BY: Ces Oreña-Drilon
Hans Sy, the 4th of the Sy-blings, as Bilyonaryo calls them, sat down with me to explain his green initiatives in the SM Group, a chat that turned into an interesting look into how he became a sustainability champion, the lessons he learnt from his father, Henry Sy Sr., and legacy-building.
Why is sustainability important to him? Sy says, “We do it not because there is a law that will require us, not because there would be savings but because it is the right thing to do.”
Sy now sits as Chairman of SM Prime Holdings’ Executive Committee, having let go of his day to day responsibilities as President in 2016 when he turned sixty.
“Retirement is giving a little life back,” says Hans T. Sy who can pursue more freely now his green agenda with the Asian Ministerial Conference for Disaster Risk Reduction to be held in the Philippines on October 2024. Sy is the first Filipino member of the United Nations International Strategy for Disaster Reduction (UNISDR) or ARISE International Board, the top global business leaders’ group on disaster risk reduction management (DRRM).
The Sy family’s business interests range from retail, property development, banking and finance to energy and education.
Their secret? To this day, Hans and his siblings -Tessie, Elizabeth, Henry Jr., Harley and Herbert meet once a week to get a consensus on important business decisions. For Hans, the solid footing of the Sy-blings’ various business interests is due to the family’s consensus building. They may have differences, just like every family, but in the end they agree on a single move. “This is my father’s real legacy – in getting the second generation all working together. Yes, we have our differences, but we always manage to get things agreed upon after meeting. This is what I’m most proud of.” Sy explains, mentioning that even the third generation are as collaborative in decision-making.
The Sy-blings tradition stemmed from his “Tatang”, Henry Sr., “He would require us to all join him for lunch. In fact he would go buy seafood and cook it himself, to get us to go there. If we don’t go he will say, he spent so much time buying the seafood and ‘you’re not coming?’ It has been a tradition – our Sunday lunches. But as we grew older, the discussions were more on the business. And until one day my mother said, ‘Stop! I don’t want any of you talking about business anymore. Sunday is not supposed to be talking about business!’ So my father moved it to Tuesday.” Hans Sr. forbade any absences unless they were abroad.
But if there is any contribution that Hans is proud to have made in the manner their business is run, it is in the area of the environment and sustainability. I was really affected by the movie, ‘Inconvenient Truth.’ That was my turning point. I knew we should do something for the environment. I invited Al Gore here to talk about it. (Gore visited the Philippines in 2016.) I received a lot of calls from friends saying, ‘Oh that’s not true. This guy doesn’t know what he’s talking about.’ So, I brought him here and in that alone, I think I was successful in raising awareness about caring for the environment.”
Another turning point in getting Hans deeper into environment issues was a man made disaster – a fire that gutted SM Makati in 1988.
“It was really one of the hardest tasks I’ve ever handled, having to clear out the whole debris. I told myself, ‘Nobody should go through this. There should be a better way to prevent it.’ I brought in the sprinkler system but we first, we had horrible problems. Leaks here, leaks there, leaks everywhere. But we learnt and it helped us because we would have smaller fires every now and then that were put out quickly. Fire can be a serious problem but it is a man-made disaster. Then I watched “The Inconvenient Truth” of Al Gore and saw the environmental problems we face were much larger and I knew I could do something,” Sy said, which explains how he got involved in disaster risk management.
Currently, Sy is the first Filipino member of the United Nations International Strategy for Disaster Reduction (UNISDR) or ARISE International Board, the top global business leaders’ group on disaster risk reduction management (DRRM).
Ironically, the United Nations recognition of his work came on the very day he was accused of chopping trees indiscriminately in SM Baguio. Hans smiles at the remembrance.
Sy was invited to a dinner hosted by Senator Loren Legarda for a special guest. Before he could take his place at the dining table, he recalls Senator Legarda chastising him, “‘Hans, what are you doing? People know we’re friends and I’m with the environment and you’re cutting trees!’ So I said, ‘Madame Senator, please hear me out.’ I think there’s something I need to explain. That area is prone to erosion and foreign consultants have said there is a risk of a serious landslide and it could hit The University of the Cordilleras beside our hill. I don’t want that to happen without doing anything to prevent it.”
Moments later, Sy realized that the Senator’s special guest was Margareta Wahlstrom, then head of the United Nations for Disaster Risk Reduction, UNDRR. “I could see the doubt in her face as if to say, ‘Sure, you say this because you want to justify what you are doing.’ I said, ‘Madame, I didn’t say this just to let you hear it. I’ve been doing this since the 90’s.’ She didn’t seem to believe me. After dinner she asked, ‘Can I send a team to document all the things you’ve done?’”
Sy explains that by this time, he had already completed the reclamation of SM MOA, as well as SM City Marikina which is built on stilts to prevent flooding. “They couldn’t have come at a better time. The UN team came after we had a storm surge that flooded the US Embassy, Sofitel, even Solaire. Everything was flooded, except SM MOA. The team asked me to explain what I did to protect MOA. I said, ‘Did you watch the “Inconvenient Truth”? I learnt from it that there will be a time when all the ice caps and icebergs would melt and our water table would go up 3 meters. So, I put up the reclaimed elevation to 6 meters.”
Wahlstrom realized Sy was the real deal and offered for him to be a Private Sector Representative to the United Nations for Disaster Risk Reduction.
Since the Baguio controversy, SM has planted more than half a million trees in the City of Pines. And in its latest endeavor, it launched the first-ever water filtration system in a mall, turning collected rainwater into potable water at SM City Baguio.
SM City Baguio tenants now enjoy potable water from collected rainwater.
It is Sy’s engineering background and sustainability mindset that has proven to be useful in mall design features that are environment friendly. SM Supermalls has adopted the rainwater catchment system in 25 malls located in flood-prone areas, collecting rainwater and helping neighboring communities keep safe and flood-free. These basins can catch and store almost 80,000 cubic meters of rainwater, equivalent to 32 Olympic-size swimming pools.
All of SM’s 84 malls recycle water, including its first, SM North Edsa which opened in 1985, “We’ve been doing that even before the price of water had gone up. I tried to save water when water was cheap, and now that water is so expensive and scarce – the cost of water recycling is really a justified investment.”
As early as the 1990s, Sy pushed for the conversion of air conditioning systems for SM malls from ozone depleting refrigerants to more environment friendly systems. It was a hard sell, he admits, “I didn’t want to wait until 2025, when the freon gas act will stop its production. I told our team, I want to do it now. The board of First Asia that owns Megamall asked me, ‘Why do you want to spend so much?’ I couldn’t justify the cost except to tell them that it was for the love of our environment – I think this is important. Guess what? After I changed all our compressors, using the more environment friendly kind using recycled water – power rates went up. In just a year, we recouped the investment as the new system is more energy efficient. In the end it has saved us a lot of money.”
Although his dad wanted him to take Commerce in college, Sy took up Mechanical Engineering in De La Salle University and laughingly confesses, “I really wasn’t interested in Commerce as a course. And one thing about my dad… he would never force us.”
Upon graduation, he officially joined SM Cubao’s Menswear Section in 1978.
All his weekends, beginning at age 13, Sy had spent with the other Sy-blings learning the ropes in the business. But he was indeed surprised that on his first official day at work, wearing his best clothes, he was told that his task was to take out the garbage!
Then he became a Cash Clerk. “It’s a nicer word of calling it “pautos”. Then, we had a centralized cash system and one cash register manned by Tessie. If someone buys an item, we ask – “is this cash or charge”, and if cash, they will write out the invoice. I get the cash and the invoice, run to the counter, help Tessie register it in, then run back with the change. That’s why I’m a long distance runner,” Sy laughs.
Sy learned a lot working with his Tatang, “I consider myself very lucky I was able to walk around with him and learn why he does certain things. I’ve learned perseverance, integrity, and humility from him. I saw him get upset, too when others are not practical. I remember we would go to job sites. Once, there was this contractor wearing white pants and white shoes. My father looked at him and said, ‘How can you do proper job site inspection in white pants and those shoes?’ Things like that taught us to the importance of being hands on. He really walked the talk –inspecting each nook and corner of every project.”
Hans T. Sy and SM Group founder Henry Sy, Sr. whom everyone called Tatang. “He inspected every nook and corner of every project.”
Sy recalls the days when SM malls were just beginning to expand, “Carol (his wife) had to spend nights in the car waiting for me. We were just newly married then. I remember going into the building at 8 o’clock in the morning, when the sun was shining, and coming out, it was still bright because it is 24 hours later. “
The opening of SM North Edsa during the tumultuous economic period of the 80s, is etched in Sy’s memory, referring to it as the “turning point” for his Tatang, “My father’s timing was perfect. He would give me a call on the landline, one way of checking if I was on site. He would always ask, “Hans, how is the schedule going?” I would report that we were very much on track. Then he would say, ‘Remember, the interest rate is 36%, if I deposited this (in the early 80’s), in 3 years I would have made my money back. I’m investing a lot, so let’s make sure we don’t lose time.’ I was under a lot of pressure, but it really developed in me a respect for time and to be very careful with expenses.”
SM North Edsa, then and now. Hans Sy says this was the turning point for Tatang and the whole SM Group.
The income from department stores SM Cubao, SM Makati and SM Harrison, in the words of Sy, “provided the cash flow to build SM North Edsa.” There were no periods when they would be under financial risk, even during this era of massive mall expansion.
“My father would always say, “Whatever decision we make, we should be able to eat and sleep well.” Good financials are something he made sure of. Up to now, this is our guiding principle. During this pandemic, even as we were among the first to say, let’s not charge rent and forego all those revenues to help our tenants, we made sure first that we were very stable with our financials.”
Sy calls it “reverse investment,” a term he coined himself where instead of putting up new structures, SM invests by not collecting rent because in the end, if tenants are kept afloat and normal times return, they would be able to quickly get back to business. In the end, their “reverse investment” paid off.
Sy says he does not see himself as a good son, but rather as a good soldier, “I always tell people, about me and my father: I’m a good soldier. If he says jump, my reply is how high? I never ask why.”
This explains his foray into education, “He told me, ‘Hans, come and help me with National University.’ I didn’t even tell him, I’m not an academic. I went in and began to understand education.”
Sy says it has always been his father’s goal to leave a legacy in education, “I remember his words’ ‘Education is the greatest equalizer.’ He felt this country is where it is today because education is taken for granted. He wanted to really be able to help out as many students as possible. That was why when he asked me to help him out with growing National University. He said, ‘Try to achieve in this.’ As you know, he trained us to be overachievers. My father said, ‘Target 100,000 students.’ When we took over, enrollment was only 1000 students.”
Currently, NU, chaired by Sy, has an enrollment of 55,000 students. Sy projects that in three years, he will achieve his Tatang’s goal of 100,000.
Sy no longer keeps the long hours he had as president of one of Southeast Asia’s biggest integrated property developers. He used to begin his day at 8 in the morning with breakfast meetings and call it a day at 10 in the evening. But his days are still somewhat regimented. Tuesdays are for the Family Board Meeting, Wednesdays are reserved for Chinabank where Sy sits as chairman, Thursday lunches are reserved for a meeting with his son, Chico and Fridays are reserved for golf.
The author with Hans Sy and his wife Carol. When they were newlyweds, Carol would wait in the car while her husband kept long hours working at the mall.
Hans Sy Jr., or Chico, as he is called, has taken over all construction meetings as President of SM Engineering Design & Development Corp. “I would give my inputs every now and then. But the rest, I leave to him. I just sit at the table, chatting with some contractors and friends. Now, I’m just taking it easy,” Sy smiles.
Sy surprised SM Prime executives when he announced his retirement in 2016. He had planned it five years earlier when he pledged to double the income of SM Prime (then PhP 16B) “I said, ‘Watch us in the next 5 years.’ What I had in mind was that would be the the time I would step down. It caught Jeffrey (Jeffrey Lim is his successor as President of SM Prime Holdings) by surprise. But it wasn’t just a decision made solely by me. As always, I consulted my siblings. “But,” he smiles, “I’m also the type of guy who likes to surprise.”
Sy pronounces his “retirement” as one of the best decisions he has made, “It is giving me a little life back.”