Human Rights Due Diligence and Supply Chain

Our Commitment to Respecting Human Rights

The European legal framework in which Vonovia operates with its business model is strictly regulated and overseen in the markets in Germany, Austria and Sweden. This applies in particular to fundamentally enshrined human rights, to which Vonovia attaches great importance irrespective of the legal framework. Compliance with, and the fostering of, these rights is reflected in our ethos and mission statement.

Due to the Supply Chain Due Diligence Act and the announced European regulation, the way in which supply chains are structured and the due diligence obligations associated with this are of increasing importance to the company. In our Declaration of Respect for Human Rights, we communicate our clear conviction for a pluralistic democratic society and zero tolerance of human rights violations. We adhere to the core labor standards of the International Labour Organization (ILO), the UN Guiding Principles on Business and Human Rights, and the principles of the UN Global Compact, which we committed to in 2020.

Responsibility in the Supply Chain

Value chains are often global and complex – creating transparency in supply chains is a challenge for many companies. Almost all of our direct suppliers are based in the European Union.

Vonovia’s business model includes the construction, maintenance and modernization of homes. We are aware of our social responsibility as a company active in this important sector. Our constant aim is to prevent or minimize the risks associated with our business activities.

In terms of human rights, the mining of raw materials and manufacture of construction materials is particularly relevant in our upstream supply chain. Complying with work and social standards on construction sites is also associated with risks. Some trade/construction activities in Germany are carried out by our own technical service – and therefore by our own employees. This lessens dependency on the services of external construction companies and – thanks to the measures established in the company’s own business area – the risk of noncompliance with labor and social standards.

We strive for full transparency in our compliance with human rights and all relevant standards along the entire supply chain. Our stakeholders, too, increasingly expect this transparency – from raw material extraction to sales. We therefore oblige external partners and service providers to comply with the following requirements:

• The Business Partner Code
• The general terms and conditions of purchasing
• Vonovia SE’s general terms and conditions for building services,
• Vonovia SE’s general terms and conditions for planning services and
• Individual agreements as part of our structured supplier management

Cooperation with our Suppliers and Supplier Reviews

Our Business Partner Code for contractual relations in Germany and Austria must be signed by all domestic and foreign suppliers before contract completion. In the Business Partner Code, we set out, among other things, all material requirements necessary for compliance with human rights – from legal conformity and the fulfillment of legal standards for working conditions to an assurance of freedom of association and the exclusion of child labor, forced labor and discrimination. The Code is regularly updated. The next update is scheduled to take place in 2023.

BUWOG’s (Austria) Business Partner Code was reviewed in the reporting year and adapted with regard to the whistleblower system in particular. Our Swedish subsidiary Victoriahem also has its own Code that is regularly reviewed and adjusted to superordinate requirements. In the first quarter of 2023, Victoriahem reviewed both the Code of Conduct for its own employees and the Supplier Code of Conduct for necessary changes.

The use of sustainable materials and products (see Sustainable Materials and Products) in new construction and refurbishment has an impact on the climate and the environment. Raw materials in buildings are valuable resources that can be fed back into a circular economy in various different ways. The entire life cycle of the materials used, including in cooperation with suppliers, should be taken into account for all new construction and conversion projects. We require our partners to take the requirements of our product manual into consideration in order to promote the procurement of sustainable materials. In addition, we have formulated specific environmental criteria in Sweden that all new suppliers that we work with must fulfill. Existing supplier agreements will be updated by 2025 or will come to an end by then.

The Vonovia partner portal also plays a vital role in our sustainable approach to supplier management. The portal serves to log qualifications and check whether suppliers adhere to social and environmental standards and human rights, and is connected to our whistleblowing system. In the event of incidents and breaches, a structured management of measures is activated, which – once all other means have been exhausted – may result in blocks on orders and termination of contract. A comparison with the EU sanctions list is performed automatically before the completion of every contract in Germany. In the 2022 reporting year, this requirement was also taken over by Victoriahem and established as part of the supply review. This comparison is also due to be introduced in Austria in 2023. The partner portal for BUWOG Austria went live in November 2022. The first assessment of a significant business partner is planned to take place in 2023. In addition, the BUWOG partner portal will be expanded further in 2023 and business partners added in line with the Group guidelines.

Compliance with the Requirements of the Supply Chain Due Diligence Act

In the reporting year we closely examined the requirements of the Supply Chain Due Diligence Act (LkSG). This also includes reviewing existing guidelines, codes and processes as well as establishing responsibilities. In the course of this process, we updated our Declaration of Respect for Human Rights and republished it in the form of a Group guideline in January 2023. We will publish the first report on Vonovia’s compliance with human rights due diligence in 2024.

The Chief Compliance Officer was appointed Human Rights Officer as of January 1, 2023, and will report regularly to the Management Board in the future. He will be supported by a committee that brings together due diligence coordinators from relevant departments and meets at least once every quarter. In the reporting year, we looked at how we can plan training sessions in order to further improve awareness of our human rights and environmental due diligence obligations among employees in relevant business areas in the future.

The procurement department, with other departments, organized further workshops in order to determine the human rights risks in different groups of goods. The abstract risk analysis pursuant to LkSG showed priorities in the following areas for ensuring we meet our due diligence obligations:

• Fair working conditions (appropriate pay and social security)
• Occupational health and safety
• Freedom of association
• Anti-discrimination and equal opportunities
• Privacy and data protection
• Demolition and recycling of building materials, chemicals that contain persistent organic hazardous substances, and environmentally correct disposal of waste, and
• Prohibition of forced labor as well as child labor

A detailed risk analysis will be performed for the supply chain and the company’s own business area in 2023.

Update of the Procurement Department’s Group Guideline

In the reporting year, we revised the Group procurement guidelines to further strengthen compliance with due diligence obligations and internal governance procedures, among others. A new chapter was also added to supplier management in order to establish and implement the requirements of the LkSG. The new guidelines apply throughout the Group and have been in effect since January 1, 2023.

We also started the gradual integration of Deutsche Wohnen’s suppliers into Vonovia’s partner portal in the reporting year. The structures of Vonovia’s central procurement department were transferred to the Deutsche Wohnen subgroup. The procurement department has been assigned to the Chief Transformation Officer's (CTO) Management Board function since January 1, 2022.