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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 545,919 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 in connection with supplying our buildings with heat and warm water, known as Scope 1 and 2 emissions. Greenhouse gas emissions from the upstream value chain (Scope 3 emissions) and other environmental aspects are also relevant for us, meaning that we are increasingly collecting data on them.

Vonovia has set itself the target of achieving a virtually greenhouse gas-neutral housing stock by 2045, with carbon intensity of less than 5 kg of CO₂ equivalents per sqm of rental area (in terms of Scope 1, 2 and 3.3). By 2030, our housing stock in Germany is to have a CO₂ intensity of less than 25 kg CO₂e per sqm. Binding interim targets have been defined for the next five years so that we can achieve this goal.

Vonovia Climate Path: Strategy for Decarbonizing the Housing Stock

We had our climate pathway’s compatibility with the Paris Agreement target calculated using the XDC model from right.based on science in 2022. 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. The 1.5° target path of the Carbon Risk Real Estate Monitor (CRREM) for multifamily residences in Germany (as of July 2021) was used as a benchmark. This calculation revealed that, taking into account long-term sales that are already planned and Recurring Sales, Vonovia’s climate pathway is compatible with global warming of 1.4° Celsius.

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. In continuing to develop and implement our climate pathway, we maintain an overview of the risks, e.g., those resulting from future increases in prices for causing greenhouse gas 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.

Since 2022, Vonovia has been using an IT tool 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 material negative impacts on our business activities due to the effects of climate change to be analyzed at portfolio and property level. The climate risks examined using this tool are heat, 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 building or neighborhood level and are able to identify the climate risks for each building in the portfolio and, as a result, its vulnerability.

The risk assessment at company level is based on scenario RCP4.5, which, according to the United Nations (UNEP Emissions Gap Report 2023), represents an increase of around 2 to 3 degrees Celsius 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 at portfolio level has been identified for any of the climate-related hazards up to 2045.

Relevant risks could arise at the level of individual neighborhoods or buildings. As part of Vonovia’s modernization strategy, potential adaptations are to be defined at portfolio level in the future and then implemented individually for the properties or neighborhoods concerned. 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 and developing a neighborhood.

Implementation of the TCFD Recommendations at Vonovia

Implementation of the TCFD Recommendations at Vonovia

Content of the Recommendations

Implementation at Vonovia

Additional Information


Organizational structureof the company regardingclimate-related risks andopportunities

The entire Management Board bears responsibility for sustainability and climate protection, as well as climate-related risks and opportunities.

2023 Annual Report:The CompanyCorporate StructureSustainability Management at VonoviaManagement SystemEnvironmental IssuesOpportunities and Risks2022 Sustainability Report:Environment and Climate

Management of Opportunities and Risks

In its Strategy, Finance and Sustainability Committee, the Supervisory Board addresses climate protection and relevant risks and opportunities, among other topics. 

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 and the expansion of renewable energies for heating and powering 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 non-financial performance indicator used in the management system is the Sustainability Performance Index (SPI). It includes the carbon intensity of the housing stock in Germany and the average primary energy consumption 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.

2023 Annual Report:StrategySustainability Management at VonoviaEnvironmental IssuesRisk Assessment Based on Sustainability Aspects2022 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.

The climate pathway and scenarios for the portfolio are stored in the decarbonization tool.

An extensive modernization program to increase energy efficiency, as well as the use of heat pumps and connections to heating networks (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 in the current regulatory framework (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 organizationidentifies, assesses, andmanages climate-relatedrisks

Climate-related risks form part of the company-wide risk management process; half-yearly evaluation of all risks by the management.

2023 Annual Report:Environmental IssuesRisk Assessment Based on Sustainability AspectsOpportunities and Risks2022 Sustainability Report:

Management of Opportunities and Risks

Physical risks are analyzed in a separate climate risk 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 usedto assess and managerelevant climate-relatedrisks and opportunities

Extensive data on greenhouse gas emissions based on the GHG emission protocol

2023 Annual Report:StrategyManagement SystemEnvironmental Issues2022 Sustainability Report:Environment and ClimateNew Construction and Conversions

Environmental Key Figures

GHG emissions in the portfolio (in Germany) in 2023: 973,255 metric tons of CO2e (Scopes 1, 2, 3*).

Expansion of renewable energies using photovoltaics (PV): 1,353 installations with a nominal output of 53.1 MWp


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

Reduction of CO₂ intensity 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 300 MWp by 2026.

Reduction in average primary energy consumption in completed new buildings to 27 kWh per sqm by 2025.

  1. *Scope 3.3: “Fuel and energy-related activities 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 Management System and the renumeration paid to senior management. In the reporting year, the CO2 intensity for our housing stock in Germany was 31.7 kg CO2e per sqm of rental area, down by around 3.9% year-on-year (2022: 33.0 kg CO2e per sqm). In addition to the modernization measures implemented in the reporting year despite the lower investment volume, this development can also be traced back to numerous energy certificate updates. As the economic conditions remain challenging, for example the increased cost of capital and construction costs and the uncertain subsidy conditions, we have nevertheless kept the medium-term targets of our climate pathway unchanged. For 2024, this equates to a figure that is roughly on a par with the previous year. If, however, we manage to implement our reduction levers successfully, we are confident that we will once again report figures that are below those set out in our climate pathway.

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

Material performance indicator - SPI





Target for 2024

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

kg CO₂e/‌ m² rental area



roughly same level as the previous year

  1. * Total portfolio excl. Care segment, based on final energy figures from energy performance certificates, in some cases including specific CO₂ factors from district heating suppliers.

The transformation plan for our housing stock, our climate pathway, consists of three levers:

  1. Saving energy through energy-efficient modernization of the building envelope
  2. Increasing the share of renewable energies in the neighborhood
  3. Fundamental transformation of the energy sector

In order to operationalize this transformation plan, Vonovia uses the decarbonization tool (DCT), which maps its housing stock with all of the relevant ecological and economic characteristics. The DCT provides an overall plan showing how the housing stock needs to be modernized in detail in order to meet the Group’s overall target and the time frame in which this must be done. Individual solution plans are identified for all buildings which are then set out in more specific detail in the plans for energy-efficient modernization and the energy concepts.

In doing so, we adopt a holistic view at neighborhood level, 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 often be implemented in a more technically feasible and economically viable way within larger neighborhoods. Our approach is shaped by the concept of sequential development. This means that, depending on the efficiency class and existing energy supply, the measures to enhance the individual buildings and advance towards the 2045 targets set in the climate pathway are staggered in some cases. When it comes to the specific implementation process, tailored and economically viable concepts are developed for scalable solutions that focus on linking the heat, electricity and mobility sectors.

Public-sector subsidy programs are being used for many of the modernization measures in order to minimize the costs for our tenants. Here, federal subsidies 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. Uncertainty surrounding the continuation of subsidy programs that have been initiated, or surrounding the structure of programs that have been announced, is currently making it much more difficult for us to plan.

We achieved an overall refurbishment rate of 1.2% in the reporting year. The year-on-year decline (2022: 1.8% excluding Deutsche Wohnen) can be traced back to the fact that the 2023 investment volume was lower owing to the sharp rise in the cost of capital. Nevertheless, we exceeded our target corridor of between 0.3% and 0.8%. This was due to numerous modernization projects implemented by Deutsche Wohnen that had already been commenced before the reporting year and were completed in 2023. Looking ahead to 2024, we expect the refurbishment rate to be roughly on the same level as 2023.

Material Performance Indicator – Refurbishment rate (in Germany)

Material performance indicator





Target for 2024

Refurbishment rate (in Germany)*




same level as the previous year

  1. * Change of the calculation basis to completions per calendar year, corresponding correction of the figure for 2022. 2023 actual incl. Deutsche Wohnen (excl. Care segment).

In order to make energy-efficient building refurbishment even more cost-effective in the medium and long term, we continued to forge ahead further with serial refurbishment in the reporting year. Following on from a pilot project implemented in Bochum in 2022, another refurbishment project based on the Energiesprong principle was carried out in the reporting year. In Witten, four and, for the first time, eight-story apartment buildings including six to 24 apartments were fitted with prefabricated, glass-faced facade elements featuring a honeycomb structure that allows solar radiation to be used to generate heat. Heat is also generated by a highly efficient heat pump powered by green electricity generated by photovoltaics on the roof and facades. The windows have integrated blinds and allow for living area ventilation. Overall, the project will upgrade the buildings from energy efficiency class E to A+ after the refurbishment. The project is cost-neutral for tenants in the medium and long term. Preparations for further serial refurbishment projects are currently underway.

Since as early as 2022, we have been accelerating the electrification of heat generation through our heat pump initiative, a key component in our quest to implement our climate pathway. Based on a pilot batch of 50 heating networks involving 108 buildings in Dortmund, primarily implemented in the reporting year, key challenges related to use of the technology in apartment buildings were identified and addressed with relevant stakeholders. In addition to the installation of the air-to-water heat pumps, the focus was also on replacing radiators wherever this was necessary in order to further reduce the supply temperature to enable efficient heat pump operation. The measure will reduce the carbon emissions from the 50 heating networks by 40%. The findings will be used to expand the initiative to cover other regions.

Another aspect of implementing the climate pathway is increasing energy generation from renewable sources. Vonovia continued the program it had launched back in 2021 to expand electricity generation using photovoltaics in the reporting year. The focus is on ensuring that the electricity generated is used directly in the neighborhood – to supply our tenants and to operate heat pumps. The installation of these systems is therefore also closely interlinked with the heat pump initiative and the modernization program.

At the end of the reporting year, Vonovia owned 1,353 photovoltaic systems with an installed output of 53.1 MWp. This outstripped the target of 43.3 MWp by far (+22.6%). Starting in 2024, the pace of PV expansion is to be accelerated significantly again: Instead of our original plan of having around 280 MWp of installed capacity by 2030, we are aiming to install around 300 MWp of capacity by the end of 2026. We are aiming for additional capacity of 80 MWp in the 2024 fiscal year. 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 2024

Number of photovoltaic plants*




Installed output





  1. * Photovoltaic systems (feed-in points) owned by the Group as of Dec. 31; adjustment of the figures for FY 2022 (exclusion of six contracting systems in Austria).

The reporting year saw Vonovia set up an integrated system for housing-related infrastructure services under the “Quartierwerk“ umbrella. This encompasses activities relating to renewable energies and energy sales, as well as metering services, multimedia and the Internet of Things (IoT).

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 45,000 households with around 50 GWh of low-cost 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.

Vonovia is also forging ahead with digitalization in the field of heat supply. In the reporting year, more than 1,450 gas-fired heating systems had already been connected to a digital solution developed in collaboration with the start-up Othermo, which detects heating system failures in real time and supports optimized adjustments to the system technology. This system offers the potential to save around 15% in energy and CO2, with direct benefits for tenants.

The energy innovation team, which is part of the Innovation & Business Building department, actively works to help ensure that climate pathway targets are met by analyzing and testing innovative technologies. Projects in the reporting year focused on the introduction of a simulation tool that allows even complex energy systems and flows in the neighborhood to be mapped in various configurations in a short space of time. This allows the technical and commercial design of new technologies to be analyzed directly in detail, allowing for faster and better decisions in the context of specific neighborhood development. Preparations were also under way for a pilot project for the selection and introduction of an energy management system in the reporting year. The aim is to make a central technical system operational for efficient operational control and optimization as well as flexible marketing of electricity generation from photovoltaics. The energy management system is designed to control energy flows, especially electricity flows, at portfolio level and also prepare forecasts of electricity demand and electricity production depending on user behavior and weather data in order to make optimum use of the spot market for surplus or required electricity. The pilot projects will start at the beginning of 2024. Vonovia is also partnering in two funded research projects. The EU-funded Neutralpath project in Dresden is looking into how the district heating supply temperature can be reduced and the formation of legionella prevented at the same time. Seven different technological systems are being tested are part of the project. The ReFaTEk project is researching what is known as the energy clinker, a technology in which the facade is to serve as an additional heat source for a heat pump via a brine pipeline in the clinker.

A further key lever for our climate pathway is the supply of sufficient quantities of CO₂-free district heating and electricity by the energy sector. This requires the energy sector to 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 mandatory municipal heating planning process 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. The German Heat Planning Act (Wärmeplanungsgesetz) also features mandatory targets for the decarbonization of heating networks. One good example in practice is the Bochum heat transition project that Vonovia is involved in. One key element of this project involves adopting an integrated view of heat and electricity generation that takes all stakeholders in the municipality into account. 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 by public utilities companies. As a result, Vonovia is examining the decarbonization strategies of the most important district heating providers and, based on these conclusions, drawing up potential courses of action for incorporating them into its long-term neighborhood strategy.

The Portfolio Management department, which reports to the Chief Rental Officer (CRO), is responsible for coordinating the energy-efficient modernization activities. The neighborhoods and buildings to be modernized are selected in a targeted manner in cooperation with the regions, and the optimal degree of modernization and modernization roadmap for each building is defined. The investments for the modernization programs and PV expansion are approved by the Management Board. The newly established “Quartierwerk“ unit is also part of the Chief Rental Officer’s (CRO) executive division, meaning that it is closely linked to the management of the portfolio. Innovation & Business Building with the energy innovation team falls under the CEO’s executive division.

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 in greenhouse gas emissions of 55% and an increase in energy efficiency of 35% by 2030 compared to the baseline year of 2005. Both targets are likely to be met ahead of time. 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 more environmentally-friendly energy sources, in particular district heating. 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 2013/2014 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. The regular review audit was completed successfully in the reporting year.

In Sweden, around 90% of existing Victoriahem buildings are supplied with district heating, the generation of which already produces extremely low CO₂ emissions. Therefore, the road to climate neutrality at Victoriahem will primarily be shaped by further decarbonization of heating supply, coupled with ongoing improvements in energy efficiency. Heat pumps are also being installed in selected buildings during modernization work to support the heat supply and make it more flexible. The aim is to reduce energy consumption (electricity and heat) by 30% per sqm by 2030 compared to 2015. The current reduction level is around 25%. In 2022, Victoriahem also joined the Swedish housing association’s “Allmännyttans klimatinitiativ”, which aims to achieve an energy supply that does not feature any fossil fuels 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 attractive, sustainable and diverse residential neighborhoods in Germany and Austria, and the densification of buildings as part of the development of existing neighborhoods. 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. Our focus is on the development of large, inner-city properties in major cities (known as brownfield projects) that require a whole range of requirements to be taken into account. This allows us to create additional homes and avoid additional sealing, for example by converting sealed industrial areas into state-of-the-art residential neighborhoods. 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 and demolition – in order to minimize its emissions, the impact it has on the environment and the amount of resources that it consumes.

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 2023, the average primary energy demand was 25.3 kWh per sqm per year, down considerably on that of the previous year as planned. We anticipate higher primary energy demand for 2024 due to a number of projects resulting from the merger with Deutsche Wohnen.

Material Performance Indicator – Average primary energy requirement – new construction

Material performance indicator - SPI





Target for 2024

Average primary energy demand – new construction*

kWh/m² p. a.




  1. *Based on energy performance certificates, excluding commercial projects and extensions.

In the reporting year, BUWOG prepared a sustainability strategy for development that is to be implemented starting in 2024. Guides, specifications and tools have been developed in 14 topic areas to address the full range of sustainability aspects in new construction. These include optimized heat supply in the neighborhood, the use of ecological building materials and designs for open spaces. The strategy is based on the use of the German efficiency house standard or the basic criteria of Austria’s “klimaaktiv” initiative.

Numerous results from the previous year’s “Perspectives on the Future of Construction” dialogue process, in which Vonovia had, among other things, made a commitment to give greater consideration to life cycle assessments and to increase the use of sustainable building materials and the recyclability of constructions, were also incorporated into the elaboration of the Development sustainability strategy. The reporting year saw BUWOG become a member of the Timber Construction Coalition (Koalition für Holzbau), an initiative that brings together academics, planners, architects and project developers with the aim of improving acceptance of, and overall conditions for, timber construction in Germany. Timber construction is already playing an increasingly important role at Vonovia: with the “Hygge Höfe” residential neighborhood that is currently under construction, BUWOG is in the process of building a timber construction neighborhood in Berlin-Kaulsdorf, featuring 166 residential units using an innovative timber hybrid construction method. The method saves around 64% in CO2 compared to conventional concrete construction. The method also involves unsealing the soil: A site that was previously fully sealed will be largely unsealed and landscaped as part of the neighborhood development plans.

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. We also take the neighborhood criteria of the DGNB (German Sustainable Building Council) for biodiversity (ENV2.4) and water cycle systems (ENV2.2) into consideration and already meet these standards in various neighborhoods.