Environmental – Climate and Environmental Protection

The topics of climate and environmental protection are becoming much more important – and not just in the eyes of the public. In Germany, the federal government responded to this by implementing a climate action package in late 2019 designed to allow the country to meet the objectives set out in the 2015 Paris Agreement. The package created a statutory basis for sector-specific climate targets and CO₂ pricing for the very first time. As far as the buildings sector is concerned, this means slashing greenhouse gas emissions in Germany by almost 39% from 118 million metric tons in 2020 to 72 million metric tons in 2030. Vonovia intends to live up to its responsibility in this area and supports the federal government’s climate protection targets. The long-term aim is to achieve a virtually climate-neutral housing stock by 2050.

Within this context, the topic of biodiversity is also becoming increasingly important – be it with regard to species protection, adjusting to the implications of climate change or regarding the responsible use of natural resources. Here, too, Vonovia is actively committed to creating an ecologically valuable residential environment.

Climate and Environmental Protection in Our Portfolio

Climate and environmental protection in our properties includes issues such as energy efficiency and reducing greenhouse gas emissions in the portfolio, environmental protection in the portfolio and environmental protection in connection with renovation and new construction measures (see Materiality Matrix).

Vonovia contributes to greenhouse gas emissions via the construction and operation of residential buildings. The overwhelming proportion of these emissions are attributable to existing buildings. Although we can only influence the energy and resources that our tenants consume to a limited extent in our role as landlord, energy-efficient building upgrades and moves to replace inefficient heating systems are the biggest lever that our company has when it comes to reducing energy consumption – and, as a result, greenhouse gases. As a result, Vonovia is sticking to the target set back in the 2017 Annual Report, in which it pledged to perform energy-efficient refurbishment measures on at least three percent of its own buildings every year. The energy-efficient modernization measures focus on heat insulation for facades, basement ceilings and attics, the replacement of windows and the installation of new heating boilers. We pursue a needs-based approach to these measures and take care to choose the optimal degree of modernization for each building. Partial modernization, i. e., the decision to only perform individual modernization measures, is often a better way of achieving an efficient cost/benefit ratio than a full modernization project. Our modernization efforts are also being expanded in Sweden, in particular. Public-sector subsidy programs are being used for many of the energy-efficient modernization projects. Modernization projects planned for Berlin in 2019 were postponed due to the plans to introduce the rent freeze. This reduced our renovation rate from the 4.0% we had originally planned to 3.7%.

These efforts are countered by waning acceptance of energy-efficient modernization among the population. For Vonovia, this means that we are confronted with, and have to navigate our way through, the conflict between energy-efficient solutions and rising costs for tenants on a day-to-day basis. The aim is to achieve both objectives simultaneously: affordable and climate-neutral homes for everyone. In order to get all stakeholders on board in this discussion, Vonovia has launched a long-term dialogue process. In 2019, the dialogue program included a parliamentary evening with the Federal Minister for the Environment and a conference entitled “Outlook for climate-neutral housing” with professional support provided by the Fraunhofer Society and the German Energy Agency involving 85 participants from the fields of politics, academia, tenant representatives and environmental associations. The conference outcomes are being explored in greater detail by a number of working groups and will be presented to the public at another climate conference to be held in mid-2020.

Over and above energy-efficient building upgrades, we are also focusing more on ensuring that our new buildings are optimized from an energy efficiency perspective and use construction methods aimed at preserving resources. We take into account low-emission construction and energy-efficient operational management as early as the planning and construction stages. The Group can benefit from further expertise in this regard thanks to BUWOG Group GmbH, a long-standing partner of the ambitious “klimaaktiv pakt2020” launched by the Austrian Federal Ministry for Sustainability and Tourism. BUWOG has had an ISO 50001-certified energy management system in place in Austria since 2013/14, which features both established processes and a written energy policy. This tool for the professional management of energy-related issues was expanded to cover the area of development in Germany in 2018.

The second big lever for improving our environmental footprint is the expansion of decentralized energy supplies using renewable energies. With this in mind, we had already conducted a solar cadastre analysis in 2018, discovering considerable potential for solar energy on around 5,000 roofs in our portfolio. Our “1,000 roofs” program was rolled out in the summer of 2019, the aim being to equip at least 1,000 roofs with photovoltaic facilities over the next few years. The “1,000 roofs” program will allow Vonovia to produce around 10,000,000 kWh of solar power annually and feed it into the public grid. In the mid- to long-term, Vonovia is seeking to decentralize the energy supply to its own neighborhoods using tenant electricity concepts.

Vonovia also uses other renewable energy generation systems such as cogeneration units, geothermal energy systems or biogas plants.

Vonovia is offering its customers the opportunity to purchase electricity from renewable energy sources via its own energy distribution company. This offer is aimed primarily at new customers when they sign a lease agreement. By supplying certified green electricity, Vonovia is expanding the options available to it for promoting climate protection and is helping customers to avoid greenhouse gas emissions.

In addition, Vonovia is also using numerous cooperation projects (with scientific support) and integrated approaches, for example, the Energiesprong concept, in its quest to find new solutions for energy efficiency and climate neutral buildings. These efforts, which were stepped up considerably again in 2019, are based on the realization that neither energy-efficient building upgrades in their current form nor the expansion of renewable energies will be sufficient to achieve the objective of establishing a virtually climate-neutral building stock by 2050. This is an area in which Vonovia sees itself as a pioneer in development.

In addition to buildings, the residential environment is also a major factor when it comes to protecting our climate and the environment. Smart measures to create green spaces, for example, are helping to improve air quality in conurbations and have the capacity to cool urban heat islands, alleviate the consequences of heavy rainfall and improve biodiversity. Municipalities, associations and tenants are also increasingly expecting this sort of contribution from a landlord with outdoor spaces spanning more than 40 million square meters. Vonovia started to expand its biodiversity activities considerably in both Germany and Austria in 2019. Moves to turn utilitarian lawns into meadows of wild flowers, the installation of insect hotels or an active rainwater and waste management system are the first visible signs of this development, which will be intensified further in the years to come. Vonovia and Naturschutzbund Germany e. V. (NABU), Germany’s largest environmental organization in terms of membership, have concluded a two-year collaboration agreement within this context. According to NABU, Vonovia is the first company from the German housing industry to take this step. Similar concepts are in place in Sweden.

Climate and Environmental Protection in Our Own Business Activities

This section looks at company environmental protection and the impact of transportation/logistics (see Materiality Matrix).

Compared with the lever that climate and environmental protection measures relating to our housing stock have, changes to our business processes have much less of a potential impact. Nevertheless, we continuously seek out opportunities to increase our level of resource efficiency and reduce our impact on the climate and the environment in our internal processes as well. For example, 100% of the electricity supplied to our corporate headquarters, which we moved into in 2018 and which have been awarded a Gold standard certificate by the German Sustainable Building Council (DGNB Gold), is green electricity. In the medium term, we aim to expand this concept to also include other company locations wherever possible.

Vonovia maintains an extensive fleet of around 5,200 vehicles in Germany. This means that fleet management plays an important role in climate and environmental protection. While our fleet will continue to grow in tandem with our business over the next few years, we aim to use scheduling and route planning as well as lower-consumption vehicles, to ensure that the increase in fuel consumption and, as a result, in our CO₂ emissions is less pronounced than the increase in the fleet itself. Pilot projects are also being used to test alternative drive models for their suitability for day-to-day use in long-term field trials.

All of these measures aim not only to reduce costs, but also to reduce the energy that needs to be used. This applies both to average fuel consumption and to the total energy used in our business operations. These are to remain at least constant, but ideally drop, in 2020.