opportunities for further growth in these markets.

a healthy pipeline in Brazil
During the third quarter of 2011, we started the construction of Passeio das Águas Shopping, in the city of Goiânia, the Company’s 13th asset in Brazil. Scheduled to be inaugurated in 2013, this new centre represents an investment of around €167 million, creating the largest and most modern shopping centre in the region. Passeio das Águas Shopping will offer 282 stores within 78,100m2 of GLA and the catchment area of the scheme will have a direct influence on a population of 1.6 million people in Goiânia and surrounding areas. After its inauguration the shopping centre is expected to create employment for over 6,300 people. We entered the final stage of construction of Uberlândia Shopping, which is due to open in the first quarter of 2012. Located in the Minas Gerais region, Uberlândia Shopping has 89% of its GLA already let, a testament to the quality and innovation of this project. Two of the major anchors, Walmart and Leroy Merlin, have already opened. The centre will offer shopping, culture and entertainment within 45,300m2 of GLA, encompassing 166 shop units; six large stores; 17 restaurants; the Walmart hypermarket and five Cinemark cinemas. We also proceeded with the development of Boulevard Londrina Shopping, a joint venture between Sonae Sierra Brasil and Marco Zero Group which is scheduled to be inaugurated during the second half of 2012. Boulevard Londrina Shopping will offer 47,800m2 of GLA, 70% of which has already been let to wellknown brands and local retailers. The centre will introduce some new brands to the Londrina region, including Cinemark cinemas, Walmart hypermarket, Magic Games, Memove and others.

ana Guedes Oliveira Director, Developments

“duRINg thE SEcoNd QuARtER of 2011 wE ANNouNcEd thE coNStRuctIoN of A NEw ShoppINg cENtRE IN SolINgEN, gERmANy, AS A 50/50 joINt vENtuRE wIth mAb dEvElopmENt, REpRESENtINg AN INvEStmENt of AppRoxImAtEly €120 mIllIoN. SolINgEN IS A pRojEct wIth 30,000m2 of glA IN A cAtchmENt AREA of ARouNd 270,000 INhAbItANtS.”

ECONOMIC PERFORMANCE
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Operational Performance continued
Upgrading the quality of existing assets
During 2011, we continued to strategically improve our portfolio through refurbishment and expansion works to further upgrade the quality of service provision within existing operational assets wherever possible. • We completed the first phase of the expansion and refurbishment of Shopping Metrópole, a 31 year old shopping centre located in São Bernardo do Campo, São Paulo (Brazil), representing a net investment of R$56.8 million (€24.5 million). As a result, Shopping Metrópole boasts an additional 8,700m2 of GLA, 31 new stores, new façades and a refurbishment of the existing areas (including floors, ceilings, lighting, furniture, etc.) with a more modern and colourful design. A new nursery room, escalators and ambulatory care facilities were also added. 506 new jobs were created as a result of the project. • We completed the expansion of Shopping Campo Limpo, also in Brazil, representing a net investment of R$9.7 million (€4.2 million). The expansion added 18 new shops and around 23,500m2 of GLA. • In Portugal, we proceeded with the refurbishment of C.C. Continente de Portimão, which was acquired by Sonae Sierra in 2007. We also completed the refurbishment of the food court at CascaiShopping, and refurbished the exterior areas at Centro Colombo. • In Germany, we completed the first floor refurbishment at Münster Arkarden, including the reorganisation of retail units and the relocation and extension of toilet facilities. As a result, footfall flows to the first floor were significantly improved and for the first time since opening the centre is fully let. • Further expansion works are being prepared at CascaiShopping, along with plans for the expansions of AlgarveShopping and NorteShopping in Portugal and Luz del Tajo and Dos Mares in Spain. During the course of the year we succeeded in obtaining approval for a formal change in the use of particular zones within the Plaza Mayor and Parque Principado shopping centres in Spain, which will allow for important refurbishment work to be undertaken at these centres in the near future. We are also planning to refurbish the leisure area at Centro Colombo in Portugal. We intend to reinforce and further increase this area of our business in future, and have ambitious plans to double such revenues by 2015, thereby further driving the international growth of the Company. This enables us to enter new emerging markets as a service provider in a capital light mode (before committing to direct investment) and learn first-hand about the market characteristics and key risks or opportunities they present. In 2012 we intend to add asset management to the list of services that we already provide to third parties. We believe that our accumulated experience and know-how in developing, leasing and managing shopping centres will be of significant value to developers and investors in the retail real estate business. Key highlights over the past 12 months include: • Four new property management agreements in existing markets where we are already well established: Le Isole in Italy; Bikini Berlin in Germany; Plaza Éboli and El Rosal in Spain (all for third parties). • Five new leasing contracts: Carcaixent (Spain); Shopping Park (Italy); Sun Plaza; Vitantis Mall and Magnolia (all in Romania). • A brand new joint venture agreement with Cévital Group to provide development, property management and leasing services for shopping centres in Algeria – a new market for Sonae Sierra. • Entry into Morocco in March 2011, having won a development services mandate for Marina Shopping in Casablanca. • A contract to provide development services for Vrbani Shopping Centre in Croatia, signed in September 2011.
Portfolio under management
GLA (000 m2) No. of contracts
2011 2010 2009 2008 2007 2006 2,234 / 8,495 2,220 / 8,521 2,284 / 8,924 2,163 / 8,455 2,183 / 8,162 2,001 / 7,293 2,455 / 7,189

Delivering services to third parties
Providing services to third parties is a key part of Sonae Sierra’s strategy to grow new income streams and increase know-how and experience in new and emerging markets. In 2011, we grew this side of our business substantially – signing ten new property management and/or leasing contracts and two new development contracts with clients who recognise our unique specialism in the development and management of shopping centres.

2005

ECONOMIC PERFORMANCE
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Operational Performance continued
Prime retail assets maintain their income potential
Overall, our property management business coped remarkably well in 2011, maintaining strong performance in both tenant sales and rental income, despite falling consumer confidence in many markets and reduced purchasing spend. But to get a full view of our performance, it is important to consider conditions in Europe very separately from those in Brazil. In Europe, the austerity measures implemented by governments in an attempt to contain the Eurozone debt crisis have impacted on consumer spending. Sales declined in all European markets we operate in, particularly in the last quarter of 2011, with the exception of Germany and Italy. Nevertheless, even in some of our worst hit markets such as Portugal and Spain, the decrease in tenant sales in our centres has been slower than the decline rate of wider industry benchmarks such as the Eurostart Non Food Consumer Retail Index (excluding fuel). So as a result of the quality of our assets and the attentiveness of our management activities, we have successfully maintained high levels of occupancy throughout our centres in Europe. This has undoubtedly buffered the potential impact that tenant difficulties could have had on our rents, and these have remained relatively stable on a like-for-like basis over the 12 month period to December 2011. In Brazil on the other hand, we have enjoyed substantial growth in both sales and rents on a like-for-like basis: sales grew by 12% in comparison with 2010 and rents were up by over 15% (comparing values in Reais). These results are influenced by a very dynamic retail environment and the sustained increase in the average net income of the population which has a growing middle class segment. Demand for retail space is on the rise in this vibrant market, and occupancy rates have reached an all-time high in the country. The North and Northeast regions are presenting some of the highest growth rates, and consequently the performance of Manauara Shopping – located in Manaus – has surpassed our expectations. Moreover, we have maintained a high level of satisfaction among our tenants which has helped us to secure uptake for space in our new projects under construction. All in all, the results presented by Sonae Sierra Brasil have further improved our financial position globally, and have enabled us to focus on further expansion plans for this market that still carries very significant potential.

Joao Correia de Sampaio Director, Property Management and Leasing

“AS A RESULT OF THE QUALITY OF OUR ASSETS AND THE ATTENTIVENESS OF OUR MANAGEMENT ACTIVITIES, WE HAVE SUCCESSFULLY MAINTAINED HIGH LEVELS OF OCCUPANCY THROUGHOUT OUR CENTRES IN EUROPE. THIS HAS UNDOUBTEDLY BUFFERED THE POTENTIAL IMPACT THAT TENANT DIFFICULTIES COULD HAVE HAD ON OUR RENTS, AND THESE HAVE REMAINED RELATIVELY STABLE ON A LIKE-FOR-LIKE BASIS OVER THE 12 MONTH PERIOD TO DECEMBER 2011.”

ECONOMIC PERFORMANCE
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Operational Performance continued
Prime retail assets maintain their income potential (continued)
Rents Fixed Rents 2011 2010 Variable Rents 2011 2010 Total Rents 2011 2010 % 11/10 Rents total like-for-like

Portugal Spain Italy Germany Greece Romania Europe Brazil (€) Brazil (R$) Total Sierra
Rents in € million

187.7 62.7 24.5 44.0 1.5 1.6 321.9 92.3 214.2 414.2

187.7 68.6 23.6 41.4 15.7 2.0 339.0 80.2 186.6 419.2

4.3 2.2 1.0 2.1 0.1 0.0 9.8 9.9 23.0 19.7

6.8 2.4 1.3 1.9 0.7 0.0 13.1 8.2 19.2 21.3

191.9 64.9 25.5 46.2 1.6 1.6 331.7 102.1 237.2 433.9

194.5 71.0 24.9 43.3 16.4 2.0 352.1 88.4 205.8 440.5

-1.3% -8.6% 2.4% 6.6% -90.0% -21.0% -5.8% 15.5% 15.3% -1.5%

-2.0% 2.2% 4.2% 10.9% -24.3% -21.8% 0.7% 15.3% 15.1% 3.8%

Management solutions to enhance tenant performance
Our approach to property management has always involved a close scrutiny of our tenants’ businesses so as to develop a deep understanding of their needs and strategic plans. In the challenging context of recent events in Europe, this has enabled us to remain well informed of their businesses’ exposure to key market risks as they unfold. Our proactive management style leads us to monitor our tenants’ approach and results in terms of sales strategy, marketing campaigns, customer service and competitor landscape, all of which has enabled us to advise and support them in their efforts to remain in business. It is in our best interests to retain tenants in our centres, thereby maintaining high occupancy rates. So in the past 12 months, we have sought to assist them by implementing operational cost efficiencies in a mission to drive down service charges even further. Notable successes in 2011 included the rationalisation of supplier contracts across different centres and the continued scrutiny on non-essential costs, which resulted in us cutting some of these out altogether.

Jose Baeta Tomas Director, Chief Executive Officer, Sonae Sierra Brasil

“IN BRAZIL, WE HAVE ENJOYED SUBSTANTIAL GROWTH IN BOTH SALES AND RENTS ON A LIKE-FOR-LIKE BASIS: SALES GREW BY 12% IN COMPARISON WITH 2010 AND RENTS WERE UP BY OVER 15% (COMPARING VALUES IN REAIS). THESE RESULTS ARE INFLUENCED BY A VERY DYNAMIC RETAIL ENVIRONMENT AND THE SUSTAINED INCREASE IN THE AVERAGE NET INCOME OF THE POPULATION WHICH HAS A GROWING MIDDLE CLASS SEGMENT.”

ECOnOMIC PERFORManCE
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Operational Performance continued
Prime retail assets maintain their income potential (continued)
average occupancy index (% by GLa) 2011 2010

Portugal Spain Italy Germany Greece Romania Europe Brazil Sierra

98% 95% 94% 99% 73% 81% 96% 99% 97%

98% 93% 95% 98% 93% 82% 96% 98% 96%

Through working in close partnership with our joint venture partners and tenants, we seek to improve the value proposition for the visitors of our centres and differentiate these further from the competition. As a result, Sonae Sierra’s shopping centres have shown far greater resilience to retail market declines due to our unique value proposition. Our centres are managed by specialist professionals who implement innovative solutions such as improving the tenant mix, prioritising customer service and creating sound marketing campaigns whilst taking a long-term sustainable approach. Our research suggests that some of the most significant trends amongst consumers worldwide include a move to Go Digital, Go Green and Go Healthy. As a result we are adopting a range of different strategies to respond to these proactively. These range from simple online sales activation programs and loyalty clubs, to the introduction of new eco-brands in our tenant mix and, particularly in Europe, the reinforcement of services in the customer offer such as gyms, sports facilities and health services.
Sales % 11/10 total like-for-like -8.9% -2.7% 9.9% 1.2% -8.6% 68.0% -4.9% 12.2% 12.0% -0.2% -9.7% -2.8% 1.1% 1.1% -8.7% -1.0% -6.0% 12.2% 12.0% -1.0% Portugal Spain Italy Germany Greece Romania Europe Brazil total Sierra
Visits in million

visits % 11/10 total like-for-like -4.8% -2.5% 17.4% 2.7% -78.6% 72.9% -3.3% 1.6% -2.1% -5.3% -2.5% 0.5% 2.6% 2.2% 12.7% -3.2% 1.6% -2.1%

2011 Portugal Spain Italy Germany Greece Romania Europe Brazil (€) Brazil (R$) total Sierra
Sales in € million

2010 2,383.5 863.0 281.7 495.3 16.2 10.0 4,049.7 1,523.8 3,545.3 5,573.5

2011 184.9 73.9 22.1 38.1 1.6 4.8 325.5 102.5 428.0

2010 194.3 75.8 18.8 37.1 7.6 2.8 336.4 100.9 437.3

2,170.9 839.6 309.6 501.0 14.8 16.8 3,852.7 1,709.3 3,969.4 5,562.0

ECONOMIC PERFORMANCE
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Operational Performance continued
Developing sustainable buildings
We believe sustainable real estate will deliver above average returns and outperform non-sustainable real estate over the medium to long term. In fact, investors are increasingly aware of the importance that sustainability features represent when making investment decisions. However, 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 properties lacking such features because they are at greater risk of obsolescence. In this context, we integrate specific investment initiatives into each shopping centre’s Investment Plan to ensure that we maintain our reputation as sustainability leaders within our industry. In 2011, we maintained the electricity efficiency of our owned portfolio and improved our performance on a like-for-like basis against 2010. Waste management has also continued to improve over time with 53% of waste now being recycled across our global portfolio. These initiatives have enabled us to pass on further cost savings to tenants through reductions in service charge costs, thereby increasing the attractiveness of our centres compared with others. By implementing the rigorous safety standards required by our Safety, Health and Environmental Management System (SHEMS), we have also reduced the risk of accidents in Sonae Sierra shopping centres. We continue to believe that our sustainable approach significantly adds value to our customer proposition, in the light of growing consumer interest in more ‘responsible’ consumption (e.g., ecofriendly; ethical; healthy products and services) in all of the countries where Sonae Sierra operates. Indeed, through our customer research, we have obtained statistical evidence that, in the European geographies where we are present, up to 87% of Sonae Sierra’s shopping centres’ visitors are interested in, and taking action on, social and environmental issues.
Open Market Value of Centres in Operation
Total Value Sonae Sierra Control
2011

OMV in € million
6,320 3,328

2010

6,481 3,504

2009

6,340 3,595

2008

6,166 3,598

2007

6,147 3,786

2006

4,741 2,745

2005

4,096 2,498

Geographic split of the Open Market Value

21% 0% 1% 13% 44%

Portugal Spain Italy Germany Greece Romania
14%

6%

Brazil

Investment Market Fundamentals
During 2011, yields increased in many of our key markets, most notably in Portugal and Greece. Fortunately this was not the case in all markets; for instance towards the end of 2011, yields in prime shopping centres in Germany reached a five-year low caused by very high investment demand and limited supply of stock. Yields in Italy also remained virtually flat in 2011. In Spain, yield adjustments have been less homogeneous; prime properties actually saw some compression, whilst secondary properties and those facing more competition have witnessed yields moving out. However, given that the Spanish market had adjusted more quickly in 2008-2009, the changes in 2011 have been lower in magnitude than other regions. All in all, increased yields have adversely impacted on total Open Market Value (OMV) of our shopping centres and the indirect side of our profit and loss account.

As a counter-measure to try to minimise the negative effect of yield expansions, we have increased the efficiency of the centres we manage – and we have implemented measures that allowed us to deliver good quality services with lower costs. This has enabled Sonae Sierra to achieve performance gains that have minimised expansion of yields, especially in Portugal. In Brazil, on the other hand, property values continued to rise in 2011, mostly fueled by the operational performance of our centres. At least for the moment, no significant compression of yields has occurred which translates into a very conservative approach to future value in spite of a very busy Merger & Acquisition (M&A) market.

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Operational Performance continued
Successful capital recycling despite limited transactions in Eurozone
Throughout 2011 the lack of financing and erosion in investor confidence across the Eurozone created illiquidity in the capital markets, leading to reduced transaction activity. This prevented our investments business from completing its ambitious programme of capital recycling initiatives – namely the sale of interests in certain properties in Europe. Until finance becomes readily available, and at reasonable prices, we must continue to find innovative ways to raise capital and to rationalise costs and capital expenditure in operational shopping centres, so as to protect our cashflow. Nevertheless, in 2011 we did successfully sell our interests in Plaza Éboli and El Rosal in Spain to Doughty Hanson & Co Real Estate for €120 million. These sales released substantial resources for new business development in other geographies and allowed us to leverage the services component of the Company since both centres will continue to be managed by Sonae Sierra. We also managed to successfully re-finance AlgarveShopping in Portugal in November on a long-term mortgage-backed nonrecourse loan – a significant achievement in the current economic climate and one which puts us in good stead for 2012. We continue to proceed with our capital recycling strategy; the prospective sales of Dos Mares in Spain and Airone in Italy are progressing as planned and we are confident that we will reach a successful close of both during 2012. Outside the Eurozone but still within Europe, Romania seems to provide the best prospects for growth, and elsewhere, Brazil (where Sonae Sierra has been present for around 12 years), besides other emerging markets in Latin America and the Mediterranean Basin. In Brazil, an asset swap arrangement was made at the end of 2011 with Credit Suisse HG to obtain an additional 30.0% ownership interest in Shopping Plaza Sul in exchange for a minority stake in Shopping Penha and R$ 63.9 million in cash. • Shopping Plaza Sul is located in the south region of the city of São Paulo and has a GLA of 27,145m2. Through this transaction Sonae Sierra Brasil increased its ownership in this asset to 60.0%. The 30.0% ownership interest in Shopping Plaza Sul was valued at R$102.9 million. • Shopping Penha is located in the east region of the city of São Paulo and has a GLA of 29,703m2. Sonae Sierra Brasil has transferred a 17.12% stake in this mall to CSHG Brasil Shopping FII. With this transaction, Sonae Sierra Brasil will reduce its ownership stake in Shopping Penha from 73.18% to 56.06%, nevertheless maintaining the controlling ownership stake of this centre. This transaction reinforces Sonae Sierra Brasil’s strategy to pursue opportunistic M&A activities, adding the controlling ownership of a high-quality asset located in the city of São Paulo to the portfolio while maintaining the controlling ownership stake in another asset. Both shopping centres continue to be managed by Sonae Sierra Brasil.

a healthy level of fund activity
In addition to the direct ownership of some of our shopping centres, we co-own many others through innovative investment funds launched in partnership with international investors. In line with the Company’s strategy, Sierra Investments is working with its co-investors in order to determine the best path to continue with the investment in the Sierra Fund and guarantee the continued revenues from management activities. In 2011, the Sierra Fund acquired a further 25% ownership of Plaza Mayor Shopping (previously held by minority partners), becoming the sole owner of the asset. The current targets for investment in Europe are Germany and Italy, where growth prospects for the shopping centre industry are likely to be more robust than in other Eurozone countries where we operate. Following the success of the Sierra Fund and the Sierra Portugal Fund, we are planning to launch a third fund in 2012, the Sierra Retail Fund III, focused on German and Northern Italian assets. The marketing materials for this new Fund have been shared with a number of prospective investors, with the assistance of a placement agent. In parallel, the structuring documents are under preparation. Preliminary feedback from prospective investors indicates that investment decisions will be made through the course of the first half of 2012.

Pedro Caupers Director, Investment and Asset Management

“uNtIl fINANcE bEcomES REAdIly AvAIlAblE, ANd At REASoNAblE pRIcES, wE muSt coNtINuE to fINd INNovAtIvE wAyS to RAISE cApItAl ANd to RAtIoNAlISE coStS ANd cApItAl ExpENdItuRE IN opERAtIoNAl ShoppINg cENtRES, So AS to pRotEct ouR cAShflow.”

ECOnOMIC PERFORManCE
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Consolidated accounts
The following Financial Statements consolidate all the companies by the proportional method.

net asset value
The Company measures its performance, in the first instance, on the basis of changes in Net Asset Value (NAV) plus dividends distributed. The Company calculates its NAV according to the guidelines published in 2007 by INREV (European Association for Investors in Non-listed Real Estate Vehicles), an association of which the Company is a member. On the basis of this methodology, the NAV of Sonae Sierra, as of 31 December 2011, was €1,173 million compared with €1,251 million on 31 December 2010. The NAV per share of the properties attributed to the Company is €36.07 against €38.47 recorded on 31 December 2010.
net asset value (nav) amounts in €000 31 Dec 11 31 Dec 10

Sonae Sierra Consolidated accounts
Sonae Sierra’s direct net profit reached €61.1 million which compares with €57.5 million in 2010, an increase of 6%. Although the total direct income from investments decreased by 8%, from €227 million to €209 million, this reflected the decrease in the portfolio universe due to the sales of Alexa and Mediterranean Cosmos in 2010 as well as the sales of Plaza Éboli and El Rosal and the Brazilian IPO in 2011. There was also a decrease in net financial costs, a consequence of higher interests on bank deposits namely in Brazil and lower financial costs, as our outstanding bank debt is lower, due to the sales mentioned above. Efficiency programmes are maintained with selective costs cutting efforts in all the countries where the Company operates. Losses on Sales of Properties in 2011 mainly included transaction costs on the sales of Plaza Éboli and El Rosal. The Losses on Sales of Properties in 2010 were the result of the sale of a majority interest in Alexa (Germany) to Union Investment, the gain on the sale of LeiriaShopping (Portugal) to the Sierra Portugal Fund (SPF) and the gain on the sale of Mediterranean Cosmos (Greece). The Value Created on Investment Properties is lower than the one obtained in the same period of last year, a consequence of yield expansion especially in Portugal. This was partially compensated for by performance improvements in both the European and Brazilian portfolios. Deferred Taxes are lower than those in 2010 given that in this year they already reflected the negative impact of the new corporate tax rule in Portugal (additional tax of 2.5%). The Total Assets of the Company reached €2,563 million of which €2,058 million corresponds to Investment Properties and €256 million to Properties under Development and Concessions. The decrease in Investment Properties compared with 31 December 2010 is the consequence of the sales of El Rosal and Plaza Éboli, in Spain; the Brazilian IPO; the adverse foreign exchange rate effect of the Brazilian Real and the decrease of the real estate valuations in Europe with exception of Italy and Germany. These reductions were slightly compensated by the opening of the Colombo office Tower Ocidente; by the acquisition of a further 4.5% of interest in Alexa and by the acquisition of a further 25% interest in Plaza Mayor Shopping. Properties under Development are slightly above 31 December 2010 mostly due to the on-going investments in Le Terrazze, Solingen and the three Brazilian projects under development. The Net Worth as at 31 December 2011 is lower than that at 31 December 2010 due to the €23.7 million dividends to be paid to Shareholders; the negative variance in the Translation Reserves – consequence of the depreciation of the Brazilian Real - and the negative variance in the markto-market valuation of hedging instrument. These negative impacts were compensated for by the current year’s net result. Bank Loans are lower when compared with those of last year mainly due to the sales executed in 2011.

NAV as per the financial statements Revaluation to fair value of developments Deferred tax for properties Goodwill related to deferred tax Gross-up of Assets NAV

941,090 10,430 238,686 -36,073 18,765 1,172,899

1,000,431 14,033 249,382 -37,347 24,426 1,250,926

Ratios
The Loan-to-Value (LTV) ratio is 43.7%, favourably comparing with 46.4% in December 2010, a decrease that derives largely from the cashin generated by the Brazilian IPO and, to some extent, from the sales of El Rosal and Plaza Éboli. The lower gearing ratios result primarily from the Brazilian business which presents a negative gearing level. The improvement trend in both gearing indicators is a result of the decrease in net debt (external debt less cash). The Company also measures its exposure to the retail real estate development risk through the Development Ratio, by monitoring the weight of the funds already spent in all its committed and noncommitted developments and those still to be spent in all its committed developments in relation to its total real estate portfolio (including the funds still to be spent in its committed projects). The Development Ratio is slightly below that of December 2010 due to the decrease in Investment Properties (the Brazilian IPO) and also the decrease in the overall committed developments with the inauguration of Colombo office Tower Ocidente.
Ratios 31 Dec 11 31 Dec 10

Loan-to-value Interest cover Development ratio

43.7% 2.82 12.0%

46.4% 2.27 12.1%

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Consolidated accounts continued
Sonae Sierra Consolidated accounts
Consolidated Profit and Loss account (€000)

2011 Direct Income from Investments Direct costs from investments EBItDa Net financial costs Other non-recurrent income/cost Direct profit before taxes Corporate tax Direct net profit Gains realised on sale of investments Impairment & Development funds at risk provision value created on investments Indirect income Deferred tax Indirect net profit net profit 209,287 96,487 112,800 35,799 -3,241 73,760 12,663 61,097 -8,226 -6,977 -33,741 -48,944 2,405 -51,349 9,748

2010

% 11/10

226,881 103,465 123,416 44,101 -6,583 72,732 15,193 57,539 -1,707 -29,425 18,205 -12,927 35,918 -48,845 8,694

-8% -7% -9% -19% 51% 1% -17% 6% -382% 76% -285% -279% -93% -5% 12%

Consolidated Balance Sheet (€000) 31 Dec 2011 31 Dec 2010 Var. (11-10)

Investment properties Properties under development and others Other assets Cash & Equivalents total assets net worth Bank loans Deferred taxes Other liabilities total liabilities net worth and liabilities

2,058,594 255,841 135,300 113,798 2,563,533 941,090 1,107,428 286,956 228,058 1,622,443 2,563,533

2,284,916 223,484 139,709 54,252 2,702,360 1,000,431 1,198,091 304,627 199,212 1,701,929 2,702,360

-226,321 32,356 -4,409 59,546 -138,828 -59,341 -90,662 -17,671 28,847 -79,487 -138,828

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Consolidated accounts continued
Sierra Investments
Sierra Investments contributed negatively with €21.7 million to the Consolidated Net Profit of Sonae Sierra. The direct profits of Sierra Investments are derived from the operation of shopping centres that are part of its portfolio, including those assets that are in the Sierra Fund and in the Sierra Portugal Fund. The direct profits also include the asset management services provided to the properties by Sierra Asset Management. Direct net profit is in line with last year. However, the Shopping Centre Net Operating Margin in 2011 is below that of last year (€7.3 million). This variation is mostly related with the impact of the sales of interests in 2010 (Alexa and Mediterranean Cosmos) and those of 2011 (Plaza Éboli and El Rosal). Asset Management Net Operating Income is below last year’s due to lower valuations of the existing portfolio and to the portfolio reduction. The Financial Result is higher than that achieved in 2010, mainly due to the reduction of bank debt as a consequence of the sales of assets. Indirect profits arise either from the change in value of the investment properties or the realisation of capital gains on the sale of assets and/or shareholding positions. The Indirect Result is €34.5 million below last year due to a higher decrease in the Value Created on Investments Properties, compensated for by a lower amount of deferred taxes. Value Created in Investment Properties in 2011 was heavy penalised by the yield expansion in Portugal which resulted from the economic crisis in Europe and the economic and financial situation of this country in particular. The Deferred Taxes show a decrease compared with the same period of last year, in that the negative impact of the new corporate tax rules imposed by the Portuguese government was already reflected in 2010. Investment Properties decreased its balance by €163 million when compared with 31 Dec 2010. This decrease is explained by the sales of Plaza Éboli and El Rosal and the value decrease of the portfolio in 2011. The opening of Ocidente Tower, the purchases in 4Q11 of 25% of Plaza Mayor Shopping and 4.5% of Alexa partially compensate the otherwise larger reduction of the Investment Properties. Bank Loans are below those at December 2010 mainly due to the sales of Plaza Éboli and El Rosal, deducted by the purchasing of 25% of Plaza Mayor Shopping and 4.5% of Alexa and the loan drawdowns made by the Colombo office Tower Ocidente.

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Consolidated accounts continued
Sierra Investments
Profit and Loss account (€000) 31 Dec 2011 31 Dec 2010 % (11-10)

Retail Net Operating Margin Parking Net Operating Margin Cogeneration Net Operating Margin Shopping Centre net Operating Income Offices Net Operating Income Asset Management Net Operating Income net Operating Income (nOI) Net financial costs Other non-recurrent income/cost Direct profit before taxes Corporate tax Direct net profit Gains realised on sale of investments Value created on investments Indirect income Deferred tax Indirect net profit net Profit

101,550 1,478 508 103,536 0 1,881 105,417 36,331 -5,808 63,279 10,117 53,162 -8,079 -76,302 -84,381 -8,529 -75,852 -22,690

109,103 1,588 544 111,235 73 2,501 113,810 42,616 -6,672 64,522 11,150 53,372 -3,549 -13,637 -17,186 23,339 -40,525 12,847

-7% -7% -7% -7% -100% -25% -7% -15% 13% -2% -9% 0% -128% -460% -391% -137% -87% -277%

Consolidated Balance Sheet (€000) 31 Dec 2011 31 Dec 2010 Var. (11-10)

Investment properties & others Other assets Cash & Equivalents total assets net worth Bank loans Deferred taxes Other liabilities net worth and liabilities

1,747,849 180,502 45,976 1,974,327 644,698 947,275 230,134 152,220 1,974,327

1,910,802 162,321 75,317 2,148,439 713,140 1,062,757 238,206 134,337 2,148,439

-162,952 18,181 -29,341 -174,112 -68,442 -115,482 -8,071 17,883 -174,112

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Consolidated accounts continued
Sierra Developments
Sierra Developments contributed negatively with €17.8 million to the Consolidated Net Profit of Sonae Sierra. The figure presented in Value Created in Projects concerns Le Terrazze and the imparity losses booked in the Greek projects. The Development Services Rendered are slightly lower than those provided during same period of last year mainly due to lower income from Sonae Sierra projects under development. However, higher Services Rendered to Third Parties partially compensated for the total decrease under Development Services Rendered.
Profit and Loss account (€000) 31 Dec 2011 31 Dec 2010 % (11-10)

Project Development Services Rendered Value created in projects Operating Income Operating costs Net Operating Income (NOI) Depreciation and provisions Net financial costs Other non-recurrent income/cost Income tax net Profit

5,932 -5,110 821 23,942 -23,120 4 912 -533 -7,778 -16,791

6,133 -24,503 -18,370 23,203 -41,573 99 2,292 -544 -3,212 -41,296

-3% 79% 104% 3% 44% -96% -60% 2% -142% 59%

Consolidated Balance Sheet (€000) 31 Dec 2011 31 Dec 2010 Var. (11-10)

Properties under development Other assets Cash & Equivalents total assets Net worth Bank loans Shareholder loans Deferred taxes Other liabilities net worth and liabilities

187,888 70,690 7,244 265,822 19,403 40,570 89,955 3,531 112,363 265,822

164,128 77,364 5,585 247,077 -68,465 9,320 175,476 4,063 126,682 247,077

23,760 -6,674 1,659 18,746 87,868 31,249 -85,521 -532 -14,319 18,745

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Consolidated accounts continued
Sierra Management
Sierra Management contributed with €4.4 million to the Consolidated Net Profit of Sonae Sierra. Sierra Management was successful in the implementation of its selective cost cutting efforts, thus maintaining its Net Operating Income in line with the previous year. However, the Income from Management Services decreased by 3% versus the previous year mostly due to reduced rents and letting activity in our European portfolio, stemming from the crisis affecting most of the countries where we operate. Improvements on the financial and tax management sides have allowed a 26% growth of Sierra Management’s Net Profit. The total assets of €63.6 million correspond basically to short term loans to group companies and to rents not yet received.
Profit and Loss account (€000) 31 Dec 2011 31 Dec 2010 % (11-10)

Total Income from Management Services Operating Costs net Operating Income (nOI) Net financial costs Other non-recurrent income/cost Income tax net Profit

32,583 26,654 5,929 -1,009 -307 2,208 4,424

33,510 27,483 6,027 -851 -847 2,521 3,510

-3% -3% -2% -19% 64% -12% 26%

Consolidated Balance Sheet (€000) 31 Dec 2011 31 Dec 2010 Var. (11-10)

Other assets Cash & Equivalents total assets Net worth Other liabilities net worth and liabilities

24,973 38,666 63,639 14,027 49,613 63,639

20,990 34,541 55,532 9,939 45,593 55,532

3,982 4,125 8,107 4,087 4,020 8,107

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Consolidated accounts continued
Sonae Sierra Brasil
Sonae Sierra Brasil contributed with a positive result of €47.4 million to the Consolidated Net Profit of Sonae Sierra. Net Operating Income has decreased by 11% versus last year but this stems from the IPO launched during the first quarter of 2011. In fact, the operational performance was considerably better than in last year, with an increase in total rents (like-for-like) due to superior sales in all centres. Indirect net profit is higher than in the previous year due to an important improvement of operational performance in all properties. The Investment Properties decreased when compared with 31 December 2010, which is explained by the effect of the IPO and the adverse FX variance. Without these effects value corresponding to Investment Properties would have increased. The amount in Bank Loans corresponds to the loans in Manauara Shopping, Uberlândia Shopping, Shopping Metrópole, Boulevard Londrina Shopping and to the corporate revolving credit facility utilisation.
Profit and Loss account (€000) 31 Dec 2011 31 Dec 2010 % (11-10)

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 Direct Profit Value created on investments Deferred tax Indirect net profit net Profit

21,744 3,301 25,045 5,910 7,803 23,152 -3,022 -220 25,953 3,570 22,383 39,630 14,620 25,010 47,393

24,772 3,253 28,026 7,401 9,270 26,157 10 -2,824 23,322 3,548 19,774 25,102 10,481 13,863 33,637

-12% 1% -11% -20% -16% -11% – 92% 11% 1% 13% 58% 39% 80% 41%

Consolidated Balance Sheet (€000) 31 Dec 2011 31 Dec 2010 Var. (11-10)

Properties Other assets Cash & Equivalents total assets Net worth Bank loans Deferred taxes Other liabilities net worth and liabilities

372,776 13,786 54,851 441,413 323,778 45,637 55,935 16,062 441,413

433,772 14,739 14,294 462,804 338,404 41,004 63,561 19,835 462,804

-60,996 -953 40,558 -21,392 -14,626 4,633 -7,626 -3,773 -21,392

ENVIRONMENTAL PERFORMANCE
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Sonae Sierra is a pioneer in environmental management in the shopping centre sector.
As early as 1998 we had developed and approved our ambitious Environmental Policy, defined environmental requirements for inclusion in shopping centres’ design specifications and developed our Environmental Management System (EMS).

We have saved costs by making our operations more

eco-efficient
and begun to futureproof our assets against natural resource shortages

Plaza Mayor, Spain

ArrábidaShopping, Portugal

Our shopping centres were among the first in their countries to pilot environmental practices and technologies and our Company has received numerous international awards for demonstrable improvements in environmental performance. We have a robust system in place to monitor our environmental impacts and measure performance across all the sites where we operate. Improving our environmental performance across all our activities has benefitted our business in several ways. We have saved costs by making our operations more eco-efficient; enhanced our reputation, and begun to future-proof our assets against natural resource shortages. Moreover, we are helping to lead our sector towards a more sustainable way of doing business: in 2011, our property funds were ranked as the most sustainable in Europe and third worldwide by the Global Real Estate Sustainability Benchmark (GRESB).

Manauara Shopping, Brazil

EnvironMEntAl PErforMAncE
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Energy and climate
A strategy to reduce gHg emissions and increase energy efficiency in buildings
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 long-term objective is to achieve a 70% reduction in GHG emissions per m2 of GLA, by 2020, compared to the 2005 level. Increasing the energy efficiency of our activities – and in particular of our buildings – constitutes one of the main strategies to help us to achieve our GHG emissions reduction goal. We aim to attain a maximum average electricity consumption of 400kWh per m2 (mall and toilet area) per year across our shopping centres by 2020. 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, natural ventilation, Combined Heat and Power (CHP) and district heating. We are especially committed to designing buildings that will achieve high energy efficiency ratings under the European Union’s Energy Performance of Buildings Directive.

IncreaSIng the energy effIcIency of our actIvItIeS – and In partIcular of our buIldIngS – conStItuteS one of the maIn StrategIeS to help uS to achIeve our ghg emISSIonS reductIon goal.

Alongside our efforts to manage our shopping centres’ energy use as efficiently as possible during the operations phase (as described on page 25), we investigate opportunities for onsite generation of renewable energy and procurement of green electricity through the grid. Three of our shopping centres are supplied by a certified renewable energy provider with a CO2 emissions factor of zero for electricity, and one of them is also able to fully compensate CO2 emissions from natural gas consumption. We also seek to reduce the energy consumption and GHG emissions that are generated as a consequence of our other direct and indirect activities. These include transport emissions generated by people visiting our shopping centres; by our staff travelling to and from work and for business purposes; emissions produced by tenants occupying our shopping centres and by our contractors on construction sites. During the construction phase, we implement our Safety, Health and Environment Management System (SHEMS) for construction (or the SHE Management Plan for major refurbishments and expansions) which include guidelines for monitoring energy consumption and implementing best practices in energy conservation in order to achieve greater energy efficiency. By giving preference to the reuse of demolition materials and use of materials sourced within a 500km distance, we seek to avoid indirect GHG emissions associated with the transport of building materials to and from our construction sites. During the operations phase, we strive to maximise the accessibility of our centres to those using alternative transport modes. Most of our centres have dedicated spaces for the provision and display of travel information, including public transport timetables, and cycle storage facilities for tenants and visitors. We have also established Green Travel Plans at 13 shopping centres and two corporate offices to analyse the existing transport infrastructure and implement measures to encourage and improve the accessibility to the shopping centre by public transport, bicycle and on foot. It is part of our strategy to advocate more sustainable practices at an industry level and in 2011, we signed The 2° Challenge Communiqué. The Communiqué supports a robust, equitable and effective United Nations agreement on climate change, built on existing foundations. It calls upon governments to undertake a variety of actions, including international collaboration; creating effective market mechanisms; financing the transition to a low-carbon economy; incentivising innovation and encouraging efficiency. It is the fifth statement of its kind which is being issued to governments by leaders of companies from around the world, organised by the Corporate Leaders Network for Climate Action, The Prince of Wales’s Corporate Leaders Group on Climate Change and the University of Cambridge Programme for Sustainability Leadership.
tArgEtS for 2012

• Attain a maximum value of 0.0281 tonnes of GHG emissions per m2 of GLA (GHG Protocol scopes 1 and 2, plus business air travel). • Attain a maximum value of electricity consumption of 509kWh per m2 of mall and toilet area, aggregated across all Sonae Sierra owned shopping centres.

EnvironMEntAl PErforMAncE
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Energy and climate continued
reducing our total carbon footprint
In 2011, we were ranked in first place for the sixth time by the ACGE Corporate Climate Responsibility Sector Index 2011. This index, which is published by Euronatura, included the participation of Portugal’s 82 largest companies and is based on 28 criteria regarding the management of and investment in strategies to combat climate change and reduce greenhouse gas emissions. We reduced our total carbon footprint by 23% compared with 2010. Furthermore, we surpassed our 2011 target by reducing our GHG emissions per m2 of GLA (GHG protocol scopes 1 and 2 and business air travel) by 18% compared to 2010, meaning that overall we have achieved a reduction of 67% since 2005, our baseline year. With these results, we are on track to meet our 70% reduction in GHG emissions per m2 of GLA, by 2020. Our total carbon footprint is composed of:
We reduced our total carbon footprInt by 23% compared WIth 2010. furthermore, We SurpaSSed our 2011 target by reducIng our ghg emISSIonS per m2 of gla (ghg protocol ScopeS 1 and 2 and buSIneSS aIr travel) by 18% compared to 2010, meanIng that overall We have achIeved a reductIon of 67% SInce 2005, our baSelIne year.

21,136 tonnes co2e
our direct (scope 1) emissions, which

30,627 tonnes co2e
our indirect (scope 2) emissions, which

692,541 tonnes co2e
our other significant indirect (scope 3) emissions, which are GHG emissions

correspond to GHG emissions from sources owned or controlled by Sonae Sierra, such as the company car fleet19, air-conditioning equipment, boilers and cogeneration plants.

are GHG emissions that are generated as a result of Sonae Sierra’s activities but are owned or controlled by another organisation, e.g., emissions produced by the electricity and heating and cooling which we purchase from energy companies.

associated with our activities that are also owned or controlled by another entity. The GHG emissions data which Sonae Sierra collects and reports for scope 3 covers emissions generated by: visitors’ travel to and from shopping centres; staff commuting; business air and rail travel; waste produced in our shopping centres and in corporate offices and the treatment of wastewater generated by our shopping centres20.

We measure our carbon footprint in tonnes of CO2 equivalent (tCO2e).
Sonae Sierra’s carbon footprint (tonnes co2e)
Scope 3 emissions
2011 2010 2009 2008

Scope 2 emissions

Scope 1 emissions
692,541 / 30,627 / 21,136 897,223 / 22,422 / 41,116 939,597 / 82,157 / 42,775 871,330 / 85,721 / 44,835

19

20

It was verified that the type of energy consumed by the company car fleet of Athens office is petrol and not diesel as reported in previous years. The São Paulo office started to report the energy consumed by the shopping centres’ company car fleet from April 2011, because it was not possible to quantify this for the first three months of the year due to the lack of reliable data. Sonae Sierra is evaluating the new GHG protocol guidance for scope 3, and the possibility of covering other indirect emissions sources in the future. Currently it is not yet possible to set an implementation plan with specific targets and deadlines, but we aim to do that next year.

ENVIRONMENTAL PERFORMANCE
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Energy and Climate continued
Reducing our total carbon footprint (continued)
Scope 1 GHG emissions by source (tCO2e) 2011 2010 2009

Boilers and natural gas Owned vehicles Combined Heat and Power (CHP) Refrigeration equipment and HFCs leakages Total scope 1

3,005 1,074 16,158 899 21,136

3,493 1,107 32,993 3,523 41,116

3,843 1,129 36,110 1,693 42,775

Scope 2 GHG emissions by source (tCO2e) 2011 2010 2009

Electricity Chilled and hot water consumption Total scope 2 Total scopes 1 and 2

27,772 2,855 30,627 51,763

19,251 3,171 22,422 63,538

79,636 2,521 82,157 124,932

Scope 3 GHG emissions by source (tCO2e) 2011 2010 2009

Business train travel Business air travel Employee commuting Visitors’ travel to and from our shopping centres Wastewater treatment (co-workers) Wastewater treatment (visitors) Waste treatment Total scope 3 Total scopes 1, 2 and 3
Data Qualifying Note:

43 1,690 1,359 664,065 32 9,595 15,756 692,541 744,304

64 1,923 1,150 884,023 33 10,030 – 897,223 960,761

38 2,853 1,159 925,532 33 9,982 – 939,597 1,064,529

Scopes 1 and 2 GHG emissions include all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as seven out of eight main corporate offices. 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. The electricity emission factors (kgCO2e/kWh) were provided by our electricity suppliers in each country, except for Brazil where we used the value provided by the Environment Ministry associated with the national grid (http://www.mct.gov.br/index.php/content/view/321144.html#ancora). The values refer to 2011, except those for Brazil and Germany, since no data was available for 2011 at the time when we calculated the carbon footprint. In 2011, for Greece, there was a reformulation of the car fleet fuel consumption data for 2009 and 2010, because diesel consumption had been reported instead of petrol consumption. For MaiaShopping and NorteShopping in Portugal there was a minor correction in CHP emissions (kg CH4) for 2010. In 2010, an incorrect emission factor was used to convert electricity consumed at GranCasa in Spain, so a minor correction was made for scope 2 emissions in 2011 at this centre. Scope 3 GHG emissions include all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as seven out of eight main corporate offices. The emissions in 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 where Sonae Sierra operates in Europe and in Brazil. For Brazil and Romania, there was no business train travel in 2011. For Germany, business train travel values for 2010 were used because it was not possible to have the records of each train journey made in 2011. In 2011 updates were made on employees’ commuting patterns and visitors’ travel to and from our shopping in accordance with 2011 employee figures and visitor numbers respectively. The emissions factors were updated according to values referenced in: DEFRA, 2011 Guidelines to Defra/DECC's GHG Conversion Factors for Company Reporting, “Annex 6 - Passenger Transport Conversion Tables”. For AlbufeiraShopping in Portugal and Zubiarte in Spain, and for shopping centres in Brazil, it was assumed that visitor patterns remained the same as those analysed in 2007 and an update was made in accordance with 2011 visitor numbers. For wastewater treatment (co-workers and visitors), we applied the same methodology used in previous years, using the 2011 employee figures and visitors numbers. Emissions associated with waste treatment covered the following disposal methods: anaerobic digestion; composting; incineration (with and without energy recovery) and landfill. For anaerobic digestion we used the emission factor published in: Emissions Factor Guide - Version 6.1 - Bilan Carbone - Agence de l'Environnement et de la Maîtrise de l' Energie. June 2010. For incineration and landfill, we used the emission factor published in: Company certified by Carbon Disclosure Project: Ecometrica - 2011 (http://emissionfactors.com/ (for incineration with energy recovery the emission factor is always assumed to be zero). Sonae Sierra also produces waste which is disposed of through recycling, reuse and other treatment/ elimination processes. For these types of disposal methods, we do not yet have a procedure in place to calculate GHG emissions. Corrections were made to the 2010 GHG emissions data related with wastewater treatment.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our scopes 1, 2 and 3 GHG emissions by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

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50

Energy and climate continued
tackling greenhouse gas emissions associated with visitors’ travel
The chart on page 48 shows that Sonae Sierra’s scope 3 emissions are far greater than scopes 1 and 2. With over 396 million visits to our owned shopping centres, in 2011 visitors’ travel accounted for 89% of our total carbon footprint. Whilst we neither control our visitors’ nor our employees’ travel to and from our sites, we can seek to influence it. In previous years we have developed Green Travel Plans for 13 of our shopping centres and two corporate offices, to promote the use of public and environmentally friendly transport. Some of the initiatives implemented as part of our Green Travel Plans have included creating bicycle parking areas; establishing walkways for pedestrians; cooperating with local authorities to create new bus routes or additional bus stops and organising green transport campaigns. In 2011 we analysed the impact of Green Travel Plans at seven shopping centres across Portugal, Spain, Italy and Germany and found that the use of one or more sustainable modes of transport has increased at all but one of these centres. We also introduced battery recharge stations for electric cars at four shopping centres in Portugal (two of our shopping centres in Germany already have this facility in place). In 2011, GHG emissions corresponding to visitors’ travel decreased by 25% due to the overall decrease in the number of visits made to our centres and the minor increase in the proportion of visitors using more sustainable modes of transport to travel to and from our shopping centres, as shown in the chart below.
Number and percentage of visits made by private car; and number and percentage of visits by other modes of transport, to and from our shopping centres
Private car
2011 2010 2009 2008

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation during the full reporting year. Not all of our shopping centres performed Mall Tracking studies (which allow us to identify the number of visits made by private car) in 2011. In these cases, data from previous years’ studies has been used.

Other modes of transport
256 (64%) / 141 (36%) 269 (65%) / 146 (35%) 251 (61%) / 162 (39%) 257 (64%) / 146 (36%)

Further reference:

Historical data from earlier years is available on our corporate website at http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx

reducing greenhouse gas emissions associated with energy consumption
In 2011 we reduced our total scope 1 and scope 2 GHG emissions by 19% in comparison with 2010. Overall, we have reduced these emissions by 61% since 2006. We have more direct control over our scopes 1 and 2 emissions, which are associated with energy consumption in our operational shopping centres; corporate offices and by our company car fleet. The 61% decrease is mainly justified by the selling of Centro Colombo’s cogeneration in late 2010, which was accountable in that year, for 39% of the Scope 1 emissions. 76% of our scope 1 emissions are generated by the two cogeneration plants which we own at NorteShopping and MaiaShopping in Portugal. The remaining emissions are linked to the use of boilers at 19 shopping centres, our company car fleet, and coolant leakage from air-conditioning units. We ensure that all equipment is used and maintained adequately and we repair equipment producing abnormal leakage. We also procure more energy efficient boilers when they are renewed, which has allowed us to reduce our natural gas consumption. In 2011, we analysed the feasibility of procuring zero emissions vehicles for our company car fleet in Portugal as and when vehicles needed to be replaced. After examining different scenarios and evaluating proposals from potential service providers, we decided to purchase two electrical vehicles in 2012 for the fleet as replacements. We hope to maintain and enhance this approach in future years. Although our scope 2 emissions, driven by electricity and hot and cooled water use, increased in 2011 compared to 2010 levels, they still represent a 64% reduction compared to 2008 emissions. This has resulted from our efforts in recent years to change our energy contracts so as to procure electricity from suppliers using a high proportion of renewable sources to produce energy. Energy efficiency improvements across our shopping centres have also influenced the trend.

In 2011 We reduced our total Scope 1 and Scope 2 ghg emISSIonS by 19% In comparISon WIth 2010. overall, We have reduced theSe emISSIonS by 61% SInce 2006.

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Energy and climate continued
Measuring the energy and carbon efficiency of our business activities
Analysing our GHG emissions and our electricity consumption in relation to our portfolio size gives us a more accurate indicator of whether our operations are becoming more energy and carbon efficient. We do this principally using the following two key performance indicators, with respect to which we have set long-term objectives: • GHG emissions of our owned portfolio and corporate offices, as tonnes of CO2e divided by m2 of GLA in shopping centres and by m2 of offices. This indicator includes our scopes 1 and 2 emissions and emissions associated with business air travel (part of scope 3); i.e., the GHG emissions which we are able to control. • Electricity efficiency (excluding tenants) of our owned portfolio, as kWh divided by the mall and toilet area of our shopping centres. This reflects the electricity efficiency of the areas within our buildings which we have direct control over. We have focused on monitoring our electricity efficiency (rather than energy efficiency) as this is easier for us to accurately measure without including tenants’ consumptions and accounts for the largest part of energy use in landlord-controlled areas. We also measure GHG emissions of our owned portfolio and corporate offices divided by m2 of mall and toilet area in shopping centres and m2 of offices.
GHG emissions of our owned portfolio and corporate offices – GHG Protocol scopes 1 and 2, plus business air travel (tCO2e/m2 GLA)
2020 2011 2010 2009 2008 0.025 0.028 0.034 0.067 0.071 2011 2010 2009 2008 0.113 0.137 0.270 0.302

GHG emissions of our owned portfolio and corporate offices – GHG Protocol scopes 1 and 2, plus business air travel (tCO2e/m2 mall and toilet area)

Electricity efficiency (excluding tenants) of our owned portfolio (kWh/m2 mall and toilet area)

2020 2011 2010 2009 2008

400 514 514 527 553

Data Qualifying note: The GHG emissions indicators include all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as Sonae Sierra’s eight main corporate offices. The electricity efficiency indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year. In 2011, C.C. Continente de Portimão in Portugal was undergoing refurbishment works from September to December. During this period, electricity consumption for the refurbishment project was provided by the shopping centre and could not be metered separately. Consequently, electricity consumption values for this shopping centre were estimated for this period, in order to exclude consumptions from the refurbishment works.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our GHG emissions and electricity efficiency by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

The charts above show that we have continued to increase the energy and carbon efficiency of our business. Since 2005, our baseline year, we have reduced GHG emissions per m2 GLA by 67%, meaning that we are on track to meet our 2020 objective. In 2011 alone, we reduced our GHG emissions per m2 GLA by 18% and saved 10.1 million kWh of energy across our shopping centres and offices on a likefor-like basis. In 2011 we reduced GHG emissions associated with business air travel by 12% in comparison with 2010, mainly as a result of the increase in the use of video-conferencing tools and restrictions on staff travel budgets. In terms of electricity efficiency, we consider that there was an effective improvement in this aspect since two of our assets with consumptions lower than the portfolio average (El Rosal and Plaza Éboli in Spain) were sold and were therefore not considered in this year’s data set. Nonetheless, we maintained the 2010 value and on a like-for-like analysis, we improved our performance. All the same, we are conscious of the efforts still needed in this area to achieve our long-term objective. Our centres in Brazil and Germany are the highest electricity consumers, both with an average consumption of 582kWh per m2. Our Italian and Portuguese portfolios are also high consumers, with average consumptions of 567kWh per m2 and 564kWh per m2 respectively. Overall, our Italian and German portfolios demonstrated the biggest improvements of 8.3% and 7.8% respectively. In Germany this was mainly thanks to measures introduced to reduce lighting electricity consumption.

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52

Energy and climate continued
Measuring the energy and carbon efficiency of our business activities (continued)
In Portugal, all shopping centres decreased their consumption apart from AlgarveShopping, which maintained its consumption. However, the introduction of full year data from LeiriaShopping into the data set had a negative effect, as electricity consumption at this shopping centre is 4% higher than the country average. In Portugal we implemented strict internal procedures to control electricity efficiency without jeopardising visitors’ comfort. In Brazil, on the other hand, our shopping centres increased their electricity consumption per m2 by 5.4% (mainly due to the particularly high electricity consumption at Manauara Shopping, where very warm temperatures and high humidity all year round mean that there is high demand for cooling). Whilst River Plaza Mall in Romania registered a 4.8% decrease in its electricity consumption per m2, Pantheon Plaza in Greece increased consumption by 10% due to the installation of heaters to improve visitors comfort. Our Spanish shopping centres are the most efficient in our portfolio, with an average electricity consumption of 293kWh per m2. A further decrease was registered this year as all shopping centres in Spain improved their electricity efficiency. We also monitor the electricity efficiency of our corporate offices and our construction projects, although we have less direct control over the measures which can be implemented to improve energy efficiency on these sites. Unfortunately, electricity consumption per m2 in our corporate offices increased by 8% in 2011 in comparison with 2010. Although in total electricity consumption in offices did in fact decrease, there was also a decrease in the floor size of three of our offices (Athens, Düsseldorf and Madrid) and as a result, electricity efficiency deteriorated. The Athens office replaced its electrical ballasts as part of its energy saving plan, but it is not yet possible to calculate the energy saved as a result of this measure. With respect to construction projects completed in 2011, the Colombo office Tower Ocidente project had a construction electricity indicator of 15.2 kWh/€000 construction cost. This result is higher than that of its twin project, the Colombo office Tower Oriente, as it was necessary to add additional reinforcements during the construction21. The construction electricity indicator for Shopping Metrópole is in line with our expectations for expansion projects.
Construction electricity indicator on completed projects (kWh/€000 construction cost, completed projects)
166 153 146 86 Colombo office Tower Ocidente (2011) Shopping Metrópole expansion (2011) Colombo office Tower Oriente (2010) Centro Colombo expansion (2010) Parque D. Pedro Shopping expansion (2010) 15.2 5.7 8.58 4.36 6.75

Electricity efficiency in corporate offices (kWh/m2)
2011 2010 2009 2008

Data Qualifying note: This indicator includes seven out of eight of our main corporate offices. Data from the Maia office was not included because the space in this office is shared with employees from other Sonae companies, therefore, no individual consumptions are available.

Data Qualifying note: This indicator includes all major development projects completed during the reporting year with the exception of the Shopping Campo Limpo expansion in Brazil which is explained on page 4. The values reported are indicative of the quantity of electricity consumed during construction on these projects. The indicator is calculated for each project by dividing the total electricity consumed on 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 works. The total construction cost of the Shopping Metrópole expansion was based on the best predicted value.

21

The development of office buildings is not part of our core business and we did not report on the performance of the Colombo office Tower Oriente project in 2009. However, we made the decision in 2011 to report on the performance of the Colombo office Tower Ocidente.

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Energy and Climate continued
Reaping the rewards of greater energy efficiency in shopping centres
Since 2002, we have reduced our shopping centres’ electricity consumption per m2 of mall and toilet area by 30%. The electricity efficiency measures which we have introduced since then enabled us to avoid the consumption of an additional 100,000,000KWh of electricity in 2011, which is equivalent to over €7.3 million in energy costs. Energy prices have significantly increased over the past three years – by 6% in Spain, 5% in Portugal and 10% in Germany for instance22 – so improving the energy efficiency of our operations continues to be an important strategy which can help us to reduce costs; an imperative in the current challenging economic situation. We have performed energy audits across all of the shopping centres which we have owned for two or more years and in 2011 we implemented the recommendations of the energy audits carried out at 10 shopping centres as well as a range of other energy conservation actions, corresponding to a total investment of €457,128. These included:
Energy conservation action kWh saving kgCO2 avoided

Since 2002, we have reduced our Shopping centreS’ electricity conSumption per m2 of mall and toilet area by 30%. the electricity efficiency meaSureS which we have introduced Since then enabled uS to avoid the conSumption of an additional 100,000,000Kwh of electricity in 2011, which iS equivalent to over €7.3 million in energy coStS.

Installing LED lamps in different areas in four shopping centres in Spain (GranCasa, Luz del Tajo, Parque Principado and Plaza Mayor). Purchasing new, more efficient HVAC equipment for Valle Real in Spain. Shutting down the HVAC system during the winter months at Gli Orsi in Italy. Replacing the chiller at Airone and the chiller and cooling tower at Valecenter in Italy with more efficient ones. Substituting lamps in WCs and/or office areas at Manauara Shopping, Pátio Brasil Shopping, Parque D. Pedro Shopping, Shopping Metrópole and Shopping Penha (all in Brazil) with more efficient ones. Substituting the air-conditioning equipment at Pátio Brasil Shopping

118,451 14,196 514,800 98,154 35,526 39,420

23,408 1,420 97,812 18,649 1,019 1,131

Click here for a full list of energy conservation actions implemented in our shopping centres, corporate offices and on completed development projects in 2011.

22

Source: Eurostat (http://epp.eurostat.ec.europa.eu/statistics_explained/images/8/8f/Energy_prices_2011s1.xls).

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Energy and climate continued
reaping the rewards of greater energy efficiency in shopping centres (continued)
luz DEl tAjo SAvES 7,000kWH of ElEctricity WitH A ligHting Solution for liftS
Lighting is responsible for a significant amount of electricity consumption in our shopping centres. A report from the International Energy Agency highlights that switching to efficient lighting could cut the world’s electricity bill by 10% and save 16,000 megatonnes of CO2 in the years up to 2030. Improving electricity efficiency is one of Sonae Sierra’s public commitments, and with this in mind Luz Del Tajo in Spain recently introduced an innovative measure to avoid wasteful consumption. The team identified that lighting was not needed in the shopping centre’s lifts when they were not in use, and therefore decided to install presence sensors that would automatically switch the lights on and off. Fluorescent light bulbs were also substituted by more efficient LED bulbs by the maintenance contractor, Schindler. The team calculated that the hours of operation would drop from 22 hours a day (on average) to eight hours; as presented in the table below, representing savings of almost 7,000kWh per year. This is equivalent to the annual electricity consumption of a large household, and allows us to save costs of €1,386 per year after a payback period of 3.2 years to cover the investment costs – a major accomplishment considering that this is achieved through changes to three lifts and four hoists!
Lifts Panoramic lift Hoists

Hours in operation per day – before Hours in operation per day – after KWh per year – before KWh per year – after kWh saving per year cost saving per year (€)

17 13 1,787 319 1,468 293

24 3 5,466 298 5,168 1,034

24 9.1 315 20 295 59

All light bulbs that need replacing at Luz del Tajo will from now on be substituted with LED light bulbs.

Promoting the use of renewable energy in shopping centres
By improving the sustainability of our energy supply, we reduce our dependency to fossil fuels, which are finite resources subject to price volatility and inflation. At the same time, we support the development of clean technologies in the countries and regions where we operate, which contributes to building green economies and create local jobs. As explained on page 47, we prioritise energy suppliers which generate electricity based on renewable energy wherever economically feasible. This has led to a number of changes in the past years, as almost all our shopping centres in Portugal and Spain, and all of those in Germany now have electricity contracts in place which have low CO2 emissions factors per kWh. In 2011, Loop5 in Germany agreed a new contract for its supply of natural gas which will enable the CO2 emissions generated as a result of the shopping centre’s gas consumption to be offset through a reforestation project managed by the Forest Carbon Group and verified by independent third parties. We also evaluate options for generating renewable energy on site on new projects and on existing shopping centre sites where economic conditions (such as Feed-in Tariffs in Europe23) are favourable. Different options are available to produce electricity or heat on site including wind turbines, solar and photovoltaic panels, combined heat and power (CHP) and geo-thermal energy, but chosen sites need to fulfil certain characteristics for these technologies to be feasible. Moreover, the costs and benefits associated with each option needs to be carefully weighed up to ensure they are financially viable for our business. Two of our shopping centres – Manauara Shopping in Brazil and 8a Avenida in Portugal – generate part of the energy they consume using solar energy systems on site. In 2011 we commissioned a study at Gli Orsi in Italy to identify possible options to generate renewable energy at this shopping centre, and will proceed with the recommendations in 2012. At Loop5 in Germany, we succeeded in finding a cost effective way to exploit the roof space for the use of photovoltaic panels. This involved renting out the shopping centre’s roof to a third party, Walter Konzept, which has installed a photovoltaic (PV) array consisting of 2,838 PV panels. The system is expected to produce 600,000kWh of electricity annually which is fed into the energy grid, thereby adding renewable energy to the regional energy mix. Sonae Sierra will receive an annual rental income from Walter Konzept, meaning that this agreement is beneficial to us financially as well as being beneficial to the environment, as it enables 300 tonnes of CO2 to be averted each year.
23

Feed-in Tariffs are a scheme set up by many governments in Europe to promote small-scale generation of renewable energy. They involve giving payments to energy users (households, commercial property owners, etc.) for the renewable electricity that they generate.

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Energy and climate continued
Anticipating the potential impacts of climate change
Although it is impossible to predict how climate change risks will impact our business, we believe in taking action now to prevent potentially serious and irreversible damage from occurring in the future. It is now widely accepted among scientists across the world that some impacts of climate change will be inevitable: on current trends, average global temperatures are expected to rise by 2 to 3˚C, within the next 50 years or so, and the earth will be subject to several degrees more warming if emissions continue to grow. If the increase in global average temperatures exceeds 1.5 to 2.5˚C, major changes in ecosystem structure and function are anticipated, with predominantly negative consequences for biodiversity and ecosystems goods and services such as water and food supply24. 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. With reference to the findings of the Intergovernmental Panel on Climate Change (IPCC) and other sources, we have identified the potential climate change impacts which may arise in the regions where we operate. We cannot anticipate exactly how these impacts might affect our shopping centres, although we can estimate, for example, that rising temperatures in several regions could increase demand for cooling within our shopping centres, putting further pressure on energy resources and causing operational costs to increase.

Locations where Sonae Sierra owns shopping centres Locations where Sonae Sierra has shopping centres under development and in the pipeline

Potential impacts of climate change in Europe and Brazil

region

Potential impacts
£ £ £

Europe – Atlantic region

Increased coastal erosion and flooding. Loss of ecological habitat. Storm risk in winter. Increased likelihood of winter flooding. Health risks as a result of heat waves. Reduced water availability and increased likelihood of drought. Loss of biodiversity. More frequent forest fires. Increased energy demand in summer for cooling, reduced hydropower capacity. Health risks as a result of heat waves. Higher temperatures and more heat waves. Lower rainfall and risk of drought. Higher temperatures and more heat waves. More periods of intense rainfall. More periods of intense rainfall. Higher temperatures and more heat waves. Less frosts in the São Paulo region.

Europe – central region Europe – Mediterranean region

£ £ £ £ £ £ £

Brazil – north region Brazil – central West region Brazil – South East region

£ £ £ £ £ £ £

24

Source: Intergovernmental Panel on Climate Change (IPCC), “Climate Change 2007: Synthesis Report”.

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Energy and climate continued
investigating the financial risks associated with climate change on two Portuguese assets
The information presented in the maps above is based on two sources: the IPCC25 and the study ‘Economia da Mudança do Clima no Brasil: Custos e Oportunidades’ for specific information on Brazil26. However, to respond appropriately to the impacts of climate change, we need to gain a better understanding about how our business activities and our shopping centres specifically will be affected. 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%.

£

£

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 2010 we commissioned the Centre for Molecular Biology and Environment of the University of Minho in Portugal to perform a study on ecosystems services dependency focused on the same two pilot shopping centres, AlgarveShopping and NorteShopping. This study used the outputs of the previously mentioned study and highlighted other potential risks associated with climate change, such as seasonal water shortages, flooding due to extreme weather events and the possible introduction of a carbon emissions tax. All together, these studies emphasised the importance of reducing our dependency on fossil fuels and mains water supplies, increasing operational efficiency and improving drainage systems on shopping centre sites. These are strategies which Sonae Sierra is already actively pursuing. Nonetheless, we are aware that climate change is a complex phenomenon that could have further ramifications for our business activities in the different locations where we operate. To this end, we have defined an objective to develop and implement a long-term Climate Change Adaptation Strategy covering investment, development, management and corporate activities.

25 26

Intergovernmental Panel on Climate Change (IPCC), Fourth Assessment Report; “Working Group II Report: Impacts, Adaptation and Vulnerability”, 2007. Sergio Margulis (Banco Mundial) and Carolina Burle Schmidt Dubeux (COPPE/ UFRJ), eds., Economia da Mudança do Clima no Brasil: Custos e Oportunidades (2010).

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Water
Designing and operating water efficient buildings
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. For this reason, in 2010, Sonae Sierra started to 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 Environmental 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 greyWater recyclIng SyStemS on neW projectS to reduce the need for freShWater or maInS Water conSumptIon.

Where feasible, we integrate rainwater harvesting and greywater recycling systems on new projects to reduce the need for freshwater or mains water consumption and we have set an objective for at least 10% of total water consumed at our shopping centres to be reused greywater or harvested rainwater by 2020. During the fit out process, we set requirements for water efficient sanitary equipment (such as sensor spray taps, waterless urinals and low flush toilets). 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. Within our operational shopping centres, we install water efficient appliances such as waterless urinals, low flush toilets and sensor taps in all refurbishments and set procedures to restrict water use wherever appropriate. It is our objective to attain a level of water consumption at or below three litres per visit (aggregated across all our shopping centres) by 2020. 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. 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 oil and hydrocarbon separators or wastewater treatment plants is 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. Currently, we have a wastewater quality standard to control wastewater quality beyond existing legal requirements. 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. The main bio-chemical parameters 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. During construction works, we implement our Safety, Health and Environment Management System (SHEMS) for construction which includes guidelines for monitoring water consumption, targeting water efficiency improvements and implementing best practices in water conservation. We also place demands upon our contractors in order to avoid the risk of water pollution from construction activities.

tArgEtS for 2012

• Attain a level of water consumption at or below 3.63 litres per visit, aggregated across all Sonae Sierra owned shopping centres. • Study the feasibility of using rainwater in other applications at a further two shopping centres, with the aim of increasing the use of harvested rainwater at these centres. • Install a water treatment system at one of our shopping centres so that water withdrawn from the borehole can be used in the cooling tower, thus reducing our reliance on municipal water supplies. • Improve the wastewater networks by taking actions at 14 shopping centres to ensure that discharges to water courses comply with Sonae Sierra's wastewater quality standards and pollutant limits.

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Water continued
Increasing the reuse of water on our sites
In 2011, our shopping centres consumed a total of 1,312,557m3 of water, which is equivalent to 525 Olympic swimming pools. Over the past few years, we sought to reduce the proportion of water withdrawn from municipal supplies and increased our use of water from other sources, such as harvested rainwater, groundwater and treated wastewater. In 2011, at least 70% of our shopping centres’ water consumption was withdrawn from mains water supplies and at least 20% was supplied by groundwater and rainwater collected by our shopping centres.
Water Source (m3)
2011
Data Qualifying Note: This indicator includes 46 out of 49 shopping centres owned by Sonae Sierra and in operation for the full reporting year. Alexa in Germany was excluded as it was not possible to determine rainwater consumptions for this shopping centre due to the lack of meters. Loop5 in Germany was excluded due to problems with the water meters and due to this shopping centre’s Building Management System (BMS) not being fully operational. Pantheon Plaza in Greece was excluded because it was not possible to distinguish rainwater withdrawal and water withdrawn from mixed sources. In 2011, C.C. Continente de Portimão, in Portugal had refurbishment works from September until December. During this period, water consumed for the works was provided by the shopping centre and could not be metered separately. Consequently, water consumption values for this centre were estimated for this period in order to exclude consumptions from the refurbishment works. Across the portfolio, water withdrawal from wastewater was not included in 2011 as in previous years, since the wastewater used is not sourced from another organisation.

Ground water Rainwater collected directly and stored by the reporting organisation Municipal water supplies or other water utilities Mixture of ground water and municipal water Total water withdrawal

265,718 2,806 914,304 129,729 1,312,557

Percentage and total volume of water recycled and reused (m3 / %)
2020 2011 2010 2009 2008 10 75,500 / 5.8 61,862 / 4.3 66,927 / 4.6 43,000 / 3.1

Data Qualifying Note: This indicator includes 46 out of 49 shopping centres owned by Sonae Sierra and in operation for the full reporting year. The shopping centres excluded are those mentioned under the indicator ‘Total water withdrawal by source’. The percentage of water recycled or reused is determined by the following formula: (Water reused/recycled (m3) / Total water withdrawal (m3))* 100. The shopping centres which are contributing to water recycled/reused are: CascaiShopping; Centro Colombo; CoimbraShopping and LoureShopping in Portugal; Gli Orsi and Freccia Rossa in Italy and Parque D. Pedro Shopping and Shopping Plaza Sul in Brazil. Centro Colombo started to collect rainwater and also reuse water from cooling towers in November 2011, and these consumptions were included. For Dos Mares in Spain, it was considered that the methodology used in 2010 to estimate the amount of water reused/recycled was very imprecise, and consequently, data from this shopping centre was not reported in 2011. 8a Avenida, LeiriaShopping and ArrábidaShopping in Portugal, Pantheon Plaza in Greece and Shopping Penha in Brazil have water reuse systems in place but currently are not able to measure the real amount of water reused.

In 2011 we continued our efforts to install water re-use systems. Cooling towers and air conditioning systems are a large consumer of water but through processes such as ‘reverse osmosis’ it is possible to treat and reuse that water. We implemented rainwater harvesting systems at ArrábidaShopping, 8a Avenida and Centro Vasco da Gama in Portugal and set up water reuse systems in cooling towers at LoureShopping and GaiaShopping in Portugal. We also proceeded with the implementation of a rainwater harvesting system GaiaShopping in Portugal and water reuse systems at NorteShopping (Portugal) and Parque D. Pedro Shopping (Brazil). In total, 11 Sonae Sierra shopping centres have rainwater harvesting systems in place; 21 are harvesting groundwater and nine are reusing water from their cooling towers. At Gli Orsi in Italy, the installation of the water reuse system is planned for 2012.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our total water withdrawal by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

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Water continued
Investigating our exposure to water scarcity
In 2010, we applied the WBCSD Global Water Tool to all our owned shopping centres and projects under development, as mentioned on page 57. The outcomes of our analysis showed that, for our 49 operational shopping centres: • One (2%) is located in an area of ‘extreme scarcity’ relative to the annual renewable water supply per person and ‘extreme stress’ according to the mean annual relative water stress index. • A further five shopping centres (10%) are located in areas of ‘high scarcity’ and two (4%) are located in areas of ‘medium scarcity’. • 37 shopping centres (76%) are located in areas where the water supply per person is ‘sufficient’ or ‘abundant’. For four centres (8%), no data was available. With respect to our development portfolio, one out of 11 projects is located in an area of ‘extreme scarcity’ relative to the annual renewable water supply per person and two are located in areas of ‘medium scarcity’. All other projects are located in areas where the water supply per person is ‘sufficient’. In 2011, we compared those results with the new set of data provided by WBCSD for 2010. We did not find any difference between the two assessments and will continue to focus on finding ways to increase water efficiency and reduce reliance on external water supplies on new projects and at shopping centres located in areas of water scarcity.

Measuring the water efficiency of our operations
In 2011, our shopping centres consumed 3.66 litres per visit (rounded to 3.7), which represents a marginal improvement in comparison with 2010 but is short of our target, mainly due to the poorer performance of our Brazilian centres which in 2011 consumed an average of 0.5 additional litres per visit. We do also monitor the water efficiency of our shopping centre portfolio based on total water consumption in m3 per m2 of mall and toilet area, and based on this indicator our water efficiency improved from 3.2m3 per m2 in 2010 to 3.1m3 per m2 in 2011. This suggests that the overall reduction in the number of visits made to our shopping centres in 2011 compared with 2010 may have also had an impact on our water efficiency performance based on the litres per visit indicator.
Water efficiency (excluding tenants) of the owned portfolio
(litres/visit)
2020 2011 2010 2009 2008 3.0 3.7 3.7 3.8 3.6

Data Qualifying Note: This indicator includes 48 out of 49 shopping centres owned by Sonae Sierra and in operation for the full reporting year. This indicator refers to the amount of water consumed by each shopping centre, excluding tenants, during the reporting year, divided by the number of visits to the shopping centre in that year. Loop5 from Germany was excluded for the same reasons explained on page 58.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our water efficiency by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

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Water continued
Measuring the water efficiency of our operations (continued)
We also monitor the water efficiency of our corporate offices and our construction projects, although we have less direct control over water efficiency improvements at these sites. In our corporate offices, we achieved a value of 6,416 litres per worker. This result is difficult to compare with the previous years as it does not include consumptions for the Lisbon office (see explanations in the data qualifying note below), but does include the Bucharest office, which started reporting its water consumption in 2011. The construction water indicator obtained on the Colombo office Tower Ocidente project is in line with our expectations, being similar to the value obtained on its twin project, the Colombo office Tower Oriente. On the Shopping Metrópole expansion, water consumption was aligned with similar Sonae Sierra projects.
Water efficiency in corporate offices (litres/worker)
2011 2010 2009 2008 6,416 6,836 5,432 5,772

Data Qualifying note: This indicator includes four out of eight main corporate offices. It corresponds to the amount of water consumed at each office during the reporting year divided by the number of workers at each office (including all Sonae Sierra direct employees, supervised and independent workers who are working at each office). Data from the Maia office was not included because toilets in this office are shared with employees from other Sonae companies. Data from the Milan and São Paulo offices was not included because there are no water meters at these offices. Data from the Lisbon office was also excluded since in 2011 the landlord decided to include in Sonae Sierra’s Invoice the irrigation water, which was estimated as no separated network existed. As the value was believe to be very high, it was decided to separate the irrigation network from the condominium and these works were only concluded at the end of November 2011. With these works it was also installed a water meter in order to report accurate values of this office’s consumption.

Construction water indicator (m3/€000 construction cost) on completed projects
Colombo office Tower Ocidente (2011) Shopping Metrópole expansion (2011) Colombo office Tower Oriente (2010) Centro Colombo expansion (2010) Parque D. Pedro Shopping expansion (2010) 0.1 0.6 0.07 0.12 0.58

Data Qualifying note: This indicator includes all major development projects completed during the reporting year, with the exception of the Shopping Campo Limpo expansion in Brazil which is explained on page 4. The values reported are indicative of the quantity of water consumed during construction on these projects. The 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. The total construction cost of the Shopping Metrópole expansion was based in the best predicted value.

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Water continued
investment in shopping centres’ water efficiency pays off
Since 2003, we have reduced shopping centres’ water use per visit by 12%, and the water efficiency measures which we have introduced since then enabled us to avoid the consumption of an additional 212,422m3 of water - equivalent to €814,962 in costs – in 2011. In 2011, we invested a total of €677,469 in water efficiency improvements. In shopping centres, a significant amount of water is used in toilet areas and for irrigation purposes and we implemented a range of actions to reduce water consumption in WCs and irrigation specifically: • We installed waterless urinals or dual flushes in a further five shopping centres, which will enable us to save a total of 2,274m3 of water, and we installed sensor taps (to avoid the water from running when not needed) in two shopping centres. All our shopping centres now have one or more devices to reduce water use in WCs. • At CascaiShopping and MadeiraShopping in Portugal and Shopping Plaza Sul in Brazil we improved our landscape irrigation system, while at Pantheon Plaza in Greece we substituted the plants in the food court for ones with lower water needs. At Valecenter in Italy, we installed a new more efficient cooling tower and made adjustments to the operation of the existing chiller, which allows us to save 2,000m3. We also introduced improvements to the way in which we monitor water consumption. We installed leak detection systems at a further six shopping centres (LoureShopping, GuimarãeShopping and CoimbraShopping in Portugal; Valecenter in Italy and Parque D. Pedro Shopping and Shopping Metrópole in Brazil) and additional water meters which connect automatically to the existing BMS at a further two shopping centres (Pantheon Plaza in Greece and Parque D. Pedro Shopping in Brazil). We also installed additional meters necessary to sub-meter water consumption at three shopping centres.

Click here for a full list of water efficiency actions implemented in our shopping centres and on completed development projects in 2011.

SInce 2003, We have reduced ShoppIng centreS’ Water uSe per vISIt by 12%, and the Water effIcIency meaSureS WhIch We have Introduced SInce then enabled uS to avoId the conSumptIon of an addItIonal 212,422m3 of Water – equIvalent to €814,962 In coStS – In 2011.

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Water continued
Investment in shopping centres’ water efficiency pays off (continued) EFFICIENT EQUIPMENT AND CREATIVE CAMPAIGNING SAVE WATER AT GRANCASA
Sonae Sierra’s shopping centres in Spain are among the most water efficient in the portfolio – using 2.3 litres of water on average per visit in 2011. GranCasa decided to implement a programme to reduce visitors’ water consumption in the shopping centre even further by acting on two different fronts: awareness raising and technical measures. Between March and June 2011, the shopping centre organised five campaigns, at a total investment of €2,130. With the theme of saving water in everyday activities, these campaigns used different media such as awareness messages; television; leaflets with water saving tips and even a competition to incentivise shopping centre visitors to take shorter showers. Furthermore, improvement works being undertaken in the shopping centre toilets were seen as an opportunity to procure and install waterless urinals which would allow significant water savings. However, we faced some challenges: the work had to be done outside of business hours and the necessary investment had to fit within our existing budget. We were able to complete the work by spreading it between January and September 2011 and by rationalising costs, managing to fund the whole project for €7,000 in total. Overall in 2011, GranCasa reduced its total water consumption by 0.5% in comparison with 2010. We hope that the awareness raising events have also inspired staff, tenants and visitors to use water more efficiently both inside and outside of the shopping centre.

Avoiding Water Pollution
Water pollution can spread fast and far, with the potential to damage many ecosystems. The quality of the wastewater discharged by shopping centre buildings is subject to regulations in every country where Sonae Sierra operates. Different pollutants can only be present in the water up to a certain threshold. In the European Union, Council Directive 91/271/EEC concerning urban waste water treatment sets requirements regarding the collection, treatment and discharge of wastewater. Member States have to collect and treat wastewater in all settlements with more than 2,000 inhabitants and must monitor the performance of treatment plants, among other requirements. We study the quality of wastewater emitted by every shopping centre we own and manage, and compare the results with thresholds set by our SHEMS and current regulations. In 2011 we discussed the results of the analysis within our Environmental Working Group and identified parameters which regularly exceeded the limits set (oils and fats for instance) and proposed a methodology to reduce these going forward. We identified shopping centres in Portugal, Spain, Brazil, Germany and Romania where further actions are required to guarantee that wastewater complies with Sonae Sierra’s standards. We also identified another four shopping centres where we needed to improve the internal wastewater networks. In Portugal, this included improving the wastewater tank pumping system and removing grease and solid particles from the effluents produced by McDonald’s in ViaCatarina and installing a grease collector at CoimbraShopping. We will build on this work in future years to ensure that all discharges to local water courses and sewers comply with our quality standards and are well within legal thresholds.

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Waste
our progressive approach to waste management
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. Sonae Sierra takes 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, and have set an objective to obtain a minimum average recycling rate of 55% (and a maximum average landfill rate of 30%), aggregated across all our owned shopping centres by 2020. Over the past years, we have successfully achieved significant reductions in the amount of waste sent to landfill. This is largely due our efforts to increase recycling and recovery rates, by investing significant resources in waste separation; finding new waste disposal opportunities (like on-site composting and incineration with energy recovery), and carrying out awareness raising and training activities among our staff, tenants and service suppliers. In Germany, a ‘polluter-payer’ system is in place in all our shopping centres (see page 67 for further details), and we continue to investigate the feasibility of applying similar systems in the other countries where we operate.
tArgEtS for 2012

over the paSt yearS, We have SucceSSfully achIeved SIgnIfIcant reductIonS In the amount of WaSte Sent to landfIll. thIS IS largely due our effortS to IncreaSe recyclIng and recovery rateS, by InveStIng SIgnIfIcant reSourceS In WaSte SeparatIon; fIndIng neW WaSte dISpoSal opportunItIeS and carryIng out aWareneSS raISIng and traInIng actIvItIeS among our Staff, tenantS and ServIce SupplIerS.

• Attain a minimum average recycling rate of 53.4%, aggregated across all Sonae Sierra owned shopping centres. • Guarantee that the proportion of waste (by weight) sent to landfill, aggregated across Sonae Sierra owned shopping centres, does not exceed 36.3%. • Attain a minimum average recycling rate of 78%, aggregated across Sonae Sierra corporate offices. • Reduce the proportion of waste send to landfill by one percentage point, aggregated across Sonae Sierra corporate offices. • Achieve a recycling rate of at least 85% on all new projects completed in 2012 (including refurbishments and expansions).

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Waste continued
understanding our total waste impact
In 2011, our shopping centres and corporate offices combined generated a total of 47,892 tonnes of waste, of which 17,360 tonnes (36%) were disposed of in landfill. The remaining 30,532 tonnes (64%) were disposed of principally through recycling, composting, incineration with energy recovery and anaerobic digestion. Our completed construction projects generated a total of 13,259 tonnes of waste, of which 5,824 tonnes (44%) were disposed of in landfill and the remaining 7,435 tonnes were disposed of through reuse and recycling; hazardous waste treatment; waste composting and incineration with energy recovery.
total weight of waste by type and disposal method Shopping Centres and Corporate Offices (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 totals

– – – 1 – 80 2 28 111

1,161 6,072 4,615 2 17,360 18,294 136 141 47,781

1,161 6,072 4,615 3 17,360 18,374 138 169 47,892

2% 13% 10% 0% 36% 38% 0% 0%

Completed Projects (tonnes) Disposal Method Hazardous waste Non-hazardous waste Total

Landfill Treatment/Elimination (includes waste composting, energy recovery, treatment of hazardous waste, reuse and recycling processes) totals

– 2 2

5,824 7,433 13,257

5,824 7,435 13,259

44% 56%

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as our eight main corporate offices. It also includes data from the major development projects completed during 2011, the Colombo office Tower Ocidente in Portugal and the Shopping Metrópole expansion in Brazil. The Shopping Campo Limpo expansion in Brazil was not included for the reason explained on page 4. The indicator covers data for the whole of the construction, demolition and excavation period. The values presented above, for our completed development projects, exclude the weight of excavated soils, since their inclusion would misrepresent the management of waste effectively done during construction. If not reused on site, these soils are sent to external valorization and reuse options.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our total weight of waste by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

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Waste continued
tackling waste production on our construction sites
The generation of waste on our construction sites can be significant; for example, LeiriaShopping, which was inaugurated in Portugal in 2010, produced 9,184 tonnes of waste during its construction phase, which was equivalent to around 20% of the annual amount of waste generated by the 51 shopping centres in operation which we owned in 2010. Construction and demolition waste is one of the heaviest and most voluminous waste streams and its disposal in landfill can result in significant harmful impacts for the natural environment. Furthermore, according to one source, “incinerating 10,000 tonnes of waste creates one job; landfilling the same amount of waste creates six jobs, but recycling the same 10,000 tonnes creates 36 jobs27”. We have set an objective to maintain high performance in terms of waste recycling on construction projects and to increase the proportion of construction materials used which have a recycled content. In 2011, we applied our waste management practices on all projects under construction28. Whilst the Colombo office Tower Ocidente project achieved a recycling rate above our target value of 85% for new projects, the recycling rate of the Shopping Metrópole expansion represented a poor performance that was below our expectations.
Total waste recycled as a proportion of waste produced (% by weight, on completed projects)
Colombo office Tower Ocidente (2011) Shopping Metrópole expansion (2011) Colombo office Tower Oriente (2010) Centro Colombo expansion (2010) Parque D. Pedro Shopping expansion (2010) 92% 39% 72% 100% 100%

Data Qualifying note: This indicator includes all major development projects completed during the reporting year, with the exception of the Shopping Campo Limpo expansion in Brazil which is explained on page 4. The construction recycling indicator is calculated for each major individual project completed during 2011. The indicator covers waste recycling for the whole of the construction period. It includes waste that is recycled, recovered and reused.

increasing our shopping centres’ recycling rates reduces costs
In 2011, our shopping centres achieved a global recycling rate of 53%, compared with 51% in 2010. We also reduced the rate of waste sent to landfill from 39% in 2010 to 36% in 2011, meaning that we are on track to meet our 2020 objectives. In 2011, we saved costs of €0.6 million as a result of the 179% increase in the proportion of waste recycled between 2002 and 2011. The overall increase in the recycling rate in 2011 was achieved mainly by increasing our efforts to raise tenants’ awareness; optimise the allocation of personnel involved in waste management; improve waste collection facilities and apply our good waste management practices. All countries apart from Spain increased their shopping centres’ recycling rates. Our German portfolio continues to demonstrate the best performance in terms of recycling (69%), whilst the Romanian portfolio has the lowest recycling rate at 41%. In Spain, the year-on-year decrease in the recycling rate was mainly due to the sale of Plaza Éboli and El Rosal, which had demonstrated higher than average recycling rates in this country.

In 2011, We Saved coStS of €0.6 mIllIon aS a reSult of the 179% IncreaSe In the proportIon of WaSte recycled betWeen 2002 and 2011.

27 28

Source: Green Facts by Ecoforce (http://www.ecoforce.co.uk/green-facts.htm). With the exception of the Shopping Campo Limpo expansion in Brazil, which is explained on page 4.

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Waste continued
increasing our shopping centres’ recycling rates reduces costs (continued)
Total waste recycled as a proportion of waste produced (% by weight,
across our owned portfolio)
2020 2011 2010 2009 2008 55 53 51 46 42

Proportion of waste that is sent to landfill
(% by weight, across our owned portfolio)
2020 2011 2010 2009 2008 30 36 39 42 48

Data Qualifying note: These indicators include all shopping centres owned by Sonae Sierra and in operation for the full reporting year. Waste recycled includes waste that is recycled and recovered.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our waste recycling rates by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

In 2011 we continued our efforts to divert waste from landfill and improved our recycling rates at our shopping centres. We improved waste storage facilities at three centres. In Portugal, the waste storage area at GuimarãeShopping was remodelled to improve its capacity, and in Centro Vasco da Gama, the food court service station containers were replaced. In Spain, our team at GranCasa identified that the waste compactor for recyclable cardboard was not located conveniently, and the space was reorganised to move it closer to the undifferentiated waste compactor. Between March and October 2011, this simple measure improved the cardboard recycling rate by 4.4% a month on average. At Luz del Tajo in Spain, we investigated the feasibility of introducing on-site organic waste composting, with the conclusion that the system was approved for implementation in 2012. At Shopping Campo Limpo and Pátio Brasil Shopping in Brazil, we implemented the recommendations of the Waste Characterisation Studies which were performed in previous years. In Portugal, Spain, Italy and Brazil we performed studies to identify whether it would be feasible to set up ‘polluter payer’ waste management schemes for our tenants, following the success of this system in Germany. In Spain and Brazil we concluded that this system would not be feasible to implement. In Portugal and in Italy, Sonae Sierra will consider the possibility of setting up pilot systems starting in 2012 and 2013 respectively.

Click here for a full list of waste management actions implemented in our shopping centres in 2011.

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Waste continued
increasing our shopping centres’ recycling rates reduces costs (continued) rEDucing coStS By incrEASing tHE rEcycling rAtE At looP5
Our shopping centres produce significant amounts of waste. If not managed appropriately, a large proportion of this waste can end up being disposed of in landfill sites, taking up valuable land space and causing pollution to the air, soil and water. Since most shopping centre waste is produced by our tenants, influencing tenants’ practices is one of the principal strategies we can adopt in order to reduce the impact of our shopping centres’ waste production on health and the natural environment. When Loop5 opened in Germany in October 2009, the shopping centre implemented a ‘polluter payer’ or ‘pay by weight’ waste management scheme whereby tenants’ waste is separated by type and the associated cost is allocated directly to the tenant through a card system. Recyclable packaging materials (plastic, metal, plastic foil and glass) are free of charge. Paper, cardboard, organic waste and wood have a lower cost than mixed (unsorted) waste so as to encourage tenants to recycle. The success of a scheme such as this depends on tenants’ participation. For this reason, Loop5 organises regular training sessions for tenants and delivers brochures to explain the recycling programme and procedures. The shopping centre team analyses each tenants’ waste production by type on a monthly basis. Tenants identified as having a low recycling rate are asked to meet regularly with the shopping centre team, who explain to them the environmental and economic benefits of waste recycling. Tenants identified as having a high recycling rate are congratulated for their good performance. As a result of this strategy, Loop5 increased its average recycling rate to 73% in 2011, compared with 63% in 2010 and 48% in 2009 (during its first three months of opening). The increase in the recycling rate allowed us to reduce waste management costs by 19% in 2011 in comparison with 2010, and generated a cost saving of around €20,000. Following negotiations with our waste management supplier in September 2011, it also became possible for us to dispose of more recyclable materials (paper and cardboard, organic waste and wood) free of charge. This enabled us to make a final cost saving of around €35,000, a 33% reduction in comparison with 2010. All waste from Loop5 that is not recycled or composted is disposed of through incineration with energy recovery, meaning that the shopping centre does not send any waste to landfill.

Pro-active waste management in our corporate offices
In 2011 we improved the recycling rate of our corporate offices by an impressive 14% in comparison with 2010, meaning that we already met our 2020 objective of attaining an 80% recycling rate. However, this was partly due to some specific circumstances, including changes in the work areas in the Lisbon and Madrid offices and the recycling of waste materials which are not normally generated in our offices (wood waste in the Lisbon office and electrical appliances which were replaced in the Athens office). For this reason, we will maintain our long-term objective at 80%. Improving waste management in our offices is as much about motivating people as it is about equipment and infrastructures, and one of the other factors which contributed to our improved performance in 2011 was our efforts to raise awareness about the importance of recycling waste through campaigns and events held at all offices. For example, at the Madrid office we provided training, guidance and tips to staff and organised a competition to create the best Christmas decoration made from waste materials. At the São Paulo office, we held training sessions for our new cleaning service supplier to promote greater involvement of cleaning staff in waste management, and there was an improvement in the follow-up of waste management results by the SHE team.
Total waste recycled as a proportion of waste produced (% by weight,
in our corporate offices)
2020 2011 2010 2009 2008 80 80 70 67 57

Proportion of waste that is sent to landfill
(% by weight, in our corporate offices)
2011 2010 2009 2008 11 13 31 46

Data Qualifying note: These indicators include all eight main Sonae Sierra corporate offices. Waste recycled includes waste that is recycled and recovered.

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Biodiversity and Habitats
Managing our impacts on biodiversity
Our most fundamental impact on biodiversity results from the development of land and the associated change in land use that this causes. This is particularly relevant where projects are located on ‘Greenfield’ or previously un-developed land which is most likely to be rich in biodiversity or 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 (resulting in delays in or rejection to planning applications) and the risk of fines due to instances of 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 which can increase support for new projects and enhance the developer’s reputation. For these reasons, we have set an objective to promote the use of previously developed land for new Sonae Sierra shopping centre projects and to protect and enhance biodiversity wherever possible. Environmental Due Diligence (EDD), Environmental Impact Studies (EIS), Safety, Health and Environment Development Standards (SHEDS) and a site specific Safety, Health and Environmental Management System (SHEMS) are applied to all our new developments. EIS are performed for every land acquisition or expansion process and can be of two types: Environmental Impact Assessments, when required by legislation and, in all other cases, Preliminary Environmental Evaluations (PEE) which are performed according to Sonae Sierra’s specifications. The EIS identifies the potential environmental impacts of each project’s design, construction and operation on the site’s biodiversity and specifies mitigation measures. We monitor the implementation of these recommendations 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. The SHEDS also establish requirements in relation to biodiversity, namely: • Ecological features classified as premium features according to the EIS must be preserved throughout construction and integrated in the landscape design. All other relevant ecological features should be preserved and integrated into the landscape project to the greatest extent possible. • Native flora should be specified for use on all of the development’s outdoor ‘soft’ landscaping works, and preference should be given to the use of “green barriers” such as hedgerows rather than fences. Exotic, allochthonous, invasive or non-indigenous plant or tree species should not be specified for any of our new shopping centre’s landscape projects. • Flat roofs (i.e. roofs with gradients of no more than 5 degrees), which are not used for any specific purpose (e.g. car parking, pedestrians use, housing of plant rooms, etc.), should be considered by design as suitable locations for green roofs. In 2011, the SHEDS were revised in order to include a new standard related to long-term impact on biodiversity. A note was also included within the SHEMS procedure, making the implementation of all the recommendations of the EIS that refer to biodiversity compensation mandatory on Greenfield sites where full mitigation of biodiversity impacts is not possible. 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. We have on-going projects at LoureShopping in Portugal and Parque D. Pedro 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.
tArgEt for 2012

• Achieve 100% compliance with the approved recommendations of the PEE (or equivalent study) on new completed projects.

conStructIng on prevIouSly developed land and enhancIng the ecologIcal value of contamInated SIteS can brIng benefItS to the local economy, envIronment and communIty.

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Biodiversity and Habitats continued
integrating biodiversity on our new projects
In 2011, 100% of new completed development 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.
Proportion of completed development on previously developed land (% by area)
2011 2010 2009 2008 100 100 100 51

Data Qualifying note: This indicator includes all Sonae Sierra development projects completed during the reporting year, with the exception of the Shopping Campo Limpo expansion in Brazil which is explained on page 4. In 2011 this applied to one project, the Shopping Metrópole expansion in Brazil. It did not apply to the Colombo office Tower Ocidente because this project involved development inside shopping centre building boundaries.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx

Our shopping centre expansion project which was completed in 2011, Shopping Metrópole in Brazil, complied with all the EIS recommendations for this site. This included, for example, setting up control points on the construction site for waste management and regularly monitoring fossil-fuel powered equipment and vehicles on site. At Passeio das Águas Shopping, our project under development in Goiânia, Brazil, we are committed to restoring a degraded forest area of 57,641m2 around the River Caveirinhas. We are developing an Environmental Recovery Plan which will involve reforestation of the area with native tree species and the preservation of wild fauna.

Promoting biodiversity protection in operational shopping centres
Once our shopping centres are in operation, there is less scope for us to enhance local biodiversity on site, except on those shopping centres which include significant areas of green space within the site (namely LoureShopping in Portugal and Parque D. Pedro Shopping and Manauara Shopping in Brazil). Therefore, during the operations phase, we focus our actions on raising awareness about biodiversity protection, capitalising on our ability to communicate with the large number of people who visit our shopping centres, and on supporting local organisations involved in biodiversity protection. Biodiversity protection is a particularly pertinent issue in Brazil. This country has the greatest biodiversity on the planet but wildlife and forests are under threat due to pollution, deforestation and poaching. Our shopping centres in Brazil launched several campaigns and activities on the theme of biodiversity protection in 2011. For example: • Shopping Campo Limpo organised an awareness campaign in March 2011 presenting a photographic exhibition on dolphins from the archipelago of Fernando de Noronha, a UNESCO Natural World Heritage Site in Brazil. • Manauara Shopping organised educational activities on nature and wildlife for children and supported the project ‘Plantar Muda’ (‘Planting Changes’), launched by Manaus City Council, which involved planting 15,000 trees in different areas of the city. • Tivoli Shopping planted 30 trees and distributed 500 native tree seedlings to visitors, to raise awareness among adults and children on the importance of forests and biodiversity. • Pátio Brasil Shopping organised the fourth edition of the international eco-cartoon competition and exhibition. The 2011 theme was the preservation of biodiversity. The shopping centre team received more than 500 applications, which were assessed by a jury composed of five illustrators and environmental experts. In total, 109 cartoons were selected to be displayed during the month of June.

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Biodiversity and Habitats continued
Promoting biodiversity protection in operational shopping centres (continued) gAiASHoPPing MoBiliSES tHE locAl coMMunity to ProtEct forEStS
Forest fires can cause extensive damage to human life and the natural environment. In Portugal, where forest cover occupies around 38% of the total land surface and various forest products are important contributors to the export market, forest fires present a significant risk and can be devastating. Like our other shopping centres which have a Community Advisory Panel (CAP)29 in place, in 2011 GaiaShopping in Portugal held a discussion with CAP members on the International Year of the Forest. Inspired to take action to protect local woodlands, the CAP members decided to work together to reforest an area that had been previously burned down in a forest fire. With little budget and a lot of people to involve, the GaiaShopping team made great efforts to organise the reforestation day. The nature conservation organisation Quercus, which is represented on the GaiaShopping CAP, identified the area where the work should be done and advised on the particular species which should be planted taking into account the conditions of the soil and climate, and the need to mitigate the risk of forest fires from spreading in the future. A total of 53 people volunteered, including staff from tenants’ shops and shopping centre service suppliers and representatives from local entities which are part of the GaiaShopping CAP, such as the forestry department, local firemen, the local council and charitable organisations which support social and environmental causes. The day was a great success. Everyone collaborated as a team and all stakeholders involved were very pleased to have the opportunity to make a positive contribution to their community and the environment.

29

For more information about our Community Advisory Panels, see page 87.

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First and foremost, we are

Our approach to social issues focuses on the stakeholder groups most affected by our operations: our suppliers; tenants; visitors; employees and the communities close to our shopping centres and new projects.
First and foremost, we are committed to conducting our activities so that risks towards people and assets are minimised, and to achieving excellent levels of social responsibility. We formalised this commitment in 2004 with the introduction of our Safety and Health Policy, and in 2008 our Safety and Health Management System became the first in the shopping centre sector to achieve certification in accordance with the OHSAS 18001 standard.

committed to conducting our activities so that risks
towards people and assets are minimised, and to achieving excellent levels of social responsibility

CLICK2, innovation training

Gli Orsi, Italy

It is part of our day-to-day operations to make sure that our tenants and our shopping centres’ visitors are satisfied with the quality of service they receive from our Company and results have shown that, in spite of the challenging economic conditions, our shopping centres remain attractive to both. Beyond our emphasis on customer satisfaction, we have developed significant programmes to actively engage with our stakeholders on wider sustainability issues, including the Personæ and Planet Sierra Tenant Awards; our Community Advisory Panels; campaigns to promote responsible behaviour among visitors and innovation programmes for employees. Our studies suggest that there may be further opportunities to exploit growing consumer appetite for more environmentally sustainable and health-orientated products and services, and we are beginning to explore these through our tenant mix and marketing strategies.

Community day, Portugal

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Suppliers
Our Responsible Procurement Policy
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: • Integrating CR criteria into our Service Suppliers’ Management Procedures so as to ensure that the social and environmental performance of our suppliers is considered when tendering, managing and evaluating supplier contracts. • Engaging with our suppliers in order to improve their CR performance. • 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 used, and/or are sourced from companies which adhere to ethical and/ or environmental standards. 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 that ensures that our main suppliers’ performance meets with Sonae Sierra’s Safety, Health and Environmental (SHE) requirements.

Within the scope of these procedures, all contracts with critical suppliers30 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.

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.

We collaborate closely with our critical suppliers on specific issues relating to SHE through our SHEMS procedures such as those described on pages 24 and 25 and in the Safety and Health chapter on pages 96 to 103. Our SHE training plans for each site include the identification of training needs for service suppliers. For Sonae Sierra, it is difficult to control the selection of raw materials used in shopping centre development projects as our development contractors 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 materials consumption. Nonetheless, through our SHEDS and our Service Suppliers Management Procedures we encourage our suppliers to reuse demolition materials and favour materials that are low-toxic, locally sourced, 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 managed forestry.
TARGETS FOR 2012

• Ensure that at least 50% of timber used in new shopping centre projects or refurbishments is procured from certified sustainable sources. • Ensure 100% of relevant suppliers answer the CR questionnaire and receive feedback with the aim of assessing their baseline CR performance and to allowing us to measure their improvement. • Ensure that 100% of bids and contracts signed during 2012 with critical property management service suppliers include clauses for minimum requirements in relation to social and environment standards. • Implement CR audits for all maintenance; security; cleaning and waste management suppliers in each Sonae Sierra owned shopping centre using the check-list created during 2011, and reduce non-conformities to a maximum of 15%.

30

For Development, critical suppliers are considered to be those with whom Sonae Sierra has a contract of over €2 million. For Property Management, critical suppliers are considered to be main shopping centre service providers: cleaning, security, maintenance and waste management.

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Suppliers continued
Embedding our sustainable supply chain procedures
In 2011, as in previous years, we ensured that 100% of contracts signed by our Development and Property Management businesses with critical service suppliers included clauses for minimum requirements in relation to safety, environmental and social standards. We employed a greater proportion of suppliers with ISO 14001 certified Environmental Management Systems and we increased our high proportion of spend on locally-based suppliers. On new projects, supporting local suppliers can have considerable benefits for the local economy. For example, we estimated that €6 million was invested in the regional economy through the use of regional service providers and resources for the construction of LeiriaShopping in Portugal, which was completed in 2010.
Proportion of suppliers with ISO 14001 certification (%)
2011 2010 2009 2008 38 27 17 58

Data Qualifying note: This indicator includes all Sonae Sierra suppliers with a total transaction value superior to €50,000 (n= 369 in 2011) with the exception of Brazil, where only suppliers of São Paulo office were included. The indicator is calculated as the total number of suppliers with ISO 14001 certification (n= 61) divided by the total number of applicable suppliers who responded to this question (n= 160).

Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation (€ million)
2011 2010 2009 1,012 / 42 970 / 62 1,382 / 76

Data Qualifying note: This indicator includes the suppliers of our Property Management and Development businesses, as well as corporate services suppliers.

on neW projectS, SupportIng local SupplIerS can have conSIderable benefItS for the local economy. for example, We eStImated that €6 mIllIon WaS InveSted In the regIonal economy through the uSe of regIonal ServIce provIderS and reSourceS for the conStructIon of leIrIaShoppIng In portugal, WhIch WaS completed In 2010.

Value of spend (€) on national suppliers Value of spend (€) on international suppliers

We aim to treat our suppliers fairly, and we monitor the number of days within which our suppliers’ invoices are paid. In 2011, suppliers’ invoices were paid within an average time of 50 days31.

31

The suppliers’ invoice payment time is determined as the time between the invoice date and date of payment, weighted by the number of invoices.

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Suppliers continued
Embedding our sustainable supply chain procedures (continued) EngAgEMEnt WitH SuPPliErS At lE tErrAzzE BringS PoSitivE rESultS
In January 2010, we began construction at Le Terrazze in Italy. With 38,600m2 of Gross Lettable Area (GLA), 80% of which is already let, Le Terrazze will be the biggest shopping centre in La Spezia province. Since the beginning of the construction works, we have been implementing our SHEMS on site to reduce risks for workers and the community, and lower our impact on the environment. We have faced several difficulties: on a practical side, the relatively small size of the site made it difficult to store some materials or install some equipment needed to implement the good practices prescribed by the SHEMS, and the characteristics of the site made it prone to flooding. We also had to challenge the conventional habits and attitudes of our suppliers, presenting SHE practices which were new to them. We worked hard to solve these challenges, rationalising the available space, implementing water run-off improvements and continuously engaging with our suppliers and assessing their SHE performance. We delivered extensive training every month, totalling 1,876 man hours since 2010, to ensure that all new staff were appropriately informed about different SHE aspects. We tracked the water and energy consumption and waste production associated with the construction activities and dedicated considerable effort to minimise the amount of waste sent to landfill. For example, the soil removed from the construction site was used for nearby areas’ construction works and waste separation was improved thanks to clearer instructions on waste compactors. We installed a rainwater collection system to spray roads for dust prevention and reused water to wash trucks. We adopted a series of measures to minimise safety risks and hazards and carried out observation exercises every month to establish and report on potential non-conformities with our SHEMS. We kept a record of every incident and near-miss, and although we recorded six staff accidents, auditors established that they were circumstantial and did not reflect the quality of our SHEMS. Our external project manager, Jacobs, also held regular SHE meetings with managers of all construction suppliers working on site. After inspecting the construction site in July 2011, auditors from Lloyds Register Quality Assurance recommended Le Terrazze for ISO 14001 and OHSAS 18001 certification, and Le Terrazze became the first construction site in the world to simultaneously obtain this double certification.

“I think that le terrazze’s Safety, health and environment management System (certified according the ISo 14001 and ohSaS 18001 norms) is very robust and well-structured. the starting point was the corporate Sonae Sierra management system that was enriched with the jacobs She programme. the final result was very positive and effective. the commitment to continuous improvement is evident; by december 2011 we had registered more than 2,300 S&h observations from all people involved! the involvement of contractors is always crucial, and we reinforced this throughout the construction phase by organising four She leadership meetings with them. to further strengthen the involvement of workers, we put in place a recognition programme with coupons for workers who followed the She procedures and best practices – with excellent results.”
Maria Elena gasperini, Quality Manager, Jacobs Italia

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Suppliers continued
Assessing our suppliers’ cr performance
We assessed the CR performance of development suppliers with whom we had large contracts in place (over €2 million) by distributing questionnaires to collect information on our suppliers’ policies and practices regarding a range of CR issues including ethics; anti-corruption; human rights; environmental compliance; equal opportunities; safety and health and community investment. Each supplier was allocated a score according to the results achieved and this was communicated back to the supplier. Of the 21 suppliers surveyed, 29% obtained an ‘A’ rating (equivalent to a score above 75%) and 71% obtained a ‘B’ rating (equivalent to a score above 50%). Through this process, we hope to raise awareness on CR and establish scrutiny on our suppliers’ practices, encouraging them to perform better when possible. For our critical property management suppliers, we introduced a CR audit procedure which involved creating a check list of CR issues to assess suppliers’ knowledge about our shopping centres’ SHE procedures and the conditions of their equipment. The audits were carried out across all our owned operational shopping centres. The results revealed that: • All main service suppliers demonstrated good team work, organisation and timekeeping. • Among our waste management and cleaning suppliers, knowledge of Sonae Sierra’s fire, accident and evacuation procedures could be improved. Some non-conformances were also detected in some countries regarding the use of protective clothing and the delivery of training and medical check-ups for staff. • Among our maintenance suppliers, the use of protective equipment and clothing required improvement. Non-conformances were also detected regarding employees’ knowledge of working permit procedures and the delivery of training and medical check-ups to staff. • Our security suppliers demonstrated good knowledge of shopping centre safety procedures and high levels of conformance with the use of the correct uniform. The percentage of security staff with both first-aid and defibrillators certificates could be improved. In early 2012 we will develop an action plan to follow-up on these results with a strong focus on addressing non-conformances. We will then perform another round of CR audits for all critical property management suppliers across all our shopping centres.

integrating sustainable materials into completed projects
On the Shopping Metrópole expansion project in Brazil and in the CascaiShopping refurbishment in Portugal we implemented several measures to reduce the environmental impacts of the materials used during the development process. For example: • 26% of materials used (by value of spend) on the Shopping Metrópole expansion contained recycled content. • 100% of timber products purchased (by value of spend) on the CascaiShopping refurbishment in Portugal had a PEFC™ or FSC® certificate. • Both projects sourced an average of 80% (by weight) of heavy materials (e.g., concrete, steel and ceramic bricks/tiles) and an average of 71% (by value of spend) of light materials (e.g., thermal and acoustic insulations, and paints) within the same region of the project’s location.

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Suppliers continued
investigating alternative materials for use in future developments
It can be challenging to find the most sustainable alternatives for many products used in our construction and refurbishment activities because the ‘sustainability’ of these products depends on a number of factors, including: the raw materials used in the product; the environmental and ethical impacts associated with the raw materials’ extraction; the distance that the product and its various components have travelled; the eco-efficiency of the processes used to manufacture the product and its potential to be recycled or reused after the end of its life. For this reason, in 2011 we undertook three initiatives to identify and evaluate different sustainability aspects of a number of materials and products used in our development activities. First of all, we used the methodology produced by The Department of Resources Recycling and Recovery of California (CalRecycle) to identify the eco-efficiency of different types of materials which can be used for each key building element, with attention to factors listed on page 72. This enabled us to create a sustainable materials checklist, using colour codes to grade different types of materials according to how eco-efficient they are. The table below shows some examples of the ‘gold’ (most sustainable) and ‘silver’ (second best) materials which are included in the full checklist32. In future, we intend to set targets for the use of ‘Gold’ and ‘Silver’ materials.
Building element ‘Gold’ materials ‘Silver’ materials

Façades

• Ceramics with recycled content (e.g., incorporating recycled glass) • Concrete panels from a certified sustainable manufacturer • Organic floor e.g. bamboo; cork; certified timber • Recycled rubber • Recycled ceramic or ceramic containing recycled material • In-situ concrete with recycled aggregate (crushed structures) • Cement with green certificate e.g. Ecooperando by Cemex • Timber from certified sustainable sources • Insulation comprising organic materials e.g. sheep’s organic wool; wood fibre; cellulose • Thermo insulated paint • VOC-free paint • Eco-labelled paints

• Zinc metal sheets instead of steel or aluminium

Flooring

• Natural local stone

Foundations and structures

• Pre-cast and pre-stressed concrete • Certified recycled steel

Insulation materials Paint

• Insulation comprising naturally occurring mineral e.g. glass mineral wool

Secondly, we carried out a preliminary study to evaluate the viability of developing a standard specification which could be incorporated into all contracts on all development projects in order to ensure that materials come from reliable sources in respect of child labour and working conditions. Among the materials we identified for appraisal were light fittings; sanitary fixtures; furniture; pipework; ductwork and cabling; solar panels; air-conditioning equipment and any other equipment manufactured in Asia (except Japan) and Africa. We developed a questionnaire for our suppliers to establish whether any of these materials procured on our behalf came from regions with child labour risks and began liaising with suppliers to obtain answers from them at the start of 2012. Our third initiative involved a pilot project at Boulevard Londrina Shopping, a new shopping centre project which is under development in the Paraná State in Brazil. We assessed the recycled content of a number of materials used during this project’s construction phase. The study showed, for example, that whilst the recycled content of cement blocks was only 2% and the recycled content of the cement used for the building’s foundations was 14%; the recycled content of the steel bars used was between 60 and 70%. We will use the methodology developed for this pilot project to assess the recycled content of key materials used on future development projects. The findings can also help us to identify which materials we might prioritise for seeking more sustainable alternatives.
32

Besides covering a wider range of building elements than those highlighted here, our checklist also includes ‘black-list’ materials, such as materials containing asbestos; artificial mineral fibres; lead; ozone depleting substances; silica; sea-dredged aggregates; Volatile Organic Compounds (VOC); pesticides and timber products derived from non-sustainably managed forests. Sonae Sierra prohibits the use of these materials in all development and property management activities.

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Suppliers continued
Monitoring our impact in our own offices
In 2011 we monitored our materials use across all our corporate offices and shopping centre offices for the second year running, and identified the proportion of materials used that were recycled input materials. The table below shows that we reduced our consumption of materials in comparison with 2010, which was due both to budget reduction measures and the increased reuse of materials such as paper; archive folders; document dividers and plastic bags. We increased the percentage of materials used that were recycled input materials to 90%, and we also reduced the amount of paper consumed per worker by 15% in comparison with 2010.

Materials used by weight or volume in corporate offices and shopping centre offices
Tonnes used in 2011 Tonnes used in 2010

Material category

Percentage of materials used in corporate offices and shopping centre offices that are recycled input materials (%)
2011 2010 90 85

Archive folders Binder clips Business cards Document dividers Envelopes Markers Paper Pencils Pens Plastic bags Post it notes total

30 1 1 2 23 1 376 0 5 2 1 442

68 1 2 8 76 2 1,406 1 13 69 2 1,648

Data Qualifying note: These indicators include materials consumed in the offices of all shopping centres owned by Sonae Sierra and in operation for the full reporting year, as well as our eight main corporate offices. The reported materials are considered to be the most relevant in the activity of Sonae Sierra. All materials listed are direct materials; no non-renewable materials are consumed in Sonae Sierra’s offices. The percentage of recycled input materials used is calculated by applying the following formula: (total recycled input materials used/input materials used) x 100.

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tenants
A strategy to maintain high levels of tenant satisfaction and engagement
In 2011, we had 8,495 contracts with tenants across both our owned shopping centres and those managed on behalf of third parties. We view our tenants as strategic partners; the financial performance of our tenants impacts directly on our own business performance through occupancy rates and rental income. It is our objective to deliver a high quality service to tenants and maintain high levels of tenant satisfaction, and we have set ourselves the goal of achieving an average tenant satisfaction level of 4 or above33 in all Sonae Sierra owned shopping centres by 2015. It is also our aim to engage with tenants to help them to improve their safety, health and environment performance.

It IS our objectIve to delIver a hIgh qualIty ServIce to tenantS and maIntaIn hIgh levelS of tenant SatISfactIon.

Our shopping centre management teams work with tenants on a daily basis to ensure that they are treated fairly and in a way to improve their business potential. Sales audits and individual meetings with tenants are two examples of how we evaluate tenants’ performance and work with them to identify solutions to make their businesses grow. We undertake annual tenant satisfaction surveys in all our owned shopping centres, and use the results to develop action plans to address aspects which received low scores and ultimately drive continuous improvement in tenant satisfaction levels. We regularly engage with our tenants on CR issues. We provide training on Safety, Health and Environment (SHE) issues and invite tenants to actively participate in Open SHE Committees. Within the scope of our Safety, Health and Environment Management System (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 tenants’ employees’ work practices through our SHE Preventive Observations (SPO), a form of audit carried out in our shopping centres and corporate offices to observe workers, detect any instances of behaviour that present safety and health risks or environmental impacts and engage with the person(s) involved to make them more aware of SHE. We also invite tenants to compete for our Best Tenant Awards; the Personæ Award for best practice in S&H and the Planet Sierra 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. 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.
tArgEtS for 2012

• Achieve an average tenant satisfaction level of 3.80 or above in each Sonae Sierra owned shopping centre. • Achieve an average tenant satisfaction level of 4.25 or above in at least 85% of Sonae Sierra owned shopping centres. • Achieve a global average occupancy level of at least 95% (measured by GLA), aggregated across all Sonae Sierra owned shopping centres. • Organise at least four meetings with tenants on CR issues, in each Sonae Sierra owned shopping centre.

33

Tenant satisfaction is measured on a scale of 1 (‘not satisfied’) to 6 (‘very satisfied’).

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Tenants continued
Maintaining high levels of tenant satisfaction
In 2011 we increased the global occupancy rate of our owned shopping centres to 96.7% (see table on page 36), and maintained the average level of tenant satisfaction at 4.6. An occupancy rate of over 95% was achieved at 36 out of 49 of our centres. We narrowly missed our targets for all shopping centres to achieve an average tenant satisfaction rate of 3.75 or above (98% of shopping centres achieved it) and for 85% of shopping centres to achieve an average tenant satisfaction rate of 4.25 or above (84% of our shopping centres achieved it). These results are nonetheless impressive taking into account the difficult economic environment in most countries where we operate, and have been achieved by working together with tenants, shopping centre owners and visitors to improve the value proposition of our centres and differentiate them from competition.
Global Tenant Satisfaction Index
2011 2010 2009 2008 2007 4.6 4.6 4.6 4.2 4.0

Data Qualifying Note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for at least six months as on 31 December 2011. Sonae Sierra’s tenant satisfaction index is derived from tenants’ response to two questions: (1) Relationship with the 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’).

IN 2011 WE INCREASED THE GLOBAL OCCUPANCY RATE OF OUR OWNED SHOPPING CENTRES TO 96.7%, AND MAINTAINED THE AVERAGE LEVEL OF TENANT SATISFACTION AT 4.6.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our tenant satisfaction index by country is available in our Country CR Summary Reports at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

We also received positive feedback from some of our property management services clients for whom we manage shopping centres.

"We have every confidence that Sonae Sierra can provide high quality services and deliver fast and solid results, during a challenging time for the Romanian retail market."
Peter Kotsikis, Pradera Head of Greece and Romania.

Sonae Sierra manages the Militari Carrefour Gallery in Romania on behalf of Pradera Real Estate.

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tenants continued
Energy efficiency initiatives help tenant to reduce their costs
In the context of the tough retail conditions in many of the markets where we operate and in particular in Portugal, Spain and Greece, we also challenged our shopping centre teams to identify cost reduction opportunities. Bearing in mind that energy is one of the main cost items in the service charge, we performed energy audits with tenants in each country in order to identify best practices that can be shared with all tenants in 2012. At River Plaza Mall in Romania, for example, we identified a series of actions with our largest energyconsuming tenants to save energy and costs, some of which were commenced in 2011 and others which will be put in place in 2012. These included: • Installation of movement sensors for lighting control in tenant unit areas that are used only by personnel. • Optimisation of the HVAC equipment controlled by tenant units. • Replacement of incandescent lamps with fluorescent ones that consume less power. • Improving the preventive maintenance plan for electrical equipment in tenant units. Investments in equipment to reduce energy and water consumption which were approved and implemented at various shopping centres also enabled us to pass on cost savings to tenants.

rEDucing coStS for tEnAntS WitH An EnErgy SAving Solution At gli orSi
A common challenge in the property industry is that buildings which are designed to meet high standards of eco-efficiency do not always perform well in practice, and this is often a result of the building not being used in an efficient way by its occupiers. Gli Orsi in Italy was developed by Sonae Sierra and inaugurated in 2008. Although the shopping centre was developed in accordance with our environmental standards, its electricity consumption in operation has been relatively high; in 2010 Gli Orsi consumed an average 601kWh per m2 of mall and toilet area compared to a portfolio average of 514kWh during the same time period. Gli Orsi shopping centre consists of four main buildings. We identified that the high demand for electricity was specifically connected with building A, which had a total annual consumption of 3,501,000kWh, accounting for 67% of the shopping centre’s total electricity consumption. Within this building, there was a chocolate store which required high levels of cooling. Having identified the reason for the particularly high electricity consumption in this building, we engaged with the tenant to seek a solution which would enable us to improve the shopping centre’s environmental performance and at the same time allow us to reduce service charge costs. We found that the best approach was to install a small dedicated cooling system in the chocolate store which would avoid the need to keep the main chillers running to meet this one shop unit’s cooling needs. This initiative resulted in considerable benefits: on a like-for-like basis, we reduced the total electricity consumption of building A by 31% in comparison with 2010 during the winter months, enabling the shopping centre to save 536,000kWh of electricity and avoid costs of €64,000 on its energy bill. Moreover, Gli Orsi was able make a saving of around €180,000 on its service charge, mainly as a result of reductions in energy consumption achieved, and this saving will be passed back to tenants through a credit note in 2012.

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tenants continued
understanding our tenants’ attitudes and expectations around cr
In 2011, we included some new CR questions in our Tenants’ Survey which is completed by tenants in each Sonae Sierra shopping centre. The results of the survey revealed that: • 26% of our tenants agreed that a shopping centre’s commitment to environmental and social responsibility was an important factor that their company considers when making decisions to lease new space. Agreement with this statement was highest in Greece (38.5%) and lowest in Germany (6.4%). • 68% agreed that a shopping centre’s commitment to environmental and social responsibility was an important factor that contributed to their overall satisfaction with the shopping centre, but only 30% agreed that this was an important factor that contributed to their overall satisfaction with Sonae Sierra as a landlord. Increasing energy efficiency and reducing GHG emissions are the most important environmental issues for our tenants. Most tenants agreed that Sonae Sierra is meeting their expectations concerning environmental responsibility; in particular with regards to waste recycling and minimising water consumption. The survey identified that Sonae Sierra could perhaps do more in terms of working jointly with tenants to improve environmental performance and reduce costs and to help tenants to promote environmentally-friendly products. With regards to social issues, providing good customer care for visitors is seen as being the most important social responsibility issue. 58% of tenants believe that Sonae Sierra is meeting their expectations on this issue, but 19% identify room for improvement. Sonae Sierra is seen as being proactive in relation to S&H, but tenants appear to be less aware of Sonae Sierra’s efforts to engage with and support local communities. With regards to tenants’ own CR behaviour: • 47% measure and monitor their environmental impact. • Energy saving, water saving and waste recycling are the most common ways in which tenants practice environmental responsibility; but only 30% use sustainable modes of transport. • 58% tenants participate in SHE training organised by the shopping centre. • 39% say that they promote eco-friendly products and/or inform customers about eco-friendly consumption choices. • Active accident prevention is practiced by 80% of tenants. All in all, these results highlight the growing importance of CR issues for our tenants, and the further potential for us to collaborate with tenants to improve the CR performance of our shopping centres as a whole.

26% of our tenantS agreed that a ShoppIng centre’S commItment to envIronmental and SocIal reSponSIbIlIty WaS an Important factor that theIr company conSIderS When makIng decISIonS to leaSe neW Space.

SOCIAL PERFORMANCE
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Tenants continued
Challenging tenants to follow safety best practices and reduce energy consumption
In 2011, we continued to engage with tenants on CR issues. We held the fourth edition of the Personæ Tenant Award for Safety and Health, which distinguishes tenants who demonstrate an outstanding commitment to S&H. In 2011, over 80 tenants competed for the Award, and 15 winners were selected. They were:

PORTUGAL
• • • RR Center – CascaiShopping Elena Miró – NorteShopping Continente – AlgarveShopping

GREECE
• • Media Markt EXE (both in Pantheon Plaza)

ROMANIA SPAIN
• • Pepe Jeans – GranCasa Joyería Montañesa – Luz del Tajo • • McDonald’s Pizza Star (both in River Plaza Mall)

BRAZIL ITALY
• • Primigi – Gli Orsi Progetto Vista – Airone • • Magazine Luiza Roasted Potato (both in Shopping Penha)

GERMANY
• • C&A Reformhaus Escher (both in Loop5)

We also worked with three tenants in each country to identify best practices in energy saving that can be shared with all tenants in 2012 as part of our strategy to reduce tenants’ costs. Further information about this project can be found on page 80. We held a total of 502 meetings with tenants on CR issues across all our owned shopping centre and engaged with tenants through SHE training.

“CR and SHE meetings organised by Dos Mares shopping centre are always interesting, and I participate in all of them. In our view, Sonae Sierra’s CR initiatives are aligned with McDonald’s policy. I believe it is vital to develop a workplace policy that respects people and the environment around us.”
Francisco José Paredes, McDonald’s Restaurant Manager, Dos Mares, Spain

We believe that tenants are increasingly seeing the value of CR initiatives, particularly as we have been able to achieve significant improvements in energy efficiency and waste management which benefit our tenants indirectly through reductions in service charge costs. In 2012, we will aim to continue to work with tenants to identify opportunities to reduce energy consumption.

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communities and visitors
our commitment to community members and shopping centre visitors
Sonae Sierra is committed to providing attractive shopping centres that serve the needs of the local population. We seek to generate local economic benefits 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. As well as benefiting the community, this strategy can also help us enhance our reputation and increase visitor numbers.

We develop projects in compelling locations, creating shopping centres with a long-term market perspective which offer leisure and entertainment and a broad, innovative tenant mix. We create convenient and efficient layouts to offer visitors an experience that fits with the local setting by generating strong, meaningful links with community values. Many of our shopping centre projects involve considerable improvements to the urban infrastructures that surround the site. These improvements are always part of the base project and in some cases, are also part of protocols with local authorities. Through our Community Advisory Panels (CAPs) programme, we integrate community consultation and engagement into the development and operation of each of our shopping centres and seek to build on-going relationships with local communities that will facilitate environmental, social and economic improvements in the areas in which we operate. We aim to achieve full implementation of the CAPs across our whole development and operational portfolio by 2014.

We Seek to generate local economIc benefItS 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.

We recognise that by minimising adverse environmental impacts generated by our activities we can increase local communities’ support for our shopping centre projects. To this end, we promote sustainable transport and uphold eco-efficient management practices within the scope of our Safety, Health and Environmental Management System (SHEMS) that reduce waste production, water and energy consumption. In Portugal and Spain we also implement procedures to improve accessibility, with reference to the UNE 170001-2:2001 standard. We acknowledge that the creation of new shopping centres can also have an adverse impact on local businesses and to mitigate this impact, we offer local retailers high quality accommodation in our centres. In 2011, 33% of the shops within our shopping centres were occupied by local retailers (i.e. businesses based in the local catchment area of each centre). We also offer an alternative retail format, Shop Spots, which is ideal for new entrepreneurs and small businesses to market their products in a prime location in our stores at a competitive cost. During the operations phase, besides ensuring that the tenant mix, facilities and events offered by the shopping centre are suited to visitors’ needs and interests, we undertake to play a proactive role in raising visitors’ awareness of CR concerns, promoting a large number of events and campaigns with environmental and social themes. We also support charitable initiatives to promote community members’ well-being. We have set ourselves medium-term goals to devise and implement a long-term strategy to improve communities’ well-being and to enhance visitors’ recognition of our shopping centres’ sustainability performance.
tArgEt for 2012

• Invest a proportion of the total marketing budget of every operational shopping centre and project under development in community-related initiatives (at least 3% for sites in Europe and 1% for sites in Brazil).

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communities and visitors continued
investing in local communities
In 2011, a total of €1,483,638 was invested in local community initiatives. This included: • €1,148,581 in investments in charitable causes and specific activities, events and campaigns with social responsibility themes, made through our shopping centres’ marketing budgets. • €132,078 in shopping centre-level community investment in cash, including donations of €83,974 collected from shopping centres’ visitors on behalf of charitable causes. • €126,398 in corporate donations to charitable causes and sponsorships. • €65,064 in shopping centre-level sponsorships. • €11,517 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 12,524 kg of food contributions, 9,622 litres of milk and 32,439 other items such as clothing and books34.
Global marketing investments in CR and other community contributions (€ million)
2011 2010 2009 2008 1.484 1.219 1.143 2.380

Data Qualifying note: This indicator includes Sonae Sierra’s corporate businesses; all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all projects under development during the reporting year, and all Sonae Sierra direct employees and shopping centres’ visitors. The currency rate used to convert Reais into Euros was 0.43061 and RON into Euros was 0.23618.

Further reference:

Data on our marketing investments in CR and other community contributions by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/engb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

Across our operational shopping centres, we achieved our target to invest a minimum percentage of our shopping centres’ marketing budget in community-related initiatives (3% in Europe and 1% in Brazil); in fact, our shopping centres invested an average of 4% of their marketing budget in community initiatives (aggregated across the operational portfolio). However, whilst our two development projects in Europe invested an average 11% of their marketing budget in community initiatives, none of our three projects under development in Brazil achieved the target. In total, we supported 766 charitable organisations35 with a wide range of causes and implemented 684 actions, events and campaigns with a social or environmental theme, representing 42% of the total actions, events and campaigns held in our shopping centres. Across all shopping centres in Europe, we launched a campaign using digital media and indoor advertising to inform visitors about Sonae Sierra’s commitment to CR and our achievements to date. The campaign used consumer-friendly language to present key messages around performance in terms of water and electricity efficiency, waste recycling and GHG emissions reduction. In Portugal, one of our more significant campaigns involved joining forces with Acreditar, an association for the parents and friends of children with cancer. Called “Música por uma Ca(u)sa” (Music for a Cause, for a Home), the campaign involved the use of music to raise funds for the construction of an Acreditar home in Porto to host around 220 families of children with cancer from the northern region of the country, during the periods of out-patient treatment at the Portuguese Institute of Oncology and the S. João Hospital in Porto. Sonae Sierra raised a total of €40,608 for the campaign and, due to the high profile it received, was able to motivate other companies, including some of our tenants, to offer support in the form of in-kind and monetary donations and partnerships for fundraising campaigns.

34

35

All 12,524kg of food were donated by shopping centre visitors. 9,088 litres of milk were donated by Sonae Sierra employees and 534 litres were donated by shopping centre visitors. 4,800 other items were donated by Sonae Sierra employees, and 27,639 were donated by shopping centre visitors. This figure corresponds to the sum of charitable organisations supported, as reported by our shopping centres. In cases where two (or more) shopping centres have supported the same charitable organisation, this has been counted twice (or more times), in order to reflect each individual shopping centre’s commitment.

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communities and visitors continued
investing in local communities (continued)
In Brazil, our shopping centres held a wide range of social and environmental campaigns and activities, ranging from collection points for visitors to donate clothes and blankets for families in need at Pátio Brasil Shopping and Franca Shopping to an eco-fashion show at Manauara Shopping. All our Brazilian shopping centres held sales campaigns with an environmental theme (see page 90 for further details). In Spain, La Farga was awarded the Humana Foundation’s Textile Recycling Prize in the ‘Private Enterprise’ category for having collected the largest amount of clothing for charitable causes.

our on-going coMMitMEnt to invESting in EDucAtion BEnEfitS ovEr 70 StuDEntS in BrAzil
Investment in education is recognised as an important factor in the reduction of social problems. It increases the opportunities that citizens have to enter the labour market, broadens their perspectives and strengthens both personal and professional values. Two of our shopping centres in Brazil have implemented a pioneering programme that offers free classes to the public and the possibility for students to complete their high school graduation. The idea was developed by Shopping Metrópole which had identified the need to empower employees and service providers who had the potential and willingness to learn, but were unable to complete their studies owing to financial limitations, a lack of family support or their working hours. In 2006, Metrópole Educa was launched. Based on this model, Shopping Penha set up the ‘Penha Educa’ programme in December 2008. Access to the programme was extended to local residents after a survey conducted by the centre indicated that there was also an interest and demand for this type of scheme in the community. Since its implementation, Shopping Penha has invested more than R$175,000 (€75,360) in the programme. This covers classroom infrastructure; furniture; audio-visual resources; the periodic purchase of educational materials such as books and school supplies; the contract with the department for industrial social services (SESI) for the payment of qualified teachers; an academic advisor and the organisation of graduation and publicity. The approximate annual investment is R$56,000 (€24,110). Both Shopping Metrópole and Shopping Penha point to the testimonials of its students as evidence of the success of the project. Many of them have stated that they feel more prepared for the labour market, have greater self-esteem and are highly motivated to continue; with a good number of students staying on to complete the second level of studies. This year the Metrópole Educa programme enrolled an initial class of 18 students and a second group of 15 students are preparing for graduation. Currently there are 38 students enrolled in the Penha Educa programme.

“I am very satisfied with the course. I am a bus driver and work at dawn, so I couldn’t enrol in classes, but now this opportunity has given me motivation and made it possible. as soon as I finish high school I intend to do a technical course, so the sacrifice is worth it."
Mario Azevedo Euripedes, Penha Educa Student

“I am a carer for two elderly people who I also live with. my dream was always to go to college and to do so I am devoting my time to the classes. I'm sure I can do it."
Angela Maria dos Santos, Penha Educa Student

“With this opportunity I have been able to overcome challenges and I have learned to speak and express myself better. the classes motivate me to continue learning so that I will have more opportunities.”
Maria de lourdes de Souza, Penha Educa Student

“this project has given me the basis to acquire new knowledge, culture and inclusion in society. thank you for this great opportunity.”
Antonio de oliveira Sales nicácio, Metrópole Educa Student

In the future, we will investigate the possibility of making partnerships with companies to allow students who have completed their course greater potential access to the labour market.

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communities and visitors continued
Dedicating time and resources to good causes through employee volunteering
Besides the impact we have on local communities at the shopping centre level, we aim to contribute to the community at a corporate level by mobilising our staff to participate in community volunteering. 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.
Number of hours spent by employees in charity organisations
2011 2010 2009 2008 3,059 2,746 3,001 2,521

Proportion of volunteering day entitlements taken up by employees (%)
2011 2010 2009 2008 35 31 33 28

Data Qualifying note: These indicators include all Sonae Sierra direct employees as on 31 December 2011. The number of hours spent by employees in charity organisations is the sum of all hours spent by employees who volunteered. The proportion of volunteering day entitlements spent by employees in charity activities is determined by the following formula: % = total number of hours spent by employees in charity activities/(total number of volunteer hours available (8)*number of Sonae Sierra direct employees)).

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx

In 2011, our staff dedicated a total of 3,059 hours of time to community volunteering, an 11% increase in comparison with 2010. 2,781 of these hours were contributed through the Sonae Sierra Community Day. We invested €36,176 in Community Day activities, benefitting 61 institutions and at least 2,640 people who received our support. Some examples of initiatives undertaken included: • Afternoon entertainment for elderly people, featuring karaoke, dancing and a social lunch, held by AlgarveShopping and AlbufeiraShopping in Portugal. • The refurbishment of a children’s centre and participation in activities with children at the Santos-o-Velho Parish Association, supported by employees in the Lisbon office. • Serving food to homeless people at a nearby day-centre near the Luz del Tajo shopping centre in Spain. • A day at the Ca’ Dei Fiori Community Home for the Elderly spent by the team at Valecenter in Italy. • A day at Münster’s animal shelter, where employees from Münster Arkaden in Germany delivered goods and foods and helping staff with their daily activities. • A clean-up operation on one of the most popular municipal beaches in Athens by employees of the Athens office. • A partnership with the Brazilian Association of Alzheimer’s Disease which allowed employees in Brazil to visit nursing homes and disseminate information about the disease and to conduct workshops for disease prevention.

“there is no doubt that we owe our ability to put quality into our institution’s operations to all this support. thank you very much!! I also want to congratulate the individuals you have in your service. each role was executed with an incredible spirit of mutual assistance. each person took care to make the best effort they could, demonstrating great positivity and satisfaction at all times.”
Maria do carmo ribeiro, Director of Santos-o-Velho Parish Association

As well as the specific events which took place as part of the Sonae Sierra Community Day, Sonae Sierra staff contributed to local communities through some unique and on-going initiatives. In total, we welcomed 283 school visits to our shopping centres, which involved educating children and young adults about environmental and safety equipment and procedures. At Tivoli Shopping in Brazil, we continued our project with local schools to educate staff and pupils about environmental management practices. We invited several schools to visit the technical areas of Tivoli Shopping to learn about eco-efficiency and safety practices in the centre and we invited them to participate in a competition to create a model eco-school by implementing similar practices to those they had seen in the shopping centre. We supported the winning school, EE Prof. Risoleta Lopes Aranha, to implement their eco-school project within the school grounds.

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communities and visitors continued
community Advisory Panels initiate engagement with the local community
Through our CAP project, we aim to integrate community consultation and engagement into the development and operation process of our shopping centres. Over the past five years, we have established CAPs at 29 Sonae Sierra shopping centres and development projects. The CAPs help us to create trust and cooperation between our shopping centres and local community representatives. At the CAP meetings, which are held two or three times a year, community representatives are invited to raise ideas and concerns and present potential projects for collaboration. In 2011 we reinforced the CAP guidance and facilitated a training and knowledge-sharing session with shopping centres with a CAP. We continued to use the CAPs as a forum to discuss relevant issues with local community members, for example: • At Valle Real in Spain, we discussed the communities’ concerns about poor child nutrition and the growing rate of child obesity in Spain, and decided to plan an event in collaboration with the Eroski hypermarket, our anchor tenant, to promote good eating habits. On 10 November, we welcomed 25 children from the Pedro Velarde School to teach them about having a balanced breakfast and helping them learn about nutrition through a videogame.

through our cap project, We aIm to Integrate communIty conSultatIon and engagement Into the development and operatIon proceSS of our ShoppIng centreS. over the paSt fIve yearS, We have eStablIShed capS at 29 Sonae SIerra ShoppIng centreS and development projectS.

• At Shopping Plaza Sul in Brazil we received very positive feedback from the CAP members about the refurbishment activities which had taken place in the shopping centre; CAP members agreed that investments in the shopping centre also benefitted the local community.

“cr initiatives such as the community advisory panel were fundamental for us in getting buy-in when we first entered this city. the cap and community day activities helped us to develop relationships with the local community and they enable us to find partners for collaboration in new projects on an on-going basis.”
Manauara Shopping Management team

Besides our CAPs, we receive feedback from local communities through our Geo Tracking surveys, media coverage and compliments and complaints that are presented to our shopping centres. In 2011, we received 873 cases of press coverage on social and environmental issues. Of these, only two (less than 1%) were unfavourable. Favourable press coverage focused on our Water Saving Campaign held in shopping centres in Portugal, Spain and Italy; activities undertaken as part of our Community Day; the Planet Sierra Tenant Awards; our Green Sales campaign in Brazil and the environmental and safety and health certification achieved at various shopping centres.

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communities and visitors continued
Measuring and enhancing visitor satisfaction
Engaging with visitors in order to understand what drives their behaviour and decisions is fundamental to our shopping centres’ success. We undertake Mall Tracking surveys at our shopping centres every year or two years to help us understand our visitor’s profile, their behaviour and requirements. These surveys monitor trends in visitor satisfaction, expectations, loyalty and behaviour, and also ask questions about social and environmental aspects. 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 2011, we increased visitor satisfaction levels in Portugal and Spain and maintained visitor satisfaction levels across Italy, Germany, Greece, Romania and Brazil. We use two different methodologies to monitor visitor satisfaction (each country applies one or the other) and results against both of these are shown in the charts below. Although we use different questions to analyse visitors’ feedback for different types of shopping centres in our portfolio, in particular our centres are recognised for credentials such as: • Offering the visitor a wide range of stores, services and leisure activities which provide a complete experience (beyond shopping). • Offering visitors the certainty that they will be able to find what they are looking for. • Keeping their stores, services and leisure activities up to date. • Supporting local causes and promoting regional development. • Offering entertainment for families.

“I was born in this neighbourhood 45 years ago and Shopping metrópole has always been part of my life, from the time before the food court existed and shopping was the main entertainment for young people. now I have brought my children here to see father christmas and it was lovely to see how happy and excited they were. Shopping metrópole will always be a part of our lives.”
Edilson cirello, Visitor, Shopping Metrópole, Brazil

In 2011, we implemented measures to improve visitors’ satisfaction across all shopping centres; in Brazil, this included the expansion of Shopping Campo Limpo; the inauguration of three new food court stores, the revitalisation of the internal landscaping and the construction of a more secure motorcycle parking lot at Franca Shopping; and the creation of new rest lounges and the refurbishment and expansion of the food court area at Tivoli Shopping (which helped us to achieve a 12% increase in sales in food court shops in 2011).
Visitor satisfaction index – ‘old methodology’
(Italy, germany, greece, romania and brazil)
72.8 72.2 70.8 70.9 2011 2010 2009 2008 3.2 3.2 3.3 3.1

Visitor satisfaction index – ‘new methodology’
(portugal and Spain)
2011 2010 2009 2008

Data Qualifying note: The ‘new’ visitor satisfaction methodology includes all 30 shopping centres owned and in operation for the full reporting year in Portugal and Spain. The ‘old’ visitor satisfaction methodology includes 16 out of 19 shopping centres owned and in operation for the full reporting year in Italy, Germany, Greece, Romania and Brazil. Shopping Metrópole, Shopping Plaza Sul and Manauara Shopping in Brazil were excluded because data was not available from these centres. The visitor satisfaction results are based on a sample of 500 interviews which are proportionally stratified according to shopping centre traffic. The survey takes the form of a personal interview based on a structured questionnaire. The number/type of visitors who receive the interview are selected through systematic counting during one week. The ‘old’ methodology is based on a survey in which different factors are rated from 1 to 4 according to the visitors’ assessments. The ‘new’ methodology is based on a survey in which different factors are rated from 1 not satisfied to 5 very satisfied and between 15 and 20 items are valued. Taking these values we create an indicator in a scale 1 to 100.

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communities and visitors continued
investigating visitors’ attitudes towards ‘green’ and ethical shopping
There is growing evidence that retail consumers are demanding more environmentally-friendly and ethical products and services. In a study involving over 6,000 shoppers and 11 major retailers, Deloitte found that there is an unfulfilled, latent demand for green products that could be realised through increased product development, in-store communication, and product availability36. Even in the context of the economic downturn, consumers still care about environmental and social responsibility and more than two consumers out of three prefer products that involve no child labour and which have no substantial carbon impact. European consumers tend to prefer products that are made locally. However, customers are wary of “sustainability” being an excuse for higher prices37. In 2010, Sonae Sierra commissioned a specific study to investigate our shopping centre visitors’ attitudes towards sustainability. We found that our centres attract a high proportion of environmentally conscious shoppers and that significant levels of consumers are purchasing locally produced and ethically sourced products. Most of our visitors also believed and expected that shopping centres should help them to live more sustainable lives. In 2011, we integrated new sustainability questions into our annual visitor surveys (Mall Tracking) in Europe so that we can continue to track consumer attitudes towards sustainability and in doing so identify ways in which we can help to meet visitors’ needs whilst at the same time promoting sustainable consumption choices to a wider market. The results of the survey revealed that: • 12% of visitors say that a company’s environmental and social track record influences which shopping centre they visit. • 23% say that a company’s environmental and social track record influences what products they buy. • A significant proportion of visitors (46%) agree that a company’s environmental and social track record is important, but it is not an important factor in deciding where they shop or what they buy. There were some significant differences between countries and between shopping centres within the same country. Overall, Spain appeared to have the most conscious consumers, with 15% saying that a company’s environmental and social track record influences where they shop and only 10% stating that environmental and social responsibility is ‘not important’ with respect to shopping. In Germany environmental and social issues were considered important by almost 60% of consumers, but these factors are not widely taken into account in purchasing decisions. When asked which social and environmental issues were most important for them with respect to their visit to the shopping centre, the most common factors cited were: • Provision of facilities for disabled people and improving accessibility to, in and around the shopping centre. • Waste management, including recycling. • The promotion of eco-friendly products. • Increasing energy efficiency and reducing GHG emissions. • Preventing S&H risks. Sonae Sierra’s performance in relation to these issues was rated as being ‘good’ or ‘very good’ (3 to 5 on a scale of 1 to 6). In Brazil, we commissioned a market research study by Ibope Inteligência which found that 80% of visitors recognise our Brazilian shopping centres as being concerned about environmental issues and/ or are actively involved in the local community. These were seen as positive attributes which added value to the shopping centre. In 2011 we developed a strategy to deliver a sustainable shopping experience to our visitors, with a particular focus on attracting and retaining environmentally-conscious visitors. Some of the actions we are taking include introducing new brands within our tenant mix, such as organic supermarkets and restaurants and other speciality shops; holding events to promote environmentally-conscious consumption and raising visitors’ awareness of Sonae Sierra’s commitment to sustainability.

36 37

Source: Deloitte; Green Shopper Study’ (2009). Source: Deloitte, ‘Natal 2011: Indispensável ou supérfluo?’ (Study of Christmas Shopper Habits in 2011).

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communities and visitors continued
investigating visitors’ attitudes towards ‘green’ and ethical shopping (continued)
Within our shopping centres, we already offer a tenant mix which includes services as well as shops, including services which have an environmental or social mission. Some activities worth highlighting in Brazil include: • The Citizen’s Environmental Space (Espaço Cidadania Ambiental) at which occupies a unit at Manauara Shopping and offers workshops, talks and exhibitions about environmental concerns. • A course centre was set up during one month at Shopping Penha, offering classes free of charge to give local residents the opportunity to learn a new hobby, craft or technique, which could even lead to an additional income for them. • At Boavista Shopping, Shopping Penha and Shopping Plaza Sul we have established sports groups which are free of charge for local residents and are designed to help them improve their health and quality of life. Both of our sales campaigns in Brazil included actions to raise awareness about environmental responsibility. During the February sales, we distributed Eco bags to visitors and asked them to make a commitment to responsible consumption by reducing waste, recycling and reusing; during the August sales, we held a raffle of 680 bicycles to encourage the use of sustainable modes of transport.

“I thought the eco bag was a really good idea. now that plastic bags aren’t given out for free any more in the supermarket, we are going to need to use more bags like these. as well as receiving a gift from the shopping centre, I know that I am taking home something that will help me protect the environment.”
Maristela Domene, Visitor, Parque D. Pedro Shopping

At Münster Arkaden in Germany, we collaborated with members of the shopping centre’s CAP to organise a Fair Trade Week38 for visitors to promote the fair trade products available in the shopping centre and support the City of Münster as a candidate for Fair Trade City (a city which made a commitment to supporting Fair Trade and using products with the FAIRTRADE Mark). We organised a varied programme of activities including: • An oriental dance and story-telling for children to promote fair trade carpets sold by our tenant Nyhues; • Fair Trade chocolate tasting courtesy of our supermarket tenant BioMarkt; • Fair Trade wine tasting at the Restaurant Pablo, and • The promotion of fair trade books by tenant Thalia. We received very positive feedback from tenants and visitors about the event.

38

Fair Trade is about allowing better prices; decent working conditions; local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), Fair Trade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their position and have more control over their lives.

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Employees
our approach to creating a positive and stimulating work environment
In 2007, we launched our first Corporate Climate and Employee Satisfaction Survey (Employee Survey). The results of this survey helped us to focus our efforts on key areas where staff satisfaction could be improved, such as work conditions and work-life balance. Over the past years, we have implemented measures to improve performance in these areas, for example by rolling out ergonomic assessments across our corporate and shopping centre offices and introducing new policies to promote better work-life balance, such as our Part Time Working Policy, Working From Home Policy and Flexible Work Schedule Policy. We also promote initiatives to increase staff well-being, such as ‘Healthy Month’ in Europe and ‘workplace gymnasiums’ in Brazil (which involve a physical exercise routine in the workplace). Since 2009, we have performed an Employee Survey bi-annually, our most recent survey having been completed in June 2011. We have set a long-term objective to offer our employees more flexible work arrangements with the aim of becoming a recognised leader in this area by 2020. We are also aiming to create the best possible work conditions (including ergonomic conditions) for all our staff by 2015. In 2008, we introduced a formal non-Discrimination and Diversity policy, which states our commitment to a meritocracy culture and our objective to become a best practice reference in this aspect of CR. 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. To further enforce these principles and policies, the Sierra Ombudsman is a formal procedure which employees (and other stakeholders) can use to report work related issues including breaches in our Code of Conduct. We nurture our employees’ talents through our professional development programmes which include training, knowledge sharing, technical support and encouragement. We believe that providing our staff with additional knowledge, confidence and skills has benefits for both the individual and the wider firm. Indeed, many of the awards for excellence that Sonae Sierra has been granted are a testimony to the talent and skills of our employees. Talent developed and retained by Sonae Sierra enhances our know-how, which boosts Sonae Sierra’s reputation. In turn, our strong reputation contributes substantially to attracting new talent, thus perpetuating the cycle.

We belIeve that provIdIng our Staff WIth addItIonal knoWledge, confIdence and SkIllS haS benefItS for both the IndIvIdual and the WIder fIrm.

It is our objective to encourage our employees to develop their skills and expertise and to foster a culture of innovation. We operate an innovation office which develops and co-ordinates a range of activities to stimulate innovation across the Company. These include: • The Explore programme, which is a company-wide on-line platform for all employees to present innovative ideas for business improvement. These are analysed by a specific team on a regular basis, and the most promising are discussed by our Innovation Steering Committee. • Challenges, a programme to identify solutions to key challenges which are identified by Sonae Sierra’s senior management. Each challenge is tackled by a group of people during a given time period. • CLICK (Creative Learning, Innovation and Continuous Knowledge), which is designed to stimulate innovative ideas and unleash our employees’ creativity. • [email protected], a programme focused on day-by-day work, questioning the way we do our work and finding innovative solutions to do it more efficiently. We use Key Performance Indicators (KPIs) to measure how individuals are contributing to Sonae Sierra’s business goals. These help employees to manage their own performance and ensure that bonuses are paid according to performance achieved at corporate, business unit/ department and individual employee level. These KPIs also cover Safety, Health and Environment (SHE) and innovation.
tArgEtS for 2012

• Reinforce the communication of the existing flexible working policies and develop two new flexible working policies. • Form partnerships with gyms and give conditions for staff to sign up for a gym (applicable to sites with at least 10 employees). • Through the climate survey results, identify areas of perceived unequal opportunities and promote initiatives to change them.

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Employees continued
our workforce in 2011
As of 31 December 2011, we directly employed 1,090 people and supervised a further 18 people employed by other companies and 17 independent contractors. 1,053 (97%) direct employees were permanent employees and 1,080 (99%) worked full-time. Our employees are a vital asset to our Company, and we seek to maintain high levels of staff retention by ensuring that our staff are given the best work conditions possible and are rewarded fairly for their contribution to Sonae Sierra.
Click here for further details about the composition of our workforce and staff turnover in 2011.

aS of 31 december 2011, We dIrectly employed 1,090 people and SupervISed a further 18 people employed by other companIeS and 17 Independent contractorS.

introducing measures to improve staff satisfaction
We performed our fourth Employee Survey to ascertain levels of staff satisfaction in relation to many different workplace aspects. The results of this survey were mixed, but staff satisfaction aggregated across all aspects decreased in comparison with 2009. More specifically, satisfaction with the aspects ‘team work’, ‘overall satisfaction’, ‘line management’ ‘engagement’, ‘work life balance’ and ‘compensation’ decreased in comparison with 2009, whilst satisfaction with ‘communication’ increased substantially, and satisfaction with ‘work conditions’, ‘training and development’ and ‘performance management’ increased marginally. ‘Mission and values’ and ‘Corporate Responsibility’ still rank as the aspects which employees are most satisfied with, whilst ‘Work life balance’ and ‘compensation’ are viewed as being the weakest aspects. The results of our 2011 Employee Survey were presented to our Executive Committee and the Human Resources team is maintaining efforts to improve those aspects which employees have ranked unfavourably. For example, we are reinforcing the internal training programme ‘LISTEN’ to improve managers’ ability to give feedback to employees and we are changing our performance review methodology in order to have a more transparent career development process in place and allow a higher level of information to be available to all employees.
Proportion of staff who agree or strongly agree that Sonae Sierra is a good company to work for
(%)
2011 2009 2008 2007 83.3 84.4 84.3 79.6

Proportion of staff who agree or strongly agree that there is a positive working environment at Sonae Sierra (%)
2011 2009 2008 2007 76.8 81.9 79.7 82.2

Data Qualifying note: These indicators correspond to two of the questions asked in Sonae Sierra’s Employee Survey which are representative of overall staff satisfaction and satisfaction with the work environment.

In 2011, we implemented some specific measures to increase satisfaction (and ultimately retention). These included: • Monitoring the uptake of flexible work arrangements which were introduced in recent years (such as Part-time Working, Working from Home and Flexible Work Schedule). We found that a small number of employees had adopted flexible work arrangements, constituting just over 1% of our direct employees. We therefore decided to reinforce communication on the flexible work arrangements available and to evaluate other flexible work options which could be offered to complement the existing ones. • Performing a salary and benefits review, involving comparison with other companies and industry benchmarks and using the findings to inform our salary revision process for 2012. • Continuing to improve ergonomic conditions for our staff. The results of our 2011 Employee Survey showed that the proportion of Sonae Sierra staff who are satisfied with their ergonomic set-up has increased by 4% in comparison with 2009. • Holding the third edition of ‘Healthy Month’ across our offices in Europe, inviting employees to take part in healthy activities such as relaxation massage; yoga; pilates; shiatsu; reiki; nutrition, dieting and skincare workshops; football; circuit training; gymnastics; cycling; walking; healthy breakfast and healthy lunch. 452 employees took part in a total of 165 ‘Healthy Month’ activities and reported positive feedback about the initiative. Given that ‘lack of career perspectives’ is often cited as a reason that people leave our company, we also began a process to define career steps and theoretical careers paths within the Sonae Sierra business. This project is on-going and will be communicated to our employees during 2012. At the Sonae Group level, we are developing a new Personal Assessment and Career Development process, which will be launched in 2012. This will be supported by two new IT tools which will go live in 2012; one to facilitate the salary revision process and the other to track individual employees’ Key Performance Indicators (KPIs).

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Employees continued
Maintaining our commitment to equal opportunities
In 2011, we maintained our commitment to non-Discrimination and Diversity. Feedback from our 2011 Employee Survey showed that 80% of our employees agree or strongly agree that ‘discrimination on the grounds of race, religion, gender or sexual orientation does not exist at Sonae Sierra (up from 75% in 2007) and 68% believe that ‘there are equal opportunities for women and men in the workplace’ (up from 60% in 2007).
Number and percentage of employees by gender and age group, per employee category <35 Female Male
Global Senior Executive, Senior Executive and Executive Senior Manager Manager Team Leader Project Team Specialist Team Member – 1 2 19 39 209 – – 8 20 35 101

35-44 Female Male
– 6 21 30 32 113 3 20 37 39 36 98

45-54 Female Male
3 5 6 9 6 39 6 18 18 9 11 34

55-64 Female Male
– – 1 1 – 6 8 10 6 4 2 11

>64 Female Male
– – – – – 3 3 – – 1 – 1

total Percentage (%)

270

164

202

233

68 6.2%

96 8.8%

8 0.7%

41 3.8%

3 0.3%

5 0.5%

1,090 100%

24.8% 15.0%

18.5% 21.4%

Number of disabled employees, per employee category
Disabled people Female

Data Qualifying note: These indicators include all of Sonae Sierra’s direct employees on 31 December 2011.

Male

Total

Global Senior Executive, Senior Executive and Executive Senior Manager Manager Team Leader Project Team Specialist Team Member total

– 3 – – 1 – 4

– – – – 1 2 3

– 3 – – 2 2 7

Ratio of basic salary of women to men by employee category
Basic Salary Ratio (%)

Ratio of remuneration of women to men by employee category
Remuneration Ratio (%)

Global Senior Executive, Senior Executive, Executive Senior Manager Manager Team Leader Project Team Specialist Team Member

82 96 85 87 89 126

Global Senior Executive, Senior Executive, Executive Senior Manager Manager Team Leader Project Team Specialist Team Member

87 98 86 87 91 130

Data Qualifying note: These indicators include all of Sonae Sierra’s direct employees on 31 December 2011. 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. Sonae Sierra demonstrates its commitment to non-discrimination in recruitment and treatment of staff in the workplace by monitoring the 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.

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Employees continued
investing in staff training and development
In 2011, we invested €528 per capita in staff training and development. This value is lower in comparison with previous years, and reflects the economic constraints on our Company in 2011. To compensate for this as far as possible, we increased the delivery of internal training to staff, and succeeded in providing employees with an average 48.9 hours of training during the course of the year, an increase of 28% in comparison with 2010. This meant that we achieved our target to maintain the total number of training hours per employee in comparison with 2010 levels. Examples of training initiatives carried out in 2011 included: ‘LISTEN’ (see page 92); ‘HIRE’ which trained line managers on how to deliver recruitment interviews; foreign languages; first aid; meeting management; stress management and advanced negotiation skills training.

In 2011, We InveSted €528 per capIta In Staff traInIng and development. thIS value IS loWer In comparISon WIth prevIouS yearS, and reflectS the economIc conStraIntS on our company In 2011. to compenSate for thIS aS far aS poSSIble, We IncreaSed the delIvery of Internal traInIng to Staff, and Succeeded In provIdIng employeeS WIth an average 48.9 hourS of traInIng durIng the courSe of the year, an IncreaSe of 28% In comparISon WIth 2010.

We encourage employees to identify their own training needs and we monitor participant feedback received on all our training sessions. We also include questions on training and development in our Employee Survey. Whilst employees’ assessment of the training opportunities offered by Sonae Sierra has improved over the last five years, this is still an aspect which could be further enhanced. In 2011, we provided a greater level of information to employees on the training and development opportunities available. In 2011, 100% of our direct employees received regular performance and career development reviews39. We also applied our 360° appraisal tool to all Managers and Team Leaders who manage more than three members of staff.
Investment in staff training and development
(€ per capita)
2011 2010 2009 2008 528 776 1,195 900

Average hours of training per year per employee
(number of hours)

Proportion of training undertaken by type
Number of hours Proportion of total training hours (%)

Type of training
2011 2010 2009 2008 48.9 38.1 40.2 38.3

Technical Behavioural Languages total

28,880 6,985 17,488 53,353

54% 13% 33% 100%

Data Qualifying note: These indicators include all of Sonae Sierra’s direct employees on 31 December 2011. A breakdown of the average hours of training per year per employee by employee category is provided in the Global Reporting Initiative chapter of this report, under LA10, on page 142.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on our investment in staff training and development and average hours of training by employee by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

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This included all Sonae Sierra direct employees on 31 December 2011: 551 female employees (100%) and 539 male employees (100%).

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Employees continued
Promoting a culture of innovation
We estimate that the Net Present Value (NPV) of innovation projects already implemented by our Company is €6.9 million. The NPV of projects that are in the pipeline is estimated at €91.8 million, totalling €98.7 million in all. In 2011 we continued to promote innovation among our employees through a range of programmes developed by our Innovation Office, including those described on page 91. In 2010 we launched 4Sight, a new project to accelerate the identification of future opportunities for Sonae Sierra. From a total of 13 strategic initiatives defined, six were concluded in 2011, three are in progress and four are expected to start during the first half 2012. We concluded nine challenging projects (‘Challenges’) commenced in previous years and proceeded with Challenges concerning Back Office costs, bureaucracy and the balance between rents and service charges in shopping centres. As a result, we implemented six new measures in 2011, and nine are under development. 1,490 ideas were submitted by employees to our Explore Programme, and 32 of these were approved for implementation and/ or implemented during 2011. A further 21 ideas are under analysis by our team of evaluators. The ideas implemented or scheduled for implementation included: • Creation of a portal to centralise information about our service suppliers. • Development of a retail offer and special shopping centre services to meet the needs of visitors aged 55 and above, particularly as this age group already represents 35% of the European population and is growing. • Installation of a device to monitor the temperature of the electrical fryers to avoid fires in shopping centres’ restaurant kitchens caused by overheated oil. • Development of a ‘fashion blog’ for fashion-focused shopping centres to inform people about the latest seasonal fashion trends. • Use of ‘bubble deck’ concrete decks in shopping centre developments instead of conventional concrete solutions. ‘Bubble deck’ is more flexible, requires less construction time and has lower embodied energy and CO2 emissions. We launched [email protected], an initiative to promote an innovation culture in our daily activities. This involved a series of internal workshops for all Sonae Sierra teams to address questions such as ‘What do we do that we should not do?’; ‘What don’t we do, but should do?’ and ‘What should we do differently?’. As a result, 43 initiatives were defined for implementation in 2012. Last but not least, we developed Open Innovation, a programme which engages other external companies to partner with Sonae Sierra´s efforts to solve some of the challenges we have identified. This programme is currently being piloted with a strategic initiative developed called “Consumer and Retail Knowledge” and involves engagement with tenants and other relevant external entities. It is expected to be concluded during 2012.

StiMulAting crEAtivity AnD initiAtivE to BuilD A culturE of innovAtion
Sonae Sierra believes that innovation training can bring real benefit to the business. CLICK (Creative Learning, Innovation and Continuous Knowledge) is a programme designed to enhance Sonae Sierra’s innovation capacity. First launched in 2009 with a focus on developing creativity, in 2011 we held the second part of the programme, CLICK2, to promote an initiative with the strapline “Become the change you want to see”. It is our view that combining creativity with initiative is the formula for creating innovation. The content of the CLICK2 programme was developed by the Innovation Office, in co-operation with Sonae Sierra’s Human Resources Department and sponsored by the CEO and all Executives. It consisted of one day workshops in small groups and was facilitated by Sonae Sierra’s own ‘Innovation Champions’, selected staff from all business functions and levels who have been trained by external consultants to deliver the programme. CLICK2 received good feedback from employees at all levels of the business, with an 84% participation rate and an average evaluation of 3.7 on a scale of 1 to 4. It also increased the satisfaction and motivation of the Innovation Champions and allowed them to work closely with people from other departments to share their knowledge about innovation and help embed an innovation culture across our organisation.

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Safety and Health
our commitment to creating a safety culture across all our sites and activities
With 49 operational shopping centres, five projects under construction and eight main corporate offices in Europe and Brazil, we are responsible for the safety of millions of people – in particular shopping centre visitors, tenants, service suppliers and our own employees – that are present on these sites on a daily basis. Our Safety and Health (S&H) strategy aims to prevent all accidents, thereby protecting every person present on our premises. Zero accidents is our ultimate goal and we aim to achieve this through the creation of a safety-conscious culture across our entire organisation. In 2008, our S&H Management System was the first in the shopping centre industry to be certified according to OHSAS 18001 standard. In 2011 this system was integrated with the Environmental Management System to create the Safety, Health and Environment Management System (SHEMS) (see pages 24 and 25 for further details). The SHEMS continues to provide us with the tools necessary to maintain a safety culture embedded throughout all our activities, minimising risks and promoting a safer and healthier lifestyle to all the people who visit our shopping centres. To date, 29 of our shopping centres have obtained OHSAS 18001 certification for their local SHEMS, as have four construction projects. Our objective is to obtain OHSAS certification for all our new construction projects and all assets which we own and have managed for at least two years by 2015.

Zero accIdentS IS our ultImate goal and We aIm to achIeve thIS through the creatIon of a Safety-conScIouS culture acroSS our entIre organISatIon.

We strive to continually minimise the occurrence of workplace incidents and occupational diseases, as well as to promote good health and well-being among our workforce. We do this by implementing our SHEMS and delivering S&H training, workshops, regular SHE meetings, improving workplace ergonomic conditions and infrastructures on our sites. 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. 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. A description of the tools and other practices we use to improve construction site safety can be found on pages 99 and 100. In respect to expansions and refurbishments a simplified SHEMS version is also implemented (see page 25 for further details). 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. 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 with an investment proposal approved after December 2009 and is checked through a final audit carried out by a third party. Compliance with local S&H regulations is also confirmed by competent authorities prior to opening as part of new shopping centres’ licensing procedure. 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 monitor and evaluate S&H performance on a regular basis using tools such as SHE Preventive Observation (SPO), emergency drills and SHE inspections (covering safety-related equipment and installations in tenant units and technical areas). We hold regular SHE meetings at all shopping centres during which we encourage suggestions, participation and engagement from Sonae Sierra staff and service suppliers. Open SHE committees with tenants covering CR themes are also held at all our shopping centres, during which S&H issues are discussed and tenants are asked to actively participate in shopping centres’ S&H management. Any issues identified by these procedures are followed-up and corrective actions are taken. We also 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. Furthermore, SHE audits are developed to validate the S&H data reported by all sites and internal audits are developed yearly to follow-up on each site’s implementation of our corporate SHEMS requirements.

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Safety and Health continued
our commitment to creating a safety culture across all our sites and activities (continued)
tArgEtS for 2012

• Reduce the number of work accidents (per million hours worked) with workforce absence, in comparison with 201140. • Reduce the severity of work accidents and occupational diseases with workforce absence, in comparison with 201141. • Decrease the Lost Workday Case Accidents Frequency Rate (LWCAFR) on construction works by at least 5%, compared with 2011. • Achieve 100% accomplishment of Safe Practice Index (SPI) hours on construction works at the end of the year. • Reduce the number of level 3, 4 and 5 accidents in shopping centres, per million visits, in comparison with 2011. • Reduce the LWCAFR of shopping centres' service suppliers by at least 4% in comparison with 2011. • Achieve zero fatalities due to accidents within the Sonae Sierra workforce and among stakeholders present across all Sonae Sierra sites. • Achieve OHSAS 18001 certification in an additional three shopping centres in operation and in all construction works of new centres opening in 2012.

reducing accidents and occupational diseases in the workplace
Our SHEMS includes a cross-cutting procedure aimed at identifying and evaluating S&H hazards and risks to people. This risk analysis is made for every area in offices, shopping centres in operation and on development projects and it covers Sonae Sierra’s workforce, external suppliers, tenants and visitors. We evaluate risks by considering the strength and weaknesses of the control measures in place; the frequency and probability of the risks’ occurrence and their potential severity. After considering all these issues, we classify risks into four separate categories: two that are considered as acceptable and two non-acceptable. Non–acceptable risks identified must be addressed through the implementation of additional risk control measures until the risk is classified into one of the two acceptable risk categories. In 2011, we reduced the rate of work accidents in our workforce42 by 1% in comparison with 2010. We also reduced the severity of work accidents among our workforce, measured as the number of staff days’ absence due to work accidents and occupational diseases per million hours worked. There were no fatalities or occupational diseases among our workforce in 2011.
Global rates of injury, occupational diseases, lost work days, absenteeism and number of work-related fatalities
2011 2010
Data Qualifying note: This indicator covers the entire Sonae Sierra workforce during 2011 (direct employees and supervised workers). Regarding independent contractors, there were no injuries; occupational diseases; lost days; absentee periods and fatalities to be reported. The formulas used to calculate the presented rates are: • Injury rate = (Number of injuries * 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 In 2011, the formulas used to calculate the lost day rate and the total time worked were different from those used in previous years. Data was also reformulated for 2010, taking into account these differences. Workable hours are now calculated on a monthly basis, through the multiplication of the workforce by the number of workable days by eight hours per day. At the end, the monthly workable hours are summed up to calculate the total number of workable hours in the reporting year. Injuries reported do not include minor injuries (first-aid level or medical treatment level). For Sonae Sierra, “days” means “scheduled work days” and the “lost days” count begins from the immediate working shift (or day) after the accident/occupational disease occurred.

Injury rate Occupational disease rate Lost day rate Absentee rate Fatalities

2.37 0.00 11.84 0.02 0.00

2.40 0.00 14.88 0.03 0.00

40 41 42

This includes accidents which may occur during travel to and from the workplace. The workforce covers Sonae Sierra’s direct employees and supervised workers. Same comment as above. We consider our workforce to be the 1,090 people who we directly employ and the 18 people that are employed by other companies but are supervised by our Company, as reported in the Employees chapter on page 92.

SOCIAL PERFORMANCE
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Safety and Health continued
Reducing accidents and occupational diseases in the workplace (continued)
We maintained our strong focus on incident prevention and in 2011 we delivered a total of 130,855 man hours of Safety and Health (S&H) training and awareness to our staff, suppliers and tenants combined across all our sites. A total of 1,527 training sessions were held, involving 28,370 participants. These sessions included training on: • Sonae Sierra’s SHEMS procedures; • Incident reporting and investigation; • Emergency response procedures; • The use of the SHE Portal; • SHE Preventive Observations (SPO); • Safe Practice Index (SPI) audits; and • Other specific topics such as fire fighting systems, first aid and construction site safety. We also performed 216 hours of SPO and an average 2.1 emergency practice drills across our main corporate offices (for more details on emergency drills, see the Embedding our S&H management procedures sub-section on page 103). We achieved 85% accomplishment of our corporate target relating to the number of SPOs; Regular SHE Meetings; Emergency Practice Drills and Incident Investigation in corporate offices, as shown by our “SHE Global Achievement” indicator below.
Total number of man hours of Safety and Health training and awareness provided across all Sonae Sierra sites (number of hours)
2011 2010 2009 2008 130,855

“SHE Global Achievement” (corporate offices)
SHE Global Achievement components

2011

2010

2009

2008

SHE Meetings SPOs
145,407 20,307 13,467

119% 123% 100% 0%

101% 142% 100% 100%

106% 134% 119% n.a.

59% 90% 113% n.a.

Data Qualifying Note: The S&H training and awareness indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all shopping centres managed but not owned by Sonae Sierra during the reporting year; all projects under development and Sonae Sierra’s eight main corporate offices. It includes hours spent in SHE meetings. The “SHE Global Achievement” includes all eight main corporate offices and comprises the average of the following four elements: (1) The percentage of SHE meetings provided during reporting period, in relation to the target set; (2) The percentage of hours of SPOs undertaken during the reporting period in relation to the target set; (3) The percentage of emergency practice drills undertaken during the reporting period in relation to the target set; (4) The percentage of incidents investigated during the reporting period in relation to the number of incidents that must be investigated.

Drills Incident Investigation

Further reference:

Historical data for S&H training and awareness from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on S&H training and awareness by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

The World Day for Safety and Health at Work (28 April) is the occasion for all workers to remember the victims of occupational accidents or diseases, and for Sonae Sierra, an opportunity to reinforce the importance of preserving the safety and health of all. We celebrated this day in our shopping centres, delivering training on S&H; organising appointments for our employees with an Occupational Health Doctor, and offering medical screening. We also raised awareness among tenants and service suppliers about work accidents. We specifically urged staff to ‘Expect the Unexpected’ on their way to and from their workplace, as we have identified that half of the accidents involving members of the Sonae Sierra workforce in the last two years have happened during their journey to or from work. Because day-to-day work activities can lead to stress in some individuals, and high levels of continuous stress have a negative impact on health, we are committed to helping employees that might be suffering from it. We organised a training programme called ‘Personal and Professional Stress Management’, and held three training sessions open to all of our employees between December 2010 and May 2011, and three other sessions from May to September 2011 dedicated to the Accounting Department. In total, over 50 employees were trained.

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Safety and Health continued
reducing accidents and occupational diseases in the workplace (continued)
In 2011 we continued to promote good ergonomic conditions for our workforce. We held a meeting in every office on musculoskeletal disorders which can be triggered by office work and on how best to handle manual loads. We also carried out an ergonomic assessment in all corporate and shopping centre offices where this had not been done in 2010, and, at offices which had carried out assessments in 2010, we implemented 34% of corrective actions required. We also promoted ‘Healthy Month’ for the third consecutive year to encourage our employees to adopt healthy lifestyles and give them opportunities to practice sports and relaxation techniques which they might not normally have time to do (see page 92 in the Employees chapter for further details). In Italy, our proactive approach to S&H management and in particular our attainment of OHSAS 18001 certification for our SHEMS enabled us to obtain a reduction of around €3,791 in insurance costs from the National Institute for Insurance Against Accidents at Work (INAIL)43.

Promoting safety on construction sites
We use specific tools such as the SPI to assess and continuously improve construction site safety conditions and workers’ actions. The SPI is an auditing tool that is used to assess the probability of accidents occurring on construction site works through observations made by the Sonae Sierra Development Site Manager, the outsourced project management team, the Site S&H Coordinator and major contractor representatives. The SPI measures the level of adherence to Sonae Sierra’s S&H requirements as construction works evolve, and results are reported back to the project team. The higher the index results, the higher the safety conscience is amongst the construction workforce. Where deviations or non-conformities are detected, various actions can be taken, such as correcting them, increasing worker supervision, providing further training or more resources. We also hold regular SHE Meetings and carry out emergency practice drills on all construction sites. All serious incidents which occur are investigated and lessons learned are communicated across the Company through the tool called Safety Alerts, which are messages that are sent to Sonae Sierra employees, and describe preventive actions which should be taken to avoid certain accidents. In 2011, we implemented the following measures to reduce the number of accidents: • We carried out SPI observations on all our projects under construction (including expansion and refurbishment works). The average SPI score across our construction sites was 94%, meaning that we have increased the high level safety conditions and behaviour practices achieved on Sonae Sierra construction projects44. • We delivered 753 man hours of S&H training on construction sites. • We held S&H awareness raising events for construction suppliers. For instance, on the Boulevard Londrina Shopping site in Brazil, one of the three events we held focused on providing guidance on the safe handling of chemical products. On the Uberlândia Shopping site, also in Brazil, we raised awareness about health risks related to smoking and drinking.

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Instituto Nazionale per L’Assicurazione contro gli Infortuni sul Lavoro. It should be noted that the SPI is a subjective tool that relies on the inputs of a number of project collaborators and that site conditions do not directly correlate with the number of incidents. From the perspective of the auditors, the overall safety conditions of our sites have been improving each year, in spite of the fact that we have recorded more (but less serious) incidents.

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Safety and Health continued
Promoting safety on construction sites (continued)
We did not inaugurate any new shopping centres in 2011, but we did already achieve OHSAS 18001 certification for SHEMS of Le Terrazze in Italy and Uberlândia Shopping in Brazil, which are scheduled to open in the first quarter of 2012. Unfortunately, in spite of the enforcement controls in place and considerable efforts dedicated to S&H awareness-raising, we did not achieve our target to reduce the Lost Workday Case Accidents Frequency Rate (LWCAFR) by 5% in comparison with the 2010 result. The LWCAFR is the number of incidents resulting in one or more lost workdays per million hours worked on construction sites. In 2011, a relatively high number of minor accidents occurred on the Uberlândia Shopping project in Brazil. No fatalities occurred on our construction sites in 2011.
Lost Workday Case Accidents Frequency Rate (LWCAFR) on construction sites
2011 2010 2009 2008 17.2 13.0 7.5 12.7

Data Qualifying note: This indicator includes projects under development as on 31 December 2011 as well as projects completed during the reporting year. The LWCAFR is the number of incidents resulting in one or more lost work days (incident category level 4) per million hours worked on construction sites.

Safe Practice Index (SPI)
(%)
2011 2010 2009 2008 94 92 91 88

Data Qualifying note: This indicator includes projects under development as on 31 December 2011 as well as projects completed during the reporting year. The SPI is obtained through the weighted average of SPI values for the reporting year. This indicator covers all projects with an SPI programme in place. This includes the CC Continente de Portimão refurbishment and the Colombo office Tower Ocidente project in Portugal; Le Terrazze and the Valecenter refurbishment in Italy; Solingen Shopping in Germany and the Shopping Metrópole expansion; Boulevard Londrina Shopping and Uberlândia Shopping in Brazil.

A PErSonAl logBook to iMProvE SitE SAfEty At SolingEn in gErMAny
The construction industry is the sector where most workplace accidents happen, according to Eurostat data. Sonae Sierra is particularly aware of this issue for its shopping centre construction sites, where the scale and nature of the work can generate Safety and Health (S&H) risks for workers on site. Because those workers are our construction contractors’ employees, as opposed to direct Sonae Sierra employees, it can be demanding to reach them and ensure that they respect our internal S&H rules and procedures. We also need to make sure that construction workers are fit for work and that the tasks assigned, the training provided and personal S&H records are sufficient and adequate. We started the demolition work on Solingen site in Germany in September 2011 and, to tackle these issues, we decided to distribute personal logbooks to each worker. These logbooks are designed to hold certificates, evidence and information that their owner needs to work on site, including: • • • • Name Age ID reference number Medical examinations • • • • Vaccinations Skills Training sessions attended S&H records (non-compliance with established procedures, etc.)

This logbook is a document that every worker is required to carry when on site. Their use was suggested by our demolition phase S&H coordination team, GeoExperts. We explained to our suppliers how to use them and they have been well-accepted by all. The use of the logbooks has improved the efficiency of our S&H coordination by identifying workers who should or should not carry out specific tasks; who need training or special authorisation in certain cases; and those who might have recurrently been exposed to safety hazards or involved in incidents. Although we cannot accurately measure or anticipate how many accidents were avoided thanks to this measure, we expect that it has played a part in the good S&H results achieved so far, as no incidents have been reported. Another important benefit is that this logbook has contributed to increasing workers’ S&H awareness by being part of their daily routine. It also establishes clear responsibilities and allows supervisors to check workers’ certificates as and when needed.

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Safety and Health continued
Making shopping centres safer
In 2011 we succeeded in reducing the LWCAFR among our service suppliers in shopping centres by 26% in comparison with 2010, exceeding the target we had set. Although the LWCAFR has shown an increase over the four year period since 2008, this is more likely to be due to the improving quality of data reported at our shopping centres. In 2011, our data audits did not find any incidents which had not been reported, which means that we can now have greater confidence in the reliability of this indicator. However, unfortunately we were unable to reduce the frequency rate of level three, four and five category accidents per million visits to our shopping centres; the frequency rate of these types of accidents was 1.48 in 2011 compared with 1.02 in 2010. Some of the factors which have influenced this trend included an improvement in the quality of data reported and the 4% decrease in the overall number of visits to our shopping centres in 2011 compared with 2010. We also deeply regret that in 2011 one accident occurred in one of our shopping centres where a tenant’s supplier suffered a fatal injury whilst working on our site.
Global frequency rate of level 3, 4 and 5 category accidents per million visits in shopping centres
2011 2010 2009 2008 1.48 1.02 0.73 1.01

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year, as well as a further six shopping centres which we managed on behalf of other owners in both 2010 and 2011. The frequency rate of accidents occurring among shopping centre visitors is calculated as the number of level 3, 4 and 5 category accidents divided by the total number of visits. In accordance with Sonae Sierra’s 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.

Global Lost Workday Case Accidents Frequency Rate (LWCAFR) among suppliers in shopping centres
2011 2010 2009 2008 2.88 3.88 2.76 1.39

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year, as well as a further six shopping centres which we managed on behalf of other owners in both 2010 and 2011. The LWCAFR is the number of incidents resulting in one or more lost work days of accidents per million hours worked by suppliers who are based in our shopping centres (i.e., cleaning, maintenance and security staff).

We continue to promote safe behaviour, prevent accidents and make sure that we know how to respond in emergency situations across all our shopping centres. When incidents do occur, we issue safety alerts to all our shopping centres and update our SHEMS procedures with the aim of preventing any similar incident from occurring again. In 2011 a further five of our shopping centres’ SHEMS were certified in accordance with OHSAS 18001: GuimarãesShopping and LoureShopping in Portugal; Parque Principado and GranCasa in Spain and Münster Arkaden in Germany. In 2011 we delivered training to shopping centre suppliers and tenants on the SHEMS; emergency procedures and fire fighting; hazard identification and risk assessment; first aid and ergonomics, as well as induction training for new staff. We also performed 10,580 hours of SPO45 across our shopping centres (including some of those which we manage on behalf of other owners). The number of hours of SPO performed decreased in comparison with previous years as the monthly target number of hours of SPO set for shopping centres (previously four hours per month) was adjusted according to the number of shops and number of personnel in each shopping centre management team to perform the SPO. In 2011, we detected an average 7.8 non-conformities per hour of reference SPO, a 34% increase in comparison with 2010. This partly reflects the change in the methodology used to calculate this indicator (see the data qualifying note for further details). However, it is also consistent with an increase in the number of non-conformities detected across all SPO performed.

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Safety, Health and Environment Preventive Observations formerly Safety Preventive Observations, SPO allow us to identify and correct behaviour which could potentially lead to incidents, and are therefore an important part of our accident prevention strategy. In 2011, in line with the integration of our Safety and Health and Environmental Management Systems, the SPO included environmental as well as S&H criteria.

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Safety and Health continued
Making shopping centres safer (continued)
Number of hours of Safety, Health and Environment Preventive Observation (SPO) performed in shopping centres and corporate offices (number of hours)
2011 2010 2009 2008 10,795 12,880 12,445 11,659

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as our eight main corporate offices. It also includes 12 out of 20 shopping centres managed by Sonae Sierra on behalf of other owners where the SPO tool is applied.

Number of nonconformities detected per hour of reference SPO
(number of non-conformities detected per hour)
2011 2010 2009 2008 7.8 5.8 5.7 7.9

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year. In 2011, the methodology used to calculate this indicator changed. In previous years, ‘reference SPOs’ (which are included in this indicator), only included SPOs performed by Country S&H Coordinators or by the Sustainability Office team on so called ‘reference sites’, a sample of sites which were intended to represent a proxy for our whole portfolio. In 2011, this was changed to avoid the need for additional travel to be made specifically to these sites. ‘Reference SPOs’ are SPOs performed by any Country SHE Coordinator or by the Sustainability Office team on any Sonae Sierra site. In 2011 the calculation method for non-conformities also changed to account for the fact that environmental criteria are now included. The number of nonconformities per hour of SPO is now calculated as the total number of S&H and SHE non-conformities divided by 80% of SPO hours performed, multiplied by the total number of SPO hours.

Further reference:

Historical data from earlier years is available on our corporate website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/ourprogress.aspx Data on the number of SPOs performed by country is available in our Country CR Summary Report at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

“SHE Global Achievement” (shopping centres)
SHE Global Achievement components
Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year, as well as shopping centres managed by Sonae Sierra on behalf of other owners during the reporting year. Please see page 98 for an explanation of how the “SHE Global Achievement” is calculated.

2011

2010

2009

2008

SHE Meetings SPOs Drills Incident Investigation

137% 193% 109% 111%

121% 126% 101% 101%

123% 130% 116% n.a.

108% 121% 100% n.a.

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Safety and Health continued
Embedding our S&H management procedures
One of our SHEMS procedures involves the regular inspection of our tenants’ units and in 2011 we carried out 3,865 of these inspections and engaged with tenants to address all non-conformances detected. Moreover, our use of Personal Digital Assistants (PDAs) to help us conduct these inspections in a more efficient and effective way achieved us recognition as the winner of a European Risk Management Award in the category “Most innovative use of IT or other technology”. These awards are presented by StrategicRISK, a British magazine which acknowledges the best and most innovative activity in risk management. All our shopping centres (as well as our corporate offices) have an Internal Emergency Plan developed during the construction phase of the site, or after acquisition, and this plan covers all possible emergency scenarios. It is tested at least twice per year on each site against two of these scenarios, through the practice of emergency drills. We have identified fires as being the most significant major hazard for shopping centres and a fire emergency is one of the scenarios we practice every year. In 2011 our shopping centres performed an average of 2.3 emergency practice drills. In addition to the ‘fire scenario’, we chose to test the earthquake scenario, where this risk exists, since it is a natural phenomenon which can prove destructive and take many lives. Our shopping centres tested their procedures and informed staff, tenants and suppliers about the safe behaviour practices to adopt before, during and after an earthquake. These drills attracted significant media coverage and also counted on the participation of official entities, like the fire brigade and civil protection authorities, who praised our initiative.
Number of drills performed divided by total number of sites of operation
(number of drills by site)
2011 2010 2009 2008 2.3 2.0 2.1 1.9

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for at least six weeks of the reporting year; as well as our eight main corporate offices. This indicator represents the total number of practice safety, health and environment emergency drills carried out across all sites of operation and corporate offices, divided by the number of sites. In 2011, environmental drills, which previously were excluded from the scope of this indicator, were included together with safety and health emergency drills due to the integration of these two procedures.

We continue to raise awareness among our suppliers, tenants and visitors about S&H issues. In 2011 we put together a leaflet explaining the most common sources of accidents in our shopping centres and how to avoid them, and disseminated it among all our tenants. We held a range of events to celebrate World Day for Safety and Health at Work on 28 April, including training about road safety, occupational diseases and safety rules in our shopping centres. Many of our shopping centres also held campaigns for visitors with S&H themes at different times in the year, including campaigns to promote awareness about the prevention of specific diseases and offer vaccinations. In Brazil, we rolled out the use of WIKA, our children’s safety mascot, by introducing the WIKA microsite on all shopping centres’ websites. This site contains five interactive, educative computer games for children about safe behaviour in shopping centres. Each game tackles a different theme relating to the areas found in a shopping centre (e.g., escalators, lifts, restaurant areas) where children can have different experiences whilst learning basic safety rules so that they can learn how to be safe in each of these areas.

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Board Members and Executives
Board Members
Non-Executive Directors
Paulo Azevedo joined the Sonae Group in 1988. In 1996 he was appointed Director of Modelo Continente SGPS. From 1998 to 2000 he was Chairman of the Executive Committee of Optimus Telecomunicações SA before later being appointed CEO of Sonaecom’s Executive Committee. In 2007 he was elected CEO of Sonae SGPS and Chairman of the Boards of Sonaecom, Sonae Sierra and Sonae Distribuição.
Academic achievements
Paulo Azevedo Chairman

Degree in Chemical Engineering, École Politechnique Federal de Lausanne; MBA, ISEE, University of Porto.

Mark Preston joined Grosvenor in 1989. He was appointed leader of the company’s fund management operations in 1997. In 2006, after four years in San Francisco, he became CEO of Grosvenor Britain & Ireland before being appointed Group CEO in 2008. He currently sits on the Board of the Association of Foreign Investors in Real Estate and is a member of the North West Business Leaders’ Trust.
Academic achievements
Mark Preston Non-Executive Director

BSc Hons degree in Land Management, Reading University; member of the RICS; International Executive Programme at INSEAD.

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 Civil Engineering, University of Porto; MBA, ISEE, University of Porto.
Ângelo Paupério Non-Executive Director

Nicholas Scarles joined Grosvenor in 2004 as Finance Director, Grosvenor Fund Management and Director of Corporate Finance, Grosvenor Group, before being appointed Group Finance Director in 2006. Prior to Grosvenor, Nick was CFO of Centrica plc’s North American operations, following a number of years at Price Waterhouse and Coopers & Lybrand in London and New York.
Academic achievements
Nicholas Scarles Non-Executive Director

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).

Neil Jones has been a Non-Executive director of Sonae Sierra since 1999. He is Managing Director of Almacantar, a property investment and development company. He was CEO of Grosvenor Continental Europe from 1997 to 2009 and an Executive Director of Grosvenor’ Group Ltd. He remains an advisor to Grosvenor. Based in Paris since 1998, he has also lived and worked in London, Brussels and Hong Kong.
Academic achievements
Neil Jones Non-Executive Director

Degree in Estate Management, University of West of England; General Management Programme, Harvard Business School.

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Board Members and Executives continued
Board Members (continued)
Executive Directors
Fernando Guedes Oliveira joined Sonae Sierra in 1991, as Project Manager of the company’s ViaCatarina 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 the Sustainability Office. He is the chair of the CR Steering Committee and the S&H Steering Committee.
Fernando Guedes Oliveira Chief Executive Officer

Academic achievements

Degree in Civil Engineering, University of Porto; MBA, ISEE, University of Porto; AMD, Harvard Business School. 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.
Academic achievements

Edmundo Figueiredo Director, Chief Financial Officer

Degree in Finance, Lisbon School of Economics (ISCEF).

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 portfolio. He is also manager of the Sonae Sierra Funds.
Academic achievements

Degree in Electrical Engineering, Instituto Superior Técnico; PhD, Paris University; MBA, INSEAD.
Pedro Caupers Director, Investment and Asset Management

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 in all markets except Brazil. She is the Co-Chair of the CR Suppliers Working Group.
Ana Guedes Oliveira Director, Developments

Academic achievements

Degree in Civil Engineering, Porto University; MBA, ISEE, University of Porto; AMP, INSEAD.

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, with the exception of Brazil. He is the Chair of the CR Tenants Working Group and Co-chair of the CR Suppliers Working Group.
João Correia de Sampaio Director, Property Management and Leasing

Academic achievements

Degree in Military Sciences, Academia Militar, Lisbon; MBA, Nova University of Lisbon. 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 development of SonaeCom, two Sonae companies operating in Brazil. In 2010 he was appointed CEO of Sonae Sierra Brasil.
Academic achievements

José Baeta Tomás Director, Chief Executive Officer, Sonae Sierra Brasil

Degrees in Finance, ISE, Lisbon, and Retail Marketing, Management Centre Europe, Oxford.

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Board Members and Executives continued
Other Executives
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 development services to third parties in new markets.
Academic achievements

Degree in Civil Engineering, University of Porto; MBA, Kent State University, Ohio.
João Pessoa Jorge Development Services, New Markets

Joaquim Pereira Mendes joined Sonae Sierra in 1989 and is responsible for the company’s Legal, Tax and Mergers & Acquisitions activities.
Academic achievements

Degree in Law, Coimbra University; Visiting Professor, Portucalense University, Porto.
Joaquim Pereira Mendes Legal, Tax, Mergers & Acquisitions

José Quintela has been with Sonae Sierra since 1986, and is, since 1992 leading the team responsible for the concepts and design of all the company’s shopping centres across all the countries Sonae Sierra is active in.
Academic achievements
José Quintela Conceptual Development and Architecture

Degree in Architecture, School of Fine Arts, Lisbon; MBA, Nova University of Lisbon; AMD, Harvard Business School.

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 become responsible for the expansion of the development services area in Maghreb region and in 2011 he was designated Director of the new EMEA Services department.
Academic achievements
José Falcão Mena EMEA Sierra Services

Degree in Civil Engineering, Instituto Superior Técnico, Lisbon; Management Graduated, ISCTE, Lisbon; Advanced Marketing Studies, Católica Lisbon –School of Business and Economics.

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 2006 – he has been responsible for Finance, Planning and Control.
Academic achievements

Joaquim Ribeiro Finance, Planning and Control

Degree in Economics, Faculdade de Economia do Porto; MBA, Nova University of Lisbon; MSc in Property Investment, City University, London.

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Board Members and Executives continued
Other Executives (continued)
Ingo Nissen joined Sonae Sierra in 2000, when the company began operations in Germany. In 2007 he was appointed Director, Development, Romania, with particular responsibilities for the company’s shopping centre development activities in that country.
Academic achievements

Degree in Civil Engineering, Technical University, Braunschweig; PhD, Technical University, Munich.
Ingo Nissen Development, Romania

Thomas Binder has more than 20 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
Thomas Binder Development, Germany

Degree in Real Estate Management, Wirtschaftsakademie, Kiel; studied Law in Bochum and Kiel.

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. In 2012 he also become responsible for the expansion of the property management services in new markets, including Algeria.
Academic achievements
Vitor Nogueira Property Management, in Italy, Greece, Romania and Algeria

Degree in Management Administration, UL & UM, Lisbon; MBA, IEDE, Madrid; Master of Science in Finance, Central Western University, Texas; Global Strategic Management at Harvard Business School.

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 the Chair of the CR Communities and Visitors Working Group.
Manuela Calhau Marketing and Innovation

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.

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
Cristina Santos Property Management, Portugal

Degree in Food Engineering, Católica Lisbon – School of Business and Economics.

Alexandre Fernandes joined Sonae Sierra in 1997 as Project Manager of NorteShopping, later becoming the centre’s General Manager. In 2000 he was appointed Asset Manager for Portugal. 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.
Academic achievements
Alexandre Fernandes Asset Management, Portugal and Spain

MSc in Management, University of Porto; MBA, ISEE, University of Porto.

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Board Members and Executives continued
Other Executives (continued)
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.
Academic achievements

Degree in Law, UNED, Madrid; Studied General Management, London Business School.
Alberto Bravo Property Management, Spain

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.
Academic achievements

Carlos Alberto Correa CFO, Sonae Sierra Brasil

Degree in Accounting & MBA, Universidade Presbiteriana Mackenzie, São Paulo; Studied Finance at Fundação Getúlio Vargas.

Jerry Boschi joined Sonae Sierra in 2002, as it’s the third employee in the Italian office. In 2012 he was appointed Director, Development, Italy, with particular responsibilities for the company’s shopping centre development activities in that country.
Academic achievements

Degree in Civil Engineering, UMIST, University of Manchester; MBA, Cranfield School of Management
Jerry Boschi Development, Italy

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.
Academic achievements

Degree in Mechanical Engineering, IST, Lisbon; MBA, Nova University of Lisbon; PED, IMD, Lausanne.
Pedro Soveral Rodrigues Human Resources

Waldir Chao joined Sonae Sierra Brasil in 2011 after 15 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.
Academic achievements
Waldir Chao Property Management and Leasing, Sonae Sierra Brasil

Degree in Industrial and Management Engineering, – U.S.P., São Paulo; MBA, California State University, San Diego.

GLOBAL REPORTING INITIATIVE
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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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 world’s most widely used sustainability reporting framework. Since 2006 we have published reports which comply with the G3 Sustainability Reporting Guidelines. This report complies with level A+ of the G3.1 Sustainability Reporting Guidelines, the updated version of the G3 Guidelines which was released in March 2011. Moreover, this report also follows a significant part of the new GRI Construction and Real Estate Sector Supplement (CRESS) guidance which was launched in September 2011. This chapter follows the structure of the GRI 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.

This report

complies with level A+ of the G3.1 sustainability reporting guidelines

Freccia Rossa, Italy

Alexa, Germany

Manauara Shopping, Brazil

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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profile Disclosures
Strategy and Analysis
1.1 Statement from the most senior decision-maker of the organisation about the relevance of sustainability to the organization and its strategy Description of key impacts, risks and opportunities. CEO’s Statement, pages 2 and 3.

1.2

Sonae Sierra has identified nine environmental and social impact areas that are most important for our business, and the key issues associated with each one. The impact areas were first identified through the application of the five-part Materiality Test developed by sustainability think-tank AccountAbility46 in 2006 and key issues were identified through a more rigorous review based on the same tests in 2009, which was repeated in 2010. In 2010 we also introduced a new materiality test focusing on innovation opportunities. The outcomes of this review enabled us to identify a total of 23 CR material issues; which are shown in the chart below. The impact areas form the cornerstone of our CR strategy and management system and the environmental and social chapters of this report are structured around our CR impact areas. The specific risks and opportunities associated with each CR impact area are presented in Our Business Strategy, Risk Management, pages 20 and 21.

Prioritisation of CR issues by impact and likelihood 5
sl
Avoiding water pollution

S&H of workforce

Visitor satisfaction

Tenant satisfaction

llt

l

l n
Construction site safety

Talent management

– Impact on local communities – Waste management

4

l
Community consultation and engagement

l
Employee satisfaction and retention

l
GHG emissions and energy efficiency

l
Shopping centre safety

Biodiversity and Habitats

3 Likelihood

nnl
Tenant CR engagement Equal opportunities

ls

l

low RISK
2
l
Suppliers CR performance

– Sustainable Ethical conduct buildings – Efficient water use Sustainable energy supply

l
Climate change adaptation

s
Sustainable water supply

l

1

l
Materials

1 KeY
l s t n

2 Impact

3

4

5

Energy and Climate Water Waste Biodiversity and Habitats

l Suppliers n Tenants l Communities and Visitors

l Employees l Safety and Health l Other (cross-cutting) issues

46

The Materiality Report – Aligning Strategy, Performance & Reporting; Maya Forstater, Simon Zadek et al., AccountAbility, BT Group plc & LRQA, 2006.

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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profile Disclosures continued
organisational profile
2.1 2.2 2.3 Name of the organisation. Primary brands, products and/or services. Our Company, page 9. Our Company, page 9.

Operational structure of the Our Company, Organisational Structure, page 11. organisation, including main divisions, operating companies, subsidiaries and joint ventures. Location of the organisation’s headquarters. Our headquarters are located in Maia, Portugal.

2.4 2.5

Number of countries where the Our Company, page 9, and Our Company, Where We Operate, page 12. organisation operates and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. Nature of ownership and legal form. Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries). Scale of the reporting organisation. Significant changes during the reporting period regarding size, structure, or ownership. Our Company, Corporate Governance, page 13. Our Company, page 9, Our Company, Where We Operate, page 12.

2.6 2.7

2.8 2.9

Our Company, page 9, Our Company, Where We Operate, page 12. The Year At A Glance, Key Activities, page 4.

2.10

Awards received in the reporting period. A summary of the most important awards and acknowledgements we received at a corporate level in 2011 are reported in The Year At A Glance, Key Achievements and Performance Indicators, pages 5 to 7. In addition to those, we also received several awards at a shopping centre level and were shortlisted for others at a corporate level: • Centro Colombo was elected Best Shopping Centre in Portugal for the second time in a row at the Hipersuper Awards and was distinguished by the Revista Imobiliária “Special Magazine Award” in the National Real Estate Awards 2011 in Portugal for its refurbishment project. LeiriaShopping in Portugal was honoured with the Revista Imobiliária Eurohypo “Real Estate Oscar Award” and the “Eurohypo Award” in the National Real Estate Awards 2011 in Portugal. Loop5 in Germany was commended in the 2011 International Council of Shopping Centres (ICSC) European Shopping Centre Awards in the category “New Developments: Large”. NorteShopping in Portugal won the ICSC Jean Louis Solal Marketing Award for Cause Related Marketing for the campaign ‘Cycle and switch on our Christmas tree’ which was intended to increase environmental awareness among the local community. We were shortlisted for the Edie Awards for Environmental Excellence 2011 in the category ‘Green Corporate Initiative’. We were shortlisted for the DuPont Safety Award for our innovative approach to creating safer shopping centres for children. We were shortlisted for the Digital Communication Award 2010 for outstanding accomplishment in the field of ‘Digital communications and PR for Corporate Social Responsibility Report’. In Spain, we were a finalist in the Premios Corresponsables (Corresponsables Award) for the GUIO project to help blind people and those with visual impairment to use our shopping centres. La Farga in Spain was awarded the Humana Foundation’s Textile Recycling Prize in the ‘Private Enterprise’ category for having collected the largest amount of clothing for charitable causes.

• • •

• • • • •

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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profile Disclosures continued
Report parameters
3.1 3.2 3.3 3.4 Reporting period (e.g., fiscal/ calendar The information in this report relates to the calendar year ending on 31 December 2011. year) for information provided. Date of the most recent previous report (if any). This report succeeds our 2010 In Review: Economic, Environmental and Social Performance Report and our 2010 Corporate Responsibility Report which were published in April 2011.

Reporting cycle (annual, biennial, etc.). We report on a calendar year cycle. Contact point for questions regarding the report or its contents. Process for defining report content, including: • Defining materiality; • Prioritising topics within the report; and • Identifying stakeholders the organisation expects to use the report. Nuno Rafael Alves Corporate Responsibility Reporting Coordinator Email: [email protected] The GRI framework includes principles to help organisations develop a balanced and accurate account of their sustainability performance. Here we describe how Sonae Sierra has applied each of these principles to this report.

3.5

Materiality
Our latest full Materiality Review was performed in December 2010 (see page 110 for further details). The contents of this report are based around the 23 material issues which were identified through that review. In 2011, we performed two of five materiality tests defined by AccountAbility: a review of stakeholder feedback and a review of peer-based norms. The review of stakeholder feedback revealed that indoor air quality is an important issue for our tenants in particular. Whilst this issue is addressed through our Safety, Health and Environment Management System (SHEMS), we have included some further information about our management of indoor air quality in this report (see page 125).

Stakeholder Inclusiveness and Clarity
Through our considerable experience of developing and managing shopping centres, we have identified those stakeholder groups that are significantly affected by our activities and whose actions can affect our business performance. For further details about our stakeholders, see pages 118 to 120. We have also produced a number of external communication materials to accompany this report and to make the information more accessible to a wider audience. These include: • 2011 In Review: Economic, Environmental and Social Performance, which offers a short summary of our 2011 performance http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx CR Country Summary Report, which provides a summary of our performance in the seven main countries where we operate http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx The CR section on our Corporate Website http://www.sonaesierra.com/en-gb/corporateresponsibility/ourvision.aspx





Sustainability Context
Where applicable, this report includes objective information with reference to broader sustainable development concerns and trends, as recognised in regional and/or global publications and links between sustainability topics and Sonae Sierra’s organisational strategy. We have also identified sustainability initiatives undertaken within our Company which we believe to be particularly innovative in the shopping centre sector. These are shown by the ‘innovation star’ symbol.

balance
This report discloses both favourable and unfavourable aspects of our performance. Where possible we have included positive and critical feedback received from our stakeholders. We also present and comment on our performance data in a way that enables the reader to easily interpret trends and to understand the factors that may have influenced our performance.

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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Report parameters (continued)
timeliness
The information and data presented in this report (including environmental, social and economic performance data) relates to the calendar year 2011. The next update on our environmental, social and economic performance is scheduled for publication in April 2013.

Completeness
See ‘Boundary of the report’ under Global Reporting Initiative, Profile Disclosures, Report Parameters, 3.6, below.

Accuracy, Reliability and Comparability
See ‘Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report’ under Global Reporting Initiative, Profile Disclosures, Report Parameters, 3.9, on page 114. 3.6 Boundary of the report (e.g., countries, This report covers key aspects of our economic, environmental and social performance with a specific divisions, subsidiaries, leased focus on our CR material impact areas. This considers all our business activities, namely the ownership, facilities, joint ventures, suppliers). development and management of shopping centres. 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 Colombia, Morocco and Algeria where we do not own shopping centres. Excludes our corporate offices in Colombia; Morocco; Algeria; The Netherlands and Luxembourg. Includes the Colombo office Tower Ocidente project in Portugal within environmental and social performance indicators, in spite of the fact that the development of office buildings is not part of our core business. 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 CR targets related with shopping centres. Plaza Éboli and El Rosal in Spain fall within this group; these shopping centres were sold in March 2011 although Sonae Sierra still provides property management and leasing services for these shopping centres. They have both been excluded from this report. 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 energy, water consumption and waste management of our significant development projects completed in 2011, the Shopping Metrópole expansion in Brazil and the Colombo office Tower Ocidente project in Portugal. Figures for energy, water consumption and waste management of the Shopping Campo Limpo expansion in Brazil were not included, for the reason explained on page 4.





• •

3.7

State any specific limitations on the scope or boundary of the report.

The completeness of the data used to compile our Key Performance Indicators (KPIs) is explained through the notes which accompany each performance measure. Where data is not available or could not be verified the abbreviation ‘n.d. (‘no data’) has been used. Similarly where data is not applicable to the site in question the abbreviation ‘n.a.’ (‘not applicable’) has been used.

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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profile Disclosures continued
Report parameters (continued)
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations. Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. The Safety, Health and Environment (SHE) information in this report 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.

3.9

In this report, actual measurements are presented whenever possible. Any estimates, underlying assumptions, or limitations on the values presented are explained using data qualifying notes beside each performance indicator. In all cases, we are confident that the margin of error associated with quantitative data will not affect stakeholder’s ability to reach accurate conclusions about our performance. With respect to financial performance and other monetary data, average FX exchange rates have been used throughout this report to convert Brazilian values in Reais (R$) into Euro (€) (0.43061) and Romanian values in Lei to Euro (€) (0.23618). GRI indicators have been calculated in accordance with the guidelines in the GRI indicator protocols. The methodologies used to calculate non-GRI indicators are explained in the notes alongside each KPI in cases where these are not obvious to the reader. In cases where Sonae Sierra’s response does not exactly meet all of the GRI requirements, explanations can be found in the data qualifying notes.

3.10

Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods). Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report. Table identifying the location of the Standard Disclosures in the report. Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain the relationship between the reporting organisation and the assurance provider(s).

Any re-statements of previously reported values are explained using data qualifying notes beside each performance indicator.

3.11

The most significant change in terms of scope in comparison with the previous reporting period was the sale of Plaza Éboli and El Rosal in Spain, meaning that on 31 December 2011 we had 49 shopping centres in our operational portfolio compared with 51 at the end of 2010. Any other changes in scope, boundary or measurement methods with respect to individual performance indicators are reported in the data qualifying notes besides each indicator. This section of our report (pages 110 to 154) is comprised of tables which make up the GRI Standard Disclosures. This report has been externally assured by an independent auditor to ensure that data and information is accurate and complies with GRI G3.1 guidelines. The independent auditor’s review can be found on pages 155 to 156.

3.12 3.13

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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profile Disclosures continued
Governance, Commitments and engagement
4.1 Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight. Our Company, Corporate Governance, pages 13 to 14, and Board Members and Executives, pages 104 to 108. In the diagram on page 13 we have explained the composition of the highest governance body and each of its committees. In accordance with the new GRI G3.1 requirement, in the table below we state the proportion of committee members by gender.

Governance body/committee

Proportion (%) of male members

Proportion (%) of female members

Board of Directors Investment Committee Finance Committee Audit & Compliance Committee Compensation Committee Fiscal Board Executive Board

91% 86% 100% 100% 100% 100% 80%

9% 14% 0% 0% 0% 0% 20%

4.2

Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organisation’s management and the reasons for this arrangement).

Our Company, Corporate Governance, pages 13 to 14.

4.3

For organisations that have a unitary Our Company, Corporate Governance, pages 13 to 14. board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members. Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Our shareholders are represented on both the General Shareholders Assembly and the Board of Directors, providing them with an opportunity to express their views to these bodies. We also hold meetings with the Boards of each of the Sierra Funds, which provide Fund investors the opportunity to express their opinions. We invite employees to raise concerns and opinions at monthly Safety, Health and Environment (SHE) meetings held at each site where we operate. CR Working Groups are an important conduit for employees to provide CR recommendations to the highest governance bodies within the Company. The Explore programme, which is open for employees to express their ideas, provides another opportunity for employees to make suggestions to the Board of Directors. The Explore programme is described on page 91.

4.4

4.5

Linkage between compensation Our Business Strategy, CR Governance and Management System, page 22. for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organisation’s performance (including social and environmental performance).

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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Governance, Commitments and engagement (continued)
4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided. Our Code of Conduct includes a requirement for all staff to report any situations where conflicts of interest exists or may exist. In addition, Sonae Sierra’s Executive Committee has approved a set of Anti-Corruption Guidelines which were issued in 2011. The Anti-Corruption Guidelines include a specific policy concerning conflicts of interest. They state that conflicts of interest are not acceptable within Sonae Sierra and no employee should be in a position to grant a business commitment to a relative or associate, namely on the selection of suppliers, contractors or approving contracts for utilisation of shopping centre areas. Any cases of conflict of interest which arise in these situations must be communicated and authorised in writing by the Board member responsible for the employee’s business division. The Sierra Ombudsman, described on page 14, offers another channel which can help to ensure that conflicts of interest are avoided. 4.7 Process for determining the composition, qualifications and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity. Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation. When appointing new Board members, shareholders take into consideration the qualifications and expertise of the candidates and their understanding of the economic, environmental, and social issues which are of relevance to our business.

4.8

Our Vision and Mission are presented in Our Company, page 10. Our CR Management System is underpinned by several public policies, including our over-arching CR Policy, all of which can be found on our corporate website: http://www.sonaesierra.com/en-gb/corporateresponsibility/crmanagement.aspx

4.9

Procedures of the highest Our Business Strategy, CR Governance and Management System, pages 22 to 23. governance body for overseeing the organisation’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance. Explanation of whether and how the precautionary approach or principle is addressed by the organisation. We do not have a formal process for evaluating the performance of the Board of Directors with respect to economic, environmental and social issues because there is not an intermediary body between the Board of Directors and the General Shareholders Assembly that could effectively undertake such an evaluation. However, the performance of the Board of Directors is evaluated by our shareholders and the market which is positive judging by the number of prestigious awards. The precautionary principle is addressed through our approach to safety, health and environmental (SHE) issues. We operate a Safety, Health and Environmental 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 24 to 25 for further details, including the number of our local SHEMS which are certified). We apply an Environmental Due Diligence procedure on new projects and our Safety, Health and Environment Development Standards (SHEDS), also described on pages 24 to 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 55 to 56 for further details.

4.10

4.11

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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Governance, Commitments and engagement (continued)
4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or 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.
Our Global Compact Report can be found on our website at: http://www.sonaesierra.com/en-gb/corporateresponsibility/reportsandfeedback/reports/2011reports.aspx

Greenprint Foundation
In 2009, Sonae Sierra became a Founding Member of the Greenprint Foundation, a global industry initiative supported by key players in the property sector. The mission of the Greenprint Foundation is to enable its members to reduce the carbon footprint of their portfolios in an economically feasible manner in line with the current Intergovernmental Panel on Climate Change (IPCC) goals for global greenhouse gas stabilisation by 2050. Key programmes to achieve this aspiration include helping members to improve the energy efficiency of their buildings by piloting technological and management improvements and sharing the results. In 2011, Sonae Sierra participated in the ‘Greenprint Performance Report Volume 2’ (previously called Greenprint Carbon Index). We submitted energy consumption and Greenhouse Gas (GHG) emissions data from 47 shopping centres, which were analysed and compared to other Greenprint members’ portfolios.

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 focuses 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 became a member of the INREV Sustainability Working Group in 2009 and participates in Working Group meetings. In 2011, we were involved in the preparation of the INREV Best Practice Recommendations (BPR) for Sustainability Reporting.

programa Acción Co2
We are a member of the Programa Acción CO2 (CO2 Action Programme) developed by Fundación Entorno, the Spanish Business Council for Sustainable Development, which aims to promote the voluntary reduction of over 8,000 tonnes of CO2 emissions among companies from all sectors operating in Spain. In 2011 we participated in the development of the Programa Acción CO2 Action Plan and in benchmarking activities. We are also working with Programa Acción CO2 to develop a questionnaire for suppliers.

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° Challenge Communiqué
In 2011 Sonae Sierra signed The 2° Challenge Communiqué. Information about The 2° Challenge Communiqué can be found on page 47.

world business Council for Sustainable Development
We represent Sonae as a Liaison Delegate of the WBCSD. In previous years we have participated in the core group of the 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, was one of the 24 founding members of the World Safety Declaration and became a signatory to this agreement in November 2005.

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SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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Governance, Commitments and engagement (continued)
4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organisations in which the organisation: • Has positions in governance bodies; • Participates in projects or committees; • Provides substantive funding beyond routine membership dues; or • Views membership as strategic. Memberships in industry associations • AMCHAM Brasil – Câmara Americana de Comércio (American Chamber of Commerce) – São Paulo • 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)* • 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)** • REIS – Real Estate Investor Society, Romania • 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.

4.14 4.15 4.16

List of stakeholder groups engaged by the organisation.

Our Business Strategy, Our stakeholders, page 16.

Basis for identification and selection The stakeholder groups with whom we engage have been identified based on our considerable of stakeholders with whom to engage. experience of developing and managing shopping centres. Approaches to stakeholder engagement, In the tables below we have provided a summary of the stakeholder engagement techniques we employed including frequency of engagement in 2011 and key feedback received. More detailed commentary on feedback received from stakeholders by type and bystakeholder group, and in 2011 and the ways in which we responded to this feedback can be found in the Suppliers, Tenants, Communities and Visitors and Employees chapters of this 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.

4.17

our Investors
How we engaged and informed
• • • General Shareholders Assembly Annual Reports and Quarterly Reports Regular meetings and presentations about our financial performance and risk management practices INREV Sustainability Working Group

General feedback received and how we responded
Our investors expressed satisfaction with our approach to CR. As this report demonstrates, we have maintained our strong focus on environmental and social aspects of performance. We were engaged by INREV to help approve Best Practice Recommendations (BPR) for Sustainability Reporting. In line with the INREV BPR, we included a sustainability performance annex in our asset fund reports.

Example in focus
In 2011 we were invited by one investor to participate in the Global Real Estate Sustainability Benchmark (GRESB). We participated in the GRESB and our property funds were ranked as the most sustainable in Europe.



GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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Governance, Commitments and engagement (continued)
our employees
How we engaged and informed
• • • • • • • • Employee satisfaction survey Horizons magazine and intranet Explore programme CLICK (Creative Learning, Innovation and Continuous Knowledge) programme Regular Safety, Health and Environment (SHE) Meetings SHE “Tips” and Alerts, SHE training and Safety Preventive Observations (SPO) Involvement of employees in the definition of SHE targets Surveys to obtain feedback on training needs, SHE initiatives and reporting practices

General feedback received and how we responded
83% of staff responding to our Employee satisfaction survey agreed that ‘Sonae Sierra is a good company to work for’. Staff expressed most satisfaction with Sonae Sierra’s corporate strategy, mission and values; communications and line management. Performance management; work life balance and compensation were the themes which were ranked lowest, although scores had improved since our last survey in 2009. We are maintaining efforts to improve those aspects which employees have ranked unfavourably.

Example in focus
1,490 ideas were submitted by employees to our Explore programme in 2011. 32 of these have been implemented or are under implementation. One of these ideas was to develop shopping centre services and a retail offer for customers aged 55 and over. Another was to develop different types of gardens in our shopping centres that need little or no water, in order to reduce our water consumption.

Further details can be found under Employees, pages 91 to 95.

our tenants
How we engaged and informed
• • • • • • • SierraCentres network and newsletter Tenant Satisfaction Surveys Top Tenant Survey Management meetings SHE Open Committees SHE training, SPO and emergency practice drills Energy reduction programme with tenants that consume the most energy

General feedback received and how we responded
98% 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 marketing events, shopping centre cleaning, security and shopping centre maintenance were evaluated favourably across our shopping centres. Factors such as temperature, background music and WC cleaning showed room for improvement in some centres. Tenant action plans have been developed to address areas of concern identified at a shopping centre level.

Example in focus
At GaiaShopping in Portugal, one of our tenants suggested that the shopping centre could organise a walk in the interest of promoting health and fitness and consideration for the environment. In response to the suggestion, GaiaShopping organised an 8km walk for tenants’ staff to a water treatment plant where they were given a talk about water management.

Further details can be found under Tenants, pages 78 to 82.

our Suppliers
How we engaged and informed
• • • • • CR Questionnaire for critical, repeat development suppliers CR audits with maintenance, security, cleaning and waste management suppliers Service Suppliers’ Evaluation Procedure Regular SHE Meetings SHE training, SPO and Safe Practice Index

General feedback received and how we responded
29% of our critical development suppliers assessed through our CR questionnaire achieved an ‘A’ rating and 71% achieved a ‘B’ rating. The results of the CR audits revealed that all suppliers demonstrated good team work, organisation and time-keeping but knowledge and implementation of Sonae Sierra’s safety procedures could be improved. In 2012 we will follow-up with suppliers on improvement areas identified.

Example in focus
Our suppliers at shopping centres in Spain informed us that the regular SHE meetings are helpful because staff responsible for workers have the opportunity to raise S&H issues and agree corrective actions which can be put in place to address them.

Further details can be found under Suppliers, pages 72 to 77.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

120

profile Disclosures continued
Governance, Commitments and engagement (continued)
our Communities and visitors
How we engaged and informed
• • • • • • Community Advisory Panels (CAPs) Community and Visitor surveys Customer Contact Management System for visitors to present suggestions and complaints Email updates on services and events at local shopping centres

General feedback received and how we responded
We increased levels of visitor satisfaction in Portugal and Spain and maintained satisfaction in Italy and Romania. In Germany and Greece visitor satisfaction decreased marginally. Followup action plans have been developed in response to the feedback received.

Example in focus
At Manauara Shopping in Brazil, one of our CAP members raised the question about how we were helping people with mobility difficulties to have access to the shopping centre. We identified a project which was being carried out by the Federal University of the Amazon State (UFAM), the Programme for Motor Activities for People with Disabilities (PROAMDE), which we contributed to through a campaign to raise awareness about respecting the use of parking spaces which are reserved for people with disabilities. We also installed signs in the shopping centre car park to make people aware about the reserved parking spaces.

School liaison and staff volunteering activities According to our Mall Tracking survey, 12% of visitors say that a company’s environmental and Awareness-raising events with Safety and Health and Environmental themes, including social track record influences which shopping centre they visit and 23% say that a company’s the celebrations of World Day for S&H at environmental and social track record influences Work and World Environment Day what products they buy. We have developed a strategy orientated towards visitors with this profile.

Further details can be found under Communities and Visitors, pages 83 to 90.

local Authorities
How we engaged and informed
• • Community Advisory Panels (CAPs) Engagement at the shopping centre level during the planning, development and operations phases

General feedback received and how we responded
Local authority representatives are often invited to participate in our CAPs, where they are invited to raise any concerns and suggestions regarding shopping centre activities and present ideas for collaboration. At Parque Atlântico in Portugal, for example, a policeman raised the issue of safe driving. As a result, the shopping centre will hold a workshop on the issue next year.

Example in focus
For several years, MaiaShopping in Portugal has held emergency drills in close collaboration with the municipal civil protection, police and fire services. Having worked together in emergency drills, these teams collaborated for another type of challenge: a football tournament which was organised by MaiaShopping in July. The teams drew, and the event helped to solidify the good relationships built up over the past years.

the Media
How we engaged and informed
• • • Conferences and presentations Publication of articles in press covering economic, social and environmental issues Interviews

General feedback received and how we responded
In 2011, we received 5,082 cases of press coverage, covering economic, environmental and social aspects of our performance. Of these, 96% were positive or neutral.

Example in focus
Favourable press coverage focused on our Water Saving Campaign held in shopping centres in Portugal, Spain and Italy; activities undertaken as part of our Community Day; the Planet Sierra Tenant Awards; our Green Sales campaign in Brazil and the environmental and safety and health certification achieved at various shopping centres.

Besides the specific feedback methods listed above, the Sierra Ombudsman is available for all stakeholders to present their complaints with the guarantee that these will be responded to. In 2011, the Sierra Ombudsman received 149 complaints from employees, suppliers and tenants. The majority of complaints focused around tenant’ service; the quality and efficiency of services such as cleaning and security; parking access; lack of information; provision of smoking areas and complications with gift vouchers and promotions. All of these complaints were responded to by email or letter and, in some cases, a meeting. Operational adaptations and improvements were made in response to some requests.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

121

economic Aspects
Disclosures on Management Approach
economic performance and Market presence
Goals and performance Information about our strategic economic goals is provided in Our Business Strategy, Our Medium- to Long-Term Strategy, page 18. Information and data concerning our market presence and economic performance in 2011 is provided in summary in Our Company, Where We Operate, page 12 and in The Year at a Glance, pages 4 to 5. A more detailed account of our economic performance can be found in Operational Performance on pages 32 to 38 and Consolidated Accounts, pages 39 to 45. Policy Our policies and practices in relation to risk management are explained in Our Company, Corporate Governance, pages 13 to 14 and Our Business Strategy, Risk Management, page 19. Additional contextual information Information about key economic successes and shortcomings and major changes can be found in Operational Performance on pages 32 to 38. Information about key economic successes and shortcomings, major changes and key strategies for implementing policies or achieving performance can be found in Our Business Strategy, Our Medium- to Long-Term Strategy on page 18 and The Economic Context on pages 30 to 31.

Indirect economic Impacts
We do not have specific goals related with indirect economic impacts, but we do report on our impact on the local economy through the supply chain in the Suppliers chapter on page 73 and on our impacts on local communities in the Communities and Visitors chapter on pages 83 to 86.

performance Indicators
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

eC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. (Core)
Data Qualifying note: This indicator covers all company activities. Property taxes recharged to tenants or land owners by Sonae Sierra are considered to be immaterial. Operating costs by country are reported on page 12.

Full

Full

€million Direct economic value Generated 201.1

Revenues + sales of assets
economic value Distributed

201.1
250.9

Operating Costs Employee wages and benefits Payment to capital providers Community Investment Payments to Government
economic value Retained

58.3 58.0 72.5 0.003 62.1
-49.8

eC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change and other sustainability issues. (Core)

Full

Full

Sonae Sierra’s CR Steering Committee, which is chaired by the CEO and includes other representatives of the Executive Board, has identified that climate change can present risks and opportunities for the business and Sonae Sierra has already performed studies to identify the potential financial risks for its business due to climate change. In the Energy and Climate chapter on pages 55 to 56 we have identified potential climate change impacts in the regions where we operate and described the outcomes of the studies we have performed to date on the specific climate change risks for our business. In the Water chapter on page 59 we have also reported on the proportion of our assets which are located in areas where water is ‘stressed’ or ‘scarce’.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

122

economic Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

eC2 (continued) We are aware that climate change is a complex phenomenon that could have further ramifications for our business activities in the different locations where we operate. To this end, we have defined an objective to develop and implement a long-term Climate Change Adaptation Strategy covering investment, development, management and corporate activities. In 2011 we had hoped to commission the development of this strategy, but we did not have enough resources within our team to manage a project of this scale. In 2012 we will analyse again the feasibility of progressing with this project. Until we perform a study such as this, we do not have significant insight into the risks and opportunities presented by climate change at an asset level or up and down our value chain (i.e., risks to suppliers and tenants). We have presented a summary of other sustainability risks and opportunities for our business on pages 20 to 21. eC3 Coverage of the organisation's defined benefit plan obligations. (Core) Full Full

The only country where we have a defined benefits plan obligation is The Netherlands, where Sonae Sierra only employs three people (representing 0.3% of the total workforce). This benefit plan states that the employers' obligation to pay defined pension contributions must be met directly and not through a fund held and maintained exclusively for the purpose. This does not constitute an indefinite liability to the employer; the liability is limited to the pension premium, which is only due as long as the employee is in the services of the company. The percentage of contribution is 5% for the employee and the remainder for the employer. eC4 Significant financial assistance received from government. (Core) In 2011, Sonae Sierra did not receive any significant financial assistance from the government across any of its activities. eC5 Range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation. (Additional) Not reported eC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation. (Core) Our proportion of spending on locally-based suppliers is presented on page 73. We select the best suppliers based on the experience and historical transactions performed with our Company. Regarding our property management business, when suppliers are considered to be of equal merit we do give preference, according to internal procedures established, to locally based suppliers. Our development business initiated the development of a similar internal procedure in 2010. According to the internal procedures mentioned, Sonae Sierra does give preference to locally based suppliers as part of our day-to-day activities. eC7 Procedures for local hiring and proportion of senior management and all direct employees, contractors and sub-contractors hired from the local community at significant locations of operation. (Core) Full Full Full Full – – Full Full

The hiring policy of Sonae Sierra is based on merit, experience and other professional criteria, regardless of nationality. There is no policy that guarantees preference to local employees. eC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement. (Core)
Infrastructure investments (€)

Full

Full

Portugal

1,164,657.32

Data Qualifying note: This indicator covers all company activities. This investment was made as a result of a contractual agreement with the local council, and involved investments in developing the infrastructure surrounding the LeiriaShopping centre.

eC9 Understanding and describing significant indirect economic impacts, including the extent of impacts. (Additional) Not reported.





GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

123

environmental Aspects
Disclosures on Management Approach
overall
Goals and Performance Our long-term objectives and 2012 targets in relation to environmental aspects can be found on pages 26, 27, 47, 57, 63 and 68. Commentary on our environmental performance in 2011, including key success and shortcomings and changes to environmental management procedures which occurred during the reporting year can be found in Our Business Strategy, Safety, Health and Environment Management System on pages 24 to 26 and in each environmental impact area chapter under Environmental Performance on pages 47 to 70. Policy Our Environmental Policy establishes our responsibility to be proactive in safeguarding the environment for both today’s and future generations and sets out a series of principles, including our commitments to: – Plan, implement and operate our shopping centres in an environmentally responsible way; and – Continually improve the environmental performance of our products, process and business activities.
Our Environmental Policy, which is available on our corporate website at http://www.sonaesierra.com/en-gb/corporateresponsibility/crmanagement.aspx

Organisational Responsibility Ultimate responsibility for environmental aspects lies with Sonae Sierra’s CEO and Executive Committee. The Safety, Health and Environment (SHE) Steering Committee constitutes the senior level of decision making. This Committee establishes the Environmental policy, goals and objectives and monitors progress in respect of these objectives. The Sustainability Office actively supports the SHE Steering Committee and advises on environmental policies 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 S&H, environmental management and technical issues. Training and Awareness 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 Corporate 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. Monitoring and Follow-up For an introduction to our SHEMS, see Our Business Strategy, Safety, Health and Environment Management System on pages 24 to 26. 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 all the involved entities, including the SHE 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 further 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.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

124

environmental Aspects continued
Disclosures on Management Approach (continued)
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; and, – 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. In addition to the procedures described above, we monitor the number and proportion of complaints we receive about environmental concerns:
Complaints of an environmental nature (number and %)
Shopping Centres and Corporate offices
2011 2010 2009 2008
Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; Sonae Sierra’s eight main corporate offices and all projects under development during the reporting period. Complaints of an environmental nature received in 2011 included complaints about temperature; air quality; smoking in or around shopping centres; noise; odours from some tenant units or from waste.

Total number of complaints Total number of environmental complaints Proportion of complaints about environmental issues (%) projects under development Total number of environmental complaints

3,958 119 3.0%

4,323 5,302 5,095 136 3.1% 214 4.0% 164 3.2%

10

Additional Contextual Information Details of the environmental risks and opportunities that we have identified as being most relevant for our business are provided on page 20. Key strategies for implementing our environmental objectives and targets are explained in each environmental impact area chapter, on pages 47, 57, 63 and 68.

Materials
See Suppliers, pages 72 and 75 to 77.

energy
See Energy and Climate, pages 47 to 54.

water
See Water, pages 57 to 62.

biodiversity
See Biodiversity and Habitats, pages 68 to 70.

emissions, effluents, and waste
See Energy and Climate, pages 47 to 54; Water, on page 62 and Waste, pages 63 to 67. We focus on energy efficiency as the main strategy for reducing our carbon dioxide (CO2) emissions; we have not established a policy with regards to carbon off-setting although we have compensated for CO2 emissions in relation to some minor events.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

125

environmental Aspects continued
Disclosures on Management Approach (continued)
land Degradation, Contamination and Remediation
In accordance with our Land Use Strategy, we aim to treat contaminated soil rather than disposing of it in landfill. In cases where remediation of contaminated land is required, each project must investigate the possibility of employing the ‘in situ bio-remediation’ technique by identifying organisations which might be able to undertake this remediation work and the associated costs needed as well as business impact. This investigation is made as part of our Due Diligence process. Our SHEDS prohibit the use of harmful materials such as asbestos, lead, chromium, mercury and manmade mineral fibres. Suppliers are made aware of the prohibited materials list and the SHEDS audit checks that the prohibited materials list has been adhered to. Since not all of the shopping centres in our operational portfolio have been developed by Sonae Sierra or in accordance with the SHEDS, we follow all legal requirements and best practices to ensure that harmful materials are managed where they exist. ‘Harmful materials’ is one of the environmental aspects which is addressed through the Due Diligence process for the acquisition of existing shopping centres.

products and Services
See Our Business Strategy, Safety, Health and Environment Management System, pages 24 to 26. Regarding 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 (in addition to those requested by local authorities) which cover a range of different parameters; and Legionella monitoring. Four of our air quality parameters 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 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. Shopping centres must have the capacity to measure indoor air quality against the parameters of air temperature; relative humidity; CO2 and carbon monoxide (CO) in different areas of the building.

Compliance
Our SHEMS ensures that, as a minimum, Sonae Sierra complies with all SHE legislation and regulations in the countries where it operates. The legal and other requirements procedure is established and maintained to identify the legal and other requirements that are applicable to Sonae Sierra’s activities and periodically evaluate compliance with these.

transport
See Energy and Climate, pages 47 and 50.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

126

environmental Aspects continued
performance Indicators
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en1 Materials used by weight, value or volume. (Core) Suppliers, page 77. en2 Percentage of materials used that are recycled and reused input materials. (Core) Suppliers, page 77. en3 Direct energy consumption by primary energy source. (Core)

Full

Partial

Full

Partial

Full

Partial

Fuel Type

Use

kWh

GJ

Natural Gas Natural Gas Diesel Petrol (Gasoline) Ethanol totAl

CHP at MaiaShopping and NorteShopping Boilers Fleet cars and business travel in staff's own cars Fleet cars and business travel in staff's own cars Fleet cars and business travel in staff's own cars

79,752,778 14,833,333 3,818,611 354,444 301,944 99,061,111

287,110 53,400 13,747 1,276 1,087 356,620

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; our eight main corporate offices and energy consumed by mobile sources such as the company car fleet, with the following exceptions: • • • Natural gas consumed by boilers does not include the Düsseldorf office because there are no meters installed to measure it. Electricity produced on site (and consumed) at in Manauara Shopping in Brazil is excluded because there are no meters installed to measure the electricity produced on site. Energy consumed by the company car fleet of shopping centres in Brazil excludes the first three months of the year, because reliable data could not be obtained by the São Paulo office.

It was verified that the type of energy consumed by the company car fleet of Athens office is petrol and not diesel as reported in previous years. The conversion factors used to covert fuel to Gigajoules are endorsed by the Portuguese Environmental Agency. The calculation of the intermediate energy purchased and consumed is based on publicly available information. The conversion factor used to convert kWh to GJ is 0.0036, as defined by the GRI G3.1 Guidelines.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

127

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en4 Indirect energy consumption by primary source. (Core)

Full

Partial

Sonae Sierra’s total indirect energy consumption includes: • Electricity consumption (245,834,455kWh/885,004GJ); • Chilled water consumption (9,841,062kWh/35,428GJ); and • High temperature hot water consumption (4,309,874kWh/15,516GJ). The total corresponding primary energy consumed in its production is 502,378,771 kWh/ 1,808,563GJ, taking into account the losses which occur in electricity production, transportation and distribution. Indirect energy consumption by primary source and by country is presented in the table below.
electricity
Non-renewable energy Country GJ kWh Renewable energy GJ kWh GJ Total kWh

Portugal Spain Italy Germany Greece Romania Brazil total

486,350 156,184 95,780 142,686 24,473 14,903 42,269 962,645

135,097,222 43,384,444 26,605,556 39,635,000 6,798,056 4,139,722 11,741,389 267,401,389

292,440 53,904 31,700 31,418 3,794 5,494 343,228 761,978

81,233,333 14,973,333 8,805,556 8,727,222 1,053,889 1,526,111 95,341,111 211,660,555

778,790 210,088 127,480 174,104 28,267 20,397 385,497 1,724,623

216,330,556 58,357,778 35,411,111 48,362,222 7,851,944 5,665,833 107,082,500 479,061,944

heat
Non-renewable energy Country GJ kWh Renewable energy GJ kWh GJ Total kWh

Portugal Spain Italy Germany Greece Romania Brazil total

58,755 – 10,952 11,695 – – – 81,402

16,320,833 – 3,042,222 3,248,611 – – – 22,611,666

– – 596 1,942 – – – 2,538

– – 165,556 539,444 – – – 705,000

58,755 – 11,548 13,637 – – – 83,940

16,320,833 – 3,207,778 3,788,056 – – – 23,316,667

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as seven out of eight main corporate offices. In 2011, C.C. Continente de Portimão in Portugal was undergoing refurbishment works from September to December. During this period, electricity consumption for the refurbishment project was provided by the shopping centre and could not be metered separately. Consequently, electricity consumption values for this shopping centre were estimated for this period, in order to exclude consumptions from the refurbishment works. The Maia office in Portugal was excluded since it is in a shared floor/building, with no individual energy meters. This indicator also excludes high temperature hot water consumption from River Plaza Mall in Romania because this centre does not have separate meters for tenants’ consumption. In 2011, Centro Colombo in Portugal reported chilled water purchased and consumed in January only. Sonae Sierra no longer reports chilled water at this centre because in February 2011 the cogeneration stopped functioning and started the process of converting to natural gas, ceasing the chilled water supply to the centre. The calculation of indirect energy consumed in the production of the intermediate energy purchased and consumed by Sonae Sierra is based on publicly available information. The conversion factor used to convert kWh to GJ is 0.0036, as defined by the GRI G3.1 Guidelines. The desegregation of primary energy was based on the International Energy Agency (IEA) Energy Balances of OECD and non OECD Countries published in 2011.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

128

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

CRe1 Building energy intensity. (Core)



Partial

Country

Building Energy Intensity, Shopping Centres (kWh/ m2 mall and toilet area)

Building Energy Intensity, Corporate Offices (kWh/ m2)

Portugal Spain Italy Germany Greece Romania Brazil total

1,024 317 832 707 1,109 n.d. 582 747

195 100 57 n.d. 296 69 262 177

Data Qualifying note: See the data qualifying note for indicator EN4 above. This indicator includes 48 out of 49 shopping centres owned by Sonae Sierra and in operation for the full reporting year and six out of eight main corporate offices. The Düsseldorf office was also excluded from this indicator since there are no meters in place to enable us to measure natural gas consumed by boilers.

en5 Energy saved due to conservation and efficiency improvements. (Additional)

Full

Partial

GJ

kWh

Offices Shopping Centres total

56 36,396

15,556 10,110,000

Data Qualifying note: This indicator includes 47 out of 49 shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as seven out of eight main corporate offices. LeiriaShopping in Portugal, Manauara Shopping in Brazil and the Maia office in Portugal were excluded because data was not available for 2010 and/or 2011. The conversion factor used to convert kWh to GJ is 0.0036, as defined by the GRI G3.1 guidelines.

36,452 10,125,556

Relevant financial data, actual or estimated, such as money invested in conservation and efficiency improvements, and money saved through energy reduction initiatives is presented on page 53.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

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environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. (Additional)

Full

Full

Shopping centres in operation and corporate offices

Initiative description

Reduction (GJ)

GHG emissions reduction (Kg CO2)

GranCasa; Luz del Tajo; Plaza Mayor; Parque Principado (Spain) Manauara Shopping; Parque D. Pedro Shopping; Pátio Brasil Shopping; Shopping Metrópole; Shopping Penha; Shopping Plaza Sul (Brazil) CascaiShopping (Portugal) Valle Real (Spain) Airone; Freccia Rossa; Valecenter (Italy) Pátio Brasil Shopping (Brazil) Centro Colombo; Centro Vasco da Gama; GaiaShopping; NorteShopping (Portugal) Plaza Mayor (Spain) Alexa; Loop5 (Germany) River Plaza Mall (Romania) Zubiarte; La Farga (Spain) Münster Arkaden (Germany) LoureShopping (Portugal) Freccia Rossa (Italy) MadeiraShopping; Parque Atlântico (Portugal) Gli Orsi (Italy) Münster Arkaden (Germany) Shopping Plaza Sul (Brazil) Parque Principado (Spain) NorteShopping (Portugal) Athens office (Greece)

Substitution of lamps with LED or more efficient lighting.

55447

24,427

Installation of new, more efficient HVAC equipment (including Air Treatment Units, chillers and cooling towers).

57648

24,236

Installation of electric car battery charging systems. Improvement of the lighting management system and/ or installation of lighting sensors. Improvement of the energy monitoring and/or metering system. Improvement of the building’s insulation. Implementation of free cooling. Shut-down of the HVAC system during winter. Installation of energy sensors and equipment to turn off heating consumption during the summer. Installation of paper disposal to clean hands in the toilets, in order to decrease the use of electric hand driers. Radiation reduction inside the mall. Replacement of electric reactive armour in the car park. Replacement of electric ballasts. .

n.d. n.d.

n.d. n.d.

n.d. n.d. n.d. 1,853 n.d. n.d. n.d. n.d. n.d.

n.d. n.d. n.d. 97,812 n.d. n.d. n.d. n.d. n.d.

Completed development projects

Initiative description

Reduction (GJ)

GHG emissions reduction (Kg CO2)

Colombo office Tower Ocidente (Portugal)

The office building façade was designed in a way that allows a high degree of thermal insulation. The HVAC system introduced in the offices is an induction system with units which do not require an engine, thus reducing noise and energy consumption. The HVAC system in the open areas uses induction units installed in the false ceiling. This system works with four tubes, receiving both cold and hot water, making it especially efficient. The office uses the Lighting Novaluna model made by SITECO, which allows for low energy use and maximises the dispersion of light.

n.d. n.d.

n.d. n.d.

n.d. n.d.

n.d. n.d.

Shopping Metrópole expansion (Brazil)

Introduction of thermal insulation and high efficiency electric motors on the HVAC system.

Data Qualifying note: This indicator covers all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all main corporate offices and all projects under development completed during the reporting year.
47 48

Includes nine out of ten shopping centres listed in the left-hand column. Data was not available from Shopping Plaza Sul in Brazil. The same comment applies to the GHG emissions reduction. Includes five out of six shopping centres listed in the left-hand column. Data was not available from CascaiShopping in Portugal. The same comment applies to the GHG emissions reduction.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

130

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en7 Initiatives to reduce indirect energy consumption and reductions achieved. (Additional)

Partial

Partial

Shopping centres in Operation

Initiative description

Reduction (GJ)

All countries Shopping Penha (Brazil)

Identified the three tenants with the highest energy consumption in each country and engaged with them in an energy reduction programme. Use of video conference which will decrease business travel to join meetings. Letter sent to tenants asking them to turn off lighting when the shopping centre is closed.

n.d. n.d. n.d.

Data Qualifying note: This indicator covers all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all main corporate office and all projects under development completed during the reporting year.

en8 Total water withdrawal by source. (Core)

Full

Partial

Water, page 58. Actions to mitigate and reduce water consumptions, including reuse and recycling solutions, and water savings as a result of these actions, are reported under EN26 and within the water chapter on pages 58, 61 and 62. Relevant financial data (actual and estimated), such as money invested in conservation and efficiency improvements, and money saved through water reduction initiatives is presented on page 61.

en9 Water sources significantly affected by withdrawal of water. (Additional) Not reported. en10 Percentage and total volume of water recycled and reused. (Additional) Water, page 58. CRe2 Building water intensity. (Core)





Partial

Partial



Full

Country Portugal Spain Italy Germany Greece Romania Brazil total

Building Water Intensity (litres/visit) 6.64 5.55 6.21 3.01 7.84 4.70 9.29 6.88

Data Qualifying note: This indicator includes 47 out of 49 shopping centres owned by Sonae Sierra and in operation for the full reporting year. Building water intensity is determined by the following formula: (Total Water Consumption (excluding tenants) + Total Water Consumption purchased on behalf of tenants)*1,000)/"Number of visits in the reporting year across the owned portfolio). Parque Atlântico in Portugal was excluded because the shopping centre is not able to measure the water purchased on behalf of the tenants. Loop5 in Germany was excluded due to problems with water meters and the BMS not being fully operational during 2011. Tenants water consumptions from AlbufeiraShopping and RioSul Shopping in Portugal; GranCasa in Spain and Airone in Italy were excluded because tenants at these centres pay for their own water consumption directly.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

131

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. (Core) Biodiversity and Habitats, page 69. en12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. (Core) Biodiversity and Habitats, page 69. en13 Habitats protected or restored. (Additional) No habitats were protected or restored during 2011. en14 Strategies, current actions, and future plans for managing impacts on biodiversity. (Additional) Biodiversity and Habitats, page 68. en15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. (Additional) Not applicable. en16 Total direct and indirect greenhouse gas emissions by weight. (Core) Energy and Climate, pages 48 and 49. en17 Other relevant indirect greenhouse gas emissions by weight. (Core) Energy and Climate, pages 48 and 49. CRe3 Greenhouse gas emissions intensity from buildings. (Core) Not reported. CRe4 Greenhouse gas emissions intensity from new construction and redevelopment activity. (Core) Not reported. en18 Initiatives to reduce greenhouse gas emissions and reductions achieved. (Core) Reported under EN6 on page 129. en19 Emissions of ozone-depleting substances by weight. (Core)

Full

Full

Full

Full

Full

Full

Full

Full





Full

Partial

Full

Full









Full

Full





Not applicable. We have not reported on emissions of ozone-depleting substances because the only emissions of ozone-depleting substances that result from our activities are during the usage and replacement of air conditioning systems. We operate a procedure defined under our SHEMS regarding the management of equipment that uses ozone-depleting substances and this includes a programme to replace equipment that uses HCFC.

en20 NOx, SOx, and other significant air emissions by type and weight. (Core)

Full

Full

Air emissions by type (kg)

NOx Non Methane Volatile Organic Compounds (NMVOC) Particulate Matter (PM) SOx Volatile Organic Compounds (VOC) totAl

13,486 2,906 2,187 1,242 128,483 148,304

Data Qualifying note: This indicator covers all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as all eight main corporate offices. The information reported covers NOx, SOx and other significant air emissions from boilers at shopping centres and from on-site cogeneration systems at two of our centres in Portugal (MaiaShopping and NorteShopping). Emissions from mobile sources such as the company car fleet and the emergency generators have not been included here. Data from boilers at the Düsseldorf office were unavailable. The calculations of emissions from boilers have been made using the figures for natural gas consumption and associated emissions conversion factors. The methodology used is consistent with the Intergovernmental Panel on Climate Change (IPCC) and the Portuguese Environmental Agency (Agência Portuguesa do Ambiente, APA). The calculations of emissions from cogeneration have been made based on direct measurements of the NOx, SOx and other significant air emissions. The total values for these emissions in 2011 have been calculated using the average of the two most recent measurements from each engine and multiplied by the total number of hours of their operation during the year.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

132

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en21 Total water discharge by quality and destination. (Core)





Not applicable. Sonae Sierra does monitor wastewater quality at all owned shopping centres, but the wastewater produced is domestic rather than industrial effluent and therefore does not fit within the indicator protocol defined by the GRI.

en22 Total weight of waste by type and disposal method. (Core) Waste, page 64. en23 Total number and volume of significant spills. (Core)
Data Qualifying note: This indicator refers to all spills of over 2.5 litres. This indicator includes all the significant spills of chemicals, oils, fuels, waste and other type of spills in shopping centres owned by Sonae Sierra and in operation for the full reporting year. It also includes Sonae Sierra’s eight main corporate offices and projects that were under development and/or completed during the reporting year. In 2011, four spills were reported in Sonae Sierra shopping centres: two fuel spills in Shopping Campo Limpo in Brazil; one oil spill in Plaza Mayor in Spain and one food oil spill in Loop5 in Germany.

Full

Full

Full

Full

Operations Shopping Campo Limpo Plaza Mayor Loop5

Total number of significant spills total

2

1 4
Operations

1

Shopping
Campo Limpo

Plaza
Mayor Loop5

Total volume of significant spills (litres) total (litres)

60

4 114

50

en24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. (Additional) Not applicable. en25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff. (Additional) Not applicable. CRe5 Land and other assets remediated and in need of remediation for the existing or intended land use according to applicable legal designations. (Core)
Data Qualifying note: This indicator covers all projects under development during the reporting year.











Full

Site

Area/Volume decontaminated

Le Terrazze

Brownfield

59,250m2

The land at Le Terrazze was contaminated as a consequence of the actions of a third party. The seller carried out the decontamination before the start of the Le Terrazze project.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

133

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en26 Initiatives to enhance efficiency and mitigate environmental impacts of products and services, and extent of impact mitigation. (Core)
Shopping centres in operation, corporate offices and completed projects

Full

Full

Initiative description

extent of impact mitigation

All shopping centres All shopping centres in Portugal, Spain and Italy GranCasa (Spain) Münster Arkaden (Germany) Boavista Shopping; Pátio Brasil Shopping; Shopping Campo Limpo; Shopping Metrópole expansion; Shopping Penha; Tivoli Shopping (Brazil) Centro Vasco da Gama; GuimarãeShopping; RioSul Shopping (Portugal) Parque Principado (Spain) Loop5 (Germany) River Plaza Mall (Romania) Pátio Brasil Shopping (Brazil) ArrábidaShopping; MadeiraShopping; RioSul Shopping; ViaCatarina (Portugal) La Farga (Spain) Münster Arkaden (Germany)

Communication of ‘Environment Tips’ and ‘Quick Wins’ to all Sonae Sierra employees to increase environmental awareness. Awareness campaign to encourage water saving. Installation of equipment to reduce water use in toilets (e.g., waterless urinals, flow reduction devices on taps and flushes).

n.a. n.a. 2,274m3 of water saved49

Installation of equipment to improve waste segregation, recycling and/ or reduce waste production in the shopping centre.

Additional four tonnes of waste recycled in 2011 at River Plaza Mall; 94.2 tonnes of non-recyclable glasses sent to incineration instead of landfill at RioSul Shopping50 ViaCatarina: Improvement in wastewater quality against the COD and Sulphides parameters51 La Farga: Improvement in wastewater quality against the COD, BOD, Oils/fats and inhibitor materials parameters52 n.d.

Implementation of measures to improve wastewater quality.

8a Avenida; MaiaShopping (Portugal) La Farga (Spain) Alexa; Münster Arkaden (Germany) Pantheon Plaza (Greece) CoimbraShopping; LoureShopping (Portugal) Parque D. Pedro Shopping; Shopping Metrópole (Brazil) Centro Colombo (Portugal) Shopping Plaza Sul (Brazil) C.C. Continente de Portimão; MadeiraShopping (Portugal) Airone (Italy)

Installation of water meters.

Implementation of alarms for water leaks through the BMS.

n.d.

Use of a rainwater harvesting system53.

Centro Colombo: 1,168m3; and Shopping Plaza Sul: 61.69m3 rainwater collected n.d. Eliminates the risk of releasing R22, which has higher Global Warming Potential than R407c 2,000m3 of water saved

Installation of ‘Ponto Electrão’, an electronics recycling point for communal use. Substitution of the older chiller which used R22 with a new one which uses R407c.

Valecenter (Italy)

Adjustments to the operation of the existing chiller and installation of a more efficient cooling tower.

49

50 51 52

53

Includes five out of eight shopping centres listed in the left-hand column. Data was not available from Münster Arkaden in Germany and Pátio Brasil Shopping and Shopping Metrópole in Brazil. The other five shopping centres listed in the left-hand column were not able to estimate the increase in their recycling rates as a result of the specific measures undertaken. Reduction of Chemical Oxygen Demand (COD) from 1,100 to 780mg O2/litre; reduction of Sulphides from 9.5mg SO3 /litre to 1.3 mg SO3 /litre. Reduction of COD from 4,257 to 472mg O2/litre; reduction of Biological Oxygen Demand (BOD) from 540 to 108mg O2 /litre; reduction of oils/fats from 2005 to 20.6 mg/litre; reduction of inhibitor materials from 20.9 to 2 Eq/m3. Several other Sonae Sierra shopping centres installed rainwater harvesting systems in 2011, but did not have data available to report on rainwater collected. See page 58 for further details.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

134

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en26 (continued)
Shopping centres in operation, corporate offices and completed projects

Initiative description

extent of impact mitigation

8a Avenida (Portugal) AlgarveShopping (Portugal) GaiaShopping (Portugal) NorteShopping (Portugal) Pantheon Plaza (Greece) Parque D. Pedro Shopping Maia office Athens office Shopping Metrópole expansion

Noise reduction measures. Awareness campaign on environmental damage caused by of plastic bag use. Implementation of water management measures, including changes to the irrigation system. Implementation of a system for filtering water withdrawn on site. Installation of gas leakage sensors on chillers. Updating of “AS-BUILT”. Awareness session on eco driving. Binding of scrap paper to make notebooks. Use of materials with recycled content and materials sourced locally or regionally.

n.d. n.d. n.d. n.d. n.d. n.d. n.d. 12kg of paper reused 27% of materials had recycled content; 88% of heavy materials were of local or regional origin; 84% of the light materials were of local or regional origin54

Substitution of plants in the food court with ones which require less water. n.d.

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all main corporate offices and all projects under development completed during the reporting year. For the Colombo office Tower Ocidente project, it was not possible to determine the initiatives implemented because Sonae Sierra’s Environmental Standards for Retail Development (ESRD) were not applicable to this project.

en27 Percentage of products sold and their packaging materials that are reclaimed by category. (Core)





Not applicable. The disposal of products and packaging materials at the end of a use phase is not applicable to our shopping centre business. en28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. (Core)
operations and offices Monetary value paid of significant fine (€) Number of cases brought through dispute resolution mechanisms

Full

Full

Number of monetary sanctions received

Number of non-monetary sanctions received

GaiaShopping La Farga
Development

0 6,010
Monetary value paid of significant fine (€)

1 0
Number of cases brought through dispute resolution mechanisms

0 1
Number of monetary sanctions received

0 0
Number of non-monetary sanctions received

Le Terrazze Boulevard Londrina Shopping

200 0

0 0

1 0

1 1

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; our main corporate offices and all projects that were under development and/or completed during the reporting year. Across our operational portfolio, Sonae Sierra received one monetary fine in 2011 with a value of €6,010 at La Farga in Spain. There was one case brought through dispute resolution mechanisms for GaiaShopping in Portugal related with the ineffective functioning of the smoking area. This process was not solved in 2011, and GaiaShopping is still waiting for a decision. Across projects on-going or concluded in 2011, Sonae Sierra received one monetary fine with a value of €200 and one non-monetary sanction for Le Terrazze in Italy, and one non-monetary sanction for Boulevard Londrina Shopping in Brazil. Sonae Sierra does not have a threshold of significance in terms of fines. All fines are reported regardless of their value.
54

The proportion of materials with recycled content and local and regional origin were calculated by value of spend.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

135

environmental Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

en29 Significant environmental impacts of transporting products and other goods and materials used for the organisation’s operations, and transporting members of the workforce. (Additional)

Full

Full

We have considered as significant impacts of transporting members of the workforce: • The values reported under EN3 (diesel and petrol consumed by the company car fleet and business travel in staff owned cars); • The values reported under EN16 (GHG emissions associated with the company car fleet); and • The values reported under EN17 (GHG emissions associated with business air travel and staff commuter journeys). Regarding the impacts of transporting products and other goods and materials for Sonae Sierra operations (development and management activities), it is not possible to quantify their impact, although measures to mitigate such impacts are implemented (for example, the implementation of the SHEDS during the construction phase, and promoting local procurement). Sonae Sierra’s corporate SHEMS encompasses a methodology for the Identification and Evaluation of Environmental Aspects and Impacts. In the guidelines for environmental significance assessment the different energy uses and their sources are taken into account. The environmental impacts of transporting members of the organisation’s workforce are mitigated by: • The full implementation of the SuperCom project across our offices, which has helped us to reduce emissions associated with staff business travel. SuperCom has involved the installation of video- and audio-conferencing facilities in all meeting rooms and enabling staff to hold video-conferences and telephone calls through their laptops; and Proceeding with the purchase of electric cars for the company car fleet in Portugal.
Full Full



en30 Total environmental protection expenditures and investments by type. (Additional)

total environmental investments (€) by type for shopping centres

Prevention and environmental management costs Waste disposal, emissions treatment, and remediation costs totAl
total environmental investments (€) by type for corporate offices

8,085,171 9,201,238 17,286,409

Prevention and environmental management costs Waste disposal, emissions treatment, and remediation costs totAl
total environmental investments (€) by type for projects under development

21,312 478 21,790

Prevention and environmental management costs Waste disposal, emissions treatment, and remediation costs totAl

42,629 410,346 452,975

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all eight main corporate offices and all projects concluded during the reporting period (including the Shopping Metrópole expansion project which was completed during the reporting year). Environmental investments for shopping centres are based on the values obtained from Sonae Sierra’s Environmental Management Accounting (EMA) Model. Information for all countries where Sonae Sierra has shopping centres in operation is available in the EMA. The values extracted from the EMA were arranged using a matrix which matched the main environmental activities defined in the model with the corresponding categories required for EN30 as defined by the GRI guidelines. Environmental investments for offices include costs related with internal audits; services for legislation updates, and measures to improve water and energy efficiency. Environmental investments for the Shopping Metrópole expansion project include costs related with waste management activities; wastewater monitoring; noise measurements; internal audits and other items. The conversion factor used to convert Brazilian Reais into Euros was 0.43061. The conversion factor used to convert Romanian RON into Euros was 0.23618.

GLOBAL REPORTING INITIATIVE
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

136

Labour Practices and Decent Work Aspects
Disclosures on Management Approach
Employment, Training and Education, Diversity and Equal Opportunity
Goals and Performance Our long-term objectives and 2012 targets in relation to Employees aspects can be found on pages 28 and 91 respectively. Commentary on our performance in relation to Employees aspects in 2011, including key success and shortcomings and changes to human resources procedures which occurred during the reporting year can be found in Employees, pages 92 to 95. Policy Our Code of Conduct is based around six Ethical Principles, which include the respect for the dignity and rights of each individual; respect for individual identity (independent of race, gender or religion) and promoting a balance between personal and professional life.
Our Code of Conduct is available here on our corporate website: http://www.sonaesierra.com/en-gb/corporateresponsibility/crmanagement.aspx

We also have four other policies in place in relation to employment issues. These are: – – Non-Discrimination and Diversity Policy Working From Home Policy – – Part-Time Working Policy Flexible Work Schedule Policy

Organisational Responsibility Ultimate responsibility for Employees aspects 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. Training and Awareness We provide a regular integration scheme for new employees, called JUMP, which includes a specific sustainability programme and an explanation of Sonae Sierra’s policies and its Code of Conduct, besides the role of the Sierra Ombudsman. In 2011, we launched ‘HR Knowledge Pills’ for our employees and managers. These are sessions prepared by our local HR teams which focus on specific HR issues (e.g., information on legal requirements and Sonae Sierra HR procedures). ‘HR Knowledge Pills’ have already been held in Spain and Italy focusing on Maternity and Paternity Leave, and we will roll them out across other countries where we operate in 2012. We also developed and carried out two internal training initiatives; ‘LISTEN’, which intends to raise awareness about the importance of giving feedback to colleagues; and ‘HIRE’ which trained line managers on how to deliver recruitment interviews. For details about employees’ career development and individual training plans, see page 94. Monitoring and Follow-up Information about our Employee Survey and the outcomes of the 2011 Employee Survey are explained on pages 91 and 92 respectively. Our Personal Assessment and Career Development process ensures that all our employees receive regular performance and career development reviews, and have the opportunity to comment on the assessment made by their line manager. We have developed guidelines to conduct 360˚ appraisals for all managers and team leaders who have more than five employees reporting directly to them, and the 360˚ appraisals now occur every two years. Managers and team leaders who are subject to this process are encouraged to meet with the HR team to better understand their results, and they may select one competency to improve and establish a development plan together with HR in order to do this. With respect to training and development, we monitor employees’ feedback on all training sessions attended. The Sierra Ombudsman, which is described on page 14, 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. Additional Contextual Information Details of the employees-related risks and opportunities that we have identified as being most relevant for our business are provided on page 21. Key strategies for implementing our Employees objectives and targets are explained in the Employees impact area chapter, on page 91. In recent years, in the context of a challenging economic climate, we have created a new business unit with the purpose of selling property services to third parties. This is also a strategy that will allow us to maintain our people and their know-how and expertise.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

137

labour practices and Decent work Aspects continued
Disclosures on Management Approach (continued)
occupational health and Safety
Goals and Performance Our long-term objectives and 2012 targets in relation to safety and health (S&H) aspects can be found on pages 28 and 97 respectively. Commentary on our S&H performance in 2011, including key success and shortcomings and changes to S&H management procedures which occurred during the reporting year can be found on pages 96 to 103. Policy Our Safety and Health Corporate Policy establishes our commitment to conduct our activities so that risks towards people and our assets are minimised, and to achieve excellent levels of social responsibility, safety and health. It is our principle that the prevention of risk is a management responsibility, and that responsibility for S&H management belongs to our entire organisation.
Our Safety and Health Corporate Policy is available here on our corporate website http://www.sonaesierra.com/en-gb/corporateresponsibility/crmanagement.aspx

Our Responsible Procurement Policy commits us to integrating CR criteria into our Service Suppliers’ Management Procedures so as to ensure that the social and environmental performance of our suppliers is considered when tendering, managing and evaluating supplier contracts.
Our Responsible Procurement Policy is available here on our corporate website http://www.sonaesierra.com/en-gb/corporateresponsibility/crmanagement.aspx

Organisational Responsibility Ultimate responsibility for S&H aspects lies with Sonae Sierra’s CEO and Executive Committee. The Safety, Health and Environment (SHE) Steering Committee constitutes the senior level of decision making; this Committee establishes the S&H policy, goals and objectives and monitors progress with respect to these objectives. The Sustainability Office actively supports the SHE Steering Committee and advises on S&H policies and standards. Responsibility for the implementation of our Safety, Health and 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 S&H, Environment management and technical issues. Training and Awareness Our S&H Corporate Policy commits us to promoting safety training among all our employees. 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 S&H procedures within our SHEMS, as well as on legal S&H issues specific to the country where they coordinate SHE management. Practices in relation to training and awareness for our service suppliers are explained in Suppliers, page 72. Monitoring and Follow-up See Environmental Aspects, Disclosures on Management Approach, Monitoring and Follow-up on pages 123 to 124. Practices in relation to the monitoring and follow-up of our service suppliers’ S&H performance are explained in the Suppliers chapter on pages 72 and 75.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

138

labour practices and Decent work Aspects continued
Disclosures on Management Approach (continued)
occupational health and Safety (continued)
Procedures to identify and evaluate S&H risks to people See Safety and Health, page 97. As explained on page 97, we evaluate risks by considering the strength and weaknesses of the control measures in place; the frequency and probability of the risks’ occurrence and their potential severity. After considering all these issues, we classify risks into four separate categories: two that are considered as acceptable and two non-acceptable. Non–acceptable risks identified must be addressed through the implementation of additional risk control measures until the risk is classified into one of the two acceptable risk categories. For example, in our shopping centres, we identified that the inspection and testing of emergency generators could incur loss of hearing capacity. To avoid this we implemented several controls, like short-term worker exposure to noise, regular noise measurements and the use of mandatory protective equipment. On our development sites, we identified that workers involved in demolishment activities are more susceptible to pick up respiratory problems due to excessive dust conditions, so we set up a procedure to humidify all areas foreseen to be demolished in advance of demolition works and provide all involved workers with suitable masks and training on their proper use. In our corporate offices, the possibility of air handling units’ maintenance operations generating musculoskeletal disorders was identified. Therefore, to avoid this risk, we provide mechanical transport equipment to ease manual workloads, deliver training on the functionalities of the equipment and monitor how it is used in practice through regular inspections. All risk matrixes are approved by qualified technicians and the respective Site Manager. In shopping centres, the matrixes are also validated on site by an S&H Technician that is specialised in risks relating to staff. Additionally, in all countries where it is a legal requirement, an occupational doctor also provides follow-up and feedback to Sonae Sierra staff in regular consultations and assesses each employee’s workstation to evaluate and mitigate any possible future occupational health complaints. Policies and procedures for the procurement, transport, handling, use and disposal of hazardous materials Within our SHEDS there is a specific requirement which is included within the design team and contractors’ service agreements which prohibits the use of hazardous materials and substances (as defined by Sonae Sierra) throughout the construction works. The use and disposal of the any hazardous materials which are not prohibited is controlled by the implementation of our SHE procedures for development; namely the SHEMS for new projects, the Safety, Health and Environment Management 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. Policy 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. Regarding mental health issues, in 2011 Sonae Sierra promoted ‘Healthy Month’ for the third time within our corporate offices where several relaxation activities took place. We have also held some training sessions on stress management for our employees, and in particular for our accounts department. The objective of these sessions was to help employees to identify stress and the effects that it has on individuals and learn techniques to minimise these effects. 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 case of serious work-related injuries or fatalities, the fines that are paid to Sonae Sierra revert to the families of injured workers. Policies and procedures for the commissioning, operation and decommissioning of equipment Proper commissioning is dealt with through two of the SHEDS during the design and construction phase of our shopping centres. These ensure that operational teams work in a shopping centre that is functional and efficient. Our contracts with service suppliers include requirements to make sure that pre-opening testing and training is performed on new equipment 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. Additional Contextual Information Details of the S&H risks and opportunities that we have identified as being most relevant for our business are provided on page 21. Key strategies for implementing our S&H objectives and targets are explained in the Safety and Health chapter on page 96.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

139

labour practices and Decent work Aspects continued
performance Indicators
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

lA1 Total workforce by employment type, employment contract, and region, broken down by gender. (Core)

Full

Partial

Direct Employees Country Female Male Total Country Female

Independent Workers Male Total

Portugal Spain Italy Germany Greece Romania Algeria Colombia Brazil The Netherlands total

231 64 31 24 13 17 – – 170 1 551

178 47 24 26 4 13 1 1 243 2 539

409 111 55 50 17 30 1 1 413 3 1,090

Portugal Spain Germany Greece Romania total

5 – 2 1 1 9

5 1 2 – – 8

10 1 4 1 1 17

Direct Employees Employment type Female Male

Supervised Workers Country Female Male Total

Full Time Permanent Part time Temporary Part Time total

542 9 – 551

538 1 – 539

Portugal Spain Italy Germany Greece Romania total

2 4 – 1 1 3 11

2 3 1 – 1 – 7

4 7 1 1 2 3 18

Direct Employees Employment type Female Male

Permanent Telework Temporary total

527 – 24 551

526 – 13 539

Data Qualifying note: This indicator includes all Sonae Sierra direct employees, supervised workers and independent contractors as on 31 December 2011. There are no supervised workers or independent contractors in Brazil; Colombia; The Netherlands and Algeria. There are also no independent contractors in Italy.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

140

labour practices and Decent work Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

lA2 Total number and rate of new employee hires and employee turnover by age group, gender and region. (Core)

Full

Full

turnover by age group
Number Ratio (%)

new employee hires leaving employment by age group
Number Ratio (%)

Less than 35 years 35-44 years 45-54 years 55-64 years More than 64 years total number

76 67 18 6 1 168

7.0% 6.1% 1.7% 0.6% 0.1%

Less than 35 years 35-44 years 45-54 years 55-64 years More than 64 years total number

18 4 3 – – 25

11.8% 2.6% 2.0% – –

turnover by gender
Number Ratio (%)

new employee hires leaving employment by gender
Number Ratio (%)

Male Female total number

97 71 168

8.9% 6.5%

Male Female total number

12 13 25

7.9% 8.6%

turnover by region
Number Ratio (%)

new employee hires leaving employment by region
Number Ratio (%)

Portugal Spain Italy Germany Greece Romania Colombia Brazil The Netherlands total number

38 9 6 11 7 2 0 94 1 168

3.5% 0.8% 0.6% 1.0% 0.6% 0.2% 0.0% 8.6% 0.1%

Portugal Spain Italy Germany Greece Romania Colombia Brazil The Netherlands total number

2 – 1 1 – – – 21 – 25

1.3% – 0.7% 0.7% – – – 13.8% –

new employee hires by age group
Number Ratio (%)

new employee hires by gender
Number Ratio (%)

Less than 35 years 35-44 years 45-54 years 55-64 years More than 64 years total number

108 33 9 2 – 152

9.9% 3.0% 0.8% 0.2% –

Male Female total number

78 74 152

7.2% 6.8%

new employee hires by region
Number Ratio (%)

Data Qualifying note: This indicator includes all Sonae Sierra direct employees as on 31 December 2011. The rate (%) of employee turnover has been calculated using the following formula: Number of employees leaving employment divided by the total number of employees as on 31 December 2011. The rate (%) of new employee hires was calculated using the following formula: Number of new employee hires divided by the total number of employees at the end of the reporting period. The rate (%) of new employee hires leaving employment was calculated using the following formula: Number of new employee hires leaving employment divided by the total number of new employee hires as on 31 December 2011.

Portugal Spain Italy Germany Greece Romania Colombia Brazil The Netherlands total number

20 2 10 7 2 – – 110 1 152

1.8% 0.2% 0.9% 0.6% 0.2% – – 10.1% 0.1%

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

141

labour practices and Decent work Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

lA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation. (Additional) Not reported. lA15 Return to work and retention rates after parental leave, by gender. (Core)









Not reported. We do not report on this indicator yet as we have thus far been unable to gather the data required. We will be able to report on this in 2012, after establishing the necessary procedures to collect the data, including a new information system application which will facilitate this process. lA4 Percentage of employees covered by collective bargaining agreements. (Core) Sonae Sierra does not have any collective bargaining agreements, so zero per cent of employees are covered. lA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements. (Core) Full Full Full Full

Sonae Sierra’s practice on this matter is to communicate to all employees the significant changes that might occur during their professional career in a timely manner according to each of the situations and with local legal obligations. The only exception is when both parties have established a different agreement. lA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes. (Additional) Not reported. lA7 Rates of injury, occupational diseases, lost days and absenteeism, and total number of work-related fatalities, by region and by gender. (Core) Safety and Health, page 97. CRe6 Percentage of the organisation operating in verified compliance with an internationally recognised health and safety management system. (Core) – Full Partial Partial – –

Direct Employees

Supervised Workers

Independent Contractors

Total workforce and independent contractors Total number of direct employees, supervised workers and independent contractors, externally verified to be operating in compliance with OHSAS 18001 Percentage of direct employees, supervised workers and independent contractors, externally verified to be operating in compliance with OHSAS 18001 (%) 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) 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) (%)

1,090

18

17

Data Qualifying note: This indicator includes all Sonae Sierra direct employees, all supervised workers and all independent contractors as on 31 December 2011.

477

9

13

44%

50%

76%

1,041

17

17

96%

94%

100%

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

142

labour practices and Decent work Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

lA8 Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases. (Core)

Full

Full

Coverage of programmes

Education/Training

Counselling

Prevention

Treatment

Staff Families of staff Community members

Yes Yes Yes

Yes Yes Yes

Yes Yes Yes

n/a n/a n/a

Data Qualifying note: This indicator covers all company activities. During 2011, 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. The “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 for diseases or long-term damage to health. In 2011 Safety Tips delivered to staff and their families included advice about: “Make your workplace more enjoyable while you are working”; “Expect the Unexpected”; “What is cholesterol?” and “Noise problem at home work”. 2. Training sessions on ergonomics. Our main corporate offices carried out ergonomics training sessions including how to adjust working stations, suitable work postures, frequency of breaks, etc. 3. First aid courses. Some members of our staff at our Lisbon and Maia offices 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. 4. Shopping centre and office campaigns. In 2011 Sonae Sierra undertook several campaigns in some shopping centres in Europe to raise public awareness about serious diseases. A celebration of the World Day for Safety and Health at Work (28 April) and events related with “Healthy Month” were carried out in all our main corporate offices. 5. Training on the use of defibrillators. Some members of our staff in our Lisbon office received specific training on the use of external automatic defibrillators. 6. Legionnaire’s disease: Some members of our staff in our Lisbon office completed a basic training about Legionellosis.

For details on our procedures for managing risks to people, see page 138.
lA9 Health and safety topics covered in formal agreements with trade unions. (Additional) Not applicable. Sonae Sierra does not have any formal agreements with trade unions. lA10 Average hours of training per year per employee by gender and by employee category. (Core)
Average number of hours per employee





Partial

Partial

Employee Category

Number of employees

Number of hours

Global Senior Executive, Senior Executive, Executive Senior Manager Manager Team Leader Project Team Specialist Team Member total

23 60 99 132 161 615 1,090

439 2,294 5,016 5,363 8,737 31,504 53,353

19.1 38.2 50.7 40.6 54.3 51.2 48.9

Data Qualifying note: This indicator includes all Sonae Sierra direct employees as on 31 December 2011. To obtain the average hours per employee (AHE), by employee category and by type of training, the following formula was applied: AHE (by employee category and by type of training) = total hours of training per employee category and type of training, divided by total employees per employee category.

lA11 Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career ending. (Additional) Not reported. lA12 Percentage of employees receiving regular performance and career development reviews, by gender. (Additional) Employees, page 94. lA13 Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity. (Core) Employees, page 93. lA14 Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation. (Core) Employees, page 93.





Full

Full

Full

Full

Full

Full

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

143

human Rights Aspects
Disclosures on Management Approach
It is our principle to respect the dignity and rights of each individual. Within the scope of our own direct activities, we uphold this principle through the implementation of practices that are aligned with our Code of Conduct and our core values, namely our responsibilities to our staff; tenants; suppliers; communities and other stakeholders. Our business activities do not typically infringe upon or come into direct conflict with internationally proclaimed human rights issues. We operate in regions which typically possess significant bodies of legislation to protect working conditions and human rights amongst the labour force. Nonetheless, we consider that the inclusion of clauses relating to human rights in contracts with our critical first tier suppliers constitutes a form of human rights screening. Likewise, the inclusion of clauses in agreements with partners to guarantee good standards of safety and health management on joint venture projects also helps to ensure the safety of first tier suppliers.

performance Indicators
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

hR1 Percentage and total number of significant investment agreements and contracts that include clauses incorporating human rights concerns or that have undergone human rights screening. (Core)

Full

Full

In the context of our business, we consider “investment agreements” to be agreements made with joint venture partners. Within agreements made with joint venture partners regarding new projects and operational shopping centres, we include criteria to encourage our partners to make their best efforts to ensure the implementation of good practice standards for safety and environmental management in accordance with ISO 14001 and OHSAS 18001 on joint venture projects. Across all countries where we operate, in 2011 only one agreement with a joint venture partner was signed (for the Solingen project in Germany) and these clauses were included. It is part of our procedure to ensure that all contracts signed with critical suppliers55 include clauses for minimum requirements in relation to safety, health, social (including human rights) and environment standards. In 2011, a sample of contracts signed with critical property management suppliers were reviewed by an external party as part of our 2011 CR Target Review, and in all cases these clauses had been included. Contracts signed with critical development suppliers were not subject to an external review, as we did not set a CR Target relating to critical development suppliers’ contracts, but they are still subject to the internal procedure. hR2 Percentage of significant suppliers, contractors and other business partners that have undergone human rights screening and actions taken. (Core) Full Full

We are conscious of our responsibility to ensure that human rights are not negatively impacted upon as a result of activities in our upstream supply chain. It is part of our procedure to ensure that of our new Development and Property Management suppliers receive our Responsible Procurement Policy and that all contracts signed with critical suppliers include clauses for minimum requirements in relation to safety, health, social (including human rights) and environment standards. In 2011, a sample of contracts signed with critical property management suppliers were reviewed by an external party as part of our 2011 CR Target Review, and in all cases these clauses had been included. Contracts signed with critical development suppliers were not subject to an external review, as we did not set a CR Target relating to critical development suppliers’ contracts, but they are still subject to the internal procedure. hR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. (Core) Full Full

The internal training package called ‘JUMP’, which is delivered to new employees, covers issues related to human rights, such as the Code of Conduct and Non-Discrimination Policy. During 2011, a total of 552 hours of ‘JUMP’ training was provided, involving 23 employees (representing 15% of the total new employee hires in 2011 and 2.1% of the total direct employees). hR4 Total number of incidents of discrimination and corrective actions taken. (Core) No incidents of discrimination were registered within the Company in 2011. hR5 Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights. (Core) Full Full Full Full

We do not have any kind of policy against freedom of association among any of our stakeholders. We operate in an industry where trade unions exist and are free to exercise their collective bargaining rights. We also seek to ensure that our employees’ views and interests are represented in corporate decision-making in a number of areas, e.g., Safety and Health.

55

For Development, critical suppliers are considered to be those with whom Sonae Sierra has a contract of over €2 million. For Property Management, critical suppliers are considered to be main shopping centre service providers: cleaning, security, maintenance and waste management.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

144

human Rights Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

hR6 Operations and significant suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour. (Core)

Full

Full

Our business activities do not typically infringe upon or come into direct conflict with internationally proclaimed human rights issues. Sonae Sierra does not employ any child labour. We operate in regions which typically possess significant bodies of legislation to protect working conditions and human rights amongst the labour force. Nonetheless, we consider that the inclusion of clauses relating to human rights in contracts with our critical first tier suppliers constitutes a form of human rights screening. hR7 Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour. (Core) Full Full

Our business activities do not typically infringe upon or come into direct conflict with internationally proclaimed human rights issues. Sonae Sierra does not uphold any forced or compulsory labour practices. We operate in regions which typically possess significant bodies of legislation to protect working conditions and human rights amongst the labour force. Nonetheless, we consider that the inclusion of clauses relating to human rights in contracts with our critical first tier suppliers constitutes a form of human rights screening. hR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations. (Additional) Not reported. hR9 Total number of incidents of violations involving rights of indigenous people and actions taken. (Additional) Not reported. hR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments. (Core) Full Full – – – –

We have not applied human rights reviews or impact assessments to any of our operations across all company activities. We do not consider human rights to be a material risk for our own direct operations. However, we do recognise that there are potential human rights risks within our supply chain and, although these risks are several tiers removed from our business, we have, for example: • Included clauses relating to human rights in contracts with our critical first tier suppliers. • Assessed the CR performance of our critical first tier suppliers by distributing questionnaires to collect information on about their policies and practices regarding a range of CR issues, including human rights. In 2011 the questionnaires were completed by critical first tier development suppliers; from 2008 to 2010 inclusive they have also covered critical first tier property management suppliers. • Commenced a preliminary study to evaluate the viability of developing a standard specification to incorporate into contracts on all development projects, establishing procedures to ensure that materials come from reliable sources in respect to child labour and working conditions. This involved identifying which regions have high risks of child labour according to UNICEF data, and developing a questionnaire to ask suppliers about child labour risks. hR11 Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms. (Core) No grievances related to human rights were registered within the Company in 2011. Full Full

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

145

Society Aspects
Disclosures on Management Approach
local communities
Goals and Performance Our long-term objectives and 2012 targets in relation to Communities aspects can be found on pages 27 and 83 respectively. Commentary on our performance in relation to Communities aspects in 2011, including key success and shortcomings, can be found in the Communities and Visitors chapter on pages 84 to 90. Policy Our policy towards the community is based on values and principles such as Environmental Awareness; Community Involvement; Openness to Society and Confidence and Ethics. Our Corporate Responsibility (CR) Policy states our commitment to play a proactive role in changing society through education and awareness-raising campaigns, by capitalising on our ability to communicate with the public who visit our shopping centres.
CR Policy is available here on our corporate website: http://www.sonaesierra.com/en-gb/corporateresponsibility/crmanagement.aspx

Organisational Responsibility Ultimate responsibility for Communities 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 is 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 lie with our Shopping Centre Managers, supported by the central Marketing Department. Training and Awareness We provide training to shopping centre management teams and development managers regarding community relations, with a particular focus on the implementation of Community Advisory Panels (CAPs). Our employees are also made aware of community issues through surveys, participation in volunteering activities and school liaison projects. Monitoring and Follow-up 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 2007, we launched our first CAP project at Dos Mares in Spain and, since then, we have rolled out CAPs to a further 28 shopping centres and development projects. CAPs aim to create trust and co-operation between Sonae Sierra shopping centres and local community representatives. Community representatives are invited to raise ideas and concerns and present potential projects for collaboration with the shopping centre. 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. Additional Contextual Information Details of the communities-related risks and opportunities that we have identified as being most relevant for our business are provided on page 21. Key strategies for implementing our Communities objectives and targets are explained in the Communities and Visitors chapter on page 83. 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.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

146

Society Aspects continued
Disclosures on Management Approach (continued)
Corruption, Anti-Competitive behaviour and Compliance
Policy 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. Organisational Responsibility 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. Training and Awareness During 2011, the Sonae Sierra Executive Committee approved the Anti-Corruption Guidelines which reiterate the Company’s anticorruption policy and the role of the Sierra Ombudsman. They also establish a series of anti-corruption activities which were initiated in 2011, including regular staff training on the contents of the Code of Conduct in relation to Ethics. The training programme, named BEST (Behaviour with Ethics Sierra Training) is mandatory for all employees. It commenced in 2011 and will last until the end of 2012. Afterwards, it is foreseen that training will be carried out every year in order to cover all employees over a certain period of time. At the end of each training session, employees are required to sign the Sonae Sierra Code of Conduct Acknowledgement to confirm that they have received the Code and agree to comply with its provisions. Monitoring and Follow-up 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 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. 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 and transactions which are approved 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. The Code of Conduct in practice Our Code of Conduct establishes that it is forbidden for Sonae Sierra staff to accept any personal gift or other economic benefit with an individual value in excess of €100 (including Christmas gifts). In 2011, one of our shopping centre managers was given a Samsung Galaxy Tab GT P1000 (tablet computer). In accordance with the Code of Conduct, that gift became the property of Sonae Sierra and it was delivered to Sonae Sierra’s Human Resources (HR) Department, which arranged an internal auction for the computer with a base price of €300. The money raised from the auction was donated to a charitable organisation.

public policy
Essentially, Sonae Sierra supports political endeavours to encourage greater social cohesion and environmental responsibility, although we resist changes in legislation that are likely to significantly and adversely affect our business. Lobbying activities which took place in 2011 are reported under GRI Performance Indicator SO5 on page 148.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

147

Society Aspects continued
performance Indicators
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

So1 Percentage of operations with implemented local community engagement, impact assessments and development programmes. (Core)

Full

Full

On 31 December 2011, Sonae Sierra owned 49 shopping centres, had five projects under construction and six new projects in different phases of development. We have one significant local community engagement programme in place, our Community Advisory Panels (CAPs), which are described on page 87 in the Community and Visitors chapter of this report and are in place across 27 (55%) of our operational shopping centres and 2 (40%) of our projects under construction. Environmental Impact Studies (EISs) or Preliminary Environmental Evaluations (PEEs) 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. Through our Geo Tracking studies, we evaluate the impact of our shopping centres on local consumer habits on an annual basis. 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 two of our shopping centres, Shopping Metrópole and Shopping Penha in Brazil, but aside from these, we do not have any other local community development projects in place across our portfolio. 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 Environmental 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. Our approach to community engagement through the property lifecycle stages to ensure successful project delivery and community acceptance is described in the Community and Visitors chapter on page 83. So9 Operations with significant potential or actual negative and positive impacts on local communities. (Core); So10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities. (Core) – –

Not reported. We do not report on these indicators yet as we have thus far been unable to gather the data since we do not have the necessary mechanism in place to report on it. Only after defining the correct mechanisms we will be able to define when to report the information. CRe7 Number of persons voluntarily and involuntarily displaced and/or resettled by development, broken down by project. (Core) – Full

There were no cases of persons voluntarily or involuntarily displaced and/or resettled within our new projects which commenced in 2011; Solingen Shopping in Germany and Passeio das Águas Shopping in Brazil. This indicator covers projects started in 2011. It does not include the refurbishment of shopping centres as refurbishments do not involve an increase in GLA. So2 Percentage and total number of business units analysed for risks related to corruption. (Core) Full Full

Total number of business processes analysed for risks related to corruption Percentage of business processes analysed for risks related to corruption

7 54%

Data Qualifying note: This indicator includes all business activities. 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 the Sonae Sierra Risk Matrix through the audit work carried out by business process areas. During 2011, the Internal Audit activities covered all the core business risks included in the Risk Matrix and 54% of the corresponding business processes. In 2011, no instances of corruption were detected. The Risk Management Working Group approved the Anti-Corruption Guidelines that will enable the development of anti-corruption awareness through the provision of staff training.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

148

Society Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

So3 Percentage of employees trained in organisation’s anti-corruption policies and procedures. (Core)
Data Qualifying note: This indicator includes all Sonae Sierra’s direct employees as on 31 December 2011. In 2011, one BEST (Behaviour with Ethics Sierra Training) session was held for employees, with the total duration of two hours. The percentage and the total number of employees in each employee category who have received anti-corruption training during the reporting year was calculated using the total number of Sonae Sierra direct employees as on 31 December 2011.

Full

Full

Employee Category

Number of Employees

Senior Executive Senior Manager Manager Team Leader Project/ Team Specialist Team Member total %

1 5 2 2 5 7 22 2%

So4 Actions taken in response to incidents of corruption. (Core) No incidents of corruption were detected across the Company in 2011. Therefore no follow-up actions were necessary. So5 Public policy positions and participation in public policy development and lobbying. (Core)

Full

Full

Full

Full

Lobbying activities through own initiative in 2011 included: • Petitions to municipalities at several locations in Portugal regarding local planning regulations where Sonae Sierra is looking to make expansions or changes to the use of car parking space. • Petitions to municipalities in Cascais and Lisbon (Portugal) for exemption from waste collection taxes due to the fact that Sonae Sierra’s shopping centres have their own waste management system. • Suggestion to the Vila Nova de Gaia, Seixal and Covilhã municipalities (Portugal) for some amendments to be made to the regulation proposal regarding the opening hours of commercial shops (including those located inside shopping centres). • Suggestions to the local building regulations authorities in Albufeira and Maia (Portugal) regarding some technical issues. • Suggestion to Maia municipality (Portugal) about local regulations regarding the licensing of some tenant activities. • Comments on the draft law “Licenciamento Zero” (Portugal) which defines the new licensing process of several activities of our tenants. We also supported or were involved in defining policy positions led by industry associations, including the European Property Federation’s (EPF) responses to a range of European Union-level Directives and legislative initiatives, such as: • The adoption of a voluntary common European Union (EU) certification scheme for the energy performance of non-residential buildings under the Energy Performance of Buildings Directive. We proposed a methodology for the certification scheme using Sonae Sierra know-how. • The EU’s Energy Efficiency Directive. We contributed to the final paper submitted by the EPF to the European Commission regarding this Directive. • The legislative initiative on Water Performance of Buildings. We contributed comments to the statement issued by the EPF. • The European Commission’s Retail Market Monitoring Report. We countered the arguments put together by the European Commission which stated that retailers are suffering due to a ‘retail property market malfunction’. In Italy, we supported the action of the Consiglio Nazionale dei Centri Commerciali (CNCC)56 in favour of the extension of retail opening hours on Sundays and festive days and additional flexibility for stores opening hours, as well as simpler and less restrictive regulations for the creation of new shopping centres, in keeping with the EU Directives and court rulings on competition. As current chairman of the CNCC and responsible for Sierra Institutional Relations in Italy, Pietro Malaspina promoted this viewpoint in a number of congressional events and interviews, as well as in meetings with government officials. This action, combined with similar lobbying activities by other industry associations, was instrumental in bringing about the decisions taken by the Italian Government in June and in December 2011, that liberalised retail opening hours and set the basis for deep changes in retail laws at regional level, towards the elimination of limitations to the creation of new shopping centres, except in cases of proven conflict with public interest. Although these legislative measures are being challenged at the Italian Constitutional Court by regional governments, it is generally felt that they have established a turning point from a very restrictive legislation towards a more liberal one.

56

The Italian filiation of the International Council of Shopping Centres (ICSC).

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

149

Society Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

So6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. (Core) No financial and in-kind contributions were made by Sonae Sierra to political parties, politicians, and related institutions in 2011. So7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes. (Additional) There were no legal actions made against Sonae Sierra for anti-competitive behaviour, anti-trust, and monopoly practices in 2011.
So8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations. (Core)

Full

Full

Full

Full

Full

Full

In 2011 Sonae Sierra paid two significant fines with a total value of €3,246 (both in Spain). The Company did not receive any non-monetary sanctions and there were no cases brought through dispute mechanisms. Last year, Sonae Sierra reported three cases brought against the Company through dispute resolution mechanisms. For one of them the process was favourable for Sonae Sierra, but we still waiting for the resolution process for the other two cases.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

150

product Responsibility Aspects
Disclosures on Management Approach
Customer health and Safety
Goals and Performance Our long-term objectives and 2012 targets in relation to shopping centre safety and health (S&H) aspects can be found on pages 28 and 97 respectively. Commentary on our S&H performance in shopping centres in 2011, including key success and shortcomings and changes to S&H management procedures which occurred during the reporting year can be found on pages 96 and 101 to 103. Policy See Labour Practices and Decent Work Aspects, Disclosures on Management Approach, Occupational Health and Safety on page 137. Organisational Responsibility See Labour Practices and Decent Work Aspects, Disclosures on Management Approach, Occupational Health and Safety on page 137. Training and Awareness See Labour Practices and Decent Work Aspects, Disclosures on Management Approach, Occupational Health and Safety on page 137. See also the Safety and Health chapter, pages 101 to 103. Monitoring and Follow-up See Labour Practices and Decent Work Aspects, Disclosures on Management Approach, Occupational Health and Safety on page 137. Besides the monitoring practices reported under Occupational Health and Safety, we also operate a range of practices relating to shopping centre users’ health, safety and security during all phases of the property lifecycle. Our Safety, Health and Environment Development Procedures (SHEDS), which are implemented during the shopping centre design and development process, are described in the Safety and Health chapter on page 96. Details of our emergency procedures in shopping centres are provided in the Safety and Health chapter on page 103.

product and Service labelling – Sustainable building Standards and Certification
Goals and Performance Our 2012 targets in relation to sustainable building standards and certifications can be found on page 26. Progress we have made to date towards achieving these standards and certifications can be found on page 25. Details of new certifications achieved in 2011 can be found on pages 6 and 7 respectively. Policy Through our years of experience in designing, constructing, owning and managing shopping centres we have identified the sustainability features which are most important for our operations. The 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. The SHEDS are structured in a way that they allow our shopping centre projects to achieve the international ‘BREEAM Good’ standard or above for environmental design as well as our own minimum requirements. We do aim to apply ‘BREEAM’ ratings to our projects in future. During the construction and operations phases, we operate a Safety, Health and Environment Management System (SHEMS) on all our construction sites and in all our operational shopping centres which is based on ISO 14001 and OHSAS 18001 standards. Applying these standards enables us to guarantee that all SHE risks and impacts are identified and controlled. It is also part of our policy to seek third party audit and certification of the SHEMS 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 policies 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. Training and Awareness Training and awareness on the SHEDS and our SHEMS procedures is addressed through our SHE training procedures, which are described under Environmental Aspects, Disclosures on Management Approach on page 123 and Labour Practices and Decent Work Aspects, Occupational Health and Safety on page 137. Monitoring and Follow-up 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.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

151

product Responsibility Aspects continued
Disclosures on Management Approach (continued)
product and Service labelling – Customer surveys
Goals and Performance Our primary customers are our tenants. Our long-term objective and 2012 targets in relation to tenant satisfaction can be found on pages 27 and 78 respectively. Commentary on our performance in relation to tenant satisfaction in 2011, including key success and shortcomings, can be found on pages 79 to 82. Commentary on our performance in relation to shopping centre visitors’ satisfaction in 2011 can be found on page 88. Organisational Responsibility Senior responsibility for tenant satisfaction and other aspects of tenant engagement and management are 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 property management processes in an integrated way, covering leasing, marketing, operations, administration, maintenance, safety and security activities. Monitoring and Follow-Up 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 CR programme and satisfaction with our shopping centre management teams. Survey results are used to develop action plans to address aspects which receive low scores and ultimately drive continuous improvement in tenant satisfaction levels. Recognising that understanding and responding to our tenants’ concerns will help us to deliver a higher quality service, in 2008 we launched a top tenant survey in Portugal, Spain and Brazil to obtain feedback from key tenant companies at the senior management level. In 2009 we also rolled out top tenant surveys in Germany, Italy and Greece, and these were completed at the beginning of 2010. Following these top tenant surveys, tailor-made actions plans were developed and are being implemented in each country. With respect to shopping centre visitors, we undertake Mall tracking surveys at our shopping centres every year or two years to help us understand our visitor’s profile, their behaviour and requirements. These surveys monitor trends in visitor satisfaction, expectations, loyalty and behaviour, and also ask questions about social and environmental aspects. 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. 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.

Marketing Communications
Sonae Sierra does not currently monitor marketing communications to evaluate conformity and/or good practices with respect to transparency and fair marketing communication with customers. This is principally due to the following two reasons: 1) the budget invested in marketing communication campaigns does not justify the costs that Sonae Sierra would have to bear to contract the ICAP (Portuguese official compliance entity); 2) to date Sonae Sierra has not received any complaints concerning lack of transparency in marketing communications.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

152

product Responsibility Aspects continued
Disclosures on Management Approach (continued)
Customer privacy
Sonae Sierra does not supply data concerning tenants to third parties (sales achieved or results of audits) except in cases where we are obligated to by law or we are authorised to do so by the tenant company. Sensitive tenant data is always kept confidential, with data only being disclosed in the case of a shopping centre valuation (and in this case, the valuator who analyses the data is obliged to adhere to a confidentiality agreement). The application of these measures eliminates the need for a specific strategic management approach concerning customer privacy.

performance Indicators
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

pR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. (Core)

Full

Full

Life cycle stages

Percentage of service categories covered

Comments on assessment procedures

New construction

100%

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 page 25. 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 96.

Management

100%

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 use some specific tools to assess the safety of our shopping centres for building users, which are described on page 96. Audits are performed to assess compliance with Sonae Sierra’s SHEMS at corporate and site levels on an annual basis. This covers expansion and refurbishment activities. The same procedures apply as those described in relation to ‘New construction’ above.

Development/redevelopment

100%

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

153

product Responsibility Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS

pR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes. (Additional)
Incidents of non-compliance with regulations resulting in a fine or penalty Incidents of non-compliance with regulations resulting in a warning

Full

Full

Country

Incidents of non-compliance with voluntary codes

Portugal Spain Italy Germany Greece Romania Brazil total

– – – – – – – –

4 1 – – – 1 1 7

– 3 – – – – 3 6

Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year as well as shopping centres managed by Sonae Sierra on behalf of third parties. The incidents of non-compliance with regulations resulting in a warning occurred in the following shopping centres: • Portugal: Tavira Gran Plaza (2); CascaiShopping (1); LeiriaShopping (1). • Spain: Max Center. • Romania: River Plaza Mall. • Brazil: Franca Shopping. The incidents of non-compliance with voluntary codes occurred in the following shopping centres: • Spain: GranCasa (2); Parque Principado (1). • Brazil: Parque D. Pedro Shopping (3). There were not any instances of non-compliance with regulation and voluntary codes resulting from dangerous occurrences, reportable injuries and fatalities to non-workers on or off site in 2011.

pR3 Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. (Core)

Full

Full

Significant building and infrastructure components and products used by our business and for which we apply a specific environmental, safety and/or ethical criteria or require adherence to a particular certification/label/rating are foreseen on the Safety, Health and Environmental Management System (SHEMS). As example we have under our SHEMS standards for: – Prohibition of the use of Hazardous Materials; – Timber Products; – Sustainable products, and – Low emission products. For additional information regarding Environmental and Safety and Health certifications please consult pages 25, 47 and 75. CRe8 Type and number of sustainability certification, rating and labelling schemes for new construction, management, occupation and redevelopment. (Core) In 2011 we achieved a total of 12 new sustainability certifications for construction sites and operational shopping centres.
Shopping Centres Development Projects
Data Qualifying note: This indicator includes all shopping centres owned by Sonae Sierra and in operation for the full reporting year; all eight main Sonae Sierra corporate offices and all projects under development during the reporting year.



Full

Offices

ISO 14001 certification OHSAS 18001 certification

– –

3 5

2 2

For details of the type and number of sustainability certifications achieved by our business to date, see Our Business Strategy, Safety, Health and Environment Management System, page 25.

GlobAl RepoRtInG InItIAtIve
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

154

product Responsibility Aspects continued
performance Indicators (continued)
Indicator Compliance with Compliance with GRI G3.1 GRI CRESS Full Full

pR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service
information and labelling, by type of outcomes. (Additional)

No incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling occurred in 2011 at any of our owned shopping centres or in shopping centres we manage on behalf of other owners.

pR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. (Additional)
Tenants, pages 78 to 81. Communities and Visitors, pages 83 and 88.

Full

Full

pR6 Programmes for adherence to laws, standards, and voluntary codes related to marketing communications,
including advertising, promotion, and sponsorship. (Core)

Full

Full

Sonae Sierra does not adhere to any codes or voluntary standards relating to marketing communications, including advertising, promotion and sponsorship.

pR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing
communications, including advertising, promotion, and sponsorship by type of outcomes. (Additional) Not reported.





pR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of
customer data. (Additional) Not reported.





pR9 Monetary value of significant fines for noncompliance with laws and regulations concerning the provision and
use of products and services. (Core)

Full

Full

Sonae Sierra did not identify any non-compliance with laws or regulations across all company activities in 2011. We consider significant fines or penalties to be ones for which the amount (individual fine) is greater than €500.

GLOBAL REPORTING INITIATIVE
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

155

Independent Auditor’s Review

REVIEW REPORT Introduction 1. We have been requested by the Board of Directors of Sonae Sierra, SGPS, SA to perform a review of the corporate responsibility information included in the Economic, Environmental and Social Report 2011, that covered: – The reliability of the “Profile Disclosures” information and the 2011 data relating to all the GRI performance indicators reported by Sonae Sierra, all core and several additional, as indicated in the “Annex: Global Reporting Initiative” to the Economic, Environmental and Social Report 2011, and its consistency with the remaining content of that report, as well as its compliance with the disclosure of information requirements defined by the Guidelines for Sustainability Reporting of the Global Reporting Initiative, version v3.1 of 2011, for the A+ application level; The reliability of all the additional 2011 data requested by the GRI Construction and Real State Sector Supplement that was reported by Sonae Sierra, as indicated in the same Annex; Sonae Sierra’s own corporate responsibility performance indicators disclosed in chapters 1, 3 and 4 of that report, in accordance with the criteria defined by Sonae Sierra, mentioned in attachment to the indicators referred to; and The reported progress against the 2011 Corporate Responsibility targets and actions, in accordance with criteria established by Sonae Sierra, which is publically available, as identified in that report.

– –



Responsibilities 2. Sonae Sierra’s Board of Directors is responsible for preparing the Economic, Environmental and Social Report 2011, 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. 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 personnel and analytical procedures, including tests on a sample basis and therefore, less assurance is obtained than in an engagement aimed at obtaining reasonable assurance.

GLOBAL REPORTING INITIATIVE
SONAE SIERRA Profile Disclosures Economic Aspects Environmental Aspects Labour Practices and Decent Work Aspects Human Rights Aspects 110 121 123 136 143 Society Aspects Product Responsibility Aspects Independent Auditor’s Review 145 150 155 Economic, Environmental and Social Report 2011 Back to main contents

156

Independent Auditor’s Review continued
Page 2 of 2
5. The main procedures performed were: – Interview of those responsible in Sonae Sierra for the preparation of the Report and for the reported data, so as to know and understand the management and report principles, systems and procedures applied; Review of the compliance and consistency of the GRI indicators reported and of the remaining “Standard Disclosures” related contents, with the GRI guidelines requirements; Review of the processes, criteria and systems used to collect, accumulate, present and validate the data for 2011, relating to the information reviewed by us; Review of the procedures and criteria in place to monitor and measure progress against 2011 Corporate Responsibility targets and 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 Economic, Environmental and Social Report 2011 and related publicly available reports, and that does not contradict any significant information included in the Sonae Sierra’s Consolidated Report and Accounts 2011.

– – – –



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 corporate responsibility information included in the Sonae Sierra, SGPS, S.A. Economic, Environmental and Social Report 2011, 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 version 3.1 of 2011 of the GRI Guidelines for the A+ application level and with the criteria defined by Sonae Sierra. Lisbon, 23 March 2012

_____________________________ Deloitte & Associados, SROC S.A. Represented by João Carlos Frade

SONAE SIERRA Back to main contents

Economic, Environmental and Social Report 2011

157

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 Amílcar Cabral, n˚ 23, Quinta do Lambert, 1750-018 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 Client Media Shopping centre visitor Government/ local authority Sonae Sierra’s employee Student Supplier 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 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 This report included information that is of interest to me I liked the design and layout of this report I was able to find the information I was looking for The report contained a good summary of information across all topics 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 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 The financial information presented in this report? Sonae Sierra’s economic performance during the course of 2011? The environmental information presented in this report? Sonae Sierra’s environmental performance during the course of 2011? The social information presented in this report? Sonae Sierra’s social performance during the course of 2011?

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. ...................................................................................................................................... ......................................................................................................................................
continued

SONAE SIERRA Back to main contents

Economic, Environmental and Social Report 2011

158

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. .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... .......................................................................................................................................... Do you give us permission to publish your comments in our future CR 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

poRtUGAl
lISboA RUA AMíLCAR CABRAL, 23 1750-018 LISBOA TELEPHONE: +351 21 751 5000 FAX: +351 21 758 2688 poRto LUGAR DO ESPIDO,VIA NORTE 4471-909 MAIA TELEPHONE: +351 22 948 7522 FAX: +351 22 010 4698

ColoMbIA
CAlI CARRERA 98 NRO 16 -200 OFICINA DE ADMINISTRACIóN - CALI VALLE- COLOMBIA TELEPHONE: +57 2 324 7225 FAX: +57 2 324 72 25 (EXT. 107)

lUxeMboURG
lUxeMboURG AV. JOHN. F. KENNEDY, 46 A 1855 LUXEMBOURG TELEPHONE: +352 26 00 52 13 FAX: +352 26 005 803

RoMAnIA
bUChAReSt BANEASA BUSINESS & TECHNOLOGY PARK BUILDING B, THIRD FLOOR, WING 1, 42-44 BUCURESTI PLOIESTI, SECTOR 1 013696 BUCURESTI ROMANIA TELEPHONE: +40 21 36 10 910 FAX: +40 21 36 10 988

MoRoCCo GeRMAnY
DüSSelDoRF PETER-MüLLER-STR. 18 40468 DüSSELDORF TELEPHONE: +49 211 4361 6201 FAX: +49 211 4361 6202 CASAblAnCA ZÉNITH MILLÉNIUM IMMEUBLE 1 LOTISSEMENT ATTAOUFIK 4ÉME ÉTAGE SIDI MAâROUF 20190 CASABLANCA TELEPHONE: +212 (0)522879490 FAX: +212(0)522879494

SpAIn
MADRID C/ CONDE DE ARANDA, 24, 5° 28001 MADRID TELEPHONE: +34 91 575 8986 FAX: +34 91 781 1960

AlGeRIA
KoUbA ILOT D N°6 ZHUN, GARIDI II, KOUBA ALGER TELEPHONE: +213 (0) 21 56 38 02 FAX: +213 (0) 21 44 58 55

GReeCe
AthenS CHATZIYIANNI MEXI, 5 – 6° 11528 ATHENS TELEPHONE: +30 210 725 63 60 FAX: +30 210 729 25 00

the netheRlAnDS
hooFDDoRp POLARISAVENUE, 61 2132 JH HOOFDDORP TELEPHONE: +31 23568 50 80 FAX: +31 23568 50 88

bRAzIl
São pAUlo AV. DR. CARDOSO DE MELO, 1184 – 12,13,14 FLOORS VILA OLíMPIA, SãO PAULO – SP CEP: 04548 - 004 TELEPHONE: +55 11 3371-4133 FAX: +55 11 3845-4522

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MIlAn CORSO GARIBALDI 86 20121 MILAN TELEPHONE: +39 02 62369001 FAX: +39 02 623690230/1

www.sonaesierra.com

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