Integration of Sustainability into the Corporate Strategy
For us, sustainability is not merely an end in itself, but a core component of our corporate self-image, which we have anchored even further into our corporate strategy in 2020. For us, translating strategic objectives into our corporate processes is a task that can only be successfully implemented with the cooperation of all Vonovia employees. That is why we are involving numerous divisions and departments in this project.
In our view, corporate strategy at Vonovia has reached a high level of maturity and has proven its viability and flexibility in recent years. We were able to sustainably improve customer satisfaction, address new requirements and successfully establish new business models. This strategy continues to consist of the four basic approaches of the Property Management strategy, the Financing strategy, the Portfolio Management strategy and the Value-add strategy. The two strategic approaches of opportunistic acquisitions and internationalization reinforce and complement the four basic approaches (4+2 strategy).
More detailed explanations of the 4+2 strategy can be found in the 2020 Annual Report.
In 2020, we analyzed and further developed the corporate strategy in light of the megatrends and stakeholder expectations described above, assessed its impact on the business model of the future, and realigned it in terms of content and organization with regard to sustainability. In doing so, we specifically address the current sustainability requirements of the Sustainable Development Goals (SDGs) of the United Nations as well as the concrete ESG (Environment, Social and Governance) targets of European and national regulations.
In concrete terms this means for us:
E: With the climate plan developed in 2020, we are committing to the goal of a climate-neutral building portfolio by 2050.* This requires both a more consistent level of refurbishment than in the past and increased, decentralized use of renewable energies for heating and powering neighborhoods (see action area Environment and Climate and action area Sustainable Construction and Development).
S: We assume social responsibility for our tenants and employees. In doing so, we rely on a socially responsible, reliable rent policy and see the expansion of a social infrastructure incorporating innovations and new technologies in our neighborhoods as an integral part of community development projects in order to shape urban, ecological and affordable housing in a socially responsible manner. We offer our employees an attractive working environment characterized by diversity and personal scope for development (see action area Homes and Customers, action area Society and Contribution to Urban Development and action area Corporate Culture and Employees).
G: We are committed to governance that is reliable, transparent and trustworthy, and based on the international practice of good corporate governance. Compliance with applicable laws and internal and external guidelines is an absolute prerequisite for us to be perceived as a reliable and trustworthy partner (see action area Governance and Responsible Business Practices and action area Future Fitness and the Capital Market).
We also want to create transparency and reliability through our sustainability reporting. We have therefore had this Sustainability Report externally certified with a limited assurance engagement (see Auditor’s Report).
A key element of strategy development is establishing the Sustainability/Strategy department, which is directly attached to the CEO of Vonovia in organizational terms. We have also established a sustainability committee in which both the full Management Board and other relevant decision-makers in the company are represented. The committee has a managerial function and enables us to bring sustainability issues directly into the company via the Management Board in line with our strategic objectives (see section Organizational Establishment in the Company).
Due to the integration of BUWOG’s property development business and our ongoing internationalization in Austria and Sweden, we have revised our materiality analysis. With the involvement of all relevant stakeholder groups, we implemented this process in the summer of 2020 and reviewed the key strategic sustainable action areas of our sustainability activities (see section Key Topics).
In order to successfully operationalize our corporate strategy, we are expanding our management system to include non-financial performance indicators as of the 2021 fiscal year. In the future, the Sustainability Performance Index (SPI) will serve as a key performance indicator throughout the Group on an equal footing with financial indicators. It consists of six key figures derived from the material topics at Vonovia, and for which specific targets have been defined up to 2024. The key figures are recorded quarterly by Controlling and used in our external reporting and for communication with the capital market. The SPI will also be incorporated into the long-term remuneration of Management Board members and senior executives. This was approved by the Annual General Meeting in April 2021.
* Current legal status; we will review the amendments to the German Climate Protection Act planned for this year once they have been passed and incorporate these into our strategy.