Ayala Land Achieves World’s Largest EDGE Zero Carbon Office Portfolio Through Strategic Green Financing

Ayala Land Inc. has redefined the boundaries of sustainable real estate development in emerging markets by achieving EDGE Zero Carbon certification for more than 1.5 million square meters of commercial office space, establishing the largest EDGE Zero Carbon-certified office portfolio globally as of December 2025. This landmark achievement positions the Philippines’ leading property developer as a formidable force in the global green building movement and validates a multi-year strategy linking climate ambitions with capital markets innovation.

The milestone represents far more than an environmental accolade for the Philippine conglomerate. It demonstrates how emerging market developers can successfully retrofit existing infrastructure to meet stringent zero-carbon standards while simultaneously using sustainability performance as collateral for accessing substantial international financing. By achieving this certification target, Ayala Land has fulfilled a critical performance benchmark tied to approximately $1 billion in sustainability-linked financial instruments, avoiding potential interest rate penalties while reinforcing investor confidence in its climate commitments.

On January 22, 2026, Ayala Land formally received the EDGE Zero Carbon certifications during an awarding ceremony in Bonifacio Global City, attended by representatives from the International Finance Corporation, the Philippine Green Building Initiative, Ayala Land executives, and property management teams. The Philippine Green Building Initiative, one of the approved certifiers by IFC in the Philippines, conducted the rigorous third-party audits and awarded the certifications, providing independent verification that these properties meet the demanding technical requirements for carbon neutrality in operations.

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Pioneering Sustainability-Linked Finance in Southeast Asian Real Estate

Between 2024 and 2025, Ayala Land raised approximately USD 1 billion (₱56 billion) through carefully structured sustainability-linked instruments that tie borrowing costs directly to measurable environmental outcomes. These financial mechanisms represent a sophisticated evolution in green finance, moving beyond traditional green bonds that finance specific projects toward performance-based structures that hold borrowers accountable for delivering tangible sustainability results across their entire portfolios.

The financing package includes a ₱14.2 billion Sustainability-Linked Loan obtained in July 2024 and ₱12.87 billion SLL2 obtained in August 2025, both from IFC. Additionally, a total of ₱29 billion in Sustainability-Linked Bonds were issued and listed on the Philippine Dealing & Exchange Corp. between July 2024 and October 2025, making Ayala Land one of the most active issuers of sustainability-linked debt instruments in the Southeast Asian real estate sector.

These financial instruments are tied to clearly defined sustainability performance targets, including achieving EDGE Zero Carbon certification for 1.5 million square meters of commercial office properties by December 2025 and reducing greenhouse gas emissions by 42 percent across its malls, offices, and hotels by December 2030. The financing structures incorporate a critical accountability mechanism: a step-up in interest rates if targets are not met, ensuring that Ayala Land maintains genuine commitment to its environmental pledges rather than treating them as aspirational marketing statements.

The December 2025 achievement of the EDGE Zero Carbon certification target means Ayala Land has successfully avoided triggering these interest rate step-ups, protecting shareholders from additional financing costs while demonstrating to capital markets that sustainability commitments can be translated into verifiable operational changes. This success creates a powerful precedent for other emerging market developers considering similar financing structures, proving that ambitious environmental targets can be both achieved and monetized through innovative financial engineering.

Understanding EDGE Zero Carbon Certification Standards

EDGE Zero Carbon represents the highest tier within the Excellence in Design for Greater Efficiencies certification framework developed by the International Finance Corporation. To qualify for this prestigious designation, buildings must navigate a demanding multi-step process that begins with achieving EDGE Advanced certification, demonstrating at least 40 percent reduction in energy consumption plus at least 20 percent savings in both water use and embodied carbon in materials compared to conventional construction baselines.

Once these fundamental efficiency thresholds are met, projects must then operate using 100 percent renewable energy or verified carbon offsets to neutralize their remaining operational carbon footprint, while maintaining at least 75 percent occupancy for one full year to prove that the efficiency gains translate into real-world performance under normal operating conditions. This requirement for sustained occupancy prevents developers from gaming the system by optimizing buildings under idealized conditions that don’t reflect typical usage patterns.

The certification process requires extensive documentation, third-party verification, and ongoing monitoring to maintain EDGE Zero Carbon status. Buildings must demonstrate their energy consumption through actual utility data entered into the EDGE Carbon Calculator, providing transparency that allows independent auditors to verify claimed performance levels. Certificates indicate both the year of award and expiration date, requiring periodic recertification through submission of annual records to ensure continued compliance with carbon neutrality standards.

For Ayala Land, navigating this certification process across 50 office properties spanning multiple cities required developing sophisticated internal systems for tracking energy consumption, renewable energy procurement, and carbon offset verification at scale. The company’s success in certifying this massive portfolio demonstrates organizational capabilities that extend well beyond individual project execution toward enterprise-wide transformation of operational practices.

Geographic and Typological Diversity of Certified Portfolio

Ayala Land’s certified portfolio spans 50 office properties across Metro Manila, Laguna, Cebu, Baguio, Iloilo, and Bacolod, covering a total of 1,529,179 square meters of gross floor area. This geographic distribution reflects the company’s strategy of developing integrated mixed-use estates in key growth centers throughout the Philippines, rather than concentrating exclusively in the capital region of Metro Manila.

The portfolio includes a diverse mix of corporate headquarters and business process outsourcing facilities, the latter category being particularly significant given the Philippines’ position as a global leader in the BPO industry. By certifying buildings that house international BPO operations, Ayala Land enables multinational corporations to meet their own environmental, social, and governance objectives through their choice of Philippine office locations, potentially attracting premium tenants willing to pay higher rents for certified green buildings that support their corporate sustainability commitments.

The successful certification of properties across secondary cities like Cebu, Baguio, Iloilo, and Bacolod demonstrates that EDGE Zero Carbon standards can be achieved outside major metropolitan areas where renewable energy access and technical expertise might be more readily available. This geographic breadth strengthens Ayala Land’s competitive positioning in regional markets while contributing to more equitable distribution of sustainable development beyond Manila’s traditional commercial core.

Strategic Genesis: The September 2023 IFC Partnership

The foundation for this achievement was laid in September 2023 when Ayala Land and AREIT signed a memorandum of understanding with the International Finance Corporation to pursue EDGE Zero Carbon certification for 1.5 million square meters of office space by 2025. This commitment represented a bold declaration of intent given that it involved retrofitting existing buildings rather than simply incorporating green design into new construction, a technically and financially more challenging undertaking.

The partnership involved IFC providing advisory support to help Ayala Land navigate the complex certification process, develop energy efficiency upgrade strategies, transition to renewable energy procurement, and accelerate implementation of efficiency initiatives across dozens of properties simultaneously. This technical assistance component proved crucial in helping Ayala Land build the internal capacity necessary to manage such an ambitious portfolio-wide transformation within an aggressive timeframe.

Carol T. Mills, president and CEO of AREIT and Head of Ayala Land Offices, articulated the strategic rationale for pursuing the highest EDGE certification level: “We believe achieving zero carbon in our buildings will yield not only for ourselves but also for our valued office locators the most substantial, relevant and much needed contribution towards long-term sustainability and environmental responsibility.” This tenant-focused framing recognizes that green buildings create value not just through operational cost savings but by enabling occupants to meet their own sustainability objectives.

Jean-Marc Arbogast, IFC Country Manager for the Philippines, emphasized the difficulty of greening existing infrastructure: “In many ways, it’s much harder to green existing infrastructure. Ayala Land’s pledge to certify its portfolio as zero carbon underscores their deep commitment to net zero and whole-portfolio decarbonization.” This acknowledgment highlights that Ayala Land chose the more challenging path of retrofitting rather than simply focusing on new green construction, demonstrating genuine commitment to reducing the carbon footprint of the built environment at scale.

Building on Earlier Certification Milestones

Ayala Land’s EDGE Zero Carbon journey began with significant early successes that built organizational confidence and technical expertise. In January 2024, AREIT received EDGE Zero Carbon Certification for eight office buildings comprising 354,000 square meters, making Ayala Land and AREIT’s offices the largest EDGE Zero Carbon certified portfolio in the Philippines at that time. These pioneering buildings included Glorietta 1 and 2 Corporate Center, Solaris One, McKinley Exchange Corporate Center in Makati, and Vertis North Corporate Centers 1, 2, and 3 in Quezon City.

This initial certification represented proof of concept that Ayala Land’s technical approach and organizational systems could successfully navigate the rigorous EDGE Zero Carbon requirements. The company then systematically scaled these proven methodologies across its broader portfolio, targeting 900,000 square meters to be certified by 2024 and an additional 600,000 square meters by 2025 to reach the ambitious 1.5 million square meter target.

The phased approach allowed Ayala Land to learn from early implementation challenges, refine its procurement strategies for renewable energy, optimize its energy efficiency retrofit techniques, and develop standardized processes that could be replicated across diverse property types and geographic locations. This methodical scaling demonstrates sophisticated program management capabilities essential for portfolio-wide sustainability transformations.

Renewable Energy Transition at Scale

A critical enabling factor for achieving EDGE Zero Carbon certification across such a vast portfolio was Ayala Land’s parallel commitment to transitioning its properties to renewable energy sources. The company reports that 1.3 million square meters of its portfolio already operate on 100 percent renewable energy sources, a commitment that will endure for all forthcoming developments and represents one of the largest renewable energy procurement programs in the Philippine commercial real estate sector.

By 2024, Ayala Land and AREIT had shifted 88 percent of their office portfolio to renewable energy, equivalent to 1.2 million square meters of gross leasing space, enabling their office locators to attain their own ESG objectives without having to independently procure renewable energy or purchase carbon offsets. This tenant benefit creates competitive advantage in attracting multinational corporations and BPO operators facing increasing pressure from stakeholders to demonstrate environmental responsibility.

The renewable energy transition involved navigating the Philippines’ evolving energy regulatory framework, including participation in the government’s Green Energy Option Program that allows large electricity consumers to directly contract with renewable energy suppliers. Ayala Land’s scale provided negotiating leverage to secure favorable long-term renewable energy supply agreements while contributing to demand signals that encourage continued renewable energy capacity expansion in the Philippines.

International Recognition Through TIME Magazine

Ayala Land’s sustainability leadership received global validation in 2025 when the company was recognized by TIME Magazine as one of the World’s Most Sustainable Companies, the only Philippine real estate firm on the list. The ranking, conducted by TIME in partnership with global data firm Statista, evaluated more than 5,700 companies across 21 industries and 36 countries using a rigorous four-stage methodology assessing over 20 environmental, social, and governance indicators.

Ayala Land joined Globe Telecom as one of only two Philippine companies on TIME’s 2025 global list, reinforcing the Ayala Group’s leadership in sustainable transformation. Globe ranked 451st overall while Ayala Land was 486th among the 500 companies globally that scored highest in ESG performance, with the financial and tech sectors dominating the rankings. Ayala Land’s inclusion signals growing global recognition of real estate’s critical role in climate action and urban resilience.

Robert S. Lao, Ayala Land Chief Sustainability Officer, emphasized that the recognition affirms sustainability’s central role in the company’s identity: “This global distinction affirms that sustainability is not just a pillar of our strategy—it’s embedded in the way we build, grow, and create impact. It pushes us further to lead in shaping greener, more resilient communities for generations to come.”

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Comprehensive Sustainability Performance Beyond Certifications

The EDGE Zero Carbon achievement exists within a broader sustainability framework that encompasses multiple environmental and social dimensions. As of end-2024, 96 percent of gross leasable area across Ayala Land’s malls, offices, and hotels is powered by renewable energy, covering 101 commercial properties. This near-complete transition to renewable energy across commercial operations represents one of the most extensive renewable energy commitments in the Southeast Asian real estate sector.

Ayala Land has also made significant progress on waste management, diverting 32 percent of total waste from landfills across both operations and construction sites, with pilot programs underway for plastics, food waste, and residual waste. These initiatives support the company’s Zero Waste to Landfill target by 2030, an ambitious goal that will require continued innovation in waste segregation, recycling partnerships, and circular economy approaches to construction materials.

The company maintains 34 green-certified buildings covering more than 1.16 million square meters of gross floor area, with certifications from LEED, BERDE, WELL, and EDGE standards. This multi-certification approach demonstrates Ayala Land’s commitment to meeting diverse sustainability frameworks rather than selectively pursuing only the easiest or most marketing-friendly credentials, building genuine technical expertise across multiple green building methodologies.

Green mobility represents a growing focus for the company, with investments in pedestrian zones, bike lanes, electric vehicle charging stations, and improved access to public transportation integrated into its mixed-use estate developments. These mobility interventions recognize that building-level carbon reductions must be complemented by transportation infrastructure that reduces the carbon footprint of daily commutes by office workers and retail visitors.

Advancing Climate Targets with Science-Based Validation

Ayala Land is advancing toward Net Zero carbon emissions by 2050, with near-term goals to reduce absolute greenhouse gas emissions by 42 percent by 2030. These targets have been validated by the Science Based Targets initiative, aligning Ayala Land with best-in-class global climate standards and providing independent verification that its emissions reduction pathway is consistent with limiting global temperature increase to 1.5 degrees Celsius as called for in the Paris Agreement.

The company reports sustainability performance using international ESG frameworks including the Global Reporting Initiative, SASB, TCFD, and the UN Sustainable Development Goals. This multi-framework reporting approach ensures comparability with global peers while satisfying the disclosure requirements of diverse stakeholder groups ranging from impact investors to international development institutions to sustainability-focused ratings agencies.

Ayala Land receives high marks from leading ratings agencies such as CDP, S&P Global CSA, MSCI, and Sustainalytics, providing third-party validation of its sustainability performance that builds confidence among investors, lenders, and other stakeholders evaluating the company’s ESG credentials. These consistently strong ratings have proven instrumental in accessing sustainability-linked financing at competitive rates while attracting ESG-focused institutional investors to the company’s equity and debt securities.

Expanding Green Certification Beyond Offices

While the recent EDGE Zero Carbon milestone focused on office properties, Ayala Land continues pursuing green building certifications across its diversified portfolio, including malls, hotels, residential developments, logistics facilities, and mixed-use estates. This comprehensive approach reinforces sustainability as a core operating principle across all property types rather than a niche focus area limited to prestigious corporate headquarters buildings.

In March 2024, Ayala Land Hotels and Resorts Corp signed an agreement with IFC to commit to becoming the first hotel group in the Philippines to target EDGE Zero Carbon certification by 2026 for 2,826 rooms in its hotel portfolio. This pioneering commitment extends the zero-carbon approach into the hospitality sector, where operational energy consumption patterns differ significantly from office buildings due to 24/7 operations, food service, recreational facilities, and guest room conditioning requirements.

The hotel certification effort demonstrates Ayala Land’s willingness to tackle the technical challenges of different property types rather than limiting green certifications to the building categories where achieving standards is most straightforward. Hotels require sophisticated energy management systems, extensive water conservation measures, and careful attention to embodied carbon in frequent renovation cycles, making the EDGE Zero Carbon certification substantially more complex than office buildings with simpler operational profiles.

Broader Implications for Philippine Real Estate Sector

Ayala Land’s achievement of the world’s largest EDGE Zero Carbon office portfolio establishes a powerful demonstration effect for the Philippine real estate sector, proving that ambitious sustainability targets can be achieved even in an emerging market context with infrastructure constraints and developing green building supply chains. The company’s success creates competitive pressure on peer developers to enhance their own sustainability commitments while providing a roadmap of proven technical approaches and financing mechanisms that others can adapt.

The Philippine Green Building Initiative, which conducted the certification audits, has been working to promote green building practices in the Philippines since its incorporation in 2010. The organization partnered with IFC in 2016 to launch the EDGE certification program in the country, developing local technical expertise and building a network of trained auditors capable of conducting rigorous third-party assessments of green building performance.

Ayala Land’s large-scale certification program provides validation of the Philippine Green Building Initiative’s capacity to support ambitious green building portfolios while contributing to the development of local green building expertise through the extensive technical engagement required to certify 50 diverse office properties. This capacity building strengthens the broader Philippine green building ecosystem, making it easier for smaller developers to access certification services and technical guidance.

Financial Innovation Driving Environmental Outcomes

The sustainability-linked financing structures that Ayala Land has pioneered represent an important evolution in how capital markets can drive corporate environmental performance. Unlike traditional green bonds where proceeds are earmarked for specific environmental projects, sustainability-linked loans and bonds tie the cost of capital directly to the borrower’s achievement of predefined sustainability performance targets across their entire business operations.

This performance-based approach creates stronger incentives for borrowers to deliver actual environmental improvements rather than simply allocating capital to green projects that might have been undertaken anyway. The interest rate step-up mechanism ensures that missing targets carries tangible financial consequences, maintaining pressure on management to treat sustainability commitments as core business objectives rather than aspirational goals that can be deprioritized when operational challenges arise.

For lenders and bondholders, sustainability-linked structures provide an additional layer of risk management by aligning borrower incentives with environmental performance that increasingly affects long-term asset values, regulatory compliance costs, and market positioning. Properties with strong environmental credentials command higher occupancy rates, attract quality tenants willing to pay premium rents, face lower obsolescence risk from tightening building codes, and maintain better resilience to climate-related physical risks.

Meean Dy’s Strategic Vision for Portfolio Decarbonization

Meean Dy, President and CEO of Ayala Land, has articulated a comprehensive vision for embedding sustainability into development, operations, and capital allocation. Under his leadership, the company has moved beyond treating green building as a specialized practice limited to flagship projects toward making it standard operating procedure across the entire development pipeline.

Dy emphasized the company’s ambition to exceed EDGE Zero Carbon requirements: “Ayala Land is prepared to go above and beyond the EDGE Zero Carbon framework, starting with Embodied Carbon – we are committing to reduce embodied carbon in our buildings beyond what is required through efficient design and use of construction materials.” This commitment to surpass minimum certification standards demonstrates that Ayala Land views sustainability as a source of competitive differentiation rather than merely a compliance exercise.

The company’s approach to embodied carbon reduction involves exploring partnerships with suppliers of sustainable materials with lower carbon footprints, offsetting remaining embodied carbon through carbon forests, and taking initiative to divert generated waste away from landfills by ensuring that a significant volume of waste is sent to recyclers, ecohubs, and composts. These initiatives address the full lifecycle carbon footprint of buildings rather than focusing narrowly on operational energy consumption.

Building Resilience Index Integration

Beyond carbon reduction, Ayala Land is working with IFC to implement the Building Resilience Index across 50 commercial and industrial properties, making it the first developer in East Asia and the Pacific to embed BRI into its project development process. This initiative recognizes that climate adaptation is equally important as climate mitigation, particularly in the Philippines where exposure to typhoons, floods, and other climate-related hazards makes building resilience a critical determinant of long-term asset value.

The Building Resilience Index assesses how buildings will perform under future climate conditions, considering factors such as flood risk, heat stress, water scarcity, and extreme weather events. By integrating resilience considerations early in the development process, Ayala Land can make design modifications and infrastructure investments that protect tenants and preserve asset values as climate impacts intensify over coming decades.

This dual focus on mitigation through EDGE Zero Carbon certification and adaptation through Building Resilience Index implementation positions Ayala Land as having the most significant EDGE Zero Carbon-certified and BRI-rated portfolio globally, creating differentiation in attracting tenants, investors, and lenders increasingly focused on climate risk management.

Economic Impact of Sustainability Investments

The second sustainability-linked loan of ₱12.87 billion from IFC will fund development of Greenbelt 1 in Makati and Ayala Malls Evo City in Cavite, two large-scale commercial projects with an estimated gross leasable area of 89,000 square meters. The investment is expected to generate over 1,000 direct jobs during construction and operations, while merchant activities in the new properties are projected to employ about 3,000 workers, creating vibrant commercial ecosystems in both districts.

This job creation dimension demonstrates that sustainability investments can deliver economic and social benefits beyond environmental outcomes. The construction of green buildings employs local workers, generates demand for sustainable building materials that can support green manufacturing jobs, and creates long-term operational employment in facility management, maintenance, and tenant services that offer career pathways in the growing green building sector.

Amena Arif, IFC Country Manager for the Philippines, emphasized the programmatic nature of the partnership: “This programmatic approach not only mobilizes financing, but also creates jobs and strengthens resilience in a country prone to extreme weather events.” The integration of climate resilience with economic development represents a holistic approach to sustainable development that recognizes the interconnections between environmental, economic, and social dimensions.

Adherence to International Sustainability Finance Standards

Ayala Land’s sustainability-linked financing program was established in adherence to international guidelines including the ASEAN Sustainability-Linked Bond Standards, the Sustainability Linked Bond Principles issued by the International Capital Market Association, and the Sustainability Linked Loan Principles issued by the Asia Pacific Loan Market Association. This alignment with established frameworks provides credibility with international investors while ensuring that the sustainability performance targets and verification mechanisms meet rigorous global standards.

The adherence to these principles helps prevent greenwashing by establishing clear requirements for target setting, disclosure, verification, and reporting that sustainability-linked instruments must satisfy. Investors can have confidence that Ayala Land’s sustainability-linked bonds and loans incorporate genuine accountability mechanisms rather than vague environmental commitments that cannot be objectively measured or verified.

Long-Term Vision: Net Zero 2030 and Beyond

Robert S. Lao emphasized the strategic continuity between the EDGE Zero Carbon achievement and broader climate targets: “By securing the EDGE Zero Carbon Certifications for our office portfolio, we are able to verify the performance of our green buildings with measurable results that support operational efficiency, and long-term asset value.” This framing connects immediate certification milestones with long-term financial and environmental value creation, demonstrating how sustainability investments strengthen business fundamentals rather than representing costly compliance exercises.

As Ayala Land advances toward its Net Zero 2030 emissions-reduction targets for commercial operations and Net Zero 2050 for the entire organization, the company continues to integrate sustainability into development, operations, and capital allocation—aligning climate action with business performance and long-term value creation. The EDGE Zero Carbon certification of 1.5 million square meters represents a major milestone on this journey, but the company’s ambitions extend well beyond this achievement toward comprehensive transformation of the Philippine built environment.

The demonstration that a major emerging market developer can successfully achieve the world’s largest EDGE Zero Carbon office portfolio while accessing substantial sustainability-linked financing creates a powerful template for replication across Southeast Asia and other developing regions where the vast majority of future building construction will occur. If Ayala Land’s integrated approach combining technical excellence, financial innovation, and strategic commitment proves replicable, it could accelerate the transformation of global real estate toward zero-carbon operations essential for meeting Paris Agreement climate targets.

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By: Montel Kamau

Serrari Financial Analyst

28th January, 2026