Vonovia SE

Between 2017 and 2021, Vonovia decreased its emissions intensity at the rate required by its 1.5°C pathway. The average historical annual decrease in the company’s emissions intensity was nearly 10%, exceeding the 7% annual reduction required by its 1.5°C pathway between 2021 and 2026. As part of its low-carbon transition plan, Vonovia has been maintaining a refurbishment rate of around 3% for the past years. Also, the company has been increasing its solar generation capacity and aims to reach 194,000 megawatt hours (MWh) per year by 2030.

The company’s governance on climate change is overseen by its board of directors. However, there is no indication that board members possess expertise in climate change or low-carbon transition. Vonovia’s emissions intensity reduction targets for 2030 and 2040 have been incorporated into its sustainability performance index (SPI), which affects the long-term incentive plan (for periods of four years) of the management board. There is no evidence that Vonovia has conducted climate change scenario testing to inform its transition plan. To ensure that the ambition of the company’s transition plan is sufficient to align with a 1.5°C pathway, the company should carry out the analysis at the group level for a specified timescale and identify physical, financial and regulatory risks.

Vonovia is one of the few companies in the benchmark that has quantified plans to renovate its portfolio. The company has an ongoing target to renovate 3% of its managed buildings per year (2.3% in 2021), but it is unclear if the company will carry out renovation actions through to 2045. There is a risk that Vonovia will exceed its 1.5°C carbon budget by approximately 70% across the next 25 years if this renovation target is not carried out over the long term. The company can improve the likelihood of a successful low-carbon transition by developing long-term year-on-year renovation commitments aligning with its 1.5°C pathway.

Vonovia has set near-, mid- and long-term emissions intensity reduction targets for scope 1, 2 and 3 emissions of its German properties. The company has a target to achieve 5 kgCO2e/m2 by 2045, which is an 86% reduction in its emissions intensity from 2021. Additionally, it has interim targets to achieve 31.6 kgCO2e/m2 and 25 kgCO2e/m2 by 2025 and 2030 respectively.

As part of Vonovia’s transition plan, Vonovia has launched a sustainability roadmap to achieve a low-carbon portfolio by 2045. The roadmap show the company’s plans for investments in a new business model for landlord-to-tenant solar electricity systems.

Vonovia has quantified plans to renovate its portfolio, aiming to renovate 3% of its managed buildings per year. The target includes the replacement of conventional heating units with hybrid systems and heat pumps and the introduction of timber as a construction material in new builds. Also, the company has been increasing its solar generation capacity and aims to reach 194,000 MWh per year by 2030.

Vonovia funds the Powerhouse of the Future project, researching electrolysers to produce hydrogen, fuel cells, heat pumps and stratified storage to cover at least 60% of the heating needs of its buildings portfolio and households. Moreover, its emissions intensity has decreased year-on-year in line with its 1.5°C pathway.

Vonovia acknowledges climate change as an issue and has a transition plan. The company intends to increase its solar generation capacity to 194,000 MWh per year by 2030 and is almost on track to meet its 2045 target. However, Vonovia has not yet made a net-zero commitment to cover all its emissions.

No evidence was found of Vonovia’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

Vonovia discloses the actions it takes to create jobs, such as projects to deploy rooftop photovoltaic (PV) panels on their buildings. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.

No public commitment by the company was found stating its intention to re- and up-skill workers displaced by the low-carbon transition. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if Vonovia identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.

No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

Vonovia commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and in its supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders to report human rights concerns.

No evidence of Vonovia’s policies or commitments related to key decent work practices were found in the public domain. These practices include the provision of secure, safe and healthy workplaces, where workers are fairly renumerated and have a meaningful say in decision making.  The company does, however, disclose some workforce diversity fundamentals, as well as targets related to gender equality in the company.

Vonovia commits to protecting personal data. However, no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data. Additionally, the company discloses its global tax strategy and board accountability for the strategy. The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. Furthermore, though the company does not have a public lobbying and political engagement policy, it does have a policy that prohibits making political contributions.