Bearing the standard for sustainable investments for the country’s biggest conglomerate SM Group is Jessica Bianca “Jica” Sy, the daughter of Henry “Big Boy” Sy Jr., co-vice chairperson of SM Investments Corp. and chairperson of SM Prime.
Through Jica Sy, the SM Group has underlined the importance of sustainable investments in fostering a greener future.
At a recent forum organized by the Philippine Institute of Certified Public Accountants (PICPA), Sy said that securing a better future for the group hinges on its commitment to innovative solutions and projects that embody sustainability principles.
“Sustainable investments play a crucial role in this endeavor,” remarked Sy, who is the lead executive for Design, Innovation and Strategy of SM Prime Holdings Inc. and SM Development Corporation (SMDC).
Sy highlighted that investment decisions at SM prioritize Environmental, Social, and Governance (ESG) factors, focusing on pursuing investments that conserve nature.
SM’s initiatives address key environmental issues including climate change, pollution, deforestation, energy efficiency, and waste management.
“I believe that to aim for a future we dream for our children and for ourselves and future generations, we need to be more diligent in the solution that we present with the new infrastructures and communities that we wish for them to inherit,” Sy said.
I sincerely believe we also need to be grounded in the technology that we create to help the youth cope with what society is going to face for years to come.
She added that the global goals set by the United Nations guide the SM Group in creating a future where all people are fed, healthy, employed, educated, empowered and thriving.
Achieving such aims must not be at the expense “of other life on earth.” For Jica Sy, securing a sustainable future will greatly depend on what is being done today which means that a balance must be observed between providing the needs of thriving humans and communities today and safeguarding healthy natural ecosystems “in an environment that can nurture the greatest and most compassionate human spirit.”
“We need to start asking and answering difficult issues to be able to create that shift that we want to see for a better future,” she indicated.
Towards such sustainability ends, the SM Group believes that big businesses will have to contribute and act as catalysts for social impact as part of achieving a sustainable future.
“However, this comes at a price, literally,” Sy underlined.
“The United Nations has admitted that to meet the SDGs by 2030, the world will spend between $3 trillion to $5 trillion annually. These are large numbers,” she said.
She added, however, that delaying the needed actions would mean bigger costs as the response becomes more expensive every year.
“It’s a high cost. A sustainable future can only be possible when industries work together and companies contribute to sustainable development together with government efforts.”
Recognizing the urgency of meeting sustainability goals, companies have started aligning investments and financing to meet global targets.
“They take different investment approaches such as impact investing, green bonds, and environmental, social, and government investing, or ESG investing, to prepare for a future where their businesses can also thrive,” she said.
Investment decisions must prioritize environmental, social, and government factors.
She explained non-financial factors are considered when companies identify business risks and grow opportunities.
“In considering ESG factors in finance, we first consider the environmental impact and pursue investments to conserve nature.”
Responsible investing
“Social factors are likewise considered in that investment decisions must protect human and animal rights, promote consumer protection, and adhere to fair and diverse hiring practices.”
This aspect of ESG investing covers several areas, including customer satisfaction, data protection and privacy, diversity employment engagement, community relations, labor standards, and valuing employees.
Companies are relied on to uphold high standards in running and managing organizations to contribute to sustainable development.
Sy cited governance issues including the integrity of companies’ board of directors, separation of powers and accountability and transparency, and bribery and corruption that must be addressed.
Another priority for Jica Sy is impact investing that allows an investor to aim for financial returns and at the same time make a measurable positive impact on society and the environment or putting money to work while contributing to social improvement.
In impact investing, an investor’s wealth can be used to bring about social progress while providing a return on investment.
She cited as an example, companies who are investing on residential property development for low-income areas.
“This type of investment might not be as lucrative as investing in a high-growth commercial space.”
An example would be investment in low-cost housing. She said with the right investment partners, strong government and civil society relationships, such projects can yield financial gains while creating substantial positive impact for less fortunate communities.
“Such investment will create jobs and livelihood opportunities in an area with strong demand.”
The return on investment may take longer, but she believes it addresses long-standing social issues like chronic housing shortages, lack of livelihood, and underdevelopment in poorer communities.
In the long run, substantial returns from investments in these areas are expected as businesses experience exponential growth.
Sy, nonetheless, said impact investing should not be confused with charity.
Aid not doleout
At SM Prime, sustainable framework and ambition roadwork helps follow ESG+R principles where R stands for resiliency, which helps make investments toward decisions, especially when it comes to climate change and risks.
For SM Prime, sustainable finance means investing in ways that transform existing businesses into platforms that yield greater shareholder value and significant environmental gains.
The group incorporated the Task Force on Climate-Related Finance Disclosures in its annual integrated report to guide and inform stakeholders of governance programs and to provide transparency.
She said the SM group has been actively integrating sustainability and resiliency parameters into its operations and for future needs.
Sy said as a result of resiliency endeavors, at least 50 percent of its properties source renewable energy sources in 2022 at 12.67 megawatt peak capacity primarily through solar panels installed in SMDC homes.
Some 23 malls have water impoundment facilities, 24 hectares of mangroves protected, and 3 marine protected areas.
“We can confidently say that investing in nature protection and climate mitigation is also healthy for our bottom line, which we believe is truly part of sustainability,” according to Sy.
“As one of SM’s stewards, I aim to be my example in exploring and turning sustainable finance into a priority,” she indicated.
While we’re on track with our sustainability agenda, much can still be done to integrate sustainability into our financial decision-making. In the coming years, we intend to take our investments to the next level.
