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Environmental Issues

Environmental issues include the following material topics for Vonovia: “Reducing CO2 in the real estate portfolio” and “Sustainable new construction and refurbishment” (see Materiality Matrix).

The mitigation of global warming and the protection of natural resources for life on earth are some of the most important challenges facing society as a whole in our time. As such, environmental and climate protection is accorded paramount importance within our sustainability strategy. Targets set at international level, such as the Paris Agreement and the European Union Green Deal, as well as those set at national level, such as the goal set by the German Federal Government to achieve climate neutrality by 2045, are of high significance for Vonovia in this regard.

As Europe’s housing industry market leader with our own real estate portfolio of 548,524 residential units and our development activities, we possess significant levers for protecting the environmental and climate. Here, our main concern is greenhouse gas emissions that can be largely influenced directly, known as scope 1 & 2 emissions. These are produced by supplying heat and hot water to our buildings, with the majority of our housing stock being located in Germany. Greenhouse gas emissions from the upstream value chain and other environmental aspects are also becoming increasingly important to us.

Vonovia has set itself the target of achieving a virtually climate-neutral housing stock by 2045, with carbon intensity of less than 5 kg of CO2 equivalents per sqm of rental area. By 2030, our housing stock in Germany is to have a CO2 intensity of less than 25 kg CO2e/sqm. These targets remain unchanged following the merger with Deutsche Wohnen and were confirmed in 2022. Binding interim targets for the next five years have also been defined.

During the reporting year, we had the Vonovia climate pathway’s compatibility with the Paris Agreement target calculated using the XDC model from right.based on science. The XDC model converts CO2 emissions based on our climate pathway into a number of degrees that shows by how much the earth’s temperature would increase if the entire world's climate performance were identical to that of Vonovia. This calculation reveals that, taking into account sales that are already planned, Vonovia’s climate pathway is compatible with global warming of 1.4° Celsius. The 1.5° target path of the Carbon Risk Real Estate Monitor (CRREM) for multifamily homes in Germany (as at 07/2021) was used as a benchmark.

Vonovia's Climate Pathway: Strategy for Decarbonizing the Housing Stock

Defining and implementing the climate pathway is part of our systematic way of tackling climate change – with regard to both Vonovia's 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 partnership with Deutsche Wohnen 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 analysis of material negative impacts on our business activities due to the effects of climate change 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 property 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.

As part of the neighborhood strategy, potential adaptations are to be defined at portfolio level in the future and subsequently implemented individually for the properties or neighborhoods for which there are material risks at the corresponding level. Adaptation measures include, in particular, insulating buildings and replacing windows to provide protection against heat and cold, creating shade using blinds and shutters, and installing suitable equipment designed to handle the infiltration and absorption of larger amounts of precipitation. In the future, the individual findings from the climate risk analysis will be incorporated into the specific neighborhood profiles that provide the guidelines for managing a neighborhood.

Implementation of the TCFD Recommendations at Vonovia

Implementation of the TCFD Recommendations at Vonovia

Content of the Recommendations

Implementation at Vonovia

Further Information


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 Annual Report:The CompanyCorporate StructureSustainability Management at VonoviaManagement SystemEnvironmental IssuesOpportunities and Risks2021 Sustainability Report:Environment and Climate

Management of Opportunities and Risks

The 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 development and implementation of relevant measures.

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 the 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 segment is responsible for the technical implementation and use of new technologies.

The central non-financial performance indicator is the Sustainability Performance Index (SPI), which includes the carbon intensity of the housing stock in Germany and the primary energy consumption targets for development projects.


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 Annual Report:StrategySustainability Management at VonoviaEnvironmental IssuesRisk Assessment Based on Sustain­ability Aspects2021 Sustainability Report:Environment and Climate

New Construction and Conversions

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 neighborhood solutions with renewable energies (fuel switch).

No material physical risks currently determined; transitory risks 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 can be found, in particular, in optimization at neighborhood level and our own decentralized energy generation for supplying heat and providing tenants with electricity from renewable energy sources, especially photovoltaics.

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 Annual Report:Environmental IssuesRisk Assessment Based on Sustain­ability AspectsOpportunities and Risks2021 Sustainability Report:

Management of Opportunities and Risks

Physical risks are analyzed in a separate tool using various IPCC scenarios. Material risks are addressed in the further development of the neighborhoods and in the planning for development projects, and appropriate potential adaptations are defined and implemented.

The climate risk analysis performed using the climate risk tool does not indicate any material physical risks for Vonovia’s housing stock.

Metrics and Targets

Metrics and Targets Used to Assess and Manage Relevant Climate-Related Risks and Opportunities

Comprehensive carbon footprint for the housing stock and business operations in accordance with the GHG Protocol and IW.2050

2022 Annual Report:StrategyManagement SystemEnvironmental Issues2021 Sustainability Report:

Environment and ClimateSustainable Construction and DevelopmentEnvironmental Key Figures

CO₂e in the portfolio (in Germany) in 2022: 1,019,431 metric tons (scopes 1,2,3*)

Expansion of renewable energies through PV: 533 systems with a nominal output of 19.3 MWp


Virtually climate-neutral housing stock by 2045 (< 5 kg CO₂e per sqm rental area)

Reduction of CO₂ intensity from current level of 33.0 to less than 25 kg CO₂e per sqm of rental area by 2030 in Germany

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 per sqm by 2025

  1. *Scope 3.3 “Fuel and energy-related emissions upstream”

CO2 Reduction in the Real Estate Portfolio

The CO2 intensity of the building portfolio represents the central indicator of our climate performance management. It is also an extremely important component of the Sustainability Performance Index (SPI) and therefore of the Corporate Management System. In the reporting year, the CO2 intensity for our housing stock in Germany was 33.0 kg CO2e/sqm (2021: 38.4 kg CO2e/sqm, excluding Deutsche Wohnen). As we switched to using the Carnot method to calculate district heating CO2 emissions in the reporting year, as announced in the previous year, the values are not entirely comparable. Once adjusted for method, there is a reduction of around 10% compared with the previous year’s figure (CO2 intensity in 2021 taking into account the Carnot method: 35.6 kg CO2e/sqm, excluding Deutsche Wohnen). CO2 intensity has therefore already reached the level planned for 2023. In addition to the modernization measures, this can also be attributed to our further improved monitoring, as part of which numerous energy performance certificates were updated and the specific emission values of a major district heating supplier were taken into account. As we have already met the original 33.0 kg CO2e/sqm target for 2023, the lowered expectations for modernization in 2023 due to the increase in construction costs and changes in the interest rate environment do not jeopardize our chances of staying on our climate pathway.

Material Performance Indicator – Carbon intensity of the existing portfolio (in Germany)

Material Performance Indicator – SPI





Target for 2023

Carbon intensity of the housing stock Vonovia SE (in Germany)*

kg CO₂e/‌ m² living area




Roughly same level as the previous year***

  1. *Total portfolio, based on final energy demand from energy performance certificates and related to rental space, in some cases including specific CO₂ factors from district heating suppliers.
  2. **Exclusive Deutsche Wohnen.
  3. ***Carbon intensity in 12/2022 lower than expected in planning, therefore target value in 2023 roughly at previous year's level.

We have identified three levers for implementing Vonovia’s climate pathway: comprehensive energy-efficient modernization work, increasing the share of renewable energies within neighborhoods and a fundamental transformation of the energy sector.

Energy-related modernization to improve energy efficiency is an essential pillar of our climate pathway. In order to determine the optimal modernization path for the portfolio, Vonovia developed the decarbonization tool (DCT), which includes both environmental and economic targets. The DCT shows how the various neighborhoods need to be modernized in order to meet the Group’s overall target and the time frame in which this must be done. Differentiated solutions will be identified for all neighborhoods in the future, which are then set out in more specific detail in the development plans for each particular neighborhood.

For this purpose, a new end-to-end process for ensuring efficient cooperation between all departments involved in neighborhood development was defined during the reporting year. The neighborhood advisors provide an interface between the various stakeholders, bundle requirements and information in the context of neighborhood development and act as the link between Vonovia’s internal departments. In the future, this will allow the different neighborhoods to be treated individually, and tailored, economically viable concepts to be developed in terms of a modular system for scalable solutions that focus on linking the heat, electricity and mobility sectors. In doing so, we adopt a holistic view of the neighborhood, examining both the modernization of the building envelope (insulation of facades, basement ceilings and attics, and replacement of windows) and the conversion of the energy supply to climate-friendly systems in their wider context. We believe that many integrated solutions for energy provision with renewable energies and CO₂ optimization can only be implemented in a technically feasible and economically viable way within larger neighborhoods.

The Portfolio Management department, which reports to the Chief Rental Officer (CRO), is responsible for coordinating the energy-efficient modernization activities. The neighborhoods to be modernized are selected in a targeted manner in cooperation with the regions, and the optimal degree of modernization for each building is defined. The investments for the modernization programs are approved by the Management Board as a whole.

Public-sector subsidy programs are being used for many of the modernization measures in order to minimize the costs for our tenants. Here, the federal subsidy program for energy-efficient buildings (BEG) play a particularly crucial role. Planning in the real estate sector involves long timescales and is complex, especially in a neighborhood context. The BEG’s subsidy eligibility conditions, however, which changed multiple times at short notice, made it much more difficult for us to plan in the reporting year.

For us to be able to successfully implement our climate pathway, we need reliable framework conditions and predictable subsidy eligibility conditions. While the inclusion of district heating in the CO2 Cost Sharing Act provides an incentive to reduce emissions, it also represents an additional liability for future investment opportunities.

A total refurbishment rate of 1.9 % (excluding Deutsche Wohnen) was achieved in the reporting year. The year-on-year drop (2021: 2.3%) is, among other things, attributable to the new conditions for subsidies and the adjustments to the internal management system to focus on the neighborhood level, which requires more complex and therefore longer planning. In the year ahead, the refurbishment rate is expected to fall between 0.3% and 0.8% due to the challenging interest rate environment, increased construction costs and reduced subsidies.

Material Performance Indicator – Refurbishment rate (in Germany)

Material Performance Indicator





Projection for 2023

Refurbishment rate (in Germany)*





  1. *Excluding Deutsche Wohnen, planned value 2023 including Deutsche Wohnen.

In order to make energy-efficient building refurbishment even more cost-effective in the medium and long term, we continued to forge ahead with serial refurbishment in the reporting year. In Bochum, a refurbishment project comprising 24 apartments was completed in accordance with the Energiesprong principle. Preparations for further serial refurbishment projects are currently underway. Additionally, Vonovia is undertaking remote digital monitoring of heating systems to ensure optimized operational management and early detection of faults.

With regard to heating modernization, we have begun to ramp up the electrification of heat production against the backdrop of the current situation on the energy markets. We therefore launched a heat pump initiative in the reporting year, allowing us to play a pioneering role in the installation of heat pumps in multifamily homes. This represents a further step in the implementation of our climate pathway. Our aim here is to further reduce the CO2 intensity of buildings that already have a good energy efficiency standard and thus cut demand for gas within the portfolio by up to 30%. In Dortmund, a pilot-scale batch of single-energy-source systems will be installed in 50 heating networks with over 100 buildings. Building on the results of this pilot, the initiative is to be rolled out to other regions in 2023. We repeatedly come up against obstacles, particularly due to the time and costs involved in extending domestic electrical connections, which will require a political solution in the long run. We are involved in the political discourse on ramping up the use of heat pumps and are advocating for viable solutions.

Another aspect of implementing the climate pathway is increasing energy generation from renewable sources. To achieve this, Vonovia launched a long-term program in 2021 to expand photovoltaic capacity. In the reporting year, Vonovia owned 533 photovoltaic systems with an installed output of 19.3 MWp. The 24.4 MWp target was not met due to supply difficulties and delays associated with the network operators.

Overall potential has increased as a result of the merger with Deutsche Wohnen. Our new aim is to continuously increase the additional installed output per year and to achieve an installed output of around 280 MWp by 2030 (compared to 18.0 MWp in 2021). Since 2022, we have focused exclusively on tenant installations, where the electricity generated is used within the neighborhood itself – to supply our tenants and to power heat pumps. The installation of these systems is therefore also closely interlinked with the heat pump initiative and the modernization program.

All activities relating to renewable energies and energy distribution are organized in the Value-add business area and are managed by a chief representative who reports directly to the Chief Transformation Officer (CTO) of Vonovia. In order to achieve the targets for PV output, we are also investing in in-house installation capacities and creating about 100 new jobs in total. In 2023, installed output is set to more than double to around 43 MWp. In the long term, we intend to fit all suitable roof spaces in the German portfolio with PV panels by 2050.

Material Performance Indicator – Number of photovoltaic plants

Material Performance Indicator





Target for 2023

Number of photovoltaic plants*




Installed output





  1. *Photovoltaic plants owned by Vonovia at reporting date Dec. 31.

The newly formed energy innovation team, which is part of the Innovation & Business Building department, actively works to support that climate pathway targets are met by analyzing and testing innovative technologies. Targeted efforts have already been made to scout out new technologies at all stages of the stringent innovation process, which are then assessed for technical feasibility and economic viability with the involvement of relevant stakeholders. Particular focus is given to the testing of innovative generation and storage solutions in the context of decentralized energy supplies.

Vonovia is offering its customers the opportunity to purchase electricity from renewable energy sources via its own energy distribution company (VESG). By providing green energy that has been generated or certified in the neighborhood, we are supplying them with cheap electricity and helping them to reduce greenhouse gas emissions. Our objective is to maximize the share of energy we produce ourselves for the benefit of our customers and the environment, and also to use it for our housing-related services, e. g., e-mobility. The purchase of certified green electricity to supply communal areas makes a further contribution to our climate strategy.

A further component of our climate pathway is the supply of sufficient quantities of CO₂-free district heating and electricity by the energy sector. This requires that the energy sector implement the targets set by policymakers for phasing out coal and increasing the share of renewable energies in energy or electricity generation. We consider the proposal of the German Federal Ministry for Economic Affairs and Climate Action (BMWK) on municipal heating planning to be an important step towards this goal. This can provide long-term planning security with respect to the availability of district heating within the municipalities. In this regard, adopting an integrated view of heat and electricity generation that takes all stakeholders into account is of particular importance. District heating is always an important lever for us where it is economically viable to connect additional properties to a district heating network while making consistent progress in decarbonizing heat generation. During the reporting year, Vonovia therefore examined the decarbonization strategies of the most important district heating providers in depth and, based on these conclusions, drew up potential courses of action for incorporating them into its long-term neighborhood strategy.

In Austria, energy efficiency modernization measures are, just like overall business operations in Austria, the responsibility of the Chief Development Officer (CDO) under the BUWOG umbrella, where they are led by the Real Estate Management division. Since 2011, BUWOG has been a partner of the “klimaaktiv Pakt” climate protection initiative launched by the Austrian Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology. As part of this initiative, BUWOG has defined the goal of achieving a reduction of 55% by 2030 compared to the baseline year of 2005. The highest share of the CO₂ reduction will be accounted for by modernization and improvements to existing stocks, particularly energy-efficient refurbishment, improvements in the efficiency of heating systems and conversion to renewable energy sources. Furthermore, all oil heating systems are to be replaced by 2030, five years earlier than required by law. BUWOG has had a certified energy management system that is consistent with ISO 50001 standards in place in Austria since 2013/14 and in Germany since 2018. The system is a tool used voluntarily to systematically manage energy performance and improve it continuously. The corresponding establishment of processes that reflect this policy in the company and clear objectives serve to increase energy efficiency, reduce energy consumption and cut energy costs.

In Sweden, virtually all existing Victoriahem buildings are supplied with district heating, the generation of which already produces extremely low CO₂ emissions. Therefore, the road to climate neutrality will primarily be shaped by further decarbonization of heating supply, coupled with ongoing improvements in energy efficiency. As such, the aim is to reduce energy consumption per sqm by 30% by 2030 compared to 2015. In 2022, Victoriahem also joined the Swedish housing association’s “Allmännyttans klimatinitiativ,” which also aims to achieve a CO2-free energy supply by 2030.

Sustainable Construction and Refurbishment

Vonovia’s new construction activities are helping to create urgently needed new and affordable homes, especially in metropolitan areas. The development business operating under the BUWOG brand is active in both the development of high-quality residential neighborhoods for the company’s own portfolio (to hold) and for direct sale (to sell) in Germany and Austria, and the densification and adding of extra stories to buildings as part of the development of existing neighborhoods in Germany. The activities of the BUWOG development business in Germany and Austria are the responsibility of the Chief Development Officer (CDO), and the individual development projects are approved by the Management Board.

By taking a holistic neighborhood-based approach to developments, we bring together planning expertise and construction. This involves focusing on vertical expansion and densification in order to provide additional homes while minimizing surface sealing. Our approach is complemented by our Building Information Management (BIM) strategy, which allows us to identify effective measures on the basis of data from across the entire life cycle of our neighborhoods. This reflects our commitment to long-term sustainability, which takes a close look at every stage of a building’s life – from finding plots of land through to handing over the keys to the demolition phase – in order to minimize its emissions, the impact it has on the environment and the amount of resources that it consumes. In its new construction and refurbishment projects, Vonovia takes care to ensure optimized energy design and the use of renewable energies. We achieve this, for instance, by using the German efficiency house standard or the new-build criteria of the Austrian “klimaaktiv Pakt” initiative.

The average primary energy demand of newly constructed buildings, in relation to rental area, is the most important non-financial performance indicator in development. This performance indicator is part of the Sustainability Performance Index (SPI) and planning process and must be made transparent as part of all Management Board approvals of new-build and development projects. In 2022, the average primary energy demand was 37.7 kWh/sqm per year, lower than that of the previous year and below the target for 2022, for which we had assumed a significantly higher value compared to 2021. This can be explained in particular by the early completion of a relatively large project with a low primary energy demand. We expect to see a significantly lower primary energy demand in 2023.

Material Performance Indicator – Average primary energy requirement – new construction

Material Performance Indicator – SPI





Target for 2023

Average primary energy demand – new construction*

kWh/m² p.a.





  1. *Based on energy performance certificates, excluding commercial projects and extensions.
  2. **Exclusive Deutsche Wohnen.

In the reporting year, resource-saving and eco-friendly construction and, in particular, analysis of the entire life cycle came more to the fore. As part of our “perspectives on the future of construction” dialogue process, we discussed the necessary framework conditions for climate-neutral construction with representatives of the scientific community, building materials manufacturers, planners and the construction industry. We presented the results at our final conference in November and discussed them with representatives from the world of politics. As part of this, Vonovia committed itself to give greater consideration to life cycles and to increase the use of sustainable building materials and those made from renewable raw materials. Improving the recyclability of constructions and construction products and cooperating more closely with our suppliers are also set to become even more important in the future.

In 2023, we will translate these aims into specific measures and continue to develop our processes with these in mind. The dialogue process shows that policymakers in particular need to adapt the framework conditions; to name but a few examples, it calls for the harmonization and simplification of regulations, acceleration of approval procedures for sustainable materials, higher subsidy rates for using sustainable building materials, the strengthening of centralized collection and return systems, and mandatory deconstruction concepts for new buildings.

Designing the residential environment and preserving biodiversity are top priorities for us. Numerous buildings feature green spaces that serve as natural habitats for flora and fauna at ground level, on roofs or on facades. In addition to the optical effects, these green spaces also offer a practical added value, for example, by slowing the flow of rainwater into the partially overburdened municipal sewage system and by making a considerable contribution to the microclimate, especially by preventing urban heat islands in built-up areas. We also take care to conserve resources and protect the environment during construction.