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Dear readers,

2022 was a turbulent year: Global politics focused on the Russian invasion of Ukraine. European politics concentrated on shaking off Europe’s dependency on Russian natural gas and tackling the rapidly rising cost of energy. In Germany, the government turned its attention to solutions aimed at balancing climate protection and affordability in housing. And last but not least, we had the financial markets: In reaction to skyrocketing prices, the central banks initiated interest rates changes that were unprecedented in their momentum. As you can imagine, we observed these developments in our company with bated breath.

Nevertheless, we have remained on track. We remain at our customers’ side and keep a close eye on our climate targets. Only with regard to further new construction projects did we take our foot from the gas for the time being. It is our aim to provide affordable homes, and we can only do that if our construction work is economical.

However, in some ways, the past year has confirmed our intrinsic value. By this I mean the intrinsic value of our sustainable business model: We continue to provide our customers with affordable homes and support them when times get tough. We invest large sums in our property portfolio, thereby securing the implementation of our social targets.

We do what we can to contribute to solutions aimed at tackling the social challenges of our times. And even though we’re not progressing as quickly as we would like under the current circumstances, we are using this time to develop our company intensively in other areas – in the field of digitalization, renewable energy production, and climate-friendly housing construction methods. We are also preparing numerous neighborhood development projects so that we can get straight to work once the economic situation has improved.

Without a doubt, one particular highlight in 2022 was our dialogue series with the motto “Perspectives on the Future of Construction.” In March, we brought representatives from the fields of industry, research and politics together to discuss new possibilities for sustainable construction. In the months after these discussions, we followed up with workshops and then combined and discussed the findings in a trade conference with 300 participants. Communicating with one another and coming up with specific solutions together: This is how we will achieve progress.

In 2022, we expanded our climate path to include the housing stock of Deutsche Wohnen. This has changed the parameters but not our objective of achieving a virtually climate-neutral housing stock by 2045. Thanks to our continuous investment in our portfolio, more than 35% of our German housing portfolio now has an energy efficiency standard of C or higher and our CO2 intensity is 33 kg CO2e/m2, and we were able to keep the average cost passed on for modernization work at € 1.20/m2 last year. This puts us significantly below the legally permissible level.

We are also pushing ahead with the expansion of renewable energies, with Deutsche Wohnen joining our photovoltaic program, for instance. We are now aiming to install equipment with a total output of more than 280 MWp by 2030; this equates to an increase of 40%. And we are also looking at other options, such as heating pumps and district heating to achieve our environmental goals – and for the benefit of our customers who rely on affordable energy.

I also place value on the fact that we provide homes for everyone in society. We do not exclude anyone. Almost every tenth new rental agreement in the past year was entered into with Ukrainian citizens and almost every third newly rented out home is adapted to meet the needs of an aging society. We have also expanded hardship management and our special promise to people over the age of 70 to the Deutsche Wohnen portfolio. These are both important signals that show our determination to be there for people.

I’m delighted that our customers recognize our efforts: Customer satisfaction – which we measure several times a year through independent surveys – improved by 1.3% on average over the year. This puts satisfaction at an all-time high. And we have put great effort into achieving this result – with our customer service, on-site presence and the constant improvement in our services.

Internally, 2022 was a year of growing together. Petrol and blue, Vonovia and Deutsche Wohnen are coming together more and more each day, growing into a large, diverse and functional team. Each and every one of us is getting to know new people, making new experiences and exploring new possibilities.

This diversity increases our appeal as an employer: In 2022, we took on 2,100 new employees, with an above-average ratio of 5.2% with regard to training. Anyone who joins our company will experience modern human capital development. Ongoing training and education, talent promotion and fair remuneration and extensive social benefits to promote employee loyalty are extremely important to us.

Let me take this opportunity to come back to a recent event: The authorities conducted investigations on our premises in March 2023. It would seem that some employees of our subsidiaries accepted bribes with a detrimental impact on Vonovia. You can rest assured that we will be clarifying these incidents in full.

When you begin reading this report, you will also see that we have also developed our reporting: The merger has led to us combining our materiality analyses and the strategically relevant topics identified in the analyses. In addition, our data collection is also improving continuously and with it the quality of data.

If you have any questions that are not covered in this report, please feel free to contact us. I would like to encourage you to follow our work throughout the year. Perhaps one or two of the projects we feature on our website will inspire you to take action in your own everyday life. After all, sustainable action is most effective when a large number of people work together.

I hope you enjoy reading this report!

Bochum, April 2023

Rolf Buch