Sustainability Management

Our Sustainability Approach

As a sustainable and responsible residential real estate company, Vonovia believes that it has a particular obligation toward its customers and, at the same time, toward society and its shareholders. In all of its three core markets, Vonovia takes responsibility as a provider of affordable housing, as a service provider, building contractor and developer as well as in its role as a corporate citizen. Sustainability is an integral part of our business model. Our customers and the sustainability of our activities are both at the center of our strategy. Vonovia’s business model allows it to provide answers and solutions to issues such as the shortage of housing and climate protection – also by building new homes. Vonovia makes a decisive contribution to solving the current issues facing our society by providing homes and neighborhoods that have undergone energy-efficient and senior-friendly modernization measures and meet state-of-the-art standards, as well as by implementing vertical expansion projects and building new homes. 102-44

Our business model is integrated into social and ecological change processes. For us, these include the following megatrends in particular (see AR 2019, Societal Megatrends):

• Climate change
• The housing shortage and urbanization
• Demographic change and the need for senior-friendly homes
• Integration

We systematically incorporate the developments associated with these processes into our business decisions.

Vonovia defines sustainability as ensuring that the company has a license to operate, meaning that its business model is comprised of corporate activities that are of benefit to society as a whole. Sustainability is a firm feature of our business strategy and our business model. From Vonovia’s perspective, sustainability is about operating in a manner that ensures that our business activities benefit society as a whole in the long term, meaning that we can maintain the social license to operate we need in the long term.

As a real estate company with a long-term focus, we aim to strike a balance between economic activity on the one hand, and social responsibility and ecological objectives on the other. Our business activities, which involve 356,000 apartments and one million customers, embrace the three aspects of sustainability: environmental (E), social (S) and governance (G). We review the impact that our business activities have on these three areas on a regular basis, and take their impact on our business into account.

(E) Environmental: Our environmental commitment refers to our energy-efficient building refurbishment measures, the use of renewable energy, ecological and social supply chain management, sustainability in the use of construction materials in our modernization and new construction measures as well as moves to ensure biodiversity when it comes to designing green spaces and residential environments.

(S) Social: Vonovia’s social commitment includes the provision of affordable and suitable homes, while at the same time complying with an appropriate level of regulations and adhering to voluntary commitments. At the same time, we aim to ensure that our neighborhoods, i.e., our tenants’ living environments, are designed to foster integration. Our social commitment also involves the measures aimed at our employees and our efforts to value the contributions that they make.

(G) Governance: Governance means acting in accordance with the principles of lawful and responsible management, protecting human rights and ensuring sustainable financing in the process.

In the period under review, we launched a strategy process that saw us start to develop a sustainability strategy for the entire company. The strategy will be geared toward the three ESG dimensions and will define clear targets. We will be developing the sustainability strategy and the associated road map for achieving our sustainability objectives further in 2020 (see section Sustainability Road Map 2019–2020).

Framework

Vonovia’s sustainability activities are based on the laws and regulations that apply in the countries in which we operate. In addition, numerous national and supranational standards and agreements serve as a guide for the design of our sustainability concept. This includes, for example, the 2015 Paris Agreement and the German government’s 2050 climate protection plan as well as upholding human rights and working standards, fulfilling our duty of care and adhering to safety provisions. We are also keeping an eye on developments such as the discussion on the EU-wide classification system for sustainable and environmentally friendly investments (“EU taxonomy”). In addition, Vonovia will, in future, be focusing explicitly on selected UN Sustainable Development Goals (SDGs) on which its business model has an impact in one way or another. We will be selecting these SDGs as part of our sustainability strategy in 2020 and in accordance with our Mission Statement and Business Philosophy. We will report on this process in detail in the 2020 Sustainability Report.

We revamped our Business Philosophy in 2019. We use this to 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.

Organizational Establishment in the Company 102-18, 102-19

The CEO of Vonovia SE is responsible for sustainability at Vonovia. The Supervisory Board supports and monitors this issue in the Audit Committee. 102-20

In 2020, we will focus more strongly on the issue of sustainability in our company and implement a new organizational structure for this. In the new “Sustainability/Strategy” department, we will be pooling the large number of sustainability-related activities from across the Group and driving them forward. This will also allow us to ensure that sustainability issues can be dealt with as part of a structured and cross-departmental approach. At the same time, we are aiming to use the new structure to provide impetus for new initiatives.

The new “Sustainability/Strategy” department will report directly to the CEO in the future. The existing sustainability specialist role will be transferred to this new department. A Sustainability Committee will also be established, comprising the entire Management Board as well as the heads of Sustainability, Controlling and Corporate Communications. The new committee is to meet around three to four times a year and will be responsible for making important decisions on the continued focus of the company’s sustainability strategy and objectives.

The “Sustainability/Strategy” department will be charged with developing Vonovia’s sustainability strategy and road map further in collaboration with the specialist departments. This will include identifying and following up on defined sustainability objectives that can be implemented in a commercially viable manner, initiating sustainability projects covering all stages of Vonovia’s value chain, implementing reporting and sustainability communications as well as the varied requirements relating to governance (e.g., developing and amending guidelines, reporting requirements) and maintaining contact with all operational areas and specialist departments.

Sustainability in Vonovia’s Organizational Model

The sustainability topics will be dealt with and implemented in operational terms by the specialist departments and operational areas of the line functions of Vonovia SE. Those responsible for certain areas will ensure that sustainability issues are integrated into day-to-day business, pilot projects and research initiatives.

In Austria and Sweden, there are central functions responsible for sustainability. You can find more information in the chapters Austria – Sustainability at BUWOG and Sweden – Sustainability at Victoria Park.