Greenhouse Gas Balance

Greenhouse Gas Balance

2023 by Country

Key Figures

Unit

2021

2022

2023

Germany

Austria

Sweden

Greenhouse Gas Balance 1)

ESRS E1–6 & GRI 305–1, 305–2, 305–3, 305–4, 305–5

Emissions Scope 1+2+3

Total portfolio + business operations location-based

t CO₂e

1,395,288

1,839,803

1,742,702

1,593,769

97,680

51,252

of which issues portfolio

t CO₂e

1,300,650

1,678,670

1,637,500

1,518,026

72,026

47,448

of which emissions from business operations

t CO₂e

94,638

161,133

105,202

75,743

25,655

3,805

Total portfolio + business operations market-based

t CO₂e

1,371,551

1,773,162

1,670,346

1,529,323

97,561

43,463

of which issues portfolio

t CO₂e

1,282,895

1,619,226

1,570,723

1,459,039

72,026

39,658

of which emissions from business operations

t CO₂e

88,657

153,936

99,623

70,284

25,535

3,805

Intensities

Emissions portfolio per rental space 2)

kg CO₂e/m²

36.1

31.5

30.0

31.7

35.6

10.1

Portfolio emissions per € million Rental segment revenue 2)

t CO₂e/‌ in € million

385

353

327

349

503

91

Total emissions per € million Total segment revenue
(location-based)

t CO₂e/‌ in € million

267

331

338

352

351

150

Total issues per € million Total segment revenue
(market-based)

t CO₂e/‌ in € million

263

319

324

338

350

127

Emissions Scope 1+2

Total portfolio + business operations

t CO₂e

878,003

909,438

835,122

768,007

38,040

29,075

of which emissions portfolio

t CO₂e

850,106

880,370

808,374

742,003

37,838

28,533

of which emissions from business operations

t CO₂e

27,897

29,068

26,748

26,003

202

542

Scope 1 (Direct Emissions)

Total portfolio + business operations

t CO₂e

468,980

547,110

508,284

488,599

19,199

486

Scope 1 Portfolio

Combustion processes of stationary plants

t CO₂e

448,790

526,253

487,711

468,590

19,121

0

of which heat natural gas (ME)

%

88.6

92.0

93.2

93.9

78.0

of which heat fuel oil (ME)

%

9.4

7.0

5.8

5.3

19.7

of which heat coal (ME)

%

2.0

1.0

0.9

0.9

0.8

of which biomass (ME)

%

0.0

0.0

0.1

0.0

1.5

Scope 1 Business Operations

Combustion processes of business operations

t CO₂e

20,190

20,857

20,573

20,010

77

486

of which mobile plants

%

94.5

92.8

94.2

94.2

57.1

100.0

of which stationary plants

%

5.5

7.2

5.8

5.8

42.9

0.0

Scope 2 (Indirect Emissions from Energy Purchases) 3)

Total portfolio + business operations location-based

t CO₂e

426,778

421,772

393,615

338,395

18,842

36,379

Total portfolio + business operations market-based

t CO₂e

403,041

355,132

321,259

273,948

18,842

28,589

Scope 2 Portfolio

Energy supply location-based 4)

t CO₂e

419,071

413,561

387,440

332,401

18,716

36,322

of which district heating (ME)

%

94.0

86.3

88.0

88.9

79.7

84.1

of which heat electricity (ME)

%

4.0

3.7

3.0

2.4

14.7

2.7

of which electricity (common areas) 5)

%

2.0

10.0

8.9

8.6

5.7

13.2

Energy supply market-based 4)

t CO₂e

401,316

354,117

320,663

273,414

18,716

28,533

of which district heating (ME)

%

93.8

92.9

94.2

96.7

79.7

79.7

of which heat electricity (ME)

%

4.2

4.3

3.7

3.0

14.7

3.4

of which electricity (common areas) 5)

%

2.0

2.8

2.1

0.3

5.7

16.9

Scope 2 Business Operations

Energy supply location-based

t CO₂e

7,707

8,211

6,175

5,993

125

56

of which electricity

%

49.8

70.9

69.5

69.3

61.8

100.0

of which district heating

%

50.2

29.1

30.5

30.7

38.2

0.0

Energy supply market-based 6)

t CO₂e

1,726

1,015

596

534

5

56

of which electricity

%

100.0

100.0

100.0

100.0

100.0

100.0

of which district heating

%

Scope 3 (Other Indirect Emissions)

Total portfolio + business operations

t CO₂e

499,530

870,920

840,804

766,775

59,640

14,388

3.2 Emissions from capital goods 7)

t CO₂e

61,729

125,354

72,361

43,987

25,307

3,067

3.3 Fuel and energy-related emissions (not Scope 1+2) 8)

t CO₂e

109,543

223,795

210,026

192,906

14,500

2,620

Portfolio

t CO₂e

105,240

217,950

204,800

187,838

14,445

2,516

Business operations

t CO₂e

4,304

5,845

5,226

5,068

55

104

3.6 Business trips

t CO₂e

709

866

867

685

91

91

3.13. Downstream leased assets

t CO₂e

327,549

520,906

557,549

529,197

19,742

8,609

Downstream leased assets WEG 9)

t CO₂e

33,596

26,915

52,275

43,414

8,861

0

Household electricity

t CO₂e

293,953

493,991

505,274

485,784

10,881

8,609

  1. Greenhouse gases included in the calculation: CO₂ equivalents (greenhouse gases regulated in the Kyoto Protocol CO₂, CH₄, N₂O, SF₆, HFC and HFC).
  2. Sources of emission factors: GEMIS 5.0, Defra, Federal Ministry of Environment Germany, Federal Ministry of Environment Austria, Covenant of Mayors for Climate and Energy, and Swedenergy (Swedish non-profit organization).
  3. 1)From 2022 incl. Deutsche Wohnen (excl. Care segment and SYNVIA).
  4. 2)Excl. emissions from capital goods (Scope 3.2) and household electricity.
  5. 3)2021 without separate disclosure of upstream chain in energy supply.
  6. 4)Calculation using utility-specific emission factors (market-based) if available in qualified form. Otherwise, use of location-specific emission factors (location-based).
  7. 5)For the Germany region, all volumes traded via VESG using 100% green electricity guarantee of origin, cleared via the Federal Environment Agency’s register of guarantees of origin.
  8. 6)For locations in the Austria region: 100% green electricity. Calculation using utility-specific emission factors (market-based) if available in qualified form. Otherwise, use of location-specific emission factors (location-based).
  9. 7)Of which 100% from emissions caused by new construction/development.
  10. 8)Increase in 2022 compared to previous years due to separate reporting of upstream chain for energy supply (Scope 2). Includes fuel- and energy-related emissions of the entire portfolio (incl. WEG share), in each case stationary combustion.
  11. 9)Rental units that belong to a residential property owners’ association (WEG) in which Vonovia has an ownership interest of ≤ 50 % in the building (no full operational control). There are no proportional ownership rights in the Sweden region.

Notes on the Greenhouse Gas Emissions

This greenhouse gas balance (GHG balance) was prepared on the basis of the standards of the Greenhouse Gas Protocol (GHG Protocol Corporate Standard and Corporate Value Chain (Scope 3) Standard, the internationally recognized standards for calculating greenhouse gas emissions. The recommendations set out in the guidance issued by the Federal Association of German Housing and Real Estate Enterprise Registered Associations (GdW), “Arbeitshilfe 85 (CO2 Monitoring)”, and the recommendations published by the Wohnen 2050 housing initiative (IW2050), have also been taken into account. The scope of consolidation relevant to Vonovia’s greenhouse gas balance matches that of the other environmental indicators in this ESG Factbook. GHG emissions were calculated in carbon dioxide equivalents (CO2e), the standardized unit to measure the relative contributions to the greenhouse effect of the greenhouse gases CO₂, CH₄, N₂O, SF₆, HFCs and PFCs regulated by the Kyoto Protocol.

The calculation of GHG emissions in the portfolio is conducted according to the financial control approach. Emissions produced as a result of portfolio operations over which Vonovia has full control are disclosed under Scope 1 and Scope 2 emissions. For the part of the portfolio, in which the company holds a minority interest, the carbon emission figures are reported under Scope 3.

As actual measured values for the relevant reporting year are not available at the required time, we calculate the emissions on the basis of the valid energy certificates of the individual buildings. The energy consumption of those buildings that do not have energy certificates is extrapolated based on the age of the building and corresponding average values based on the rest of the portfolio.

To calculate the emissions from the combustion of fossil fuels and location-based emissions in Scopes 1, 2 and 3.3, the CO₂e factors from version 5.1 of the GEMIS (Global Emission Model for Integrated Systems) database were used. GEMIS is an internationally recognized model for determining energy and material flows with an integrated database. The model calculates life cycles for all processes and scenarios, i.e., it takes into consideration all material steps from primary energy and raw material extraction to effective energy and material provision, and also includes the auxiliary energy and cost of materials to produce energy plants and transport systems.

In order to calculate market-based emissions, the specific emission factors of the energy suppliers were used where this data was available. With regard to the purchase of district heating from combined heat and power (CHP) plants, we use emission factors based on the Carnot allocation method, as this allows for more realistic allocation of emissions to heat or electricity in physical terms. If no specific emission factors were available, the corresponding location-based factor was used. If other emission factors are applied in individual cases, this is indicated accordingly.

Explanatory information on the scopes included in the GHG balance:

Scope 1 – Direct emissions: GHG emissions from stationary combustion for heating and warm water, as well as mobile combustion (vehicles owned by the company).

Scope 2 – Indirect emissions from energy purchases: GHG emissions from the generation of (general) electricity, local and district heating for heating and warm water. When calculating the GHG emissions, we have changed the emission factor for district heating from combined heat and power (CHP) plants from the energy-based allocation method to the Carnot allocation method with effect from the Sustainability Report 2022. Accordingly, the values for 2021 are not directly comparable with those of the subsequent years.

Scope 3 – Indirect emissions in the upstream and downstream value chain (where these are identified as material and can be calculated):

Vonovia will expand its GHG balance on an ongoing basis to include further material Scope 3 categories and include them in its reporting in the future.

Adjusted EBITDA Total

Adjusted EBITDA Total is the result before interest, taxes, depreciation and amortization (including income from other operational investments and intragroup profits) adjusted for effects that do not relate to the period, recur irregularly and that are atypical for business operation, and for net income from fair value adjustments to investment properties. These non-recurring items include the development of new fields of business and business processes, acquisition projects, expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments. The Adjusted EBITDA Total is derived from the sum of the Adjusted EBITDA Rental, Adjusted EBITDA Value-add, Adjusted EBITDA Recurring Sales and Adjusted EBITDA Development.

Adjusted EBITDA Rental

The Adjusted EBITDA Rental is calculated by deducting the operating expenses of the Rental segment and the expenses for maintenance in the Rental segment from the Group’s rental income.

Adjusted EBITDA Value-add

The Adjusted EBITDA Value-add is calculated by deducting operating expenses from the segment’s income.

Adjusted EBITDA Recurring Sales

The Adjusted EBITDA Recurring Sales compares the proceeds generated from the privatization business with the fair values of assets sold and also deducts the related costs of sale. In order to disclose profit and revenue in the period in which they are incurred and to report a sales margin, the fair value of properties sold, valued in accordance with IFRS 5, has to be adjusted to reflect realized/unrealized changes in value.

Adjusted EBITDA Development

The Adjusted EBITDA Development includes the gross profit from the development activities of “to sell” projects (income from sold development projects less production costs) and the gross profit from the development activities of “to hold” projects (fair value of the units developed for the company’s own portfolio less incurred production costs) less the operating expenses from the Development segment.

Covenants

Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the bond obligor to meet specific requirements or to refrain from undertaking certain activities.

COSO

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a private-sector U.S. organization. It was founded in 1985. In 1992, COSO published the COSO model, an SEC-recognized standard for internal controls. This provided a basis for the documentation, analysis and design of internal control systems. In 2004, the model was further developed and the COSO Enterprise Risk Management (ERM) Framework was published. Since then, it has been used to structure and develop risk management systems.

CSI (Customer Satisfaction Index)

The CSI is determined at regular intervals by means of systematic customer surveys and reflects how our services are perceived and accepted by our customers. The CSI is determined on the basis of points given by the customers for our properties and their neighborhood, customer service and commercial and technical support as well as maintenance and modernization management.

European Public Real Estate Association (EPRA)

The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.

EPRA NAV/Adjusted NAV

The presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business model. The equity attributable to Vonovia’s shareholders is adjusted to reflect deferred taxes on investment properties, the fair value of derivative financial instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted NAV, which involves eliminating goodwill in full, is also reported.

EPRA NAV/Adjusted NAV

The presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business model. The equity attributable to Vonovia’s shareholders is adjusted to reflect deferred taxes on investment properties, the fair value of derivative financial instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted NAV, which involves eliminating goodwill in full, is also reported.

EPRA Key Figures

For information on the EPRA key figures, we refer to the chapter on segment reporting according to EPRA.

Fair Value

Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

GAV

The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.

Group FFO

Group FFO reflects the recurring earnings from the operating business. In addition to the adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows for recurring current net interest expenses from non-derivative financial instruments as well as current income taxes. This key figure is not determined on the basis of any specific international reporting standard but is to be regarded as a supplement to other performance indicators determined in accordance with IFRS.

Maintenance

Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.

Vacancy Rate

The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.

LTV Ratio (Loan-to-Value Ratio)

The LTV ratio shows the extent to which financial liabilities are covered. It shows the ratio of non-derivative financial liabilities pursuant to IFRS, less foreign exchange rate effects, cash and cash equivalents less advance payments received by Development (period-related), receivables from disposals, plus purchase prices for outstanding acquisitions to the total fair values of the real estate portfolio, fair values of the projects/land currently under construction as well as receivables from the sale of real estate inventories (period-­related) plus the fair values of outstanding acquisitions and investments in other real estate companies.

Rental Income

Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.

Rental Income

Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.

Modernization Measures

Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.

Monthly In-place Rent

The monthly in-place rent is measured in euros per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs. The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent (in € per square meter) on a like-for-like basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-for-like basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.

Sustainability Performance Index (SPI)

Index to measure non-financial performance. A performance indicator introduced at Vonovia in January 2021 consisting of key figures on the CO2 intensity of the portfolio, primary energy requirements in new buildings, (partial) modernization measures to make apartments fully accessible, customer and employee satisfaction, and diversity within the management ranks.

Non-core Disposals

We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Recurring Sales

The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums from our portfolio. It does not include the sale of entire buildings or land (Non-core Disposals). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of our operating business within the narrower sense of the term. Therefore, these sales will be reported under “Other” in our segment reporting.

Fair Value Step-up

Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-­generating units (CGUs).