Future Viability and the Capital Market
Overview of the Action Area
We can only be sustainable if we are also commercially successful. We want to grow as a company and contribute to sustainable development in our sphere of influence at the same time. This also makes us attractive to investors, who are attaching increasing importance to sustainability.
Vonovia SE has been publicly listed since 2013. Our share has been traded in the DAX 30 index since 2015. We consider our securities to be an attractive prospect for those interested in a long-term investment with stable and reliable dividends and a sustainable increase in value. Capital markets also give Vonovia access to external capital and important financing opportunities. Our successful growth and the performance of our share to date have met these expectations – even in a year marked by the coronavirus pandemic. We are pursuing growth with a sustainable corporate strategy in attractive European markets, while also ensuring access to modern housing at fair prices.
- Stability of the business model proven – despite the pandemic
- Positive business development once again
- First residential real estate company listed in the EURO STOXX 50
- Sustainability risks incorporated into risk management
- Green Bond Framework published and first green bond issued (March 2021)
- Substantial improvement in some ESG ratings and included in Dow Jones Sustainability Index Europe
Investors and analysts are increasingly focused on sustainability and ESG (environmental, social and governance) criteria, which often form the basis for targeted investment decisions. We therefore consider it vital that we contribute to sustainable development in areas within our sphere of influence. We implemented a wide range of measures in 2020 as part of our commitment to integrating sustainability into our corporate strategy. One key element is the implementation of the Sustainability Performance Index (SPI) as a key performance indicator from 2021 onwards.
In order to remain an attractive prospect on the capital markets, Vonovia is committed to communicating its ESG activities to all stakeholders and using rating systems to evaluate their effectiveness. Vonovia was able to achieve a substantial improvement in a number of ESG ratings in 2020. For example, we achieved an excellent result in the Sustainalytics ESG Risk Rating, received Prime status from ISS-oekom for the first time and were included in the Dow Jones Sustainability Index Europe. These internationally acknowledged sustainability ratings provide guidance to investors on the extent to which companies have incorporated ESG criteria into their business operations. Our good performance in these ratings systems shows capital market participants that Vonovia is a strong candidate for sustainable investment. We also began developing a Green Bond Framework in 2020 so that we can issue green bonds as additional financing instruments. On this basis, we were able to issue our first green bond with a volume of € 600 million in March 2021, which was met with very high demand and was also certified by the Climate Bond Initiative.
Policymakers, companies and the capital markets are also increasingly focused on sustainability risks. Investors tend to favor companies that factor these risks into their decision-making processes. This applies both to potential risks that could affect business operations and how these operations impact the environment and society. To do justice to both, Vonovia identified sustainability risks in a wide-ranging project in 2020 and integrated them into its existing risk management system (see the risk report in the 2020 Annual Report). We have published information about the risks to which we are exposed as a result of climate change in the Annual Report and in this sustainability report in line with the recommendations of the Task Force on Climate-Related Disclosures (TCFD) (see Implementation of the TCFD Recommendations)
Digitalization is a key part of our sustainability strategy and is playing an increasingly important role in our communication with tenants and within the company. The coronavirus pandemic accelerated this trend and showed that we are already on a very good track. We are implementing a variety of digitalization projects with partners on the basis of the Vonovia Business Partner Code and our Code of Conduct. We believe it is very important to build long-term relationships, both with our business partners and our customers, the tenants. Vonovia is using digitalization to streamline its processes in this respect.
The materiality analysis performed in 2020 identified the topic of Appeal on the Capital Market as material in the action area of future fitness and capital markets. Other important topics are Sustainable and Long-term Growth, Digitalization of Processes, Risk and Opportunitie Management and Sustainable Relationships with Business Partners.