Meet The Expert With Hugo Padrão, Director of Sustainability at Mercan Properties

In this edition of Meet the Expert, we speak with Hugo Padrão, Director of Sustainability at Mercan Properties. Hugo leads the definition of the company's sustainability goals and was responsible for developing Mercan’s first Sustainability Report. This key milestone reinforces our commitment to transparency, accountability, and value creation across our hospitality portfolio.

In this interview, Hugo outlines Mercan’s sustainability priorities, explains what sustainability means for Mercan Properties Group, and highlights our approach to social impact. Learn more about Hugo's work in the following interview.

Now that Mercan Properties Group launched its first Sustainability Report, what are our priorities in terms of sustainability goals?

Launching our first Sustainability Report marks a defining step in Mercan’s evolution. It reflects a Group ready to transparently assess the impact of its business model and set clear, measurable sustainability goals.

Our priorities focus on strengthening the environmental performance and long-term value of our hospitality portfolio. We are committed to ensuring that both operating and future developments meet recognized environmental certification standards. At least 80% of new developments will launch with a green certification strategy from the design phase, and 100% of hotels will obtain a recognized green certification within one year of operation.

We are also embedding sustainability across procurement and investment processes by integrating ESG criteria into supplier engagement and formalizing ESG risk and impact assessments in all new investment decisions.

Finally, we are implementing digital environmental monitoring systems across operational hotels to track energy, water and waste performance, enabling data-driven efficiency and continuous improvement.

Together, these priorities aim to future-proof our assets, strengthen operational resilience and ensure sustainable value creation aligned with evolving market expectations.

What does “sustainability” mean across the Group?

We are doing business in an increasingly unpredictable world, exposed to growing environmental and social risks. Adapting to climate risks, resource constraints and evolving societal expectations is shaping how companies operate today.

Evolving into a truly sustainable organization requires resilience, but above all cultural alignment across all ESG dimensions. In a Group as diverse as Mercan, this means embedding environmental, social and governance considerations into every stage of our business model, integrating them into decision-making, governance and performance rather than treating sustainability as a parallel initiative.

In practice, this translates into more efficient buildings within our hotel and F&B portfolio, responsible sourcing and smarter resource use. Across our supply chain, it means aligning partners with higher sustainability standards. Recruitment is equally crucial, as building a diverse workforce that shares the Group’s values increases innovation, engagement and long-term performance. In areas such as water and resource management, it requires continuous monitoring and efficiency improvements to reduce environmental impact while maintaining the high standards of guest excellence.

Ultimately, sustainability across the Group enables Mercan to connect development, investment and operations within one coherent approach, strengthening the resilience and credibility of our hospitality portfolio and ensuring alignment with the expectations of our investors and the markets in which we operate.

On the “Social” side of ESG, what are Mercan’s priorities when it comes to people and communities - such as employee wellbeing, diversity & inclusion, supply chain practices, and local community impact?

Mercan’s business model has always been designed around people. Our projects are developed with a long-term view, aiming to generate economic activity, employment and lasting integration within the communities where we operate.

On the employee side, our priority is to foster long-term talent retention and internal growth. We are strengthening career development pathways, promoting internal mobility and reinforcing structured recognition and performance systems, while advancing diversity, equity and inclusion across all operations. We remain committed to maintaining full health insurance coverage for full-time employees and continuously enhancing well-being and mental health programs.

Beyond our internal teams, we focus on deepening positive community impact. We support local economic integration across project phases and collaborate with regional services and suppliers. Our hotel infrastructure incorporates public-facing spaces such as green areas, restaurants and wellness facilities that strengthen community access and regional vitality. We also encourage all hotel units to carry out community engagement initiatives that generate social, cultural or environmental value aligned with brand ESG standards.

How is the evolving European ESG regulatory framework shaping Mercan’s strategy and operations, both today and in the years ahead?

Europe has developed one of the most robust and demanding ESG regulatory environments globally. Instruments such as the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR) have significantly increased transparency, comparability and accountability, positioning the region at the forefront of sustainable finance.

For Mercan, this regulatory evolution directly shapes our strategy and operations. We chose to align our first Sustainability Report with the CSRD framework, conducting a double materiality assessment that evaluates both our environmental and social impacts and the financial risks and opportunities linked to sustainability. This process has allowed us to integrate stakeholder expectations into our strategy and strengthen governance, data management and decision-making processes.

Beyond reporting, we are committed to progressively aligning our investment approach with internationally recognized frameworks such as the Principles for Responsible Investment and GRESB, reinforcing the integration of ESG criteria into capital allocation decisions. Although alignment with the EU Taxonomy is not yet mandatory for Mercan, we view it as a strategic decision that enhances asset quality, facilitates access to green financing and protects long-term value. International building and sustainable hotel operation certifications further elevate the technical and operational performance of our assets and support alignment with broader regulatory expectations.

Looking ahead, regulations such as the Empowering Consumers for the Green Transition Directive and the Corporate Sustainability Due Diligence Directive will increase scrutiny over ESG claims and formalize due diligence obligations across value chains. In anticipation of this shift, we are already advancing structured work within our value chain to strengthen risk assessment, supplier alignment and governance mechanisms.

Ultimately, regulation sets common ambition and enhances transparency, but companies are the true agents of transformation. The challenge lies in translating global commitments into operational execution, turning compliance into resilience and sustainability into competitive advantage.

Sustainability is increasingly central to how hospitality assets are developed, operated, and valued, and Mercan is taking a structured, measurable approach to that transformation. The actions we took yesterday are shaping the days we live now, and the values we'll share tomorrow.