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Appeal on the Capital Market

Inflation, interest rates and views on possible recession scenarios continued to dominate the international capital markets in 2023. Following a marked drop in inflation, given that interest rates have now peaked, at least according to capital market assessments, and in light of the prospect of initial rate cuts in 2024, sentiment brightened considerably and led to broad-based price increases, particularly at the end of the year. Vonovia’s shares also benefited from the improved macroeconomic environment, gaining 29.6% over the course of the year. All in all, we nevertheless observed a widening gap between capital market expectations on the one hand, and ongoing robust development on the residential real estate market on the other (see Vonovia SE on the Capital Market).

The construction and management of residential real estate is a business with a long-term focus. Our aim in this segment is to bring economic activity hand in hand with environmental benefit, living up to the various expectations of stakeholders. It is important to us to provide relevant information on our company and our economic development as well as on the sustainable direction of Vonovia, thereby providing an accurate picture of Vonovia. We want to generate attractive risk-adjusted rates of return for our investors and achieve sustainable revenue and value increases. This strengthens trust in the Vonovia brand.

We are committed to both the principles of the social market economy and the imperative of profitability. Economic success is the prerequisite for further investments in environmental and social sustainability. At the same time, we firmly believe that these investments also pay off in terms of our appeal for investors. This is substantiated by the growing demand for sustainable financial products and the ever greater establishment of ESG criteria as a basis for investment decisions.

In line with the targets we have set, Vonovia uses a broad mix of financial instruments, like bonds, promissory notes, secured real estate loans, commercial papers, working capital facilities and loans from development banks like the German government-owned development bank Kreditanstalt für Wiederaufbau (KfW) and the European Investment Bank (EIB), in order to secure good access to the capital market. Our sustainable bonds, seven of which we placed successfully on the capital market in 2022, meet the demand for both green and social bonds – and play a crucial role in our financing strategy. In 2023, we also raised equity by selling minority interests. These joint ventures have given us access to equity in a manner that is much more cost-effective than implementing capital increases via the stock exchange.

The European Union Sustainable Finance Disclosure Regulation (SFDR) is aimed at providers of financial products and financial advisers such as banks, asset managers, institutional investors and insurance companies. Under the SFDR, these groups are required to align their products, processes and strategies with ESG guidelines. We have made our Sustainable Finance Framework – which has applied since February 2022 – consistent with the EU taxonomy, which was confirmed by an independent third party in a Second Party Opinion (SPO). All green bonds that we issue under this framework are environmentally sustainable as defined in the EU taxonomy (environmental objective 1 – climate change mitigation).

With our Sustainable Finance Framework, we have also laid the foundation for the definition and selection of social assets in the real estate sector on the Swedish market. The eligible properties are located in “particularly vulnerable,” “high-risk” and “vulnerable” areas identified by the Swedish police, in which Vonovia has also launched initiatives to promote integration and reduce unemployment among its tenants. The criteria we selected in this context have already been adopted by at least three other issuers on the market.

We have published our Sustainable Finance Framework, the annual impact report evaluating the effectiveness of our measures and further information about our sustainable financing strategy on our Group website.

Our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) are responsible for our capital market activities. The Investor Relations department and the Sustainability/Strategy department report to the CEO. The Corporate Finance and Treasury department, which is responsible for the implementation of our financial instruments, reports to the Chief Financial Officer (CFO). The Head of Corporate Finance and Treasury chairs the Sustainable Finance Committee, which comprises representatives from several different departments and is responsible for managing and further developing our sustainable financing activities. The Sustainability/Strategy department is responsible for our participation in ESG ratings, involving the operating departments in this process.

Involving our stakeholders on the capital market is handled by the Investor Relations (IR) division in close consultation with the Management Board. Transparency is the watchword here. Through formats such as investor conferences and roadshows, we seek out dialogue – including and especially on ESG topics – with our shareholders and potential investors. Face-to-face conversations, additional property tours and the participation in conferences for private investors represent additional communication channels.

At the same time, IR acts in an inward-facing way so that the topics communicated to us by capital market actors come to the attention of the right people within the company.

Sustainability ratings and indices serve as valuable indicators of our sustainability performance and key sources of information for the capital market to help with investment decisions. As a result, they are a top priority at Vonovia. The Sustainability Committee decides which ESG ratings we actively use (see Sustainability Management at Vonovia).

The 2023 rating results were influenced, in particular, by their consolidated application for the integrated Group for the very first time – for example through an improved carbon footprint – as well as by the suspected case of bribery involving individual (former) employees in March 2023, which also involved Vonovia’s business premises being searched (see Combating Corruption and Bribery). The latter, for example, resulted in an MSCI downgrade. Nevertheless, we once again achieved good to very good results in all ESG ratings relevant for Vonovia and its investors in 2023. As such, we continue to be listed on the renowned Dow Jones Sustainability Index Europe (despite the lower number of points in the corresponding S&P rating due to increased requirements and the restructured questionnaire), as well as on sustainability indices such as the DAX 50-ESG or the STOXX Global ESG Leaders, to name but a few examples, and have been awarded Prime status by ISS-ESG.  Sustainalytics has assigned us to the lowest risk category and we rank among the top 100 performers of all companies analysed by Sustainalytics (> 15,000 companies worldwide, as of December 31, 2023).

Material Performance Indicator – Performance in Relevant ESG Ratings

Material Performance Indicator: Performance in relevant ESG Ratings*




Sustainalytics ESG risk rating






CDP Climate Change






S&P Global CSA



  1. *2022 excl. Deutsche Wohnen, from 2023 incl. Deutsche Wohnen (excl. Care segment and SYNVIA).

For 2024, we have set ourselves the goal of maintaining our consistently high performance in the relevant ESG ratings and continuing to present our sustainability performance to the capital market in a comprehensive and transparent way. As well as performing regular checks to see whether we are listed in the relevant indices, we also use the results of the rating process and peer group comparisons to further develop our sustainability measures in a targeted manner.