Sustainable Governance and Responsible Business Practices
Opportunities and Risks
Vonovia has been listed on the Deutsche Aktienindex (DAX) since 2015. It became the first residential real estate company to be listed on the EURO STOXX 50 index in 2020, and is currently the only real estate company on the index. Access to external capital is a fundamental prerequisite for our success. In the 2022 reporting year, the market was characterized by high rates of inflation, rising interest rates, a slowdown in economic growth and indications of a risk of recession. This was also reflected in Vonovia’s share price.
ESG criteria is becoming increasingly significant in investment decisions and sustainable financing options. Failure to meet ESG expectations presents risks up to being excluded from an investor’s investment portfolio or other access to capital. In contrast, a probably good performance in sustainability issues results in the opportunity of gaining good access to a broad range of financing options. This enables us to continue responding to the challenges facing the housing industry, both now and in the future.
- Stability of the business model proven – despite crises and high interest rates
- Sustainability Performance Index (SPI) at 103%
- New Sustainable Finance Framework (EU taxonomy-compliant) implemented
- Seven sustainable bonds amounting to more than € 4 billion and SEK 1.25 billion issued
- Top ESG ratings defended and expanded – DJSI European member once again
- Declaration of Respect for Human Rights updated
- Independent whistleblower hotline in regular operation for employees and stakeholders; additional channel for reporting discrimination incidents set up
- Further development of training offers for dealing with conflicts of interests and anti-corruption
Sustainability, transparency and corporate success are all mutually dependent; integrating sustainability into business and strategy processes in particular is constantly gaining in importance. With the inclusion of digital work and communication processes in the business world, the structured management of information and data is also growing in significance. This issue is particularly relevant for us as we handle sensitive corporate and personal data. It is extremely important that we keep this data safe in order to avoid a loss of reputation and potential legal fees.
Transparency is the Foundation of our Business
Trust is the top priority for our customers, the capital market, employees and all other key stakeholders. In order to gain trust and maintain it, we have made reliable and transparent corporate governance the foundation of our business. We adhere to laws, guidelines and regulations and manage our business responsibly and independently in line with the principles of good corporate governance.
If we fail to meet the expectations of our stakeholders in terms of responsible corporate governance, this may lead to risks that could have an impact on our business (e. g., liability risks or potential administration fines) and our reputation.
Although the laws in the markets we serve in Germany, Austria and Sweden already offer a secure framework particularly in terms of labor and social standards – such as the Supply Chain Due Diligence Act – human rights aspects are increasingly moving into the spotlight. This applies, for instance, to risks relating to compliance with labor and social standards on construction sites.
As an active member of society, Vonovia is involved with socio-political processes to form opinion. We want to engage with stakeholders on an equal footing and believe that this dialogue makes a valuable contribution along with what we do as a company. As Germany’s largest residential real estate company, we believe there is an opportunity for us to be heard when the public debate focuses on solution-oriented exchanges regarding housing policy.
In the sustainable Governance and Responsible Business Practices action area, the two main topics for us are Governance and Compliance and Appeal on the Capital Market. These are flanked by the topics of Sustainable Corporate Strategy, Digitalization and Data Security, Human Rights Due Diligence and Supply Chain and Contribution to Socio-Political Dialogue.