Annual Report 2019

Business Model and Risk Assessment

A Sustainable Business Model – Serving the Greater Good With Purpose

As a residential real estate company, Vonovia is part of society. Our activities are guided by the principles of the social market economy and, in addition to the financial aspects, it has taken social factors into account as well; after all, a home is a basic human need.

This is why we take responsibility for safe, good-quality and affordable housing and offer homes for everyone. For us, this means providing needs-based and good living standards, an intact residential environment that protects our climate and biodiversity, and neighborhoods that are functioning and appealing at the same time. Then, there is our commitment to building new apartments. Our activities focus on our customers and their needs. We offer long-term benefits for society and nature – and make an active contribution to the greater good.

In this respect, the social acceptance of our activities is of particular importance. Sustained earnings power can only result from a sustainable and socially accepted business model. This is why we take social discourse on how housing should be organized very seriously and actively (help) shape developments. After all, the challenges facing the housing market can only be solved in a joint effort involving all social and political players. As a general rule, we include all stakeholder groups in these discussions and launch local and supraregional dialogue formats.

We revamped our business philosophy in 2019. In it, we show what we stand for at Vonovia and where we see our role in society. It serves as a guiding framework for our company’s employees and external stakeholders alike. In addition, it also sets out the values we want to be measured against.

The corporate strategy and structure of Vonovia SE has been further explained in the chapter entitled Fundamental Information About the Group. The corresponding non-financial performance indicators are set out in more detail under Management System.

An Extensive Risk Assessment

According to CSR-RUG, material risks associated with the corporation’s own business activities which are very likely to occur and which could have challenging negative effects on non-financial topics and, as a result, on the business model must be reported. We identify potential risks relating to areas such as corporate governance, society and the environment as part of our comprehensive risk management system. These risks are identified in both gross and net terms.

In the opinion of Vonovia’s management, there are no risks that meet the materiality criteria pursuant to Section 289c (3) Nos. 3 and 4 HGB in net terms. We have provided detailed information on other risks in the opportunity and risk report of the combined management report.