Implementation of the TCFD Recommendations
GRI
3-3
201-2
With our climate strategy, we are systematically addressing climate change – with regard to both our contribution to mitigating climate change and the effects of climate change on our company’s economic development. Our climate pathway combines grand ambitions for CO2 reduction with the economic efficiency required to implement them. In continuing to develop this path further, we maintain an overview of the risks, e. g., those resulting from future increases in prices for causing CO2 emissions or the impact of climate change on our buildings, as well as the opportunities, e. g., in the form of climate-resilient and particularly competitive neighborhoods. The recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD) constitute important guidance in this regard.
During the reporting year, Vonovia developed an IT tool in accordance with EU taxonomy requirements in order to analyze the physical risks associated with climate change. This tool enables physical climate risks to be identified and evaluated for the Group-wide portfolio on a continuous basis using the prescribed climate scenarios (RCP2.6, RCP4.5 and RCP8.5). This climate risk tool covers Vonovia’s portfolio and development projects in Germany, Austria and Sweden and allows material negative impacts on our business activities due to the effects of climate change to be analyzed at portfolio and property level. The climate risks examined using this tool are heat, cold, drought, increases in precipitation, wind and storms, snow loads and flooding. Depending on the granularity of the available data source, we measure climate risks at the building or neighborhood level and are able to complete a climate risk assessment for each building in the portfolio.
The risk assessment is based on scenario RCP4.5, which, according to the United Nations (UNEP Emissions Gap Report 2022), represents the probable increase in the global average temperature that will result from the national contributions to climate change mitigation that have currently been defined and implemented. In this scenario, no material risk has been identified for any of the climate-related hazards up to 2045.
Implementation of the TCFD Recommendations at Vonovia
Implementation of the TCFD Recommendations at Vonovia | ||||
Content of the Recommendations | Implementation at Vonovia | Further Information | ||
Governance | ||||
Organizational Structure of the Company Regarding Climate-Related Risks and Opportunities | The entire Management Board bears responsibility for sustainability and climate protection, as well as climate-related risks and opportunities | 2022 Sustainability Report:Environment and Climate Management of Opportunities and Risks 2022 Annual Report:The CompanyCorporate StructureSustainability Management at VonoviaManagement SystemEnvironmental IssuesOpportunities and Risks | ||
Sustainability Committee – comprising the entire Management Board and representatives of the central functional departments Sustainability/Strategy, Controlling, Communication, Investor Relations and Accounting – determines the strategy and targets and monitors progress | ||||
The central department Sustainability/Strategy, within the executive division of the CEO, coordinates and spearheads the measures and their implementation | ||||
Climate-related risks are calculated and collated on a half-yearly basis as part of the company-wide risk management process; the process is coordinated by Controlling, with the Management Board taking the final decision on risk assessment | ||||
Energy efficiency modernization in the existing portfolio in Germany is the responsibility of the CRO (Regions and Portfolio Management); for Austria, the CDO is responsible, for Sweden the CEO of Victoriahem. | ||||
The Value-add unit is responsible for technically implementing and using new technologies | ||||
The central non-financial performance indicator Sustainability Performance Index (SPI) includes the carbon intensity of the building portfolio | ||||
Strategy | ||||
Actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning | As key drivers of long-term business success, climate protection and CO₂ reduction are fundamental components of the corporate strategy | 2022 Sustainability Report:Environment and Climate Sustainable Construction and Refurbishment 2022 Annual Report:StrategySustainability Management at VonoviaEnvironmental IssuesRisk Assessment Based on Sustainability Aspects | ||
A binding climate pathway, taking into account various scenarios, defined in cooperation with the scientific community. | ||||
An extensive modernization program to increase energy efficiency, as well as the use of heat pumps and neighborhood solutions with renewable energies (fuel switch) | ||||
Transitory rather than physical risks currently expected, including through legislation in Germany (CO₂ pricing) and the European Union, as well as through a lack of cost-effectiveness of energy efficiency modernization and the development of renewable energy generation (balance between investments and capacity for passing on costs/affordability for tenants) | ||||
Opportunities in particular through decentralized internal energy generation for the supply of heating and the provision of electricity for tenants | ||||
Risk Management | ||||
How the Organization Identifies, Assesses, and Manages Climate-Related Risks | Climate-related risks form part of the company-wide risk management process; half-yearly evaluation of all risks by the management | 2022 Sustainability Report: Management of Opportunities and Risks 2022 Annual Report:Risk Assessment Based on Sustainability AspectsOpportunities and Risks | ||
In the future, physical risks will be evaluated on the basis of regularly updated risk maps | ||||
No material risks currently identified for the Vonovia building portfolio | ||||
Metrics and Targets | ||||
Metrics and Targets Used to Assess and Manage Relevant Climate-Related Risks and Opportunities | Comprehensive and complete carbon footprint for the building portfolio and business operations in accordance with the GHG Protocol and IW.2050 | 2022 Sustainability Report:Environment and ClimateSustainable Construction and Refurbishment 2022 Annual Report:StrategyManagement SystemEnvironmental IssuesForecast Report | ||
CO₂e in the portfolio (in Germany) in 2022: 1,019,431 metric tons (scopes 1, 2, 31) | ||||
Expansion of renewable energies through PV: 533 systems with a nominal output of 19.3 MWp | ||||
Targets: | ||||
Virtually climate-neutral housing stock by 2045 (<5 kg CO₂e/m2 rental area) | ||||
Reduction of CO₂ intensity in Germany from current level of 33.0 to less than 25 kg CO₂e/m2 of rental area by 2030 | ||||
Installation of photovoltaic systems with a nominal output of around 280 MWp by 2030 | ||||
Reduction in average primary energy consumption in new buildings to 27 kWh/m2 by 2025 | ||||
- 1) Scope 3.3: “Fuel and energy-related emissions upstream”.