s greece brazil e lisboa corso magenta 85 chatziyianni

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 2813

SPAINC/ CONDE DE ARANDA, 24, 5º 28001 MADRIDTELEPHONE: +34 91 575 8986FAX: +34 91 781 1960

ITALYCORSO MAGENTA 8520123 MILANOTELEPHONE: +39 02 4654 621FAX: +39 02 4391 2531

GERMANYKENNEDYDAMM 5540476 DÜSSELDORFTELEPHONE: +49 211 4361 6201FAX: +49 211 4361 6202

GREECECHATZIYIANNI MEXI, 5, 1º11528 ATHENSTELEPHONE: +30 210 725 6340FAX: +30 210 729 0988

NETHERLANDSPOLARISAVENUE, 612132 JH HOOFDDORPTELEPHONE: +31 23568 50 80FAX: +31 23568 50 88

BRAZILRUA GOMES DE CARVALHO, 1327, 2ºVILA OLÍMPIA, SÃO PAULO – SP04547 – 005TELEPHONE: +55 11 3371 4133FAX: +55 11 3845 4522

Corporate ResponsibilityReport

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Our mission continues to be to create value for shareholders while taking into account our socialresponsibilities towards other important stakeholders such as partners, retailers, employees and localcommunities, as well as our environmental responsibilities. We firmly believe that this balance iscrucial to achieve the sustained development of the Company.

Our CR strategy is fundamental to achieving this mission. In the past year, we have reviewed the focus of our CR Strategy in line with tightening risk management practices, to ensure that we prioritise efforts on those issues that represent the most significant challenges and opportunitiesto the business. Through a series of tests applied in 2006, we have identified the following issues as being most ‘material’ to our business in the short to medium term:

For each of these issues, we have set targets to be achieved in 2007, aimed at improving both ourmanagement approach and our actual performance. We also include in this report measures of ourpast performance against meaningful indicators, and progress achieved against our 2006 targets.Importantly, we have now approved a revised governance structure for CR, with a CR SteeringCommittee overseeing the entire strategy, and CR Working Groups to address each of the ninematerial issues listed above, as well as additional Working Groups for Brazil and Risk Management.This should ensure more embedded ownership and responsibility for these areas across the business.

We recognise that some of these issues pose significant challenges to our business in the longer-term. In particular, 2006 may be remembered as the year that climate change became a mainstreamissue, having become a cornerstone of political, business and media concern all over the world.

Contents

CEO’s Statement“This is Sonae Sierra’s third CorporateResponsibility (CR) Report. It incorporateschanges in style and content which Ibelieve reflect the increasing confidenceand maturity of our CR management andreporting approach.”

ifc CEO’s Statement02 Company Profile04 Report Profile06 Strategy & Analysis10 What We Did & What We Will Do16 Governance & Commitments20 Corporate Performance25 Issue in Focus: Climate Change30 Country Focus: Portugal35 Country Focus: Spain

39 Country Focus: Italy42 Country Focus: Germany44 Country Focus: Greece47 Country Focus: Brazil51 Lessons to be Learnt52 Detailed Datasheets58 Verification Statement61 GRI Content Index66 Glossary67 Feedback Form

Climate change

Water Waste Land use Business Chain

(Suppliers)

Business Chain

(Tenants)

Communities(including visitors)

Employees Safety andHealth

Designed and produced by MAGEE

Printed by CTD

Printed on Accent White

Accent White is manufactured with 75% recycled fibre,

comprising of 25% post consumer waste, 50% mill broke and 25% chlorine free fibre.

This grade is fully recyclable and the mill has been accredited with ISO 14001 certificate,

and complies with Pan European Forestry Guidelines.

Property developers and investors are increasingly expectedto play a role in meeting national and internationalgreenhouse gas reduction targets, and in ensuring thatsociety is able to adapt to such risks through appropriatelydesigned buildings. As a result, Sonae Sierra has set itself a target to achieve a 10% reduction of greenhouse gasemissions by square metre of Gross Lettable Area by 2020,compared to the 2005 level. We also have long-termcommitments to improve standards in respect of safetyand health for our employees.

Looking back on 2006, we are proud to have strengthenedour CR commitments in all areas. We have provided moretraining on CR issues than ever before, not only to ourown employees, but also to tenants and service providers.Our 2006 target to introduce environmental awarenessand training activities for tenants and service providers atall shopping centres was fully achieved, as was our targetto provide CR-related training to our own staff throughthe use of the World Business Council for SustainableDevelopment’s Chronos programme. Employees withdirectly relevant functions have also seen environmentaland safety and health objectives linked to their annualremuneration and bonus appraisals.

Furthermore, we achieved ISO 14001 certification for the construction works at both of our completeddevelopments and eight of our owned shopping centresunder management in Spain and Portugal. We wereplaced third this year in Portugal’s Euronatura ClimateResponsibility Ranking. The collective efforts put towardsour ongoing Personæ project addressing safety and healthrisks throughout the company won us an ECO prize by the American Chamber of Commerce in Brazil. People’s safety continues to be a central pillar of Sierra’scorporate philosophy, as we embrace our responsibilitytowards employees, tenants, service providers and visitorsalike. We recognise that we can never be complacent in this critical aspect of performance, as people’s lives are at stake and awareness of safety risks can always be improved.

Over the past year, we have improved against our keyenvironmental performance indicators, with positive trendsin energy efficiency, water efficiency and waste recyclingfor owned or co-owned centres. We continue to invest insub-metering infrastructure for energy and water acrossour portfolio, to better monitor and understand whereusage is high and efficiencies might be made. Ourcompleted projects created 2,217 new jobs in their localcommunities, and at one development we piloted a postcompletion review with local community representatives to establish their views about our performance. We havemade significant progress in trying to standardise themethodology used to evaluate both tenant and visitorsatisfaction across all countries.

Overall, we have fully achieved or exceeded 51% of our2006 CR targets, with most of the remainder having beenprogressed to some extent. We regret the 13% of 2006targets that have not yet been progressed, and we havenot sufficiently progressed the integration of CR standardsin our supply chain. Responsible procurement continues to be an area for concerted attention.

We cannot rest on our laurels, as there is still much to learn and improvements to be made. We have setourselves another 45 ambitious targets for 2007, and wemust work together to achieve these. To us, CR is not justabout doing the same business a little bit better. Rather,we view CR as businesses’ contribution to sustainabledevelopment – that is development that is sensitive to theneeds of both current and future generations. It requiresus to work together to be creative and adapt our productsand services so as to ensure social justice, environmentalprotection, and economic prosperity.

Álvaro PortelaCEO

Sonae Sierra – Corporate Responsibility Report .01

DeclarationG3 Self-Declaration StatementSonae Sierra believes that this report complies with levelC+ of the GRI Sustainability Reporting Guidelines, G3published in October 2006 – both in terms of reportingcontents and performance indicators. Furthermore, wehave sought to have this independently verified byDeloitte, whose statement at the end of this reportenables us to Self-Declare to Level C+ of the GRIGuidelines.

2002in

Accordance C C+ B B+ A A+

Mandatory Self Declared 3

Third PartyOptional Checked 3

GRI Checked

SIGNIFICANT CHANGES REGARDING OUR SIZE AND STRUCTURE DURING 2006 INCLUDE:

• Changes to the corporate governance (see Corporate Governance section) and the CR governance structure (see CR Governance section)

• Shareholder structure (Grosvenor increased its shareholding to 50%)• We sold 50% of Sierra Brazil to Developers Diversified Realty (DDR)• We commenced the construction of three new development projects and completed two (Campo Limpo, Brazil

and RioSul, Portugal)• We completed the expansion of ArrábidaShopping (Portugal) adding 4,257 m2 of GLA

Sonae Sierra has earned an international reputation for the development of innovative products as well as for itsmanagement skills, and continues to receive large numbers of international prizes and awards celebrating itsachievements. During 2006, awards were received by individual shopping centres and by different Sierra companies.Those awards specifically relating to CR performance include the ECO Award 2006 from the American Chamber ofCommerce in Brazil which was won by the Personæ Project.

Sonae Sierra S.G.P.S., S.A. is an international companyspecialising in the investment, development andmanagement of shopping and leisure centres. The companywas incorporated in 1989 in Portugal and is 50% owned by Sonae SGPS (Portugal) and 50% by Grosvenor (UnitedKingdom). Our principal objective is to achieve a leadingposition in our sector in all the markets where we operate;in Portugal, Spain, Italy, Germany, Greece, and Brazil.

Sierra is a holding company for four separate subsidiarybusinesses: Sierra Investments, Sierra Developments, SierraManagement and Sonae Sierra Brazil. Sonae Sierra Brazilencompasses all of the same activities for shopping andleisure centres in Brazil. The corporate support functionsincluding Finance, Legal, Human Resources, Environment,Communication, Safety and Health and Back-Office forEurope, are centralized in Sierra Corporate Services. Our headquarters are located in Maia, in Porto, Portugal.We outsource the principal activities of design andconstruction to technical advisors and constructioncompanies. We undertake property management directly,rather than outsourcing this to managing agents, althoughwe do outsource some of the operational managementtasks such as cleaning and security. As an indication of ourpurchasing power, Sierra spent a total of €137,319,9001

on suppliers in 2006. Sonae Sierra also places greatimportance on the value of partnerships, working withboth international investors and local partners to formjoint ventures and co-own the majority of our shoppingcentres. Sierra has an ownership stake in a wide range of subsidiary companies across all areas of our businessactivities, the extent of our ownership varying significantlyin each case.

Our markets include international retailers and leisureoperators who rent space within our shopping and leisurecentres. In partnership with our tenants, we aim to apply innovation and excellence to maximise benefits for the visitors to our centres, since it is they who are the ultimate customers.

As a property investor, Sierra’s equivalent figure to netsales is total rents received, which in 2006 amounted to €179.5 million2. Our total revenues generated (whichinclude both direct income plus indirect income from gainson sale of investments) amounted to €255.2 million. Our retained earnings reached €124.1 million3

Sonae Sierra – Corporate Responsibility Report.02

Company Profile

Key facts as at 31st December 2006

• Operating in 6 countries with a total of 731 employeesworldwide (88% of which are located in Europe)

• 7,293 contracts with tenants

• 40 centres owned or co-owned (GLA of over 1.65 million m2)4

• 14 major projects under development (a total GLA above 500,000 m2)

• EBITDA of €150 million

1 The conversion rate used for Brazilian Real is 0.36658; based on an average of the varying conversion rates during 2006. 2 This figure is based on the proportion of total rents received in Sierra owned and co-owned shopping centres that we receive directly, according to the

% of Sierra’s ownership. 3 Retained Earnings presented are as calculated by deducting paid dividends from Consolidated Direct Net Profit after Taxes and Minorities.4 All of the centres which we either own or co-own are also managed by Sonae Sierra.


Web referencesFor a full list of partnerships see http://www.sonaesierra.com/aboutus/ourpartnerships

For the organisational structure see http://www.sonaesierra.com/aboutus/ourorganisation

For more information on the subsidiary companies themselves, and for details of Sonae Sierra’s respectiveownership stake in each of these, see the Annual Report & Accounts, In Review 2006 page 18.

A full list of awards received in 2006 can be found on Sonae Sierra’s website atwww.sonaesierra.com/aboutus/whoweare/

Where we are

Portugal Spain Italy Germany Greece Brazil Total

No centres owned or co-owned 17 11 2 0 1 9 40

GLA of owned and co-ownedcentres (m2) 738,213 477,727 72,671 0 45,957 319,362 1,653,930

GLA under management5 917,350 585,105 133,545 0 45,957 319,362 2,001,319

Total rent received at centres owned and co-owned by Sierra (€ million)6 175.2 68.0 6.9 0 13.3 43.7 307.1

Total tenant sales at all centres under management (€ million)7 2,229.7 886.9 42.3 0 118.8 826.8 4,104.5

Costs by country8 (for all countries/regions that make up 5 percent or more of total revenues) (€ million)9 92.4 13.5 6.3 2.1 0.7 5.2 120.2

Total number of employees10 396 139 42 38 19 91 725

5 These figures correspond to shopping centres owned, co-owned and managed on behalf of others.6 These figures correspond to the total rents collected (100%) from Sierra owned and co-owned shopping centres.7 These figures do not include sales achieved by tenant owners (those who own individual units in our centres).8 Costs by country includes external supplies and services, costs with common charges of the centres, buy out costs and other operating expenses. 9 Holland is not included in this table, but Sonae Sierra’s costs in this country total 1.4 € million.10 Sonae Sierra also has 4 employees based in The Netherlands and 2 in the UK.

The data and information presented in this Corporate Responsibility (CR) Report relates to the financial/calendar yearending 31 December 2006. It should be read alongside the Annual Report & Accounts, In Review 2006. This is SonaeSierra’s third printed CR report, the two previous reports having been published in April 2005 (covering the financial yearending 31 December 2004) and April 2006 (covering the financial year ending 31 December 2005). The company’s CRreporting cycle is annual, and aligned with the financial reporting cycle.

For further information on any aspect of this report, please contact:Elsa MonteiroHead of Institutional Relations, Environment and CommunicationEmail: [email protected]

Report scope & boundaryIn this 2006 CR Report, Sonae Sierra has sought to apply the Global Reporting Initiative11 (GRI) Sustainability ReportingPrinciples for defining report content to present a balanced and relevant account of our sustainability performance, andto contribute to transparency and formal recognition of achieved value. The process employed to apply these principles issummarised in Table 1 opposite. In short, we are trying to achieve a better balance between completeness and relevance,avoiding the inclusion of too much information just because it exists.


Report Profile

Web referencesFor a copy of the GRI G3 Sustainability Reporting Guidelines, seehttp://www.globalreporting.org/ReportingFramework/G3Online/

For Sierra’s 2006 GRI Supplement, seewww.sonaesierra.com/corporateresponsibility/reports/

11 Global Reporting Initiative G3 Sustainability Reporting Guidelines. Published October 2006


Table 1: How Sonae Sierra has applied the GRI ‘Guidance on Defining Report Content’ and the associated Principles(GRI 3.5 – 3.9, 3.11)

Materiality

The process for defining the contents of this printed 2006 CR Report consisted of a comprehensive review of Sierra’s material CRissues by applying AccountAbility’s five-part materiality test, as described in table 2 on page 7.

Stakeholder Inclusiveness

In previous CR Reports published in 2005 and 2006, Sierra sought feedback from stakeholders reading the reports to establishtheir perceptions of the report quality (content, relevance, completeness, design, etc). Feedback received following the 2005 CR Report principally originated from Sierra’s own staff, suggesting that employees continue to be a key audience for our CR reports. Feedback received was used to shape the content of the 2006 CR Report, as were stakeholders’ perceptions of theCR issues that are most significant to Sierra’s business, as canvassed through more targeted surveys. While Sierra has determinedthe contents of this printed report with all its various stakeholders in mind (as identified in table 3 on page 9), this printed reportis particularly targeted towards employees; investors and financiers; suppliers; tenants; the media; and local authorities, since webelieve they are likely to be most interested in, or affected by, our approach to CR. To maximise the impact of the report, we willpost copies to senior representatives from each of these stakeholder organisations with a personal letter from the ChiefExecutive, inviting feedback and dialogue on the issues presented here.

Sustainability Context

For the first time, this CR Report presents Sierra’s CR performance by country. Each of these sections includes information aboutthe national context for sustainability performance in each country where we operate, including national targets for improvedsustainability wherever these are readily available. Given the international scale of Sierra’s operations, it is challenging to findmeaningful industry benchmarks or accurate figures on social/environmental/economic limits against which Sierra’s performancemight be compared.

Completeness

In terms of scope, this 2006 CR Report covers key aspects of Sierra’s economic, environmental and social performanceagainst a range of material impacts. It is accompanied by a detailed GRI Supplement, with more information about our performance against indicators specified by GRI that gobeyond the material issues covered in this printed report.

The data contained within this report covers all of SonaeSierra’s direct operations in Europe and Brazil. Where this isnot the case, detailed data qualifying notes throughout thereport indicate the scope of the operations covered. It coversall business activities, including ownership, development andmanagement of Sierra owned and co-owned shopping andleisure centres. All environment-related data in this reportexcludes the performance of centres that are managed butnot owned or co-owned by Sierra. In some instances, datarelating to the economic and social aspects of CR also includesthe performance data of some centres which were managedbut not owned or co-owned by Sierra throughout 2006. Ineach of these instances, the scope of the data covered by theindicator is made explicit in the data qualifying note.

The environmental and safety and health information in thisreport covers all our owned and co-owned subsidiary holdingcompanies, regardless of our ownership stake in these. The financial information typically does so too, althoughsometimes we report only on the financial value deriveddirectly by Sierra, which is proportionate to our ownershipstake. Where this is so, we indicate it in the notesaccompanying the data.

All our owned and co-owned shopping centres include largenumbers of individual units leased out to tenants, and theimpacts of these facilities (tenants’ own impacts) are notquantified in this report. Our outsourced operations(construction activities) are not covered by performance datapresented in this report, although we have included figures for water consumption and waste management at RioSul, a development project completed in 2006 in Portugal, which relates more directly to the construction company’ssustainability impacts.

In respect of time, the information presented in this reportrelates to activities or impacts that arose during the financialyear 2006. All of the data presented also relates to the fullcalendar year, so it excludes any centres that were opened or purchased part way through the year.

In respect of data quality and reliability utilities and waste data is now collected direct from properties as part of SonaeSierra’s internet-based Environmental Management System(EMS). Actual measurements are used wherever possible, with estimation kept to a minimum. Sonae Sierra is striving to improve and assure the quality of the data used in itsmonitoring systems. Obvious anomalies have been removedfrom the dataset presented here, and reflected in the reducedcomprehensiveness of coverage (as indicated in data qualifyingnotes). In a small number of cases, historic data was eitherincorrect or calculated against different parameters. Wherethis is the case, we have updated such data in this report, and provided an explanation.


Strategy & AnalysisOur ImpactsDeveloping and managing shopping and leisure centres has the potential to cause a number of significant impacts on theenvironment, society and the economy. Although our management approach to tackle these impacts differs according toour level of control or influence, the impacts arising from buildings in use are usually capable of being addressed throughcareful design and construction practices. In the diagram below, we have sought to illustrate the variety of sustainabilityimpact areas that might arise from our core business activities.

Development(design & construction)

We believe that the investment value of our propertiesis underpinned, in part, by their economic, social andenvironmental performance. Such risks can impact onproperties both financially and physically, and can addvalue to our brand through innovation and marketdifferentiation.

Environmental Impact AreasClimate change (energy use; transport;

HCFCs etc)Water use

Waste production/managementLand use

Biodiversity Emissions to air, land and water

Materials use

Social Impact AreasTenant satisfaction

Communities (including visitors)Nuisance (noise, dust, traffic)

Accessibility to differently abled personsCrime prevention & Security

Training & SkillsSafety and Health

Economic Impact AreasLocal economic benefits

Job creationFinancial impact on key stakeholder groups

Management(operations)

Investment(acquisition and disposal)

Corporate Wide

• Business Strategy & Planning • Risk Management • Corporate Governance •• Employees • Procurement • Business Ethics •

The application of these simple tests has enabled us to prioritise nine material CR impact areas which will continueto form the backbone of our CR strategy. These are:

Rigorous risk management processes continue to be applied to ensure that each of these material impact areas is tightly managed and controlled, so as to avoid any detriment to the company and maximise opportunities. At 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 exercise suggest thatwe face as many social and environmental risks as we do financial, and that these three categories of risk are moresignificant than the others.


Material Impact areasDuring 2006, in keeping with sustainability reporting trends to prioritise material CR impacts, Sonae Sierra undertook acomprehensive review to re-evaluate the relative significance of the economic, social and environmental issues addressedthrough the CR strategy and covered in printed CR reports. The principal aim of this work was to ensure that we focusour efforts to drive improvements against those issues that are most relevant to the business, and that add value toexisting business practices. This was done by applying a five part test recommended by UK sustainability think-tankAccountAbility12, which also meets with GRI guidance on materiality.

Table 2: Tests applied by Sonae Sierra in reviewing material CR issues

GRI tests to guide the use of the Materiality Principle for defining report content

External Factors taken into account

Main sustainability interests/topics and Indicators raised by stakeholders.

The main topics and future challenges for the sector reported by peers and competitors.

Relevant laws, regulations, international agreements, or voluntaryagreements with strategic significance to the organisation and itsstakeholders.

Reasonably estimable sustainability impacts, risks, or opportunities (e.g.,global warming, HIV-AIDS, poverty) identified through sound investigationby people with recognised expertise, or by expert bodies with recognisedcredentials in the field.

Internal Factors taken into account

Key organisational values, policies, strategies, operational managementsystems, goals, and targets.

The interests/expectations of stakeholders specifically invested in the successof the organisation (e.g., employees, shareholders, and suppliers).

Significant risks to the organisation.

Critical factors for enabling organisational success.

The core competencies of the organisation and the manner in which theycan or could contribute to sustainable development.

AccountAbility’s Materiality Tests applied by Sierra during 2006

Test 4 – Review of Stakeholder Behaviour & Concerns

Test 3 – Review of Business peer-based norms

Test 5 – Societal Norms (regulatory & non-regulatory)

Strategic advice continuously sought from a widevariety of different consultants and industry experts.

Test 2 – Policy related performance

Test 4 – Review of Stakeholder Behaviour & Concerns

Test 1 – Direct short term financial impacts

Not explicitly part of process during 2006.

Not explicitly part of process during 2006.

For further information:A list of the key business risks and opportunities presented by each of our ninematerial issues can be found in the Corporate Responsibility section of our AnnualReport & Accounts, In Review 2006 page 52. Detailed information about Sierra’sbusiness strategy, planning cycle, and financial performance can be foundthroughout In Review 2006.

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

Climate change


(Suppliers)

Business Chain

(Tenants)




Strategy & Analysis continued

Our StakeholdersAt 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 engagement hasbeen generic, and has not required us to be selective about the specific stakeholders we engage with in each stakeholdergroup. However, we do intend to undertake more targeted stakeholder engagement in future, so we will report on ourselection processes accordingly.

• During the year, we commissioned a brand awareness survey to evaluate perceptions around thecore values and what the brand represents. The survey was carried out through both face to faceinterviews and questionnaires with key stakeholder groups, including investors, employees andtenants. As part of this, a number of CR questions were also raised, seeking in particular to establishwhat different stakeholders perceive to be the most important environmental, social and economicissues faced by Sonae Sierra, both now and in five year’s time.

• The results suggested that all stakeholders believe that environmental issues will increase inimportance over the next five years. Energy use and waste emerged as the most importantenvironmental issues for Sierra. With regard to social issues, Visitor and Tenant Satisfaction andSafety and Health, were perceived to be the most significant as well as Employee relations. All stakeholders identified Business Strategy and Planning as a critical issue underpinning our long term success.

• We analysed all of the detailed findings of this consultation as part of the review of material CR issues for the business and they informed our decisions made about what to include in more detail in this CR Report 2006 and on-line.


Important Stakeholder Groups

Investors and Financiers

Employees

Tenants

Suppliers

Visitors

Government Authorities(in particular municipalities & regional bodies)

Local Communities

Media

Methods and outcomes of engagement in 2006

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

We produced both corporate-wide and country specific communications including printed magazines(Horizons) and intranet news. Individuals each had performance evaluation plans and access to HRsupport. Staff were individually consulted on specific issues (e.g. Safety and Health) and wecontinued to administer the Be Innovative programme to stimulate ideas and reward innovativesuggestions for new ways of working.

Tenants are engaged with on a regular basis at all levels within Sierra, and targeted through variouscommunications including a specific intranet site Sierracentres.network. They are also invited toattend meetings and training sessions, with a strong focus in 2006 on Safety and Health andEnvironmental management.

We conducted tenant satisfaction surveys in all of our owned and co-owned shopping and leisurecentres in Spain and 13 out of 16 centres in Portugal*, seeking feedback from them on our quality of service and performance. In these surveys, those environmental issues identified as being mostimportant to tenants were air quality, segregated waste bins and recycling and natural lighting. Most tenants were aware of Sonae Sierra’s commitment to safety and health and stated that theyhad sent their employees to training sessions promoted by the shopping centre.

In November 2006 Sonae Sierra carried out a survey aimed at gaining feedback from suppliers about its CR practices and evaluating their own CR policies. Questionnaires were sent to a few of Sonae Sierra’s largest Portuguese, Spanish and Italian suppliers and the results highlighted WasteManagement, and Safety and Health as the most common issues addressed. Many companies hadtheir own Environmental and/or S&H policies, and some had an EMS in place but few had formalisedtheir community investment or staff volunteering policies.

Overall, Sonae Sierra’s own commitment to CR issues was rated highly by suppliers, visitorsatisfaction being perceived as Sierra’s strongest commitment, followed by Safety and Health, Tenant Satisfaction and Community Care. Energy and water use were considered to be the greatestchallenges for Sierra and, interestingly, supplier loyalty was regarded as the issue least likely to impactupon Sonae Sierra’s business.

During 2006 we conducted visitor surveys in all our owned and co-owned centres in Portugal, Spainand Greece, 1 of our 2 centres in Italy and 3 of our 9 centres in Brazil. By way of example, visitorsurveys undertaken at 15 out of 17 centres in the owned and co-owned portfolio and 4 further centresmanaged only by Sierra in Portugal found that 69% of visitors considered our centres to be concernedabout environmental protection. They were most aware of our efforts in managing and reducing waste,saving water and energy. Their greatest concerns related to potential nuisance during construction andrenovation processes and the traffic generated by visitors to the centre travelling by car.

We engage very closely with all municipalities as part of the planning and development process, andin 2006 we had 14 projects under development. We also work closely with local and regional bodiesthroughout the operation and management of our centres. We have particularly close relationshipswith authorities such as the police and emergency services.

Sierra has consulted with local communities around all centres planned for development prior tocommencing the work, to allow the development of the scheme and to define a balanced tenant mix based on the needs of the residents in the catchment area. We have also undertaken qualitativestudies to assess the impact of the construction phase on local communities and identify potentialimprovements. In 2006, Sierra also undertook a review for one completed centre a few months afteropening, to evaluate community perceptions of the scheme and whether it met with their expectations.Finally, visitor surveys are undertaken in most of our shopping centres (see Visitors above) to analyse theimpact of the shopping centre on residents and consumer demand patterns in the local area. All of thefindings from these studies have led to actions employed on future projects.

In 2006, Sonae Sierra received a total of 1,309 cases of CR-related press coverage. Of these, 84% were positive, and 16% were negative principally related with social issues. In regard toenvironmental issues a total of 142 positive cases of press coverage were received, in comparisonwith 33 cases of negative press coverage on this aspect of our performance.

Table 3: Sierra’s stakeholders, and methods and outcomes of engagement in 2006

* We carried out this survey at our shopping centres in Brazil in 2005.


What we did & what we will do

Sonae Sierra set itself 45 targets in relation to different aspects of CR, for achievement during 2006. The pie chart belowsummarises the extent to which we achieved these in the audit of performance undertaken by our external strategic CRconsultants, Upstream.

Web referencesA detailed independent report of Sierra’s progressagainst 2006 targets, including specific actions takenand the criteria used for evaluation of achievements,can be found on our websitewww.sonaesierra.com/corporateresponsibility/managementsystem/targetsKPI/.

Table 4 opposite provides a full list of all 45 targets set in 2006 alongside completion levels achieved, and a full list of afurther 45 CR targets set in 2007.

Where targets have been set in areas that were not previously targeted or when we have not felt the need to establishtargets for this year, the table is blank.

Percentagecompletion

0%

25%

50%

75%

100%

Level of progress achieved

No progress

Action initiated but little progress

Some progress, action half completed

Substantial progress

Target fully achieved

6

5

5

3

3

23

0%

1-25%

26-50%

51-75%

76-99%

100% or above

Overview of achievement of 2006 CR Targets

For those targets where progress could be quantitatively evaluated, including performance targets and managementtargets referring to a pre-specified scope of sites, the target achievement level is a precise calculation based on quantifiedachievements (rounded off to the nearest whole number). For those targets that are more qualitative in their nature,Upstream used the following classifications of achievement, as in previous years.


100%

Targets 2006 Progress Targets 2007

Table 4. Progress against 2006 CR targets and CR targets 2007

Climate Change

To develop a long-term Carbon Management Planto reduce Sonae Sierra’s GHG emissions

Commission a study of the potential financial risks associatedwith climate change impacts on Sierra owned centres underdevelopment and management in Portugal with a view toreporting at Board level on the financial implications of climatechange to Sierra’s business

Secure Board approval for the integration of on site renewableenergy generation technology in at least one development project(pilot)

To reduce greenhouse gas emissions associated with electricityconsumption (scope 2 GHG Protocol) per square meter of GrossLettable Area across the owned and co-owned shopping centresin Portugal by 1% (compared with 2006 levels)

CR Management

100%Review the key CR issues reported on to checkwhether these remain the most significant risksand opportunities for Sonae Sierra in the contextof changing operations andregulatory/stakeholder requirements

Investigate the applicability of different certification standards forour CR Management System

Environmental Management

100%Integrate headline CR objectives in the corporatestrategy

81%Ensure that all projects achieve 100% ofcompliance with critical ESRD standards

Ensure that all projects achieve 100% of compliance with criticalESRD standards

100%At the time of each centre’s opening day, to haveachieved ISO 14001 certification for 100% ofconstruction sites (by number)

At the time of each centre’s opening day, to have achieved ISO14001 certification for 100% of construction sites (by number)

100%To achieve ISO 14001 certification on 8 of SonaeSierra’s centres under operation

To achieve ISO 14001 certification:– on a further 5 owned or co-owned centres under operation

in Portugal; – on a further 4 owned and co-owned centres under operation

in Spain;– on 1 owned or co-owned centre under operation in Brazil

75%To pilot an environmental accountingmethodology on an appropriate Sonae Sierraprocess or project

75%Define a dynamic structure for the EnvironmentalManagement contents for the shopping centrewebsites


What we did & what we will docontinued



100%

75%

To install the necessary infrastructure in 3Portuguese centres in order to measure andmonitor individual energy uses (HVAC, carparking, lighting and vertical transport) separatelyand evaluate the needed infrastructure changes inall remaining centres (Portugal)

To install the necessary infrastructure in 3 Spanishcentres in order to measure and monitor individualenergy uses (HVAC, car parking, lighting andvertical transport) separately and evaluate theneeded infrastructure changes in all remainingcentres (Spain)

To install the necessary infrastructure in at least 4 more shoppingcentres owned or co-owned by Sierra in Portugal, in order tomeasure and monitor individual energy uses (HVAC, car parking,lighting and vertical transport)

To install the necessary infrastructure in the remaining Spanishshopping centres originally developed by Sierra in order tomeasure and monitor individual energy uses (HVAC, car parking,lighting and vertical transport)

Evaluate the investments needed, per shopping centre, to installthe infrastructure to measure and monitor individual energy uses(HVAC, car parking, lighting and vertical transport): – in all Italian shopping centres owned or co-owned by Sierra– in all Brazilian shopping centres owned or co-owned by Sierra

To perform an energy audit or evaluation (depending on theHVAC installed) at each office, engage with the building owneron any structural recommendations, and implement at least 75%of all management related recommendations

Trial the implementation of a Green Travel Plan on one existingowned or co-owned centre

To undertake independent energy audits in sixteen shoppingcentres in Portugal to ensure that they meet with good practicestandards

To undertake independent air quality audits in ten shoppingcentres in Portugal to ensure that they meet with good practicestandards

Climate Change (continued)

100%

100%

100%

Water

To install the necessary infrastructure in all centresin order to measure and monitor individual wateruses (WCs, fountains and cooling towers)separately at all centres in Brazil

To restart the system for reusing recycled water inParque D. Pedro

Ensure that in the Lisbon offices 100% of taps inwashrooms are automatic no-touch taps, in orderto reduce water consumption

Evaluate the investments needed, per shopping centre, to installthe infrastructure to measure and monitor individual water uses(WCs, fountains and cooling towers) in Italy and Greece

Review local municipality requirements for wastewater quality at Sierra owned and co-owned centres to evaluate theappropriateness and feasibility of setting a wastewater qualitystandard across the portfolio




140%

100%

150%

90%

100%

50%

0%

Increase the proportion of total waste recycled (byweight) in 2006 compared to 2005, aggregatedacross all centres in each country, by the followingamounts;

5 percentage points in Portugal;

5 percentage points in Spain;

6 percentage points in Brazil;

10 percentage points in Greece

Introduce a waste recycling system and monitor it(by weight) across all Italian centres

Increase the proportion of total waste recycled (byweight) by 10 percentage-points in 2006compared to 2005, aggregated across all SonaeSierra offices

Reduce the total amount of paper/cardboard waste(by weight) produced, by 5 percentage-points in2006 compared to 2005, at the São Paulo offices

Increase the proportion of total waste recycled (by weight) inorder to achieve the following recycling rates, aggregated acrossall centres in each country:

Portugal 35%;

Spain 30%;

Brazil 36%;

Greece 20%;

Italy 30%

Increase the proportion of total waste recycled (by weight) inorder that each office achieves a minimum recycling rate of 30%(Offices: Corporate wide)

Increase the percentage of total waste that is composted to 7%(by weight) aggregated across all Portuguese centres

Roll out a consistent methodology to establish the proportion of completed developments occurring on brownfield land

Roll out a consistent methodology to monitor the number ofnative trees planted at all completed development projects

Waste

Land Use

25%

12.5%

Business Chain

Suppliers

Consider introducing performance appraisals formajor suppliers, including long term suppliers andcontractors, and to ensure they also get theopportunity to feedback on performance andworking practices

Develop a responsible procurement strategy,including a phased programme of implementationto ensure that Sonae Sierra is addressing the mostsignificant environmental and social risks throughits procurement of goods and services

Develop a responsible procurement strategy, including a phasedprogramme of implementation to ensure that Sonae Sierra isaddressing the most significant environmental and social risksthrough its procurement of goods and services

Pilot a methodology for developing a measurement inventory ofcore building materials used during the construction of oneproject in Portugal

Increase the proportion of paper purchased from recycled sourcesfor use in Sonae Sierra offices in Portugal, Brazil and Italy to 75%

Undertake research into industry initiatives in 1 country toincrease the recycled content and/or sustainability of core buildingmaterials used by Sonae Sierra and consider becoming involved in these

0%

50%

Identify one major development where bestpractice community involvement and participationtechniques might be employed from a very earlystage, and use this as a pilot to establishappropriateness and significance of such practicesfor other developments

Undertake post completion reviews at each site,upon completion of developments, to find outcommunity perspectives regarding the urban ‘fit’of the development, including design andarchitecture

Pilot a community panel at 1 owned centre with the aim ofconsulting more effectively with key local stakeholders, anddefine the Terms of Reference for future panels at all centres

Investigate the possibility of implementing a public art strategy,whereby a piece of public art is included in the design of all newshopping centres so as to bring community benefit


What we did & what we will docontinued

100%

50%

76%



Communities (including visitors)

Develop central guidelines to be issued to allcentral and centre management staff, with a viewto achieving more cohesion and consistency incommunity related activities across the portfolio

Create an interface with local educationalstructures, to encourage the diffusion to studentsof the safety and environmental culture of SonaeSierra, with active visits both to sites andinstitutions

Promote a marketing event/campaign with anenvironmental theme involving visitors and localcommunity at all shopping centres

Develop central community investment guidelines to identify andpromote a small number of specific themes that Sierra is keen tosupport, with a view to achieving more cohesion and consistencyin community related activities across the portfolio

Promote an environmental event involving a school from the localcommunity at all shopping centres including communicationabout the shopping centres environmental best practices

Invest at least 5% of marketing annual budget in communityrelated initiatives

100%Create a volunteer programme for staff toparticipate in social activities

Double the proportion of Sonae Sierra staff who are taking partin community volunteering activities

100%Monitor levels of crime at each centre with a viewto recording centrally and improving over time

100%Benchmark all shopping centres across theportfolio against Luz del Tajo and LoureShopping,in order to highlight the operational strengths andweaknesses of each centre’s access provisions

Business Chain (continued)

Tenants

100%

25%

13%

100%

Introduce measures to ensure standards ofcustomer satisfaction are consistent acrossdifferent countries

Link customer satisfaction levels to remunerationand bonus systems for operational staff

To develop detailed performance improvementaction plans based on the findings of the latestcustomer satisfaction surveys

Introduce environmental awareness and trainingactivities for tenants and service providers(cleaning, maintenance and security) at allshopping centres

Integrate tenant satisfaction objectives into the annual businessplan cycle for each individual shopping centre and each countryof operation


0%



Employees

Achieve zero lost injury days amongst Sierra’sdirect employees as a result of workplaceaccidents

Undertake ergonomic and workplace conditions assessments for75% of the workforce and define an action plan to implementthe recommendations

Achieve zero injury lost days among Sierra’s direct employees as aresult of workplace accidents

0%Achieve zero fatalities or preventable majorinjuries across the Sierra portfolio

Achieve zero fatalities or preventable major injuries across theSierra portfolio

Achieve a level of 11 non conformances per hour resulting fromSafety Preventive Observations in Reference Sites* by the end of2007

0%Introduce a formal policy on equal opportunitiesand diversity, endorsed by senior managementand publicly available

7%Monitor the number of jobs created duringplanning and construction of new projects

100%Monitor the number of jobs created from all newdevelopments completed (after opening)

Safety and Health

* Reference sites refers to a “basket” of 9 sites, defined by the S&H Steering Committee as being an adequate sample representative of Sierra’s overall portfolio,which are monthly audited by the Personæ core team.

50%Integrate relevant CR responsibilities intoindividual job descriptions across all businessesfunctions and link these to remuneration andbonus systems

0%Monitor approach to internal staff managementand recruitment to ensure compliance with equalopportunities policy

50%Ensure that there is a formal disciplinaryprocedure in place to tackle harassment relatedclaims

100%Introduce internal learning forums and cross-disciplinary knowledge exchanges across differentcentres, countries and divisions

100%Implement a training programme for allemployees on CR related issues

Review the recruitment strategy employed by Sierra, with a viewto proactively recruit disabled people

Within the scope of legal restrictions in each country where Sierraoperates, identify roles which might be suitable for more flexibleworking arrangements, thereby increasing opportunities for part-time staff

100%Create a programme for staff children to do post-graduate training in Sonae Sierra

Communities (including visitors) (continued)


Governance & CommitmentsCorporate 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.

Each of the 6 Executive Members of the Board has special responsibilities on certain businesses or areas of the company,and the Board of Directors retains responsibility for the company’s strategy, long-term business plan, finance strategy andreporting, amongst other tasks. Sonae Sierra has an Executive Committee (which ultimately takes strategic responsibilityfor day-to-day operations, including CR) and three specialised Committees. The Investment Committee and the FinanceCommittee are chaired by the CEO, and the Audit & Compliance Committee is chaired by an independent person chosenby the Board of Directors. Sonae Sierra’s definition of ‘independent’ is any individual who is not directly employed bySonae Sierra or otherwise have a financial interest in the company.

General ShareholdersAssembly

Remuneration CommitteeEffective Fiscal Member

Deloitte & Associates

Substitute Fiscal Member

Board of Directors5 Non-Executives (including Chairman)

6 Executives (including CEO)

Investment Committee Finance Committee

Audit & Compliance CommitteeChaired by independent person

Executive Committee


Executive Board Members Responsibilities of Sonae Sierra (including economic, social and environmental performance)

Álvaro Portela (CEO) Chairman of Investment, Finance and Executive Committees; Safety and Health; CorporateCommunications; Environment; Institutional Relations; Investments and Asset Management

João Pessoa Jorge Brazil; Chair of Brazil Working Group for CR

Edmundo Figueiredo (CFO) Internal Audit; Legal, Fiscal and Mergers & Acquisitions; Finance; Planning & Control; HR and Back Office

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

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

António Casanova Key accounts, Marketing, New Technologies Business; Chair of Communities Working Group for CR

There are no minority shareholders so the use of shareholder resolutions to enable such shareholders to express an opinion to the highest governance body is not applicable. Shareholders are represented on both the GeneralShareholders Assembly and the Board of Directors, so their opinions are expressed at meetings of these bodies. One example of a CR related recommendation made by a shareholder was Sonae SGPS recommending the use of the GRI Reporting Guidelines in Sierra’s CR Reporting. This is one of the principal reasons for this 2006 CR Reportseeking compliance with level C+ of the GRI G3 Guidelines.

CR GovernanceDuring 2006, Sierra’s CR Management Strategy continued to be governed by a CR Working Group chaired by the CEO and made up of representatives across the senior management team. At the end of 2006, Sierra made changes to this governance structure, principally to reflect the prioritisation of material CR impact areas for future improvements.Ultimate responsibility for CR continues to rest with the CEO of Sonae Sierra, who reports to the Executive Board on all CR issues. The previous CR Working Group, made up of senior representatives from all business divisions, has nowbecome a CR Steering Committee to oversee the company’s entire CR strategy. It will set the long-term objectives andgoals for the company to strive towards and agree the annual plans for performance monitoring, target-setting andreporting and communicating. The CR Steering Committee continues to be chaired by the CEO of Sonae Sierra.

Governance & Commitments continued


A number of individual CR Working Groups have been established to govern each of the material impact areas. TheseGroups will prepare the decision proposals for the CR Steering Committee, and coordinate their implementation anddelivery. They are made up of a larger number of individuals from across Sierra, at different levels of seniority, all of whomwill take responsibility for driving performance against Sierra’s nine most ‘material’ impact areas. Two Working Groups (RiskManagement and Brazil) are cross-cutting, addressing all impact areas. Each Working Group is chaired by a representative on the CR Steering Group.

Throughout the business, and across different functions and divisions, individuals continue to have responsibility forimplementing specific aspects of CR in their daily activities. Where applicable to their core jobs, environmental and safety and health objectives now form part of people’s performance appraisals and link through to remuneration and bonus schemes.

The CR Working Groups described on the previous page are an important conduit for employees to providerecommendations on CR to the highest governance bodies within the company. The Safety and Health (S&H) WorkingGroup established in January 2007 is distinct from the S&H Steering Committee established in September 2004, which isthe governing body for safety and health in Sierra. Sierra’s S&H integrated organisation includes also several sub-committees, covering more specific topics including: Emergency Response; Preventive Observations and Inspections; ServiceSuppliers Management; New Projects & Commissioning Subcommittee; Incident Investigation and Communication; andAvian Flu Pandemic. In addition, most sites have now established monthly S&H meetings in which Sierra staff participatealongside representatives of service suppliers and/or contractors. These are de-facto local Safety and Health Committees,where representatives of workers discuss their concerns in relation to S&H, help to develop and monitor improvement plansfor their site and receive S&H training on prescribed issues. This takes place at each and every shopping centre underoperation (including those centres managed by Sonae Sierra but owned by third parties), in total representing just over54% of Sierra’s global workforce to engage with them to better understand and manage specific risks and hazards. Thishas been represented in Table 5 opposite.

Executive Board of Sonae Sierra

Corporate Responsibility Steering Committee

RiskManagement

WorkingGroup

Environment Working Group

EmployeesWorkingGroup

CommunitiesWorkingGroup

Safety &Health

WorkingGroup

Business Chain

WorkingGroup

Brazil WorkingGroup

RiskManagement

ClimateChange

Land Use

EmployeesCommunities

(includingvisitors)

Safety &Health

All nine CR Impact Areas and Risk Management

Water Waste

Tenants

Suppliers


Web referenceDetailed information about each of the components of Sierra’s CRManagement System can be found on the company website.http://www.sonaesierra.com/corporateresponsibility/managementsystem/

Level at which committee Number of Number of workers representedType of committee operates (national) workers in local S&H Committees

Portugal 396 163

Spain 139 66

Italy 42 0

Greece 19 5

Germany 38 0

Holland 4 0

UK 2 2

Brazil 382** 312

Total workforce 1,022 548

% of total workforce represented

54

Local Safety and Health committee meeting once a month in every shopping centre under operation

Table 5: GRI LA6 Percentage of total workforce* represented in formal join management-worker health and safetycommittees that help monitor and advise on occupational health and safety programs

* Due to the nature of Sonae Sierra’s business activities, ‘Workforce’ in this context includes people with supervising roles within the company, such as theshopping centre managers.

** The figure for number of workers in Brazil includes ‘condominium’ or supervised workers who manage the shopping centres but do not have a legal contractwith Sierra. This arrangement is unique to Brazil, where the shopping centre management is undertaken by joint venture companies that Sonae Sierra Brazil hassome ownership stake in. For this reason the these workers have been included within the scope of this indicator, whereas supervised workers employed byservice providers in shopping centres across all countries of operation have not.

During 2006, there were no other formal ‘work councils’ besides these ones for safety and health, but there were othermeans for employees to make recommendations to the highest governing body on social, environmental or economicperformance, including those listed in Table 3 of this report. Examples of such recommendations from staff arising fromfeedback on the 2005 CR Report and feedback from the WBCSD sustainability training (Chronos) undertaken during thepast year, included the suggestion to increase employees’ awareness on CR-related issues. Further CR-related trainingwas indeed provided by Sierra in 2006, including the Chronos Sustainable Development training. Safety and Health isanother area in which staff recommendations are welcomed and carefully considered. At the local S&H meetings whichtake place each month, a time slot is scheduled for suggestions from all those who attend. At one of our centres inSpain the suggestion of providing a safer stepladder for access to the roof made by one of our employees was laterimplemented. Similar efforts are taken to ensure continuous improvement in S&H performance through the “Quick Win”system. Through this system, staff are encouraged to send safety and health recommendations to the managementteam, who select one of these each month as the ‘winner’. The “Quick Win” recommendation is then sent out to staffat all centres in a poster format, encouraging them to implement it locally.

Policy CommitmentsSierra’s CR management system continues to be driven by its mission, corporate values and key principles of economic,social and environmental responsibility. During 2006 Sierra undertook a review of its CR Policy commitments and minorrevisions were agreed. The latest version of the company’s CR policy statement, and supporting commitments, has nowbeen approved by the Executive Board. The policy is a voluntary commitment by Sonae Sierra (i.e. not a legislativerequirement) which applies to all countries where it operates.


Climate change: Electricity efficiency (excluding tenants) of the ownedand co-owned portfolio [See also Issue in Focus:Climate Change and EN16, EN17]

Financial Performance:Continuous growth in EBITDA over 5 year period (€ million)

Corporate PerformanceThis section highlights trends in our global performance against headline indicators for each of our most materialimpact areas. In each case, the headline indicator is accompanied by a data qualifying note which specifies datacoverage, accuracy and reliability and an explanatory note seeking to describe the reasons for the trend in ourperformance.

2002

2003

2004

2005

2006 150

126

108

98

96

Comment on trend: The financial strategy and a policyof constantly recycling capital allow us to continue togenerate innovative and creative concepts, and deliverattractive returns for investors, as demonstrated by ourfive year EBITDA evolution.

Data Qualifying note: EBITDA data includes the whole company’sactivities across all countries of operation.

Comment on trend: Electricity consumption per m2 for theaggregated Sonae Sierra portfolio is less this year than last,decreasing from 594 kWh/m2 in 2005 to 563 kWh/m2 in 2006,the lowest rate so far recorded over the last five years. This trend can also be seen for the values of indirect greenhouse gasemissions per m2 (associated with electricity), which during thesame period of time has fallen from 249 kg CO2e/m2 to 242 kgCO2e/m2.

The decrease achieved in electricity consumption per m2 isprincipally due to the implementation of efficiency measures, mostnotably at centres in Portugal, and to extensive awareness-raisingamong both staff and tenants in all countries of operation. Sub-metering infrastructure has also been installed to monitorindividual energy uses at some centres in Spain and Portugal to better understand the scope for further efficiencies. Electricityconsumption per m2 varies from centre to centre on account of several factors, including weather patterns, the age of thecentre and its layout and design. Sonae Sierra aims to buy,build and manage its assets so that energy is used with greaterefficiency each year. In order to compare the trends in ourperformance with those of the industry, Sonae Sierra takes part in the performance benchmarking survey undertaken by Upstream,and we are keen to encourage other European property investorsto take part in this benchmarking for shared learning.

Data Qualifying note: The data presented for 2006 covers all shopping centresowned and co-owned by Sierra for the full calendar year 2006 across all countries of operation. The year-on-year growth of the size of our portfolio means that thesample of centres varies between years, as does the scope of coverage of ourreporting from 10 out of 21 owned or co-owned centres in 2002 to 38 out of 38 in 2006.

It should be noted that an updated, more accurate figure for electricity efficiencyhas been reported here for 2005, which varies slightly from the figure reported inthe CR Report 2005.

“It has been a great pleasure to haveSonae Sierra as a leading member of theWorld Business Council for SustainableDevelopment (WBCSD). The company hasearned an international reputation for itsability to innovate in a very competitivemarket, and has won more internationalawards than any other company in itssector. It also publishes a frank andreadable corporate responsibility report,with clear goals, progress indicators andlessons learned.”

Björn StigsonPresident, WBCSD

2005200420032002 2006

kWh

/m2

(mal

l+to

ilet

area

)/ye

ar

56359

4

586

748

755


Water: Water efficiency (excluding tenants) of the owned and co-owned portfolio

Comment on trend: Water consumption per visit per yeardecreased very slightly from 4.3 litres/visit in 2005 to 4.2litres/visit in 2006. 2005 was one of the hottest years onrecord, which partly explains why our highest recordedconsumption coincides with that year. Sonae Sierra has beenproactive in raising awareness among staff, tenants andvisitors on the issue of water saving. At 13 properties theseactions resulted in decreased consumption per visit since2005, but at 11 properties consumption per visit increased. At some of the properties with deteriorating performance,this may be due to high demand that is weather-driven.However, at others, no clear reason has emerged for poorerperformance, and these properties will be the focus forgreater investigation from our staff charged withenvironmental responsibilities in each country.

Data Qualifying note: The data presented for 2006 covers all shoppingcentres owned and co-owned by Sierra for the full calendar year 2006 across all countries of operation, with the exception of 3 centres in Spain; 1 centre inItaly and the 1 in Greece, as full data for the year was not available from these.Metering problems, particularly those at the Spanish properties above, are anarea of concern that we are addressing.

The year-on-year growth of the size of our portfolio means that the sample of centres varies between years, as does the scope of coverage of our reportingfrom 18 out of 24 owned or co-owned centres in 2003 to 33 out of 38 in 2006.

It should be noted that an updated, more accurate figure for water efficiencyhas been reported here for 2005, which varies slightly from the figure reportedin the CR Report 2005.

Waste: Total waste recycled13 as a proportion of wasteproduced (% by weight), across the owned and co-owned portfolio

Comment on trend: The increase in waste recyclingacross the Sonae Sierra portfolio is encouraging. This hasprimarily been thanks to our ongoing endeavours toincrease awareness among employees, tenants and visitorson the issue of recycling, and to ensure the provision offacilities to make recycling possible. The aggregated globalportfolio proportion of waste recycled in 2006 hasreached 31%, the highest percentage recorded yet, andan increase of 4.8 percentage points over the 2005performance. Currently, 20 out of the 36 Sierra propertiesare recycling more than the ‘typical practice’ benchmark(26%) from the Upstream performance benchmarkingsurvey for shopping centres. We are striving to ensure allour centres attain this typical practice benchmark as aminimum.

Data Qualifying note: The data presented for 2006 covers all shoppingcentres owned and co-owned by Sierra for the full calendar year 2006across all countries of operation, with the exception of 1 centre in Spainand the 2 located in Italy. The large majority of the data presented hererelates to waste that is produced by Sierra’s tenants, the disposal of whichwe have responsibility for managing.

The year-on-year growth of the size of our portfolio means that the sampleof centres varies between years as does the scope of coverage of ourreporting. The 2002 data included 9 out of 21 owned or co-owned centres,and in 2006 it includes 35 out of 38.

It should be noted that an updated, more accurate figure for wasterecycled has been reported here for 2005, and this varies slightly from thepercentage reported in the CR Report 2005.

2005200420032002 2006

litre

s/v

isit

/yea

r

4.24.3

3.6

4.2

not

know

n

2005200420032002 2006re

cycl

ing

rate

%

31

26

21

1919

13 Waste recycled includes composting, recovery and material recycling (all waste which is not sent to landfill, incineration or special treatment).


Corporate Performance continued

Land use:Proportion of completed development on previouslydeveloped land (by area) 100%

Data Qualifying note: The data provided above covers only thosedevelopments completed in 2006 – both Campo Limpo (Brazil) and RioSul(Portugal).

Comment on trend: Every construction project offersdiffering opportunities for waste recycling. At RioSul, therecycling rate of 90% was very high, partly as a result of theproject being a big extension of an existing shopping centre,thereby enabling significant opportunities for the on site reuseof demolition materials.

Data Qualifying note: The data above covers only one of the twodevelopments completed in 2006 – RioSul (Portugal), as the waste datacollected for Campo Limpo (Brazil) was not sufficiently reliable.

Comment on trend: Across the Sierra portfolio, we continueto have extremely high levels of occupancy (consistently above90%) and low void rates, which we consider to be anencouraging indicator of our continued attractiveness as alandlord. The most significant factor affecting occupancyindices for Sierra is where we have contracts in renovation,with tenants unable to occupy the units for a given period.

Data Qualifying note: This indicator covers all shopping centres undermanagement on 31/12/06, excluding 1 in Spain.

Comment on trend: The Visitor Satisfaction Index remainsrelatively high, with marginal differences across the portfolioover the year. As Sonae Sierra rolls out an improvedmethodology for measuring visitor satisfaction across all countries from 2007 onwards and action plans areimplemented for improvement, we would expect the visitorsatisfaction index to improve further in future.

Data Qualifying note: The figure for total 2006 donations includes only cashdonations (not in kind community contributions), and covers both corporate-wide donations and those made by our owned or co-owned shopping centres.

The data for 2006 comprises the average visitor satisfaction index of thoserecorded in Portugal, Spain, Italy, Greece and Brazil. The data presented herecovers all centres owned and co-owned in Portugal and Spain on 31/12/06 and 4 further centres managed only. The visitor satisfaction index is based on theresults of a visitor satisfaction survey in which different factors are rated from 0 to 4 according to the visitors’ assessments. The data for 2005 comprises theaverage visitor satisfaction index of those recorded in Spain and Portugal only.

Business chain: SuppliersConstruction waste recycling Indicator

Business chain: Tenant SatisfactionOccupancy Index

LoureShopping(2005)

SerraShopping

(2005)

RioSul(2006)

Con

stru

ctio

nw

aste

recy

clin

gin

dica

tor

(%of

tota

lwas

tese

ntfo

rre

cycl

ing

orre

cove

ry)

90

62

86

2005 2006

Ave

rage

Occ

upan

cyIn

dex

at31

stD

ecem

ber

(%by

GLA

) 9594

Communities (including visitors)Corporate Community Investment & Visitor Satisfaction Index

0.3€ million donated to charitable or cultural initiatives

2005 2006

Vis

itor

Satis

fact

ion

Inde

x

3.1

3.0

Employees:Investment in staff training and development(€ per capita)


Comment on trend: Sierra has significantly increased thetotal spent on staff training and development (per capita)since 2005. Despite a dip between 2004 and 2005, thelatest figure exceeds all previous years. The number ofemployees at Sierra also continues to increase; in 2006 we welcomed 22 new members to our workforce.

Data Qualifying note: The data for 2005 and 2006 covers training (alltypes) provided to 100% of Sierra’s worldwide employees. The data for 2004covers training (all types) provided to employees in Portugal and Spain only.The costs recorded refer to the costs of external training only. They do notinclude internal training costs, nor do they include associated travelling costs.

Case Study:Chronos Sustainable Development Training

2004

2005

2006 1,728

935

1,503

In 2006 Sonae Sierra launched a comprehensiveSustainable Development training programme for all employees across the business. The Chronos trainingprogramme was developed by the World BusinessCouncil for Sustainable Development (WBCSD), and was adapted by Sierra and delivered to all its staff in all countries of operation via CD-ROMs.

During a series of information sessions led by Sierraemployees, the contents of the CD ROMs werediscussed interactively with a total of around 550employees, encouraging them to share their ownexperiences of sustainable development. The trainingaims to demonstrate the ways in which social andenvironmental performance adds value to the business,and to encourage staff to assume a more active role inthe delivery of a more sustainable future. Participants arechallenged to find favourable solutions to corporatedilemmas and to consider different scenarios from a range of different stakeholders’ perspectives.

Safety and Health:Nº of non conformances per hour of SafetyPreventive Observation (SPO) in Reference Sitesaudited by Personæ core team


Case Study:Safety and Health Meetings

Corporate Performance continued

2005 2006

No

ofno

nco

nfor

man

ces

per

hour

ofSP

O

15

21Comment on trend: This particular indicator has been chosen by Sierra because it is proactive, seeking to measure what we are doing to prevent safety and health incidents occurring in the first place. SafetyPreventive Observations (SPOs) are our interpretation of behaviouralaudits aimed at identifying unsafe conditions. For every hour ofobservation undertaken, a number of non-conformances might bedetected, which then form the basis for engagement with the peopleinvolved at the site. Encouragingly, this number has decreased since2005 at the nine reference sites, suggesting that awareness of safetyamongst our staff and contractors is increasing, and the number of risksand hazards are correspondingly decreasing. We would expect this tocontribute towards low incident/accident rates in our operations.

Data Qualifying note: The data reported here covers a sample of 9 Reference Sites (5% of total sites managed by Sonae Sierra) audited by the Personæ core team. The 2005 figurereported in the CR Report 2005 (11.24) was lower than the figure reported here as itincluded all sites where SPOs were being undertaken, rather than just the 9 reference sites.The latter is a more reliable and accurate measure of the potentially unsafe acts or conditionsthat exist in the portfolio, as it is based on observations by persons with a higher awarenessand understanding of S&H risks.

At the start of 2006, all Sonae Sierra shopping centresunder operation began to organise monthly Safety andHealth Meetings for Sierra staff and management teams,and for resident service suppliers’ supervisors. The aim isto establish local S&H Committees on each site which caninteract and exchange opinions and experiences. Theservice suppliers’ supervisors are asked to disseminate themeeting minutes to their own staff and colleagues formaximum effect.

The structure of the meetings includes training on specificissues and discussion on past improvements, andattendees are required to prepare presentations on self-selected topics to ensure participation and involvement.

Sierra has received very positive feedback on thesemeetings from most regions and sites, despite initialresistance, suggesting that they are a real success. Peoplefeel encouraged by the fact that they are truly involved inthe decision-making process and that their efforts arevalued. The adoption of this culture within the Safety andHealth Management System has facilitated opportunitiesfor dissemination of information and training not only onS&H issues but even on Environment and RiskManagement ones.


Issue in Focus:Climate Change

In the Executive Summary of the latest report issued by international scientists andofficials of the IPCC (Intergovernmental Panel on Climate Change)14 it is stated thatglobal warming is definitely happening and that it is “very likely” caused by man,particularly through the burning of fossil fuels. Both the EU and Brazil have ratifiedthe Kyoto Protocol to the United Nations Framework Convention on Climate Change(1997), the former having also agreed to reduce emissions of greenhouse gases by2008-2012. In fact, the EU has now agreed a pact to cut greenhouse gas emissions by20% unilaterally by 2020 compared to 1990 levels. The 160 million buildings in the EUuse over 40% of Europe’s energy and account for over 40% of its carbon dioxideemissions. Consequently, buildings are being targeted by a raft of policy measures toraise standards of energy efficiency (e.g. Energy Performance of Buildings Directive)and to encourage the generation of renewable energy.

14 Intergovernmental Panel on Climate Change, ‘Climate Change 2007: The Physical Science Basis: Summary for Policymakers’ (http://www.ipcc.ch/).

Climate Change RisksExtreme Weather

Water Coastal Land Energy Biodiversity events

Need for Generaldiversi- disruption

Water Rising Desert- fication to eco- Forest Heat-Drought Flooding quality Erosion sea level ification Landslides of sources systems fires waves Storms

North,

Portugal South Winters South

Spain

Italy

Germany

Greece

Brazil Regional Regional Regional


Risk is either already having an impact or is very likely to occur

Risk that is quite likely to occur

Risk is not mentioned in literature reviewed

Inconclusive

Each of the risks referred to in the table above might, at some stage in the future, pose a potential financial risk forSierra and its properties. These financial risks may arise from the need for us to incur additional costs to future-proof,namely to avoid physical damage to our buildings (for instance through subsidence and increased weathering), as well aspotentially through emergency preparedness costs (such as flooding).

Our own efforts to reduce climate change impacts are not new, and since 2004, we have been working on the definitionof a long-term climate change strategy, including a greenhouse gas emissions reduction plan. We are now pleased toannounce our commitment to achieve:

“a 10% reduction of greenhouse gas emissions by square metre of GrossLettable Area by 2020, compared to the 2005 level”

This target is set for all shopping centres owned and co-owned by Sonae Sierra and corporate offices in all countries,including those in countries with no binding emissions reduction target (such as Brazil). This target refers to scope 1 andscope 2 emissions16 (as defined by the Greenhouse Gas Protocol Initiative17), as well as emissions from business air travel(Scope 3)18, given their relative importance both politically and in terms of impact magnitude. A relative target – carbonintensity, expressed as kg CO2e/m2 Gross Lettable Area (GLA), has been adopted to accommodate Sonae Sierra’scontinuous expansion, albeit hopefully at an ever more carbon efficient pace. However, it is clear that, in absolute terms,Sierra’s greenhouse gas emissions continue to grow in line with business growth, as demonstrated in the chart opposite.

To us at Sierra, it is clear that climate change is a critical issue for our business. As part of the review of ‘material’ CRissues that we undertook during 2006, our strategic CR consultants Upstream identified specific climate change risks inthe countries where we have operations, drawn from Government and other research reports published in each of thosecountries. These risks are presented in the table below, and while not all of these will present direct risks to our business,we are conscious that they could each have direct or indirect effects on our business activities15:

Issue in Focus: Climate Change continued

15 The sources used during the investigation of the risks identified in this table are listed under glossary page 66.16 Scope 1 refers to emissions from sources which belong to or are controlled by the organisation. This includes emissions generated by the company car fleet,

leaks occurring from heating and cooling installations, the use of boilers and cogeneration motors. Scope 2 refers to emissions which result from the productionof electricity or steam consumed by the organisation.

17 The GHG Protocol Initiative is the international accounting tool for quantifying greenhouse gas emissions. Developed in partnership between the WorldResources Institute and the World Business Council for Sustainable Development,

18 Scope 3 refers to emissions related with the organisation's activities but which result from sources that neither belong to nor are controlled by the theorganisation. This includes staff commuting journeys, air travel, visitor’s journeys to and from shopping centres and the treatment of wastewater generated bySonae Sierra.


Climate Change:Total direct and indirect greenhouse gas emissionsby weight; tCO2e (GRI EN16)

Comment on trend: The increase in total greenhouse gasemissions over the two year period should be considered as a result of the expansion of Sierra’s operations. Attentionshould also be given to the fact that the new countries with shopping centres, Italy and Greece, have a more carbonintensive electricity as a result from a lower percentage of renewables in their national grid. It should also be notedthat the positive trends in electricity consumption per m2

(see climate change chart on page 20) were followed by the decrease of the CO2 equivalents emissions per m2.

Data Qualifying note: This indicator covers all centres owned and co-ownedby Sierra, and occupied offices, and includes fuel combustion on companyvehicles at all of the sites which we manage (Scope 1 and 2).

The conversion factors from the year 2005 were used to calculate emissions of CO2e produced by electricity consumption, as the 2006 conversion factors of the countries national grids were not available at the time of reporting.

The figure recorded here for 2005 differs from that published in the CR Report2005 as we now have more accurate data regarding our emissions during that year.

2005 2006

Tota

ldire

ctan

din

dire

ctgr

eenh

ouse

gas

emis

sion

sby

wei

ght;

tCO

2e

150,

945

124,

720

Climate Change: Other relevant indirect greenhousegas emissions by weight; tCO2e (GRI EN17, partial)

762,456Data Qualifying note: This indicator covers centres owned and co-ownedin terms of installations but includes all employees, even those that work at the sites that are just managed but not owned or co-owned by SonaeSierra. Included in this indicator are employees’ commuting journeys, airtravel (Portugal employees only), visitors’ journeys to and from shoppingcentres and the treatment of wastewater generated by Sonae Sierra;

Climate Change: TransportNumber of visitors arriving by different types oftransport in the owned and co-owned portfolio, 2006 (millions and %)

Comment on trend: The increase in the number ofvisitors to our shopping centres is a reflection of ourgrowing portfolio. The percentage of visitors arriving by forms of transport other than private car has changedlittle year-on-year. This highlights an area which isparticularly challenging for Sonae Sierra given that wecannot control visitors’ transport choices – though wemay have some degree of influence. Sonae Sierra has seta target for 2007 to trial the implementation of a GreenTravel Plan on one existing owned and managed centre. Ifconsidered successful, this could be rolled out across the portfolio in future.

Data Qualifying note: The data presented for 2006 covers all shoppingcentres owned and co-owned by Sierra for the full calendar year 2006across all countries of operation, with the exception of 1 centre in Italy.

The year-on-year growth of the size of the portfolio means that the sampleof centres varies between years (from 25 out of 26 in 2004 to 37 out of38 in 2006).

200620052004

Vis

itors

(mill

ions

)

Arriving by all other forms(other than private car)

224

198

175

107

109

92

Arriving by private car

Case Study:Initiatives to reduce indirect energy consumption

Issue in Focus: Climate Change continued


Sonae Sierra is a “Carbonfree – The Seal of ClimateResponsibility” company, which implies that it has madea strong corporate commitment to reducing andaddressing its climate change impacts. For furtherdetails of the specific commitments required by thisinitiative see http://www.carbonfree.pt/.

Sonae Sierra is committed to reducing not only the greenhouse gas emissions for which we are directly responsible,but also those to which we contribute indirectly, such as those caused by visitors and employees travelling to ourshopping centres and offices by car, and those resulting from the energy used by our tenants and contractors. During2006 we undertook several initiatives to reduce our indirect energy consumption, and associated carbon emissions:

• Road safety and Ecodriving training was provided to 59 staff in Portugal, led by firemen, police andmedical staff trainers. These were just the first steps towards a larger project that aims to raiseenvironmental and safety awareness among Sierrastaff who drive regularly across all countries ofoperation. During the training sessions, the risks of climate change associated with emissions fromvehicles were highlighted, and employees werereminded that commuting and travelling betweendifferent sites by car has an adverse environmentalimpact, which can partly be addressed through‘ecological driving practices’.

• Sonae Sierra also facilitated the creation of a busstop at LoureShopping in Portugal to encourage theuse of public transport where it was not previouslyavailable during night time. We explored differentpossibilities with the bus operator and the localmunicipality to identify a solution, and we tookresponsibility for constructing the bus stop which has now been open since December 2006 withconsiderable success by way of its usage.


As an energy and environment consultant in the real estate and building industry sector, my opinion is that Sonae Sierra adopts a leadership attitude with regard to energy policy, of which I would highlightthe following:

1) New developments:

• Energy is addressed as part of Sonae Sierra’s broader environmental policy, alongside water, materials, ecologyand land use, atmospheric emissions, wastewater, waste and indoor environment quality. Energy is not seenas cost that must be reduced, but as a means with which to provide a service (e.g. indoor air quality) for whichefficiency must be maximised.

• It is a major challenge to integrate all environmental issues in the design concept of complex buildings such asshopping centres, especially in view of tight timetables and budgets, and standard references beinginapplicable. To address this challenge, Sonae Sierra has developed its own environmental standards for retaildevelopments (ESRD – 188 standards in total), 42 of which relate to energy, including measures to reduceenergy needs, optimise energy management and minimise air pollution associated with energy use and systems.

2) Shopping Centres in operation:

Energy used by shopping centres depends on local features and on building facilities and dimensions. Despitethese differences, Sonae Sierra has developed a tool that will be used to accurately benchmark energyperformance in all its owned and co-owned shopping centres, allowing the company to prioritise energy reductionefforts on the most inefficient buildings.

From my experience, these measures are innovative in the real estate and building industry. For thatreason, I consider them to be a sign of maturity and commitment towards energy and the environmentand a demonstration of leadership in the sector.

Ricardo Sá, Managing Director,Edifícios Saudáveis (An energy consultancy)

Country Focus: Portugal


“I am sure that in reality we have the capacity to define a new target: in 2010, 45% of all electricity consumed will be supplied by renewableenergy. This target will place Portugal at the forefront of renewable energyproduction, making our country, on par with Austria and Sweden, one of the three strongest European countries in this area.”

Source: José Socrates, Prime Minister, Portugal 24 January 2007

National ContextThe National Strategy for SustainableDevelopment in Portugal is structuredaround seven main objectives, whichinclude:

• Increasing public awareness andknowledge

• Sustained growth, global competitivenessand energy efficiency

• A better environment and considerationfor national heritage

• Improved equality, equal opportunitiesand social cohesion

National targets set by Government in Portugal• 45% renewable electricity generation

by 2010• 55% packaging waste to be recycled

by 2012• 492 thousand hectares new forest area

to be planted by 2010

Sierra ApproachOther recent legislation has introduced more stringent requirements aroundpollution control, energy consumption and waste management. Sonae Sierra hassought to address these environmentalissues, alongside other climate change risksidentified in Portugal (see table on page 26)through a variety of initiatives. Specificexamples undertaken in 2006 include:

– Groundwater use at Centro Vasco daGama in order to be more waterefficient.

– Organic waste composting introduced at GuimarãeShopping, GaiaShopping,Centro Colombo and LoureShopping to reduce waste going to landfill andavert emissions to air.


As part of Sonae Sierra’s ongoing commitment toimproving safety and health through the Personæ project, the company has carried out Safety PreventiveObservations (SPOs) in shopping centres undermanagement for several years. The SPO is a tool whichfocuses on the correction of ‘unsafe’ behaviour throughdialogue with people working in the shopping centres and has proved a successful means of promotingconscious behaviour among employees and tenants.

Case Study:The implementation of azero-accidents culture atVasco da Gama

In November 2006, Sonae Sierra organised a staffvolunteering initiative in aid of the ‘Against Hunger’campaign. Sierra employees helped to separate andstore products at a Food Bank warehouse in Alcântara(Greater Lisbon), while Sierra CEO Álvaro Portela andother colleagues helped to collect food items at theModelo Bonjour Supermarket in Norteshopping.

“Taking part in the ‘Against Hunger’Food Bank initiative was a great way to help those in need and to fulfil ourduty as socially responsible citizens”

João Lélis and Susana CostaSonae Sierra, 2006

Case Study:Employee volunteeringin ‘Against Hunger’campaign

The Centro Vasco da Gama management team has taken the Personæ Project one step further by using the database of non-conformances noted by the SPOs in a coherent manner. The database logs each non-conformance by category(according to the type of risk presented). A critical trend analysis can be a powerful starting point for corrective actionplans to be drawn up to increase ‘safe’ attitudes and behaviour. Inspections to tenant units complement the SPOs andensure that unit supervisors or tenant managers improve the safety of existing conditions. By raising common issues atmonthly safety meetings attended by staff and resident service suppliers (e.g. security, cleaning, maintenance), a two-waycommunication channel is enabled to raise awareness of safety and health related issues in a consistent way by actingsystemically, oriented by critical analysis to S&H proactive indicators, involving tenants, service suppliers and Sierra staffon its S&H activities.

The result is a culture of rigorous accident-prevention at Centro Vasco da Gama, demonstrated through continuous andconsistent safety improvements over time.

“It was a very gratifying experiencethat I want to repeat”

Álvaro PortelaCEO Sonae Sierra, 2006

Country Focus: Portugal continued


Comment on trend: Portugal shows the highest rentalincome as the scale of Sonae Sierra’s operations here isgreater than in any other country. The increase in rentalincome over the two year period is a reflection of thecontinuing expansion of our operations in Portugal.

Data Qualifying note: Rental income covers rents received across the portfolioin Portugal in 2006.

Comment on trend: Electricity consumption per m2 inPortugal has decreased overall, from 718 kWh/m2 in 2005 to 697 kWh/m2 in 2006. This trend can also be seen for the values of indirect greenhouse gas emissions per m2

(associated with electricity), which during the same period of time has fallen from 386 kg CO2e/m2 to 375 kg CO2e/m2.

The most significant decreases in electricity consumption per m2 occurred at Parque Atlântico, CascaiShopping and Arrábida Shopping. All other centres which were alsooperational in 2005 demonstrate a positive trend, with the exception of NorteShopping, MaiaShopping andGaiaShopping, where electricity consumption increased. The introduction of energy optimisation measures in thosecentres in Portugal which show a positive trend has enabledstaff to better understand and control individual electricityuses. Moreover, awareness raising among tenants and staffon environmental issues has also continued to impact upon behaviour.

Data Qualifying note: The data presented for 2006 covers all of the 16shopping centres owned and co-owned by Sierra for the full calendar year2006 in Portugal.

The year-on-year growth of the size of our portfolio means that the sample of centres varies between years, as does the scope of coverage of our reporting from 10 out of 12 owned and co-owned centres in 2002 to 16 out of 16 in 2006).

Climate change: Electricity efficiency (excluding tenants) ofthe owned under and co-owned portfolio

Financial Performance: Total rent received

2005 2006

Rent

alin

com

e(€

mill

ions

)

175.

2

161.

3

2005200420032002 2006

kWh/

m2

(mal

l+to

ilet

area

)/ye

ar

697718

70574

8

755


Comment on trend: In Portugal, average water consumptionper visit across all centres increased from 3.8 litres/visit in2005 to 4.0 in 2006. Although this shows a negative trendover the two year period, 2006 performance is still lower that recorded in 2003. It is nonetheless an area which we will investigate further in the coming year.


The year-on-year growth of the size of our portfolio means that the sample of centres varies between years, as does the scope of coverage of our reportingfrom 11 out of 12 owned and co-owned centres in 2003 to 16 out of 16 in 2006.

It should be noted that an updated, more accurate figure for water efficiencyhas been reported here for 2005, which varies slightly from the figure reportedin the CR Report 2005.

Comment on trend: The average waste recycling rate hasincreased from 27% in 2005 to 34% in 2006 at Portugueseshopping centres, meaning that more recycling has beenachieved than ever before. The highest recycling rates were achieved at NorteShopping and MaiaShopping.Improvements at both these centres are driven in large part by the waste composting initiative.


The year-on-year growth of the size of our portfolio means that the sample of centres varies between years, as does the scope of coverage of ourreporting. The 2002 data included 9 out of 12 owned and co-owned centres,and in 2006 it includes 16 out of 16.

It should be noted that an updated, more accurate figure for waste recycledhas been reported here for 2005, and this varies slightly from the percentagereported in the CR Report 2005.

Water: Water efficiency (excluding tenants)of the owned and co-owned portfolio

Waste: Total waste recycled19 as a proportion of wasteproduced (% by weight), across the owned andco-owned portfolio


2005200420032002 2006

litre

s/v

isit

/yea

r 4.0

3.84.

0

4.7

not

know

n

2005200420032002 2006

recy

clin

gra

te%

34

27

22

1919

Country Focus: Portugal continued

Business chain: SuppliersConstruction water indicator (m2/€000 construction cost)

0.32Data Qualifying note: The data provided above covers only thosedevelopments completed in 2006. In Portugal this was only RioSul.

Safety & Health: Total Number of man hours of Safety & Health trainingprovided

3,219Comment: This figure has not been normalised by thenumber of employees who attended the training, sincetraining is provided not only to Sonae Sierra staff, but also to tenants and service providers. It is expected that thisindicator will increase over time as safety and health trainingis rolled out to more newly acquired and completedshopping centres and other sites under operation.

Data Qualifying note: The data presented here shows the total number ofman hours of safety and health training provided in Portugal in 2006 across22 sites under operation, including all shopping centres in the owned and co-owned portfolio, 1 site under development, 1 competed project, and 4 centresmanaged only.


Employees: Investment in staff training and development (€ per capita)

2,335Comment: Since Sonae Sierra’s headquarters are based inPortugal, a large part of Sonae Sierra’s management andsenior management staff is also based in this country, hencethe higher spending on training and development per capitain Portugal in comparison with other countries of operation.

Data Qualifying note: The data represented in this indicator is derived fromthe total amount in Euros invested in staff training and development in Portugaldivided by the number of employees in this country. The costs recorded refer tothe costs of external training only. They do not include internal training costs,nor does it include associated travelling costs.

Business chain:Tenant satisfactionSatisfaction level with the management team of the shopping centre

Comment on trend: Tenant satisfaction has notchanged over the two-year period in Portugal,remaining relatively high. We will aim to improve on our tenant satisfaction levels as we roll out a newstandard index for measuring tenant satisfaction acrossall countries of operation and develop action plans to address the outcomes

Data Qualifying note: This indicator includes all centres owned andco-owned by Sonae Sierra with the exception of 3 centres. It includesin addition 1 centre which was acquired by Sonae Sierra at thebeginning of 2007. The tenant satisfaction index is based on theresults of a tenant satisfaction survey in which different factors arerated from 0 to 4 according to the tenants’ assessments.

Communities (including visitors): investment in thecommunityTotal direct community investment by Sonae Sierra (includingcash € and value of in kind donations)

Total Contributions collected from visitors (in cash)

Total number of jobs created from completed developmentsincluding expansion projects over 1,000 m2

Donations: €179,701

Contributions collected: €15,258

Jobs created: 1,081

Comment on trend: Visitor satisfaction did not change over thetwo-year period in Portugal, remaining relatively high. We will aim to improve on visitor satisfaction levels as we roll out a new standardindex for measuring visitor satisfaction across all countries of operationand develop action plans to address the outcomes.

Data Qualifying note: The figure for direct community investment includes bothcorporate donations made by Sierra in Portugal and donations made at individualshopping centres (7 out of 16 centres in the owned and co-owned portfolio in Portugal).The latter does not take account of in-kind donations in cases where the value in Euroswas not estimated.

Contributions collected include donations from visitors to Sierra shoppings recorded at 7 out of 16 centres in the owned and co-owned portfolio in Portugal.

The number of jobs created has been compiled on the basis of new jobs recorded at RioSulShopping (inaugurated during 2006) and Arrábida Shopping (expanded during 2006).

The indicator for visitor satisfaction covers all shopping centres in the owned and co-owned portfolio in Portugal. The data presented comprises the average visitor satisfactionindex of those recorded in Portugal in 2005 and 2006. The visitor satisfaction index isbased on the results of a visitor satisfaction survey in which different factors are ratedfrom 0 to 4 according to the visitors’ assessments.

2005 2006

Vis

itor

Satis

fact

ion

Inde

x

3.1

3.1

2005 2006

Tena

ntSa

tisfa

ctio

nIn

dex

2.8

2.8

Country Focus: Spain

National ContextSpain’s National Plan of Adaptation toClimate Change identifies the need tointegrate measures of adaptation to climatechange in the management of naturalresources, such as forests and ecosystems,water resources and the soil, and humanactivities including transport, urbandevelopment, construction and energy.Recent legislation in Spain has placed mostemphasis on the sustainability related issuesof Emissions to air, land and water, Energyconsumption and Water Consumption.

National targets set by Government in Spain• 29.4% renewable electricity generation

by 2010• 4,200,000m2 surface area of solar

panels to be installed by 2010

Sierra ApproachSonae Sierra has sought to address some ofthe issues relating to climate change impacts(see page 26) through a variety of initiativesacross its operations in Spain. Examples from2006 include:

– The pursuit of an agreement with glassrecycling organisation ECOVIDRIO toincrease waste recycling rates at MaxCenter in Bilbao.

– Raising environmental awareness byinviting school children to Valle Real andDos Mares shopping centres to see andlearn about the waste recycling and energyefficiency systems, air quality control andthe importance of saving water.

– The implementation of energy efficiencymeasures at Avenida M40 including the zoning of the electricity network in different areas within the centre(enabling a better understanding and control of individual energyconsumptions). These measures arebeneficial both in terms of energy savingand carbon reduction and cost. So far, areduction of 127,42 tonnes of CO2 hasbeen achieved due to the measuresimplemented at Avenida M40, and withregard to costs, it is estimated that withina pay-back time of less than three years,the zoning should enable cost savings ofaround 7,500€ per year.



Country Focus: Spain continued

Comment on trend: The increase in rental income over thetwo year period is a reflection of the continuing expansion ofour operations in Spain.

Data Qualifying note: Rental income covers rents received across the portfolioin Spain in 2006.

Comment on trend: Electricity consumption per m2 hasdecreased more significantly in Spain than in Portugal, from429 kWh/m2 in 2005 to 399 kWh/m2, but still not reachingthe level achieved in 2004, of 343 kWh/m2. A similar trendcan be seen for the value of indirect greenhouse gasemissions per m2 (associated with electricity), which has fallenfrom 250 kg CO2e/m2 in 2005 to 209 kg CO2e/m2 in 2006.Electricity consumption decreased most considerably atAvenida M40, Dos Mares and Luz del Tajo. This positive trend is attributable in part to factors outside our control (less cooling demand in the summer of 2006 than 2005) but also to our actions, such as awareness-raising by SonaeSierra among staff and service providers such as cleaning,security and maintenance teams In the case of Avenida M40,optimisation measures were also implemented. Avenida M40’selectricity consumption per m2 improved from 590kWh/m2

in 2005 to 478kWh/m2 in 2006.

Electricity consumption per m2 in Spain is lower than inPortugal and Brazil due to the fact that, unlike in Spain,cooling takes place in these countries during most of the year.

Data Qualifying note: The data presented for 2006 covers all of the 11shopping centres owned and co-owned by Sierra for the full calendar year2006 in Spain.

The year-on-year growth of the size of our portfolio means that the sample ofcentres varies between years, as does the scope of coverage of our reportingfrom 6 out of 6 owned and co-owned centres in 2004 to 11 out of 11 in 2006.

It should be noted that an updated, more accurate figure for electricityefficiency has been reported here for 2005, which varies from the figurereported in the CR Report 2005.

Climate change: Electricity efficiency (excluding tenants) of the owned and co-owned portfolio


2005 2006

Rent

alin

com

e(€

mill

ions

) 68.0

64.3

2005200420032002 2006

kWh/

m2

(mal

l+to

ilet

area

)/ye

ar

39942

9

343

not

know

n

594

not

know

n

Sonae Sierra is aware of the importance of water efficiency in the countries where it operates, and as a result has soughtto investigate different ways to reduce consumption within its shopping centres. In Spain one such example was thelaunching of a water efficiency contest for tenants in DosMares in Murcia. Another can be found at Luz del Tajo inToledo, where water saving devices have been installed intaps which are estimated to reduce water consumption by 3 litres a minute without compromising the water flow quality.What is more, this water saving initiative proves to be bothbeneficial for the environment and profitable for Sonae Sierra,since it has been calculated that the investment will be paidback within about six months.

Case Study:Water Efficiency


Comment on trend: In Spain the difficulties in different yearswith broken water meters has meant that we only havereliable data for 3 years at one property – Max Centre. What is more, all properties that have reliable data for both2005 and 2006 have improved between the two years. The different performance levels for the aggregated portfolioare more due to inaccuracies in data than any particularsaving measure. We now have reliable data for 8 out of 11properties for 2006, and apart from improving metering atthe missing 3, we will monitor the effect of our efficiencymeasures in the coming year.

Data Qualifying note: The data presented here covers 8 out of 11 shoppingcentres owned and co-owned by Sierra for the full calendar year 2006 in Spain.

The year-on-year growth of the size of our portfolio means that the sample ofcentres varies between years, as does the scope of coverage of our reportingfrom 3 out of 6 owned and co-owned centres in 2003 to 8 out of 11 in 2006).

Comment on trend: In Spain the average waste recyclingrate demonstrates a reasonable increase from 21% in 2005to 26% in 2006. The highest recycling rate was achieved at Plaza Éboli (34%) – with 2006 being its full year of operation. Max Center also recycles around a third of its waste, where an agreement with the organisationECOVIDRIO assisted in increasing the recycling rate.

Data Qualifying note: The data presented for 2006 covers 10 out of 11shopping centres owned and co-owned by Sierra for the full calendar year2006 in Spain.

The year-on-year growth of the size of our portfolio means that the sample of centres varies between years, as does the scope of coverage of ourreporting from 5 out of 6 owned and co-owned centres in 2004 to 10 out of 11 in 2006).



2005200420032002 2006

litre

s/v

isit

/yea

r

3.4

4.8

2.93.

2

not

know

n

2005200420032002 2006

recy

clin

gra

te%

26

21

19

not

know

n

not

know

n

20 Waste recycled includes composting, recovery and material recycling (all wastewhich is not sent to landfill, incineration or special treatment).



992Data Qualifying note: The data represented in this indicator is derived fromthe total amount in Euros invested in staff training and development in Spaindivided by the number of employees in this country. The costs recorded refer tothe costs of external training only. They do not include internal training costs,nor do they include associated travelling costs.

Safety & Health: Total number of man hours of Safety & Health trainingprovided

903Comment on trend: This figure has not been normalisedby the number of employees who attended the training,since training is provided not only to Sonae Sierra staff, butalso to tenants and service providers. It is expected that thisindicator will increase over time as safety and health training is rolled out to more newly acquired and completedshopping centres and other sites under operation.

Data Qualifying note: The data presented here shows the total number ofman hours of safety and health training provided in Spain in 2006 across 11sites under operation.

Country Focus: Spain continued

Comment on trend: Tenant satisfaction has not changedover the two-year period in Spain, remaining relatively high.We will aim to improve on tenant satisfaction levels as we rollout a new standard index for measuring tenant satisfactionacross all countries of operation and develop action plans toaddress the outcomes.

Data Qualifying note: This indicator covers all shopping centres in the ownedand co-owned portfolio in Spain. The data presented comprises the averagetenant satisfaction index of those recorded in Spain in 2005 and 2006. Thetenant satisfaction index is based on the results of a tenant satisfaction surveyin which different factors are rated from 0 to 4 according to the tenants’assessments.

Business chain:Tenant satisfactionSatisfaction level with the management teamof the shopping centre

2005 2006

Tena

ntSa

tisfa

ctio

nIn

dex

594

594

594

2.9

2.9

Comment on trend: Visitor satisfaction has also changedvery little over the two-year period in Spain, remainingrelatively high. We will aim to improve on visitor satisfactionlevels as we roll out a new standard index for measuringvisitor satisfaction across all countries of operation anddevelop action plans to address the outcomes.

Data Qualifying note: This indicator covers all shopping centres in the ownedand co-owned portfolio in Spain. The data presented comprises the averagevisitor satisfaction index of those recorded in Spain in 2005 and 2006. Thevisitor satisfaction index is based on the results of a visitor satisfaction survey inwhich different factors are rated from 0 to 4 according to the visitors’assessments.

Communities (including visitors):Visitor Satisfaction Visitor Satisfaction Index

Vis

itor

Satis

fact

ion

Inde

x

3.0

2.9

2005 2006


Country Focus: Italy

National ContextIn Italy, the Ministry for the Environment,Territory and Seas focuses primarily on theissues of energy, climate and atmosphericpollution, and has programmes for action inthe areas of biodiversity, waste, water andland use. Recent legislation in Italy focuseson the corporate responsibility related issuesof Emissions to air land and water, Energyconsumption and Waste production.

National targets set by Government in Italy• 25% renewable electricity generation

by 2010



In October 2006 Sonae Sierra carried out workshops inorder to engage with tenants and service providers onenvironmental issues at its newly acquired centres,Valecenter and Airone.

Before the workshops began, Sonae Sierra sentrepresentatives to both shopping centres who gave out

Case Study:Addressingenvironmental impacts in the business chain atValecenter and Airone

leaflets to raise awareness on environmental issues to encourage the Tenants and Service Providers to start thinking alongthe right lines. Following this, both centre management teams organised a brainstorming session with their nuclearservice providers with the aim of creating environmental actions plans suitable for each centre, with an emphasis onwaste management. After a week, results were already visible; tenants showed a high level of initiative and collaboration.At Airone shopping centre restaurants are now recycling organic waste, packaging, paper and cardboard.

The seven Service Providers representatives considered the workshop to be very useful and their input to the centremanagement was crucial to the achievement of the environmental targets.


Country Focus: Italy continued


Comment on trend: The rents received during 2006 werelower than 2005 as the Valecenter underwent an expansion,requiring tenants to move out of the area which was beingrefurbished at the property during the period of theconstruction works. The lower proportion of rental incomereceived here in comparison with other countries is areflection of the smaller scale of our operations in Italy.

Data Qualifying note: Rental income covers rents received across the portfolioin Italy in 2006.

Climate change: Electricity efficiency (excluding tenants) of theowned and co-owned portfolio

475Comment: Electricity consumption per m2 in Italy is lowerthan in Portugal and Brazil due to the fact that, unlike inItaly, cooling takes place in these countries during most ofthe year.

Data Qualifying note: The data presented here covers both centresowned and co-owned by Sierra for the full calendar year 2006 in Italy.


2005 2006

Rent

alin

com

e(€

mill

ions

)

6.97.

4

Sonae Sierra – Corporate Responsibility Report .41Sonae Sierra – Corporate Responsibility Report .41


0.7Comment: Water consumption per visit at Aironeshopping centre is much lower than the average waterconsumption per visit at centres in other countries ofoperation due to the fact that the centre is smaller anddoes not have cooling towers.

Data Qualifying note: The data presented here covers only one of thetwo shopping centres owned and co-owned by Sierra for the full calendaryear 2006 in Italy (Airone), as data for the entire year was not availablefrom Valecenter.


1,423Data Qualifying note: The data represented in this indicator is derivedfrom the total amount in Euros invested in staff training and developmentin Italy divided by the number of employees in this country. The costsrecorded refer to the costs of external training only. They do not includeinternal training costs, nor do they include associated travelling costs.

Safety & Health: Total number of man hours of Safety & Healthtraining provided

45Comment: This figure has not been normalised by thenumber of employees who attended the training, sincetraining is provided not only to Sonae Sierra staff, but alsoto tenants and service providers. It is expected that thisindicator will increase over time as safety and healthtraining is rolled out to more newly acquired andcompleted shopping centres and other sites underoperation.

Data Qualifying note: The data presented here shows the total numberof man hours of safety and health training provided in Italy in 2006 across4 sites under operation (2 centres owned and co-owned and 2 furthercentres managed only by Sierra).

Communities (including visitors):Visitor Satisfaction Index

3.0Data Qualifying note: This indicator covers only one of the two shoppingcentres in the owned and co-owned portfolio in Italy (Airone). The datapresented comprises the average visitor satisfaction index of thoserecorded in Italy in 2006.The visitor satisfaction index is based on theresults of a visitor satisfaction survey in which different factors are ratedfrom 0 to 4 according to the visitors’ assessments.

Business chain:Tenant satisfactionOccupancy Index

84%Data Qualifying note: This indicator covers all shopping centres undermanagement in Italy on 31/12/06, and is calculated as % by GLA.

Country Focus: Germany


National ContextGermany’s Climate Protection Programmeaims to minimise CO2 emissions from privatehouseholds, transport and the industrialsector. Its measures include an “ecological”tax reform in the energy sector, support for combined heat and power plans and gas steam power plants, incentives forrenewable energy generation and in thetransport sector, support for the marketintroduction of energy efficient and low-consumption passenger vehicles and thepromotion of low-sulphur and sulphur free fuels.

The Sustainable Development Strategy ofthe Federal Government outlines areas ofaction necessary for achieving sustainabledevelopment in Germany, among whichClimate Protection, Energy Policy, Waste, Soil Water and Air Quality are featured.

National targets set by Government inGermany• 20% renewable electricity generation

by 2020



The Alexa shopping centre under construction in Berlin,Germany, and on schedule to be inaugurated in Autumn2007 implemented an innovative logistic concept.

One of the objectives set out under the EnvironmentalManagement System for Construction Works by AlexaManagement Team was to “minimise the environmentalimpacts throughout the minimisation of energy/fuelconsumption, noise and air emissions and traffic volume

Case Study:Mitigating environmentimpacts duringconstruction at Alexa

reduction”. With this purpose a system was developed to regulate the distribution of delivery traffic for constructionmaterials and waste collection in order to avoid bottle necks at the unloading areas, and minimising waiting time. Inaddition to this, waste is separated before disposal, and instead of a standard 7m2-transport of waste, the waste iscentrally collected and transported in portions of 20m2. Therefore only one third of the original trucks have to be used;and at Alexa, the number of vehicles transporting to and from the site was reduced from 7,500 (de-central disposal) to2,600. This enabled the use of gasoline to be reduced by 65% and subsequently, CO2 emissions were reduced by 156tonnes. On-site waste management also facilitates the avoidance of unnecessary construction waste, as some may berecovered for secondary building purposes.



1,470Data Qualifying note: The data represented in this indicator is derived fromthe total amount in Euros invested in staff training and development inGermany divided by the number of employees in this country. The costsrecorded refer to the costs of external training only. They do not includeinternal training costs, nor do they include associated travelling costs.

Country Focus: Greece


National ContextCombating climate change is one of themain priorities of Greece’s National Strategyfor Sustainable Development; the objectivesof which include the following:• Reduction of air pollution• Waste management • Rational use of water resources• Prevention of desertification • Protection of biodiversity

Greece’s the Second National ClimateChange Programme defines the additionalpolicies and measures to be undertaken inorder to ensure compliance with the targetset in the framework of the Kyoto Protocol.The main actions foreseen in the programmeinclude the promotion of renewable energysources for electricity generation and heatproduction, the conservation of energy inthe industrial and residential–tertiary sectors,transport and waste-management options.

National Targets set by Government in Greece• 20.10% electricity consumption

generated by renewable sources in 2010



In the municipality of Galatsi, located on the northernoutskirts of Athens, the Sierra Charagionis plans totransform the 6000-seat Galatsi Olympic Hall, site of theTable Tennis and Rhythmic Gymnastics competitions duringthe 2004 Summer Olympics, into a commercial shoppingand leisure centre. The partnership formed between SonaeSierra and the Acropole Charagionis was awarded theconcession to remodel and operate the new centre underthe terms of a 40-year lease with Olympic Properties, SA,

Case Study:Efficient land use andurban regeneration atGalatsi

the state-owned organisation responsible for managing all Olympic facilities. As a result, the proposed Galatsi shoppingand leisure centre becomes one of the first examples of beneficial reuse of an Olympic structure and is expected togenerate an estimated 1100 permanent jobs and an annual revenue of three million euros for the municipality.

What is more, Sonae Sierra aims to incorporate environmentally sustainable features into the design of the centre with a view to mitigating the potential impacts of development and management activities. Major renovations includeintroducing a skylight in the existing roof structure so as to allow natural light to enter, thereby creating a warmer spaceand more dramatic architectural experience. The existing building will be incorporated into the new structure as far as ispossible and there are plans for on-site reuse of excavation material in landscaping activities. The Centre is scheduled tobe opened in Autumn 2008.


Comment on trend: Rental income in Greece has increasedsignificantly due to the fact that Mediterranean Cosmos wasonly open for part of the year 2005. Rents received in Greeceare lower in comparison with other countries where weoperate as we have currently only one shopping centre co-owned in this country.

Data Qualifying note: Rental income covers rents received across the portfolioin Greece in 2006.


481Data Qualifying note: The data presented here covers the 1 co-ownedshopping centre in Greece.


2005 2006

Rent

alin

com

e(€

mill

ions

) 13.3

1.4


Country Focus: Greece continued


9%Data Qualifying note: The data presented here covers the 1 co-owned shopping centre in Greece.

Communities (including visitors):Visitor Satisfaction Index

3.1Data Qualifying note: This indicator covers the 1 co-owned shoppingcentre in Greece.The data presented comprises the average visitorsatisfaction index of those recorded in Greece in 2006. The visitorsatisfaction index is based on the results of a visitor satisfaction survey in which different factors are rated from 0 to 4 according to the visitors’ assessments.


832Data Qualifying note: The data represented in this indicator is derivedfrom the total amount in Euros invested in staff training and developmentin Greece divided by the number of employees in this country. The costsrecorded refer to the costs of external training only. They do not includeinternal training costs, nor do they include associated travelling costs.

Safety & Health: Total number of man hours of Safety & Healthtraining provided

39Comment: This figure has not been normalised by thenumber of employees who attended the training, sincetraining is provided not only to Sonae Sierra staff, but also to tenants and service providers. It is expected thatthis indicator will increase over time as safety and healthtraining is rolled out to more newly acquired andcompleted shopping centres and other sites underoperation.

Data Qualifying note: The data presented here shows the total numberof man hours of safety and health training provided in Greece in 2006 at one site of operation (Mediterranean Cosmos)

Business chain:Tenant satisfaction Occupancy Index

98%Data Qualifying note: This indicator covers the 1 shopping centre undermanagement in Greece on 31/12/06, and is calculated as % by GLA.


Country Focus: Brazil

National ContextBrazil’s Secretariat for Policies for SustainableDevelopment emphasises the following asprinciple areas of action; • The formulation of a National Policy for

Sustainable Development• The development of economic

instruments to protect the environment• The economic accountancy and valuation

of natural resources• The promotion of the development of

technologies for the protection andremediation of the environment and thereduction of environmental impacts

Emissions to air, land and water andBiodiversity are the environmental issueswhich are most strongly regulated in Brazil

Sierra ApproachSonae Sierra sought to mitigate theenvironmental impacts caused during theconstruction of a new shopping centre,Shopping Campo Limpo, inaugurated inBrazil in 2006. Thanks to the dedication ofthe whole team involved in the development,an estimated 329,300 litres of water weresaved through water reuse and rainwaterharvesting. Furthermore, noise levels nearthe residential area were reduced by twohours a day, and any activities causingsuspended particles were controlled bydampening the affected areas. Sonae Sierrawas proud to obtain ISO 14001 certificationfor the construction site.



Country Focus: Brazil continued

In April 2006 Tivoli Shopping launched the project“Awareness through art: portraying the environment withthe eyes of an investigator” with the objective of raisingawareness among children, teenagers and adults aboutenvironmental concerns and in particular the conservationof water resources. The project welcomed around 100students and seven teachers from schools located near theshopping centre, who were given the chance to participatein activities which included a seminar on conscious use ofwater and learning how to make a camera using recycledmaterials. The students were then encouraged to

Case Study:Environmental educationat Tivoli Shopping

The 27th August was ‘Make a Difference Day’ in Brazil; a major event where millions of volunteers across thewhole country get involved in simultaneous social action.On this day, Brazil was united with the purpose of making a difference to the lives of its people and theircommunities through thousands of social project inhundreds of towns and cities.

Sonae Sierra was one company which was eager toparticipate. The challenge proposed to the shoppingcentre management teams was to encourage visitors tocome to the centre to take part in environmental andsocial education activities, with the particular aim ofinvolving disadvantaged children. The result of the project,christened ‘Shopping Solidário’, was the participation ofover 350 volunteers (Sonae Sierra staff, service providers,families and friends) and almost 750 children andteenagers who would not normally be able to benefit from such activities.

Case Study:‘Make a difference day’across all shoppingcentres

photograph appealing aspects of the natural environment with their hand-made cameras. In June Tivoli shopping centrepresented the results – over 60 photographs – as an exhibition in its entrance hall and awarded prizes for the bestphotographs taken.

“Emotion, affection, gentleness; theseand so many other words aren’t enoughto express how we felt in organising andparticipating in the ‘Make a DifferenceDay’. It was a learning experience for allthose who participated as volunteersand I know that this day will beremembered by all those who attended”

Roberto Pereira,Manager, Shopping Penha


Comment on trend: The increase in rental income inBrazil is a reflection of the continuing expansion of ouroperations in this country. In 2006 Campo Limpo wasopened, adding another property to our portfolio in Brazil.

Data Qualifying note: Rental income covers rents received across theportfolio in Brazil in 2006.

Comment on trend: Electricity consumption per m2

decreased overall at Brazilian shopping centres during 2006,from 572 kWh/m2 to 555 kWh/m2. In particular, electricityconsumption per m2 decreased considerably at Patio Brasil(615 in 2005 to 471 in 2006). However, at Tivoli Shoppingthere was a significant increase in consumption per m2.Electricity consumption at our centres in Brazil does notaccount for any associated indirect greenhouse gas emissionsas renewable energy (hydropower) is sourced by the grid.

Data Qualifying note: The data presented for 2006 covers all of the 8 shoppingcentres owned and co-owned by Sierra for the full calendar year 2006 in Brazil.

The year-on-year growth of the size of our portfolio means that the sample ofcentres varies between years, from 6 out of 7 centres in 2004 to 8 out of 9 in 2006.



2005 2006

Rent

alin

com

e(€

mill

ions

) 43.7

35.3

2005200420032002 2006

kWh/

m2

(mal

l+to

ilet

area

)/ye

ar

555

57260

0

not

know

n

not

know

n

Comment on trend: Water consumption per visitincreased in 2006 in Brazil, from 5.0 litres/visit in 2005 to5.4 in 2006. The aggregated performance of Brazil is drivenby Parque D. Pedro – due it is large size. It has the highestwater use per visitor of performance of Brazil – nearly twice as much as the others at 9.1 litres/visit in 2006. Water consumption per visit increased at Patio Brasil, Franca Shopping and Shopping Penha. Some of theincreases may be attributable to the increased need for irrigation and water for cooling purposes. Waterconsumption decreased at Boavista, Tivoli, Parque D. Pedroand Metropole. At Parque D. Pedro, the reduction may bepartly as cause of the re-use of water for irrigation purposesat this centre (see GRI EN10 in GRI Context Index).

Data Qualifying note: The data presented for 2006 covers all of the 8shopping centres owned and co-owned by Sierra for the full calendar year2006 in Brazil.

The year-on-year growth of the size of our portfolio means that the sampleof centres varies between years, as does the scope of coverage of ourreporting from 4 out of 6 centres in 2003 to 8 out of 8 in 2006.


2005200420032002 2006

litre

s/v

isit

/yea

r

5.4

5.0

2.63.

0

not

know

n

Comment on trend: The average waste recycling rate inBrazil has increased from 26% in 2005 to 35% in 2006,with the highest recycling rate at Parque D. Pedro (58% in2006), and most significant increase at Franca Shopping(10% to 23% from 2005 to 2006). The high recycling rateat Parque D. Pedro is due to the fact that organic wastefrom this centre is now being converted into animal food.

Data Qualifying note: The data presented for 2006 covers all of the 8shopping centres owned and co-owned by Sierra for the full calendar year2006 in Brazil.

The year-on-year growth of the size of our portfolio means that the sampleof centres varies between years, as does the scope of coverage of ourreporting from 5 out of 6 centres in 2004 to 8 out of 8 in 2006.

Waste: Total waste recycled22 as a proportion of wasteproduced (% by weight), across the owned and co-owned portfolio

2005200420032002 2006

recy

clin

gra

te%

35

26

22

not

know

n

not

know

n



Communities (including visitors)Total Contributions collected from visitors (in cash)Total number of jobs created from completeddevelopments including expansion projects over 1,000 m2

Contributions collected: €11,100.00Jobs created: 1,136 Visitor Satisfaction: 3.0

Data Qualifying note: The figure for visitor contributions has beencompiled from the data recorded at all shopping centres in the owned andco-owned portfolio in Brazil. It does not take account of in-kind donations.

The number of jobs created has been compiled on the basis of new jobsrecorded at Campo Limpo Shopping (inaugurated during 2006).

The indicator for visitor satisfaction covers 6 out of the 8 shopping centresin the owned and co-owned portfolio in Brazil. The data presentedcomprises the average visitor satisfaction index of those recorded in Brazilin 2006. The visitor satisfaction index is based on the results of a visitorsatisfaction survey in which different factors are rated from 0 to 4according to the visitors’ assessments.

Business chain:Tenant satisfactionOccupancy Index

94%Data Qualifying note: This indicator covers all shopping centres undermanagement in Brazil on 31/12/06, and is calculated as % by GLA.

Country Focus: Brazil continued


752Data Qualifying note: The data represented in this indicator is derivedfrom the total amount in Euros invested in staff training and developmentin Brazil divided by the number of employees in this country. In Brazil theamount spend on training per capita is lower than in Portugal, Italy andGermany due to the fact that less hours of training per capita wereprovided. However, more hours of training per capita were provided inBrazil (36 hours per capita) than in Spain (20) and Greece (19), but thelower value of the Brazilian Real compared with the Euro makes it appearotherwise.

The costs recorded refer to the costs of external training only. They do notinclude internal training costs, nor does it include associated travelling costs.

Safety & Health: Total number of man hours of Safety & Health trainingprovided

1,219Comment: This figure has not been normalised by thenumber of employees who attended the training, sincetraining is provided not only to Sonae Sierra staff, but also to tenants and service providers.

It is expected that this indicator will increase over time assafety and health training is rolled out to more newlyacquired and completed shopping centres and other sitesunder operation

Data Qualifying note: The data presented here shows the total number ofman hours of safety and health training provided in Brazil in 2006 across 9sites under operation including the São Paulo offices.


Lessons LearntReusing Industrial Land: Good intentions can also have their risksAs part of our commitment to conserve the environment for future generations, we are continually evaluatingopportunities to develop our shopping centres on former industrial property. The stagnation of local economiesthat almost always accompanies the closing of a local industry is a condition that Sonae Sierra projects can help to reverse. However, redeveloping industrial property carries the risk of encountering unforeseen environmentalproblems relating to soil and groundwater contamination.

In Italy, we have learned that it is not enough to transfer the responsibility for correcting environmental damage to others, even when the degree of damage has apparently been well studied. Le Terrazze, our project in La Spezia, is located on the site of a former petroleum refinery. The pollution clean-up is being paid for and carried out by the vendor of the property and we will take ownership of the property only after the clean-up has received theapproval of the competent environmental authorities. However, the clean-up activities have experienced significantdelays due to higher than estimated volumes of contaminated soil requiring treatment, and complaints have beenreceived from neighbours regarding the treatment process, all of which caused temporary suspension of the works. These delays in turn have had an impact on the scheduling of the development, construction and openingof the centre.

The lessons learned from Le Terrazze have been applied to the most recent Sonae Sierra project planned for Italy,located in the north-western city of Pavia, on the site of a former sewing machine factory. In addition tointroducing contractual safeguards that place the financial risks for complete environmental remediation of theproperty on the vendor, Sonae Sierra has employed the services of qualified consultants to closely follow everystage of the soil contamination studies and subsequent remediation planning process. The land purchase contractwill only be finalised after a reliable appraisal of the environmental risks has been obtained. This will enable ourProject Management to establish realistic construction timetables as well as meet the expectations of the localcommunity for the beneficial reuse of this land. This procedure promotes the environmental responsibility in thebusiness chain contributing to the promotion of liability on the real estate local markets.

A fatal mistake in a tenant maintenance procedureIn July 2006, a fast food restaurant unit inside a Portuguese Shopping Centre not owned but managed by SonaeSierra, encountered an unpleasant problem with its smoke exhaust duct creating a smell in the customer area. A maintenance technician was called to solve the problem which occurred in a defective part of the exhaust duct,above the false ceiling. Trying to reach over the false ceiling from an aluminium ladder, the technician came intocontact with 220-volt wire that was supplying power to the adjacent light fixture. Tragically, this caused thetechnician to suffer a fatal electric shock, despite all attempts to resuscitate him.

This accident was proof that fatal accidents can occur even in low risk places, and hidden risks are often the mostdangerous. Tenant units must be carefully scrutinised if we are to reach our self-imposed goal of zero-accidents inour premises. All workers must also be well informed of the risks their job may imply and of the safety proceduresthey must follow, and this includes the workers who are contractors of our clients, the tenants. A method must beput in place so as to allow Sierra to be sure that all tenants’ maintenance technicians – even eventual manpowerservices – are duly trained and certified for the tasks they will be called upon to perform. One of the challenges for Sierra will be to persuade tenants that this is not an additional burden but could bring associated benefits fromtraining sessions and certification of servicing professionals.


Detailed datasheetsFacts & Key Performance Indicators reference table (by impact area)

Reporting Reporting Data Qualifying Notes Facts/Key Performance Indicator Year 2005 Year 2006 & Methodological notes

Climate Change

1) All shopping centres across the owned and

co-owned portfolio throughout the year 2006;

2) The electricity efficiency for 2005 has been

Electricity efficiency (excluding tenants) of the owned and updated since the publication of the CR Report

co-owned portfolio (kWh/m2 mall and toilet area/ year) 594 563 2005; a more accurate figure is reported here.

Number of visitors arriving by different types of transport in the owned and co-owned portfolioin 2006 (millions and %)*Number in millions (and percentage) of visitors arrivingby all forms of transport other than private car 109 (35%) 107 (32%) All shopping centres across the owned and

*Number in millions (and percentage) of visitors co-owned portfolio throughout the year 2006,

arriving by private car 198 (65%) 224 (68%) with the exception of 1 centre in Italy.

Direct energy consumption by primary energy source(GJ) (GRI EN3)*Fuel oil (CHP at Centro Colombo) n/a 252,245.2*Diesel (Mechanical priming for CHP at Centro Colombo) n/a 882.7*Natural Gas (CHP at MaiaShopping and NorteShopping) n/a 223,728.6*Natural Gas (Boilers) n/a 42,977.4*Diesel (Fleet cars & business travel in staff’s own cars) n/a 6,758.5*Petrol (Fleet cars & business travel in staff’s own cars) n/a 2,976.7*Total n/a 529,569.0 All company activities

1) This indicator covers the 31 properties which were

owned or co-owned throughout both 2005 and 2006

2) The energy conservation and efficiency improvements that

Sierra have been undertaking relate most closely to

electricity consumption.

3) Other forms of energy (thermal and gas) are less

controllable by Sierra, as they are:

a. more difficult to clearly delineate that which the

Energy saved due to conservation and efficiency landlord and tenant controls;

improvements. (GJ) (GRI EN5) b. more affected by varying weather conditions

*Electricity n/a 27,889 between the two years.

1) Includes emissions generated by the company car fleet,

leaks occurring from heating and cooling installations, the

use of boilers and cogeneration motors and emissions

which result from the production of electricity or steam

consumed by the organisation.

2) Centres owned and co-owned in terms of installations

but including all the employees even the ones that work

at the sites that are just managed but not owned;

3) The total direct greenhouse gas emissions for 2005 has

Total direct and indirect greenhouse gas emissions been updated since the publication of the CR Report 2005;

by weight; tCO2e (GRI EN16) 124,720 150,945 a more accurate figure is reported here.

1) Indirect emissions of tCO2e includes employees’

commuting journeys, air travel (Portugal only), visitors’

journeys to and from shopping centres and the treatment

of wastewater generated by Sonae Sierra;

2) Centres owned and co-owned in terms of installations

Other relevant indirect greenhouse gas but including all the employees even the ones that work at

emissions by weight; tCO2e (GRI EN17, partial) n/a 762,456 the sites that are just managed but not owned.


Facts & Key Performance Indicators reference table (by impact area)


Water

1) All shopping centres across the owned and co-owned

portfolio throughout the year 2006 with the exception

of 3 centres in Spain, 1 in Italy and the 1 in Greece;

2) The water efficiency for 2005 has been updated since

Water efficiency (excluding tenants) of the the publication of the CR Report 2005; a more

owned and managed portfolio (litres/visit/year) 4.3 4.2 accurate figure is reported here.

All shopping centres across the owned and co-owned


Total water withdrawal by source (m3) (GRI EN8) of 3 centres in Spain, 1 in Italy and the 1 in Greece.

*Surface water, including water from wetlands, We have not sought to estimate the water consumption in

rivers, lakes, and oceans n/a 0.0 these 5 centres during 2006 as we are not confident that

*Ground water n/a 326,968 we could make reliable estimates, given the wide range

*Rainwater collected directly and stored by of performance in our other centres. However, using GLA

the reporting organisation n/a 0.0 figures, the missing centres represent approximately 15%

*Waste water from another organisation n/a 0.0 of our owned and co-owned portfolio so we confirm that

*Municipal water supplies or other water utilities n/a 927,008 the data reported against this indicator is potentially under-

*Total n/a 1,253,977 estimated by roughly the same proportions.

1) Applicable only to Parque D.Pedro in Brazil as this

is the only centre where water is recycled and reused.

Percentage and total volume of water 2) The percentage value was obtained by comparing the

recycled and reused. (GRI EN10) Parque D Pedro water reused with the total water consumed

*Volume (m3) n/a 962 in all shopping centres across the owned and co-owned

*Percentage (of total water consumption portfolio throughout the year 2006 with the exception

as reported above in EN8) n/a 0.1% of 3 centres in Spain, 1 in Italy and 1 in Greece.

Waste

1) The EU waste classification system has been used to

determine the classification of hazardous and

non-hazardous waste;

2) Most hazardous waste is treated, though some is sent

to landfill or incinerated, always within the law;

3) Hazardous waste has been slightly overestimated because

some but not all electrical and toner waste is hazardous and

the quantities of this waste produced are so small (less than

0.5% of total waste) that our systems for measurement

do not currently allow its separate identification.

4) Litres to tonnes assumed conversion factors:

Sanitary waste 0.00025; Residue from petrol interceptors

0.001; Residue from grease interceptors 0.0008.

5) The only waste stream that is not represented this year

is cooking oil, though we aim to measure this consistently

Total weight of waste by type and disposal method. across the portfolio for 2007;

(GRI EN22) n/a 1,247 (0) The data reported covers all shopping centres across the

*Composting (of which hazardous) n/a 0 (0) owned and co-owned portfolio throughout the year 2006

*Reuse (of which hazardous) n/a 9,684 (0) with the exception of 1 centre in Spain, and 2 in Italy.

*Recycling (of which hazardous) n/a 915 (0) We have not sought to estimate the weight of waste

*Recovery (of which hazardous) n/a 4,100 (0) disposed of in these 3 centres during 2006 as we are

*Incineration (or use as fuel) (of which hazardous) 16,948 (0) not confident that we could make reliable estimates.

*Landfill (of which hazardous) n/a 0 (0) However, using GLA figures, the missing centres represent

*Deep well injection (of which hazardous) n/a 0 (0) approximately 9% of our owned and co-owned portfolio

*On-site storage and (of which hazardous) so we confirm that the data reported against this indicator is

other (for example, fluro tubes; either a) treated potentially under-estimated by roughly the same proportions.

as hazardous – sometimes landfill, sometimes 6) The method of waste disposal has been determined in

incineration, sometimes other treatment or b) some cases directly by the reporting organisation (e.g.

Vertedero in Spain – exact destinations for waste from n/a 5,713 (24) waste recycled), and in other cases by organisational

Sierra centres not known) (of which hazardous) n/a 38,608 (0) defaults of the waste disposal contractor (e.g. waste which

*Total (of which hazardous) is sent to landfill in Spain).


Detailed datasheets continued

* Number as at 31st December 2006



Waste (continued)

1) All shopping centres across the owned and co-owned


of 1 centres in Spain, and the 2 located in Italy;

2) The proportion of waste recycled in 2005 has been

updated since the publication of the CR Report 2005;

a more accurate figure is reported here;

3) 2006 is the first time data has been measured and

included in CR reporting for the following waste streams:

Total waste recycled as a proportion of waste produced Sanitary waste; Residue from hydrocarbon (e.g. petrol,

(% by weight) 26% 31% diesel) interceptors; Residue from grease interceptors.

Land Use

Proportion of completed development on previously This indicator covers the two projects completed in 2006,

developed land (by area) n/a 100% RioSul (Portugal) and Campo Limpo (Brazil)

Business Chain (suppliers)

See This indicator covers only one of the projects

Construction recycling indicator; % of total waste sent chart on completed in 2006; RioSul (Portugal), as

for recycling or recovery (completed projects: RioSul only) page 22 90% data from Campo Limpo was unreliable.

This indicator covers only one of the projects completed

in 2006; RioSul (Portugal), as data from Campo Limpo

was unreliable. The water indicators of projects completed

Construction water indicator; m3/€000 construction See CR in 2005 have not been included, these can be found in

cost (completed projects: RioSul only) Report 2005 0.32 Sierra’s CR Report 2005.

Total spend on suppliers (€ millions) 129.3 137.3 All company activities

All company activities; includes Holland for both 2005 and

Average number of days within which supplier 2006, for this reason the value cited here for 2005 differs

invoices are paid (no. of days) 26.9 26.5 from that published in Sonae Sierra’s CR Report 2005.

Business Chain (tenants)

Average occupancy index at 31st December 2006 All shopping centres under management

(% by GLA) 94% 97% on 31/12/06, excluding 1 in Spain


Hours spent by employees in charity organisations n/a 520 All Sonae Sierra direct employees

Proportion of volunteering day entitlements taken up by employees n/a 9% All Sonae Sierra direct employees

All shopping centres in Portugal and Brazil

Contributions for charitable organisations collected owned or co-owned by Sonae Sierra and under

from visitors in Sierra centres; (Portugal & Brazil, €) n/a 26,357.84 management by Sonae Sierra throughout the year 2006

Total direct community investment by Sonae Sierra(including cash € and value of in kind donations,in € millions) 0.3 0.3 All company activities

Number of jobs created from completed developments including expansion projects over Projects completed in 2006, including

1,000 m2 (Rio Sul, Campo Limpo and Arrábida Shopping) 5,400 2,217 expansion projects over 1,000m2 GLA

Total taxes paid, € millions 48.6 46.9 All company activities

Employees

No. of employees worldwide (excluding supervised workers) (GRI LA1, partial) 709 731* All Sonae Sierra direct employees




Employees (continued)

No. of employees by region (GRI LA1, partial)*Portugal n/a 396*Spain n/a 139*Italy n/a 42*Germany n/a 38*Greece n/a 19*Brazil n/a 91*Holland n/a 4*UK n/a 2 All Sonae Sierra direct employees

Percentage of employees located in Europe 87% 88% All Sonae Sierra direct employees

No. of jobs created (direct employees) n/a 22 All Sonae Sierra direct employees

Proportion of training undertaken by generic type*Technical 19% 43%*Behavioural 25% 17%*Languages 56% 40% All Sonae Sierra direct employees

1) All Sonae Sierra direct employees;

2) The figure reported here for payroll and benefits in 2005

differs from that reported in the CR Report 2005 due to the

Total Sonae Sierra payroll and benefits (€) 38,046,627 41,682,229 fact that an error in the earlier calculation was corrected.

Length of service at 31 December 2006 (years):* less than 2 years 31% 27%* between 2 and 5 years 34% 34%* between 6 and 10 years 22% 24%* more than 10 years 13% 15% All Sonae Sierra direct employees

Composition of workforce by gender (all staff):(GRI LA13, partial)*Male 50% 50%*Female 50% 50% All Sonae Sierra direct employees

Composition of workforce by gender (management staff)(GRI LA13, partial)*Male 80% 77%*Female 20% 23% All Sonae Sierra direct employees

Composition of workforce by gender (directors)(GRI LA13, partial)*Male 93% 94%*Female 7% 6% All Sonae Sierra direct employees

Composition of workforce by age (GRI LA13, partial)*less than 20 years 0% 0%*20 – 29 years 30% 26%*30 – 39 years 44% 48%*40 – 49 years 19% 19%*50 – 59 years 6% 5%*more than 60 years 1% 2% All Sonae Sierra direct employees

Investment in staff training and development(€ per capita)*Portugal n/a 2,335*Spain n/a 992*Brazil n/a 752*Italy n/a 1,423*Germany n/a 1,470*Greece n/a 832 1) All Sonae Sierra direct employees

*Holland n/a 121 2) The costs recorded refer to the costs of

*UK n/a 0 external training only. They do not include internal training

*Total 935 1,728 costs, nor do they include associated travelling costs.


Detailed datasheets continued



Employees (continued)

Average hours of training per year per employee by employee category (GRI LA10)*Global Senior Managers, Senior Executives & Executives(total hours; total hours per employee) n/a 726; 43*Senior Managers, Managers & Team Leaders (total hours; total hours per employee) n/a 13,139; 75*Project and Team Specialists & Team Members (total hours; total hours per employee) n/a 22,376; 42 All Sonae Sierra direct employees

Percentage of employees receiving regular performanceand career development reviews (GRI LA12) n/a 100% All Sonae Sierra direct employees

Safety & Health

This indicator measures the number of hours dedicated to

Nº of hours of Safety Preventive Observation Safety Preventive Observations across Sierra workforce at

(SPO) performed 1,203 6,127 all sites under operation

1) The No. of non conformances per hour of SPO covers a

sample of 9 Reference Sites (5% of total sites managed by

Sonae Sierra) audited by the Personæ core team. These sites

are selected by the Board to represent a “proxy” of the

whole portfolio. The scope of this indicator differs to that

of the one above (No. of hours of SPO performed) because

it is considered that individuals performing SPOs at different

sites may have their own ways of observing, which makes

comparison between such sites less meaningful. The nine

reference sites covered by this indicator, however, are

subject to a more rigorous auditing process which is carried

out at each site by exactly the same core team, with

assistance from safety and health consultants DuPont.

2) The number of non conformances reported here for

2005 differs from that published in the CR Report 2005 as

the data used here has included all sites where

SPOs were being undertaken, rather than

Nº of non conformances per hour of SPO 21 15 just the 9 reference sites.

This indicator covers all centres in the owned

Nº of drills performed over total nº of sites in operation 1.5 1.7 and co-owned portfolio throughout 2006

Total safety and health training provided during 2006(per nº persons; nº of training sessions; and total 1) This indicator covers all centres in the owned

nº man hours) and co-owned portfolio throughout 2006;

*Total safety and health training – no. of persons 1,821 4,120 2) It also covers 1 project under development, 1 project

*Total safety and health training – no. of sessions n/a 305 completed in 2006, 6 centres managed only in 2006,

*Total safety and health training – no. of man hours 4,396 5,425 the São Paulo offices in Brazil.

Percentage of total workforce represented in formaljoint management-worker health and safety committeesthat help monitor and advise on occupational health and safety programs (GRI LA6)*Formal health and safety committees that help monitor and advise on occupational safety programs at the facility level or higher with joint management/labour See representation n/a p. 18-19*Percentage of total workforce represented in formal joint management-worker health and All Sonae Sierra employees and including shopping centre

safety committees n/a 54% management staff in Brazil (see page 19) (not including

*Level(s) at which the committee(s) typically operates n/a See p. 18-19 service providers)




Safety & Health (continued)

Total nº of S&H incidents during 2006 (for Sierra Staff) (GRI LA7, partial): 1) This indicator covers all company activities (all Sierra

*Nº of accidents with lost workday per each 100,000 direct employees)

hours worked 0.36 0.45 2) For the calculation of workable hours we considered

*Nº of fatalities caused by work accident (Sierra Staff) 0 0 230 workable days per each employee, 8 hours per day and

*Nº of accidents (injuries with lost staff time – Sierra staff) 4 6 the number of direct employees as stated for LA1

Voluntary code compliance, product labels or awards with respect to social and / or environmental responsibility that the user is qualified to use or has received. n/a See page 01 All company activities

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments; € millions (GRI EC1) All company activities

Direct economic value generatedRevenues (direct income + indirect income Total rent received from Sierra Shoppings

from gains on sale of investments) 253.5 255.2 in accordance with the % of ownership

Economic value distributed*Operating costs (general suppliers General supplies and services; consolidated management

& services; consolidated management figure) 55.3 53.3 figure in accordance with the % of ownership

*Employee wages & benefits**Employee compensation 38.0 41.7

*Payments to providers of capital 43.2 56.7 Shareholders & Banks

*Payments to governments (by country)**Portugal 38.7 33.2**Spain 5.5 4.0**Italy 0.6 1.0**Germany 0.1 3.5**Greece 0 0.6 This includes national insurance contributions,

**Holland 1.2 0.6 amounting to a total €6.9 million across all countries

**Brazil 2.5 4.0 (excluding Italy, where data was not available).

*Community Investments 0.3 0.3

Total 185.4 198.9

Economic value retained calculated as economic value generated less economic value distributed 68.1 56.3


Verification Statement


Verification Statement continued

Contents checklist Location or description

1 Strategy & Analysis

1.1 Statement from the most senior decision-maker of the organisation about the relevance of sustainability to the organisation and its strategy. CEO Statement, ifc and p. 01

1.2 Description of key impacts, risks and opportunities Strategy & Analysis p. 06-07; What we did & what wewill do p. 10-15 & CR section of In Review 2006, p. 52

2 organisational Profile

2.1 Name of the organisation Company profile, p. 02

2.2 Primary brands, products, and/or services. Company profile, p. 02-03

2.3 Operational structure of the organisation, including main divisions,operating countries, subsidiaries, and joint ventures. Company profile, p. 02-03

2.4 Location of organisation's headquarters. Company profile, p. 02

2.5 Number of countries where the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. Company profile, p. 02-03; Report profile, p. 04-05

2.6 Nature of ownership and legal form Company profile, p. 02

2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries). Company profile, p. 02-03

2.8 Scale of the reporting organisation, including– Number of employees;– Net sales (for private sector organisations) Company profile, p. 02-03

or net revenues (for public sector);– Total capitalisation broken down in terms of debt and equity– Quantity of products or services provided

2.9 Significant changes during the reporting period regarding size, structure, or ownership including:– The location of, or changes in operations, including facility Company profile, p. 02

openings, closings, and expansions; and– Changes in the share capital structure and other capital formation,

maintenance, and alteration operations

2.10 Awards received in the reporting period Company profile, p. 02 and www.sonaesierra.com

3 Report Parameters

3.1 Reporting period for information provided Report profile, p. 04

3.2 Date of most recent previous report Report profile, p. 04

3.3 Reporting cycle Report profile, p. 04

3.4 Contact point for questions regarding the report or its contents. Report profile, p. 04

3.5 Process for defining report content, including;– Determining materiality; Strategy & Analysis, p. 06-07– Prioritising topics within the report, and – Identifying stakeholders the organisation expects to use the report. Report scope and boundary, p. 05

3.6 Boundary of the report (e.g, countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). Table 1, Report scope and boundary, p. 05

3.7 State any specific limitations on the scope or boundary of the report. Table 1, Report scope and boundary, p. 05

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. Table 1, Report scope and boundary, p. 05

3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied See Table 1, Report scope and boundary, p. 05, and to the compilation of the Indicators and other information in the report. the data qualifying notes under each KPI box

3.10 Explanation of the effect of any re-statements of information provided Table 1, Report scope and boundary, p. 05, and the datain earlier reports, and the reasons for such re-statement. qualifying notes under each KPI box

3.11 Significant changes from previous reporting periods in the scope, Table 1, Report scope and boundary, p. 05, and the databoundary, or measurement methods applied in the report. qualifying notes under each KPI box

GRI Content Index


Contents checklist Location or description

3 Report Parameters (continued)

3.12 Table identifying the location of the Standard Disclosures in the report. Identify the page numbers or web links where the following can be found:– Strategy & Analysis 1.1 – 1.2;– organisational Profile 2.1-2.10– Report Parameters 3.1 – 3.13; GRI Content Index table, p. 61-65– 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.

3.13 Policy and current practice with regard to seeking external assurance for the report. Verification statement provided by Deloitte, p. 58-60

4 Governance, Commitments, and Engagement

4.1 Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight. Governance and Commitments, p. 16-19

4.2 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organisation's management and the reasons for this arrangement). Corporate Governance, p. 16-17

4.3 For organisations that have a unitary board structure, state the number of members of the highest governance body that areindependent and/or non-executive members. Governance and Commitments, p. 16-19

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body. Governance and Commitments p. 16-19

4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and http://www.sonaesierra.com/corporateresponsibility/social performance and the status of their implementation. managementsystem/

4.14 List of stakeholder groups engaged by the organisation Table 3, Strategy & Analysis, p. 09

4.15 Basis for identification and selection of stakeholders with whom to engage Strategy & Analysis, Our Stakeholders, p. 08-09

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group Table 3, Strategy & Analysis, p. 09

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those keytopics and concerns, including through its reporting. Table 3, Strategy & Analysis, p. 08-09


GRI Content Index continued

Fully Partially FutureIndicator C/A Location or description Covered Covered reports

5 Management Approach and Performance Indicators

EC Economic Performance Indicators

EC1 Direct economic value generated and distributed,including revenues, operating costs, employee compensation, donations and other communityinvestments, retained earnings, and payments tocapital providers and to governments. Core See detailed datasheets, p. 57 3

This indicator is covered in the followingsections of this report:*CEO statement, ifc and p.01*Climate Change focus, p. 26*What we did & what we will do, p. 11-12, Climate Change target for 2007.And the following section in In Review 2006:

EC2 Financial implications and other risks and *Key business risks and opportunitiesopportunities for the organisation's activities due presented by each of the nine material to climate change. Core issues (including Climate Change), p. 52 3

EN Environmental Performance Indicators

EN3 Direct energy consumption by primaryenergy source. Core See detailed datasheets, p. 52 3

EN5 Energy saved due to conservation andefficiency improvements. Adtl See detailed datasheets, p. 52 3

This indicators is covered partially in the following sections in this report: Climate Change Focus, p. 28

EN7 Initiatives to reduce indirect energy consumption Country Focus: Germany (Case study and reductions achieved. Adtl relating to the Alexa development), p. 43 3

EN8 Total water withdrawal by source. Core See detailed datasheets, p. 53 3

See detailed datasheets, p.53, for the percentage and total volume of water

EN10 Percentage and total volume of water recycled re-used for irrigation purposes at and reused. Adtl Parque D. Pedro in Brazil. 3

EN16 Total direct and indirect greenhouse gas emissionsby weight. Core See detailed datasheets, p. 52 3

EN17 Other relevant indirect greenhouse gas emissionsby weight. Core See detailed datasheets, p. 52 3

EN22 Total weight of waste by type and disposal method. Core See detailed datasheets, p. 53 3

No significant spills occurred as a result of EN23 Total number and volume of significant spills. Core company activities during 2006. 3

There are many examples of initiative taken by Sonae Sierra to mitigate environmental impacts of products and services, some of which can be found in this report:*Mitigation of environmental impacts through the EMS including the ESRD, see pages 01, 19, 29, and www.environment.sonaesierra.com*Mitigation of environmental impacts through the reduction of direct and indirect carbon emissions, see pages 20, 28, 43;*Mitigation of environmental impacts in the business chain during the construction phase, see page 43;

EN26 Initiatives to mitigate environmental impacts of *Initiatives relating to the issues of water, products and services, and extent of impact Core waste and energy efficiency, mitigation. see pages 28, 40, 53 3



GRI Content Index continued


EN Environmental Performance Indicators (continued)

EN28 Monetary value of significant fines and total There were no significant fines ornumber of non-monetary sanctions for non-monetary sanctions for non-compliancenon-compliance with environmental laws with environmental laws and regulations at and regulations. Core Sonae Sierra in 2006. 3

LA Social Performance Indicators: Labour Practices and Decent Work Performance

LA1 Total workforce by employment type, employment contract, and region. Core See detailed datasheets, p. 55 3

LA6 Percentage of workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational safety programs. Adtl Governance and Commitments p. 18-19 3

LA7 Rates of injury, occupational diseases, lost day’sand absenteeism and number of work-related fatalities by region. Core See detailed datasheets, p. 57 3

LA10 Average hours of training per year per employee by employee category. Core See detailed datasheets, p. 56 3

LA12 Percentage of employees receiving regular performance and career development reviews. Adtl See detailed datasheets, p. 56 3

LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity. Core See detailed datasheets, p. 55 3

It was considered that the Human Rights Social Performance Indicators are for the mostpart not relevant to Sonae Sierra’s business activities. No Human Rights indicators have

HR Social Performance Indicators: Human Rights been covered in this year’s report.

SO Social Performance Indicators: Society Performance

SO7 Total number of legal actions for anti-competitivebehaviour, anti-trust, and monopoly practices and their outcomes. Adtl There were no legal actions in 2006. 3

We are pleased to report that there wereSO8 Monetary value of significant fines and total no fines for non-compliance across the

number of non-monetary sanctions for portfolio in 2006, apart from the onesnon-compliance with laws and regulations. Core reported under PR9. 3


PR Social Performance: Product Responsibility Performance

For the purpose of considering this indicator within the scope of our companyactivities, we are referring specifically to the safety/emergency signage. Our shopping centres have to comply with a variety of standards of safety (e.g. safety signage within the centres checked by fire preventionauthorities) and health (e.g. air quality standards set by national regulation). If we do not comply with such standards we do not receive licences for opening the buildings to the public, and we are reportedas being non-compliant. In this context, weare pleased to report that there were no incidents of non-compliance across the entire portfolio in 2006. Furthermore, we can confidently state that in centres already under operation, a strong effort was made

PR4 Total number of incidents of non-compliance with everywhere to reinforce emergency signage,regulations and voluntary codes concerning independently of law requirements which product and service information and labelling, by are always lower than our own internal type of outcomes. Adtl level of demands. 3

*CEO statement, see p. 01PR5 Practices related to customer satisfaction, *Our stakeholders, see page 08-09

including results of surveys measuring *Table 4, p. 14customer satisfaction. Adtl *See graphs from pages 22, 34, 41, 46, 50 3

The municipality of Campo Limpo, Brazil, applied a fine of R$ 1,562,839.60 to Campo Limpo Empreendimentos e Participações Ltda (18.6% held by Sonae Sierra) for opening the first phase without a license. The company appealed to court to cancel the fine and is awaiting a final response. The planning authorities of Thessaloniki, Greece, applied a fine of €2,269,431 to Pylea SA (19.95% held by Sonae Sierra) for non-compliance with

PR9 Monetary value of significant fines for the building permit of the Mediterraneannon-compliance with laws and regulations Cosmos shopping centre. Pylea has filed twoconcerning the provision and use of products objections before the competent committee and services. Core and is awaiting a final response. 3


We have also published another report where you can find more information on our performance regarding other GRI indicators (GRI Supplement)


GlossaryAR & A – Annual Report & Accounts, In Review 2006

Brownfield land – a site (or portion of the site) in which development construction (new construction, expansion, redevelopment, reuse,etc.) or use may be complicated by the presence or potential presence of hazardous substances, pollutants or contaminants. The presenceor potential presence of any of these substances is enough to classify the site (or portion of the site) as “Brownfield, disregarding any othercriteria of land use classification.

CEO – Chief Executive Officer

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortisation

ESRD – Environmental Standards for Retail Development

GLA – Gross lettable area

Green Travel Plan – a study that analyses and defines the use of public transport and other more sustainable means of travel will beencouraged amongst employees and customers. Incentives might be offered to encourage car sharing, cycling and walking, and to makebusiness vehicles more fuel efficient, or use non-fossil fuels.

GRI – Global Reporting Initiative. The Global Reporting Initiative is an international network of businesses, civil society groups, labour, andprofessional institutions whose objective is to make reporting on economic, environmental, and social performance by all organisations asroutine and comparable as financial reporting. GRI accomplishes this vision by developing, continually improving, and building capacityaround the use of its Sustainability Reporting Framework.

ISO 14001 – This is the Environmental Management Standard of the International Standards organisation

Materiality – An issue is considered to be ‘material’ if it “influences or is likely to influence the decisions, actions and behaviour ofstakeholders and/or the organisation itself” (Source: Redefining Materiality – Practice and public policy for effective corporate reporting,Simon Zadek and Mira Mirme, AccountAbility, 2003).

NAV – Net asset value

Personæ – Personæ is the name of the project which we have been implementing since 2004 on Safety & Health, in partnership withDupont. It covers all Sierra’s business activities and concerns all matters related with Safety & Health of any of our stakeholders.

Previously developed land – is a site (or portion of site) that previously contained buildings, roadways, parking lots or were graded oraltered by direct human action other than rural activities.

S&H – Safety and Health

Scope1/2/3 greenhouse gas emissions

Scope 1 – Direct Emissions from fuel combustion on company vehicles, HFC leakage from cooling systems, cogeneration systems and heatproduction in boilers.

Scope 2 – Indirect Emissions from production of electricity used.

Scope 3 – Indirect Emissions from staff commuting journeys, company air travel, visitors’ journeys to and from shopping centres and thetreatment of wastewater generated.

SPOs – Safety Preventive Observations

Stakeholder – A person such as an employee, customer or citizen who is involved with an organisation, society, etc. and therefore hasresponsibilities towards it and an interest in its success

Sub-metering – Sub-metering enables detailed measurement of specific utility consumptions (i.e. individual tenants or services or areas).

Sustainable Development – Many definitions of the term have been introduced over the years, the most commonly cited one comesfrom the report Our Common Future, known as the Brundtland Report, which states that sustainable development is development that“meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Void Rates – void rate is the term given to the proportion of our portfolio that is in fit condition to be rented out to tenants but thatremains unlet at any one time.

WBCSD – World Business Council for Sustainable Development

Zoning – Control services (electricity, gas, water, etc.) according to need by area

Further Notes:Sources used during the investigation of the risks identified in the table on page 26, see footnote 15. 1. European Topic Centre for Air and Climate Change (ETC/ACC) 2005; Vulnerability and Adaptation to Climate Change in Europe (European Environment Agency,

Copenhagen)2. Filipe Duarte Santos, Keith Forbes, Ricardo Moita (eds.), 2002; Mudança Climática em Portugal: Cenários, Impactes e Medidas de Adaptação (SIAM) (Gradiva, Lisbon)3. José Manuel Morero Rodríguez (Director), 2005; Evaluación preliminar de los impactos en España por Efecto del Cambio Climático (Proyecto ECCE Informe Final,

Universidad de Castilla La Mancha)4. Web page from the National Observatory of Athens, Greece, ‘Vulnerability Assessment, Climate Change Impacts and Adaptation Measures’

http://www.climate.noa.gr/Reports/CC_reports3rd5.htm5. Web page from APAT (Agenzia per la protezione dell’ambiente e per i servizi tecnici), ‘Impatti dei cambiamenti climatici’

http://www.apat.gov.it/site/it-IT/Temi/Protezione_dell'atmosfera_a_livello_globale/Cambiamenti_climatici/Impatti_dei_cambiamenti_climatici/6. Web page from Greenpeace Brazil, ‘Consequências das Mudanças Climáticas no Brasil’ http://p2-raw.greenpeace.org/brasil/greenpeace-brasil-

clima/entenda/impactos#7. Climate Change in Germany: Vulnerability & Adaptation of Climate-Sensitive Sectors’ D.Schröter, M. Zebisch, T.Grothmann (Klimastatusbericht 2005)

http://www.schroeter-patt.net/Schroeter-et-al-KSB06.pdf

Feedback form1. About you.

Which stakeholder group do you belong to?

( ) Investor/financier( ) Tenant( ) Visitor( ) Employee( ) Supplier( ) Local Community

2. How do you rate the 8 material impact areas in terms of their significance to Sierra’s business? Please use thenumbers below. [Scale 1 = very significant; 2 = significant; 3 = not very significant; 4 = not at all significant]

Climate Change 1 2 3 4 Business Chain (Tenants) 1 2 3 4

Water 1 2 3 4 Communities

Waste 1 2 3 4(including visitors) 1 2 3 4

Land Use 1 2 3 4Employees 1 2 3 4

Business Chain (Suppliers) 1 2 3 4Safety & Health 1 2 3 4

3. Are there any other issues which you consider important which you feel that Sonae Sierra should be payingmore attention to?

( ) No ( ) Yes, please specify which issues ......................................................................................................................................

..............................................................................................................................................................................................

4. How do you rate Sonae Sierra’s performance (i.e. target achievement levels; KPI trends) against each of the 8material impact areas? [Scale 1 = Excellent; 2 = Good; 3 = Poor; 4 = Very Poor]






5. How do you rate Sonae Sierra’s reporting coverage (i.e. scope of data) against each of the 8 material impactareas? [Scale 1 = Excellent; 2 = Good; 3 = Poor; 4 = Very Poor]






6. Please rate the effectiveness of the 2007 targets in enabling Sonae Sierra to further improve its performanceagainst the 8 material impact areas.

Not very Not at all Impact Area Very effective Effective effective effective

Climate Change

Water

Waste

Land Use

( ) NGO/charitable organisation( ) Media( ) Government authorities( ) Student( ) Other please specify

.....................................................................................

.....................................................................................

Business Chain (Suppliers)

Business Chain (Tenants)


Employees

Safety & Health

7. Which section of the report was of most interest to you and why? (Please specify)

8. What do you see as the key challenges and opportunities for Sonae Sierra, over the next few years?Challenges (please describe)

Opportunities (please describe)

9. Please rate the following aspects of 2006 CR Report using the numbers below. [Scale: 1 = Excellent; 2 = Good; 3 =Poor; 4 = Very poor]Written content (informative & interesting); 1 2 3 4Language; 1 2 3 4Layout & Design; 1 2 3 4Structure and Ease of Use; 1 2 3 4Level of detail; 1 2 3 4Use of case studies. 1 2 3 4

10. Please rate the following aspects of our approach to GRI Level C+ Compliance in our 2006 CR Report using the numbersbelow. [Scale: 1 = very useful, adds value; 2 = useful; 3 = not very useful; 4 = not at all useful, does not add value]Incorporation of GRI Content requirements; 1 2 3 4Reporting of GRI performance indicators most relevant to our activities in the main report; 1 2 3 4External verification of GRI Level C+ Compliance; 1 2 3 4Reporting of further GRI performance indicators in the GRI Supplement; 1 2 3 4Have you read our GRI Supplement? Yes/NoIf yes, did you consider it to be useful? Yes/No

Please provide any additional comments or suggestions you wish to make about our CR Reporting or our overall approach toCR in the space below

Thank you! If you would like to receive a personal response to this feedback, please tick here (and provide your email address)

fold

here

fold

here

Please send the feedback form to:Sonae Sierra Environment Department

by FAX+351217582688

or

[email protected]

MAILRua Amílcar Cabral, nº 23,Quinta do Lambert1750-018 LisboaPortugal

Our mission continues to be to create value for shareholders while taking into account our socialresponsibilities towards other important stakeholders such as partners, retailers, employees and localcommunities, as well as our environmental responsibilities. We firmly believe that this balance iscrucial to achieve the sustained development of the Company.

Our CR strategy is fundamental to achieving this mission. In the past year, we have reviewed the focus of our CR Strategy in line with tightening risk management practices, to ensure that we prioritise efforts on those issues that represent the most significant challenges and opportunitiesto the business. Through a series of tests applied in 2006, we have identified the following issues as being most ‘material’ to our business in the short to medium term:

For each of these issues, we have set targets to be achieved in 2007, aimed at improving both ourmanagement approach and our actual performance. We also include in this report measures of ourpast performance against meaningful indicators, and progress achieved against our 2006 targets.Importantly, we have now approved a revised governance structure for CR, with a CR SteeringCommittee overseeing the entire strategy, and CR Working Groups to address each of the ninematerial issues listed above, as well as additional Working Groups for Brazil and Risk Management.This should ensure more embedded ownership and responsibility for these areas across the business.

We recognise that some of these issues pose significant challenges to our business in the longer-term. In particular, 2006 may be remembered as the year that climate change became a mainstreamissue, having become a cornerstone of political, business and media concern all over the world.

Contents

CEO’s Statement“This is Sonae Sierra’s third CorporateResponsibility (CR) Report. It incorporateschanges in style and content which Ibelieve reflect the increasing confidenceand maturity of our CR management andreporting approach.”

ifc CEO’s Statement02 Company Profile04 Report Profile06 Strategy & Analysis10 What We Did & What We Will Do16 Governance & Commitments20 Corporate Performance25 Issue in Focus: Climate Change30 Country Focus: Portugal35 Country Focus: Spain

39 Country Focus: Italy42 Country Focus: Germany44 Country Focus: Greece47 Country Focus: Brazil51 Lessons to be Learnt52 Detailed Datasheets58 Verification Statement61 GRI Content Index66 Glossary67 Feedback Form

Climate change


(Suppliers)

Business Chain

(Tenants)



Designed and produced by MAGEE

Printed by CTD

Printed on Accent White

Accent White is manufactured with 75% recycled fibre,

comprising of 25% post consumer waste, 50% mill broke and 25% chlorine free fibre.

This grade is fully recyclable and the mill has been accredited with ISO 14001 certificate,

and complies with Pan European Forestry Guidelines.

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 2813

SPAINC/ CONDE DE ARANDA, 24, 5º 28001 MADRIDTELEPHONE: +34 91 575 8986FAX: +34 91 781 1960

ITALYCORSO MAGENTA 8520123 MILANOTELEPHONE: +39 02 4654 621FAX: +39 02 4391 2531

GERMANYKENNEDYDAMM 5540476 DÜSSELDORFTELEPHONE: +49 211 4361 6201FAX: +49 211 4361 6202

GREECECHATZIYIANNI MEXI, 5, 1º11528 ATHENSTELEPHONE: +30 210 725 6340FAX: +30 210 729 0988

NETHERLANDSPOLARISAVENUE, 612132 JH HOOFDDORPTELEPHONE: +31 23568 50 80FAX: +31 23568 50 88

BRAZILRUA GOMES DE CARVALHO, 1327, 2ºVILA OLÍMPIA, SÃO PAULO – SP04547 – 005TELEPHONE: +55 11 3371 4133FAX: +55 11 3845 4522

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