What sets the Company apart from its competitors is the intertwining of its value proposition to the customer with the company’s environmental commitment on sustainable development, as embodied in the Company’s Environment and Health and Safety (EHS) Policy:

We are committed to limiting the environmental impacts of ouroperations through the efficient use of natural resources, reducing input materials and waste and contributing to the conservation of biodiversity. We continue to plan, design, operate, and close operations in a manner that enhances sustainable development. We proactively identify environmental risks and opportunities as an integral part of our risk management processes and business planning.

We seek to continually improve our environmental performance by measuring and reviewing the effectiveness of our QEHS MS in conformity with the requirements of ISO 9001: 2000, ISO 14001:2004, and OHSAS 18001:1999.

With the involvement of the employees and outsourced personnel, the Company commits to continually develop a sustainable real estate development strategy to pro-actively respond to evironmental challenges and opportunities that affect the business and the society such as energy efficiency and emissions, water and wastewater management, solid waste management, resource conservation, sustainable technologies and the environmental impacts of the company’s products and services.

We apply the QEHS MS standards to all areas, departments and operations. The procedures are documented in our QEHS Procedures Manual.

A simplified process flowchart is illustrated on the right

As part of our continuing environmental management programs, we continue to:

• explore opportunities to lower our energy and water consumption through engineering (technical) and administrative (non-technical) interventions;
• review our operational processes to conserve materials and reduce waste;
• study and apply other established environmental standards to ensure that our products and services are delivered with minimal or no negative environmental impacts; and
• educate and mobilize the employees and outsourced personnel to promote good environmental practices

We have also taken steps to integrate the environmental management programs with our social programs and initiatives, such as mobilization of different sectors for the tree planting program, and the ongoing Kwarta sa Basura, involving our fenceline barangays.

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All departments, operations and areas maintain an ‘aspects and impacts’ register identifying key environmental impacts and occupational health and safety risks, and the programs and controls in place to manage these. Monthly performance reviews are conducted and EHS results are regularly reported to management.

The Company also undergoes internal (once a year) and external (twice a year) QEHS MS audits to assess the performance of the management system as against QEHS standards. The results of these audits are reported to management and communicated to all departments for action.

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According to the National Transmission Corporation (NTC), the Visayas Grid’s power generation mix is as follows: Geothermal = 72.1 percent, hydro = 0.3 percent, coal = 6.9 percent, Oil = 20.7 percent. The Visayas Grid supplies the electrical energy requirement to the islands of Leyte, Bohol, Cebu, Negros, and Panay.

The Company purchases the bulk of its (indirect) energy requirement from the power utility company, Visayan Electric Company (VECO). This amounted to 28,742,308.22 kilowatt hours in 2006 and 27,988,898 kilowatt hours in 2007.

The Company and its managed properties only consume direct energy during power interruptions, and during the weekly test runs of the properties’ individual generating sets, amounting to 7,914.65 gallons in 2006 and 7,606.58 gallons in 2007.

Energy efficiency Energy is one of the largest single costs within our business, especially for Ayala Center Cebu, and, as such, energy efficiency and energy consumption reductions drive both cost savings and emissions reduction.

The Company saved 753,410.22 kilowatt hours in 2007. Of this figure, 605,833 kilowatt hours was attributed to Ayala Center Cebu’s energy efficiency initiatives. This savings was achieved despite increasing its leased area by 5,800 square meters in 2007 with the mall expansion.

Overall, the Company met its target of 3 percent reduction in energy consumption in 2007.

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Based on the Visayas Grid generation mix and the direct energy consumed by the Company, its greenhouse gases emission are as follows:

There is an overall reduction of 3 percent in the greenhouse gases emission from the direct and indirect energy consumed by the Company.

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Water
Water consumed by the Company and its managed properties comes from the local waterworks company, Metropolitan Cebu Water District (MCWD). Water is extracted from the utility company’s deepwells located within the metropolitan area.

Water use decreased from 405,151 cubic meters in 2006, to only 360,122 cubic meters in 2007 or 11 percent.Constituting the largest decrease in consumption is Ayala Center Cebu at 14.2 percent (from 342,480 cu.m. in 2006 to 293,573 cubic meters in 2007), despite the additional leased area of 5,800 square meters.

Although there are other areas that did not meet its 3 percent mandatory reduction targets, overall, the Company reduced its waster consumption by 11 percent in 2007 compared to 2006 figures.

Wastewater
It is estimated that 85 percent of the water consumed by the properties is discharged as wastewater, classified as domestic wastewater. The wastewater generated by the properties is conveyed via a network of sewerage pipes to the central sewage treatment plant (STP), where it is aerobically degraded to conform with the wastewater quality requirements prior to discharge to Cebu City’s drainage network.

The Revised Effluent Regulations of 1990 (DAO 90-35) defines the wastewater quality level to be discharged to the receiving body of water. The wastewater quality is determined by the Biochemical Oxygen Demand (BOD).

The company uses the Class C wastewater classification as its benchmark, at 50 mg/liter, even though the requirement for the receiving waterbody is Class D (or at 120 mg/liter). The effluent discharge is monitored at least on a quarterly basis, and a Self-Monitoring Report (SMR) is filed with the Environmental Management Bureau (EMB) every quarter.

Based on the 1999 data of the Cebu City Department of Public Works, Cebu Business Park, including the Ayala Center Cebu, contributed around one percent of the solid waste generated and collected by the City.

The Ecological Solid Waste Management Act of 2000 (RA 9003) mandates the Local Government Units (LGUs) to implement and enforce the provisions of the Act within their respective jurisdictions. Specific to this is the implementation of the waste segregation program at the barangay level.

On a parallel track, the Company organized the five fenceline barangays into an alliance among the barangays and the Cebu Business Park. One of its core programs is to implement a solid waste management program in the barangay level. Since the Cebu Business Park is situated at
the center of the barangays, and the volume of its solid waste is relatively significant, the Alliance puts its effort to reduce the volume of solid waste and to earn money from the recyclables. This came to fruition in 2007, when Barangay Luz took the lead in the collection of solid waste from Ayala Center Cebu and generated income from the recyclables in the process.

Below is a graph of the solid waste generated and recycled from Cebu Business Park and Ayala Center Cebu.

Although the Ayala Center Cebu exhibited a reduction of both the recyclables and residual solid waste, the Cebu Business Park registered an increase due to increased activity within the park (new buildings that are operational and under construction in 2007).

The environmentally-sensitive approach to real estate development can be seen on the innovations done by the Company to its projects, as follows:

a. Provision of green landscape strips along roads – This innovation provides the following purposes:

• Aesthetic – a landscaped area is visually pleasing and softens the area
• Environmental – a landscaped area provides additional“green lungs” to the environment, promotes water
  percolation and recharge, and helps in block out noise and dust generated by activities

b. Occupancy sensors installed at basement areas to save electricity – basement areas are, for most part of the day, unoccupied. However, these areas should be lighted for the convenience of the building occupants that use the parking areas. Lighting up the area at all times is not practical and environmentally friendly. The occupancy sensors provide the flexibility to light up the area as needed – if the sensors detect movement, it will turn the lights on. The area remains lighted and will turn off at a preset time when the sensors no longer detect any movement.

This innovation was successfully implemented in all residential and office buildings, resulting in the reduction
of electricity consumption at the basement areas.

c. Operational initiatives done at the City Sports Club Cebu (CSCC) include:

• Replacement of incandescent lamps with compact fluorescent lamps (CFL) - The CSCC has been using
  incandescent lamps, especially the sconce lamps at the lobby areas. We replaced the incandescent lamps for a CFL with the same color index as the former to maintain the visual ambiance. As the CFLs consume less electricity than incandescent lamps, this would mean lowering the electrical consumption.
• Rightsizing of airconditioning units - On some areas where occupancy is low (e.g. billiards, table tennis), the existing 25-TR airconditioning units were changed to two-5 TR airconditioning units, thus reducing the electricity consumption. This was done in mid-2007.

  These initiatives improve the operational efficiency of the CSCC and reduce the club’s electricity consumption.

d. Constructed wetland system to treat the wastewater prior to discharge

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Asiatown IT Park, the flagship project of CHI-subsidiary, CPVDC, is the only CHI-managed property with a constructed wetland system. It is one of only two operational wetlands in the Philippines, the other one is found in Bayawan, Negros Oriental. The difference is that we are treating wastewater from the commercial operations, while the one in Negros Oriental treats domestic wastewater.

The constructed wetland system at the I.T. Park has the following components:

1. Lift station, to transfer the raw wastewater to the reaction tank using pumps

2. Reaction tank, with sedimentation and attached growth reaction chambers

3. Wetland module, with Saccharum and Vetiver plants

4. Polishing lagoon to effluent discharge line, with water hyacinth

The wetland has been operational since March 2007. It was constructed to address the quality of wastewater discharge, with the increasing build-up.

At present, the water consumption at Asiatown IT Park is at 250 cubic meters per day. Almost the same quantity is discharged as wastewater. The constructed wetland is designed to treat 2,200 cubic meters of water per day. With the present buildup, it will take around 10 years for the wetland to be operational at its full capacity.

The construction of the wetland started in May 2006, and was completed in February 2007. Influent and effluent samplings were done from March to December 2007, with the results shown on the graph below.

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CHI, with mother company, Ayala Land, partnered with the experts in environmental research and initiatives, and formed a foundation to manage Ayala Land-owned property which is part of the Central Cebu Protected Landscape. The foundation was registered with the Securities and Exchange Commission on March 17, 2007. The 71-hectare area which sits on a watershed, will be managed by the foundation with CHI as the leading partner to convert the property into an eco-tourism, educational and recreational destination in a natural setting.

The property is envisioned to be a natural science laboratory for scientific research, environmental education and a showcase for world class watershed management technology. It will also be an inspirational setting for artistic expression and a platform for stakeholder engagement and partnership.

In the coming year, CHI will be actively involved in marketing the nature park as the foundation opens it to students, the local community and the general public.

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