In a country where typhoons, floods and extreme heat can quickly turn into business disruptions, preparing for the next disaster is becoming more than an environmental concern.
For SM Investments Corp. (SMIC), it is increasingly part of the investment equation.
The Sy-led conglomerate is weaving climate resilience into decisions on where and how it builds, how it manages resources and how it protects assets meant to generate value for decades.
‘We see climate resilience as a long-term investment,’ SMIC president and CEO Frederic C. DyBuncio says. ‘It means understanding the risks around us and considering them in how we invest, operate and grow.’
That thinking is perhaps most tangible in property, where the consequences of getting climate risks wrong can be costly and long-lasting.
SMIC says site selection, master planning and building design consider hazards such as flooding and severe winds.
In higher-risk locations, properties may incorporate elevated structures, rainwater catchment facilities and stormwater management systems.
Some structures, according to the company, are engineered to withstand winds of up to 300 kilometers per hour.
The strategy takes different forms depending on location.
At SM City La Union, for instance, a 760-cubic-meter (cu m) rainwater catchment system works alongside a sewage treatment plant capable of handling 750 cu m.
SM City Laoag, meanwhile, operates a brackish water treatment facility aimed at reducing its dependence on conventional water sources.
Elsewhere, resilience is built into the structures themselves.
SM Mall of Asia and SM Marikina were designed and constructed above building code standards to withstand extreme weather and seismic events, SMIC said.
SM Marikina is elevated on 246 stilts, a design that was highlighted by the United Nations Office for Disaster Risk Reduction for its disaster-resilient features.
Behind these investments is a relatively simple calculation: spending on resilience before disaster strikes could help protect assets, minimize interruptions and extend the period over which those assets remain useful.
For a conglomerate with businesses spanning property, retail and banking, that calculation extends beyond buildings.
SMIC says its businesses are increasingly considering energy, water and other resources based on how these could affect long-term operations.
The group is also investing in cleaner and more reliable energy through Philippine Geothermal Production Co (PGPC).
The value of such investments becomes more apparent when disasters hit.
Properties that remain safe and operational can keep serving customers while also providing essential services and assistance to nearby communities, according to SMIC.
For the parent company, however, the strategy ultimately comes down to capital allocation.
SMIC believes its role is to take a longer view of risks that could threaten the ability of its businesses to create value over time.
Climate resilience, under this approach, becomes part of investment discipline rather than a separate corporate initiative.
It is a shift in perspective that matters in the Philippines, where businesses routinely operate alongside the physical risks posed by natural hazards.
For companies investing in assets expected to last decades, resilience can mean thinking about tomorrow’s disruption while money is being committed today.
‘Our growth strategy is anchored on responsible stewardship,’ DyBuncio says. ‘We want our businesses to continue creating economic value while becoming better prepared for the risks facing the country and the communities we serve.’
For SMIC, the premise is that resilience carries an upfront cost-but failing to prepare can be much costlier.