IT’S ABOUT VALUE…€¦ · • Sonae Sierra won the DuPont Safety Award in the Visible...

2007CORPORATERESPONSIBILITYREPORT

IT’S ABOUT VALUE…

Contents

1 CEO’s Statement

3 Who we are

5 Where we are

6 About this report

9 How we listen

13 How we are governed

15 How we govern CR

21 Environmental Management

Performance by Impact Area

27 Climate Change

44 Water

51 Waste

59 Land Use

65 Business Chain – Suppliers

70 Business Chain – Tenants

78 Communities (including visitors)

89 Employees

99 Safety & Health

112 Risk Management

113 Economic Performance

116 Verification Statement

119 GRI Content Index

134 Glossary

135 Annex 1: Summary of Performance by country

143 Annex 2: Review of progress against targets 2007

Front cover: El Rosal, Ponferrada, Spain

SONAE SIERRA Corporate Responsibility Report 2007 1

CEO’s Statement

Dear Reader,

It has been four years since Sonae Sierra produced its first Corporate Responsibility (CR) Report. In 2007, we haveonce again strengthened our reporting approach and levels of transparency, as demonstrated by attaining compliancelevel B+ with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, compared with Level C+ in2006. This report has (like last year’s report) been verified by Deloitte, thus ensuring further rigour and transparencyto our reporting approach.

Our corporate mission remains the same: to create value for our shareholders while taking account of our socialresponsibilities towards other important stakeholders and the environment. Our CR strategy, which is fundamental to achieving this mission, is focused on the material CR impact areas which we identified in 2006 and which continueto be the most relevant to our business. The structure of this CR Report focuses in detail on our performance,strategy and goals in relation to these key impact areas.

Once again, I am pleased to confirm that 2007 was a year of many successes, not least the full achievement of 71%of our 2007 CR targets. Some of our key achievements in 2007 included:

• We further increased overall electricity efficiency inshopping centres in operation, and decreasedcorresponding Greenhouse Gas emissions;

• We further increased water efficiency to 4.0 litres pervisit and waste recycling rates reached a globalaverage of 35%;

• We achieved accredited ISO 14001 certification for a further 11 shopping centres in operation, withParque D. Pedro and Shopping Penha being the firstbuildings of their kind to receive the certification inBrazil;

• We achieved accredited ISO 14001 certification for construction works at a further 3 completeddevelopment projects and 1 project scheduled to open in 2008;

• We won several environmental and social awardsduring 2007, in recognition of our efforts to managesuch aspects of performance;

• The number of non-conformances per hour of SafetyPreventive Observation (SPO) on reference sitesdecreased in 2007 to an average of 10.5 – the lowestrecorded yet. Sadly, however, we did not reach ourgoal of achieving zero workplace accidents among allSierra staff this year;

• We introduced measures to ensure employee welfareand satisfaction and continued to actively supportcharitable organisations serving local communities.Community volunteering amongst staff increasedacross all countries where we operate, and at DosMares in Spain we trialled our first Community Panelas a means of engaging with local communities;

• We continued to engage proactively with tenants onCR issues, and we launched the first PERSONÆ Safety& Health Award for Best Tenant to incentivise goodpractices amongst tenants; and

• We launched a Responsible Procurement Policy, and upgraded our contracts with both suppliers andtenants to include clauses relating to CR.

Looking forwards, there is still much more to do, and many challenges to overcome. One such challenge will becompliance with the increasing requirements of environmental legislation aimed at improving resource efficiency inthe built environment. Another one will be planning for the future despite the uncertainty of future risks, illustratedby our efforts to design in climate change adaptation features before we know precisely how the climate mightimpact upon our buildings. We also face a challenge to keep our suppliers and tenants inspired to replicate our ownsustainability efforts, and to continuously find innovative and more sustainable ways of developing and managingshopping centres.


CEO’s Statement

For full details of the targets set for 2007 including the criteria for theevaluation made and the extent of achievement with respect to eachtarget, please see Annex 2 on page 143 of this report.

SUMMARY OF PERFORMANCE against 2007 CR targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%32

2

4

7

CR AWARDS RECEIVED DURING 2007

• Sonae Sierra received the International Council ofShopping Centres (ICSC) ReSource Award whichdistinguished the excellence of the Company’s long term commitment to sustainable development;

• Sonae Sierra won the DuPont Safety Award in the Visible Management Commitment category for thePERSONÆ project;

• Euronatura Climate Responsibility ranking 1st

place (Portugal).

To meet some of these challenges head on, we have now set long-term objectives for water, waste and land use anddeveloped comprehensive strategies in these areas. We continue to pursue our long-term carbon management goalof a 10% reduction of greenhouse gas emissions by square metre of Gross Lettable Area (GLA) by 2020, compared toa 2005 baseline. We have developed a Safety & Health strategy and long-term objectives, and our ultimate aim in thisarea continues to be to implement a zero accident culture. To achieve all these long-term goals, we have also setourselves a further 19 challenging CR targets for completion during 2008, covering each of our material impactareas. These targets are performance based, targeting quantitative improvements.

I hope that in this same statement in our 2008 CR Report, I will be able to report as proudly as I am now on theprogress that we have made over the year. The credit for this is largely attributable to the dedication of our staff, andthe loyalty of our suppliers and tenants, without whom none of these achievements would be possible.

Álvaro PortelaCEO

DeclarationG3 Self-Declaration StatementSonae Sierra believes that this report complies with level B of the GRISustainability Reporting Guidelines, G3, published in October 2006,both in terms of reporting contents and performance indicators.Furthermore, we have sought to have this independently verified byDeloitte, whose statement at the end of this CR Report 2007 enablesus to Self-Declare to Level B+ of the GRI Guidelines.

2002 inaccordance C C+ B B+ A A+

Mandatory Self Declared 3

OptionalThird party checked 3

GRI checked

Sonae Sierra

SierraCorporate Services

SierraInvestments

SierraDevelopments

SierraManagement

Sonae SierraBrazil

Sierra Funds Portugal

Spain

Italy

Germany

Romania

Greece

Portugal

Spain

Italy

Germany

Romania

Greece

Portugal

Spain

Italy

Germany

Romania

Greece

Investment

Development

Management


Who we are

KEY FACTS AS AT 31ST DECEMBER 2007

• Operating in 7 countries with a total of 789 directemployees worldwide (89% of which are in Europe) –headquarters in Maia, Porto, Portugal.

• 8,162 contracts with tenants;

• 47 centres owned (GLA of over 1.85 million m2) 1;

• Further 18 centres managed by Sierra on behalf of other owners;

• 12 projects under development (a total GLA of 473,768m2);

• EBITDA of €154.4 million

1 All of these centres which we own are managed by Sonae Sierra.

Web references

For a full list of partnerships see:www.sonaesierra.com/aboutus/ourpartnerships

For a full list of awards received in 2007, see:www.sonaesierra.com/aboutus/whoweare/

For more information on the subsidiary companiesthemselves, and for details of Sonae Sierra’srespective ownership stake in each of these, seethe Consolidated Report and Accounts 2007,pages 16 to 31, included in the Annual Report and Accounts, In Review 2007.

Our business activities and their impactsThe company was incorporated in 1989 in Portugal and is 50% owned by Sonae SGPS (Portugal) and 50% byGrosvenor (United Kingdom). Sonae Sierra is a holding company for four separate Sonae Sierra subsidiary businesses:Sierra Investments, Sierra Developments, Sierra Management, and Sonae Sierra Brazil. Sonae Sierra Brazil encompassesall of the same activities for Shopping and Leisure Centres in Brazil. The corporate support functions including Finance,Legal, Human Resources, Environment, Communication, Safety & Health and Back-Office, are centralised in SierraCorporate Services. We outsource the principal activities of design and construction to technical advisors andconstruction companies. We undertake property management directly, rather than outsourcing this to managingagents, although we do outsource some of the operational management tasks such as cleaning and security.

Sonae Sierra S.G.P.S., SA is an international shopping centre specialist active in 7 countries, 6 in Europe and 1 inSouth America, Brazil. Passionate about innovation, we focus on the integrated activities of investment, developmentand management of shopping and leisure centres with an aim to create “leading-edge destinations” for consumers.

http://www.sonaesierra.com/aboutus/ourpartnerships

http://www.sonaesierra.com/aboutus/whoweare


Who we are

Developing and managing shopping and leisure centreshas the potential to cause a number of significantimpacts on the environment, society and the economy.Although our management approach to tackle theseimpacts differs according to our level of control orinfluence, the impacts arising from buildings in use areusually capable of being addressed through careful

design and construction practices. We identified our impacts in our CR Report 2006, on page 6. Given that our core business activities have not changed over the past year, we consider that the variety of sustainability impact areas that might arisefrom these remains the same. These impact areas areillustrated in Table 1.

ECONOMIC IMPACT AREAS

• Local economic benefits;

• Job creation;

• Financial impact on key stakeholder groups.

ENVIRONMENTAL IMPACT AREAS

• Climate change (energyconsumption/efficiency, greenhousegas emissions and other significantair emissions resulting from energyconsumption);

• Water use and emissions to water;

• Waste production and management;

• Land use and biodiversity;

• Materials use and responsibleprocurement.

SOCIAL IMPACT AREAS

• Tenant satisfaction;

• Community relations;

• Visitor satisfaction;

• Nuisance (noise, dust, traffic);

• Accessibility;

• Crime prevention and security;

• Employee satisfaction;

• Training and skills;

• Safety & Health;

• Responsible Procurement.

TABLE 1: Our Impacts


Where we are

Portugal

Romania

Greece

Germany

Italy

SpainBrazil

Key Facts at 31/12/07 by country

No. of centres owned undermanagement

GLA of owned centres undermanagement (m2)

No. of centres managedon behalf of others

Total GLA undermanagement (m2) 2

Total rent received at centresowned by Sierra (€million) 3

Total tenant sales at all centresunder management (€million) 4

Costs by country 5 (for all countries/regions that make up 5 percent ormore of total revenues) (€million) 6

Total number of direct employees 7

Portugal Spain Italy Germany Greece Romania Brazil Total

20 12 2 2 1 1 9 47

777,621 526,830 76,218 96,443 45,957 11,953 320,397 1,855,419

10 5 2 0 0 1 0 18

916,464 634,251 138,698 96,443 45,957 30,881 320,397 2,183,090

185.8 69.3 6.2 9.5 16.4 1.6 50.7 339.4

2,389.1 987.5 45.6 182.0 164.1 n.d. 1,010.6 4,779.0

101.9 15.1 5.0 11.6 1.7 1.0 3.5 141.6

423 135 53 46 31 12 85 789

2 These figures correspond to owned centres under management and centres managed on behalf of others. 3 These figures correspond to the total rents collected (100%) from Sierra owned shopping centres. The following end of year exchange rates were used to convert

Brazilian values in reais and Romanian values in leu to euros: BRL/EUR = 0.375770; RON/EUR = 0.300170.4 These figures do not include sales achieved by tenant owners (those who own individual units in our centres). The following end of year exchange rates were used to

convert Brazilian values in reais and Romanian values in leu to euros: BRL/EUR = 0.375770; RON/EUR = 0.300170.5 Costs by country includes external supplies and services, costs with common charges of the centres, buy out costs and other operating expenses. The following end

of year exchange rates were used to convert Brazilian values in reais and Romanian values in leu to euros: BRL/EUR = 0.375770; RON/EUR = 0.300170.6 These figures include the costs of The Netherlands which are €1.7 million.7 Sonae Sierra also has 2 employees based in The Netherlands and 2 in the UK.

SIGNIFICANT CHANGES REGARDING OUR SIZE AND STRUCTURE DURING 2007

• We entered the Romanian market, with the acquisition of River Plaza and with the acquisition of 2 sites in the cities of Ploiesti and Craiova;• We inaugurated 3 new shopping centres; Alexa in Germany, El Rosal in Spain and 8a Avenida in Portugal;• We acquired 50% stakes in 2 shopping centres in the cities of Albufeira and Portimão, in Portugal;• We increased our stakes held in ArrábidaShopping and GaiaShopping, in Portugal, by 50%;• We sold Lima Retail Park in Portugal, to PREF;• We sold 50% of LoureShopping, in Portugal, to Deka Immobilien Investment;• We commenced the development of several new projects in various countries: Colombo Towers in Portugal, Las Pulianas in Spain, Pantheon

Plaza in Greece, LOOP5 in Germany, Gli Orsi in Italy and Manauara Shopping in Brazil.

TABLE 2


About this report

For further information on any aspect of this report,please contact:

Elsa MonteiroHead of Institutional Relations,Environment and Communication

Email: [email protected]

In this 2007 CR Report, as in Sonae Sierra’s previous CR Report, the Company has sought to apply the GlobalReporting Initiative 8 (GRI) Sustainability Reporting Principles for defining report content to present a balanced andrelevant account of our sustainability performance, and to contribute to transparency and formal recognition ofachieved value. The process employed to apply these principles is summarised in the following section of this report.

Web references

For a copy of the GRI G3 Sustainability ReportingGuidelines, see:www.globalreporting.org/ReportingFramework/G3Online/

Materiality

This 2007 CR Report focuses in detail on the CR impact areas identified by the comprehensive materiality reviewwhich we undertook during 2006 using the 5 part materiality test designed by AccountAbility.9 These are:

During 2007, we carried out a CR Materiality Reviewwith the aim to assess whether or not we should seek to redefine the 9 material impact areas identified during2006. This involved the identification of our corebusiness activities in 2007 and, in particular, any changesto these since 2006 and the review of the five materialitytests put forward by AccountAbility to establish if any ofthese should be either reviewed or undertaken again,

given the findings of the activity review. Given that ourcore business activities and the impacts associated withthose (described in table 1 on page 4) have not changedand on the basis of the conclusions made in relation tothe five materiality tests (set out in Table 3), we deducedthat there was no reason to believe that the nine impactareas identified as being the most material to ourcompany had changed.

ClimateChange Water Waste Land Use

Business Chain

(Suppliers)

Business Chain

(Tenants)

Communities(including visitors) Employees

Safety &Health

8 Global Reporting Initiative G3 Sustainability Reporting Guidelines. Published October 2006.9 AccountAbility’s approach to materiality is defined in the following document:

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

The data and information presented in this Corporate Responsibility (CR) Report relates to the financial/calendar yearending 31 December 2007. It should be read alongside the Annual Report & Accounts, In Review 2007. This is SonaeSierra’s fourth CR Report; our most recent previous CR Report was published in April 2007. The company’s CR Reportingcycle is annual, and is aligned with our financial reporting cycle.

mailto:[email protected]

http://www.globalreporting.org/ReportingFramework/G3Online


About this report

AccountAbility’s Materiality Tests(as applied by Sonae Sierra in 2006)

Conclusions made during 2007

Test 1 –Direct short term financial impacts

Test 2 –Policy related performance

Test 3 –Review of Business peer-based norms

Test 4 –Review of stakeholder behaviourand concerns

Test 5 –Societal norms (regulatoryand non-regulatory)

The particular CR impacts subject to the most significant cost-drivers did not changesubstantially during 2007 from those identified in the original materiality review undertakenin 2006. While very slight variations in prices occurred during 2007 for utilities procurementand waste disposal in the different countries of Sierra’s operations, this was minimal, and no new taxes or laws were introduced that gave rise to a whole new area of potential cost savings.

Given that there were no material changes to Sonae Sierra policies, it was not deemedappropriate to undertake another full-scale review of the company policies to identify themost material impact areas.

Since the activities of peers change considerably over time, and that CR is a rapidly evolvingarea of business activity, it was considered relevant and appropriate to undertake a full-scalereview of selected peers’ activities during 2007. This test was re-applied through SonaeSierra’s participation in the Corporate Benchmarking Survey undertaken by Upstream.10

As part of this survey, Upstream reviewed the commitments expressed by Sonae Sierra peersand a few key tenants in order to establish whether the impact areas covered by thesecorresponded with Sierra’s own CR objectives (each of which reflects a material CR impactarea) and 2007 CR targets.

The findings of this analysis suggested that Sierra’s material CR impacts as identified in 2006were still those widely recognised as being material by other companies in the sector.

Given that the perceptions of stakeholders can change over short periods of time, and thatstakeholder feedback should underpin any corporate CR efforts, it was considered relevantand appropriate to continue to review stakeholder feedback obtained during 2007 to seewhether any of this gave rise to areas of concern that might need to be taken into accountas a material impact area going forward.

Stakeholder perceptions were sought through a variety of mechanisms (CR Report 2006feedback form, shareholder meetings, Tenant surveys, Corporate Climate survey, staffparticipation, Mall Tracking survey, Community panel, etc., ) which are described in moredetail in the How we listen section on pages 9-12. None of the feedback received throughthese engagement mechanisms led us to believe that Sierra should alter the prioritisationof the nine material impact areas.

The materiality review undertaken in 2006 included future proposals legislation/regulation,so no significant changes were noted during 2007. A review of environmental legislationwas made to inform the development of the long term strategies for Land use, Water and Waste.

As a result, it was not deemed necessary to undertake another full-scale review of legislationin all 9 material impact areas already identified in 2006.

Conclusions made in 2007 in relation to AccountAbility’s Materiality Tests

10 Upstream is a UK-based sustainability consultancy team operating within the global real estate consultancy Jones Lang LaSalle.

TABLE 3:


About this report

Stakeholder Inclusiveness

In order to ensure that our key stakeholder have accessto our CR Report, we have posted copies of our printedCR Summary Report to senior representatives from thesestakeholder organisations accompanied by a personalletter from the Chief Executive Officer (CEO), invitingfeedback and dialogue on the issues presented. Sierrahas determined the contents of this report with all itsvarious stakeholders in mind (stakeholder groups areidentified in table 4 on page 9-12). In particular, thisreport, and our printed CR Summary Report are targetedtowards our employees, investors and financiers, suppliers,tenants, the media and local authorities, since we believethat they are likely to be most interested in, or affectedby, our approach to CR.

Sustainability context

This CR Report presents Sierra’s CR Report by materialimpact area. Each of the sections is introduced withsome contextual fact about the impact in question.Where possible, this information is broken down into the principal regions where Sierra operates.

Completeness

In terms of scope, this 2007 CR Report covers keyaspects of Sierra’s economic, environmental and socialperformance in accordance with the requirements of theGRI framework and Sierra’s own material impact areas.

The performance data contained within the CR Report2007 covers all of Sonae Sierra’s direct operations inEurope and Brazil. Where this is not the case, detaileddata qualifying notes indicate the scope of operationscovered.

The report considers all business activities, includingownership, development and management of SonaeSierra owned shopping and leisure centres. All data in this report, with the exception of employees data,certain financial and Safety & Health indicators excludesthe performance of centres that are managed but notowned by Sonae Sierra. The scope of these particularindicators is made clear in the data qualifying notes. Thisreport does not cover the sustainability performance ofour joint venture partners. The data and informationreported with respect to our material impact areas andenvironmental management covers all our ownedsubsidiary holding companies, regardless of ourownership stake in these. The financial informationtypically does so too, although sometimes we report onlyon the financial value derived directly by Sierra, which isproportionate to our ownership stake. Where this is so,we indicate it in the notes accompanying the data.

All our owned shopping centres include large numbers ofindividual units leased out to tenants, and the impacts ofthese facilities (tenants’ own impacts) are not quantifiedin this report. Construction activities, undertaken bycontractors, are not covered by performance datapresented in this report, although we have includedfigures for energy, water consumption and wastemanagement at two development projects completed in 2007 in Portugal and Spain, and in addition the Safe Practice index, which relate more directly to theconstruction company’s sustainability impacts. Ourcorporate offices are not included in energy, water andwaste indicators, however they are included within thescope of indicators relating to GHG emissions.

In respect of time, the information presented in thisreport relates to activities or impacts that arose duringthe financial year 2007. All of the data presented alsorelates to the full calendar year, so it excludes anycentres that were opened or purchased part waythrough the year.

Data quality and reliability

Utilities and waste data is now collected direct fromproperties as part of Sonae Sierra’s internet-based Environmental Management System (EMS). Sonae Sierrais striving to improve and assure the quality of the dataused in its monitoring systems, and to this end we havecommissioned annual audits of environmental datagathered in shopping centres in 2007. These audits areundertaken by an external consultancy who visit all ourowned centres to review environmental data gatheredfrom all the various sources (meters, invoices, etc.) andcheck it against the data entered into our on line datagathering system (environmental portal).

In this report, actual measurements are used whereverpossible. Limitations to scope, re-statement of previouslyreported values and the use of estimations are highlightedand explained in the data qualifying notes locatedalongside each individual key performance indicator.

Values are reported to the nearest integral number,except in cases where it is considered more appropriateto report values to one or more decimal places (i.e. GHG emissions values in the GRI indicator EN18, water efficiency values, construction water and electricity indicators, tenant and visitor satisfactionindices, occupancy index, financial values reported in € millions and S&H indicators which have adenominator). GRI indicators are calculated in accordance with the methodology defined in the GRI technical protocols, which can be found at:www.globalreporting.org/ReportingFramework/G3Guidelines/.

http://www.globalreporting.org/ReportingFramework/G3Guidelines/


How we listen

At Sierra, we continue to employ a variety of stakeholder engagement techniques to ensure that we conduct ourbusiness in a way that is sensitive to their needs and concerns. We learn valuable lessons from them, both to improveour business generally, and in terms of Corporate Responsibility. To date, our approach to stakeholder engagementhas been generic, and has not required us to be selective about the specific stakeholders we engage with in eachstakeholder group.

However, we do intend to undertake more targeted stakeholder engagement in future. By way of example, during2008, we hope to launch a targeted tenant engagement survey among senior management representatives of keytenant companies in our principal countries of operation. While we already undertake tenant surveys, these aremostly answered by individual shop managers and therefore do not enable us to gain an overall top managementassessment of Sierra’s performance, especially in cases where large tenant companies have occupy many units acrossour different centres. With this in mind, we consider that a survey specifically directed at top management, is animportant survey to be undertaken.

We also plan to engage more closely with our main repeat service suppliers for both development and propertymanagement on CR issues on the basis of an internally developed questionnaire which will be issued in 2008.

Important Stakeholder Groups Methods and outcomes of engagement in 2007

Investors and Financiers

Employees

We published quarterly financial reports and conducted regular meetings and presentationsto communicate Sierra’s financial performance and risk management practices.

During 2007, we received feedback from one of our shareholders, the President of SonaeS.G.P.S, on our CR Report 2006. He congratulated Sonae Sierra for having made evidentprogress and for having defined quantitative targets to improve performance. He suggestedthat the report should be distributed in PDF format by mailing list so as to encourage morepeople, including staff, to read it.

CommunicationsWe produced both corporate-wide and country specific communications including printedmagazines (Horizons) and intranet news.

Performance management and employee participationIndividuals each had performance evaluation plans and access to HR support.

In terms of staff participation, we continued to administer the Be Innovative programme to stimulate ideas and reward innovative suggestions for new ways of working. We alsoencouraged staff to make suggestions and raise concerns through the “open word” session at monthly Safety & Health meetings organised at all owned centres in operation.These suggestions are generally followed up through the development and implementationof an action plan to address the issue in question. In 2007, suggestions raised by staffbrought about improvements such as procedures and training to free trapped customersin case elevators break down, providing training to tenants’ staff on how to operate fireextinguishers and the creation of a specific Active Emergency Plan for shopping centrekindergartens.

Sierra’s stakeholders, methods and outcomes of engagement in 2007

TABLE 4:


How we listen


Employees

Tenants

Employee surveyAll employees across the organisation were invited to participate in our Corporate Climateand Employee Satisfaction Survey during November 2007, the first employee survey of itskind undertaken by Sierra. This survey provided the opportunity for staff to give feedback on many different aspects, among them corporate responsibility, staff participation, training,work conditions, diversity, management, work-life balance and remuneration. The results ofthe survey showed that 90% of staff agree that Sierra has a clear corporate mission, strategyand values and 79% of staff believe that Sierra is a good company to work for. 80% alsoagree that there is a healthy and positive working environment within their teams. CorporateResponsibility, in particular, was also evaluated very positively. The results demonstrated thatthere are opportunities for improvement in relation to work conditions in Portugal and Spain,staff participation and communication in Spain and Italy. Staff in Spain, Germany and Brazilalso believed that training to meet their job skill requirements could be improved. Sierra’ssenior management staff analysed the results of the survey and developed an action plan to improve the areas with less positive feedback. This plan includes, for example, measuresto evaluate the possibility of enabling more flexible working arrangements and to increasefeedback sessions between employees and supervisors. A new survey in 2008 will be carriedout to assess the same areas and to monitor the respective changes.

Sierra Ombudsman2007 also saw the launch of the Sierra Ombudsman, namely the introduction of anindependent facilitator to whom all stakeholders may present their complaints with aguaranteed response. In particular, the Ombudsman constitutes a formal procedure to tackleharassment claims. In 2007 there were no incidents or court actions taken in relation to actsof discrimination in relation to race, colour, gender, religion, political opinion or social class.

CommunicationsTenants were engaged with on a regular basis at all levels within Sierra, and targetedthrough various communications including a specific intranet site Sierracentres.net.

Tenant engagementWe invited our tenants to attend monthly meetings with a theme of Safety & Health andalso sometimes covering Corporate Responsibility in general, and to participate in additionalSafety & Health training activities such as the Safety Preventive Observations (SPOs),emergency drills practice sessions and other ad hoc training. We also provided environment-related training to tenants in some centres with a focus on correct waste separation and inBrazil our team developed specific comic books on waste, energy and water management toincrease tenants’ awareness on these issues.

Furthermore, we invited senior executives/managers from some of our key tenant companiesin Portugal and Spain to attend meetings with Sierra Board members and senior managementmembers in order to explain our PERSONÆ (Safety & Health) project and invite them tocollaborate with us on it. Following these meetings, many of our key tenants wrote letters tous declaring support for the project and confirming that they would seek to replicate it withintheir own organisations.

In day to day operations, Sierra seeks to maintain an open and constructive attitude towardstenant engagement and we feel that this is beneficial for both parties. By way of example, atLoureShopping in Portugal, one tenant unit (a coffee shop) started to promote itself to othertenant employees by offering them a special discount. As this proved to be successful, thecentre management team encouraged all other tenants to do the same.


TABLE 4: continued


How we listen


Tenants

Suppliers

Visitors

Tenant surveyWe conducted tenant satisfaction surveys in all owned shopping centres under managementfor the entirety of 2007 (with the exception of Campo Limpo in Brazil which wasinaugurated only in November 2006). These surveys seek feedback from Tenants on qualityof service and performance. Feedback from these surveys formed the basis of thedevelopment of action plans per country and per shopping centre, aimed at improving ourperformance with respect to areas of weakness identified. Further details of the tenantsurvey can be found on pages 72 & 73.

During 2007, our contractors on development projects participated in the Safe Practice Index(SPI), a form of auditing tool which assesses the probability of accidents occurring on siteconstruction works. The SPI is applied through observations made by the Sierra DevelopmentSite Manager, the outsourced Project Management Team and Site Safety co-ordinator.Feedback is provided to on site workers following these observations, with the aim ofimproving safety performance.

We provided training to resident service suppliers in some centres on Sierra’s EnvironmentalPolicy and environmental certification and contractors on site received environmental trainingin preparation for the ISO 14001 certification process.

We also provided training to our property management service suppliers in relation to Safety& Health through training sessions such as emergency drills practices (undertaken at 54 sitesduring 2007) and also through the Safety Preventive Observations (SPOs), a form ofbehavioural audit aimed at identifying and correcting unsafe behaviour (this is explainedfurther on page 101). Furthermore, our resident service suppliers are also invited to themonthly Safety & Health meetings organised at each site of operation – a suggestion fromone of our service suppliers at one of these meetings in 2007 led to the implementation ofthe life line system to protect against the danger of falling when cleaning skylights.

CommunicationsWe have a visitor mailing list connected with each shopping centre which we use to sendvisitors information and updates regarding shopping centre features and activities at theirrequest.

Visitor surveysWe undertook visitor surveys, known as Mall Tracking, at 31 shopping centres in operationin 2007. These surveys enable visitors to provide feedback on corporate responsibility,satisfaction with operational aspects and impacts generated by our centres with respect tothe local community. At certain shopping centres we undertook visitor satisfaction andloyalty tracking surveys using a new methodology. Further details of these surveys and theresults presented can be found on pages 79, 80 & 83.


TABLE 4: continued


How we listen

Important Stakeholder Groups

Government Authorities(in particular municipalities& regional bodies)

Local Communities

Media

Methods and outcomes of engagement in 2007

We engage very closely with all municipalities as part of the planning and developmentprocess, and in 2007 we successfully concluded 3 projects and had 12 projects underdevelopment. We also work closely with local and regional bodies throughout the operationand management of our centres. We have particularly close relationships with authoritiessuch as the police and emergency services.

Community surveysAt the commencement of every development project by undertaking a feasibility study to enable us to establish the scale of the development and define a balanced tenant mixaccording to the needs of the residents within the catchment area. Whilst operating in thecommunity, we also carry out annual surveys in order to analyse the impact of our shoppingcentres on consumer habits within the catchment area. Finally, visitor surveys are undertakenin most of our shopping centres (see ‘Visitors’) to analyse the impact of the shopping centreon residents and consumer demand patterns in the local area.

Active community consultation2007 saw the launch of the first Sierra Community Panel at Dos Mares shopping centre inSpain. The aim of the community panel project is to develop a stronger relationship with thelocal community and to provide a platform for open dialogue in order to listen and respondto issues of concern among community members. For more information on the CommunityPanel project, see page 88.

Volunteering activitiesWe encourage our staff to participate in volunteering activities and enable them avolunteering day entitlement in which they can do so during 8 hours of paid work time per year. A large variety of activities took place during 2007 across all our maincountries of operation in collaboration with charitable organisations, among them theAssociação Criança e Consciência in São Paulo, Brazil, the Banco Alimentar Contra a Fomeand the Life Service Movement in Portugal and the Italian Environment Foundation in Italy.

School liaisonWe co-ordinated 291 visits from local schools in 38 of our shopping centres during 2007with the aim of teaching children about sustainability-related issues such as waste recycling,energy saving and Safety & Health.

In 2007 Sierra received a total of 3,167 cases of CR-related press coverage, coveringenvironmental, social and economic issues. Of these, 91.5% were positive. Concerningenvironmental issues specifically, a total of 512 articles were received and 84.7% werepositive. In relation to social issues, 1330 articles were received and 88.7% were positive.


TABLE 4: continued


How we are governed

Corporate GovernanceThe top corporate body of the Sonae Sierra group of companies is the General Shareholders’ Assembly which, amongother prerogatives, appoints the Board of the General Assembly, the Fiscal Board (effective and substitute members),the Remuneration Committee and the Board of Directors of the Company. The Board of Directors is chaired by PauloAzevedo.

Each of the 7 Executive Members of the Board has special responsibilities on certain businesses or areas of thecompany, and the Board of Directors retains responsibility for the company’s strategy, long-term business plan, finance strategy and reporting, amongst other tasks. Sonae Sierra has an Executive Committee (which ultimately takes strategic responsibility for day-to-day operations, including CR) and three specialised Committees. TheInvestment Committee and the Finance Committee are chaired by the CEO, and the Audit & Compliance Committeeis chaired by an independent person chosen by the Board of Directors. Sonae Sierra’s definition of ‘independent’ isany individual who is not directly employed by Sonae Sierra or otherwise have a financial interest in the company.

For further information about Corporate Governance at Sonae Sierra, please see pages 61 to 65 in our AR&A, In Review 2007.

InvestmentCommittee

RemunerationCommittee

Effective Fiscal MemberDeloitte & Associates

Substitute Fiscal Member

Board of Directors5 Non-Executives (including Chairman)

7 Executives (including CEO)

General ShareholdersAssembly

FinanceCommittee

Audit & Compliance CommitteeChaired by independent person

Executive Committee


How we are governed

Executive Committee Membersof Sonae Sierra

Álvaro Portela (CEO)

João Pessoa Jorge

Edmundo Figueiredo (CFO)

Pedro Caupers

Fernando Guedes Oliveira

António Casanova

Ana Guedes Oliveira

Responsibilities (including economic, social and environmental performance)

Chairman of Investment, Finance and Executive Committees; Safety & Health; CorporateCommunications, Environment & Institutional Relations.

Brazil; Chair of Brazil Working Group for CR.

Internal Audit; Legal, Fiscal and Mergers & Acquisitions; Finance; Planning & Control; HR and Back Office.

Property Management and Leasing; co-Chair of Business Chain Working Group for CR.

Developments, Europe; co-Chair of Business Chain Working Group for CR.

Key accounts, Marketing, Innovation; Chair of Communities Working Group for CR.

Investment and Asset Management, Europe.

Web references

For a full list of our Directors, including Non-Executive Board Directors, please see:www.sonaesierra.com/Web/en-GB/aboutus/ourmanagement/default.aspx

http://www.sonaesierra.com/Web/en- GB/aboutus/ourmanagement/default.aspx


How we govern CR

The CR Steering Committee constitutes a procedure for the highest governance body to oversee the organisation’sidentification and management of economic, environmental and social performance, since it is chaired by our CEOand constituted by the Heads of each CR Working Group, four of whom are also Executive Committee members. The Committee meets three times a year, although additional meetings are called if considered necessary.

The principal responsibility of the CR Steering Committee is to provide the overall vision for the company’s CRStrategy, including setting and reviewing policy, and approving the long-term objectives, short-term targets andbudgets put forward by each of the Working Groups. The Working Groups, in turn, are made up of individuals fromacross the company at different levels of seniority who take responsibility for driving performance against Sierra’s key impact areas. Two Working Groups, Risk Management and Brazil, are cross-cutting, addressing all impact areas.The Working Groups prepare decision proposals for the CR Steering Committee and coordinate their implementationand delivery.

Executive Committee

Corporate Responsibility Steering Committee

RiskManagement

WorkingGroup

RiskManage-

ment

ClimateChange

LandUse

Water Waste

Comm-unities

andVisitors

Safety &Health

Tenants Suppliers

All nineCR ImpactAreas andRisk Man-agement

Employees

Environment Working GroupEmployeesWorkingGroup

Communities(inc. visitors)

WorkingGroup

Safety &Health

WorkingGroup

Business ChainWorking Group

BrazilWorkingGroup

Throughout the business, and across different functionsand divisions, individuals continue to have responsibilityfor implementing specific aspects of CR in their daily activities. Where applicable to their core jobs,environmental and Safety & Health objectives now formpart of people’s performance appraisals and link throughto remuneration and bonus schemes.

The CR Working Groups described above are animportant conduit for employees to providerecommendations on CR to the highest governancebodies within the company. During 2007, there were noother formal ‘work councils’ besides the local Safety &Health Committees, described on page 100. Othermeans for employees to make recommendations to thehighest governing body on social, environmental oreconomic performance are included in Table 4 on pages9 & 10 on stakeholder engagement.


How we govern CR

Our CommitmentsSierra’s CR management system continues to be driven byits mission, corporate values and key principles of economic,social and environmental responsibility. The latest version of the company’s CR policy statement, and supportingcommitments, has been approved by the ExecutiveCommittee. The policy is a voluntary commitment by SonaeSierra (i.e. not a legislative requirement) which applies to allcountries where it operates. Sierra also operates a Code ofConduct which stipulates a set of Ethical Principles which all members of staff are required to adhere to.

In terms of external commitments, one of ourshareholders, Sonae S.G.P.S, is a signatory of the GlobalCompact and hence requires us to write an annualcommunication on progress with respect to the GlobalCompact Principles. Sonae S.G.P.S., represented by

Sonae Sierra, was one of the 24 founding membersof the World Safety Declaration; having formallysigned the agreement in November 2005. SonaeSierra also represents Sonae S.G.P.S as a LiaisonDelegate of the World Business Council forSustainable Development (WBCSD), activelyparticipating in initiatives such as the EnergyEfficiency in Buildings project. At a national level,Sonae Sierra represents Sonae S.G.P.S in theregional network of the WBCSD, the BusinessCouncil for Sustainable Development (BCSD) ofPortugal. Sonae Sierra’s other shareholder,Grosvenor, has also developed environmentalprinciples and policy themes which we will adhereto within our business.

Web referencesTo read our CR Policy, please go to:www.sonaesierra.com/Web/en-GB/corporateresponsibility/managementsystem/CRPolicy/default.aspx

Our Code of Conduct is available to see here:www.sonaesierra.com/Web/en-GB/corporateresponsibility/ombudsman/default.aspx

Name of the association How Sonae Sierra is represented

International Council of Shopping Centres (ICSC)

Associação Portuguesa de Centros Comerciais – APCC(Portuguese Council of Shopping Centres)

Asociación Española de Centros Comerciales(Spanish Council of Shopping centres)

Consiglio Nazionale dei Centri Commerciali Italia –(Italian Council of Shopping Centres)

German Council of Shopping Centres

Associação Portuguesa de Promotores e Investidores Imobiliários(Portuguese Property Investor and Developer Council)

Our CEO is a member of the ICSC trustees.

Sonae Sierra is a member of the Board.

Sonae Sierra is a member.

Sonae Sierra is the President.



Sonae Sierra’s membership in associations, including industry associations

TABLE 5:

http://www.sonaesierra.com/Web/en-GB/corporateresponsibility/managementsystem/CRPolicy/default.aspx

http://www.sonaesierra.com/Web/en-GB/corporateresponsibility/ombudsman/default.aspx


How we govern CR

Name of the association How Sonae Sierra is represented

Zentralen Immobilien-Ausschuss(German Property Federation)

Associação Brasileira de Shopping Centers (Brazilian Council of Shopping Centres)

European Property Federation

World Business Council for Sustainable Development (WBCSD)

BCSD Portugal – Conselho Empresarial para o DesenvolvimentoSustentável (Business Council for Sustainable Development)

Sonae Sierra participates in the European Working Group.


Sonae Sierra is member of the Managing Committee, representingthe APCC.

Sonae SGPS is a founder member and Sonae Sierra is part of thecore group of one of the WBCSD initiatives – the Energy Efficiency inBuildings (EEB) project.

Sonae SGPS is a founding member, Sonae Sierra is part of theExecutive Committee.

Public PolicySierra follows government policy at a national andEuropean Union level and shares many of the samechallenges and priorities as these governments do. For example, climate change has now become a politicalpriority and it is an impact area that Sonae Sierra hasidentified as being material to its business. We areactively contributing to finding solutions for climatechange adaptation through participation in the WBCSD.We seek to influence legislation in order to render itmore applicable to the specific types of buildings thatthe Company invests in, develops and manages.

Essentially, Sierra supports political endeavours toencourage greater social cohesion and environmentalresponsibility, although we resist changes in legislationthat are likely to significantly adversely affect ourbusiness. One example is the movement to limit retail

opening hours and licensing conditions. Sierra, on theother hand, supports flexibility and liberalisation in termsof opportunities to do business and considers this abetter solution for consumers.

Responsibility for public policy position within SonaeSierra lies ultimately with the CEO and AuditingCommittee. Reporting directly to the CEO is the Head of Institutional Relations, who manages these aspects on a day to day basis.

Table 6 shows our current public policy positions andparticipation in public policy development and lobbying.We refer only to Portugal and Spain as we do not havepublic policy positions and participation in the othercountries where we operate. We have included activitiesin relation to sites for future shopping centres which arenot yet under development.

Sonae Sierra’s membership in associations, including industry associations

TABLE 5: continued


How we govern CR

Public policy positions and participation in public policy development and lobbying (GRI SO5)Portugal

Sonae Sierra Own Initiatives

Land use

Subject Viseu PDM (Local Planning Regulations); to Municipal Chamber of Viseu.

Petition Sonae Sierra is petitioning for a change in the Municipal Master Plan allowing the installation of a Shopping Centrewithout the existence of a Detail Plan.

Subject Loures PDM (Local Planning Regulations); to Municipal Chamber of Loures.

Petition Sonae Sierra is petitioning for an approval of an Urban Plan clarifying the land use.

Industry Initiatives

APCC (Associação Portuguesa de Centros Comerciais/Portuguese Council of Shopping Centres)

Climate Changes

Subject Transposition of the EU Directive relative to Energy Performance of Buildings (COM (2001)226).

Petition Sonae Sierra supports the petition of APCC for the creation of specific rules and energy performance indicators adapted to the particular characteristics of the Shopping Centre’s buildings.

Waste

Subject Solid Waste; to Municipal Council of Lisbon, S. João da Madeira and Covilhã.

Petition Sonae Sierra is petitioning for exemption from the collection of waste tax in view of the fact that ours Shopping Centres, in those Municipalities, have there own waste management system.

Subject Solid Waste (related with green areas); to Municipal Council of Albufeira.

Petition Sonae Sierra is petitioning for exemption from the waste tax in view of the fact that our Shopping Centre, in theMunicipality of Albufeira, has its own waste management system.

Environmental Impact Assessment

Subject Environmental Impact Assessment (EIA); to Economic Regional Authority (DRE-LVT).

Petition Sonae Sierra is petitioning that if a project is in compliance with a PDM – Municipal Master Plan, to obtain a commerciallicence, doesn’t require the presentation of favourable Environmental Impact Assessment.

TABLE 6:


How we govern CR

Industry Initiatives

EPF (European Property Federation)

Business Chain (tenants)

Subject Commercial Law (revision of law 12/2004).

Petition Sonae Sierra supports the elimination of duplication of administrative procedures for the licensing of Shopping Centres andthe need to exclude from the licensing procedures the non significant modifications of GLA.

Subject Revision of the law 6/2006, New Regulation on Urban Letting.

Petition Sonae Sierra supports that a legal process to regulate the use of the Shopping Centres subject to letting is not necessary.

Subject Opening hours for retail services.

Petition Sonae Sierra supports the lengthening of the opening hours of anchor tenants; a recall of the DL 48/96.

Climate Change

Subject Environmental Standards for buildings, Participation in CEN work developing methodology for calculating IntegratedEnvironmental Performance of Building.

Land use

Subject Soil Protection Directive; to European Commission.

Petition The only amendment that EPF wished to make to the Commission’s Proposal was to restrict the soil status reportingrequirement to the owner of the site and not the prospective buyer. EPF considers that burdening prospective buyersinvolves serious business confidentiality concerns as well as creating legal grey areas and implementation difficulties.

APCC (Associação Portuguesa de Centros Comerciais/Portuguese Council of Shopping Centres)

Public policy positions and participation in public policy development and lobbying (GRI SO5)Portugal

TABLE 6: continued


How we govern CR

Sonae Sierra Own Initiatives

Waste

Subject Waste assessment in Basque Country.

Petition In the autonomous region the waste generated by the public sector is converted into compost and methane. Sonae Sierrais petitioning that the waste generated by its shopping centres and by other companies could be treated together withpublic sector waste.

Subject Waste assessment in the Autonomous Region of Madrid.

Petition In the autonomous region the waste generated by the public sector is converted into compost and methane. Sonae Sierrais petitioning that the waste generated by its shopping centres and by other companies could be treated together withpublic sector waste.

Safety & Health

Subject Escalator and travelator safety barrier.

Petition Sonae Sierra is petitioning to obtain permission for the installation of safety barriers which impede the transportation of prams, shopping or luggage trolleys on escalators at our shopping centres in Spain.

Climate Change

Subject Town Council of Toledo; extension of the bus service.

Petition Sonae Sierra is petitioning the Town Council of Toledo to extend the bus lines to the centre of Toledo in order to reducethe traffic of cars in the town centre, thus decreasing the greenhouse-gas emissions.

Business Chain (tenants)

Subject Toledo; Extension of the Tourist Area to all of the town.

Petition Sonae Sierra is petitioning to extend the “Tourist Area” from the built-up area to the whole territory of Toledo, so that ourshopping centre could open on all the holidays.

Public policy positions and participation in public policy development and lobbying (GRI SO5)Spain

TABLE 6: continued


Environmental Management

Our Strategy and Management ApproachSonae Sierra is committed to safeguarding the environment for both current and future generations by progressivelyusing eco-efficiency as a reference point for management and competitiveness and by conceiving, implementing andoperating undertakings in an environmentally responsible way.

We aim to drive continuous improvement in the environment performance of our products, processes and activities.Environmental issues are governed by our Environmental Policy, and we have an Environmental Management System(EMS), which has been certified in accordance with the ISO 14001 standard.

Our management approach to Environmental aspects focuses principally on the 4 environmental impact areasidentified as being those which are most material to our business activities and are described in detail in the previoussections of this report. Our strategy for Climate Change, Water and Waste as reported in these sections focuses mainlyon our approach at the property management phase. Moreover, our EMS includes a set of development proceduressupported by our Environmental Standards for Retail Developments (ESRD) tool. The ESRD are an innovative internet-based specification tool, designed to support Sonae Sierra Development Managers and design teams to achieve retaildevelopments that comply with Sonae Sierra’s environmental principles (eco-efficiency and continuous improvement).The ESRD includes around 190 standards covering issues such as energy, water (effluent and use), waste, transport,health and well being, sustainable site and materials. The standards were defined based on Sonae Sierra experience inoperating its own shopping centres, the Best Available Techniques in the market and existing building certificationschemes as LEED and BREEAM.

Organisational Responsibility

Ultimate responsibility for Environmental aspects lies with Sonae Sierra’s CEO and Executive Committee. The ExecutiveCommittee approves the Environmental Policy. The Corporate Responsibility Steering Committee, chaired by the CEO,defines and approves the long-term global environmental objectives and the short-term (annual) global environmentaltargets. The most senior position with operational responsibility for Environment is the Head of Institutional Relations,Environment and Communication, who guarantees the implementation and upkeep of the EMS in accordance withISO 14001 requirements, reports to the Executive Committee on performance in relation to the EMS, reports to theCR Steering Committee on performance against annual environment targets, approves EMS documents and externallyrepresents Sonae Sierra in environment-related matters.

Training and Awareness

We operate a Training and Awareness procedure within the EMS which establishes the method to defineenvironmental training and awareness-raising needs among Sierra staff. Training needs for environmental issues are defined by the Environmental Manager during the last quarter of each year and are recorded in the GlobalEnvironmental Training Plan. In 2007, our training and awareness activities included the following:

• EMS revision training to Environmental Responsible, Operational Managers and Asset Managers;

• Training on ISO 14001 implementation to Shopping Centre Managers and Operations Managers in Brazil; and

• Training on Sierra’s Environmental Policy, Environmental certification and other Environmental aspects to tenantsand service suppliers at shopping centres across all countries of operation.

Web references

To read our Environmental Policy, please go to:www.environment.sonaesierra.com/Public/Normal/en-US/environmentalmanagement/policy.aspx

For a full list of our Environmental commitments,please see:www.sonaesierra.com/Web/en-GB/corporateresponsibility/managementsystem/CRCommitments/default.aspx

http://www.environment.sonaesierra.com/Public/Normal/en-US/environmentalmanagement/policy.aspx

http://www.sonaesierra.com/Web/en-GB/corporateresponsibility/managementsystem/CRCommitments/default.aspx

We also commission audits of our environmental datagathered in shopping centres, undertaken by anexternal consultancy, in order to improve the accuracyand reliability of the operational data gathered throughvarious sources (meters, invoices, etc.) and entered intoour on line data gathering system. These audits alsoprovide suggestions for improvements to our datagathering procedures;

• Management Review, which includes an assessmentof opportunities for improvement and the need forchanges to the environmental management system.

Data relating to environmental performance is recordedmonthly at all shopping centres in operation and ondevelopment projects. The data is consolidated andanalysed per country on a quarterly basis. Separatereports are produced for operations and development foreach country where Sierra is operating. Environmentalperformance across all countries, for both operationsand development, is then consolidated in a CorporateEnvironment Performance Report which is reviewed bythe Board.

Certifications for environment-related performance

To date, we have obtained ISO 14001 certifications for:

• our EMS;

• 21 shopping centres in operation in Portugal, Spain andBrazil, (11 of which were achieved during 2007); and

• 11 construction sites in Portugal, Spain, Germany, Italyand Brazil (4 of which were achieved during 2007).



Current PerformanceKey successes during 2007

• We achieved positive trends against all of our keyenvironmental performance indicators – electricity efficiency,GHG emissions per m2 of GLA, water efficiency and wasterecycling rate;

• We achieved ISO 14001 certification at a further 11shopping centres in operation and 4 construction sites;

• We gained first place in the Euronatura ClimateResponsibility ranking in Portugal and we won the ICSCReSource Award (see page 2);

• We fully achieved 74% of our environment-related CR targets;

• We developed and approved medium-term strategies andlong-term objectives for water, waste and land use.

TARGET FOR 2008 – ENVIRONMENTAL MANAGEMENT: SHOPPING CENTRES IN OPERATION

• To achieve ISO 14001 certification at a further 17 owned shopping centres under management.

TARGETS FOR 2008 – ENVIRONMENTAL MANAGEMENT: PROJECTS UNDER DEVELOPMENT

• Ensure that all projects achieve at least 25% of the maximum possible points in relation to the applicable Leadership standardsof the ESRD (Environmental Standards for Retail Developments);

• At the time of each centre’s opening day, to have achieved ISO 14001 certification for 100% of construction sites (by number).

Monitoring and Follow-up procedures

Sierra’s EMS’s Procedures ensure the measuring andmonitoring of significant environmental aspects, amongothers, environmental performance data, and theimplementation of other requirements such as the ESRD(Environmental Standards for Retail Developments) ondevelopment projects, the recognition and correction ofnon-conformities and the environmental training andawareness plan. We use an internet-based application, theEnvironmental Portal Work Area, to display and managethese measuring and monitoring procedures. Our principalmonitoring and follow-up procedures include:

• Legal requirements procedure;

• Non-conformities assessment procedure,including non-conformity/corrective and preventiveaction plan;

• Quarterly Environmental Reports, which providedetails on performance monitored in relation to:compliance; progress towards achieving targets,environmental investments, marketing andcommunications, best practices implemented as wellas complaints, accidents or other critical issues;

• ESRD tool (this is described on page 21);

• Internal Audit procedure, which is applied annually at all shopping centres in operation, all central officesand all development sites, with the support ofspecialised external environmental auditors (ISO 14001auditors) to assess conformance of the Sierra EMS andits effective implementation across all Sierra’s activities.



We set ourselves a total of 5 Environment Management targets to becompleted during 2007. The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 EnvironmentManagement targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%4

1

Some shortcomings

• We received 4 environment-related fines in relation to waste transportation (see KPI EN28 in the KPItable);

• An oil spill of 60 litres occurred at 8a Avenida inPortugal (during the construction phase), althoughthe impacts of the spill were mitigated (see KPI EN23in the KPI table);

• Our 3 development projects completed during 2007did not comply with 100% of the critical ESRDstandards.

Major changes to systems or structures in orderto improve performance

A new post was created for a new Sierra employee in Greece to give environmental support to both thedevelopment and operations teams.

Only 1 significant spill occurred during 2007. This occurredat 8a Avenida, a development project in Portugal whichwas completed last year. The material was oil; the volumeof spill was of 60 litres, caused by the burst of a tube in amachine used on site. Environmental emergency responseprocedures were followed, so the impacts of the spill weremitigated.

Four other minor spills also occurred during 2007:

• A mineral oil spill occurred at Plaza Éboli shoppingcentre in Spain (the precise volume of the spill isunknown). The spill was produced by an autocompactor in the waste separation area. The spill was cleaned and the auto compactor was replaced by the waste service provider. No further damage wascaused by the spill.

• A small spill of lubricant oil from engines being usedon the site occurred at Gli Orsi development project inItaly. The volume of the spill is unknown. The effectswere mitigated through fast intervention and the useof absorbent materials.

• A minor mineral oil spill occurred at Grancasa shoppingcentre in Spain in the waste area. The precise volumeof the spill is unknown.

• An oil spill occurred at El Rosal, Spain (during theconstruction phase). It was cleared and caused onlyminor impacts.

Data Qualifying Note/Methodological NoteThis indicator covers all company activities.

Total number of significant spills of chemicals, oils, andfuels, and total volume of each of these (GRI EN23)

KPI



The total monetary value of significant fines received during 2007 was €9,950.00. This is composed of:

• A fine issued at CoimbraShopping (Portugal) for incorrect transportation of metal waste packaging (a non-authorisedservice provider was undertaking this service). The value of the fine was €4,850.00;

• A fine issued at ArrábidaShopping (Portugal) also due to the incorrect transportation of waste packaging by a non-authorised company sub-contracted by the authorised shopping centre waste service provider. The value of the fine was€5,100.00.

Two further sanctions were received following an environmental audit by official entities at Centro Colombo in 2007. Thesesanctions were contested by Sonae Sierra, and Sierra is now awaiting final approval of the decision regarding the sanctions andcorresponding fines. One of the inspection sanctions was due to non-conformities detected in relation to the operation of theco-generation system and in relation to its waste management and air emissions. The other was a result of shopping centrewaste transport documents and responsibility for the non-conformity has been claimed by the waste service provider.

Data Qualifying Note/Methodological NoteThis indicator covers all company activities.

Use of the Eco-cube to reduce water consumption in WCs at Dos Mares (Spain).

Installation of electronically controlled taps atMaiaShopping (Portugal).

Installation of automatic flow controlled taps in the shoppingcentre WCs at Shopping Penha (Brazil).

Installation of sensor taps in place of conventional taps atGaiaShopping (Portugal).

Traditional aerators were replaced by economic models on280 taps at Parque D. Pedro (Brazil).

33%

33%

60%

7.5%

35%

The value is calculated based on realwater consumption data.

The value is estimated based on theassumed average flow as specified bythe manufacturer of the equipmentacquired.

The reduction has been estimatedbased upon the supposedcharacteristics of the equipmentreferred to and the operationtimetable followed.



Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation (GRI EN26)

This indicator covers initiatives reported across all our owned centres under management for the entirety of the reporting yearwhich were possible to verify.

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations (GRI EN28)

Initiatives to mitigate environmental impacts ofproducts and services during 2007, by type of initiative

Extent of impactmitigation

Methodological Note/Comment

Reduction in water requirements through water efficiency measures (WCs)

KPI

TABLE 7:



Composting of organic waste at ViaCatarina (Portugal).

Composting of organic waste at RioSul (Portugal).

Implementation of door to door collection of organic wasteto restaurant tenants at LoureShopping (Portugal).

Composting of organic waste at ArrábidaShopping(Portugal), for use in the shopping centre gardens.

The implementation of a selective waste separation ofpaper/card room allowed an increase of 176.3% of thiswaste recycling rate at GuimarãeShopping (Portugal), and therealisation of several environmental trainings sessions withtenants and service providers helped to a more effectivewaste separation.

12% increase inrecycling (wasteaverted fromlandfill)


9% increase inrecycling(wasteaverted fromlandfill)

1.5 tonnes ofwaste composted(averted fromlandfill)


The value is calculated based on realwaste management data.





Initiatives to mitigate environmental impacts ofproducts and services during 2007, by type of initiative

Extent of impactmitigation


Initiatives to recycle new waste streams

Increase in the number of waste recycling bins at ParqueAtlântico (Portugal), which facilitated greater waste collectionamong restaurant tenants.

Re-use of scrap to improve waste storage spaces at ShoppingPenha (Brazil).


245,56kg (wasteaverted fromlandfill)


The value is calculated based on theweight of each piece of waste scrapthat was re-used.

Improvements made to waste storage facilities

Tivoli Shopping (Brazil) carried out construction works in itsoffice re-using 300 Kg of office material and 50 Kg of lampsin the following applications:

• internal divisions split boards, false roof boards, structuralsupport piping and lighting installation;

• the new fit out of the office.

350 kg (wasteaverted fromlandfill)

The value is calculated based on theweight of each piece of waste scrapthat was re-used.

Other initiatives

KPI

TABLE 7: continued



Type of environmental investment Value of investment (€)

Energy-related investments

Total environmental investments by type

This indicator covers environmental infrastructure investments made in 2007 at owned shopping centres in operation for theentire reporting period. It does not include environmental investments made at shopping centres under development orcompleted projects.

Installation of partial energy meters to disaggregate different consumptions

Building Energy Certification

Investments related with co-generation

Investments related with Building Management Systems (BMS)

Improvements to chillers’ energy efficiency

Fuel tank correction

Other energy efficiency investments

249,872

420,363

31,952

183,104

48,697

34,139

81,441

Water-related investments

Wastewater quality

Installation of water metering equipment

Installation of sensor taps

298,572

44,811

32,962

Waste-related investments

Improvements to waste storage areas 107,325

Other investments related with environmental quality

Air quality monitoring and/or improvements

Investments to reduce noise pollution

Improvements to green areas around the shopping centre

Investments related with Environmental certification and audits

Others

1,232,434

16,440

124,875

108,721

118,445

Total 3,134,153

KPI

TABLE 7: continued


Climate change

ContextClimate change is now generally acknowledged as the greatest challenge facing our planet today. At the UnitedNations Climate Change Conference and 3rd meeting of Kyoto Protocol signatories in Bali, December 2007, worldleaders acknowledged the dangers posed by global warming and the need to work towards reducing greenhousegas emissions.

In the European Union, where the building sector accounts for around 40% of energy consumed, targets were set toreach a 20% decrease in GHG emissions by 2020 in comparison with 1990 levels, a 20% increase in energy efficiencyand for 20% of energy to be generated by renewable sources in every member state.

Financial implications and other risks for our organisation’s activities due to climate change

To Sonae Sierra it is clear that climate change is a critical issue for our business. The potential impacts of climatechange in the regions where we operate are presented as drawn from the findings of the Intergovernmental Panel onClimate Change (IPCC)11. While not all of the impacts identified present direct risks to our business, we are consciousthat they could have direct or indirect effects on our business activities, including a potential financial risk for Sierraand our shopping centres.

During 2008, we plan to commission a study of the potential financial risks associated with climate change impactson Sierra owned centres in Portugal and we consequently hope to gain much further insight into the financialimplications for our organisation’s activities due to climate change.

Climate change risks in Europe and Brazil12

Mediterranean (Europe)

Mountains (Europe)

Central region (Europe)

Atlantic region (Europe)

Amazon region (Brazil)

North-east region (Brazil)

Cerrado region (Brazil)

Reduced water availability; increased likelihood of drought; loss of biodiversity; increased forest fires; increasedenergy demand in summer, reduced hydropower; health risks caused by heat waves; reduced tourism.

Decline of glaciers; loss of biodiversity; reduced snow cover and ski season; increase in rock fall.

Increased likelihood of winter flooding; health risks caused by heat waves.

Increased coastal erosion and flooding; loss of habitat; storm risk in winter.

Loss of biodiversity; savannisation of the eastern part.

Increase in aridity and reduction of available water resources.

Loss of biodiversity; temperature increases.

Region Potential impacts

Did you knowConcentrations of greenhouse gases are nowhigher than at any point in the past.

Source: www.everybodys-talking.org/knowledge

11 Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report; Working Group II Report: “Impacts, Adaptation and Vulnerability”, 2007.12 Source of information: Alcamo, J., J.M. Moreno, B. Nováky, M. Bindi, R. Corobov, R.J.N. Devoy, C. Giannakopoulos, E. Martin, J.E. Olesen, A. Shvidenko,

2007: Europe. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of theIntergovernmental Panel on Climate Change, M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson, Eds., Cambridge University Press,Cambridge, UK, 541-580.

http://www.everybodys-talking.org/knowledge


Performance by impact area

CLIMATE CHANGE

Business challenges and opportunities associated with Climate Change

Sonae Sierra has a policy commitment to safeguard the environment for both current and future generations and to prioritise climatechange mitigation (including energy efficiency) and adaptation.

Opportunities:

• Climate change adaptation and energyefficiency through building design can make

Sierra centres more desirable to potentialoccupiers;

• Sierra can become a leader in the sector in terms ofcarbon management;

• Energy efficiency often leads to cost savings and pay-back periods for efficient equipment are becomingshorter.

Challengesassociated with

energy:

• Rising energy prices energy efficiency often leadsto cost savings and pay-back periods for efficient

equipment are becoming shorter;

• Increasing legislation regulating energy efficiency, inparticular the EU Energy Performance of BuildingsDirective;

• Sierra policy commitment to continuously improvethe environmental performance of

undertakings, products, processes andactivities.

Challengesassociated with

carbon management:

• Increasing legislation regulating CO2 and othergreenhouse gas emissions, particular focus on

buildings, national and international targets;

• Long-term physical and financial impacts of climaticdisruption on the built environment (eg. weathering,subsidence, insurance losses, maintenance costs etc);

• Increasing media attention and public awareness onclimate change and CO2 emissions – higherstakeholder expectations;

• Rapidly growing trend of peercompanies pledging to go

Carbon Neutral;



CLIMATE CHANGE

Our StrategyAs stated last year, climate change is one of our key impact areas. Our activities have an impact on climate changeand we are committed to improve its efficiency and to raise awareness among all parties with which we are involved.

Sonae Sierra has been measuring, monitoring and targeting energy usage in its shopping centres since 2002 and iscommitted to reducing the company’s carbon footprint and increasing its energy efficiency.

Committed to reducing the company’s impacts in terms of climate change, in 2006 Sonae Sierra developed a CarbonManagement Strategy aimed at reducing both our direct and indirect greenhouse gas (GHG) emissions (scopes 1, 2and scope 3’s business air travel of the GHG protocol). The diagram indicates the main ways in which we will seek toreduce our GHG emissions across scopes 1, 2 and 3 during the medium-term:

In 2008 in particular, we will:

• Continue to implement measures to increase energy efficiency across our shopping centres in operation;

• Review options available for procuring green energy through the grid at our shopping centres in Europe;

• Undertake CO2 audits in every country to monitor progress against our long-term target and in order to seekrecommendations for improvement; and

• Investigate how we might increase the environmental performance of our company car fleet. We already took thedecision during 2007 that our company car fleet in Brazil will be supplied exclusively with ethanol.

Direct emissions

39,115tCO2e in 2007

(GHG Protocol Scope 1)

Future actions:

Switch to using natural gas ratherthan fuel oil on co-generation plants;

Investigate greener fuels to companycar fleet;

Undertake on-site renewable energygeneration feasibility studies whereappropriate.

Indirect emissions

79,668tCO2e in 2007


Future actions:

Increase electricity efficiency inshopping centres by undertakingenergy audits and implementing therecommendations and raisingawareness among centre staff;

Purchase green electricity if possible.

Other significant Indirect emissions

716,732tCO2e in 2007


Future actions:

Roll out green travel plans to furthershopping centres;

Seek to avoid business air travel byencouraging video conferencing;

Raise awareness among servicesuppliers, tenants, visitors and staff;

Continue to encourage energyefficiency on development projects(contractors’ energy use).

Carbon Management Strategy



CLIMATE CHANGE

Data Qualifying NoteThis indicator covers 38 out of 40 owned shopping centres under management for the entirety of the reporting year(corresponding to 95% of total GLA). Avenida M40 (Spain) and Pátio Brasil (Brazil), representing the remaining 5% ofGLA, have been excluded because these properties were unable to provide real and accurate electricity consumptiondata for every month of 2007.

Results for previous years are re-stated because more accurate data has been made available for the mall + toiletfloor areas of four centres (GuimarãeShopping in Portugal, Luz del Tajo and Zubiarte in Spain and MediterraneanCosmos in Greece).

The year-on-year growth of the size of our portfolio and the quality of a monitoring systems means that the sampleand coverage of centres varies between years: the value reported for 2003 represents 10 out of 24 owned centreswhereas in 2007 38 out of 40 are represented.

Methodological NoteElectricity consumption and floor area data is gathered monthly across all owned shopping centres under managementand collated in the on-line Environment portal (data gathering system). Monthly data is error-checked and the KPI(electricity consumption divided by the mall and toilet area – which is the area directly controlled by Sonae Sierra) isassessed at property, country, and whole portfolio levels and is reported internally on a quarterly basis and externallyannually.

Our Performance in 2007Our performance in 2007 was driven by a series of initiatives to set us along the way to attaining this goal, includingthose defined through our 2007 Climate change targets. We implemented a variety of measures across centres inoperation with the aim of increasing energy efficiency, with attention to lighting, HVAC and other energy consumingequipment. The effectiveness of these measures, as well as continued awareness raising among our staff, tenants andservice suppliers is demonstrated through the results achieved this year – a 3.7% reduction in global energyconsumption per m2 of mall and toilet area in comparison with 2006 (see chart).

KPIElectricity efficiency(excluding tenants) of theowned and managedportfolio (kWh/m2 malland toilet area/year)

2003 730

580

593

575

554

2004

2005

2006

2007

LONG-TERM OBJECTIVE

CORPORATE PERFORMANCE

• To achieve a 10% reduction of greenhouse gas emissions by square metre of Gross Lettable Area by 2020 compared to the2005 level (GHG Protocol scopes 1 and 2, plus business air travel).

TARGET FOR 2008

• To achieve a 1% reduction of greenhouse gas emissions by square metre of Gross Lettable Area compared to 2007 level (GHG Protocol scopes 1 and 2).

CONTINUED

Best 3 centres: Electricity efficiency*

(kWh/m2 mall + toilet area)

Valle Real (Spain) 270

Tivoli Shopping (Brazil) 276

GuimarãeShopping (Portugal) 372

* Plaza Mayor (Spain) and Franca Shopping (Brazil) did in fact achieve the bestelectricity efficiency at 129 and 132 kWh/m2 mall + toilet area respectively.However, both of these are not considered to be comparable with other centresin terms of their energy consumption since they are fully or partly open airshopping centres. Furthermore, Valecenter (Italy) which achieved 262 kWh/m2

mall + toilet area, and Grancasa (Spain), which achieved 358 kWh/m2 mall +toilet area were not considered representative given that these centres wereundergoing refurbishment works during 2007.

Comment

Following last year’s trend, electricity consumption per m2

decreased for the portfolio in 2007 and was the lowestso far recorded, at 554 kWh per m2. This overall trendof improvement has been mirrored at 26 out of 36shopping centres, where specific electricity consumptionis better in 2007 compared to last year (sometimes by asmuch as 20%).

What is more, the aggregated performance of everycountry also improved, see later sections for moreanalysis and commentary.



CLIMATE CHANGE

KPINumber and percentageof visits made by differenttypes of transport in theowned portfolio (millionsof visits | % of visitsarriving by all other forms(other than private car))

2004

2005

2006

Arriving by private car

Arriving by all other forms (otherthan private car)

2007

Data Qualifying NoteThis indicator covers all shopping centres in the owned portfolio in operation for the entirety of the reporting year.

Visits by transport mode data for 2004 and 2005 have been re-stated, as the inaccuracies in the data reported forParque D. Pedro (Brazil), La Farga and Plaza Mayor (Spain) have been resolved – though these do not affect theaggregated picture significantly.

The year-on year growth of the size of our portfolio means that the sample of centres varies between years (from26 out of 26 centres in 2004 to 40 out of 40 centres in 2007).

Methodological NoteModes of transport data is gathered through Mall Tracking surveys undertaken at centres under management. Visitsare generally counted through the counting system implemented in the centres. For 33 out of the 40 centresrepresented in this indicator, transport mode data was gathered through the 2007 Mall Tracking survey. For fourcentres (Grancasa in Spain, Airone in Italy and Shopping Metrópole and Parque D. Pedro in Brazil), data gatheredthrough the 2006 Mall Tracking surveys were used as this survey was not undertaken during 2007. At three centres(Valecenter in Italy, Boavista and Pátio Brasil in Brazil), data from the 2005 Mall Tracking survey are used due to a lackof more up to date data.

Comment

The number of visits increased in line with the increased size of our portfolio, with thepercentage of visits by non-private-car increasingly only marginally since last year.Sonae Sierra knows how challenging this can be since it is impossible to control visitorchoices but rather to influence visitors’ travel habits to encourage sustainable modesof transport. A good example of these efforts is the Green Travel Plan at CentroColombo (Portugal), Green Travel Plans will be rolled out to other centres in 2008.

34%

33%

32%

33%

185 95

97

107

114

198

224

234

CORPORATE PERFORMANCE CONTINUED

CONTINUED

Data Qualifying NoteThis indicator covers emissions corresponding to scopes 1 and 2 of the GHG protocol generated at Sierra ownedcentres in operation for the entirety of the reporting year (95% of GLA is represented) and corporate offices inPortugal, Spain, Italy, Greece and Brazil.

Exceptions are Avenida M40 in Spain and Pátio Brasil in Brazil, (which make up the remaining 5% of GLA) fromwhich data has been excluded because these properties were unable to provide real and accurate electricityconsumption data for every month of 2007.

Methodological NoteThe emissions in tonnes of CO2 equivalent have been calculated in accordance with the GHG protocol methodology,which was been adapted, where necessary data was available, to the specific national circumstances of the variouscountries in which Sierra operates. Emissions corresponding to scope 1 (direct GHG emissions from sources that areowned or controlled by the company) and scope 2 (indirect emissions from the generation of purchased electricity,heating or cooling) are included. The emissions produced at the shopping centres and corporate offices listed in theData Qualifying Note have been normalised by the GLA of the owned and managed portfolio in order to obtain anindicator which is comparable year on year.

Comment

GHG emissions of the owned and managed portfolio decreased during 2007 incomparison with 2006. Two variables in particular have affected this trend: thevariations between electricity emissions factors for 2006 and 2007 (more renewableenergy was supplied through the grid in 2007 in comparison with 2006) and thedecrease in electricity consumption (KWh) per m2 of mall + toilet area (see electricityefficiency indicator on page 30).

KPIGHG emissions of theowned and managedportfolio (tCO2e/m2 GLA)

0.076(2006: 0.082)


CONTINUED



CLIMATE CHANGE

Data Qualifying Note/Methodological NoteThe same Data Qualifying Note and Methodological Note apply as for the indicator on the previous page (GHGemissions of the owned and managed portfolio (tCO2e/m2 GLA), the difference being that the emissions produced atthe shopping centres and corporate offices listed in the Data Qualifying Note have been normalised by the mall +toilet area of the owned and managed portfolio, the area in which energy consumption is directly controlled by Sierra(as opposed to the GLA, in which energy consumed is also controlled to a varying extent by tenants).

Comment

GHG emissions of the owned and managed portfolio decreased during 2007 incomparison with 2006. Two variables in particular have affected this trend: thevariations between electricity emissions factors for 2006 and 2007 (more renewableenergy was supplied through the grid in 2007 in comparison with 2006) and thedecrease in electricity consumption (KWh) per m2 of mall + toilet area (see electricityefficiency indicator on page 30).

KPIGHG emissions of theowned and managedportfolio (tCO2e/m2 mall+ toilet area)

0.315(2006: 0.357)

Data Qualifying NoteThis indicator covers all company activities during 2007 (except construction activities).

Natural gas consumption for boilers at Avenida M40 (Spain) and Campo Limpo (Brazil) has been excluded as data for the every month of the reporting periodcould not be obtained – something Sonae Sierra is seeking to ensure is remedied in 2008.

Methodological NoteDiesel and petrol consumption by fleet cars in Germany and Italy are calculated using assumed typical efficiency of those cars, multiplied by the distance theytravelled in the year (thus 11% of the total volume of liquid fuel consumed by fleet cars has been estimated in this way). For the rest of the fleet the actualvolume of liquid fuel used has been collected.

The conversion factors from fuel to GigaJoules used are the defaults in the table on page 8 of 3G_IP_Environment.pdf from www.globalreporting.org/NR/rdonlyres/2619F3AD-0166-4C7C-8FB2-D8BB3C5F801F/0/G3_GuidelinesENU.zip. Unfortunately, this table does not provide metric volume conversion defaults,e.g. a ‘litres of diesel to GJ conversion factor’ nor a ‘litres of petrol (gasoline) to GJ conversion factor’. Nor does the GRI guidance clearly state what type ofimperial ‘gallon’ it is in the GRI default values table (i.e. a UK or US gallon). We are thus re-stating the GJ of diesel and petrol (gasoline) for 2006, assuming thatGRI’s gallon is a US one (3.79 litres), as last year it was thought to be a UK gallon. We have queries lodged with GRI to try and resolve this, and we would suggestthat all default values and measures be clearly labelled, and that prominence be given to The International System of Units (SI) (www.bipm.org/en/si/).

The two exceptions where bespoke conversion factors are used are:

1) Ethanol – used in some vehicles in Brazil: 0.021 GJ per litre (as this is not in the GRI defaults table).

2) Fuel oil and Natural Gas burnt at co-generation plants. The calorific values vary over time, so the conversions for 2006 and 2007 are specific to the fuel used inthose years, and the GJ has been calculated by EcoProgresso (Sierra’s external consultant) using PCI (kcal/kg or m3) for each month, then a kcal per GJ conversion.

Comment

The total gigajoules of direct energy consumption is greater in 2007 than 2006, largely due to increased natural gasconsumption for the co-generation plant at NorteShopping. The co-generation is used to export electricity to the gridand provide thermal energy to the whole centre, including tenants’ areas.

KPIDirect energy consumption by primary energy source (GRI EN3)

EN3. Direct energy consumption by primary energy source GJ

Fuel type Use 2006 2007

Fuel oil CHP at Centro Colombo 252,245 252,536

Diesel Mechanical priming for CHP at Centro Colombo 1,060 1,031

Natural Gas CHP at MaiaShopping and NorteShopping 233,729 279,310

Natural Gas Boilers 42,977 32,171

Diesel Fleet cars & business travel in staff’s own cars 6,759 8,266

Petrol (Gasoline) Fleet cars & business travel in staff’s own cars 2,977 1,400

Ethanol Fleet cars & business travel in staff’s own cars 288

Total 529,746 575,001

http://www.globalreporting.org/NR/rdonlyres/2619F3AD-0166-4C7C-8FB2-D8BB3C5F801F/0/G3_GuidelinesENU.zip

http://www.globalreporting.org/NR/rdonlyres/2619F3AD-0166-4C7C-8FB2-D8BB3C5F801F/0/G3_GuidelinesENU.zip

http://www.bipm.org/en/si


CONTINUED



CLIMATE CHANGE

KPIIndirect energy consumption broken down by primary source (GRI EN4).

The table indicates the estimated amount of intermediate energy purchasedand consumed from sources external to Sonae Sierra, in gigajoules and brokendown by primary source, including renewable and non-renewable sources.

Intermediate Total (GJ) Total (GJ)Energy Type 2006 2007

Coal 770,289 726,992

Natural Gas 219,210 216,227

Petroleum Products 388,353 369,529

Crude Oil 0 0

Nuclear 197,637 166,796

Non-renewable energy subtotal 1,575,490 1,479,543

Solar 0 0

Wind 4,526 4,064

Geo-Thermal 13,051 12,685

Hydro 330,627 315,260

Biomass 4,289 3,660

Hydrogen based intermediate energy 0 0

Renewable energy subtotal 352,492 335,670

Total 1,927,982 1,815,212

Data Qualifying Note/Methodological NoteThis indicator covers indirect energyconsumption in 2007 from energy purchasedand consumed at all shopping centres in theowned portfolio under management, with theexception of Avenida M40 (Spain) and PatioBrasil (Brazil).

The conversion factor used to convert kWh toGJ is 0.0036 as per GRI 3G guidelines. Thecalculations of the intermediate energypurchased and consumed used the energybalance from OCDE and Non-OCDE countriesrelative to the year 1998 and published by theInternational Energy Agency (IEA) in 2001, asmore specific and updated data for theenergetic mix production in the variouscountries where Sierra operates was notavailable, and to retain consistency with lastyear’s data.

Comment

The total gigajoules of indirect energy consumption is smaller in 2007 than2006. This is an absolute indicator that is not normalised to take account ofincreases in the scale of operations (though such efficiency indicators areincluded elsewhere in this report). Of course, we recognise the benefits ofabsolute indicators, as they help us in thinking about overall ‘budgets’ ofecological resources.

In terms of the origins of the indirect energy consumed, using the internationaldefault values 82% comes from Non-Renewable sources. Sonae Sierra iscommitted to using the energy it consumes with increasing efficiency (see EN5and other energy KPIs), and also to procure energy from low and no-carbonsources. Market regulations in most of the countries in which we operate meanthat the ability to certify electricity as being from renewable sources isimmature. We are considering researching the exact origins (primary sources) ofall types of intermediate energy we consume, though this would need to bedone on a contract-by-contract basis.


CONTINUED



CLIMATE CHANGE

KPIEnergy saved due to conservation andefficiency improvements:Electricity (reported in gigajoules) (GRI EN5)

32,202(2006: 27,889)

Data Qualifying Note/Methodological NoteThis indicator covers 36 out of 38 properties which were owned throughout both 2006 and 2007, meaning that theindicator refers to reductions in electricity consumed in order to carry out the same process (i.e. the operation in eachyear, of the properties that operated the full calendar year). The two excluded properties are Avenida M40 in Spainand Pátio Brasil in Brazil, whose electricity data is not sufficiently reliable.

The assessment of EN5 is based just on electrical energy. Sonae Sierra aims to use fuel and thermal energy efficiently, butthese are less controllable by Sonae Sierra, as it is more difficult to clearly delineate what the landlord and tenant controls,and they are even more affected by varying weather conditions between the two years than electricity consumption.

Comment

As with last year, in 2007 there was a reduction in electricity consumption from theprior year – this time by 4.3% (32 202 GJ). Some of the gains made may result fromfactors outside of our control, such as weather conditions, but specific initiatives atindividual properties can be more definitively associated with electricity savings, asseen elsewhere in this report.

Reduction in lighting energy requirements through the reduction of lamps and the installation of energy efficient alternatives

Replacement of HQI lamps with more energyefficient ones (2x26 W) at Shopping Metrópole(Brazil).

19,125 0 The reduction has been estimated based upon thetechnical characteristics of the equipment referredto and the operation timetable followed.

The lightning system at Shopping Penha (Brazil)was changed in various parts of the centre byreducing the number and/or the intensity of lamps:1) in the entrance areas of the centre;2) In the elevators area;3) In the hall area;4) In the supermarket area;5) In the garden area.


Reduction in lighting energy use through the installation of monitoring equipment (e.g., automatic sensors) or control of lighting timeschedule.

Mall lighting schedule was changed at Mediterranean Cosmos (Greece).

137,280 135.907 The reduction has been estimated based upon thetechnical characteristics of the equipment referredto and the operation timetable followed.

The mall lighting schedule was changed atLoureShopping (Portugal).

9,000 4.125 The reduction reported is based on the valuesestimated through the energy audit undertaken atthis centre during 2007.

The car parks lightning schedule was changed atLoureShopping (Portugal).


Lighting energy used was reduced in the car parkin CascaiShopping (Portugal).


Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energyrequirements as a result of these initiatives (GRI EN6); and Initiatives to reduce greenhouse gas emissions and reductionsachieved (GRI EN18)

Initiatives implemented during 2007,by type of initiative

Actual orestimatedreductionachieved in2007 in kWh

AssociatedGHGemissionsreduction in tCO2e


KPI


CONTINUED



CLIMATE CHANGE

Control and reduction of chillers’ energy use

The chiller set point at Shopping Metrópole (Brazil)was increased to 8° C.


Control and reduction of HVAC energy use

Control of HVAC timetable (weekly controlthrough the BMS) at Dos Mares (Spain).

564,061 282.595 The reduction reported is based on real measuredconsumptions.

The set point of Air Handling Unit (AHU) waschanged (24 degrees in Winter, 22 degrees inSummer) at LoureShopping (Portugal).


Other reductions in energy use achieved

Reduction achieved with the correct functioning ofthe BMS system to control the Centre systems atCentro Vasco da Gama (Portugal). This saving wasmostly enabled due to greater control on lightinghours and intensity and control of ventilationaccording to temperature instead of manually.


The air screen in the main hall at Dos Mares(Spain) was re-set.


Reduction in the operating time of the HVACthrough the optimisation of BMS and control ofthe lighting timetable at RioSul (Portugal).


Total 2,318,508 1,120

Initiatives implemented during 2007,by type of initiative

Actual orestimatedreductionachieved in2007 in kWh

AssociatedGHGemissionsreduction in tCO2e


Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energyrequirements as a result of these initiatives (GRI EN6); and Initiatives to reduce greenhouse gas emissions and reductionsachieved (GRI EN18)

Data Qualifying Note/Methodological NoteThis indicator covers initiatives reported across all our owned centres under management for the entirety of the reporting year which were possible to verify. The emissions savedassociate with initiatives to provide energy-efficient or renewable energy based products and services were calculated. The following emissions factors corresponding to eachpower company or country and the energy consumption saved:

• Portugal: 0.458 (this emissions factor is derived from the weighted average of the different emission factors associated with 2 energy suppliers used by Sierra in centres inPortugal during 2007);

• Spain: 0.501;

• Greece: 0.99;

• Brazil: 0 [due to the fact that Sierra’s electricity suppliers in Brazil have an electricity production mix consisting of hydropower].

KPI


CONTINUED



CLIMATE CHANGE

• We launched our first Green Travel Plan at Centro Colombo in Lisbon, Portugal. Theaim of the Green Travel Plan will be to improve the accessibility of the shopping centreby public transport, bicycle and on foot and to encourage people who work in thecentre to use sustainable forms of transport to travel to and from Centro Colombo;

• With the aim of working towards the common goal of helping to create a cleaner andmore environmentally-friendly city, Zubiarte’s Management Team set up a new bicycleloan scheme in collaboration with the environment department of the city council ofBilbao, Spain.

KPIInitiatives to reduce indirect energy consumption and reductions achieved(GRI EN7)

Data Qualifying Note/Methodological NoteWhilst the GRI G3 Guidelines state that theaspects of energy-intensive materials,subcontracted production, business-relatedtravel and employee commuting should beconsidered for this indicator, Sierra has alsoconsidered visitors’ travel. This is due to thefact that, given our business activities, visitors’travel to and from our shopping centresgenerates a significant impact in terms ofindirect energy consumption and also GHGemissions. We will also seek to implementmeasures to mitigate the impacts of ouremployees’ business travel as part of ourcarbon management strategy, and in futurereport on these initiatives.

KPITotal direct and indirectgreenhouse gas emissionsby weight; tCO2e(GRI EN16)

118,783(2006: 135,981)

Data Qualifying NoteThis indicator covers the GHG emissions associated with scope 1 and 2 activities at owned shopping centres inoperation for the entirety of the reporting year and corporate offices.

• Scope 1 accounts for 39,115 tCO2e. This includes journeys on fleet’s vehicles, leaks of gases from air conditioningequipments and the use of boilers and co-generation motors;

• Scope 2 accounts for 79,668 tCO2e. This covers GHG emissions generated through the production of theelectricity consumed as a result of Sierra’s activities.

In terms of portfolio coverage, 38 out of 40 owned centres under management for the entirety of the reporting yearare represented, corresponding to 95% of owned GLA. Avenida M40 (Spain) and Pátio Brasil (Brazil), which make upthe remaining 5% of GLA, were excluded on the basis that these properties were unable to provide real and accurateelectricity consumption data for every month of 2007. It also includes all 7 of our corporate offices.

Methodological NoteThe following assumptions have been made in order to calculate this indicator:

• Air-conditioning equipments: data from 2006 was used for offices in Portugal, Brazil and Greece. For shoppingcentres in Portugal and Spain, the number of equipments and its load was based on Edifícios Saudáveis (2004 –2005) study. The value used for Centro Colombo was the one used in 2003 pilot inventory, and based on realdata. Data for Brazil it was assumed the same as for 2006, since we didn’t have any report for 2007. For Italy andGreece the data was not available, so an average of the Portuguese and Spanish values was used. In 2008, effortsare being made to improve the report of this source of emissions.

• Boilers: natural gas consumption data in Centro Colombo was not considered, both for 2007 and 2006. Thismodification was due to report scope of other indicators (the data reported is solely associated with theshopping/mall consumption, and not sold to others).

• Purchased electricity: the electricity consumption for Maia office (Portugal) was based on the average Lisbon office(Portugal) consumption (per worker), since this value was not measured.

Please see comment on page 37.


CONTINUED



CLIMATE CHANGE

Comment

In comparison with 2006 data on GHG emissions, the total has decreased by 13%. There was an increase of 7% inscope 1 and a decrease of 20% in scope 2. This was due to reduction of the national grid emissions factors. Some ofthe reasons for the year on year differences are:

• Production of the electricity consumed: the emission factor (kgCO2/kWh) associated with the Portuguese nationalgrid decreased in 2007 (0.373 kgC02/kWh in 2007 compared to 0.403 kgC02/kWh in 2006). The Spanish Endesapower plant company also decreased (0.501 kgC02/kWh in 2007; 0.538 kgC02/kWh in 2006). Furthermore, thePortuguese electricity supplier for shopping centres and offices was changed during the last 4 months of the yearfrom a company with a higher emission factor to one with a lower one.

• Fleet: Brazil has in 2007 more consumption of Ethanol, with no C02 emissions.

• Air conditioning equipments and boilers: there is one more centre in Brazil included. One centre in Spain (AvenidaM40) was not included in the inventory, for 2007. These two reasons explain the difference between the totaldata in 2006 and 2007.

Finally, it should be noted that in Brazil, the emission factor for electricity consumption is 0, as the production mix ismade up of hydropower.

KPIOther relevant indirectgreenhouse gas emissionsby weight; tCO2e(GRI EN17)

716,732(2006: 762,456)

Data Qualifying NoteThis indicator covers scope 3 GHG emissions, which include the activities that are not directly managed but resultfrom its business, such as the commuting from its employees, airplane and train trips, the journeys of the shoppingcentres’ visitors, as well as the treatment of the wastewater generated.

Methodological NoteEmployee commuting: it was assumed the same data from 2006 (updated for 2007 employees figures), except forthe new Italian office. For this office, it was made available a questionnaire to employees that did not have acompany car.

Airplane trips: data for flights, including the itinerary, was available for the Portuguese, Italian and German offices.Other flights were not considered.

Train trips: data for trips was available for the Portuguese, German and Spanish Offices. It was the first time that datafrom this source was reported.

Conversion factors used to derive the emissions associated with each of these sources are in accordance with thosedefined by the GHG Protocol.

Comment

It is difficult to make an analysis as to why Sierra’s indirect (scope 3) emissions havedecreased as the raw data required to calculate this indicator is gathered from avariety of sources. In 2008, efforts are being made to improve the report of the data tocalculate this KPI.




CLIMATE CHANGE

KPINOx, SOx, and other significant air emissions by type and weight (GRI EN20)

Sierra totalAir emissions Unit emissionsby type (weight) in 2007

NOx kg 416,396

Non Methane Volatile Organic Compounds (NMVOC) kg 13,333

Particle Matter (PM) kg 7,350

SOx kg 60,823

Volatile Organic Compounds (VOC) kg 79,661

Data Qualifying NoteThe information reported covers NOx, SOx andother significant air emissions from boilers at allowned shopping centres (with the exceptionsof Avenida M40 in Spain and Campo Limpo inBrazil) and from all on-site co-generationsystems at 3 of our centres in Portugal.Emissions from mobile sources such as thecompany car fleet have not been included here,nor have emissions from emergency generators(the latter are not considered to be significant).

Methodological NoteThe calculations of emissions from boilers havebeen made using the figures for natural gasconsumption and associated emissionsconversion rates. The methodology used isconsistent with the IPCC methodology.

The calculations of emissions from co-generationhave been made based on direct measurementsof the NOx, SOx and other significant airemissions. The total values for these emissionsin 2007 have been calculated using the averageof the two most recent measurements fromeach motor and multiplied by the total numberof hours of their operation during the year.

We set ourselves a total of 11 climate change targets for completionduring 2007. The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007Climate change targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%8

3

PERFORMANCE BY COUNTRY OF OPERATION

CONTINUED



CLIMATE CHANGE

KPIPortugal

Electricity efficiency(excluding tenants) of theowned and managedportfolio (kWh/m2 malland toilet area/year)

2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers all 17 owned shopping centres in Portugal under management for the entirety of the reporting year.

Results for previous years are re-stated because more accurate data has been made available for the mall + toiletareas of 1 centre (GuimarãeShopping).

Methodological NotePlease see the note alongside the global electricity efficiency indicator on page 30.

Comment

Electricity consumption per m2 decreased in 2007 to 651 kWh/m2.

A total of 13 out of 17 properties achieved significant electricity savings in 2007(Centro Colombo and MaiaShopping, for example). It should be noted that CentroVasco da Gama, a property that performed better than average in 2006 showedfurther improvements this year, partly due to initiatives to reduce electricityconsumption (e.g. Building Management System enhancements and rescheduling thelighting and air conditioning systems).

Data Qualifying NoteThis indicator covers 10 out of 11 owned shopping centres in Spain under management for the entirety of thereporting year (Avenida M40 has been excluded because this property was unable to provide real and accurateelectricity consumption data for every month of 2007).

Results for previous years are re-stated because more accurate data has been made available for the mall + toiletfloor areas of 2 centres: Luz del Tajo and Zubiarte.


Comment

Centres in Spain also improved performance in 2007, with a decrease in annualelectricity consumption per m2 to 395 kWh/m2. Eight out of a total of 10 propertiesimproved their performance: in particular Max Center and Plaza Éboli. Grancasa had asignificant increase in the intensity of electricity, possibly due to refurbishment workstaking place in that centre. Plaza Mayor, which is essentially an open scheme, achievedthe lowest electricity consumption per area at 129 kWh/m2, largely due to this specificcharacteristic (i.e. it has no mall air-conditioning system).

730

690

704

685

651

KPISpain


2003 Not known

2004

2005

2006

2007

343

439

407

395

KPIItaly


2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 2 out of 2 owned shopping centres in Italy under management for the entirety of the reportingyear.


Comment

The Italian centers show very good performance with 366 kwh/m2 achieved in 2007,however it is important to bear in mind that these results are based on only twocentres and consequently changes in performance can be driven by factors outside anormal management scenario: in this case, electricity consumption at Valecenter hasdecreased partly as a result of refurbishment works being undertaken, meaning thatparts of the centre have been closed.

475

366

Not applicable

Not applicable

Not known

PERFORMANCE BY COUNTRY OF OPERATION CONTINUED

CONTINUED



CLIMATE CHANGE

Data Qualifying NoteThis indicator covers the 1 owned shopping centre in Greece under management for the entirety of the reportingyear. This centre opened in October 2005.

Results for previous years are re-stated because more accurate data has been made available for the mall + toilet areaof 1 centre: Mediterranean Cosmos.


Comment

A new assessment of floor areas resulted in a re-stated value for 2006. However, withthe floor area corrected and consistent for both years, there was still a very significantimprovement in electricity efficiency performance Mediterranean Cosmos during 2007.

KPIGreece


2003

2004

2005

2006

2007

800

643

Not applicable

Not applicable

Not known

KPIBrazil


2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 8 out of 9 owned shopping centres in Brazil under management for the entirety of the reportingyear (Pátio Brasil has been excluded because this property was unable to provide real and accurate electricityconsumption data for every month of 2007).


Comment

Electricity efficiency across Brazilian centres reached 541 kWh/m2/year and shows aslight improvement compared to 2006 performance. Franca Shopping, BoavistaShopping, Shopping Plaza Sul made efficiency gains since last year.

600

572

555

541

Not known


CONTINUED



CLIMATE CHANGE

Data Qualifying NoteThis indicator covers emissions corresponding to scopes 1 and 2 of the GHG protocol generated at all 17 Sierraowned centres in operation for the entirety of the reporting year in Portugal.

Methodological NotePlease see the note alongside the global GHG emissions indicator on page 31 and alongside EN16 on page 36 and 37.

Comment

In Portugal, GHG emissions associated with scopes 1 and 2 decreased by 14.8%during 2007 in comparison with 2006. The variations between electricity emissionsfactors for 2006 and 2007 (more renewable energy was supplied through the grid in2007 in comparison with 2006) and the decrease in electricity consumption (KWh) perm2 of mall + toilet area (see electricity efficiency indicator on page 39) have influencedthis trend.

In particular, the fact that Sierra switched to a different electricity supplier during thelast quarter of 2007 across centres in Portugal, and this new supplier has a loweremission factor, have also influenced the results.

KPIPortugal

GHG emissions of theowned and managedportfolio (tCO2e/m2 GLA)

0.121(2006: 0.132)

Data Qualifying NoteThis indicator covers emissions corresponding to scopes 1 and 2 of the GHG protocol generated at 10 out of 11Sierra owned centres in operation for the entirety of the reporting year in Spain. Avenida M40 was excluded becausethis property was unable to provide real and accurate electricity consumption data for every month of 2007.


Comment

In Spain, GHG emissions associated with scopes 1 and 2 decreased by 14.5% during2007 in comparison with 2006. This trend is influenced in particular by differencesbetween electricity emissions factors for 2006 and 2007 (more renewable energy wassupplied through the grid in 2007 in comparison with 2006) and the decrease inelectricity consumption (KWh) per m2 of mall + toilet area (see electricity efficiencyindicator on page 39). Emissions from boilers in Spain also decreased.

KPISpain


0.042(2006: 0.049)

Data Qualifying NoteThis indicator covers emissions corresponding to scopes 1 and 2 of the GHG protocol generated at the 2 Sierraowned centres in operation for the entirety of the reporting year in Italy.


Comment

In Italy, GHG emissions associated with scopes 1 and 2 decreased by 22.5% during2007 in comparison with 2006. This trend is influenced in particular by differencesbetween electricity emissions factors for 2006 and 2007 (a new, more up to datefactor was used in 2007) and the decrease in electricity consumption (KWh) per m2

of mall + toilet area (see electricity efficiency indicator on page 39). The refurbishmentof Valecenter accounts for part of this reduction.

KPIItaly


0.040(2006: 0.052)




CLIMATE CHANGE

Data Qualifying NoteThis indicator covers emissions corresponding to scopes 1 and 2 of the GHG protocol generated at the 1 Sierraowned centre in operation for the entirety of the reporting year in Greece.


Comment

In Greece, GHG emissions associated with scopes 1 and 2 decreased by 19% during2007 in comparison with 2006. This trend is influenced mainly by the decrease inelectricity consumption at Mediterranean Cosmos. Emissions from boilers at this centrealso decreased during 2007.

KPIGreece


0.197(2006: 0.243)

Data Qualifying NoteThis indicator covers emissions corresponding to scopes 1 and 2 of the GHG Protocol generated at 8 out of 9 Sierraowned centres in operation for the entirety of the reporting year in Brazil. Pátio Brasil was excluded because thisproperty was unable to provide real and accurate electricity consumption data for every month of 2007.


Comment

In Brazil, GHG emissions associated with scopes 1 and 2 remained the same during2007 in comparison with 2006. Brazil accounts for much lower GHG emissions incomparison with other centres, due to the fact the shopping centres in this countryare supplied by green energy (hydropower). The small amount of emissions accountedfor here are those associated with leaks of gases from air conditioning equipments.

KPIBrazil


0.001(2006: 0.001)

Centro Colombo in Lisbon, Portugal was our first shopping centre to initiate a Green Travel Plan. The aim of theGreen Travel Plan will be to improve the accessibility of the shopping centre by public transport, bicycle and on foot and to encourage people who work in the centre to use sustainable forms of transport to travel to and from Centro Colombo. The plan has now been launched, and soon new cycle racks will be installed at one ofCentro Colombo’s entrances to enable visitors and employees to arrive by bike. The Green Travel Plan project willbe rolled out to other centres in operation during 2008.

With the aim of working towards the common goal of helping to create a cleaner and more environmentally-friendly city, Bilbao’s Environmental Department and Zubiarte’s Management Team set up a new bicycle loanscheme in collaboration with the city council of Bilbao, Spain. Bilbao’s Environmental Department and Zubiarte’smanagement selected one of Zubiarte’s main doors as a strategic point where citizens could borrow and returnbicycles. The loan, which is completely free, is managed by a registration system through the internet at Zubiarte’sinformation desk. So far, it has proved to be popular with our visitors.

Case StudyPromoting green travel at Centro Colombo and Zubiarte



CLIMATE CHANGE

Sonae Sierra is a sponsor to the World Business Council for Sustainable Development (WBCSD)’s Energy Efficiency in Buildings project and contributed as part of the core group preparing a study, published in 2007, on thebusiness realities and opportunities associated with the construction of energy-efficient buildings.

The report, which was the first one to be produced by the project, concluded that key players in the real estateand construction misjudge the costs and benefits of “green” buildings, thus creating a barrier to higher energyefficiency in the building sector. The reports suggests that “green” construction costs are actually much lower than believed, and recommends that all participants can immediately drive down world energy demand and reduce carbon emissions using technology and knowledge available today.

Case StudySonae Sierra’s participation in theEnergy Efficiency in Buildings project Web references

For more information see: www.wbcsd.org/templates/TemplateWBCSD5/layout.asp?type=p&MenuId=MTA5NA

Lesson to be learnt:

“Higher efficiency does not always means higherinvestment but it always means lower running costs”.

Due to the high level of heat generated inside thebuilding, shopping centres need to be kept cool at almostall times of the year (depending on the region they arein). Chillers therefore account for a large amount of theenergy consumed in our centres, and we have defined aminimum efficiency requirement for this type ofequipment. In spite of this, not all of our centres werecomplying with the standard, and were concerned thatreplacing the chillers could incur high investment costs.A study undertaken by the energy consultancy EdíficiosSaudáveis proved that we were wrong, however. Theydemonstrated that the more efficient chiller we hadinstalled at our centre in RioSul (Portugal) was cheaper tomaintain and cheaper to purchase than the less efficienttype installed in LoureShopping (Portugal). Use of themore efficient chiller in fact saved an annual amount of energy and CO2 equivalent to that produced by 130European families. So in future we should make sure we are well-informed about the costs of eco-efficientequipment as, while they will certainly mean less runningcosts, they may even be cheaper to buy.

“”

Buildings are using around 40%of primary energy in mostcountries. By using technologyand know-how available today,we can drive down energydemand significantly and reduceCO2 emissions from the buildingsector. It would be a low-costCO2 reduction compared toother alternatives. And we canstart now...Christian Kornevall, Project Director, EnergyEfficiency in Buildings, WBCSD, January 2008.

http://www.wbcsd.org/templates/TemplateWBCSD5/layout.asp?type=p&MenuId=MTA5NA


Water

ContextWater is essential to human life, yet as our planet continues to grow in population and urbanisation increases,freshwater is becoming scarcer. Furthermore, the potential impacts of climate change might worsen this situation astemperatures rise and severe weather phenomena such as droughts and flooding increase.

Sonae Sierra operates largely in the Mediterranean region, an area which the Intergovernmental Panel on ClimateChange estimates to be “particularly exposed to the impacts of climate change on freshwater” with the potential to “suffer a decrease in water resources due to climate change”.13

Business challenges and opportunities associated with Water

Did you knowBy 2025, 1,800 million people will be living incountries or regions with absolute water scarcity,and two-thirds of the world population could beunder stress conditions.

Read more at www.unwater.org

13 Intergovernmental Panel on Climate Change Fourth Assessment; Working Group II, ‘Climate Change impacts, adaptation and vulnerability’, Chapter 3, FreshWater Resources and their Management, Executive Summary, page 3.

• Water availability is becoming aproblem in parts of the Mediterranean

region and the impacts of climatechange could aggravate this situation;

• It is possible that this area will infuture become subject to legislatoryrequirements e.g. a water efficiency inbuildings directive.

• Direct short term cost savings fromgrey water re-use and water saving

devices; pay-back periods for efficientequipment are becoming shorter.

Challenges Opportunity

http://www.unwater.org



WATER

Our StrategySonae Sierra considers water consumption, efficiency and wastewater management within the water impact area.

We have been working to improve performance in relation to water efficiency since 1999 through theimplementation of water-saving initiatives and awareness-raising among staff, tenants and visitors. Waterconsumption data has been monitored since 2003 and recorded annually as a key performance indicator (litres pervisit per year) – see our Key Performance Indicators.

In our shopping centres in operation, our strategy to date has been to increase water efficiency by investing in new,more water efficient equipment and to undertake initiatives to increase awareness on the subject of water savingamong staff and visitors. We also have a strategy in place for addressing water aspects at the project design anddevelopment phase: our ESRD includes many requirements aimed at reducing water consumption, promoting waterre-use and pollution prevention and defining water treatment procedures.

Going forwards, our objective in terms of water management is to reduce water consumption per visit and to reduce theoverall water consumption of our operations. Our action plan to achieve this reduction includes measures to installinfrastructure to measure and monitor individual water uses to enable a better understanding of water consumptions indifferent areas (as we have experienced some difficulties in determining accurate data for water consumption) to ensurethat water equipments meet our water efficiency standards and undertake studies to investigate further ways in whichwe can maximise water efficiency and, where feasible to do so, implement water re-use systems.

Our Performance in 2007In 2007, we further increased the water efficiency of our portfolio as a result of our efforts to reduce waterconsumptions and increase water re-use:

• We implemented water efficiency measures at many of our centres in operation, such as the installation of flowcontrolled taps and automatic sensors in urinals to reduce consumptions in WCs;

• We continued to raise awareness on the importance of efficient water use at our shopping centres and offices, forexample, we held awareness raising activities and disseminated information to commemorate World Water Day atour offices in São Paulo and Lisbon; and

• We re-used 64,493m3 of water treated through our wastewater treatment plant, at Parque D. Pedro in Brazil, forWCs and irrigation purposes.

We did in fact achieve our long-term objective in 2007, as we attained a global water efficiency of 4.0 litres per visitper year. At the time of target setting, we had referred to past data (in which water consumptions have tended to behigher) and were not aware that we would meet the objective so soon. Consequently we will re-evaluate whether ornot we should alter this long-term objective.

LONG TERM OBJECTIVE

• To strive to keep water consumption at or below 4 litres/visit/year.

TARGET FOR 2008

• To attain a 1% reduction of the overall consumption at all owned shopping centres that were operational during 2007 fullcalendar year.


CONTINUED



WATER

KPIWater efficiency(excluding tenants) of the owned andmanaged portfolio(litres/visit/year)

2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 31 out of 40 owned centres under management for the entirety of the reporting year,corresponding to 75% of total GLA. Data has been excluded from the following 9 centres (which represent theremaining 25% of total GLA):

• CascaiShopping (Portugal);

• Avenida M40 (Spain);

• Grancasa (Spain);

• La Farga (Spain);

• Valle Real (Spain);

• Boavista Shopping (Brazil);

• Franca Shopping (Brazil);

• Valecenter (Italy);

• Mediterranean Cosmos (Greece).

It has not been possible to rely on every month of water consumption (excluding tenants) data at these centres.Reliable water metering continues to be an area of concern and action for Sonae Sierra.

Methodological NoteWater consumption and visits data is gathered monthly across all owned shopping centres under management andcollated in the on-line Environment portal (data gathering system). Visitor numbers are generally counted through thecounting system implemented in the centres. Monthly data is error-checked and the KPI (water consumptionexcluding tenants divided by total number of visits during the reporting year) is assessed at property, country, andwhole portfolio levels and is reported internally on a quarterly basis and externally annually.

Comment

2007 was the second consecutive year with a reduction in water consumption pervisit, which now stands at 4.0 litres/visit.

Although the portfolio as a whole improved its performance the picture per propertyis mixed, as only 15 out of 29 (with reliable data for both years) improved since lastyear. Notable improvements have been made at Spanish and Brazilian centres. Somegood practice actions have included changing to more efficient taps and betterirrigation systems, together with the close control of leaks. It should be taken intoaccount that water consumption is very weather-dependent. Nonetheless, SonaeSierra will keep on striving to raise awareness amongst staff and visitors to encouragewater conservation, particularly at those centres that have not made improvementsand benchmarking reveals scope for improvement relative to other centres.

4.2

3.6

4.3

4.2

4.0

Best 3 centres: Water efficiency(litres per visit)*

Airone (Italy) 0.7

Dos Mares (Spain) 1.0

GuimarãeShopping (Portugal) 1.2

* Airone, Dos Mares and GuimarãeShopping do not have cooling towers in theHVAC system, which mainly explains why water consumption per visit is muchlower at these centres in comparison with others.




WATER

KPITotal water withdrawal by source (GRI EN8)

2006 2007consumption consumption

Water source (m3) (m3)

Surface water, including water from wetlands, rivers, lakes, and oceans 0 0

Ground water 326,968 182,403

Rainwater collected directly and stored by the reporting organisation 0 0

Waste water from another organisation 0 0

Municipal water supplies or other water utilities 927,008 855,462

Mixture of ground water and municipal water (cannot be distinguishedby source) n/a 98,313

Total 1,253,977 1,136,178

Data Qualifying NotePlease see the Note for the water efficiencyKPI on page 46 for the reasons why ninecentres are excluded from the reported data.

Methodological NoteAt most centres it is possible for us todistinguish between water sourced fromboreholes (ground water) and that which ispurchased from municipal water supplies;however, at certain properties (RioSulShopping in Portugal, Shopping Metrópoleand Shopping Penha in Brazil) it was notpossible to distinguish between these sourcesin 2007, hence we have reported waterconsumption at these centres as “Mixture ofground water and municipal water”.

Comment

Sonae Sierra seeks to reduce water consumption through water saving actionand close control of any leaks or equipment malfunctions that can waste thisvaluable resource, although technical problems with meters have underminedour intention to report absolute figures for all properties under management.Please look at the outcomes of the specific water consumption KPI for theportfolio and countries to see the effect of these actions.

KPIPercentage and total volume of water recycled and re-used (GRI EN10)

Water recycled and re-used 2006 2007

Volume (m3) 962 64,493

Percentage (%) of total water consumption as reported in EN8 0.1% 5.7%

Data Qualifying NotePlease see the Note for the water efficiencyKPI on page 46 for the reasons why ninecentres are excluded from the reported data.

Parque D. Pedro in Brazil is currently the onlycentre where water is recycled and re-used.The value reported in terms of the volume ofwater re-used at Parque D. Pedro is based onactual measurements.

Comment

Although re-used water is still only a fraction of total consumption (5.7%) thisquantity accounts now for 48% of water consumption in Parque D Pedro thefirst centre where the technical and regulatory feasibility of water re-use forirrigation has been proved. The increase from 962 to 64,493m3 reflects the factthat in 2006 the system only worked in the last months of the year.



WATER

We set ourselves 2 Water targets for completion during 2007. The chartsummarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Water targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%

1 1


CONTINUED

KPIPortugal

Water efficiency(excluding tenants) of the owned andmanaged portfolio(litres/visit/year)

2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 16 out of 17 owned centres under management for the entirety of the reporting year inPortugal. Data from CascaiShopping was excluded because it has not been possible to rely on every month of waterconsumption (excluding tenants) data at this centre.

Methodological NotePlease see the note alongside the global water efficiency indicator on page 46.

Comment

Across Portuguese properties there was a mixed trend for this indicator, with 8 propertiesincreasing water consumption per visit and 7 decreasing it out of a total of 15 centres.Overall performance did not change significantly, however it did improve to 3.9litres/visit in comparison to 4.0 litres/visit in 2006. Increase in consumption can beoften explained by weather variations, in particular with respect to centres located inwarmer regions (such as AlgarveShopping). Nonetheless, apart from this mixed trendit should be emphasised that 3 of the best 5 performing properties in terms of waterconsumption are located in Portugal: GuimarãeShopping, with a water consumptionof only 1.2 litres/visit, CoimbraShopping (1.8 litres) and Serra Shopping. (2.1 litres).

4.7

4.0

3.8

4.0

3.9


CONTINUED



WATER

Data Qualifying NoteThis indicator covers 7 out of 11 owned centres under management for the entirety of the reporting year. Data fromAvenida M40, Grancasa, La Farga and Valle Real was excluded because it has not been possible to rely on everymonth of water consumption (excluding tenants) data at these centres.


Comment

Over the last five years shopping centres in Spain have been affected by problems withmetering equipment, which is why many centres have been excluded from thisanalysis at different points in time. Bearing this caveat in mind, year on year snapshotsof properties with reliable data has improved considerably since 2005, with 2.9litres/visit achieved in 2007. Dos Mares in particular is an example of good practice,with a water efficiency of an impressive 1.0 litres/visit. Efforts such as the installationof sensor taps and the eco-cube system in WCs, as well as active monitoring havecontributed to this achievement. Whilst still the largest consumer of the Spanishproperties, Plaza Mayor also achieved a significant reduction during 2007.

KPISpain


2003

2004

2005

2006

2007

3.2

2.9

4.8

3.4

2.9

KPIItaly


2003 Not applicable

Not applicable

Not known

2007 Not known

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 1 out of 2 owned centres under management for the entirety of the reporting year in Italy.Valecenter data has been excluded because it has not been possible to rely on every month of water consumption(excluding tenants) data at this centre.


Comment

Only one centre has validated water data in Italy, Airone. The absence of evaporativecooling towers contributes to low levels of water intensity.

0.71

0.75

Data of Mediterranean Cosmos has been excluded, the 1 owned centre in operation inGreece, because it has not been possible to obtain every month of water consumption(excluding tenants) data at this centre.

KPIGreece





WATER

KPIBrazil


2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 7 out of 9 owned centres under management for the entirety of the reporting year in Brazil.Data has been excluded from Boavista Shopping and Franca Shopping because it has not been possible to rely onevery month of water consumption (excluding tenants) data at this centre.


Comment

An improvement to 5 litres/visit (equal to 2005) was achieved across Brazilian centres,where consumption is likely to be affected by weather due to the warmer climate inthis country. Four out of seven centres decreased their water consumption per visit in2007. This relatively high intensity per visit water consumption for Brazil is largelydependent on Parque D. Pedro and Campo Limpo’s performance, but as seen in EN10,it should be noted that this centre does re-use a significant amount of the water itconsumes.

3.0

2.6

5.0

5.4

5.0

At Parque D. Pedro in Brazil, water treated at the centre’s wastewater treatment plant (WWTP) is being re-used forWCs and irrigation purposes. 64,493m3 of water treated was re-used during 2007, representing 48% of the totalvolume of water consumed at the centre and thus generating a cost reduction and significant water savings.

This initiative also generated a corresponding cost reduction estimated at around €100,000 per year. Since the re-use and irrigation system itself cost €83,115, this means that the pay back on investment time was no more thanone year.

This example of natural resource optimisation also contributed to Parque D. Pedro’s certification in accordance withthe ISO 14001 Environmental Management standard which was achieved in 2007. Parque D. Pedro and ShoppingPenha were in fact the first buildings of their kind in Brazil to receive ISO 14001 certification!

Case StudyWater re-use at Parque D. Pedro, Brazil


Waste

ContextAccording to statistics published by the European Environment Agency, in the European Union alone we produce1.3 billion tonnes of waste every year. A lot of the waste produced is sent to landfill, causing damage to theenvironment. Landfill sites create air, water and soil pollution, all of which are harmful to human health, wildlife andecosystems. Efficient waste management can help to decrease the amount of waste sent to landfill by seeking newopportunities for reduction, recycling and re-use.

Business challenges and opportunities associated with Waste

Did you knowEvery plastic bag buried in landfill takes around500 years to decay

Read more at: www.wasteawarenesswales

.org.uk/keyfacts,2.html

• Tightening legislation relating toquestions of waste sent to landfill/

recycled in view of national targets;

• Peer group companies increasinglyseeking ways of reducing waste sent tolandfill and reporting and measuringwaste recycled;

• Increasing stakeholder concerns andexpectations; company can enhance its

reputation among stakeholders ifit endeavours to be proactive

on the issue of wastemanagement

• Direct short term cost savings fromreducing landfill charges by recycling

and reusing waste from constructionand management activities.


http://www.wasteawarenesswales.org.uk/keyfacts,2.html



WASTE

Our StrategySonae Sierra handles large quantities of waste of the owned shopping centres, a lot of this being waste produced byour tenants. Over the past 7 years, we have successfully achieved significant reductions in the amount of waste wesend to landfill. This is largely due to our efforts to increase recycling rates by finding new opportunities for wasterecycling and carrying out awareness-raising and training activities among our staff, tenants and service suppliers.

In our shopping centres in operation, we have defined requirements to maximise the waste separation at source, sothat waste can be easily sent for recycling. At the construction phase, waste management has been focused on bothminimisation of waste generated and separation of waste at source so as to maximise recycling rates.

Our action plan to achieve our waste objectives focuses on seeking new ways to increase our recycling rates andreduce waste sent to landfill by continuing to review options such as composting at sites where this is not yet possibleand the availability of waste-to-energy facilities.

Our performance in 2007In 2007, we achieved a global recycling rate 14 of 35% and sent 55% of our waste to landfill (see chart on thefollowing page). We pursued several initiatives to recycle new waste streams, provided training to tenants on wastemanagement and made improvements to our on site waste recycling facilities, including clearer signage to encouragepeople to separate waste correctly.

• We commenced organic waste composting at several centres in Portugal. In LoureShopping, for example, thecentre management team initiated a door to door collection of organic waste from restaurant tenants in order toincrease the amount of waste sent to composting, and in ArrábidaShopping we implemented our own wastecomposting system (see case study on page 58);

• Parque D. Pedro in Brazil began a separate collection of orange peel and coffee waste for composting, avoiding129.2 tonnes of waste to landfill;

• We made changes to the paper and cardboard waste management system which led to an increase in recyclingrates at GuimarãeShopping in Portugal;

• We improved the waste separation equipment for glass packaging at several shopping centres in Spain with theaim of improving correct separation and recycling of this waste stream.

LONG TERM OBJECTIVES

• Increase the proportion of total waste (by weight) that is recycled, recovered or re-used in order to obtain a minimum 50%recycling rate.

• Reduce the proportion of total waste (by weight) that is sent to landfill in order to attain a maximum 30% of waste sent tolandfill rate.

TARGETS FOR 2008

• To achieve a minimum global recycling rate of 36%.

• To reduce the rate of waste sent to landfill by 2%.

14 Recycling” includes waste composting, recovery, re-use and recycling.


CONTINUED



WASTE

KPITotal waste recycled as a proportion of waste produced(% by weight)

2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 37 out of 40 owned shopping centres under management for the entirety of the reporting year(corresponding to 95% of total GLA). Three centres with the remaining 5% of GLA have been excluded, namely:MadeiraShopping (Portugal), due to the fact that waste data from this centre was considered unreliable; AvenidaM40 (Spain) as it had not provided the last three months of 2007 data in time; and Airone (Italy) due to the fact thatit also manages hypermarket waste which enables the centre to achieve a higher recycling rate which is notcomparable to the performance of other centres. In 2007 the recycling rate achieved at Airone was 71%.

The year-on-year growth of the size of our portfolio means that the sample and coverage of centres varies betweenyears: the value reported for 2003 represents 11 out of 24 owned centres whereas in 2007 37 out of 40 arerepresented.

Methodological NoteWaste data – by type according the European waste catalogue and by destination route – is gathered monthly acrossall owned shopping centres under management and collated in the on-line Environment portal (data gatheringsystem). Monthly data is error-checked and the KPI (proportion of all waste that is recycled/composted/recovered –by weight) is assessed at property, country, and whole portfolio levels and is reported internally on a quarterly basisand externally annually.

Comment

Once again, waste recycling across the aggregated portfolio increased to a new highfor Sonae Sierra of 35%. The overall rate in Portugal is now 37.9%. The greatmajority, 28 out of 35 centres with waste data for both 2006 and 2007 increased theirwaste recycling rates, 8 of them by 10 percentage points or more. At the end of 2007only 4 out of 37 centres were recycling less than 20%.

Increasing awareness among employees, tenants and visitors together with theinvestments in the waste infrastructure have enabled us to surpass the waste recyclingtargets set for each country (see page 54). The increase in organic waste compostingis something we are particularly proud of as this has enabled considerable decreases inwaste sent to landfill. The growing recovery of waste vegetable oil is another measurewe have implemented, reducing a ‘waste’ stream and making it possible to eventuallyre-use some of this oil as a biofuel – 276 tonnes were recovered in 2007.

19

21

26

31

35

Best 3 centres:Waste recycling*

Parque D. Pedro (Brazil) 63%

NorteShopping (Portugal) 56%

Plaza Éboli (Spain) 43%

* Airone in Italy, which achieved a recyclingrate of 71%, was not included here for thereasons explained in the Data Qualifying Note.

Data Qualifying NotePlease see the Note for the waste recycling KPI for the reasons why three centres are excluded from the reported data.

This is a new internal Sonae Sierra KPI – which is in line with the long term objective to reduce waste to landfill. Withthe data available from 2006, it is not possible to determine this indicator by country, so it is presented only for 2007.

Methodological NoteThe same data gathering is used as for waste recycling indicator, but the KPI is the proportion of all waste that is sentto landfill – by weight.

KPIProportion of waste (by weight) that is sent to landfill

55%




WASTE

KPITotal weight of waste by type and disposal method (GRI EN22)

Weight of Weight ofwaste in waste intonnes; tonnes;

Waste by type and disposal method 2006 2007

Composting (of which hazardous) 1,247 (0) 1,905 (0)

Re-use (of which hazardous) 0 (0) 0 (0)

Recycling (of which hazardous) 9,684 (0) 12,213 (32)

Recovery (of which hazardous) 915 (0) 806 (0)

Incineration or used as fuel (of which hazardous) 4,100 (0) 4,176 (0)

Landfill (of which hazardous) 22,522 (0) 23,448 (0)

Deep well injection (of which hazardous) 0 (0) 0 (0)

On site storage (of which hazardous) 0 (0) 0 (0)

Other – mostly waste that is sent to specialist facilities, where the waste isdisassembled and then sent to different disposal routes (of which hazardous) 115 (24) 106 (14)

Total (of which hazardous) 38,608 (24) 42,654 (45)

Data Qualifying NotePlease see the Note for the waste recycling KPIon page 53 for the reasons why three centresare excluded from the reported data.

Methodological NoteThe EU waste catalogue has been used todetermine the classification of hazardous andnon-hazardous waste.

The conversion factors from litres to tonnesused are: Sanitary waste 0.00025; Residuefrom petrol interceptors; 0.001; Residue fromcooking fat separators 0.0008.

The method of waste disposal has beendetermined in some cases directly by thecentre management (e.g. waste recycled), andin other cases by organisational defaults of thewaste disposal contractor (e.g. waste which issent to waste transfer stations in Spain). Themethod for assessing the final destination ofwaste in Spain has improved, so the amountof waste reported under the ‘other’ category isnow smaller than last year and consists mostlyof just waste that is sent to specialist facilities,where the waste is disassembled, treatedbefore final disposal. In 2007 a conservativeassumption was made, in that the waste sentto municipal facilities in Spain was consideredto have landfill as the final destination. 2006data has been readjusted in accordance withthis assumption and updated in this report. Inreality, some of this waste may in fact beincinerated or recycled.

Comment

Sierra continues to concentrate efforts on incentivising higher levels of wastesegregation of a broad range of waste types in order to send waste to routesat the upper end of the waste hierarchy. The absolute increase in total wasteproduced (again, largely due to the portfolio growth) is somewhat compensatedby with the increase in recycling by a third and the increase in composting byover fifty percent. Sonae Sierra strives to reduce the quantities sent to landfillbut for mixed waste we are dependent on third parties facilities and in factthere are still few authorised incineration with energy recovery or compostingplants that enables Sierra to easily improve the recycling and reducing wastesent to landfill.

We set ourselves 7 Waste targets for completion during 2007. The chartsummarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Waste targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%

7


CONTINUED



WASTE

KPIPortugal

Total waste recycled as a proportion of waste produced(% by weight)

2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 16 out of 17 owned centres under management for the entirety of the reporting year inPortugal. MadeiraShopping was excluded due to the fact that waste data from this centre was considered unreliable.

Methodological NotePlease see the note alongside the global waste recycling indicator on page 53.

Comment

Recycling rates have steadily increased in the last five years, now reaching 38%. Eventhe centres with high recycling rates in 2006 made improvements. 10 out of 17centres recycled a greater proportion in 2007 and three of them are ranked amongstthe best five across the whole portfolio. The country performance is still driven mainlyby NorteShopping, a centre with a long history of waste segregation including theextensive organic waste sent to composting.

Data Qualifying NoteThis indicator covers 10 out of 11 owned centres under management for the entirety of the reporting year in Spain.Avenida M40 was excluded because as it had not provided the last three months of 2007 data in time.


Comment

Steady improvements are also visible for the Spanish centres, now with 30% recyclingrate, mostly drive by Plaza Éboli, Valle Real and La Farga shopping centres. Greaterrecycling is most likely a consequence of infrastructure investments and actions toincrease the awareness among employees, tenants and visitor as to the importanceof recycling.

19

22

27

34

38

KPISpain


2003 Not known

2004

2005

2006

2007

19

21

26

30

KPIItaly


2003

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers 1 out of 2 owned centres under management for the entirety of the reporting year in Italy.Airone was excluded because it also manages hypermarket waste which enables the centre to achieve a higherrecycling rate which is not comparable to the performance of other centres. In 2007 the recycling rate achieved atAirone was 71%.


Comment

Valecenter is the only property represented here with 31.4% of its 284 tonne totalbeing recycled ‘paper & cardboard’ and a further 4.1% recycled ‘mixed packaging’.

0

0

36

Not applicable

Not applicable


CONTINUED



WASTE

Data Qualifying NoteThis indicator covers the 1 owned centre under management for the entirety of the reporting year in Greece. Thiscentre opened in October 2005.


Comment

Mediterranean Cosmos, the only centre represented in Greece, should be congratulatedfor increasing recycling to 22% in 2007 compared to only 9% in 2006. Whilst thereis clearly room for further improvement, this performance goes some way todemonstrating the effort that new centres put into trying to make conservation ofresources and recycling part of their local action as well as Sonae Sierra’s global strategy.

KPIGreece


2003

2004

2005

2006

2007

0

9

22

Not applicable

Not applicable

KPIBrazil


2003 Not known

2004

2005

2006

2007

Data Qualifying NoteThis indicator covers all 9 owned centres under management for the entirety of the reporting year in Brazil.


Comment

Brazilian centres as a whole recycle 37% of their waste, with six out of nine centresincreasing their recycling rate in by more than 5 percentage points in one year. Theseresults are mostly driven by the impressive recycling rate of 63% at Parque D. Pedrofor this year, largely due to the continued and innovative recovery of organic waste fromkitchens to be recycled for animal food and organic waste from gardens, orange peeland coffee waste to be composted. Also significant is the effort and commitment ofnew centres, like Boavista Shopping and Shopping Plaza Sul, where to recycling rateshave jumped by more than 10 percentage points up to 24% and 28%, respectively.

22

26

35

37

KPIPortugal

Proportion of waste (by weight) that is sent to landfill (% by weight)

44%

Data Qualifying NoteThis indicator covers 16 out of 17 owned centres under management for the entirety of the reporting year inPortugal. MadeiraShopping was excluded due to the fact that waste data from this centre was considered unreliable.





WASTE

KPIItaly


64%

Data Qualifying NoteThis indicator covers 1 out of 2 owned centres under management for the entirety of the reporting year in Italy.Airone was excluded because it also manages hypermarket waste which enables the centre to achieve a higherrecycling rate which is not comparable to the performance of other centres. In 2007 the recycling rate achieved atAirone was 71%.


KPIGreece


78%

Data Qualifying NoteThis indicator covers the 1 owned centre under management for the entirety of the reporting year in Greece.


KPIBrazil


63%

Data Qualifying NoteThis indicator covers all 9 owned centres under management for the entirety of the reporting year in Brazil.


KPISpain


65%

Data Qualifying NoteThis indicator covers 10 out of 11 owned centres under management for the entirety of the reporting year in Spain.Avenida M40 was excluded because as it had not provided the last three months of 2007 data in time.




WASTE

At ArrábidaShopping, Portugal, a home made composting system was implemented in March, enabling organicwaste produced in the shopping centre to be composted and used by the garden managers on the shopping centregreen areas. This system has so far worked perfectly without any potential problems occurring such as odours orrodents, and it has enabled an estimated 10 tonnes of waste averted from transportation and disposal inlandfill sites in approximately 7 months. Around 2.5 tonnes of compost has been generated for use in thegardens.

Case StudyWaste composting system at ArrábidaShopping in Portugal

Shopping Penha in Brazil launched an Environment Marathon event to raise awareness on waste. The shoppingcentre team visited schools from the neighbourhood to inform students about the importance of taking care of the environment and of the environmental procedures followed at the shopping centre. Students were thenencouraged to bring their waste to the shopping centre for disposal in the specific waste recycling containerswhich were set up for the event. A total of 2092 students participated, disposing of 2,605 kg of plastic andmetal waste material! The waste was sold for recycling and the money was given back to the winning schoolthat collected the most recyclable waste and brought it to the centre.

Another innovative waste project implemented at Shopping Penha during 2007 was the re-use of demolition scrapfrom refurbishment works which took place in some of the centre’s shops in order to build a waste storage space.This meant that not only did Shopping Penha contribute to preserving the environment by avoiding sending wasteto landfill but also solved the problem posed by the lack of proper storage space for hazardous waste which isstored temporarily at the centre. A total of 245.56kg of material was re-used, including gates, railings, beamsand roof material, implying a cost saving of an estimated €356 (amount saved by not disposing of the wastein landfill and by not having to buy new materials).

Case StudyEnvironment Marathon and Waste Re-use at Shopping Penha


Land Use

ContextEcosystems and species are in decline all over the world, mainly as a result of increasing land use changes resultingfrom human activities such as agriculture and urbanisation. Property development, among these activities, takes landout of its natural functions and prevents the soil from being preserved in its natural condition.

Business challenges and opportunities associated with Land Use

Challenges Opportunities

• Societal norms increasingly requirestringent protection of the natural

environment (National Plans, NGOcampaigns);

• Peer group companies increasinglyrecognise business benefits of conservingbiodiversity, as all companies rely onfunctions performed by natural systems.Innovative concepts such as ‘green roofs’are more common in the industry due toadditional climatisation benefits;

• Reputational and financial risk of non-compliance with pollution legislation

(e.g. EU Environmental Liability Directiveand subsequent national laws).

• Use of previously developed or‘brownfield’ land facilitates the obtention

of planning permission, and reduces risk ofnegative response from the local community,

thus enhancing corporate brand andreputation;

• Use of previously developed land may resultin cost savings to the company as some

necessary components of urban infrastructureare already in place;

• Environmental and reputationalopportunities of remediating previously

polluted land, and bringing it back tolife through careful restoration

techniques.



LAND USE

Our StrategySonae Sierra has already developed mechanisms and an overall strategy for addressingboth business and environmental concerns in relation to the land use impact area,including:

• Environmental Due Diligence (EDD) procedures applicable to all new potentialacquisitions, aimed at identifying and quantifying risks due to historicalcontamination, and providing the necessary funds for adequate remediation and monitoring when necessary;

• Execution of a voluntary environmental impact evaluation (known internally as a Preliminary Environmental Evaluation (PEE)) for every approved investment,whenever an Environmental Impact Assessment is not required by law;

• Environmental Standards for Retail Developments (ESRD) to be followed in theproject design and development phase. These include many requirements intendedto reduce or mitigate negative environmental impacts associated with Land Use,including conservation of previously identified premium ecological features,creation of sufficient open space, and use of surfaces that promote maximumrainwater infiltration; and

• Implementation of an Environmental Management System (EMS) specific for theconstruction works in each project, which guarantees the impact minimisationduring the construction phase. Since 2004, all projects have obtained ISO 14001certification for environmental management on the construction site.

We have defined a long term objective and targets in relation to Land Use, focusingon the aspects of prioritising the use of previously developed land for newdevelopments, biodiversity and habitat and environmental awareness-raising.

LONG TERM OBJECTIVE

• To promote the use of previously developed land for new shopping centre projects and to protect and enhance biodiversitywherever possible.

TARGET FOR 2008

• To achieve 100% compliance with execution of Preliminary Environmental Evaluation.



LAND USE

STRATEGIES, CURRENT ACTIONS AND FUTURE PLANS FOR MANAGING IMPACTS ON BIODIVERSITY

At the level of corporate environment strategy, Sonae Sierra considers biodiversity as a key element within the Land Use impactarea. An overview of our principal impacts on land use, actions taken to mitigate these and a summary of our progress to date is publicly reported on the Environment Portal, see www.environment.sonaesierra.com/Public/Normal/en-

US/environmentissues/landuse.aspx.

Within the context of our business activities as a shopping centre developer and manager, our most fundamental impact onbiodiversity is the withdrawal of land from natural functions for property development. This occurs to a more significant degreeon projects sited on “Greenfield” or previously un-developed land than on projects sited in urban and/or previously developedareas. Sonae Sierra’s strategy for managing impacts on biodiversity is therefore based on the rigorous requirements of the NewBusiness environment procedure and the Environmental Standards for Retail Developments (ESRD), both of which are executedduring the development phase.

The New Business environment procedure involves the obligatory commission of a Preliminary Environmental Evaluation (PEE) for all Sonae Sierra shopping and leisure centre projects for which the performance of an Environmental Impact Assessment (EIA)is not required by law.15 The PEE is preferably carried out before the commencement of the design activities. The evaluationidentifies, among other aspects, the possible impacts of project design and construction on biodiversity at the site in questionand provides suggestions as to how Sonae Sierra might mitigate these impacts. Sonae Sierra then monitors the implementationof these recommendations with the aim to ensure that impacts on biodiversity are mitigated as far as possible.16

The Environmental Standards for Retail Developments (ESRD) have the overall objective of ensuring that environmental impactsare mitigated during the development phase and that the building itself is designed to maximise eco-efficiency.

Concerning biodiversity in particular, the ESRD establishes that:

• When selecting a new site for development, preference should be given to previously developed land, includingcontaminated and/or derelict sites which may require remediation;

• All existing significant ecological features should be protected from damage during construction works; preserved andmaintained thereafter (this includes all healthy trees with a trunk over 100 mm in diameter, hedges, ponds, streams, etc.);

• Ecological advice from a qualified and independent ecological consultant should be sought as early as possible and beforefinal design arrangements are agreed in order to determine how the ecological aspects of the site may be enhanced;

• Native plants species should be specified for use on all of the development’s outdoors ‘soft’ landscaping works, andpreference should be given to the use of “green barriers” such as hedgerows rather than fences;

• Flat roofs (i.e. roofs with gradients of no more than 5 degrees), which are not used for any specific purpose (e.g. carparking, pedestrians use, housing of plant rooms, etc.), should be considered for design as green roofs.

In terms of future plans for managing impacts on biodiversity, Sonae Sierra recently developed and approved a long term landuse strategy which includes proposed targets and actions relating to biodiversity to be implemented during the next 5 years(2007 – 2012).17 It includes measures such as to develop a database of native trees associated with developed “greenfield”projects during 2008.

15 Excluded from this requirement is the acquisition of existing developments if no significant design changes or construction/expansion activities are plannedthat can negatively impact the environment.

16 Sonae Sierra has not developed a methodology for establishing risk exposure to biodiversity.17 This strategy was not influenced by national regulations, although the related strategies and Directives established by the European Union were reviewed and

referred to within the document. However, this strategy has been developed in accordance with the impacts and opportunities presented by the specificnature of Sonae Sierra’s activities.

http://www.environment.sonaesierra.com/Public/Normal/en-US/environmentissues/landuse.aspx

http://www.environment.sonaesierra.com/Public/Normal/en-US/environmentissues/landuse.aspx



LAND USE

Our Performance in 2007In 2007, all of our completed projects took place on previously developed sites.

During the reporting period, we undertook several measures to restore habitats at three different locations:

At Parque D. Pedro in Brazil, there is an ongoing conservation project in place in the area surrounding the shopping centre (73,400m2) involving gardening activities,pest control and the planting of new samplings. External professionals from ArboreaAmbiental consultants are involved in auditing the measures undertaken and providetechnical assistance.

At our project under development in Le Terrazze, Italy, remediation works have beenunderway to decontaminate the site of a former oil refinery in order to enable theconstruction of a new Sierra shopping centre and a park. The total area affected is of approximately 60,000m2. The remediation works, that are being carried out bythe seller of the property, were evaluated by Sonae Sierra and are being monitored byan external company (EcoAppraisal, of Tauw Group).

At Manauara Shopping development project in Brazil, buritis trees have beenprotected and restored on the development site, around the area where the shoppingcentre will be constructed (the size of the area restored is of 3349m2). The process ofrestoration of the buritizal area is complete, although monitoring will continue for anundetermined period. The following measures were taken to ensure the protectionand restoration of the buritizal area:

• Delimitation of the preserved area to ensure protection from construction activities;

• Planting of samplings in the interior of the preserved area (the samplings weretaken out from the surroundings of the protected area);

• Continuous monitoring to ensure that the buritizal has the right conditions forgrowth (light, moisture, etc.); and

• Signposting to make known that this is a protected ecological area.

The buritizal restoration programme was approved by the Institute of EnvironmentalProtection of the Amazon and monitored by and external independent company(Ambiental Amazônia, Consultoria e Assessoria, Lda.). This action also constitutes aneffort to manage biodiversity risks and mitigate impacts on this particular project dueto it being developed in a location where the removal of vegetation and disruption to some ecosystems is inevitable (see comments on page 64).

Sonae Sierra does not have partnerships with third parties to protect or restore habitatareas distinct from where the organisation has overseen and implemented restorationof protection measures.

In terms of awareness-raising in our shopping centres under management, TivoliShopping (Brazil) set up a nursery garden project providing training to students oflocal schools about the importance of planting and protecting trees in association with a local NGO.




LAND USE

Data Qualifying NoteThis indicator covers the three projects completed during 2007: 8a Avenida in Portugal, El Rosal in Spain and Alexa inGermany.

Methodological NoteThis indicator has been calculated as the total site area in m2 across all projects completed in 2007 considered toconstitute previously developed land, divided by the total site area in m2 of these 3 projects and multiplied by 100 soas to present a percentage.

Previously developed land is considered to be land that previously contained buildings, roadways, parking lots or anyother infrastructural alteration developed as a result of human activities (except for agricultural activities).

Comment

While it is not always possible for us to avoid building on “greenfield” sites (i.e.,undeveloped land, either used for agriculture or left to nature), we do seek to giveprivilege to sites which were previously developed, thus mitigating our environmentalimpact during the construction phase. In 2007, all our completed projects weredeveloped on previously developed land.

KPIProportion of completeddevelopment onpreviously developed land (by area)

100%

KPILocation and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversityvalue outside protected areas (GRI EN11); and Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas (GRI EN12).

It is unusual for Sonae Sierra to develop on greenfield land, since the Company tends to site its shopping centres in urban areaswhich have already been built upon. Therefore, during 2007, Sonae Sierra did not own, lease, manage or acquire any landlocated in or adjacent to protected areas or areas of high biodiversity value outside protected areas.

Sonae Sierra is currently developing a new shopping centre on a site in Manaus, Brazil. This site is not located in or adjacent toa protected area or previously protected area, however, a stream runs through the site which must be preserved in accordancewith the municipal law.

The construction works at Manaus have now begun, and measures have been implemented with the aim of mitigating theimpacts caused by the removal of vegetation and disruption to ecosystems which are a consequence of the works (see page 64).To date, no other significant impacts have occurred other than the use of construction machinery and the inevitable reductionof some species and habitat.



LAND USE

We set ourselves 2 Land use targets for completion during 2007. The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Land use targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%

2

Considering the importance of palm trees in terms of livelihood and landscape, Sierra commenced a project toprotect, maintain and enhance part of the palm tree population (in particular the buritis, or Mauritia flexuosa L. f )located on the development site of Manauara Shopping.

The buritizal palm tree groves constitute an ideal habitat for wildlife, however, in recent years the area has sufferedfrom human activities such as disposal of rubbish and former use for recreation activities. There are currently 256remaining buritis trees and the buritizal ecosystem has deteriorated. It is in this context that Sierra is seekingmeasures to protect the area as far as possible from the impacts of the construction works, promote theregeneration of this ecosystem and the preservation of biodiversity whilst at the same time enabling the creation of a space in which visitors can appreciate the natural environment. Unfortunately the construction process willrequire 35 existing trees to be removed, however 7 will be replanted and a further 420 samplings (370 buritis and50 açaí palm species) have already been gathered and replanted around the site.

Case StudySustaining the palm tree population at Manauara Shopping in Brazil


Business Chain – Suppliers

ContextSonae Sierra spent €60 million18 in payments for general supplies and services in 2007 alone. As a property developer and manager, we rely on the services of many contractors through the phases of the property process.Our suppliers’ abilities to manage their CR impacts consequently also affect our own CR performance. Furthermore,the nature of some of the products we procure implies further challenges – the extraction of raw materials forbuilding can be harmful to the environment if not carried out in a sustainable way, and may put workers’ lives andhealth at risk under poor labour conditions.

Business challenges and opportunities associated with Suppliers

18 Consolidated management figure (in accordance with % of ownership), including payments to suppliers and services and other operating costs.

• Growing stakeholderexpectations for companies to

implement responsible procurementpractices and engage with

suppliers/contractors to address theirown environmental and social impacts.

• Suppliers’ performance in terms of CRcan impact upon our own, especially inrelation to environmental and safety &

health issues.

• We can improve our own CRperformance, reduce risks in thesupply chain and propagate good

practices in relation to issues such asenvironment and safety & health byengaging with suppliers on CR.




BUSINESS CHAIN – SUPPLIERS

Our Performance in 2007In 2007 we undertook steps to implement our Responsible Procurement strategy by integrating CR considerations into our Service Suppliers Management Proceduresand developing criteria to ensure that suppliers’ performance in relation to social andenvironmental impact areas is taken into account prior to hiring, whilst appointing the contract and during evaluation stages.

We also continued to engage with both our resident service suppliers and contractorson development projects in relation to Safety & Health and environment issues:

• We achieved our highest construction recycling rates on completed projects to date– 92% at 8a Avenida in Portugal and 100% at El Rosal in Spain (see chart on thefollowing page); and

• We continued to implement the Safe Practice Index (SPI) tool across developmentprojects to assess the extent to which contractors’ personnel are committed to and aware of safety issues.

Our StrategyIn 2007 Sonae Sierra developed and formally approved a Responsible ProcurementPolicy with the aims to privilege the use of environmentally-friendly materials,integrate CR-related criteria into the Service Suppliers Management Procedures and engage with our suppliers with a view to encouraging them to improve their CR performance. The Policy document can be downloaded here:www.sonaesierra.com/Web/en-GB/corporateresponsibility/socialapproach/112/42/default.aspx

Our strategy for managing the suppliers impact area will largely be based around theprinciples set out in our Responsible Procurement Policy, whilst we will also continue toengage with our suppliers on the specific issues of Safety & Health and Environmentthrough procedures such as the Safe Practice Index and Safety Preventive Observations(see page 101 and 102 for more details), Environmental training and the ESRD.

TARGETS FOR 2008 – SUPPLIERS

• To ensure that 100% of bids and contracts signed during 2008 with main service suppliers (contracts above €2 million)include clauses for minimum requirements in relation to safety, social and environmental standards.

• To ensure that 100% of bids and contracts signed during 2008 with main service suppliers (i.e. cleaning, security, maintenanceand waste removal) include clauses for minimum requirements in relation to safety, social and environmental standards.

• To increase the proportion of paper purchased from recycled sources for use in Sonae Sierra offices in Spain, Germany,Greece, and Romania to 75%.

http://www.sonaesierra.com/Web/en-GB/corporateresponsibility/socialapproach/112/42/default.aspx


CONTINUED




Data Qualifying NoteThis indicator only covers Portugal as data from other countries where Sierra operates could not be verified.

Methodological NoteThe average number of days within which suppliers are paid has been calculated using a simple (mean) average ofthe number of days between the date of invoice and date of payment for all Sonae Sierra Portugal suppliers. Itshould be noted that for some of the most representative suppliers in Portugal, the number of days was countedfrom the date on which the service was completed rather than the date that the invoice was issued.

KPIConstruction recyclingindicator* (% of totalwaste sent to recyclingor recovery, completedprojects)

RioSul

8a Avenida

El Rosal

Data Qualifying NoteThis indicator covers 2 out of 3 projects completed during 2007, due to the fact that evidences could not be providedto support the verification of the data from Alexa in Germany. RioSul Shopping, a project completed in 2006 inPortugal, has been included in the chart as a comparator.

Methodological NoteThe construction recycling indicator is calculated as the sum of waste (in tonnes) sent to recycling or re-use at eachindividual project completed during 2007, divided by the sum of waste (in tonnes) produced at each respectiveproject, multiplied by 100 in order to generate a percentage. Waste production and management is monitored andrecorded on a monthly basis at each project, from the start of the construction works until their end during thereporting year. This indicator covers waste recycling for the whole of the construction period.

Comment

Opportunities for recycling vary according to the different sites where our projects arelocated.

Recycling rates achieved during 2007 are particularly high; this can be attributed tothe increasing effort from the project teams and market maturity in terms of optionsand service providers available to undertake waste recycling. Furthermore, waste re-use is being implemented more consistently as an on-site practice and this contributesto the reduction of the amount of final waste.

90

92

100

* Recycling in the context ofconstruction projects does include re-use.

KPISimple average (notweighted) of main groupsof suppliers averagepayment time in numberof days (Portugal only)

31

KPIConstruction waterindicator (m3/€000construction cost,completed projects)

RioSul

8a Avenida

El Rosal

Data Qualifying NoteThis indicator covers 2 out of 3 projects completed during 2007, due to the fact that evidences could not be providedto support the verification of the data from Alexa in Germany. RioSul Shopping, a project completed in 2006 inPortugal, has been included in the chart as a comparator.

Methodological NoteThe construction water indicator is calculated as the total water consumed at each individual project completedduring 2007, divided by the total construction cost associated with each respective project. Water consumption ismonitored and recorded on a monthly basis at each project, from the start of the construction works until their endduring the reporting year.

Comment

There is very little variation between the construction water indicator values of the3 projects referred to. We continually seek to ensure careful water management ondevelopment projects and raise awareness among staff and contractors.

0.32

0.27

0.33





KPIConstruction electricityindicator (kWh/€000construction cost,completed projects)

8a Avenida

El Rosal

Data Qualifying NoteThis indicator covers 2 out of 3 projects completed during 2007, due to the fact that evidences could not be providedto support the verification of the data from Alexa in Germany. There is no indicator available from 2006 to provide acomparator.

Methodological NoteThe construction electricity indicator is calculated as the total electricity consumed at each individual projectcompleted during 2007, divided by the total construction cost associated with each respective project. Electricityconsumption is monitored and recorded on a monthly basis at each project, from the start of the development worksuntil their end during the reporting year.

8.17

36.44

We set ourselves a total of 4 Suppliers targets for completion during2007. The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Suppliers targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%3

1




We seek to encourage our service suppliersto adhere to our CR-related policies andprocedures both during the development andproperty management phases. At our centresunder management, our resident servicesuppliers (such as cleaning and maintenancesuppliers) are provided training on Safety &Health and Environment issues, often with thevery positive consequence that suppliercompanies begin to replicate these practiceswithin their own organisations.

Friengineering, the maintenance servicesupplier at Parque D. Pedro in Brazil, provide agood example.

Sonae Sierra has now developed a Suppliers’ engagement plan with the aim of encouraging our existing repeat suppliers to improve further their CR performance. The implementation ofthis plan will commence in 2008.

Case StudyHow Sierra’s CR practices can influence suppliers: Friengineering in Brazil

Fairtrade is a trading partnership based on dialogue, transparency and respect to stimulate greater equality ininternational trade.

In September 2007, Sonae Sierra’s offices in Athens organised a fairtrade event, in which fairtrade products wereoffered during a coffee break prepared by staff. The products were very popular, and based on feedback from theevent, the offices are considering replacing their regular products with fairtrade products, in accordance with thecompany’s commitment to corporate responsibility.

Case StudyFairtrade event at Athens offices in Greece

Lesson to be learnt

At CoimbraShopping, in Portugal, we received a fine during 2007 to the value of€4,850 due to the fact that one of our waste service suppliers was not authorised in accordance with the law. Through this experience we learnt the lesson that wealways need to ensure that our suppliers are complying with the law and with Sierra’s required standards. We hope that further engagement with our main servicesuppliers will help us to achieve this.

“”

Our team didn’t used to have in mind aprocess for correctly separating wastegenerated by maintenance works, but now this is being applied. Organic andrecyclable waste is now being separated and disposed of correctly in accordance withthe process defined by the shopping centre.Furthermore, the implementation of Sierra’sSafety & Health Policy and objective toensure zero accidents meant that new safetymeasures were adopted. Our staff are nowmore aware of these issues.

Marcos Greghi, the Friengineering maintenance engineer atParque D. Pedro, and António Borrego, the General Managerof the company.


Business chain – Tenants

ContextCustomer satisfaction is a crucial factor in ensuring any company’s success. For a shopping and leisure centredeveloper and manager such as Sonae Sierra, engagement with tenants, feedback from visitors and openness to theirsuggestions are vital components for the creation and maintenance of a centre which is stimulating and pleasant towork, shop and relax in.

Moreover, our relationship with our tenants is also fundamental in ensuring that our shopping centres operate in asustainable way. It is to this end that we seek to engage with our tenants on environmental and safety & healthissues through practices such as the Safety Preventive Observations (SPOs), regular meetings with a focus on CR andother awareness-raising and training activities. We have a policy commitment to deliver a high quality service andexperience to our tenants, and proactively engage with them on environmental and safety concerns.

Business challenges and opportunities associated with Tenants

• Tenants’ businesses underpinSierra’s own business success so

engaging with them, and ensuring thatwe are responsive to their needs and

concerns, is a critical aspect of ourservice provision.

• To be recognised as the bestquality manager.




BUSINESS CHAIN – TENANTS

Our Strategy and Management ApproachIn the past few years we have pursued various initiatives to strengthen our tenants’commitments in terms of CR, involving direct engagement with our tenants on issuessuch as Safety & Health. We continue to engage with tenants at our monthly Safety &Health meetings organised at all our shopping centres, S&H training sessions includingemergency drills practices and Safety Preventive Observations (SPOs). Furthermore, weundertake annual tenant satisfaction surveys in all our owned shopping centres withthe aim of developing continuous improvement in tenant satisfaction levels.

We recently updated our tenant contracts to include new clauses obliging our tenantsto comply with our CR Policy, and introduced mandatory standards relating to safety &health and updated the ones related with environmental issues in our shopping centreregulations. In relation to the environment, these include, for example, the dutyshopkeepers to participate in the identification of environmental aspects to consider inthe shopping centre’s operation, to abide by the shopping centre management’sdecisions in terms of environmental management and to instill in their employees andcustomers a common sense of responsibility for the protection of the environment.

Organisational responsibility

Ultimate responsibility for Tenant satisfaction and other related Tenant aspects at thehighest level is divided among the following persons:

• Sonae Sierra Board Director responsible for Property Management and Leasing in Europe;

• The Sierra Board Director responsible for Key Accounts, who has ultimateresponsibility for Sonae Sierra’s 30 top Tenants; and

• The Chief Executive Officer (CEO) of Sonae Sierra Brazil.

Responsibility is divided at the management level between the Heads of PropertyManagement in each country of operation. The Heads of Property Management, in turn, supervise the Operations Manager, the Leasing Manager and the MarketingManager in each country. Reporting to the Operations Managers (either directly orthrough a Regional Manager) are the Shopping Centre managers, who takeresponsibility for managing the day to day relations with tenants. Sonae Sierra also hasa centralised Leasing Team in each country, which takes responsibility for the leasingof the vacant shop units. The Leasing Team carries out the commercial negotiationswith all tenants in their country.

Training & Awareness

At Sonae Sierra, we do not provide specific training aimed at improving tenantrelations, however, we do provide consistent training to new members of staff toenable them to get to know tenant companies and key contacts. In general, trainingrequirements are determined on an individual basis through annual feedback meetingsbetween managers and staff. Awareness-raising about Tenant Satisfaction, on theother hand, is integral to our monitoring and follow-up procedures (see for moredetails), as the results of the Tenant Surveys are made known to each team in eachshopping centre. The teams must then develop actions to correct any weaknessesdetected. Furthermore, Sierra carries out an annual evaluation of each CentreManager, which takes into consideration results achieved in terms of Tenant Satisfactionand the corrective measures implemented in response to the Tenants Survey.




Monitoring & Follow-up procedures

Tenant survey and follow-up action plans

We carry out an annual Tenant Survey at all our shopping centres in order to evaluatetenant satisfaction and gain feedback in relation to aspects including operational factors(e.g. temperature, signage, etc.), satisfaction with the shopping centre management,marketing events, communications and our Corporate Responsibility programme.The results of the surveys are analysed at both shopping centre and country level andcorresponding action plans are developed, per shopping centre, in order to ensurethat improvements are made in areas which did not receive good feedback. Theseaction plans are then monitored to ensure that corrective measures are implemented.By way of example, at Estação Viana in Portugal we reinforced the 1st Aid Roomsignage so that tenants are aware of its existence and we have changed operationalprocedures to facilitate tenants’ access to the centre when it is closed to the publicin response to feedback received in the tenant survey regarding these issues.

Effort ratio analysis

The “Effort ratio” refers to the ratio of rents plus common charges paid by the tenantdivided by the sales they achieve. We regularly monitor the effort ratio of our tenants,comparing the performance of different tenants with the same kind of activity and bythe same brand units in other shopping centres. If we detect that a tenant has a veryhigh effort ratio, we arrange a face-to-face meeting with the store management toseek to understand the reasons for this and if possible help the tenant to find asolution. This monitoring procedure basically constitutes a pro-active letting approach.

Targets

For 2008, we have defined and approved two targets to drive continued improvementin performance in this area. We have not set ourselves long-term goals in relation toTenant satisfaction and related aspects; however our core commitment continues tobe to deliver a high quality service to our tenants.

Our Performance in 2007Key successes and shortcomings in 2007

During 2007, we pursued various initiatives to strengthen our tenants’ commitmentsin terms of CR, involving direct engagement with our tenants on issues such as Safety& Health.

• We continued to engage with tenants at our monthly Safety & Health meetingsorganised at all our shopping centres, S&H training sessions including emergencydrills practices and Safety Preventive Observations (SPOs) and, as part of a newinitiative, launched the PERSONÆ Best Tenant Award (read more on page 111).

• With the aim to ensure high levels of tenant satisfaction, we developed actionplans at all shopping centres and for all countries of operation in order to addressareas of weakness identified in the annual tenant surveys.

Major changes to systems or structures in order to improve performance

• There were no major changes in 2007 in Europe. In Brazil, the MarketingDepartment implemented the standardisation of the customer service system toimprove the quality of customer service (for visitors and tenants).

TARGETS FOR 2008 – TENANTS

• To achieve an average tenant satisfaction level of 3.5 or above in each Sierra owned shopping centre;

• To achieve an average tenant satisfaction level of 4 or above in at least 80% of the Sierra owned shopping centres.


CONTINUED




Best centres*: Tenant satisfaction

Serra Shopping (Portugal) 5.0

AlgarveShopping (Portugal)GaiaShopping (Portugal) 4.8Centro Colombo (Portugal)

* Here we refer to 4 centres, rather than 3, since 3 centres achieved the samesecond best tenant satisfaction index result at 4.8.

Tenant satisfaction index

4.0 Sierra Global Tenant satisfaction index as derived from two questions: relation with the SierraManagement Team and degree of satisfaction with Sierra [For both questions, the possible evaluation is:Not satisfied (1), (2), (3), (4), (5), Very satisfied (6) or No opinion (9)]. This indicator is the averagesatisfaction index of those achieved in each country.

Practices related to customer satisfaction, including results of surveys measuring customer satisfaction (GRI PR5)

Sonae Sierra gathers information about its customer satisfaction using two different studies:

• Tenant’s survey – an annual study available in the tenant’s portal (Sierracentres.net), which the tenants present in eachSonae Sierra shopping centre in operation for at least 6 months respond to (unit shops that are leaving the centre up untilthe end of the survey field work are excluded). This survey evaluates various parameters of the shopping centres operation,including tenant satisfaction with the relation with the Sierra Management Team and degree of satisfaction with Sierra; and

• Mall Tracking – this survey is described on page 83, under the Communities impact area.

The Tenant’s survey is carried out through a questionnaire that is available in the tenant’s portal Sierracentres.net. There is aminimum response rate for the tenants’ survey and to achieve it, the management team of each shopping centre has theresponsibility to encourage tenants’ participation. Once completed, the survey is available in two forms: in the portalSierracentre.net and a global report produced after the end of the fieldwork (2 weeks). After the deliverance of the final report, the centre manager prepares an action plan, which takes into account the results of the study. It is possible to benchmark resultsthroughout the portfolio, and therefore detect best practices.

Differences between 2006 and 2007: Currently the Tenant’s satisfaction is based on the average between two questionsasked in the tenant’s survey (relation with the Sierra Management Team and degree of satisfaction with Sierra [For bothquestions, the possible evaluation is: Not satisfied (1), (2), (3), (4), (5), Very satisfied (6) or No opinion (9)]). In 2006, in Portugaland Spain, the Tenant’s satisfaction was only based on the “Satisfaction level with the management team of the shoppingcentre” in which the tenants rated from 0 to 4 according to their assessments. For the other countries (Italy, Greece and Brazil),the indicator that was used was the Occupancy Index. Considering this, both evaluations are not fully comparable.

The Tenant survey to evaluate performance in 2006, which was collected in 2007, covered 39 out of 40 owned centres whichwere under management for the entirety of the reporting year (the exception being Campo Limpo in Brazil, which opened onlyin November 2006).

KPI





KPIAverage occupancy index(% by Gross LettableArea (GLA))

95.5%(2006: 95.6%)

Data Qualifying NoteThis indicator covers all centres owned as on 31/12/07.

Methodological NoteThe occupancy index is calculated as the sum of occupied GLA in m2 across all Sierra owned centres, divided by thesum of total GLA in m2 of all Sierra owned centres and multiplied by 100 in order to generate a percentage.

Comment

Across the Sierra portfolio we continue to have very high levels of occupancy(consistently above 90%), which we consider to be an encouraging indicator of ourattractiveness as a landlord. The most significant factor affecting occupancy indices forSierra is where we have units in renovation which tenants are unable to occupy duringa given period.

We set ourselves 1 Tenants target for completion during 2007. The chartsummarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 tenants targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%

1


CONTINUED




KPIItaly


3.0

Data Qualifying NoteThis indicator covers the 2owned centres in Italy undermanagement for the entiretyof the reporting year.

The methodology used toderive the tenant satisfactionindex is explained on page 73.

KPIGreece


4.1

Data Qualifying NoteThis indicator covers the 1owned centre in Greece undermanagement for the entiretyof the reporting year.


KPIBrazil


4.3

Data Qualifying NoteThis indicator covers 8 out of9 owned centres in Brazilunder management for theentirety of the reporting year.Campo Limpo was notincluded since the shoppingcentre opened only inNovember 2006.


KPIPortugal


4.6

Data Qualifying NoteThis indicator covers all 17owned centres in Portugal undermanagement for the entirety ofthe reporting year.

The methodology used to derivethe tenant satisfaction index isexplained on page 73.

KPISpain


4.2

Data Qualifying NoteThis indicator covers all 11owned centres in Spain undermanagement for the entirety ofthe reporting year.

The methodology used to derivethe tenant satisfaction index isexplained on page 73.





KPIItaly

Average occupancy index(% by GLA)

76.6%(2006: 79.2%)

Data Qualifying Note/Methodological NoteThis indicator covers allcentres owned in Italy as on31/12/07.

The methodology used toderive the occupancy index isexplained on page 74.

KPIGermany


99.0%(2006: n/a)

Data Qualifying Note/Methodological NoteThis indicator covers allcentres owned in Germany ason 31/12/07.


KPIGreece


99.6%(2006: 98.3%)

Data Qualifying Note/Methodological NoteThis indicator covers the oneowned centre in Greece as on31/12/07.


KPIRomania


100%(2006: n/a)

Data Qualifying Note/Methodological NoteThis indicator covers the oneowned centre in Romania ason 31/12/07.


KPIBrazil


95.8%(2006: 94.0%)

Data Qualifying Note/Methodological NoteThis indicator covers allowned centres in Brazil as on31/12/07.


KPIPortugal


97.1%(2006: 97.9%)

Data Qualifying Note/Methodological NoteThis indicator covers allcentres owned in Portugal ason 31/12/07.


KPISpain


94.1%(2006: 95.8%)

Data Qualifying Note/Methodological NoteThis indicator covers allcentres owned in Spain as on31/12/07.


Comment

The occupancy index in Italy is lower in comparisonwith other countries due to the fact that 1 of our 2owned centres was undergoing refurbishment during2006 and 2007.




Pernambucanas, an anchor tenant at Parque D. Pedro (Brazil), speak about how they integrated the CR practicespromoted by Sierra at their shop.

Case StudyPromoting CR practices among tenants: the case of Pernambucanas, Brazil

“

”

During 2007 the shop underwent several changes with respect to social and environmentalmanagement issues. These changes were influenced by the actions promoted by the shoppingcentre in these areas.

For example, we now have containers to enable correct waste separation and we are trying toreduce waste production at source through our purchasing and a project to reduce the use ofplastic cups. Our employees participated in an environment marathon event in order to collectrecyclable materials from home for disposal in the recycling bins made available in theshopping centre. In addition to this, with the aim of conserving natural resources, we putawareness-raising stickers by all the light switches and sockets in the storage areas.

All our employees are encouraged to practicing safe behaviour as part of their daily routine.A safety engineer visits our shop 3 times a year in order to carry out a Safety & Healthassessment, indicating where improvements need to be made.

Social responsibility is also encourage among our staff, who do some hours volunteeringwork two days a week with a children’s charity.Cristiane Mazieiro, Manager of Pernambucanas, an anchor tenant in Parque.D Pedro (Brazil).


Communities (including visitors)

ContextThe development of shopping centres can receive a mixed reception from communities; on the one hand, they offernew opportunities of employment, can boost local economies and provide new services and facilities.

On the other, they may be perceived as a threat by local retailers or as a nuisance by neighbouring residents as theyincrease the circulation of traffic and noise. It is of utmost importance for our shopping centres to gain the supportand favour of local communities to enable the company to enjoy the benefits of an excellent reputation and tomaximise the number of visitors to the centre. It is our policy commitment to be sensitive to, and invest in, localcommunities (including visitors) in locations where we operate.

Business challenges and opportunities associated with Communities (including visitors)

• Policycommitment to supporting

local communities in areas wherewe invest;

• Peer companies increasingly seekingto engage with local communities,both at the development andmanagement stages;

• Community consultation increasesbuy-in for our schemes from local people,and speeds up the planning process;

Visitor satisfaction is paramount tothe continued financial

performance of ourshopping centres

• Community investment andcommunity engagement enhance

the reputation of the company andincrease number of visitors to shopping

centres.




COMMUNITIES (including visitors)

Our Strategy and Management ApproachWe have always sought to maintain strong links with local communities in thelocations where we operate. We invest in communities not only by making corporatedonations and sponsorship but also through staff volunteering activities in which ouremployees are encouraged to participate and are granted work time in which to doso. Our shopping centres themselves also provide a space in which we can encourageothers to support charitable causes by holding awareness campaigns and collectingdonations from visitors. Focusing on the theme of education, we also liaise with localschools to coordinate visits to our shopping centres in order to teach children aboutour environmental management practices.

We also aim to maximise the accessibility of our shopping centres to people withdifferent needs, through the implementation of the Global Accessibility Standard (ISO 17001). Certification has already been achieved at 2 centres in Spain and 4 in Portugal.


Operational responsibility for local communities and visitor satisfaction aspects lieswith our shopping centre Managers, supported by the central Marketing Department.

Training & Awareness

In 2007 training was given to marketing co-ordinators and the Operational Managerin Spain in relation to visitor satisfaction. This involved a presentation of the results ofthe Loyalty and Satisfaction Study undertaken in Spanish centres with an explanationof the methodology, the concepts and how the results of the survey can be applied in daily operations.

Monitoring & Follow-up procedures

At Sonae Sierra, we have programmes in place for assessing the impacts of ouroperations on local communities both prior to development, during the developmentprocess and whilst we are operating in the community. These programmes arestandard practice across all our operations.

Prior to entering the community (before initiating development) we undertake afeasibility study to enable us to establish the scale of the development and anassessment to define a balanced tenant mix in accordance with the consumercharacteristics of the residents within the catchment area. This study looks into thedemographics within the catchment area, the accesses, socio-economics indicators,and the existing and predicted competition, in order to obtain a general overview ofthe most significant aspects that play in favour or against the development of such ascheme. It also includes a consumer survey (Geotracking) which assesses where thereis a lack in commercial supply, the quality of existing supply and the current shoppingfacilities used by residents. The data is collected through telephone interviews toindividuals residing in the catchments area through a structured questionnaire. Thehouseholds are selected through a random methodology. In each household, theinquiry is selected through gender/age quotas which are proportionate to the sample.This study is applied to 100% of developments across the portfolio.




While operating in the community at shopping centres in operation, Geotrackingsurveys are carried out in order to analyse the impact of our shopping centres onconsumer habits within the catchment area. They allow the adjustment of themarketing strategy in order to optimise the shopping centre to its catchment area.These surveys are currently undertaken annually at all our centres in Portugal, Spain,Italy,19 Greece, Romania and Brazil, accounting for 77% of the owned portfolio. Thedata is collected through the same process described above. Sierra does not have anyprogrammes in place for assessing the impacts of our operations on local communitieswhen making decisions to exit a community, as to date no decisions to exit acommunity have been taken.

In terms of procedures relating to visitors, we undertake annual Mall Tracking surveysat shopping centres which evaluate aspects such as visitor profile, customer behaviour,customer service needs and satisfaction, means of transport and evaluation of eventsheld in the shopping centre. A more detailed explanation of the Mall Tracking surveyand other practices related to visitor satisfaction can be found on page 83, and the 2007visitor satisfaction indices on page 86. Visitor suggestions and complaints are monitoredusing different channels: Information Desk, Shopping Centre Management, Sierra website(www.sonaesierra.com), Sierra Environmental Portal website (www.environment.sonaesierra.com)and the Shopping Centres websites (www.sierracentres.com). These suggestions and/orcomplaints are then forward to the Shopping Centre’s Manager who will respond anddiscuss them with the responsible for the specific area. More recently, Sierra alsocreated an internal co-ordinator for Customer Care within the Marketing Department.

TARGET FOR 2008

• Invest 5% of shopping centre marketing budget in the community-related initiatives (centres under management and centresunder development).

19 This year no Geotracking survey was undertaken in either of the two Italian shopping centres owned by Sierra,in Valecenter due to the refurbishment and in Airone the promotional found was not sufficient to cover costs.

http://www.sonaesierra.com

http://www.environment.sonaesierra.com

http://www.sierracentres.com





• We continued to invest in the community, this year donating €512,796 and wedeveloped guidelines for future community investment;

• We launched our first Community Panel Project, at Dos Mares, Spain, with the aimof establishing a platform for engagement with members of the local community(see Case study);

• Our staff was involved in many volunteering activities throughout the year,supporting a variety of organisations across all countries of operation, among themthe Associação Criança e Consciência in São Paulo, Brazil, the Banco AlimentarContra a Fome, Life Service Movement and the Frei Gil Foundation in Portugal andthe Italian Environment Foundation in Italy. Moreover, on December 14th, 2007,Sonae Sierra organised its first Community Day with the theme Happy Child. AllSierra employees were invited to contribute to the well-being of disadvantagedchildren in communities where we operate by preparing and donating Christmaspresents;

• We welcomed 291 school visits at centres across the portfolio, including visits withan environmental theme during which children from local schools were shown theenvironmental management practices of the centres and taught about theimportance of environmental protection. At several of our shopping centres inPortugal we also welcomed visits from senior students of the Network ofUniversities of the Third Age; and

• We continued to implement the schools project at Parque D. Pedro in Brazil, withthe aim of raising young people’s awareness about the importance of addressingthe problems of modern society and how a positive corporate attitude can affectthe community. At Shopping Metrópole, also in Brazil, we continued the educationproject Metrópole Educa which offers to employees and their families who did notpreviously have the opportunity to do so to complete their compulsory education.


In Europe, responsibility for the co-ordination of all CR-related events in shoppingcentres was changed so as to be attributed to one person. In Brazil, the MarketingDepartment implemented the standardisation of the customer service system toimprove the quality of customer service (for visitors and tenants).


CONTINUED




Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting (GRI SO1)

Concern about the community is initially acted upon in the development stage when we carry out market studies that identifythe consumers needs in retail, services and leisure activities, in order to conceive a sustainable shopping centre which issimultaneously adequate to the market needs and to the existing retail offer.

In terms of environment, we always perform an Environmental evaluation to identify potential impacts and identify theminimisation measures recommended to minimise it. Those measures are implemented during the project and constructionphases and the objective is to achieve a reduction of the impacts (during construction and operation) and promote theenvironmental quality of the new shopping centre. The construction of a shopping centre presents a potential short termnegative impact on the environment, however Sonae Sierra’s shopping centres are developed on the basis of the ESRD,ISO 14001 environmental certification and workers safety best practices, minimising the impacts on site, surrounding areasand on the people that work on the construction stage.

The project can also generate an impact on the surrounding areas and accesses since the majority of the shopping centreprojects involve considerable improvements to the urban infrastructures that surround the scheme. These improvements arealways part of the base project and in some cases, are also part of protocols with local authorities.

During the operation stage, the shopping centre has four fundamental management systems: environmental, accesses, safety &health and operational management. Sonae Sierra’s Environmental Management System, was developed in order to minimiseenvironmental impacts and aims to a continuous improvement of the performance in this area, in particular, water, waste andenergy. Sonae Sierra is also implementing a certified global accessibility management system, ensured by the UNE 17001-2:2001standard, which concerns the good access of all visitors to all public areas, namely the ones with moving impairments.

The Safety & Health Management System (PERSONÆ project) emphasises on building a culture of prevention and anticipation ofaccidents at Sonae Sierra which will protect staff and everyone who is involved with the company. The project reaches outbeyond all levels of the company and fully integrates a wide cross-section of stakeholders – including staff, contractors, tenants,suppliers, visitors and the surrounding community.

Finally, the operational management system guarantees the shopping centre sustainable performance towards visitors andretailers. This system operates on general analysis of shopping centres performance indicators, surveys, technical operationalinformation, safety, among others.

The opening of a shopping centre generates direct and indirect jobs. A shopping centre itself has a local staff for the followingareas: management and maintenance, which are added to the retailers/stores employees. Besides that, a shopping centre, on aregional level, also increases service supplier’s activities such as safety, cleaning and technical services.

Some examples of engagement with local communities are:

• Visits from schools

• “Ponto electrão” Electronic picking program

• Kinder garden/Childcare “Bichinhos Carpinteiros”

• Events: “Eco miúdos” Environmental event; Partnership EDP/Sonae Sierra – Lamps exchange, etc.

• “Saúde no Centro” – Health in Shopping Centre

• Community Panel at Dos Mares.

In February 2008 Sierra will start a campaign for the collection and recycling of domestic vegetable oil used in collaboration withDos Mares, the city council of San Javier and sustainable development of the government of Murcia (info at www.separaryreciclar.com).The campaign is aims to reduce pollutants that are discharged daily into the sewer system and the public greatly promote theperformance of municipal wastewater treatment plants.

KPI

http://www.separaryreciclar.com


CONTINUED




Practices related to customer satisfaction, including results of surveys measuring customer satisfaction (GRI PR5)(including Visitor Satisfaction Index)

Sonae Sierra gathers information about its customer satisfaction using two different studies:

• Tenant’s survey, which is described in detail under indicator PR5 in the Tenants impact area section on page 73; and

• Mall Tracking, an annual study (or every two years depending of the shopping centres) applied to a sample of ourshopping centres visitors, which evaluate various parameters of the shopping centres operation from the point of view ofvisitors, including their satisfaction with some specific factors. The sample covers 500 interviews proportionally stratifiedaccording to the shopping centre traffic. The method used takes the form of a personal interview based on structuredquestionnaire, applied on the customer way out, selected through systematic counting during one complete week.

Furthermore, Sonae Sierra has recently adopted the methodology from GFK market research company to assess visitorsatisfaction. This methodology, which consists of satisfaction and loyalty tracking, will gradually replace the existingmethodology. The satisfaction and loyalty tracking essentially aims to identify in a very precise way the product/brandcompetitive advantages and makes detailed competition analysis through 3 distinct phases:

1) A qualitative study in each country (four focus groups) to introduce the information that will be included in thequestionnaire applied on the second phase.

2) A quantitative survey to the shopping centre visitors. The sample will consist of 350 interviews per shopping centre. Thesample is stratified according to the visitors profile (gender and age quotas according to the information from MallTraking).The fieldwork is done by GFK Company.

3) The short list of attributes that contributes the most to the Customer Satisfaction Index (CSI) as well as the statements usedto calculate the Customer Loyalty Index (CLI) will be included in the Mall Tracking (annual).

After the deliverance of the LoyaltyPlus reports over to the shopping centre, the centre manager should prepare an action planwhich takes into account the results of the study, by means of fulfiling a table comprising the following information:

• Identification of the critical factors that affect the centre on the level of satisfaction, loyalty and competition;

• Clarification of the level of response that each centre provides on each critical factor;

• Definition of short (<1 year) and long term actions necessary to correct misalignments between the critical factors and thelevel of responses.

The methodology was rolled out to centres in Portugal and Spain in 2007 and will be adopted in remaining countries in 2008and 2009. Since in Italy, Greece and Brazil the former method to evaluate visitor satisfaction is still in use, it is not possible toprovide a global visitor satisfaction indicator for Sierra, however, the visitor satisfaction index is presented by country on page 86.

KPI

KPIHours spent by employeesin charity organisations(total number of hours)

670(2006: 520)

Data Qualifying Note/Methodological NoteThis indicator covers all Sonae Sierra direct employees. It comprises the sum of hours spent among all employeeswho volunteered.


CONTINUED




KPIProportion of volunteering day entitlements taken up by employees

2006 2007

Portugal 6% 15%

Spain 1% 1%

Italy 0% 10%

Germany 0% 2%

Greece 0% 5%

Romania n/a 0%

Brazil 41% 14%

Other countries 0% 0%

Sierra Global 9% 11%

Data Qualifying Note/Methodological NoteThis indicator covers all Sonae Sierra directemployees. The indicator has been calculatedusing the following method:

Total hours spent by staff on volunteeringactivities divided by the total number ofvolunteer hours available (derived by thenumber of employees as on 31/12/07multiplied by 8, which is the number ofvolunteer hours made available by Sierrafor volunteering activities during work time).This value is multiplied by 100 to generatea percentage.

KPITotal CommunityDonations (including cash € and value of in kind donations)

€512,796

Data Qualifying Note/Methodological NoteThis indicator covers corporate activities, all owned shopping centres under management for the entirety of thereporting year and corporate offices in Portugal, Spain, Italy, Greece, Germany and Brazil.

It is comprised of the sum of the following components:

• Corporate charitable donations;

• Charitable donations made by individual shopping centres;

• Sponsorships paid through the Marketing Budget;

• In kind donations made by individual shopping centres (Shopping centres in Brazil: the monetary value of in kinddonations made in Brazilian shopping centres has been estimated. Further in kind donations were made in Spain,however, the monetary value of these items could not be estimated, so they have been reported by country onpage 87);

• Monetary value of staff time spent in volunteering activities (the calculation method used to estimate the value ofstaff time was based on the payroll average for 2006 divided by total working hours in 2007 (240 days at 8 hoursper day) multiplied by the total number of hours volunteered;

• In kind donations of furniture, computers and other equipment made by corporate offices (the monetary value ofin kind donations has been estimated; in addition to the value reported, 10 PCs, 7 printers and 4 monitors weredonated in Spain, however, the monetary value of these items was not estimated);

• Donations collected from Sierra staff;

• Donations collected from visitors to Sierra shopping centres (as reported in the KPI).

Conversion rateThe conversion rate used to convert Brazilian values in reais to euros was €2.6109, which is an average rate of thevarying conversion rates in force during 2007.

Comment

The value reported here for total direct community investment is not comparable withthat reported for 2006 (€0.3 million) as the scope and coverage of the indicator isdifferent. In 2007, thanks to a more proactive and rigorous approach to data gatheringon community investment, we have included all of the elements described in thebullet points above, thus providing a more accurate reflection of the extent ofinvestment in community initiatives.



Data Qualifying Note/Methodological NoteThis indicator covers all owned shopping centres under management for the entirety of the reporting year. Itcomprises the sum of contributions collected from visitors across all centres within this scope and includes theestimated value of in kind donations of food, hygiene products, cleaning products and clothes made in Brazil. Theconversion rate used to convert Brazilian values in reais to euros was €2.6109, which is an average rate of the varyingconversion rates in force during 2007.

Comment

The value reported for 2007 is not directly comparable with the value reported for2006 as in 2006 it was only possible to gather data regarding donations in centresin Portugal and Brazil. In 2007 we increased the coverage to all countries.



KPIContributions forcharitable organisationscollected from visitors inSierra centres (€)

38,781(2006: 26,358)

KPINumber of school visits to Sierra centres

No.

Portugal 82

Spain 119

Italy 6

Greece 5

Brazil 79

Total Sierra 2007 291

Data Qualifying Note/Methodological NoteThis indicator covers all owned centres undermanagement for the entirety of the reportingyear. It comprises the sum of all school visitsmade, including visits with an environmentaltheme, educational/cultural theme and thosewhich form part of the social responsibilityprogramme involving disadvantage children.

KPINumber of jobs created from completed developments including expansionprojects over 1,000m2

2005 2006 2007

5,400 2,217 4,049

Data Qualifying Note/Methodological NoteThis indicator covers the jobs created throughthe inauguration of our 3 projects completedduring 2007: 8a Avenida in Portugal, El Rosalin Spain and Alexa in Germany.

It comprises the sum of jobs created across the3 projects cited above and includes the jobs of[tenant’s] shop staff, management staff, salesaudit team, security staff, cleaning staff,maintenance staff and other service providers.

We set ourselves a total of 6 Communities targets for completion during 2007.The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Communities targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%

1

3

1

1


CONTINUED




KPIPortugal

Visitor satisfaction index

68.24%(2006: 26,358)

Data Qualifying Note/Methodological NoteThis indicator for visitorsatisfaction covers all 17owned shopping centres inoperation for the entirety ofthe reporting year in Portugal.The data presented comprisesthe average visitor satisfactionindex of those recorded inPortugal in 2007. The visitorsatisfaction index is based onthe results of a visitorsatisfaction survey (included inMall Tracking study) in whichdifferent factors are rated from“Totally unsatisfied” to “Totallysatisfied” according to thevisitors’ assessments.

KPISpain


71.69%

Data Qualifying Note/Methodological NoteThis indicator covers allowned shopping centres inoperation for the entirety ofthe reporting year in Spain,except Zubiarte and AvenidaM40 as this study in was notcarried out in those centresduring 2007. The datapresented comprises theaverage visitor satisfactionindex of those recorded inSpain in 2007. In 2007, Spainadopted the methodologybased on the GFK study, sothese results are notcomparable with 2006 values.

KPIItaly


n.d.

Data Qualifying Note/Methodological NoteThis year, no Mall Trackingsurveys were undertaken ineither of the 2 owned centresin Italy; in Valecenter due tothe refurbishment and inAirone because thepromotional fund was notsufficient to cover the costs.

KPIGreece


3.27%(2006: 3.1%)

Data Qualifying Note/Methodological NoteThis indicator covers the 1owned shopping centre inGreece. The data presentedcomprises the average visitorsatisfaction index of thoserecorded in Greece in 2006and 2007. The visitorsatisfaction index is based onthe results of a visitorsatisfaction survey in whichdifferent factors are rated from0 to 4 according to the visitors’assessments. The methodologyused in Greece is differentfrom the one that is currentlyapplied in Portugal and Spain;the GFK methodology will berolled out to Greece within thenext 2 years.

KPIBrazil


3.0%(2006: 3.0%)

Data Qualifying Note/Methodological NoteThe indicator covers 4 out ofthe 9 shopping centres in theowned portfolio in Brazil(missing are Boavista,Shopping Metrópole, ParqueD. Pedro, Pátio Brasil e PlazaSul, which were evaluated2006 but not in 2007). Thevisitor satisfaction index isbased on the results of avisitor satisfaction survey inwhich different factors arerated from 0 to 4 according to the visitors’ assessments.The methodology used inBrazil is different from the one that are actually appliedin Portugal and Spain; theGFK methodology will berolled out to Brazil within thenext 2 years.

n.d. = No data





KPIPortugal

Total CommunityDonations (includingcash € and value ofin kind donations)

€9,629

Data Qualifying Note/Methodological NoteThis indicator covers all ownedshopping centres in Portugal undermanagement for the entirety ofthe reporting year.

It includes:

• Charitable donations made byindividual shopping centres;

• Donations collected from visitorsto Sierra shopping centres.

Corporate charitable donations andmonetary value of staff time spentin volunteering activities are notincluded here, but in the globalSierra indicator on page 84.

KPISpain


€62,711In kind donations: 10 PCs, 7 printers & 4 monitors

Data QualifyingNote/Methodological NoteThis indicator covers all ownedshopping centres in Spain undermanagement for the entirety ofthe reporting year.

The value reported in eurosincludes:


• Donations collected from visitorsto Sierra shopping centres.

The in-kind donations refer todonations made by shoppingcentres, with the exception of theIT equipment, which was donatedby our Madrid office.

Corporate charitable donations andmonetary value of staff time spentin volunteering activities are notincluded here, but in the globalSierra indicator on page 84.

KPIItaly


€18,611

Data Qualifying Note/Methodological NoteThis indicator covers all ownedshopping centres in Italy undermanagement for the entirety ofthe reporting year.

It includes:


• Donations collected fromvisitors to Sierra shoppingcentres.

Corporate charitable donationsand monetary value of staff timespent in volunteering activities arenot included here, but in theglobal Sierra indicator on page 84.

KPIGreece


n.d.

Data Qualifying Note/Methodological NoteThere were no corporate orshopping centre donationsreported from Greece.

KPIBrazil


€36,120

Data QualifyingNote/Methodological NoteThis indicator covers all ownedshopping centres in Brazil undermanagement for the entirety ofthe reporting year.

It includes:


• Donations collected from visitorsto Sierra shopping centres. Thisincludes the estimated value ofin-kind donations of thefollowing items:– 9,639 kg of food and milk

(considering a litre of milkto weigh 1,028g);

– 1,683 hygiene products and735 cleaning products;

– 399 items of clothing.

• The estimated value of in kinddonations collected from staff;

• The estimated value of in kinddonations collected fromshopping centres and ourcorporate office.

The conversion rate used to convertBrazilian values in reais to euroswas €2.6109, which is an averagerate of the varying conversionrates in force during 2007.

Corporate charitable donationsand monetary value of staff timespent in volunteering activities arenot included here, but in theglobal Sierra indicator on page 84.

n.d. = No data




In 2007 we launched our first Community Panel at Dos Mares shopping centre in Spain.

The Community Panel is an open forum for dialogue, intended to promote the exchange of ideas and concernsbetween representatives of the community and the shopping centre. It ensures that the community has anappropriate channel of expression towards the shopping centre or the development project about Sierradevelopment or operations and any concern about environment, safety & health, and builds trust between Sierra and the community.

Dos Mares Community Panel includes representatives of local authorities, emergency services and civil society, with Sonae Sierra represented by the Dos Mares Manager and the Regional Property Manager for Spain (centre &south). The Panel will meet 3 times a year to discuss a wide range of issues, including health, safety, environment,competition and business issues, education, social issues such as employment and care for elderly people, lifestyleand nuisance (noise and traffic).

On the basis of the experience at Dos Mares, Sierra has defined terms of reference for future panels at otherlocations and will roll out this project to further shopping centres in 2008.

Case StudyCommunity Panel at Dos Mares, Spain

Between June and July Sierra staff at the central office in São Paulo, Brazil, took part in the Gincana Julina, whichconsisted of the gathering of items to be donated to the Associação Criança e Consciência, situated in CapãoRedondo.

Our aim was to encourage team work among staff and to promote staff participation in charitable activitiesorganised by Sonae Sierra Brazil within the area of social responsibility. The members of each team weredetermined at random with the aim of mixing staff from different departments, and it worked!

The first task consisted of donating packets of biscuits, as many of the children living in this district do not havesufficient means to eat breakfast in their homes and the association itself is not always able to provide it.

The teams were awarded 1 point for every 100g of biscuit collected and donated. Around 2,000 kg werecollected, which meant that not only the children had a guaranteed breakfast, but that other members of theirfamily, often unemployed and with difficulty in obtaining food, could also benefit. The second task consisted of thedonation of clothes, both for adults and children. Approximately 400 items of clothing were collected and given tothe Association.

All in all, Sonae Sierra’s collaboration enabled the Association to distribute vital resources to children and families inneed. The Pinhão team were the winners at Sonae Sierra having collected the most items, but the real winner wasthe Associação Criança e Consciência.

Case StudyStaff Volunteering at our São Paulo offices, Brazil


Employees

ContextHappy and healthy employees generally perform better at work, and staff who have had the opportunity to learn andimprove useful skills tend to carry out tasks with more confidence and to a higher standard. There are, therefore,mutual benefits of providing more training, ensuring a good work/life balance and good workplace conditions.

Sonae Sierra is committed to offering high levels of employee satisfaction, encouraging career development throughaccess to training and educational programmes and to provide working conditions that avoid risks to the safety & health.

Business challenges and opportunities associated with Employees

• Employee relations are animportant stakeholder concern,

and a critical component of corporatebrand and reputation;

• High rates of staff turnover anddifficulty in attracting good candidatesfor new posts can incur costs to thebusiness.

• Staff friendly policies andcompetitive remuneration and

benefits packages can help to recruitand retain the best calibre employees;

• Provision of training anddevelopment can promote innovationand improvements.




EMPLOYEES

Our Strategy and Management ApproachWe have not set ourselves long-term goals in relation to Employees aspects; however,we will continue to invest in the professional and personal development of ouremployees and seek to ensure high levels of satisfaction. We will also continue to make improvements to workplace conditions to improve staff well-being.

Organisation-wide policy

Sonae Sierra operates a Human Resources Policy which incorporates values andprinciples as Equal Treatment, Professional Development and Safety. The HumanResources Management Policy contains no form of discrimination on the grounds ofrace, sex, religion, nationality or social class. We also have a Safety & Health policywhich covers occupational safety & health and states our commitment to promotesafety training among all its employees, with the purpose of making them aware oftheir responsibility, enabling them to acquire adequate knowledge to control andminimise risks while performing their work. Finally, our Code of Conduct stipulatesethical principles relating to fair recruitment and selection, professional training,personal and professional development, management style and health and safety at work.


Ultimate responsibility for labour practices and decent work aspects lies with theExecutive Committee. Operational responsibility is divided among line managers withineach of our business divisions, from senior management downwards. The HumanResources (HR) Department lends a supporting role by managing aspects such asrecruitment, contracts and training.

Training and awareness

We do not currently operate any specific procedures related to training and awarenessin relation to Labour Aspects, other than Safety & Health training, which is reported indetail on page 101.



EMPLOYEES


Corporate Climate and Employee Satisfaction Survey

The Corporate Climate and Employee Satisfaction Survey is a new Sierra procedure,our first survey of this kind having been launched in November 2007. To read moreabout the survey, see the case study on page 98.

Sierra Ombudsman

The Sierra Ombudsman is another new system, also launched during 2007. TheOmbudsman is an independent facilitator to whom all stakeholders can present theircomplaints and be certain that they are processed, investigated, and responded. He iscommitted to answer anyone who contacts him, making an objective analysis of theircomplaint, and has the responsibility to provide an annual report to the Audit andCompliance Committee which will make a global analysis of the Sierra Ombudsman’sactivity. In particular, the Ombudsman constitutes a formal protective procedure inplace to tackle harassment related claims and to correct any incidents contrary to theCode of Conduct. The ultimate aims of the Ombudsman system are to strengthenSierra’s image and to consolidate the practices and principles of the company, therebyrendering better results for Sierra and our stakeholders.

Training evaluation procedure

We have a satisfaction survey for each training session filled by each participant andwe create a global evaluation for each session for our own records and to assistfutures decisions on training.

TARGETS FOR 2008

• Improve the results of the Employee Satisfaction Survey in relation to the following themes by 10%:– Work conditions– Work life balance;

• 90% of Sierra staff should have at least 7 hours of training.


• We evaluated the possibility of increasing opportunities for part-time and flexibleworking;

• We carried out our first corporate climate survey with the objective ofunderstanding Employees expectations and concerns relative to Sonae Sierra andto identify opportunities for improvement; and

• We defined quantitative targets to improve performance and respective actionplans.


There were no major changes, aside from the launch of the Ombudsman system as reported under Monitoring and Follow-up Procedures.


CONTINUED



EMPLOYEES

KPITotal workforce by employment type, employment contract, and region (GRI LA1)

No.

Total direct Sonae Sierra employees 789

– Portugal 423

– Spain 135

– Italy 53

– Germany 46

– Greece 31

– Romania 12

– Holland 2

– UK 2

– Brazil 85

Supervised workers (partial) 268

Total 1,057

Total permanent Sonae Sierra employees 713

Total teleworkers 1

Total temporary Sonae Sierra employees 75

Total 789

Total full-time Sonae Sierra employees 788

Total part-time Sonae Sierra employees 1

Total 789

Data Qualifying NoteThis indicator covers all Sonae Sierra directemployees.

Supervised workers included within the scopeof this KPI are the shopping centremanagement staff in Brazil. These workers donot have a legal contract with Sierra, but witha company in which Sierra has an ownershipstake. This situation is unique to Brazil, and itis for this reason that these workers have beenincluded within the scope of this indicator,whereas supervised workers employed byservice providers in shopping centres acrossother countries of operation have not. Duringthe reporting year Sierra did not have systemsin place to gather data regarding all supervisedand independent workers.

Comment

Our total number of directemployees once again increased in2007 as our operations expanded.As of 31/12/07 we employed 789direct employees, in comparisonwith 731 as of 31/12/06.

KPIPercentage of employees located in Europe

2005 2006 2007

87% 88% 89%


KPINumber of new jobs created (among direct employees)

2005 2006 2007

No data 22 58

Data Qualifying NoteThis indicator refers to the sum of all newdirect Sonae Sierra posts created and filledduring the reporting year.


CONTINUED



EMPLOYEES

Total number and rate of employee turnover by country

KPITotal number and rate of employee turnover by age group, gender, andregion (GRI LA2)

Age group Number Rate

<20 1 0%

20-29 63 7%

30-39 59 7%

40-49 12 1%

50-59 3 0%

>60 2 0%

Country Number Rate

Portugal 33 4%

Spain 48 6%

Italy 6 1%

Germany 9 1%

Greece 6 1%

Romania 1 0%

Brazil 35 4%

Holland 2 0%

Gender Number Rate

Female 62 7%

Male 78 9%


The rate of employee turnover has beencalculated using the following formula:

% of employees leaving employment =

number of employees leaving employment /(number of employees leaving employment +total number of employees at the end of thereporting period)

Total number and rate of employee turnover by gender

KPILength of service at 31 December 2007

Length of service (in years) % of Sierra staff 2006 % of Sierra staff 2007

• less than 2 years; 27% 32%

• between 2 and 5 years; 34% 28%

• between 6 and 10 years; 24% 23%

• more than 10 years 15% 16%

Data Qualifying Note/Methodological NoteThis indicator covers all Sierra direct employees.Length of service at the end of the reportingyear has been presented as the proportion(percentage) of total direct Sierra staff whohave worked for the company during thelength of time specified by each category.


CONTINUED



EMPLOYEES

KPIComposition of governance bodies and breakdown of employees per categoryaccording to gender, age group, minority group membership, and otherindicators of diversity (GRI LA13)Composition (number) of employees per category according to gender

Functional group Male Female Total

• Global Senior Executive, Senior Executive, Executive (Governance bodies) 18 1 19

• Senior Managers 29 7 36

• Managers 55 17 72

• Team Leader 62 35 97

• Project Team Specialist 90 88 178

• Team Member 120 267 387

Total 374 415 789

Percentage 47% 53% 100%

Functional group <20 20-29 30-39 40-49 50-59 >60 Total

• Global Senior Executive,Senior Executive, Executive(Governance bodies) – – – 7 9 3 19

• Senior Managers – – 8 19 7 2 36

• Managers – – 41 23 7 1 72

• Team Leader – 2 59 28 6 2 97

• Project Team Specialist – 29 109 32 5 3 178

• Team Member 1 136 178 55 14 3 387

Total 1 167 395 164 48 14 789

Percentage 0% 21% 50% 21% 6% 2% 100%


Composition (number) of employees per category according to age

KPITotal Sonae Sierra payroll and benefits in 2007 (€)

2005 2006 2007

38,046,627 41,682,229 46,865,132

Data Qualifying Note/Methodological NoteThis indicator covers all Sierra directemployees. The value reported corresponds tothe sum of payroll and benefits paid in eachcountry where Sierra employees direct staff.

Total payroll refers to employee salaries,including amounts paid to governmentinstitutions (employee taxes, levies, andunemployment funds) on behalf of employees.Non-employees working in an operational roleshould normally not be included here, butrather in Operating Costs as a servicepurchased.

Total benefits include regular contributions(e.g., to pensions, insurance, company vehicles,and private health), as well as other employeesupport such as housing, interest-free loans,public transport assistance, educational grants,and redundancy payments. They do not includetraining, costs of protective equipment, orother cost items directly related to theemployee’s job function.

The same exchange rates were used to convertBrazilian reais and Romanian leu into euros asreported for indicator GRI EC1 on page 114.


CONTINUED



EMPLOYEES

KPIInvestment in stafftraining and development(€ per capita)

2005

2006

2007

Data Qualifying Note/Methodological NoteThis indicator covers all Sonae Sierra direct employees. It has been calculated as the total value in euros invested instaff training and development, divided by the total number of staff as on 31/12/07.

The investment recorded refers to the costs of external training only; it does not include internal training costs andnor travel costs associated with external training.

The same exchange rates were used to convert Brazilian reais and Romanian leu into euros as reported for indicatorGRI EC1 on page 114.

935

1,728

1,239

KPIProportion of training undertaken by generic type

NumberType of training of hours %

Technical 10,130 42

Behavioural 2,716 11

Languages 11,529 47

Total 24,375 100

Data Qualifying Note/Methodological NoteThis indicator covers training undertaken allSonae Sierra direct employees in Portugal,Brazil and Greece only, as it was not possibleto verify data from other Sierra countries ofoperation.

It is calculated as the proportion (percentage)of training undertaken that corresponds toeach of the training types defined.

KPIAverage hours of training per year per employee by employee category (GRI LA10)

Totals Averagenumber of

Number of Number of hours peremployees hours employee

Global Senior Executives, Senior Executives, Executives 14 332 23.7

Senior Managers 27 2,432 90.1

Managers 48 2,393 49.9

Team Leaders 58 2,761 49.3

Project Team Specialists 118 8,259 70.0

Team Members 276 8,198 29.7

Total 539 24,375 45.2

Total hours of training per employee refers to the total hours of training provided during 2007 per employeecategory divided by the total number of employees per employee category.

Data Qualifying Note/Methodological NoteAll Sonae Sierra direct employees in Portugal,Brazil and Greece only. It was not possible toverify the data from other Sierra countries ofoperation.




EMPLOYEES

KPIPercentage of employees receiving regular performance and careerdevelopment reviews (GRI LA12)

Reporting Year 2005 2006 2007

Total number of direct employees 709 731 789

Percentage of direct employees receiving regular performanceand career development reviews n.d. 100% 100%

Data Qualifying NoteAll Sonae Sierra direct employees.

We set ourselves a total of 3 Employees targets for completion during2007. The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Employees targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%2

1




EMPLOYEES

KPIPortugal

Investment in stafftraining and development(€ per capita)

1,409(2006: 2,335)

Data Qualifying Note/Methodological NoteThis indicator covers all SonaeSierra direct employees inPortugal. It has been calculatedas the total value in eurosinvested in staff training anddevelopment, divided by thetotal number of staff as on31/12/07.

The investment recordedrefers to the costs of externaltraining only; it does notinclude internal training costsand nor travel costs associatedwith external training.

KPISpain


1,026(2006: 992)

Data Qualifying Note/Methodological NoteThis indicator covers all SonaeSierra direct employees inSpain. It has been calculatedas the total value in eurosinvested in staff training anddevelopment, divided by thetotal number of staff as on31/12/07.


KPIItaly


1,801(2006: 1,423)

Data QualifyingNote/Methodological NoteThis indicator covers all SonaeSierra direct employees inItaly. It has been calculated asthe total value in eurosinvested in staff training anddevelopment, divided by thetotal number of staff as on31/12/07.


KPIGermany


1,851(2006: 1,470)

Data QualifyingNote/Methodological NoteThis indicator covers all SonaeSierra direct employees inGermany. It has beencalculated as the total value ineuros invested in staff trainingand development, divided bythe total number of staff ason 31/12/07.


KPIGreece


386(2006: 832)

Data QualifyingNote/Methodological NoteThis indicator covers all SonaeSierra direct employees inGreece. It has been calculatedas the total value in eurosinvested in staff training anddevelopment, divided by thetotal number of staff as on31/12/07.


KPIRomania


0(2006: n.a.)

Data QualifyingNote/Methodological NoteThis indicator covers all SonaeSierra direct employees inRomania.


KPIBrazil


581(2006: 752)

Data QualifyingNote/Methodological NoteThis indicator covers all SonaeSierra direct employees inBrazil. It has been calculatedas the total value in eurosinvested in staff training anddevelopment, divided by thetotal number of staff as on31/12/07.


The same exchange rate wasused to convert euros intoreais as reported for indicatorGRI EC1 on page 114.

Comment

Sierra only commenced operations in Romania during2007 and, as a consequence, training provided tostaff in this country has consisted so far of internalrather than external training.



EMPLOYEES

Bearing in mind our mission to create value for our shareholders while taking account of the social responsibilitiestowards other important stakeholders, such as employees, we carried out a Corporate Climate and EmployeeSatisfaction Survey, in November 2007, the first staff survey of its kind undertaken by Sierra.

The aim of the survey was to identify employees’ opinions, expectations and main concerns regarding Sonae Sierraand to assess staff satisfaction with the company as a basis for defining improvement objectives and developingaction plans to meet those goals. Questions were asked on many different aspects, including corporate responsibility,staff participation, training, work conditions, diversity, management, work-life balance and remuneration.

All employees across all countries of operation were invited to participate in the survey, which was available tocomplete on line during 2 weeks. The response rate was of around 75%, and the final results were analysed indetail per country, business and functional group. An action plan was drafted to improve the areas with lesspositive feedback, and this was approved by the Executive Committee in December. The plan includes, forexample, measures to evaluate the possibility of enabling more flexible working arrangements and to increasefeedback sessions between employees and supervisors. Furthermore, a new survey in 2008 to assess the sameareas and to monitor the respective changes.

Case StudyCorporate Climate and Employee Satisfaction Survey


Safety & Health

ContextAccording to the European Survey on Working Conditions 2000, 17% of absences from work are due to workplaceaccidents. This adds up to a total of about 210 million working days lost due to work accidents. The new EuropeanUnion strategy of the Employment, Social Affairs and Equal Opportunities Department for 2007 to 2012 aims toachieve an overall reduction of 25% in occupational accidents and diseases in EU member states; one of the actionsit endorses is to better identify and assess potential risks through more research, exchange of knowledge and thepractical application of results.

Business challenges and opportunities associated with Safety & Health

• Incidents of non-compliancecould damage the reputation of

the company among a wide-range ofstakeholders;

• Direct short term financial impact byway of fines for non-compliance;

• Policy commitment through thecompany’s Safety & Health policy.

• A proactive approach to accidentprevention enhances reputation amonga wide range of stakeholders.




SAFETY & HEALTH

Our Strategy & Management ApproachAt Sonae Sierra we have a strong focus on Safety & Health as one of the company’score values. We have a corporate commitment to anticipate and prevent all safety &health risks affecting the sustainable growth of Sonae Sierra, with the final goal ofachieving zero accidents. More fundamentally, we have set ourselves the challenge todrive a cultural evolution across all aspects of Sonae Sierra’s organisation and to createan interdependent culture of safe behaviour among our tenants, service suppliers andvisitors. Our PERSONÆ project (a 4 year long project which we commenced in 2004with support from Safety & Health advisors DuPont) is the principle vehicle forimplementing this aim. The PERSONÆ project was recognised as a winner of theDuPont Safety Award 2007 in the category of Visible Management Commitment for its innovation and scope: in its first two phases, over 70,000 people have beeninvolved to some degree with the project’s activities, including seminars, workshopsand behavioural safety preventive observations.

Safety & Health Policy

In addition to our Corporate Responsibility (CR) Policy, Sierra has an internallydeveloped corporate Safety & Health Policy which expresses our commitment toconduct our activities so that risks towards people and its assets are minimised andlists our company principles in terms of Safety & Health.

Organisational Responsibility

Ultimate responsibility for Safety & Health aspects lies with Sonae Sierra’s CEO andBoard of Directors. The Safety & Health Steering Committee constitutes the seniorlevel of decision making; this Committee establishes the S&H Policy, goals andobjectives and monitors progress in respect of these objectives. We also have a Safety& Health Office which actively supports the Steering Committee, advises on S&Hpolicies and standards. The S&H Steering Committee may delegate authority, althoughnot accountability, to the S&H Office. In terms of implementation of S&H standards,procedures, programmes, results, etc.; this responsibility is assigned to all leaders andmanagers in the line organisation, who are also required to demonstrate a strongVisible Management Commitment.

Furthermore, Sonae Sierra operates 6 multifunctional S&H Sub-Committees, each ofwhich support the S&H Steering Committee and the entire organisation by developingand monitoring key S&H aspects and acting as facilitators of the implementation ofrelated standards and procedures. The S&H Sub-Committees are:

• Emergency Response (ER) Sub-Committee;

• SPO and Inspections Sub-Committee;

• New Projects and Commissioning Sub-Committee;

• Service Suppliers’ Management Sub-Committee;

• Incident Investigation and Communication Sub-Committee; and

• Ad-hoc Sub-Committees (e.g., Avian Flu, Terrorism).

Web references

The Safety & Health Policy can be accessed on our corporate website at:www.sonaesierra.com/Web/en-GB/corporateresponsibility/managementsystem/CRPolicy/default.aspx.

http://www.sonaesierra.com/Web/en-GB/corporateresponsibility/managementsystem/CRPolicy/default.aspx



SAFETY & HEALTH

Finally, our organisation as a whole is supported by the Safety & Health network,which provides advice on S&H management and technical issues. The S&H network iscomposed of all the S&H professionals working within Sonae Sierra at different levels,including S&H specialists at the country operations level who give support to shoppingcentres on technical and legal requirement issues and also outsourced S&H specialistswho support the development of S&H activities as and when required.

Training and Awareness

Sonae Sierra operated a specific procedure within the Safety & Health System called“Training Awareness and Competence”. In accordance with this procedure, every newSonae Sierra employee receives a S&H induction training, and all Site Managers, SiteCorrespondents and S&H Specialists are obliged to attend training on SafetyPreventive Observations (SPOs), Emergency Response, Incident Investigation and BasicSupport of Life. In addition to this, we dedicate a large amount of resources totraining activities in the form of monthly Safety Meetings held at all sites in operation,SPO training to Tenants and Safe Practice Index (SPI) training to contractors ondevelopment projects, and ad hoc training sessions, often at the request of our staffor tenants. A total of 14,629 man hours of Safety & Health training we provided in2007 through 646 training sessions. Some of the specific S&H training themes were:

• Safety Preventive Observations (SPOs);

• Incident Investigation;

• Basic support of life;

• Emergency Response; and

• Risk assessment.


We employ several monitoring and follow-up procedures in relation to Safety & Healthaspects, covering both customer safety and occupational Safety & Health in the sensethat their ultimate purpose is to improve safety & health performance with respect toour staff, resident service suppliers, tenants and visitors. These are explained in moredetail:

• Safety Preventive Observations (SPOs)

The SPOs are by nature a monitoring and follow-up procedure since they involve the auditing of safe behaviour within shopping centres in operation. Themost important contribution of the SPOs is the awareness-raising that it promotes,since whenever an unsafe behaviour (or consequence of it) is detected, there’s aspecific technique of addressing the person in question until he/she gets convincedof the potential negative consequences of its wrong behaviour. When successful,this person now becomes a strong ally on risk prevention. Furthermore, we recordthe number of hours dedicated to SPO across our organisation and the resultsobtained, thus enabling us to monitor the evolution of non-conformances overtime and evaluate performance in respect of our goals.



SAFETY & HEALTH

• Safe Practice Index (SPI)

The SPI is another auditing tool, in this case applied to projects under development.The index assesses the probability of accidents occurring on site construction worksthrough observations made by the Sierra Development Site Manager, theoutsourced Project Management Team and Site Safety co-ordinator. The duration of the audit and the number of persons observed are also taken into account.

• Standard for Inspections procedure

This is a procedure which defines inspections of equipment to be performed on a regular basis within shop units and common areas. Not only is safety related equipment inspected, but also installations (for example, exhaust ducts inrestaurants) to determine their safe characteristics. The results of these inspectionsare followed-up and non-conformances are corrected.

Prior to the opening of new shopping centres, audits are generally also performedby official entities in accordance with the law, and are necessary for theobtainment of the centre’s operating licence.

• Performance Measurement and Monitoring

Our S&H management system includes a Performance Measurement andMonitoring procedure, which performs the function of monitoring our Safety and Health performance on an on-going basis.

• Incident Report, Investigation and Communication Procedure

In cases where an incident occurs, we use this procedure to find its root causes so that we can communicate these causes to all our other sites, thus avoiding arepeat occurrence. Linked to this procedure are our “Safety Alerts”, messages sentout to all Sierra shopping centres with details of preventive actions to be taken toavoid this type of accident.

• Workplace conditions Assessment

We recently undertook a workplace conditions assessment among our directemployees, and presented the findings to the Board and the decision was taken to implement the corrective actions recommended.

Targets

We have also developed a strategy for Safety & Health, linked with long termobjectives. Key strategies and procedures for implementing policies and achieving our goals include the Executive Leadership Workshop (ELW), which enables BoardMembers and the other Executives to elaborate and monitor their Personnel ActionPlan and Workshops between shopping centre managers and Sierra’s safety specialistswhich are held annually in Portugal, Spain and Brazil.

TARGETS FOR 2008

• To achieve zero fatalities due to accidents across the Sierra portfolio.

• To reduce the number of days of staff absence due to work accidents or occupational diseases in comparison with theaverage lost work days per year as recorded over the last 3 years, aiming towards zero.

• To decrease to 8.5 the number of non-conformances per hour of observation resulting from Safety Preventive Observationsin Reference Sites by the end of 2008.



SAFETY & HEALTH


• We were a Winner of the DuPont Safety Award, which distinguishes 5 companiesfor their safety enhancement measures, in the Visible Management Commitmentcategory. The 2007 winners were announced at the DuPont Leaders Forum onOctober 18 in Geneva, Switzerland. The independent jury congratulated SonaeSierra for its efforts in disseminating a safety culture among all stakeholders andrecognised the positive impact of Sierra’s PERSONÆ project on sustainabledevelopment.

• We achieved an impressive decrease in the number of non-conformances per hourof SPO detected by our core PERSONÆ team, from 15 in 2006 to 10.5 in 2007,and a positive result in the SPI of 88% (see KPI table).

• We introduced clauses into our contracts with tenants, shopping centreregulations, tenants’ handbook and Shop Design handbook to oblige compliancewith minimum standards for Safety & Health, with the aim of increasing the safetyof our centres to the benefit of our tenants, visitors and staff.

• As part of the continuing development of our PERSONÆ project and with the aimof making our tenants aware of the Safety & Health culture adopted by Sierra staffand service suppliers, Sierra Board Members and the other Executives, SeniorManager/Managers held a number of specific meetings with their counterpartsfrom some of Sierra’s key tenant companies in Portugal and Spain. During thesemeetings the purpose of the PERSONÆ project was explained and an appeal forco-operation was made. These requests were well-received by our key tenants,many of whom wrote letters to us declaring support for the project and confirmingthat they would seek to replicate it within their own organisations. This shows thatwe are making more progress on our goal to propagate a culture of safebehaviour.

• The PERSONÆ programme also received very positive recognition by the media thisyear in several countries where we operate.

Unfortunately, we did not achieve our target to achieve zero injury lost days amongSierra’s direct employees as a result of workplace accidents.


There were no major changes to management systems or structures during 2007,although we did implement a functional change across all our shopping centres byinstalling vertical bars at the entrance to every escalator to avoid accidents as the useof trolleys on escalators had been identified as a risk to visitor safety.

“ ”Sonae Sierra show their leadership by undertaking this kind ofinnovative project and reaching out to 70,000 people so quickly.This is a powerful sign of a growth-oriented organisation thatrecognises safety not only as the right thing to do, but asan enabler of added business value.Ian Hudson, President DuPont EMEA, October 2007.


CONTINUED



SAFETY & HEALTH

KPITotal Safety & Health training provided during the 2007 per: No. of persons;No. of training sessions

2005

2006

2007

4,396

5,425

14,629

Year 2005 2006 2007

Number of persons 1,821 4,120 8,855

Number of sessions n.d. 305 646

Total number of manhours of Safety & Healthtraining provided

Data Qualifying Note/Methodological NoteThis indicator covers all owned centres in operation throughout the reporting year and, in addition:

• 8a Avenida (completed project in Portugal) and Alexa (completed project in Germany);

• Corporate offices in Maia, Lisbon, Madrid, São Paulo, Milan;

• 2 centres acquired during 2007 (CC Modelo de Albufeira and CC Continente de Portimão, both in Portugal);

• 4 centres managed only during 2007 (CC Continente da Amadora and CC Continente de Leiria in Portugal; BicocaVillage and Moncalieri 45° Nord in Italy); and

• 3 projects under development (Loop5 in Germany, Pantheon Plaza in Greece and Manauara Shopping in Brazil).

It comprises:

• the total number of persons involved in Safety & Health training, including service suppliers and tenants as well asSierra direct employees;

• the total number of S&H related training sessions held during 2007 (including Safety Meetings, SPO training,training for tenants, SPI training and many other more specific training activities); and

• The total number of man hours of training provided, calculated as the number of sessions multiplied by thenumber of hours duration of each session multiplied by the number of participants.

Comment

The significant increase in the number of sessions, participants and man hoursdedicated to Safety & Health training is only partially related to the growth in thescope of this indicator (in 2006 it covered a total of 47 sites and in 2007 it covers 56).Moreover, it reflects our on-going commitment in this area and our endeavour tomitigate the possibility of accidents occurring through S&H training. Indeed, we havealso seen a significant decrease in the number of non-conformances per hour of SPOdetected this year.

KPINo. of hours of SafetyPreventive Observation(SPO) performed

2005

2006

2007

Data Qualifying Note/Methodological NoteThis indicator measures the total number of hours dedicated to Safety Preventive Observations across all Sierra sitesof operation. It covers SPOs undertaken by site managers and other staff within each shopping centre. For this reason it has been reported as a global sum of all hours of SPO performed rather than broken down by country orindividual site.

Comment

The impressive increase in the number of hours dedicated to SPOs across the portfoliois a reflection of our ongoing commitment in this area. The practice of SPOs increasesas shopping centre staff and tenants take it upon themselves to inform others whenthey are practicing unsafe behaviour, and, influenced by the safety culture, dedicatetime to paying careful attention to this.

1,203

6,127

10,448


CONTINUED



SAFETY & HEALTH

KPINo. of non conformancesper hour of SPO

2005

2006

2007

Data Qualifying Note/Methodological NoteThe number of non-conformances per hour of SPO covers a sample of 9 reference sites (22.5% of the total sitesowned and managed by Sonae Sierra) audited by the PERSONÆ core team. These sites are selected by the Board torepresent a “proxy” of the whole portfolio. The scope of this indicator therefore differs from that of the one above(No. of hours of SPO performed) because it is considered that individuals performing SPOs at different sites may havetheir own ways of observing, which makes comparison between such sites less meaningful. The 9 reference sitescovered by this indicator are subject to a more rigorous auditing process which is carried out at each site by exactlythe same core team, with assistance from S&H consultants DuPont.

The number of non-conformances reported here for 2005 differs from that published in the CR Report 2005 as thedata used in that report included all sites where SPOs were being undertaken, rather than just the 9 reference sites.

Comment

The number of non-conformances per hour of SPO is showing a steady decrease asawareness of safety amongst out staff, contractors and tenants increases in line withthe propagation of a safety conscious culture through the PERSONÆ project.

21

15

10.5

KPISafe Practice Index (SPI)

88%

Data Qualifying Note/Methodological NoteThe index is attained throughout a weighted average of the SPI values (the number of unsafe acts, number of unsafeconditions and the weight of these) for 2007. It takes account of the number of auditors that carried out each one ofthe SPI audits as also the time taken.

Comment

The Safe Practice Index (SPI) assesses the probability of accidents occurring withinconstruction works of Sierra shopping centres. The SPI is obtained by assigning differentweights to each of the observed unsafe acts and conditions, according to their likelihoodto generate an accident and its possible severity. The number of observed persons andthe duration of the audit are also taken into account. The range of results is as follows:Range Results

From 100% to 95% Good, continuous improvement

From 94% to 75% Satisfactory, requires supervision

From 74% to 50% Must improve

Less than 50% Unacceptable

KPINumber of drillsperformed divided by total No. of sites in operation

2005

2006

2007

Data Qualifying Note/Methodological NoteThis indicator covers all owned centres under management for the entirety of the reporting year and, in addition:

• 2 centres acquired during 2007 (CC Modelo de Albufeira and CC Continente de Portimão, both in Portugal);

• 6 corporate offices (Lisbon, Maia, Madrid, Milan, Athens, São Paulo);

• 5 sites which are managed but not owned by Sierra (Grandella, Feira Nova Loures, Sintra Retail Park and GaleriaComercial Estação Gare do Oriente in Portugal; La Morea in Spain);

• 2 projects completed during 2007 (El Rosal in Spain and Alexa in Germany); and

• 1 project under construction during 2007 (Freccia Rossa in Italy).

The indicator is calculated as the total number of drills carried out across all sites within the scope defined in the DataQualifying Note, divided by the number of sites.

Comment

In 2007 we continued to undertake emergency practice drills across our shoppingcentres, once again increasing the total number of drills carried out. We believe thatthe drills, which simulate a real-life emergency leading to total evacuation of thecentre, enable our staff, contractors and tenants to greatly increase their ability torespond in an emergency situation.

1.5

1.7

1.8


CONTINUED

Data Qualifying Note/Methodological NoteFor the calculation of workable hours, weconsidered 230 workable days per eachemployee and 8 hours per day.



SAFETY & HEALTH

KPISafety & Health“Achievement Indicator”

105%

Data Qualifying Note/Methodological NoteThe Achievement Indicator comprises the average of the of the following 3 elements:

• The percentage of Safety Meetings provided in relation to the target set;

• The percentage of hours of Safety Preventive Observations (SPOs) undertaken in relation to the target set;

• The percentage of Emergency practice drills undertaken in relation to the target set.

The sum of these 3 elements is divided by 3 to obtain an average score which is equivalent to the achievementindicator.

The indicator covers all owned centres which were under management for the entirety of the reporting year, and inaddition, 2 further centres acquired during 2007 in Portugal.

KPIVoluntary code compliance, product labels or awards with respect to social and/orenvironmental responsibility that the user is qualified to use or has received

Winner of the DuPont Safety Award 2007 (see Our Performance during 2007 onpage 103 to read more about this award)

KPITotal No. of S&H incidents during the reporting year for Sierra staff; brokendown into No. of fatalities, No. of accidents, No. of accidents with lostworkday per 1,000,000 hours worked

Total number of accidents with lost

Total number Total number of Total number of work day amongof employees hours worked by accidents with employees/on 31/12/2007* all employees Fatalities lost work day 1 million hours

1,057 1,944,880 0 7 3.6

*Employees, in the scope of this indicator, covers all Sonae Sierra direct employees and the supervisedworkers in Brazil who have a contract with a company in which Sierra has an ownership stake (see note on page 92 in relation to KPI LA1).

Data Qualifying NoteThis indicator, covers all Sierra employees andthe supervised workers in Brazil who have acontract with a company in which Sierra hasan ownership stake (see note on page 92 inrelation to KPI LA1).

KPIRates of injury, occupational diseases, lost day’s and absenteeism and numberof work-related fatalities by region (GRI LA7)*

Total number Total number (Absentee inTotal number of hours Absentee in of accidents the period/of employees worked by the period among total time Lost workon 31/12/2007 all employees† (Hours) employees‡ Injury Rate worked) x 100 day rate

1,057 1,944,880 520 7 3.60 0.027 0.033

* Minor (first-aid level) injuries are excluded from this indicator. There were 0 fatalities during the reporting year. The Occupational Diseases rate was 0.

† For the calculation of workable hours we considered 230 workable days per employee, 8 hours per day;‡ The system of rules applied in recording and reporting accident statistics are in accordance with the

national laws in force in each country where Sierra operates.


CONTINUED



SAFETY & HEALTH

KPIPercentage of workforcerepresented in formaljoint managementworker health and safetycommittees that helpmonitor and advise onoccupational safetyprograms (GRI LA6)

82%(2006: 54%)

Data Qualifying Note/Methodological NoteWe operate monthly Safety & Health meetings across almost all sites of operation in which Sierra staff participatealongside representatives of service suppliers or contractors and, in centres in operation, tenants. We consider thatthe representatives of these meetings constitute local Safety & Health Committees, where representatives of workersdiscuss their concerns in relation to S&H, and that all employees of a given site are totally represented in every casewhere a S&H committee exists and carried out at least 3 S&H meetings at that site during the reporting year.

In 2007, 82% of the 1,057 employees (which includes Sierra’s direct employees and supervised workers in Brazil)were represented at S&H Committees across Sierra sites of operation except for the following sites where they are yetto be established:

• El Rosal (completed project in Spain);

• Pantheon Plaza (project under development in Greece);

• Alexa (completed project in Germany);

• Dusseldorf offices (Germany);

• Bucharest offices (Romania);

• River Plaza Mall (centre acquired in 2007 in Romania).

This percentage does not include the “resident” Service Suppliers, which are also represented on each site’s Safety &Health Committee except for those in Brazil who are employed by a company in which Sierra has an ownership stakein. Should all “resident” Service Suppliers have been included, this percentage would have increased, however, dueto the limitation of scope of indicator LA1 (Total workforce by employment type, employment contract and region),where the total number of “resident” Service Suppliers could not be considered due to a lack of evidences availableto provide to the auditors, the scope of LA6 has also excluded “resident” Service Suppliers other than those in Brazilreferred to above.

Education, training, counselling, prevention and risk-control programs in place to assist workforce members, theirfamilies, or community members regarding serious diseases (GRI LA8)

Due to the nature of Sonae Sierra’s business activities and in the context of the locations where we operate, serious diseases do not pose a significant risk to our workforce. Nonetheless, the prevention of illness is an area which we do take intoconsideration and we continue to raise awareness of health risks as part of our Safety & Health (S&H) programmes andcorporate practices; to this effect, we have an Avian Flu Pandemic (ad-hoc) Sub-Committee among our six Safety & HealthSub-Committees.

During 2007, 2 specific education, training, counselling, prevention and risk-control programmes were in place to assistworkforce members and their families regarding serious diseases or potential long-term damage to health. These were:

1. The “Safety Tips” practice“Safety Tips” consist of regularly disseminated articles for staff that provide guidance with respect to best practice andconduct in different every-day situations covering a wide range of issues, from how to use a step-ladder, to the measureswhich drivers should adopt when undertaking long distance journeys for work or for leisure.

2. Influenza prevention kitsIn order to raise awareness about potential health problems caused by seasonal influenza, an awareness-raising campaignwas launched in September 2007, including the distribution of an influenza prevention kit to all Sierra staff. Each influenzaprevention kit consisted of a small box of tissues, a flyer and a digital thermometer. The flyer provided information regarding influenza, how it spreads, its symptoms, useful internet links and good health habits that can protect us from getting infected.

KPI


CONTINUED



SAFETY & HEALTH

Date Qualifying NoteFor Sonae Sierra, there is only one type of“product”, which is “shopping centres &related services/management”. In this case, the“life-cycle stage” designated by “certification” was assumed to be the necessary Safety &Health inspections and approvals by competentauthorities of the “products” (shoppingcentres) prior to opening to the public, whichenable each centre to gain a Utilisation Permit.Disposal, re-use, or recycling was assumed asthe refurbishment of shopping centres.

KPILife cycle stages in which health and safety impacts of products and servicesare assessed for improvement, and percentage of significant products andservices categories subject to such procedures (GRI PR1)

Percentage of significant productAre Health and Safety impacts or service categories that areof products and services covered by and assessed for

Life cycle stages assessed for improvement? compliance with such procedures

Development of product concept Yes 100%

Research & Development Yes 100%

Certification (UTILISATION PERMIT) Yes 100%

Manufacturing and production Yes 100%

Marketing and promotion No 0%

Storage, distribution and supply Not applicable Not applicable

Use and service Yes 100%

Disposal, re-use or recycling Yes 100%

Date Qualifying NoteThis indicator covers all shopping centres inthe owned portfolio which were undermanagement by Sierra for the entirety of thereporting year.

Sonae Sierra does not apply any sectorialvoluntary code regarding Safety & Health.However they subscribe a corporate voluntarycode, The World Safety Declaration.

Comment

During 2007, 7 notifications werereceived in Portugal in relationto non-conformances withproduct safety regulations(2 in LoureShopping and 5in NorteShopping).

KPITotal number of incidents of non-compliance with regulations and voluntarycodes concerning the health and safety impacts of products and services duringtheir life cycle, by type of outcomes (GRI PR2)

Incidents of Non-Compliance Incidents of Non-Compliance Incidents ofwith regulations resulting in with regulations resulting in Non-Compliance

Country a fine or penalty a warning with voluntary codes

Portugal – 7 –

Brazil – – –

Spain – – –

Germany – – –

Greece – – –

Italy – – –

The Netherlands – – –

England – – –

Romania – – –

Total – 7 –




SAFETY & HEALTH

Data Qualifying Note/Methodological NoteThis indicator covers all shopping centres inthe owned portfolio which were undermanagement by Sierra for the entirety of thereporting year.

Sonae Sierra does not apply any sectorialvoluntary code regarding Safety & Health.However they subscribe a corporate voluntarycode, The World Safety Declaration.

Comment

During 2007, 7 notificationswere received in Portugal inrelation to non-conformanceswith product safety regulations(1 in LoureShopping and 6 inNorteShopping), both regardingsafety signage.

KPINumber and type of instances of non compliance with regulations concerningproduct information and labelling, including penalties or fines assessed forthese breaches (GRI PR4)

Incidents of Non-Compliance Incidents of Non-Compliance Incidents ofwith regulations resulting in with regulations resulting in Non-Compliance

Country a fine or penalty a warning with voluntary codes

Portugal – 7 –

Brazil – – –

Spain – – –

Germany – – –

Greece – – –

Italy – – –

The Netherlands – – –

England – – –

Romania – – –

Total – 7 –

We set ourselves 3 Safety & Health targets for completion during 2007. The chart summarises our achievements.

SUMMARY OF ACHIEVEMENT against 2007 Safety & Health targets% Achievement

0%

1-25%

26-50%

51-75%

76-99%

100%2

1




SAFETY & HEALTH

KPIPortugal

Total Safety & Healthtraining provided duringthe 2007: Total numberof man hours

2006

2007

2006

2007

Data Qualifying Note/Methodological NoteThis indicator covers allowned centres in operationthroughout the reporting yearand, in addition:

• 8a Avenida (completedproject);

• Corporate offices in Maiaand Lisbon;

• 2 centres acquired during2007 (CC Modelo deAlbufeira and CCContinente de Portimão);

• 2 centres managed onlyduring 2007 (CC Continenteda Amadora and CCContinente de Leiria).

The total number of manhours of training provided,calculated as the number ofsessions multiplied by thenumber of hours duration ofeach session multiplied by thenumber of participants.

3,219

5,185

KPISpain


Data Qualifying Note/Methodological NoteThis indicator covers allowned centres in operationthroughout the reporting yearand our corporate offices inMadrid.

The total number of manhours of training provided,calculated as the number ofsessions multiplied by thenumber of hours duration ofeach session multiplied by thenumber of participants.903

2,904

2006

2007

KPIItaly


Data Qualifying Note/Methodological NoteThis indicator covers all bothowned centres in operationthroughout the reporting year,2 centres managed only(Bicoca Village and Moncalieri45° Nord) and our corporateoffices in Milan.


45

288

2006

2007

KPIGermany


Data Qualifying Note/Methodological NoteThis indicator covers Alexa,our new shopping centreopened in 2007, and 1 projectunder development (Loop5).


0

34

CONTINUED

2006

2007

KPIGreece


Data Qualifying Note/Methodological NoteThis indicator covers our 1owned shopping centre inoperation in Greece and 1project under development(Pantheon Plaza).

The total number of manhours of training provided,calculated as the number ofsessions multiplied by thenumber of hours duration ofeach session multiplied by thenumber of participants.39

178

2006

2007

KPIBrazil


Data Qualifying Note/Methodological NoteThis indicator covers all of ourowned centres undermanagement in Brazil, besides1 project under development(ManauaraShopping) and ourcorporate offices in São Paulo.


1,219

6,040



SAFETY & HEALTH

In September 2007 we launched the PERSONÆ Property Management Awards for the Best Shopping Centre Team and the BestTenant. The awards are expected to increase stakeholders’ acknowledgement of Sonae Sierra’s efforts to promote Safety &Health and to boost tenants’ participation in our key endeavour to propagate a culture of safe behaviour.

• The Best Shopping Centre Team award is attributed to a single shopping centre management team across the entire SonaeSierra Property Management portfolio. This award seeks to establish a dynamic process for sharing best Safety & Healthmanagement practices both locally and corporate-wide, as well as recognising shopping centre teams’ efforts on raising S&Hexcellence levels. Shopping centres which meet the pre-qualification criteria20 are invited to make an award entryhighlighting innovative measures taken to raise awareness on S&H within the centre or solve non-conformances, effortsmade to raise awareness among stakeholders and achieved results.

PERSONÆ Award Best Shopping Centre Team 2007 Parque D. Pedro, Brazil

• The Best Tenant award in each country21 is attributed to a single tenant unit by country (across all shopping centresmanaged by Sierra). It aims to boost tenants’ involvement in Sierra’s quest for excellence in S&H management in shoppingcentres, through the motivation of tenants’ supervisors, by recognition of tenants with best practices and by establishing aprocess inducing other tenants to pursue the same goals. Individual tenant units which meet the pre-qualification criteria areeligible to be nominated by the centre manager as the centre nominee. The nominated tenant unit may submit an awardentry explaining measures to raise awareness and incentivise staff, suppliers and customers.

PERSONÆ Award Best Tenant 2007

Portugal22 H&M, LoureShopping, and CONTINENTE, AlgarveShoppingSpain ZARA, GrancasaItaly CONBIPEL, ValecenterBrazil LOJAS RENNER, Parque D. Pedro

20 The Best Shopping Centre Team Award is based on the following criteria: 1. Pre-qualification requirement for shopping centres to have complied withthe established Sierra corporate goals and targets; 2. Pre-requisite for shopping centre to comply with requirements relating to the correct functioningof S&H-related operational systems and procedures within the centre; 3. Award entry highlighting innovative measures taken to raise awareness onS&H within the centre or solve non-conformances, efforts made to raise awareness among stakeholders and achieved results.

21 In Greece no award was granted since no applications from tenants complying with the pre-established requirements were received.

22 H&M, LoureShopping, and CONTINENTE, AlgarveShopping achieved the same score.

Case StudyLaunch of the PERSONÆ Awards

Sierra’s new shopping centre in S. João da Madeira, Portugal, was inaugurated in September 2007, boasting 130 shops andcreating 839 new jobs. The completed project was developed in accordance with the highest standards of Safety & Healththroughout the entire construction works phase. This project saw the close involvement of all construction works players – theproject management team, designers and contractors, in the implementation of the Sierra S&H management tool, Safe PracticeIndex (SPI).

The SPI tool, which is being implemented across all Sierra’s main projects under development, assesses the extent to whichcontractors’ personnel are committed to and aware of safety issues. The SPI audits, involving the project management team, aimto make safety a clear and unmistakably visible procedure for all its service suppliers. As Sierra S&H Management System states,we will only achieve the safety excellence level that we visibly demonstrate.

Throughout the entire construction works phase 8ª Avenida recorded a total of 7 accidents. These were minor accidents, whichrepresents an improvement in performance relative to previous trends.

Case StudySafety & Health management at 8ª Avenida: commitment enhances performance


Risk Management

ContextAt Sonae Sierra we have identified social and environmental risks facing the business alongside financial,technological, political and governance risks both today and in the future. Interestingly, the results of this exercisesuggest that we face as many social and environmental risks as we do financial, and that these three categories ofrisk are more significant than the others.

Our StrategyAs part of our CR Governance structure, we now operate a Risk Management Working Group, reporting directly to the CR Steering Committee and the Chief Financial Officer (CFO), which includes members from Sierra’s businessesand activities and Risk Owners (persons who undertake the actual management of risks to the company). ThisWorking Group takes responsibility for Risk Management across all CR impact areas and the economic pillar of CR,the identification of new risks and the identification of best practices in Risk Management and communication,among other functions.

In 2007 the Executive Committee approved the proposal from the Risk Management Working Group for a RiskManagement Framework for the Company. This brings together the various Risk Management activities undertakenby the businesses and should lead for a global view of Risk Management. On this basis, the Company has now a solid foundation both to manage identified risks and to search and analyse new risks.

Our Performance in 2007During the year, we have focussed on improving instruments for managing development risks. Two new reports weredeveloped for the Board, covering risks before commitment and after commitment to the project. Furthermore, workhas continued on the deployment of an integrated system for the control of project costs, based on the APSISplatform. The focus of this risk management framework was very much on financial risks, except for the PERSONÆprogram that covers non-financial risks.

For 2008, APSIS should be progressively rolled-out in Portugal, Spain and Italy. Financial risk management policies willbe refined and improvements will be introduced in monitoring and management systems. And finally, detection andanalysis of new risks will continue on an on-going basis.


Economic performance

ContextThrough continued growth, Sonae Sierra impacts on the local and international economy. Our financial strategy and apolicy of recycling capital allows the company to continue to generate innovative and creative concepts and deliverattractive returns for investors, as demonstrated by our five year EBITDA evolution.

In terms of organisational challenges presented in this area, the recent developments in the financial markets,associated with the US sub-prime crisis, may generate collateral impacts in the property markets, namely in whatconcerns availability of finance. As far as Sonae Sierra is concerned, we believe that this risk is limited. The second riskto consider relates to the state of property markets. There is a perception that, in some countries, the property cyclereached the peak in terms of valuations and investor interest. Again, we do not believe this risk to be significant forSierra since this does not apply to most of the markets where the company operates.

Our Strategy & Management ApproachSierra has defined a strategy that includes medium-term objectives and policies on how to attain them. This strategyis revised annually by the Executive Committee. The strategy is then reflected in a 5-year Plan (including financialprojections) and this serves as basis for the preparation of the Annual Budget.

In terms of Economic performance, in the short-term, the company aims to reach a €2 billion Net Asset Value to beachieved without recourse to additional funds from shareholders. In the medium-term, the company aims to achieve€10 billion of Assets under Management.

With respect to Market presence, Sierra’s objective is to have a leading position in each of the markets where weoperate (Portugal, Spain, Italy, Greece, Germany, Romania and Brazil).

Performance in 2007Key successes and shortcomings in 2007

Sierra began operating in Romania in 2007. This move came as part of the Company’s strategy to look for newgrowth opportunities, namely in markets that show significant potential in terms of shopping centre development.

Major changes in the reporting period to systems or structures to improve performance

Sierra decided to establish the Sierra Portugal Fund and commenced work on this. The fund will hold a number of properties in the Portuguese market and will be open to third-party investors. Sonae Sierra may reduce its positionto 20% of the Fund´s equity. The objective of this fund is to recycle part of the company’s capital and to extend thecompany’s asset management activity.



Date Qualifying NoteThis indicator covers all company activities.

The values reported for 2006 have been re-stated in order to include VAT added topayments to governments. VAT is nowincluded for both 2006 and 2007.

The following end of year exchange rates wereused to convert Brazilian reais and Romanianleu into euros:

BRL/EUR = 0.375770;

RON/EUR = 0.300170.

KPIDirect economic value generated and distributed, including revenues, operatingcosts, employee compensation, donations and other community investments,retained earnings, and payments to capital providers and to governments;€ millions (GRI EC1)

2006 2007

Direct economic value generated

Revenues (direct income + indirect income from gains on sale of investments) 255.2 270.3

Economic value distributed

Operating costs (general suppliers and services; consolidated managementfigure in accordance with the % of ownership, not including common charges) 53.3 60.0

Employee compensation 41.7 46.9

Payments to providers of capital (shareholders and banks) 56.8 71.6

Payments to governments 61.7 78.0

– Portugal 49.6 51.5

– Spain 7.7 11.6

– Italy 2.4 1.7

– Germany –3.2 6.0

– Greece 0.6 2.1

– Romania n/a 0.8

– Netherlands 0.6 0.4

– Brazil 4.0 3.8

Community Investments 0.3 0.1

Economic value retained calculated as economic value generatedless economic value distributed 41.4 13.8

2006

2007

KPITotal rent received (€ Millions)

Data Qualifying NoteTotal rent received at all Sierraowned centres, covering100% of rent received (ratherthan Sierra rent received asproportionate to Sierra’sownership stake in each centre).

307.2

339.4

KPISignificant financialassistance received fromgovernment (GRI EC4)

None

Data Qualifying Note/Methodological NoteThis indicator covers allSierra’s activities.

Sonae Sierra did not receiveany form of financial assistancefrom the government during2007 and the government isnot present within SonaeSierra’s shareholding structure.


Comment

The increase in our total rental income over the 2 yearperiod reflects the continuing expansion of our operationsand sustained high occupancy rates across our portfolio.

KPIDevelopment and impact of infrastructureinvestments and servicesprovided primarily forpublic benefit throughcommercial, in-kind, orpro bono engagement(GRI EC8)

None

Data Qualifying Note/Methodological NoteThis indicator covers allSierra’s activities.

In 2007, Sierra did not makeany investments of this type.The company did spend€277,889 on infrastructureinvestments (roads) atAlgarveShopping in Portugal,however this investment wasnot made primarily for publicbenefit.



KPIPortugal

Total rent received (€ Millions)

2005

2006

2007

Data Qualifying Note/Methodological NoteTotal rent received at all Sierraowned centres in Portugal,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake ineach centre).

161.3

175.2

185.8

KPISpain


2005

2006

2007

Data Qualifying Note/Methodological NoteTotal rent received at all Sierraowned centres in Spain,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake ineach centre).

64.3

68.0

69.3

KPIItaly


2005

2006

2007

Data Qualifying NoteTotal rent received at all Sierraowned centres in Italy,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake ineach centre).

The rental income in Italyshows a decrease over the3 year period due to theexpansion project at Valecenterwhich caused some tenantunits to be unoccupied duringcertain periods.

7.4

6.9

6.2


KPIGermany


9.5

Data Qualifying Note/Methodological NoteTotal rent received at all Sierraowned centres in Germany,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake ineach centre).

KPIRomania


1.6

KPIGreece


2005

2006

2007

Data Qualifying Note/Methodological NoteTotal rent received at the Sierraowned centre in Greece,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake inthe centre).

1.4

13.3

16.4

Data Qualifying NoteTotal rent received at the Sierraowned centre in Romania,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake ineach centre).

KPIBrazil


2005

2006

2007

Data Qualifying NoteTotal rent received at all Sierraowned centres in Brazil,covering 100% of rentreceived (rather than Sierrarent received as proportionateto Sierra’s ownership stake ineach centre).

35.3

43.7

50.7


Verification statement


Verification statement



GRI Content Index

1 Strategy & Analysis

1.1 Statement from the most senior decision-maker of the organisationabout the relevance of sustainability to the organisation and itsstrategy.

CEO’s Statement, pages 1 & 2

1.2 Description of key impacts, risks and opportunities. • Key impacts are listed in Table 1 on page 4

• Business challenges and opportunities are listed in each impactarea section, on pages 28, 44, 51, 59, 65, 70, 78, 89 & 99.

• Details of our Risk Management procedures are explained in theRisk Management section on page 112.

• Performance against CR targets can be seen on pages 2, 23, 38,48, 54, 64, 68, 74, 85, 96 & 109 and in the full Target Reviewreport (Annex 2).

• Long-term objectives for climate change, water, waste and landuse are shown on pages 30, 45, 52 & 60 respectively.

2 Organisational Profile

2.1 Name of the organisation. Who we are, page 3

2.2 Primary brands, products, and/or services. Who we are, page 3, and Where we are, Table 2, page 5

2.3 Operational structure of the organisation, including main divisions,operating countries, subsidiaries, and joint ventures.

Who we are, Our business activities and their impacts, pages 3 & 4Please see also Notes 3 and 4 of the Consolidated FinancialStatements in our Annual Report and Accounts (AR&A).

2.4 Location of organisation's headquarters. Who we are, Key facts as at 31st December 2007, page 3

2.5 Number of countries where the organisation operates, and names ofcountries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

Who we are, Key facts as at 31st December 2007, page 3Where we are, Table 2, page 5

2.6 Nature of ownership and legal form. Who we are, Our business activities and their impacts, page 3

2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).

Who we are, page 3Where we are, Table 2, page 5

2.8 Scale of the reporting organisation, including– Number of employees– Net sales (for private sector organisations) or net revenues (for public

sector)– Total capitalisation broken down in terms of debt and equity– Quantity of products or services provided

Where we are, Table 2, page 5

2.9 Significant changes during the reporting period regarding size,structure, or ownership including:– The location of, or changes in operations, including facility openings,

closings, and expansions and– Changes in the share capital structure and other capital formation,maintenance, and alteration operations

Where we are, Significant changes regarding our size and structure,page 5

2.10 Awards received in the reporting period CEO Statement, page 2

Contents checklist Location or description


GRI Content Index

3 Report Parameters

3.1 Reporting period for information provided. About this report, page 6

3.2 Date of most recent previous report. About this report, page 6

3.3 Reporting cycle. About this report, page 6

3.4 Contact point for questions regarding the report or its contents. About this report, page 6

3.5 Process for defining report content, including.– Determining materiality– Prioritising topics within the report, and – Identifying stakeholders the organisation expects to use the report.

About this report, Materiality, pages 6 & 7About this report, Stakeholder inclusiveness, page 8About this report, Completeness, page 8About this report, Data Quality and Reliability, page 8

3.6 Boundary of the report (e.g, countries, divisions, subsidiaries, leasedfacilities, joint ventures, suppliers).

About this report, Completeness, page 8

3.7 State any specific limitations on the scope or boundary of the report. About this report, Completeness, page 8

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities,outsourced operations, and other entities that can significantly affectcomparability from period to period and/or between organisations.

About this report, Completeness, page 8

3.9 Data measurement techniques and the bases of calculations,including assumptions and techniques underlying estimations appliedto the compilation of the Indicators and other information in thereport.

About this report, Data quality & reliability, page 8

3.10 Explanation of the effect of any re-statements of informationprovided in earlier reports, and the reasons for such re-statement.

About this report, Data quality & reliability, page 8

3.11 Significant changes from previous reporting periods in the scope,boundary, or measurement methods applied in the report.

About this report, Completeness, page 8About this report, Data quality & reliability, page 8

3.12 Table identifying the location of the Standard Disclosures in thereport. Identify the page numbers or web links where the followingcan be found:– Strategy & Analysis 1.1-1.2– Organisational Profile 2.1-2.10– Report Parameters 3.1-3.13– Governance, Commitments, and Engagement 4.1-4.17– Disclosure of Management Approach, per category– Core Performance Indicators– Any GRI Additional Indicators that were included and– Any GRI Sector Supplement Indicators included in the report.

GRI Content Index, pages 119-133

3.13 Policy and current practice with regard to seeking external assurancefor the report.

CEO Statement, page 2Verification statement provided by Deloitte, pages 116-117Sonae Sierra follows the GRI G3 Guidelines for several reasons:*The GRI Guidelines are international in their scope and recognisedworldwide as a multistakeholder standard (given that Sierra operatesinternationally, it makes sense to follow this kind of framework)*Sonae S.G.P.S, one of Sierra’s shareholders, previously recommendedthat all sub-holdings reported using the GRI framework.

In line with the aim to achieved compliance with GRI, Sierra has alsosought to ensure the transparency of the company’s CR Reporting byseeking external assurance. This external assurance guarantees that wereport in accordance with the requirements set out by the GRI and theverification process allows an improvement in the quality and reliability of performance data reported and the accuracy of the externalevaluation of progress against targets.



GRI Content Index

4 Governance, Commitments, and Engagement

4.1 Governance structure of the organisation, including committeesunder the highest governance body responsible for specific tasks,such as setting strategy or organisational oversight.

How we are governed, pages 13 & 14See also our AR&A, page 61

4.2 Indicate whether the Chair of the highest governance body is also anexecutive officer (and, if so, their function within the organisation'smanagement and the reasons for this arrangement).

How we are governed, pages 13See also our AR&A, page 61

4.3 For organisations that have a unitary board structure, state thenumber of members of the highest governance body that areindependent and/or non-executive members.

How we are governed, pages 13 & 14See also our AR&A, page 61

4.4 Mechanisms for shareholders and employees to providerecommendations or direction to the highest governance body.

There are no minority shareholders so the use of shareholderresolutions to enable such shareholders to express an opinion to thehighest governance body is not applicable. Shareholders arerepresented on both the General Shareholders Assembly and the Boardof Directors, so their opinions are expressed at meetings of thesebodies. For employees, see How we govern CR page 15.

4.5 Linkage between compensation for members of the highestgovernance body, senior managers, and executives (includingdeparture arrangements), and the organisation's performance(including social and environmental performance).

We operate a procedure by which performance in relation to Safety &Health and Environment aspects is proportionally linked to staffbonuses through an assessment of individuals’ contribution to theseaspects.

4.6 Processes in place for the highest governance body to ensureconflicts of interest are avoided.

There are no specific rules in Sierra to deal with conflicts of interest atBoard level, the general law applies in those circumstances. Additionally,there is a general rule in the Company´s Code of Conduct, stating that allemployees must report any situation of conflict of interest to their manager.

4.7 Process for determining the qualifications and expertise of themembers of the highest governance body for guiding theorganisation's strategy on economic, environmental, and socialtopics.

Since long time, main Sonae Sierra’s Board of Directors constitution hasbeen kept stable. At the time when the members were first appointed,no environment and social leadership vision or concerns were yet beingtaken into consideration by the company. Nevertheless, through theyears, these Directors were the ones responsible for the launch andbusiness incorporation of Sierra environmental, Safety & Health andcorporate responsibility policies, that presently constitute a strongsupport of the Company’s success and image. Considering thisstrategy, and in order to guarantee its continuity, in future theappointment of new Board members by shareholders will necessarilyconsider candidates’ previous contribution to managing or leadingcompanies successful in terms of Corporate Responsibility. This will notnecessarily have to involve a formal, complex process, since it will bebased mainly on knowledge of each candidate’s professional path.

For any more technical environment or social expertise that the Boardof Directors may need in order to support the direction of theorganisation's strategy functions it can rely upon the support of theseveral corporate structures as described in this report.

4.8 Internally developed statements of mission or values, codes ofconduct, and principles relevant to economic, environmental, andsocial performance and the status of their implementation.

We have developed the following internal policies, which are referred to in different sections of this report:• Mission statement, referred to in the CEO Statement on page 1• Code of conduct, referred to on page 16• Corporate Responsibility Policy, referred to on page 16• Safety & Health Policy, referred to on page 100• Environmental Policy, referred to on page 21• Responsible Procurement Policy, referred to on page 66All these policies have been fully approved and we seek to comply withthem in day to day operations as well as through ongoingimprovement in performance and progress in relation to objectives.



GRI Content Index

4 Governance, Commitments, and Engagement (continued)

4.9 Procedures of the highest governance body for overseeing theorganisation's identification and management of economic,environmental, and social performance, including relevant risks and opportunities, and adherence or compliance withinternationally agreed standards, code of conduct, and principles.

How we govern CR, page 15

4.10 Processes for evaluating the highest governance body’s ownperformance, particularly with respect to economic,environmental, and social performance.

Sierra considers the Board of Directors to be the highest governancebody, as it is the Board of Directors that provides strategic guidance to thecompany. Sierra does not operate a formal process to evaluate thehighest governance body’s own performance with respect to economic,environmental, and social issues as the corporate governance structuredoes not include an intermediary body between Board of Directors andthe General Shareholders Assembly that might effectively undertake suchan evaluation. The Board of Directors’ performance is evaluated only bySierra’s shareholders and by the market. Market opinion (from investors,banks, financial analysts and other business-related entities) has shownpositive feedback on the results achieved by Sierra in terms of economic,environmental and social performance. This can be demonstrated throughthe attainment of awards such as the DuPont Safety and Health Award,the ICSC ReSource Award and Best European Retail/Leisure Developer ofthe European Property Awards.

4.11 Explanation of whether and how the precautionary approach orprinciples is addressed by the organisation.

Our Environmental Management System (EMS), including theEnvironmental Standards for Retail Developments (ESRD) demonstrate ourapplication of the precautionary principle in relation to environmentalconcerns. Our carbon management strategy, in particular, definesmeasures to reduce our GHG emissions per m2 GLA and our ESRD includestandards relating to energy and water efficiency for new buildings. Webelieve that it is vitally important for us to implement these standards andaim to mitigate our environmental impacts despite not having knowledgeof what the precise future scenarios might be in terms of climate changein the specific locations where we operate.

4.12 Externally developed economic, environmental, and socialcharters, principles, or other initiatives to which the organisationsubscribes or endorses.

How we govern CR, Our Commitments, page 16

4.13 Membership in associations (such as industry associations) and/ornational/international advocacy organisations in which theorganisation:– has positions in governance bodies– participates in projects or committees– provides substantive funding beyond routine membership duesor – views membership as strategic.

How we govern CR, Our Commitments, pages 16 & 17

4.14 List of stakeholder groups engaged by the organisation. How we listen, Table 4, pages 9-12

4.15 Basis for identification and selection of stakeholders with whom to engage.

How we listen, page 9

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

How we listen, Table 4, pages 9-12

4.17 Key topics and concerns that have been raised throughstakeholder engagement, and how the organisation hasresponded to those key topics and concerns, including through its reporting.

How we listen, Table 4, pages 9-12




GRI Content Index

5 Management Approach and Performance Indicators

Economic Aspects: Disclosureon Management Approach

Location or description

Economic Performance Economic performance, pages 113-115

Market Presence Economic performance, page 113

Indirect Economic Impacts One of our most significant indirect economic impacts is job creation through the inauguration of new shopping centres. We monitor jobs created at new centres opened and this KPI is reported inCommunities, KPI table, page 85

Overall management approachto Economic aspects:


Goals and Performance Economic performance, Performance in 2007, pages 113-115

Policy Economic performance, Strategy and ManagementApproach, page 113

Additional Contextual Information Economic performance, Strategy and ManagementApproach, page 113

EC Economic Performance Indicators C/A Location or description FullyCovered

PartiallyCovered

EC1 Direct economic value generated and distributed,including revenues, operating costs, employeecompensation, donations and other communityinvestments, retained earnings, and payments tocapital providers and to governments.

Core Economic performance, KPI table, page 114 √

EC2 Financial implications and other risks and opportunitiesfor the organisation’s activities due to climate change.

Core CEO Statement, pages 1 & 2Climate change, pages 27 & 28

√

EC3 Coverage of the organisation’s defined benefit planobligations.

Core Not reported

EC4 Significant financial assistance received fromgovernment.


EC5 Range of ratios of standard entry level wage comparedto local minimum wage at significant locations ofoperation.

Adtl Not reported

EC6 Policy, practices and proportion of spending on locallybased suppliers at significant locations of operation.

Core Not reported

EC7 Procedures for local hiring and proportion of seniormanagement hired from the local community atsignificant locations of operation.

Core Not reported

EC8 Development and impact of infrastructure investmentsand services provided primarily for public benefitthrough commercial, in-kind or pro-bono engagement.


EC9 Understanding and describing significant indirecteconomic impacts, including the extent of impacts.

Adtl Not reported



GRI Content Index

5 Management Approach and Performance Indicators (continued)

Environmental Aspects: Disclosureon Management Approach


Energy and Emissions Climate change, Our strategy, pages 29 & 30

Water and Effluents Water, Our strategy, page 45

Waste Waste, Our strategy, page 52

Biodiversity Land use, Our strategy, pages 60 & 61

MaterialsStandards relating to environmental requirements formaterials use are included within our EnvironmentalStandards for Retail Developments (ESRD) and overlapwith our strategies defined for carbon, water andwaste management by defining standards for theimplementation of more efficient energy and waterequipments and the use of materials with a recycledcontent where feasible.

A description of our ESRD tool is reported inEnvironmental Management, Our strategy andmanagement approach, on page 21

Products and ServicesGiven that our products are shopping centres and ourservices those which we provide as a building ownerand manager, our environmental strategy is directlyaimed at mitigating the impacts of our products andservices and enhancing the environmentalperformance of both.

ComplianceCompliance in terms of environmental requirements ismonitored through internal procedures, andenvironmental fines received during the reporting yearare reported under the GRI KPI EN28.

Monitoring procedures are explained inEnvironmental Management, Our strategy andmanagement approach, on page 22EN28 is reported in the KPI table on page 24

Transport We do not consider transport in itself to be one of theEnvironmental aspects which is material to ourbusiness as we do not transport, only members of ourworkforce. We do, however, consider transport withinthe Climate change impact area and our carbonmanagement strategy includes actions to reduce GHGemissions resulting from business travel.

Climate change, KPI table, page 31

Overall management approachto Environmental aspects:


Goals and Performance Our goals and performance in relation toenvironmental aspects can be found in eachenvironmental impact area section and on pages21-26 in Environmental Management.

Policy Our Environmental Policy is referenced inEnvironmental Management, Our strategy and management approach, page 21

Organisational Responsibility Training and Awareness Monitoring and Follow-up procedures

Environmental Management, Our strategy and management approach, pages 21 & 22

Additional Contextual Information Environmental Management, pages 22 & 23Key strategies for achieving goals are explained in each of the material impact area sections.



GRI Content Index


EN Environmental Performance Indicators C/A Location or description FullyCovered

PartiallyCovered

EN 1 Materials used by weight or volume. Core Not reported

EN2 Percentage of materials used that are recycled input materials.

Core Not reported

EN3 Direct energy consumption by primary energy source. Core Climate change, KPI table, page 32 √

EN4 Indirect energy consumption broken down by primary source.

Core Climate change, KPI table, page 33

√

EN5 Energy saved due to conservation and efficiency improvements.

Adtl Climate change, KPI table, page 34

√

EN6 Initiatives to provide energy-efficient or renewableenergy based products and services, and reductions in energy requirements as a result of these initiatives.

Adtl Climate change, KPI table, pages 34 & 35

√

EN7 Initiatives to reduce indirect energy consumption andreductions achieved.

Adtl Climate change, KPI table, page 36

√

EN8 Total water withdrawal by source. Core Water, KPI table, page 47 √

EN9 Water sources significantly affected by withdrawal of water.

Adtl Not reported

EN10 Percentage and total volume of water recycled and re-used.

Adtl Water, KPI table, page 47 √

EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of highbiodiversity value outside protected areas.

Core Land use, KPI table, page 63 √

EN12 Description of significant impacts of activities, products,and services on biodiversity in protected areas andareas of high biodiversity value outside protected areas.

Core Land use, KPI table, page 63 √

EN13 Habitats protected or restored. Adtl Land use, Our performance in 2007, page 62 √

EN14 Strategies, current actions, and future plans formanaging impacts on biodiversity.

Adtl Land use, Our strategy, page 61 √

EN15 Number of IUCN Red List species and nationalconservation list species with habitats in areas affectedby operations, by level of extinction risk.

Adtl Not applicable

EN16 Total direct and indirect greenhouse gas emissions by weight.

Core Climate change, KPI table, pages 36 & 37

√

EN17 Other relevant indirect greenhouse gas emissions by weight.

Core Climate change, KPI table, page 37

√

EN18 Initiatives to reduce greenhouse gas emissions andreductions achieved.

Adtl Climate change, KPI table, pages 34 & 35

√

EN19 Emissions of ozone-depleting substances by weight. Core

EN20 NOx, SOx, and other significant air emissions by typeand weight.

Core Climate change, KPI table, page 38 √



GRI Content Index


EN Environmental Performance Indicators C/A Location or description FullyCovered

PartiallyCovered

EN21 Total water discharge by quality and destination. Core Not applicableSierra does monitor wastewater quality at all ownedshopping centres however, the wastewater producedis domestic rather than industrial effluent andtherefore does not fit within the indicator protocoldefined by the GRI.

EN22 Total weight of waste by type and disposal method. Core Waste, KPI table, page 54 √

EN23 Total number and volume of significant spills. Core Environmental Management, KPI table, page 23 √

EN24 Weight of transported, imported, exported, or treatedwaste deemed hazardous under the terms of the BaselConvention Annex I, II, III, and VIII, and percentage oftransported waste shipped internationally.

Adtl Not applicable

EN25 Identity, size, protected status, and biodiversity valueof water bodies and related habitats significantlyaffected by the reporting organisation's discharges ofwater and runoff.

Adtl Not applicable

EN26 Initiatives to mitigate environmental impacts ofproducts and services, and extent of impact mitigation.

Core Environmental Management, KPI table, pages 24 &25

√

EN27 Percentage of products sold and their packagingmaterials that are reclaimed by category.

Core Not applicable

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations.

Core Environmental Management, KPI table, page 24 √

EN29 Significant environmental impacts of transportingproducts and other goods and materials used for theorganisation's operations, and transporting members of the workforce.

Adtl We have considered as significant impacts oftransporting products and other goods and materials:• the values reported under indicator EN3 (diesel,

petrol and ethanol consumed by the company car fleet and business travel in staff owned cars), in Climate change, KPI table on page 32

• the values reported under indicator EN17 (GHGemissions resulting from business air travel andemployees’ commuting journeys), in Climate change,KPI table on page 37.

√

EN30 Total environmental protection expenditures andinvestments by type.

Adtl We have reported on environmental investments (page 26) made by owned shopping centres inoperation, however not yet in accordance with the GRI protocols.



GRI Content Index


Labour Aspects: Disclosureon Management Approach


Employment Labour/Management RelationsTraining and Education

These aspects are covered under Employees, Ourstrategy and management approach, pages 90 & 91

Diversity and Equal OpportunitySierra has not yet formally approved a policy onDiversity and Equal Opportunity, although this is underdevelopment. Our Human Resources Managementpolicy contains no form of discrimination on thegrounds of race, sex, religion, nationality or socialclass. We do not yet operate any training andawareness procedures in relation to Diversity andEqual Opportunity, however, our Ombudsman, whichis described on page 91, guarantees theimplementation of a monitoring procedure for anyharassment claims from all stakeholders.

Occupational Health and Safety This aspect is covered under Safety & Health, Ourstrategy and management approach, pages 100-103

Overall management approach to Labour aspects: Location or description

Goals and Performance Employees, Our strategy and management approach page 91 and Our performance in 2007, pages 91-97Safety & Health, Our strategy and managementapproach, page 102 and Our performance in 2007,pages 103-110.

Policy Employees, Our strategy and management approach page 90Safety & Health, Our strategy and managementapproach, page 100

Organisational Responsibility Employees, Our strategy and management approach page 90Safety & Health, Our strategy and managementapproach, pages 100 & 101

Training and Awareness Employees, Our strategy and management approach page 90Safety & Health, Our strategy and managementapproach, page 101

Monitoring and Follow-up procedures Employees, Our strategy and management approachpage 91Safety & Health, Our strategy and managementapproach, pages 101 & 102

Additional Contextual Information Employees, Our strategy and management approachpage 91Safety & Health, Our strategy and managementapproach, page 103



GRI Content Index


LA Social Performance Indicators: Labour Practicesand Decent Work Performance

C/A Location or description FullyCovered

PartiallyCovered

LA1 Total workforce by employment type, employmentcontract, and region.

Core Employees, KPI table, page 92 √

LA2 Total number and rate of employee turnover by agegroup, gender, and region.

Core Employees, KPI table, page 93

√

LA3 Benefits provided to full-time employees that are notprovided to temporary or part-time employees, bymajor operations.

Adtl Not reported

LA4 Percentage of employees covered by collectivebargaining agreements.

Core Not reported

LA5 Minimum notice period(s) regarding significantoperational changes, including whether it is specified in collective agreements.

Core Not reported

LA6 Percentage of workforce represented in formal jointmanagement-worker health and safety committeesthat help monitor and advise on occupational safety programs.

Adtl Safety & Health, KPI table, page 107

√

LA7 Rates of injury, occupational diseases, lost day’s andabsenteeism and number of work-related fatalities by region.

Core Safety & Health, KPI table, page 106

√

LA8 Education, training, counselling, prevention and risk-control programs in place to assist workforcemembers, their families, or community membersregarding serious diseases.


√

LA9 Health and safety topics covered in formal agreementswith trade unions.

Adtl Not applicable

LA10 Average hours of training per year per employee by employee category.


√

LA11 Programs for skills management and lifelong learningthat support the continued employability of employeesand assist them in managing career endings.

Adtl Not reported

LA12 Percentage of employees receiving regularperformance and career development reviews.

Adtl Employees, KPI table, page 96

√

LA13 Composition of governance bodies and breakdown of employees per category according to gender, agegroup, minority group membership, and otherindicators of diversity.


√

LA14 Ratio of basic salary of men to women by employeecategory.

Core Not reported



GRI Content Index


Human Rights Aspects: Disclosure on Management Approach

Sierra currently operate only across cities in Europe and in São Paulo and (more recently) Manaus in Brazil. These countries have typicallygot significant bodies of legislation to protect working conditions and human rights amongst the labour force. Sierra remains committedto non discrimination and all our staff are required to comply with the Code of Conduct (please see www.sonaesierra.com/Web/en-

GB/corporateresponsibility/ombudsman/default.aspx to read our Code of Conduct in full). Therefore, we do address Human Rights aspects to the extent that they are relevant to our activities through procedures such as the Sierra Ombudsman. The Ombudsman is an independentfacilitator which monitors discrimination in the workplace and compliance with the Code of Conduct and Ethical Principles, which uphold therespect for the dignity and rights of each individual and the respect for individual identity, independent of race, gender or religion. Additionally,we are conscious of the need to consider Human Rights issues in the supply chain, particularly in development, and to this end we haveincluded stipulations regarding Human Rights concerns in the newly developed Responsible Procurement Policy and we intend to gain feedbackfrom our suppliers as to how they address Human Rights aspects through the Supplier Engagement Plan, schedule to be implemented in its firstphase in 2008.

HR Social Performance Indicators: Human Rights C/A Location or description FullyCovered

PartiallyCovered

HR1 Percentage and total number of significantinvestment agreements that include human rightsclauses or that underwent human rights screening.

Core

HR2 Percentage of significant suppliers and contractorsthat have undergone screening on human rights andactions taken.

Core

HR3 Total hours of employee training on policies andprocedures concerning aspects of human rights thatare relevant to operations, including the percentage of employees trained.

Adtl

HR4 Total number of incidents of discrimination and actions taken.

Core How we listen, Table 4, page 10 √

HR5 Operations identified in which the right to exercisefreedom of association and collective bargaining maybe at significant risk, and actions taken to supportthese rights.

Core

HR6 Operations identified as having significant risk forincidents of child labour, and measures taken tocontribute to the elimination of child labour.

Core

HR7 Operations identified as having significant risk forincidents of forced or compulsory labour, andmeasures taken to contribute to the elimination offorced or compulsory labour.

Core

HR8 Percentage of security personnel trained in theorganisation's polices or procedures concerning aspectsof human rights that are relevant to operations.

Adtl

HR9 Total number of incidents of violations involvingrights of indigenous people and actions taken.

Adtl





GRI Content Index


Society Aspects: Disclosure on Management Approach


Community Communities, Our strategy and managementapproach, pages 79 & 80

Public Policy How we govern CR, Public policy, page 17

Corruption; Anti-Competitive Behaviour andCompliance Sonae Sierra’s Code of conductestablishes and promotes the fundamental aspects ofethical behaviour that Sonae Sierra’s Board believesshould be adopted in our business and all ouractivities. Sierra’s Ethical Principles as established in thisCode cover the aspects of bribery and corruption andcompliant behaviour in terms of personal integrity,market integrity and financial integrity. The Codestipulates strict compliance with the law, honestyand integrity. (Please see www.sonaesierra.com/ Web/en-

GB/corporateresponsibility/ombudsman/default.aspx

to read our Code of Conduct in full).

Every individual within Sonae Sierra has theresponsibility for adhering to the principles set out inthe Code of Conduct.

Ultimate responsibility for these aspects lies with theExecutive Committee, and is divided from the seniorlevel through line management.

Sierra does not operate any specific training proceduresin relation to these aspects, however, our Ombudsman,reporting to the Audit and Compliance Committee,guarantees the implementation of a formal procedurefor monitoring any complaints or concerns relating withthe Code of Conduct.

Overall management approach to Society aspects: Location or description

Goals and Performance Communities, Our strategy and managementapproach, page 80 and Our performance in 2007,pages 81-85How we govern CR, Public policy, page 17

Policy Communities aspects are covered by our CR Policy andCode of Conduct.

Organisational Responsibility Communities, Our strategy and managementapproach, page 79How we govern CR, Public policy, page 17

Training and Awareness Communities, Our strategy and managementapproach, page 79

Monitoring and Follow-up procedures Communities, Our strategy and managementapproach, page 79 & 80

Additional Contextual Information Communities, Our strategy and managementapproach, page 81




GRI Content Index


SO Social Performance Indicators: SocietyPerformance


PartiallyCovered

SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering,operating, and exiting.

Core Communities, KPI table, page 82, and Our strategy and managementapproach, page 80

√

SO2 Percentage and total number of business unitsanalysed for risks related to corruption.

Core Not applicable

SO3 Percentage of employees trained in organisation's anti-corruption policies and procedures.

Core Not applicable

SO4 Actions taken in response to instances of corruption. Core Not applicable

SO5 Public policy positions and participation in public policydevelopment and lobbying.

Core How we govern CR, Public policy, pages 18-20 √

SO6 Total value of financial and in-kind contributions topolitical parties, politicians, and related institutions by country.

Adtl In 2007, no financial or in-kind contributions weremade to political parties, politicians and relatedinstitutions in any of the countries where we operate.

√

SO7 Total number of legal actions for anti-competitivebehaviour, anti-trust, and monopoly practices and their outcomes.

Adtl In 2007 there were no legal actions for anti-competitive behaviour, anti-trust, and monopolypractices and their outcomes.

√

SO8 Monetary value of significant fines and total numberor non-monetary sanctions for non-compliance withlaws and regulations.

Core There were no significant fines or non-monetarysanctions for non-compliance with laws andregulations other than those reported within the scope of EN28 (page 24) and PR9 (page 133).

√



GRI Content Index


Product Responsibility Aspects: Disclosure on Management Approach


Customer Health and Safety Safety & Health, Our strategy and managementapproach, pages 100-103 and Our performance in2007, pages 103-109

Product and Service LabellingGiven the nature of our business activities as ashopping centre developer and manager, we haveconsidered safety/emergency signage in relation to thisaspect. In addition, we have disclosed ourmanagement approach to tenant satisfaction on pages71 & 72, which constitutes a product responsibilityaspect which is material to our business.

Marketing CommunicationsSonae Sierra does not have a specific policy to addressMarketing Communications nor does the companyoperate internal monitoring and follow up procedures in relation to this aspect or a formaltraining programme.The most senior position with operationalresponsibility for Marketing Communications in Europelies with the Board Director responsible for Marketing. In Brazil, the same responsibility lies with the CEO of Sonae Sierra Brasil and theDirector of Operations.During 2007, an organisation change was made to establish a dedicated Marketing Communicationsunit within the Marketing Department.

Customer PrivacySonae Sierra does not supply data concerning Tenantsto third parties (sales achieved or results of audits) except in cases where this is obliged by law or has been authorised by the tenant company. Sensitive data concerning tenants is always keptconfidential, with data only being disclosed in the caseof a shopping centre valuation (and in this case, the valuator who analyses the data is obliged to maintain an agreement of confidentiality). Given this situation, customer privacy is not an aspectwhich is of significant materiality to our businessactivities to warrant a specific strategic andmanagement approach nor is it one which would be applicable to monitor in terms of performance.

Compliance See Society Aspects on the previous page.



GRI Content Index


PR Social Performance: ProductResponsibility Performance


PartiallyCovered

PR1 Life cycle stages in which health and safety impacts ofproducts and services are assessed for improvement,and percentage of significant products and servicescategories subject to such procedures.


√

PR2 Total number of incidents of non-compliance withregulations and voluntary codes concerning healthand safety impacts of products and services, by typeof outcomes.

Adtl Safety & Health, KPI table, page 108

√

PR3 Type of product and service information required byprocedures, and percentage of significant products and services subject to such information requirements.

Core Not applicable

PR4 Total number of incidents of non-compliance withregulations and voluntary codes concerning productand service information and labelling, by type ofoutcomes.

Adtl Safety & Health, KPI table, page 109 √

PR5 Practices related to customer satisfaction, includingresults of surveys measuring customer satisfaction.

Adtl Tenants, KPI table, page 73Communities, KPI table, page 83.

√

PR6 Programs for adherence to laws, standards, andvoluntary codes related to marketing communications,including advertising, promotion, and sponsorship.

Core Not reported

PR7 Total number of incidents of non-compliance withregulations and voluntary codes concerning marketingcommunications, including advertising, promotion, and sponsorship, by type of outcomes.

Adtl Not reported

PR8 Total number of substantiated complaints regardingbreaches of customer privacy and losses of customer data.

Adtl Not applicable.

PR9 Monetary value of significant fines for non-compliancewith laws and regulations concerning the provisionand use of products and services.

Core In 2007, The Spanish authority “Dirección General deOrdenación y Gestión del Juego” applied a fine of€9000 to Avenida M40, SA, because it carried out acontest in the Shopping Centre facilities within itspromoting campaigns without having finalauthorisation of the prior mentioned authorities. Thefine was paid and the procedure is definitively closed.

The following two fines were applied and reported on in 2006:

• Fine applied by the municipality of Campo Limpo tothe value of R$1,562,839.60 to Campo LimpoEmpreendimentos e Participações Ltda (9.4% heldby Sonae Sierra) for opening the first phase withouta license. 2007.

The company appealed to court to cancel the fine,however still no decision has been made by the court.

• Fine applied by the planning authorities ofThessaloniki to the value of €2.269.431 to Pylea SA(19.95% held by Sonae Sierra) for non-compliancewith the building permit of the MediterraneanCosmos shopping centre. Pylea made two objectionsto the competent committee. The Committee’sjudgment accepted the Company’s objections andannulled the fines imposed in total.

This case is therefore closed.

√


Glossary

Açaí Palm: The açaí palm is a species of palm tree native totropical Central and South America, which grows mainly infloodplains and swamps.

APSIS: specific IT system (tool) designed to monitor the budgeton development projects.

AR&A: Annual Report & Accounts, In Review 2007.

BREEAM: BREEAM is a UK developed assessment method andtool to help construction professionals understand and mitigatethe environmental impacts of the developments they designand build.

Brownfield site: a site (or a portion of a site) in whichdevelopment construction (new construction, expansion,redevelopment, re-use, etc.) or use may be complicated by thepresence of hazardous substances, pollutants or contaminants.

Buritis: also known as the Moriche Palm, Mauritia flexuosa, is apalm tree. It grows in and near swamps and other wet areas intropical South America.

CEO: Chief Executive Officer.

CFO: Chief Financial Officer.

EBITDA: Earnings Before Interest, Taxes, Depreciation andAmortisation.

EMS: Environmental Management System.

ESRD: Environmental Standards for Retail Developments.

GLA: Gross Lettable Area – Area that produce income to thecentre by being leased to the tenants or sold. Includes all areadesigned for tenant occupancy and exclusive use, includingstorage and office spaces of the shops.

Greenfield site: a site (or a portion of a site) which isundeveloped, either currently used for agriculture or left in anatural state.

Green Travel Plan: a study that analyses the transportinfrastructure serving a site and implements measures toencourage more sustainable means of travel amongstemployees and customers. Incentives might be offered toencourage car sharing, cycling, walking, the use of publictransport and of more fuel efficient vehicles.

GRI: Global Reporting Initiative. The Global Reporting Initiativeis an international network of businesses, civil society groups,labour and professional institutions whose objective is to makereporting on economic, environmental and social performanceby all organisations as routine and comparable as financialreporting. GRI accomplishes this vision by developing,continually improving and building capacity around the use if its Sustainability Reporting Framework.

IPCC: Intergovernmental Panel on Climate Change.

ISO 14001: This is the Environmental Management Standard ofthe International Standards Organisation.

KPI: Key Performance Indicator.

LEED: Leadership in Energy and Environmental Design GreenBuilding Rating System™ is a U.S. developed benchmark forthe design, construction and operation of high-performancegreen buildings.

Materiality: An issue is considered to be ‘material’ if it“influences or is likely to influence the decisions, actions andbehaviour of stakeholders and/or the organisation itself”.(Source: Redefining Materiality – Practice and public policy foreffective corporate reporting, Simon Zadek and Mira Mirme,AccountAbility, 2003).

Ombudsman: an independent facilitator to whom allemployment stakeholders can present their complaints and becertain that they are processed, investigated, and responded.

PEE: Preliminary Environmental Evaluation, a voluntaryenvironmental impact evaluation undertaken by Sonae Sierra onall newly acquired sites prior to project development.

PERSONÆ: PERSONÆ is the name of the project which wehave been implementing since 2004 on Safety & Health, inpartnership with S&H specialists DuPont Safety Resources.

S&H: Safety & Health

Scope 1/2/3 Greenhouse Gas emissions (GHG) protocol

Scope 1 – Direct emissions from fuel combustion on companyvehicles, HFC leakage from cooling systems, co-generationsystems and heat production in boilers.

Scope 2 – Indirect Emissions generated by the production ofelectricity used.

Scope 3 – Indirect Emissions from staff commuting journeys,company air travel, visitors’ journeys to and from shoppingcentres and the treatment of wastewater generated.

SPI: Safe Practice Index

SPO: Safety Preventive Observation

Parque Atlântico

Azores Islands Madeira Island

AZORES MADEIRAMadeiraShopping

8a Avenida

Serra Shopping

AlgarveShopping

CC Continente de Portimão

CC Modelo de Albufeira

GuimarãeShopping

MaiaShopping

Estação Viana

NorteShopping

ArrábidaShopping

Centro Vasco da Gama

GaiaShoppingViaCatarina

CascaiShopping

Centro Colombo

LoureShopping

RioSul Shopping

CoimbraShopping


Annex 1

Summary of Performance by country

Facts 2006 2007

Number of visits (in millions) 230.4 218.5

Number of employees 396 423

Economic performance (total rent received at owned centres in € millions) 175.2 185.8

Portugal

Porto

Lisboa

Faro


Annex 1


Global average indicators

n.d. = no data.

2005 2006 2007

GHG emissions of the owned and managed portfolio (tCO2e/m2 GLA) 0.138 0.132 0.121

Electricity efficiency (kWh/m2 mall + toilet area) 704 685 651

Water efficiency (litres per visit) 3.8 4.0 3.9

Waste recycling rate (%) 27% 34% 38%

Tenant satisfaction index 2.8 2.8 4.6*

Community investment (charitable donations made by shopping centres andcollected by visitors)

n.d. n.d. €9,629

Total number of man hours of Safety & Health training provided n.d. 3,219 5,185

KPI

Performance area Best Shoppingcentre

Performance2007

Electricity efficiency (kWh/m2 mall + toilet area) GuimarãeShopping 372

Water efficiency (litres per visit) GuimarãeShopping 1.2

Recycling rate (%) NorteShopping 56%

Tenant satisfaction index Serra Shopping 5.0

Best Shopping centres by performance area

* A new methodology was used in 2007 and a different scale (1 to 6), so the year-on-year results are not comparable.


Annex 1


Facts 2006 2007




Spain

Valle RealParque Principado Max Center

Zubiarte

La Farga

Dos Mares

Plaza Mayor

Grancasa

Luz del Tajo

Avenida M40

El Rosal

Plaza Éboli

Barcelona

Bilbao

Madrid


Annex 1



n.d. = no data.

2005 2006 2007





Tenant satisfaction index 2.9 2.9 4.2*


n.d. n.d. €62,711

Total number of man hours of Safety & Health training provided n.d. 903 2,904

KPI


Performance2007

Electricity efficiency (kWh/m2 mall + toilet area) Valle Real † 270

Water efficiency (litres per visit) Dos Mares 1.0

Recycling rate (%) Plaza Éboli 43%

Tenant satisfaction index Dos Mares 4.6


* A new methodology was used in 2007 and a different scale (1 to 6), so the year-on-year results are not comparable.

† Plaza Mayor (Spain) did in fact achieve the best electricity efficiency at 129 kWh/m2 mall + toilet area. However, Plaza Mayor is not considered to becomparable with other centres in terms of its energy consumption since it is an open air shopping centre.


Annex 1


Facts 2006 2007 2006 2007

Number of visits (in millions) 12.5 14.6 7.3 8.2

Number of employees 42 53 19 31

Economic performance (total rent received at owned centres in € millions) 6.9 6.2 13.3 16.4

Italy Greece

Facts n.a. = not applicable 2006 2007 2006 2007

Number of visits (in millions) – 5.2 – 1.2

Number of employees 38 46 0 12

Economic performance (total rent received at owned centres in € millions) n.a. 9.5 n.a. 1.6

Germany Romania

Alexa

Münster Arkaden

Mediterranean Cosmos

Valecenter

Airone

River Plaza Mall

Athens

Berlin

Rome

Bucharest


Annex 1


Global average indicators Italy Greece

n.a. = not applicable n.d. = no data. 2006 2007 2006 2007

GHG emissions of the owned and managed portfolio (tCO2e/m2 GLA) 0.052 0.040 0.243 0.197

Electricity efficiency (kWh/m2 mall + toilet area) 475 366 800 643

Water efficiency (litres per visit) 0.7 0.7 n.d. n.d.

Waste recycling rate (%) n.d. 36% 9% 22%

Tenant satisfaction index n.a. 3.0 n.a. 4.1

Community investment (charitable donations made by shopping centresand collected by visitors)

n.d. €18,611 n.d. n.d.

Total number of man hours of Safety & Health training provided 45 288 39 178

KPI


Performance2007

Electricity efficiency (kWh/m2 mall + toilet area) MediterraneanCosmos*

643

Water efficiency (litres per visit) Airone† 0.7

Recycling rate (%) Valecenter# 36%

Tenant satisfaction index MediterraneanCosmos

4.1


* Valecenter, which achieved 262 kWh/m2 mall + toilet, was not considered representative given that this centre was undergoing refurbishment works during2007, and for that reason part of the shopping centre was closed.

† Airone shopping centre does not have cooling towers in the HVAC system, which explains why water consumption per visit is much lower at this centre incomparison with others.

# Airone, which achieved a recycling rate of 71%, was not included due to the fact that it also manages hypermarket waste which enables the centre to achievea higher recycling rate so is not comparable to the performance of the other centres which do not do this.


Annex 1


Facts 2006 2007




Brazil

Boavista Shopping

Franca Shopping

Parque D. Pedro

Shopping Plaza Sul

Shopping Penha

Shopping Metrópole

Shopping Campo Limpo

Tivoli Shopping

Pátio Brasil

SãoPaulo

Rio de Janeiro

Brasilia


Annex 1



n.d. = no data.

2005 2006 2007





Tenant satisfaction index n.d. n.d. 4.3


n.d. n.d. €36,120

Total number of man hours of Safety & Health training provided n.d. 1,219 6.040

KPI


Performance2007

Electricity efficiency (kWh/m2 mall + toilet area) Tivoli Shopping* 276

Water efficiency (litres per visit) Tivoli Shopping 2.6

Recycling rate (%) Parque D. Pedro 63%

Tenant satisfaction index Franca Shopping 4.7


* Franca Shopping (Brazil) did in fact achieve the best electricity efficiency at 132 kWh/m2 mall + toilet area. However, Franca Shopping is not considered to becomparable with other centres in terms of its energy consumption since it is a shopping centre which most areas are open and doesn’t have air conditioning.


Annex 2

Review of progress against targets 2007

IntroductionThis analysis has been prepared by Upstream23 for Sonae Sierra. It is intended to provide Sonae Sierra with anindependent and objective review of the company’s progress towards meeting its CR targets for 2007. It is dividedinto two main sections:

• Summary of progress.

• Detailed review of progress against 2007 CR targets.

Summary of progressThe level of progress achieved against each of the targets has been established by scrutinising the documentedevidence of achievement provided by each of the business functions, and through communication with personswithin Sonae Sierra responsible for target accomplishment. The methodology used in order to determine thepercentage for completion awarded for each target varies according to the type of target set.

Performance targets

A Performance target refers to a target which relates to achieving performance against a standard (e.g. ISO 14001, or relevant government standards) or a threshold of performance (e.g. a recycling rate).

Performance targets have been evaluated by awarding a percentage for completion which corresponds directly to themeasurement of performance achieved, divided by the measurement of performance which was set to be achieved.Percentages have been calculated using integral numbers. With the waste data in particular, to calculate to one ormore decimal places would give a distorted impression of the accuracy of the underlying data which, due to itsnature, should not be assumed to be accurate to the nearest decimal place.

Management targets

A Management target refers to a target which relates to a management process or procedure. Management targetsmay contain quantifiable elements, but what distinguishes these from performance targets is that a quantifiablemanagement target is simply a means of incorporating a measurable element into a target, rather than actuallymeasuring improved performance relative to a threshold or standard.

Upon setting management targets for 2007 across all CR impact areas, Sonae Sierra anticipated in advance the stepswhich would constitute the necessary process to achieving those targets. Following this, in order to determine theextent to which each step contributed to the overall achievement of the target, a weighting (%) was set for each one on an “effort” basis, by applying professional judgement. Management targets have, therefore, been awarded a percentage of achievement in view of the evidence of completion received by Upstream in relation to each stepanticipated as necessary for the whole target to be completed, and in accordance with the weighting (%) attributedto each step. The steps corresponding to each management target, as well as their attributed weighting areexplained on the following pages.

The charts on the next page show a summary of Sierra’s progress against 2007 CR Targets.

23 Upstream is a strategic system sustainability consultancy with a specialist focus on the property sector.


CR Impact Area Numberof targets

0% 1–25% 26–50% 51–75% 76–99% 100%

CR Management 1 1

Environmental Management 5 1 4

Climate Change 11 3 8

Water 2 1 1

Waste 7 7

Land Use 2 2

Business Chain – Suppliers 4 1 3

Business Chain – Tenants 1 1

Communities (including visitors) 6 1 1 1 3

Employees 3 1 2

Safety & Health 3 1 2

Total 45 2 0 0 7 4 32

% Total 4% 0% 0% 16% 9% 71%

Summary of progress against 2007 CR targets, by impact area

Annex 2


For full details of the targets set for 2007 including the criteria for theevaluation made and the extent of achievement with respect to eachtarget, please see Annex 2 on page 143 of this report.

SUMMARY OF PROGRESS against 2007 CR targets

32

2

4

7

0%

1-25%

26-50%

51-75%

76-99%

100%


Detailed review of progress against 2007 CR targetsThe following table provides details of Upstream’s independent review of Sonae Sierra’s progress against 2007 CRtargets. In order to ensure objective and independent assessments of progress, Upstream has undertaken this assessmenton the basis of discussions between Upstream and key representatives, as well as requesting supporting evidence(documented where possible) of achievements claimed by Sonae Sierra.

CR Targets 2007 %achieved

Upstream comments on extent of target achievement

Investigate the applicability ofdifferent certification standards forour CR Management System.

100% This target commits Sonae Sierra to:

1) Identify different certification standards for CR ManagementSystems;

2) Evaluate the applicability of these to Sonae Sierra’s business activities;

3) For all those identified as applicable, evaluate the likely costs(including time) and benefits of Sonae Sierra’s compliance with these standards;

4) Present a paper to the CR Steering Committee includingrecommendations against this target.

Each of the steps defined above was attributed a weighting of 25% on the basis of the view that they each make an equal contribution to the overall completion of the target.

Upstream has reviewed the following evidence in order to be able to confirm that this target was fully achieved:

• A report consisting of an investigation of different certificationstandards for CR Management Systems available and including an assessment of their applicability to Sierra’s business activities and an evaluation of the likely costs and benefits of Sierra’scompliance with these standards.

• A copy of the CR Steering Committee meeting minutes in whichrecommendations against this target were presented.

CR Management

Annex 2





Ensure that all projects achieve 100% of compliance with criticalESRD standards.

74% Since this target requires Sierra to achieve 100% compliance with criticalESRD standards on all completed projects, the target has been evaluatedin the following way:

(No. of critical ESRD standards complied with across all completed projects)

(Total No. of applicable critical ESRD standards across all completed projects)

Sierra completed 3 new projects in 2007. A total of 279 critical ESRDstandards were evaluated as being applicable across these 3 projects,and 207 of those standards were fully implemented.

This means that in accordance with the methodology defined above, this target was 74% achieved.

The extent of compliance with the critical ESRD standards identified as applicable to each project is broken down as follows:

• 93% compliance at 8a Avenida in Portugal;

• 73% compliance at El Rosal in Spain;

• 56% compliance at Alexa in Germany.

At the time of each centre’s openingday, to have achieved ISO 14001certification for 100% of constructionsites (by number).

100% Since this target requires Sierra to achieve ISO 14001 certification on100% of completed projects’ construction sites, the target has beenevaluated in the following way:

No. of ISO 14001 certifications achieved for construction sitesX 100

Total No. of projects completed during 2007

A total of 3 projects were completed during 2007, all of which gainedISO 14001 certification.

Upstream viewed the following evidence in order to confirm that thistarget was 100% achieved:

• Copies of the ISO 14001 certificates awarded by Lloyd’sRegister Quality Assurance at all 3 projects completed during 2007 (8a Avenida, Alexa and El Rosal);

• Press releases announcing the inauguration of all 3 shopping centres.


Annex 2




Annex 2




To achieve ISO 14001 certification on a further 5 owned centres inoperation in Portugal.

100% Since this target requires Sierra to achieve ISO 14001 certification at a determined number of centres in operation, the target has beenevaluated in the following way:

No. of centres (up to 5) in operation whichachieved ISO 14001 during 2007 in Portugal*

X 1005

*This refers only to centres which had not received certification prior to 2007

Upstream has seen copies of the ISO 14001 certifications obtained at ArrábidaShopping, CascaiShopping, GuimarãeShopping,LoureShopping and Serra Shopping during 2007. Since certification was achieved at 5 centres, as originally proposed, it can be concluded that this target is 100% complete.

To achieve ISO 14001 certification on a further 4 owned centres inoperation in Spain.

100% Since this target requires Sierra to achieve ISO 14001 certification at a determined number of centres in operation, the target has been evaluated in the following way:

No. of centres (up to 4) in operation whichachieved ISO 14001 during 2007 in Spain*

X 1004

Upstream has seen copies of the ISO 14001 certifications obtained atDos Mares, Plaza Éboli, Max Centre and Parque Principado during 2007,which constitute evidence that this target was 100% achieved.


To achieve ISO 14001 certification on 1 owned centre in operation in Brazil.

100% Since this target requires Sierra to achieve ISO 14001 certification at only1 centre in Brazil, the target has been evaluated in the following way:

Number of centres (up to 1) in operationwhich achieve ISO 14001 during 2007 in Brazil*

X 1001


Sonae Sierra in fact achieved ISO 14001 certification at 2 shoppingcentres in operation in Brazil – Parque D. Pedro and Shopping Penha!

Upstream has seen the following evidence to confirm that this targetwas 100% complete:

• Copies of the ISO 14001 certificates awarded by Lloyd’s RegisterQuality Assurance at Parque D. Pedro and Shopping Penha, validfrom 13/08/2007 and 12/10/2007 respectively.




Commission a study of the potentialfinancial risks associated with climatechange impacts on Sierra ownedcentres under development andmanagement in Portugal with a view to reporting at Board level on the financial implications ofclimate change to Sierra’s business.

70% This target commits Sierra to:

1) Develop a brief for the study to be commissioned;

2) Make a tender and appoint the consultant;

3) Define the scope, plan, and expected outcome of the study;

4) Approve the contract in order that the study may be carried out.

The following weightings were attributed to each of the steps definedabove, in accordance with the view that some steps are more onerousand/or contribute more to the overall completion of the target thanothers: 1 = 25%, 2 = 15%, 3 = 30%, 4 = 30%.

Upstream received the following evidences corresponding to this target:

• A copy of the brief developed and finalised during August 2007,including the scope, plan and expected outcome of the study;

• Proposals received from two different consultancy organisationswhich had been identified as having the capacity to carry out the study;

• Confirmation that a service provider was chosen to undertake the study, but that for budget reasons the contract could not be approved.

Based on these evidences and confirmation that the contract will beapproved during 2008, this target has been judged as being 70%achieved considering that steps 1, 2 and 3 were fully completed andstep 4 was not completed due to the fact that for reasons relating to the budget available the contract could not be approved before the end of 2007.

Climate Change

Annex 2





Secure Board approval for theintegration of on site renewableenergy generation technology in at least in one development project (pilot).


1) Identify the most appropriate project for the pilot;

2) Undertake a renewable energy feasibility study;

3) Submit an evaluated plan for the integration of renewable energygeneration technology to the board;

4) Commission the installation of the necessary technology.


Sonae Sierra identified the recently inaugurated shopping centre, El Rosalin Ponferrada, Spain, to be a suitable pilot for this project.

A renewable energy feasibility study was undertaken and a proposal wassubmitted to the board and approved. The installation of photovoltaicpanels was commissioned and the contract signed during 2007, thusfully completing the target.

Upstream reviewed the following evidence to confirm that this targetwas 100% achieved:

• A copy of the renewable energy feasibility study for El Rosalshopping centre;

• A copy of the email communication containing a formal proposal,including a budget analysis, feasibility study, description of thephotovoltaic system and a comparative analysis of the fees chargedby different companies offering the installation service sent to seniormanagement for approval;

• A copy of the email communication confirming approval of theproposal and informing the Chief Executive Officer (CEO) of thedecision taken;

• A copy of the signed contract between El Rosal centre managers andSolaer confirming the agreed fees for the installation of photovoltaicpanels at the shopping centre. In addition, a copy of the licencegiven by the local authority granting permission for the installationof this renewable energy system was also seen.

To reduce greenhouse gas emissions associated with electricityconsumption (scope 2 GHG) persquare meter of Gross Lettable Areaacross the owned shopping centres in Portugal by 1% (compared with2006 levels).

100% In accordance with Sierra’s verified performance data, greenhouse gasemissions associated with electricity consumption (scope 2 GHG) persquare meter of Gross Lettable Area across the owned shopping centresin Portugal were in fact reduced by 2.8% during 2007 (to 0.076 tonnesof CO2 equivalent), in comparison with 2006 levels (0.078 tCO2e). This ismainly due to the implementation of efficient measures in shoppingmalls in Portugal.

In order to compare electricity emissions between different years, an average of the emissions factors of the last 3 years was used (2005, 2006 and 2007).

Climate Change

Annex 2





To install the necessary infrastructurein at least 4 more shopping centresowned by Sierra in Portugal, in orderto measure and monitor individualenergy uses (HVAC, car parking,lighting and vertical transport).


1) Identify at least 4 more owned shopping centres in Portugal whereenergy monitoring equipment should be installed;

2) Evaluate the cost of monitoring equipment required in each centreand expected costs;

3) Secure approval for necessary investment; and

4) Install the necessary infrastructure.


Sonae Sierra did indeed install the necessary infrastructure to measureand monitor individual energy uses at a further 4 shopping centres inPortugal during 2007. Upstream reviewed the following evidence toconfirm that this target was 100% achieved:

• A list of the 4 shopping centres identified as being those whereenergy monitoring equipment was required; these were:– AlgarveShopping;– Estação Viana;– GaiaShopping;– MaiaShopping.

• The approved 2007 investment plans of the 4 shopping centres listed above, including budget for the installation of energy metersto monitor individual consumptions.

• Copies of proposals received from Building Management System(BMS) services suppliers listing the costs of this equipment andinstallation for each of the 4 centres listed above.

• Copies of the signed and dated investment forms indicating that theproposed purchase and installation of the equipment was approvedduring 2007 at Estação Viana, AlgarveShopping and MaiaShopping,and a copy of the email communication indicating approval of thisinvestment at GaiaShopping dated from April 2007.

• Copies of the stamped invoices for the purchase and installation of the energy monitoring equipment from each of the 4 centres. All invoices were indicated as paid during 2007.

Climate Change

Annex 2





To install the necessary infrastructurein the remaining Spanish shoppingcentres originally developed by Sierra in order to measure andmonitor individual energy uses (HVAC, car parking, lighting andvertical transport).


1) Identify which are the shopping centres where energy monitoringequipment should be installed in accordance with the target;

2) Make an evaluation of the equipment required in each centre and expected costs;

3) Secure approval for necessary investment; and

4) Install the necessary infrastructure.

The following weightings were attributed to each of the steps definedabove, in accordance with the view that some steps are more onerousand/or contribute more to the overall completion of the target thanothers: 1 = 10%, 2 = 30%, 3 = 10%, 4 = 50%

Upstream reviewed the following evidences, concluding that this targetwas partially completed:

• A copy of a file identifying the shopping centres where the energymonitoring equipment should be installed as being Avenida M40,Plaza Éboli and Luz del Tajo. This same file contained an evaluationof the equipment required in each centre and the expected costs,taking into account offers made by different service suppliers;

• A copy of the email in which approval was given for the investmentsat Plaza Éboli and Luz del Tajo but not Avenida M40;

• Copies of the invoices for energy monitoring equipment purchasedat Plaza Éboli (dating from September 2007) and Luz del Tajo (datingfrom February 2008).

Upstream also received confirmation that as of 31/12/07, the newenergy monitoring infrastructure at Plaza Éboli and Luz del Tajo had not yet been linked to the Building Management System (BMS) and thus could not be considered to be fully installed.

On the basis of the evidences listed above, we have evaluated steps 1 and 2 as being fully achieved, step 3 as being achieved for 2 out of 3 applicable centres and step 4 as being partially achieved asequipment had been purchased Plaza Éboli. We have therefore awarded56% as the level of achievement of this target with the considerationthat step 4 was partially achieved at 1 out of 2 applicable centres.

Climate Change

Annex 2





Evaluate the investments needed, per shopping centre, to install theinfrastructure to measure and monitorindividual energy uses (HVAC, carparking, lighting and vertical transport)in all Italian shopping centres ownedby Sierra.

100% This target requires Sierra to:

1) Make an internal assessment in order to determine the infrastructurewhich would be required to measure and monitor individual energyuses at all owned Italian centres;

2) Investigate the costs of the equipment and its installation in each case;

3) Make an evaluation of the total investment costs needed;

4) Estimate how much of the infrastructure it would be feasible to install.


Sonae Sierra undertook an assessment of the energy meteringequipment that was needed to monitor individual energy uses at thetwo owned centres in operation in Italy, Airone and Valecenter. The costsof this equipment were investigated and at both centres the budgetrequired for the energy meters was included in the shopping centre’s2008 investment plan. The target can therefore be considered to be100% achieved.

Upstream reviewed the following evidence in order to confirm thestatement above:

• Copy of an excel file containing the assessment of the energymetering equipment needed in both Airone and Valecenter and the corresponding costs for the purchase of this equipment;

• A proposal from the environmental services company Italia Ambientelisting the costs of energy metering equipment for installation inAirone and Valecenter shopping centres;

• Copy of the investment plans for Airone and Valecenter specifyingthe budget for the purchase of energy metering equipment.

Climate Change

Annex 2





Evaluate the investments needed, per shopping centre, to install theinfrastructure to measure and monitorindividual energy uses (HVAC, carparking, lighting and vertical transport)in all Brazilian shopping centres.


1) Make an internal assessment in order to determine the infrastructurewhich would be required to measure and monitor individual energyuses at all owned Brazilian centres;

2) Investigate the costs of the equipment and its installation in each case;

3) Make an evaluation of the total investment costs needed;

4) Estimate how much of the infrastructure it would be feasible to install.


Sonae Sierra has evaluated the investments needed to install meteringequipment to monitor individual energy uses in all 9 owned centres inBrazil. Indeed, some of this equipment was actually installed in 2007.

Upstream reviewed the following evidences in order to confirm that thistarget was 100% achieved:

• Evaluations undertaken by BMS service suppliers in order to identifythe energy metering equipment needed in all 9 centres, including a proposal of the costs of the equipment and installation.

• A summary list of the total number of energy meters required foreach of the 9 centres, the total corresponding investment neededand the time schedule estimated for the purchase and installation of the energy meters.

• A copy of the invoice of the energy meters purchased and installedduring 2007 at Tivoli Shopping and photograph of the new energymeters installed in the centre.

• A copy of the invoice of the energy meters purchased and installedduring 2007 at Shopping Metrópole.

Climate Change

Annex 2





To perform an energy audit orevaluation (depending on the HVACinstalled) at each office, engage withthe building owner on any structuralrecommendations, and implement at least 75% of all managementrelated recommendations.


1) Identify offices where energy audit or evaluation will be carried out,when and by whom;

2) Carry out audits or evaluations and review the findings in each case, identifying the management related and the structuralrecommendations;

3) Engage with the building owner in order to determine which of the structural measures might be implemented;

4) Implement 75% of the management related recommendationsidentified.

The following weightings were attributed to each of the steps definedabove, in accordance with the view that some steps are more onerousand/or contribute more to the overall completion of the target thanothers: 1 = 20%, 2 = 30%, 3 = 20% 4 = 30%.

Upstream reviewed evidences which informed us that Sonae Sierraundertook the following actions corresponding to this target during 2007:

• Sierra identified at which offices it would be feasible to implementthis target, concluding that the target could be implemented at 4 out of 7 corporate offices (Lisbon, Madrid, Milan and Dusseldorf).It was determined that it would not be possible to carry out theenergy audit at the Athens offices because there was no supplieravailable to undertake the audits, nor at Maia offices in Porto,because the HVAC and lighting are not managed by Sierra. In São Paulo, the target was decided to be not applicable as the Sierrateam would be moving offices in January 2008. Upstream revieweda document noting this information and including details of thesupplier company and Sierra person responsible for carrying out theaudits at Lisbon, Madrid, Milan and Dusseldorf, and the dates whenthe audits would be made. This constitutes the completion of step 1(20% of full target achieved).

• Energy audits were undertaken by service suppliers at offices inLisbon, Madrid and Dusseldorf. Upstream reviewed copies of theproposals sent by the suppliers prior to the completion of the workand reports documenting the evaluations made and correspondingrecommendations for each of these offices. A proposal was alsoreceived regarding the energy audit at Milan offices, however thisaudit was not undertaken during 2007. This means that step 2 wascompleted at 3 out of 4 offices where the target should have beenimplemented (22.5% of full target achieved).

• A summary map was developed for all 3 offices where the energyaudits were undertaken, in order to identify the recommendationswhich should be implemented. At the Lisbon offices, 80% of theserecommendations were implemented during 2007. Upstreamreceived copies of invoices to show that recommended equipmentwas installed and purchased and a signed form to show thatrecommendations to change the AVAC and lighting timetables hadbeen put in place. At the Madrid and Dusseldorf offices, however,the recommendations identified had not yet been implemented atthe end of 2007. We have therefore concluded that step 3 wasachieved at 3 out of 4 offices (15% of target achieved), and step 4was achieved at 1 out of 4 offices (7.5% of target achieved).

Having identified the extent of completion of each step, we haveconcluded that this target was 65% achieved.

Climate Change

Annex 2





Trial the implementation of a GreenTravel Plan on one existing owned centre.

100% In order to complete this target, Sierra should:

1) Identify which shopping centre this will be piloted for;

2) Evaluate the public transport infrastructure which serves the centre;

3) Design and approve a Green Travel Plan which is accessible to thepublic and details as many different travel routes as possible;

4) Ensure the communication of the travel plan with staff, visitors,tenants and service providers.


Upstream reviewed the following evidence in order to confirm that thistarget was 100% achieved:

• A copy of the Green Travel Plan proposed time schedule for CentroColombo, indicating which measures would be suitable to pursue at the shopping centre taking account of the public transportinfrastructure which serves the centre;

• A proposal for the Green Travel Plan to be implemented at CentroColombo and a copy of the email communication from the shoppingcentre manager confirming approval of the plan;

• Digital photographs of the Green Travel Plan communicationdocument on display within Centro Colombo.

To undertake independent energyaudits in sixteen shopping centres in Portugal to ensure that they meetwith good practice standards.


1) Identify ‘good practice standards’ for energy management;

2) Identify the 16 shopping centres for audit;

3) Contract independent auditor’s;

4) Carry out the audits and assess the results against the good practicestandards previously identified.


Upstream reviewed the reports of energy audits undertaken at 16 ownedand managed shopping centres in Portugal. These reports, which havebeen made by independent auditors, include an assessment of eachshopping centre’s energy performance in relation to the standardsdefined by the European Union Energy Performance in BuildingsDirective and identify measures for improvement in energy performance.

On this basis we have concluded that this target has been fully achieved.

Climate Change

Annex 2





To undertake independent air qualityaudits in ten shopping centres inPortugal to ensure that they meetwith good practice standards.


1) Identify indoor air quality indicators;

2) Identify performance targets for all the air quality indicatorsidentified;

3) Identify the 10 shopping centres for audit;

4) Contract independent auditors;

5) Carry out the audits and assess the results against the performancetargets previously identified.

The following weightings were attributed to each of the steps definedabove, in accordance with the view that some steps are more onerousand/or contribute more to the overall completion of the target thanothers: 1 = 15%, 2 = 15%, 3 = 10%, 4 = 15%, 5 = 45%.

Upstream received evidences demonstrating that an air quality evaluationwas undertaken to identify indoor air quality indicators for all shoppingcentres and thresholds of performance (from very poor to acceptable to excellent).

Upstream also reviewed evidences to confirm that air quality audits were undertaken at 10 shopping centres in Portugal. Recommendationson air quality were also made for each of those shopping centres.

We can therefore conclude that all steps of this target were fully achieved.

Climate Change

Annex 2





Evaluate the investments needed, per shopping centre, to install theinfrastructure to measure and monitorindividual water uses (WCs, fountains)in Italy and Greece.


1) Identify which shopping centres in Italy and Greece do not yet havethe infrastructure necessary to monitor individual water uses;

2) Identify the availability/manufacturers of infrastructure required tomonitor individual water uses at above centres in Italy and Greece;

3) Investigate the costs of installing this infrastructure at each centre in order to estimate the investment needed in each case;

4) Include the above costs in the 2008 cost budgets for the relevant centres.


Upstream reviewed the following evidences to confirm that this targetwas 80% achieved:

• An evaluation of the infrastructure needed to monitor individualwater uses at the 2 owned shopping centres in Italy;

• A copy of the 2008 investment plan for Mediterranean Cosmos in Greece, including the requirement for the installation of 3 watermeters and its estimated cost (however, it was confirmed that thework to identify the costs of installing the infrastructure in the centrein Greece had not been fully achieved and that the values includedin the investment plan referred only to an estimate);

• Copies of the 2008 investment plans for the 2 centres in Italy,including the budget required for the installation of the watermeters.

We have concluded that this target was fully achieved in Italy and that in Greece steps 1, 2 and 4 were achieved. The target has therefore beenevaluated as having been 80% achieved.

Water

Annex 2





Review local municipality requirementsfor wastewater quality at Sierraowned centres to evaluate theappropriateness and feasibility ofsetting a wastewater quality standardacross the portfolio.


1) Review local municipality requirements for wastewater quality at owned centres;

2) Identify an appropriate indicator for wastewater quality on the basisof these requirements;

3) Trial use of this indicator to measure wastewater quality at a sampleof shopping centres (if applicable);

4) Report back to the Environment Working Group regarding thefeasibility of rolling out this wastewater quality standard across the portfolio.


Upstream reviewed the following evidences in order to confirm that thistarget was fully achieved:

• Copies of proposals from two environmental services companies toundertake phases 1, 2 and 3 of the work needed to complete thetarget and of an email communication indicating agreement withone of these proposals;

• Excel files showing the results of the wastewater quality analysisundertaken at Sierra shopping centres in Portugal, Spain and Braziland an analysis of conformity with local wastewater qualityrequirements;

• A copy of the study undertaken by the environmental servicescompany contracted in which a appropriate indicators forwastewater quality are identified for use across all Sierra centres;

• A copy of the email communication to the Environment WorkingGroup members confirming that the wastewater quality indicatorsdefined would be integrated into Sierra’s EnvironmentalManagement System procedures.

Water

Annex 2





Increase the proportion of total waste recycled (by weight) in order to achieve a 35% recycling rate,aggregated across all Portuguesecentres.

100% This is a performance target, requiring Sierra to attain a waste recyclingrate* of 35%, aggregated across shopping centres in Portugal.

Sierra achieved a recycling rate of 38%, aggregated across allPortuguese centres. This target was therefore 100% achieved.

*Waste recycling rate = average amount of total waste sent by month from ownedshopping centres in operation to recovery, recycling, or composting.

Increase the percentage of total wastethat is composted to 7% (by weight)aggregated across all Portuguesecentres.

100% This is a performance target, requiring Sierra to attain a wastecomposting rate* of 7%, aggregated across shopping centres in Portugal.

Sierra achieved a waste composting rate of 8% aggregated acrossshopping centres in Portugal. This target was therefore fully achieved.


Increase the proportion of total waste recycled (by weight) in order to achieve a 30% recycling rate,aggregated across all Spanish centres.

100% This is a performance target, requiring Sierra to attain a waste recyclingrate* of 30%, aggregated across shopping centres in Spain.

Sierra achieved a recycling rate of 30%, aggregated across all Spanishcentres. This target was therefore fully achieved.


Increase the proportion of total waste recycled (by weight) in order to achieve a 36% recycling rate,aggregated across all Brazilian centres.

100% This is a performance target, requiring Sierra to attain a waste recyclingrate* of 36%, aggregated across shopping centres in Brazil.

Sierra achieved a recycling rate of 37%, aggregated across all Braziliancentres. This target was therefore 100% achieved.


Waste

Annex 2





Increase the proportion of total wasterecycled (by weight) in order toachieve a minimum recycling rate of 20%, at the shopping centre in Greece.

100% This is a performance target, requiring Sierra to attain a waste recyclingrate* of 20% at the shopping centre in Greece.

Sierra achieved a recycling rate of 22% at Greek centre. This target wastherefore 100% achieved.


Increase the proportion of total waste recycled (by weight) in order to achieve a 30% recycling rate,aggregated across all Italian centres.

100% This is a performance target, requiring Sierra to attain a waste recyclingrate* of 30%, aggregated across the two shopping centres in Italy.

Sierra achieved a recycling rate of 36% at Valecenter and 71% atAirone. At Airone, the recycling rate is much higher than at othercentres due to the fact that it includes hypermarket waste. This meansthat the recycling rate is not strictly comparable to that achieved at othercentres, and for this reason Airone has been excluded from the wasterecycling indicator. However, even with Airone excluded, the wasterecycling rate achieved in Italy still exceeded the target set. This targetwas therefore 100% achieved.


Increase the proportion of total waste recycled (by weight) in orderthat each office achieves a minimumrecycling rate of 30% (Offices:Corporate wide).

100% This is a performance target, requiring Sierra to attain a minimum wasterecycling rate* of 30% at each corporate office.

During 2007, all corporate offices attained a recycling rate of over 30%.

As evidence of achievement of this target, Upstream reviewed asummary map of waste produced and recycled during each quarter at each office, and copies of waste recording and control sheets asrequested through a random sample.

*Waste recycling rate = average amount of total waste sent by month from corporateoffices to recovery, recycling or composting.

Waste

Annex 2



Land Use

Annex 2




Roll out a consistent methodology to establish the proportion of completed developments occurring on brownfield land.


1) Confirm the definition of ‘brownfield land’ which will be adhered to in the methodology;

2) Define and approve a methodology to calculate the proportion of completed developments occurring on brownfield land;

3) Issue a documented procedure to Project Managers with abovemethodology and reporting requirement that this should beundertaken for all development projects;

4) Integrate the KPI into the Environment Portal.


Upstream reviewed the following evidences in order to determine theevaluation of this target as 85% achieved:

• A document introducing the target and confirming how todetermine when a site is “brownfield” and the methodology tocalculate the proportion of completed developments occurring onbrownfield sites, alongside other relevant information for ProjectManagers;

• A copy of the CR Steering Committee meeting minutes of 17/12/07in which the methodology was approved as proposed;

• An email communication sent to Project Managers in December2007 informing them about the new procedure, issuing thedocument and an excel form developed to enable the ProjectManagers to compile the indicator;

• Confirmation that the new KPI had not yet been integrated into theEnvironment Portal as of 31/12/07.

In conclusion, these evidences show that steps 1, 2 and 3 werecompleted, however, step 4 was still outstanding at the end of 2007.


Land Use

Annex 2




Roll out a consistent methodology tomonitor the number of native treesplanted at all completed developmentprojects.


1) Confirm the definition of 'native trees' which will be adhered to inthe methodology, and how it should be applied to differentcountries of operation;

2) Define and approve the methodology to monitor the number ofnative trees planted;

3) Issue a documented procedure to Project Managers with abovemethodology and reporting requirement that this should beundertaken for all development projects;

4) Integrate the KPI into the Environment Portal.

The following weightings were attributed to each of the steps definedabove, in accordance with the view that some steps are more onerousand/or contribute more to the overall completion of the target thanothers: 1 = 15%, 2 = 40%, 3 = 30%, 4 = 15%

Upstream reviewed the following evidences in order to determine theevaluation of this target as 85% achieved:

• A document explaining the definition of native trees and themethodology for determining the portion of native trees planted atall completed development projects;

• A copy of the CR Steering Committee meeting minutes of 17/12/07in which the methodology was approved as proposed;

• A copy of the documented procedure for Project Managersexplaining the methodology and reporting requirements. Thedocument is designed to be integrated into Sierra’s ESRD proceduresin the Environment Portal;

• Confirmation that on 31/12/07 the procedure had not yet beenintegrated into the Environment Portal.

In conclusion, these evidences show that steps 1, 2 and 3 werecompleted, however, step 4 was still outstanding at the end of 2007.




Pilot a methodology for developing a measurement inventory of corebuilding materials used during the construction of one project in Portugal.


1) Identify a suitable development project in Portugal where themethodology could be piloted;

2) Identify the core building materials which will be used in the construction;

3) Define a methodology for measuring these materials;

4) Establish a process to ensure that the methodology is followed and that the building materials used are measured during theconstruction phase of the project.


Sonae Sierra identified 8ª Avenida as a suitable pilot for the project, and identified the quantities of core building materials used in theconstruction of that shopping centre. Sierra also defined a methodology(based on a standard industry methodology) for measuring buildingmaterials used in construction projects. However, no evidence wasreceived to confirm that a formal process to ensure that themethodology is applied to other projects was not established.

Upstream received the following evidences to show that steps 1, 2 and 3 were completed, which led to the assessment that this target was55% achieved:

• A consolidated list of the quantities of core building materials usedfor the 8ª Avenida project;

• Lists of building materials requested from suppliers andcorresponding quantities made in accordance with the methodology;

• A copy of the standard industry methodology used to measure thebuilding materials.

Business Chain (Suppliers)

Annex 2





Undertake research into industryinitiatives in 1 country to increase therecycled content and/or sustainabilityof core building materials used bySonae Sierra and consider becominginvolved in these.


1) Identify the most suitable country to carry out the study;

2) Identify suitable industry initiatives in the chosen country; and

3) Evaluate the level of time or resource required for Sonae Sierra tobecome involved in each of these and the likely benefits of doing so;

4) Prepare a paper for the CR Steering Committee putting forwardrecommendations on the basis of the research.


Upstream received the following evidences in order to determine theevaluation of this target as 100% achieved:

• A copy of a research report undertaken during 2007 to identifyindustry initiatives in Portugal and Spain to increase the sustainabilityof building materials and identifying the most suitable initiatives forSierra to become involved in and highlighting some of the potentialbenefits;

• A copy of the CR Steering Committee meeting minutes of 17/12/07in which the report was presented and it was decided not to becomeinvolved in any of the initiatives identified.

We can conclude from these evidences that this target was 100%complete as industry initiatives were identified and evaluated and a corresponding decision was made by the CR Steering Committee.


Annex 2





Develop a responsible procurementstrategy, including a phased programmeof implementation to ensure thatSonae Sierra is addressing the mostsignificant environmental and socialrisks through its procurement ofgoods and services.


1) Identify major suppliers in all countries of operation;

2) Evaluate these in terms of social and environmental risk;

3) Develop and approve a responsible procurement policy statementwhich addresses environmental and social risks; and

4) Establish procedures and guidelines to be issued to staff in order toensure that the policy statement is adhered to, and communicatethese to staff (i.e. implementation plan).


Upstream reviewed the following evidence in order to conclude that thistarget was fully achieved:

• A list identifying major suppliers for property management in allcountries of operation and repeat suppliers for propertydevelopment;

• A copy of the evaluation undertaken to assess the social andenvironmental risks associated with each main supplier type;

• A copy of the proposed Responsible Procurement Policy statementand of procedures and guidelines developed in order to integrate CRconsiderations into the existing procedures for hiring and evaluatingsuppliers and to undertake a future evaluation of the CR practices of existing major repeat suppliers;

• A copy of the CR Steering Committee meeting minutes of 19/10/07in which the Responsible Procurement Policy was approved and itwas determined that it would be put forward to the Executive Boardfor further approval;

• A copy of the Executive Board Meeting minutes of 11/12/07 in which the Responsible Procurement Policy was approved.

Increase the proportion of paperpurchased from recycled sources foruse in Sonae Sierra offices in Portugal,Brazil and Italy to 75%.

100% This is a performance target which requires Sierra to ensure that 75% ofpaper purchased in offices in Portugal, Brazil and Italy is produced fromrecycled sources.

Upstream have reviewed the following evidences to confirm that thistarget was 100% achieved:

• Summary map with details of the quantity of paper consumed andthe proportion that was recycled, from offices in Portugal, Brazil andItaly;

• Invoices from stationary suppliers in all three countries where it ispossible to identify that recycled paper was purchased.

In fact, 100% of paper purchased at Sierra offices in Brazil wasproduced from recycled sources, compared with 95.5% at offices in Italyand 80% in Portugal.


Annex 2





Integrate tenant satisfaction objectivesinto the annual business plan cycle foreach individual shopping centre andeach country of operation.


1) Based on the outcomes of tenant satisfaction surveys, define tenantsatisfaction objectives for each shopping centre and for each countryof operation;

2) Communicate these to shopping centre management teams (centrespecific objectives) and to the board (country specific objectives);

3) Ensure that these are integrated into the annual business plan cyclefor each individual shopping centre and each country of operation;

4) Report to the Business Chain Working Group and to the Board onthe achievement of both country and shopping centre objectives.

The following weightings were attributed to each of the steps definedabove, in accordance with the view that some steps are more onerousand/or contribute more to the overall completion of the target thanothers: 1= 35%, 2 = 15%, 3 = 20%, 4 = 35%.

Upstream received the following evidences in order to make theevaluation that this target was 100% achieved:

• Copies of the tenant surveys undertaken in each country of operation and corresponding objectives defined;

• Sample action plans from shopping centres in Portugal, Spain, Brazil, Italy and Greece in which measures to improve tenantsatisfaction in shopping centres are defined, assigned responsibilitywithin the centre and monitored to determine the extent ofimplementation. These targets are monitored by shopping centre Managers.

Business Chain (Tenants)

Annex 2





Pilot a community panel at 1 ownedcentre under management, with theaim of consulting more effectivelywith key local stakeholders, anddefine the Terms of Reference forfuture panels at all centres.


1) Identify an owned centre under management where a communitypanel could be piloted;

2) Identify and/or elect suitable members of the panel;

3) Identify key local stakeholders and communicate with theseregarding the existence of the panel, inviting them to address issuesof concern (e.g. through meetings, workshops, etc);

4) Define Terms of Reference which could be used by future communitypanels at other owned shopping centres under management.


Upstream reviewed the following evidences in order to confirm that all steps were completed and that this target was therefore 100% achieved:

• A presentation introducing the Community Panel Project at DosMares shopping centre in Spain, including details of the objectives ofthe panel, the representatives involved, the areas of concern that willbe addressed by the panel and an image of the first meeting held;

• A copy of the meeting minutes of the first meeting held by theCommunity Panel at Dos Mares on 13/11/07, including the names of the persons present representing the local community;

• An email communication listing the terms of reference for the use of other shopping centres that might want to also implement thecommunity panel project.


Annex 2





Investigate the possibility ofimplementing a public art strategy,whereby a piece of public art isincluded in the design of all newshopping centres so as to bringcommunity benefit.


1) Undertake research to identify organisations that it might beappropriate to partner with;

2) Review previously completed development projects where public art has been incorporate to assess the success of different types of initiatives;

3) Determine a possible process for implementing public art on newdevelopments in future, taking into account the need for co-operation between the development and management teams as wellas local communities;

4) Assess the applicability of this process at projects under developmentacross the portfolio.

Each of the steps defined above was attributed a weighting of 25% onthe basis of the view that they each make an equal contribution to theoverall completion of the target.

Following conversations with the persons responsible for implementingthis target, it was confirmed that none of the steps outlined above were achieved.

Promote an environmental eventinvolving a school from the localcommunity at all shopping centresincluding communication about the shopping centres environmentalbest practices.

95% This target commits Sierra to, at every owned shopping centre undermanagement on 01/01/07:

1) Identify a theme and/or programme for the environmental event ateach shopping centre;

2) (At each shopping centre) communicate with local schools;

3) (At each shopping centre) set a date for the event;

4) (At each shopping centre) establish an agenda for the eventincluding communication about the shopping centre’s environmentalbest practices.

As the aim of this target was to promote an environmental eventinvolving a school at all Sierra shopping centres, the target has beenevaluated in the following way:

Total No. of Sierra centres where at least oneschool event took place during 2007

40 (Total No. of Sierra centres as on

01/01/07)

Upstream received confirmation and corresponding sample photographic evidences that at least one environmental event involving a school took place at all but two Sierra centres during 2007. Based on the methodology defined above, this means that this target was 95% complete.


Annex 2





Review the existing communityinvestment guidelines to identify and promote a small number ofspecific themes that Sierra is keen to support, with a view to achievingmore cohesion and consistency incommunity related activities across the portfolio.


1) Identify community investment themes that Sierra is keen to support(preferable in line with the core business objectives);

2) Present a paper to the CR Steering Committee to seek approval for a small number of these;

3) Develop guidelines for all relevant job functions to ensure thatcommunity investment activities address the approved themes;

4) Communicate these guidelines to all relevant staff.


Upstream reviewed the following evidences to confirm that this targetwas 100% achieved:

• A copy of the community investment guidelines and themesdeveloped;

• The minutes of the CR Steering Committee meeting of 17/12/07 inwhich the community investment guidelines were approved with thechange that “safety” should be included within the socialcommitment theme;

• A copy of the email communication in which the guidelines weresent out to all staff with relevant job functions (i.e., those involved in planning, approval and implementation of CR events).


Annex 2





Invest at least 5% of marketingannual budget in community related initiatives.

68% The intention of this target was for every Sierra centre to invest at least5% of marketing annual budget in community related initiatives, henceprogress against this target has been evaluated in the following way:

Total number of Sierra centreswhich invested at least 5% in community related initiatives

40 (total number of Sierra owned centres on 01/01/07)

In fact, 27 out of 40 Sierra centres which were owned and undermanagement on 01/01/07 invested at least 5% in community initiatives,thus this target has been considered to be 68% achieved. Sampleevidences were received in the form of copies of invoices showingamounts invested in community activities.

Double the proportion of Sonae Sierra staff who are taking part incommunity volunteering activities.

100% This is a performance target which requires Sierra to double theproportion (%) of total direct employees taking part in volunteeringactivities in 2007 in comparison with 2006.

In 2006, 21% of Sierra staff took part in volunteering activities. In 2007,the proportion was 44%, which enables us to conclude that this targetwas fully achieved.

In addition to a summary map file listing the names and number of staffwho took part in volunteering activities in each country, Upstream alsoreviewed photographic evidences of some of the volunteering activitieswhich took place in Portugal, Spain, Brazil, Germany, Greece and Italy.


Annex 2





Undertake ergonomic and workplaceconditions assessments for 75% of the workforce and define an action plan to implement the recommendations.


1) Appoint an ergonomic assessor and arrange dates for theassessments for all members of the workforce;

2) Identify the key recommendations made by the assessor for eachemployee; and

3) Draft an action plan for the implementation of therecommendations;

4) Present the action plan to the CR Steering Committee.


Upstream reviewed the following evidences in order to confirm that thistarget was 100% achieved:

• Copies of email communication between Sonae Sierra and theoccupational health specialists who were asked to undertake theworkplace conditions assessments in Portugal, Spain, Italy andGermany, and formal proposals from the same company to carry out the work in each of these countries;

• A timeschedule for the assessments to be undertaken at all locationswhere Sierra employees work in Portugal, Spain, Italy and Germany;

• Copies of the assessment reports undertaken at all sites where Sierrastaff are stationed in each of these 4 countries, and correspondingaction plans approved by each site manager for the implementationof the recommendations made;

• The minutes of the CR Steering Committee meeting of 17/12/07 in which a presentation was made about the workplace conditionsassessments project and the action plans were approved (with the exception that it was decided not to invest in the existingworkstations in the Dusseldorf offices because Sierra will moving to another office during 2008).

It was identified that a total of 611 Sierra staff had had their workconditions assessed, which constitutes 77% considering the number of direct employees on 31/12/07.

Employees

Annex 2





Within the scope of legal restrictionsin each country where Sierra operates, identify roles which mightbe suitable for more flexible workingarrangements, thereby increasingopportunities for part-time staff.


1) Investigate the legal restrictions with regards to part-time work in allSierra’s countries of operations;

2) Identify roles which might be suitable for more flexible workingarrangements;

3) Communicate with existing and prospective employees in these roleson the possibility of part-time working arrangements.

Each of the steps defined above was attributed a weighting of 33.3%on the basis of the view that they each make an equal contribution tothe overall completion of the target.

Upstream reviewed the following evidences to confirm that steps 1 and2 of this target were achieved:

• Labour law surveys undertaken with support of lawyers in allcountries where Sierra operates and a summary of the mainconclusions drawn from these surveys;

• The document prepared for the CR Steering Committee including a list of the roles identified by Sierra’s Human Resources Departmentas being suitable for more flexible working arrangements and aproposal for rules corresponding to part-time working arrangements;

• A copy of the CR Steering Committee meeting minutes of 17/12/07in which the rules applying to part-time jobs were approved and itwas agreed that they would be forwarded to the Executive Board for their approval;

• Confirmation that communication to existing and prospectiveemployees about part-time working arrangements would take place after the proposal is approved by the Executive Board inJanuary 2008.

These evidences confirm that steps 1 and 2 were achieved, however,step 3 could not be implemented as the proposal had not beenapproved by the Executive Board as of 31/12/07. In conclusion, this target was 66.6% achieved (rounded to the nearest integralnumber, 67%).

Employees

Annex 2





Review the recruitment strategyemployed by Sierra, with a view toproactively recruit disabled people.


1) Identify the recruitment routes used by Sierra and determine criteriafor evaluating their accessibility to disabled candidates;

2) Evaluate, if applicable, their accessibility to disabled candidatesaccording to the determined criteria;

3) Investigate routes which enable more proactive recruitment ofdisabled people and evaluate the feasibility and appropriateness of Sonae Sierra signing up to one or more of these;

4) Present a paper to the CR Steering Committee including therecommendations resulting from this research.


Upstream reviewed evidences in order to confirm that this target was100% achieved, with a slightly different approach taken to the onesuggested by the steps defined prior to target completion.

• Sierra contacted the recruitment companies normally worked with inorder to identify whether they enable access to disabled candidates(email communication between Sierra and recruitment companieswas provided as evidence that this work was undertaken);

• Sierra investigated the legal restrictions and obligations existing incountries where the company operates regarding disabled candidatesand identified roles within the company which could be occupied bydisabled persons;

• Sierra identified some institutions with which the company couldcollaborate with in order to identify disabled candidates (a sampleemail communication between Sierra and one such institution wasreceived as evidence);

• A paper was presented to the CR Steering Committee and reviewedat the meeting of 17/12/07. It was agreed that the recruitmentpolicy regarding disabled candidates would be forwarded to theExecutive Board for approval.

While the actions completed to achieve this target do not directly matchwith those identified through the target steps, we believe that thestrategy taken to completing this target is an equally valid one which will enable a more proactive approach to enabling access to disabledcandidates in future.

Employees

Annex 2





Achieve zero injury lost days amongSierra’s direct employees as a result of workplace accidents.

0% This is a performance target through which Sierra aims to achieve zero injury lost days among direct employees as a result of workplaceaccidents. The target is therefore evaluated on the basis that if Sierradoes indeed achieve zero injury lost days, the target is 100% achieved. If one or more injury lost days do occur then the target is not achieved (0%).

During 2007 Sierra achieved zero injury lost days in the followingcountries where staff are located:

• Spain;

• Greece;

• Germany;

• Romania;

• Holland and UK.

Unfortunately, 7 workplace accidents were recorded among Sierra’sdirect employees in Portugal (5), Italy (1) and Brazil (1), during 2007resulting in lost workdays.

Therefore, this target has sadly not been achieved.

Achieve zero fatalities or preventablemajor injuries across the Sierra portfolio.

100% This is a performance target through which Sierra aims to achieve zerofatalities or preventable major injuries across the portfolio. The target istherefore evaluated on the basis that if Sierra does indeed achieve zerofatalities or major injuries, the target is 100% achieved. If one or morefatalities or preventable major injuries occur then the target is notachieved (0%).

No fatalities or preventable major injuries occurred across the Sierraportfolio during 2007.

Achieve a level of 11 non-conformancesper hour resulting from Safety PreventiveObservations in Reference Sites by theend of 2007.

100% This is a performance target through which Sierra aims to achieve a level of 11 non-conformances per hour of Safety Preventive Observations(SPOs) in Reference Sites by the end of 2007. The target is thereforeevaluated on the basis that if Sierra does achieve 11 non-conformancesper hour or below, the target is 100% achieved. If not, the target is notachieved (0%).

Sierra did in fact achieve a level of 10.5 non-conformances per hour of SPO during 2007, so this target was attained.

Safety & Health

Annex 2


www.sonaesierra.com

PORTUGALPORTOLUGAR DO ESPIDO, VIA NORTE4471– 909 MAIATELEPHONE: +351 22 948 7522FAX: +351 22 010 4698

LISBOARUA AMÍLCAR CABRAL, 231750-018 LISBOATELEPHONE: +351 21 751 5000FAX: +351 21 758 2688

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ITALYCORSO GARIBALDI 8620121 MILANTELEPHONE: +39 02 6236 9001FAX: +39 02 62369 0230/1

GERMANYKENNEDYDAMM 5540476 DÜSSELDORFTELEPHONE: +49 211 4361 6201FAX: +49 211 4361 6202

GREECECHATZIYIANNI MEXI, 5 - 6º11528 ATHENSTELEPHONE: +30 210 725 63 60FAX: +30 210 729 25 00

NETHERLANDSPOLARISAVENUE, 612132 JH HOOFDDORPTELEPHONE: +31 23568 50 80FAX: +31 23568 50 88

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