The SM journey: Why values and ESG+R matter

(First of two parts)

Editor’s Note: Acceptance Speech of the author as the “MAP Management Person of the Year 2025” Awardee on Nov. 24.

SM was once condemned for cutting down trees in Baguio City. Today, I want to tell you why that was the right decision, and what it taught me about leadership.

Across SM Baguio is the University of the Cordilleras, the oldest postwar university in the region. It sits on a hillside and serves thousands of students.

In 2012, I noticed signs of potential soil erosion on the slope above the campus, where our mall stands. Each rainfall risked sending soil toward the classrooms below. I could not sleep knowing the danger it posed to the school.

The only way to keep the campus safe was to build a retaining wall and reinforce the ground. That required the removal and relocation of several trees in the SM Baguio property.

As someone who has long cared about the environment, it was a very hard decision to make.

Unfortunately, many saw the act but not the intent.

Despite our efforts to explain the situation, many accused SM of betraying the environment for financial gain. The reactions were harsh. A foreign artist even canceled a concert at our arena in protest.

We finished the work anyway. The hillside held, and the school remains safe. That choice—of doing what is right, even when unpopular— sharpened my understanding of leadership.

The incident also led to a truly unexpected blessing. I had a meaningful exchange with the head of the United Nations Office for Disaster Risk Reduction (UNDRR).

One conversation led to another, and soon after, I was invited to serve as the first Filipino private sector representative to the UNDRR.

Through ARISE Global, I am able to share what SM has quietly practiced since the late 1980s: forward thinking and resilience.

I now work across sectors to help communities prepare and recover faster from calamities.

Choosing to stay

The Philippines sits in the Pacific Ring of Fire and the typhoon belt. We deal with earthquakes, volcanic eruptions and storms on a regular basis.

For 21 consecutive years, our country has been named the world’s most disaster-prone nation. Our geography has made our reality tougher than most countries.

To some, that might be reason enough to leave the Philippines. But my family and I—we chose to stay.

I am 70 years old now. And I still hold only one passport, a Philippine passport. That is both a fact and a statement of faith. Despite the risks, the noise and the many uncertainties, I have never doubted our country’s promise or the strength of the Filipino spirit.

Our nation is not perfect. Our people are not perfect. Yet many of us remain here and keep going, because we believe that hope is stronger than hardship.

That life in the Philippines, no matter how difficult, is worth the struggle. And that in time, things do get better.

It is hard to imagine now, but SM was built on hardship and hope. My grandfather got my father to dream big, not just to lift himself from poverty, but to earn more than enough to help others.

So from a single shoe store in downtown Manila, SM now has an ecosystem that includes real estate, banks, retail, schools and more.

Our scale has allowed us to turn growth into service, generating jobs, building infrastructure and supporting scholars and livelihoods nationwide.

The SM journey has not been linear

We have been tested by political unrest, economic challenges and natural disasters. A pandemic even closed our malls.

After each test, we came out stronger. Not because we were spared, but because we learned, adapted and dreamt bigger.

We were able to navigate those moments because two constants guided our choices: our values and our sustainability framework.

In our family, we live by three core values: integrity, hard work and humility. These are the same values we teach our people.

Let me go through each one.

We have a very simple definition of integrity. My father would always say, “Whatever decision we make, we should be able to eat and sleep well.”

That belief guided SM’s response to the pandemic.

Three days after the lockdown was announced, we decided to waive rent for our mall tenants nationwide. We did not wait for a government directive. We just knew that it was the right thing to do.

By the end of 2020, we had extended over P23 billion in rental concessions. Our income fell, but thousands of small businesses survived and jobs were protected.

The financial risk we faced was real. But we made that call because that is how we were raised.

Working hard is second nature to our family. We were raised to believe that there is dignity in every kind of work.

My siblings and I still follow that rule today. We are in the office or on-site six days a week. But I would not really call it work. It is what we love to do.

We enjoy meeting people, listening to customers, and learning from our employees. Each visit reminds us that there is always something to improve, and be grateful for.

I would also like to think that this is why none of us look our age.

Humility—and the simplicity that comes with it—has guided our family for three generations.

When they were young, my children brought packed lunches to school. They had no allowance until they were old enough to understand the value of money.

I remember my eldest son, Chico, once telling me that his P5 weekly allowance in Grade 5 was not enough to buy soft drinks at the canteen.

I told him, “You can, if you save your allowance for two weeks.” It was a brief conversation, but the lesson stayed with him to this day.

At SM Prime, our sustainability framework is simple yet grounded in decades of experience.

We call it ESG+R, or Environmental Stewardship, Social Inclusion, Good Governance, plus Resilience.

In 2006, a documentary changed the way I viewed the environment.

Watching Al Gore’s “An Inconvenient Truth” made me realize that we could no longer just talk about climate change.

We had to do more. So we did.

We began recycling water as early as the 1990s at SM Megamall. It was the more costly choice back then. But as climate risks grew, we kept expanding our efforts.

Today, water stewardship is practiced across our malls. We manage stormwater through large rainwater tanks and use smart fixtures and waterless urinals to conserve water.

We elevated our properties to reduce flooding and strengthened our roofs to withstand stronger typhoons. That allowed us to turn our rooftops into solar fields.

Last Nov. 8, we reached 100 megawatt peak capacity. And we intend to keep going.

(To be continued)

The author chairs the executive committee of SM Prime Holdings Inc. Feedback at map@map.org.ph and info@smprime.com.