Inclusion of Sustainability Aspects
The strategy Vonovia introduced at the time of its IPO has reached a high degree of maturity and has proven its viability and flexibility. It achieved sustainable improvements in customer satisfaction, addressed new demands and successfully established new business models. This strategy still consists of the four basic approaches: the property management strategy, the financing strategy, the portfolio management strategy and the Value-add strategy. The two additional approaches, making acquisitions as and when opportunities present themselves and pursuing internationalization, continue to support and round off the four basic approaches.
Not only the increasingly dynamic development of megatrends, but also the ever louder call by various stakeholder groups for a sustainable business model, prompted Vonovia to scrutinize its strategy, which has proved so successful to date. In particular, it has addressed sustainability aspects, supplemented the company’s sustainability strategy in a targeted manner, thus ensuring the future viability of both the strategy and the business model.
As part of this ongoing strategic development process, Vonovia analyzed the dynamic development in megatrends and stakeholder expectations, assessing the impact that they could have on the business model in the future. As a result, the topic of sustainability was completely repositioned in terms of its content and organization. The aim is to forge ahead with the incorporation of sustainability into the company’s strategy and processes across the board.
This refined strategy also specifically addresses the UN’s Sustainable Development Goals (SDGs) as well as the specific ESG targets set by European and national standard setters. The integration of sustainability into the strategy is reflected in the expansion of the management system to include non-financial key figures, in particular in the form of the introduction of the Sustainability Performance Index from 2021 onwards.
The updated strategy, which will continue to have a commercially successful business model at its core in the future as well, explicitly addresses the following sustainability issues:
- Voluntary commitment to climate protection objectives and reducing CO2 (E)
- Social responsibility for our tenants, customers and employees (S)
- Trustworthy, reliable and transparent corporate governance based on the best-practice guidelines set out in the Corporate Governance Code (G).
With regard to the objective of achieving a climate-neutral housing stock, the current efforts relating to energy-efficient building shell refurbishment and the renovation of heating systems are not, however, sufficient in order to achieve the climate targets that have been set. We will need to embark on more extensive refurbishment measures, combined with a mix of renewable energies to move away from carbon-based energy supply via optimized sector coupling. Sustainable new construction using sustainable construction materials and paying attention to the responsible handling of effluents and waste are other important aspects. In Bochum–Weitmar, the first energy research and development center for the portfolio is being established with the Powerhouse of the Future.
Solutions for climate protection in the housing industry using innovations and new technologies will be implemented in our neighborhoods in a cost-effective manner to allow us to continue to design urban, environmentally-friendly and affordable housing in a socially responsible manner. Another way in which Vonovia lives up to its social responsibility is via its neighborhood development projects.
In the future, trustworthy, reliable and transparent governance will be supplemented to include ESG risk management that also takes the recommendations made by the Task Force on Climate-related Financial Disclosure (TCFD) into account. In the future, all decisions will be evaluated with regard to their impact on sustainability aspects before they are made.
Vonovia had already set up an organizational unit reporting to the CEO to coordinate and promote sustainability aspects in the context of the strategy and the business model, as well as being responsible for external sustainability reporting. A steering group, the Sustainability Committee, has also been set up. It includes the entire Management Board as well as the individuals responsible for sustainability, corporate communications, controlling, accounting and business innovation. In order to calibrate its sustainability endeavors correctly, Vonovia conducted a new materiality analysis, defining areas for action and developing a sustainability roadmap based on the results. In addition, opportunities and risks resulting from the various areas for action are monitored as part of the risk management system. All future decisions will be made taking sustainability into account.