Our Approach to Sustainability

At SM, sustainability is woven into how we operate and grow. We focus on practical solutions that drive environmental responsibility, social progress and long-term economic growth, creating meaningful impact where it matters most.

Environmental Stewardship:

Minimizing Impact, Maximizing Efficiency

With our extensive business footprint, we do our share in conserving natural resources and protecting the environment both life on land and in water. We employ the “avoid, reduce, reuse, recycle and repurpose” approach in utilizing resources for operations and product development. We implement programs on waste management, plastic management, energy management and water management. We have invested in a waste-to-fluff fuel partnership with GUUN to reduce plastics footprint and develop alternative sources of energy. We actively implement water recycling initiatives to optimize consumption and reduce environmental impact.

Social Responsibility:

Creating Opportunities and Promoting Inclusion

At the core of our sustainability efforts are our own people and the communities we serve. We champion equal opportunity ensuring fair and inclusive workplaces in every part of our business. Meanwhile, we do not leave anyone behind as we strive for social development by providing access to education, healthcare and livelihood. These efforts are complementary in creating equal opportunities and promoting social inclusion whenever SM is present.

Driving Economic Growth

The synergy of our core businesses—retail, property, and banking—fuels local economies, transforming emerging cities into thriving urban hubs. This serves as a platform to foster the creation of MSMEs, and local job creation. The availability of office spaces, hotels, and convention centers boost local tourism and attract businesses and foreign investments in the city. Lastly, the mixed use of residential and commercial spaces, encourage aspirational lifestyles which contribute to economic activity.

Our Valued Resources

At SM, sustainability is woven into how we operate and grow. We focus on practical solutions that drive environmental responsibility, social progress and long-term economic growth, creating meaningful impact where it matters most.

Manufactured Capital

With 84% of Filipinos expected to live in cities by 2040, SM aligns with the Philippine Urbanization Plan to build inclusive, resilient and sustainable cities. We continue to develop integrated lifestyle cities ensuring accessibility, economic opportunities and social cohesion. To date, we have 22 integrated lifestyle cities and 87 malls that serve as key community and economic hubs.

Our property arm, SM Prime, is investing in a 360-hectare Integrated Property Development with the Pasay City government. The master plan is set to be finalized in the first half of 2025, paving the way for horizontal development to begin in 2026.

Intellectual Capital

As a leader in multiple industries, the SM brand is one of the most recognized and trusted names in the country, shaping the way Filipinos shop, live and work. Complementing this is the country’s largest and longest-running loyalty program, SMAC (SM Advantage Card) with 10.7 million members enjoying exclusive perks, discounts, and rewards.

In the last quarter of 2024, we launched SM in Focus, a YouTube platform hosted by award-winning journalist Rico Hizon, offering an in-depth look at our businesses, social good and sustainability efforts.

Natural Capital

Environmental preservation is integral to SM’s growth strategy. We aim to reduce our carbon footprint by 40% by 2040 as reflected in our investments in green infrastructure, renewable energy projects and sustainable sourcing.

A key initiative is our partnership with GUUN through SM Prime to optimize waste management and upcycling, while BDO continues to fund renewable energy projects.

In October, we organized the PlasTIK Conference with the Department of Science and Technology (DOST), advocating for responsible plastic use and waste management. We also expanded our Green
Finds program, providing customers with more eco-friendly products, while Watsons accelerated its Sustainability efforts with over 1,600 green SKUs, refill stations and the launch of the Greener Store concept.

Social Capital

We continue to expand through sustainable partnerships that uplift businesses and communities. SM supports over 100,000 MSMEs through our retail and property network, offering accessible platforms for growth. SM for MSMEs offers small businesses affordable booth rentals in SM malls for as low as PHP500 per day. Supporting over 600 purveyors nationwide, it provides a strategic opportunity to reach the right market and grow into future mall tenants.

Supporting education and employment, 1,000 new
scholarships were awarded by SM Foundation in 2024, the highest in our history and 70,000+ job seekers were connected through Trabaho para sa Bayan: J.O.B.S (Job Opportunities Building Skills), leading to 11,000 hires across 130 job fairs. Additionally, SM Foundation’s KSK Farmers’ Training Program continues to support agricultural communities by providing essential skills and resources.

Human Capital

Our inclusive workplace policies champion equal opportunity, meritocracy, and anti-
discrimination while fostering a supportive environment with facilities such as meditation rooms, breastfeeding areas and gender-neutral restrooms.

With women comprising 64% of our workforce and holding 58% of senior leadership roles, we actively track and enhance leadership opportunities for women through comprehensive training, mentorship, and career growth programs, ensuring a diverse and empowered workforce. This year, we welcomed our new Independent Board Director, Atty. Lily Gruba, bringing women’s representation on our board to one-third.

Financial Capital

Our financial practices are guided by our vision of building sustainable businesses that drive responsible development. We prioritize sustainable returns, maintain strong balance sheets and adhere to prudent fiscal practices.

In 2024, we strengthened our financial position by launching our Euro Medium-Term Note (EMTN) Program, providing flexibility in global capital markets to fund
strategic expansion. Following its establishment, we successfully completed a USD 500 million drawdown in July, with the issuance oversubscribed by 3.2x, reaching
USD 1.6 billion in demand. The 5-year note was priced at 5.466% with a 5.375% coupon.

As early adopters of International Financial Reporting Standards (IFRS)S1 and S2, we integrate finance with sustainability, reinforcing our commitment to long-term growth, climate risk management and shared stakeholder value.