Carbon Neutrality and Net Zero Program

Aligning with the Paris Agreement’s target to combat climate change and limit global warming to 1.5 degrees Celsius in 2030, in 2017, Ayala Land committed to neutralizing scope 1 and 2 carbon emissions in its malls, offices hotels and resorts by 2022. The company further expanded its climate ambition and announced its goal to achieve net zero for scopes 1, 2 and 3 emissions of the entire group by 2050.

Carbon Neutrality by 2022

We utilize the following strategies and mitigation hierarchy to achieve carbon neutrality:

  1. Avoiding emissions by using natural light and ventilation in common spaces
  2. Reducing emissions by undertaking energy efficiency initiatives in our properties
  3. Shifting to renewable energy sources for electricity consumption
  4. Offsetting residual emissions through protecting and enhancing carbon forests (or carbon sinks) within our land bank.

To provide incentives for investing in low-carbon alternatives and to generate funds and other resources for enhancing our forests, we set an internal price on carbon for every kilowatt-hour that was not sourced from clean energy.  Its equivalent amount was also established for every ton of CO2 Scope 1 emitted by our leasing properties.

As of end-2021, 65 of our commercial buildings are sourcing renewable energy, representing 85% of total malls and offices’ gross leasable area. The share of renewable energy in the commercial properties’ total energy mix is also now at 67%. For our 586 hectares of carbon forests, more than 160,000 native trees have been planted since 2018.

These combined efforts have resulted in the reduction and offsetting of scope 1 and 2 net carbon emissions of commercial properties by 100%. To validate the offsets from the carbon forests and the carbon neutrality achievement of the company, carbon stock remeasurement and third-party ISO 14064 verification are scheduled in 2022.

Net Zero by 2050

In October 2021, Ayala Land, as part of the Ayala Group, also announced its bold commitment to achieve net-zero emissions by 2050, covering scope 1, 2 and 3 emissions of the entire group. While scope 1 and 2 emissions are associated with the company’s controllable emissions from fuel, refrigerant and electricity use, scope 3 emissions cover all other emissions from its value chain, including those of its suppliers, tenants, and customers.

The company’s 2022 carbon neutrality goal addresses scope 1 and 2 emissions from its commercial properties – malls, offices, hotels and resorts. The 2050 net zero goal is an extension of this, with emissions from other business activities, including construction, residential and estate development, logistics and airline operations to be addressed by 2050.

Ayala Land is working with South Pole, a leading climate solutions provider, to develop its net zero roadmap. The process entails completing the company’s greenhouse gas inventory to cover scope 1, 2 and 3 emissions, identifying and assessing emissions reduction strategies, and setting interim science-based 1.5°C pathway targets to ensure a robust net-zero roadmap. The roadmap is scheduled to be accomplished by end-2022 and disclosed in the next annual report.

The company also signed up as a Task Force on Climate-Related Financial Disclosures (TCFD) supporter and has started to work with a third party to evaluate the impacts of climate-related physical and transition risks on the business based on various climate scenarios. The TCFD recommendations will be incorporated in the risk mitigation measures which are to be disclosed in 2022.