Dear Readers,

In these difficult months for society, we are experiencing how important it is for everyone to pull together: science, business, politics and the public. We will only get the coronavirus under control by working together. This is also the case with the other issues that currently concern us: social cohesion and demographic change, the housing shortage in cities, and sustainability.

Our tenants can rest assured that they will not have to fear for their homes. This is included in our business philosophy. During the pandemic, we underlined this promise once again. We have waived rent increases for many months. We have stopped contract terminations. We continue to offer help when finances are tight. No one has to move out of their apartment because of the pandemic. Our hardship case management and our over-70 scheme are working.

And when the Federal Constitutional Court ruled a few weeks ago that Berlin’s rent cap was unconstitutional, we demonstrated once again what we mean when we say we are a reliable and responsible landlord: In Berlin, Vonovia is waiving rent claims of up to € 10 million. There are a lot of tenants who did not follow the government’s advice of putting aside the saved rent in the event the rent cap was overturned. We do not want to put our tenants in the situation of having to disclose their entire income situation.

Of course, the waiver on paying the additional rent does not solve the real problem – the housing shortage in metropolitan areas. That is why we are continuing to invest specifically in constructing affordable housing. Last year, despite the coronavirus pandemic, we were able to complete more than 2,000 apartments.

Politicians around the globe now agree that the issue of sustainability will determine the future viability of our planet and our society. And policymakers have responded to this realization, including in Europe – the EU Commission’s Green Deal envisages Europe becoming the first continent to reduce greenhouse gas emissions to almost zero. In Germany, following the requirement by the Federal Constitutional Court in April for clearly measurable steps to be taken beyond 2030, we can expect further regulations to follow in the summer. For the economy, this is a clear mandate to act.

For our part, regardless of what is to come, we have accepted the task and defined a binding climate path for Vonovia, one that will lead us to a carbon-neutral building portfolio.

We will not achieve this goal with energy refurbishment alone, despite the significant savings we regularly achieve as a result. We are working with partners to develop innovative concepts to close the gap. In a pilot project in Bochum-Weitmar, we are demonstrating a building block with which we can make this work – using electricity from photovoltaic systems to generate green hydrogen. We store this on site for use in fuel cells. After all, an energy management system ensures that energy is available in the right place at the right time, as electricity or heat. Or for electric charging stations.

To make our progress in sustainability measurable, we introduced a key non-financial metric in 2020. Our Sustainability Performance Index, or SPI for short, measures specific target values that we have set ourselves for the areas of environment, social affairs and governance. In addition to carbon savings in our portfolio, these include progress in the areas of senior-friendly apartment conversion, customer and employee satisfaction, and the proportion of women in management positions. Since this year, the SPI has been a key performance indicator on an equal footing with our financial indicators and is directly linked to Management Board remuneration.

By directly anchoring them into our corporate management, we have once again thoroughly reviewed our sustainability-related topics and further sharpened our focus. In the course of this, our sustainability area has grown and the dovetailing with our corporate processes has further increased. I would like to expressly thank the sustainability team for their essential contribution to the results achieved.

This path is also important for us economically. Investors today only invest in companies that have a precise picture of what they want to contribute to society. We can proudly say that our work is being recognized. We have climbed up to the prestigious Dow Jones Sustainability Index Europe. And we have a top ranking in the sustainability ranking of the Sustainalytics rating agency.

However ... For us, no recognition through rankings can replace recognition by our customers in their daily interactions. And so, in 2020, we continued to expand our services, further develop our neighborhoods and participate in a wide range of projects to strengthen social coexistence.

Our employees continue to form the basis of our sustainable success. For them, we were also a reliable employer in 2020. Despite the crisis, we were able to bring more than 1,000 new people on board last year, plus 200 apprentices. They have all contributed to the many advances that have been made.

Before I recommend further reading, I would like to express once again my personal dismay at the strokes of fate that the pandemic is currently bringing us. I can assure you that I personally and everyone else at Vonovia take every case we hear about as a reminder of our central mission: to be there for people.

Bochum, May 2021

Yours,

Rolf Buch