ESRS E1 Climate Change

E1-1 – Transition Plan for Climate Change Mitigation

Vonovia has developed a transition plan that aims to attain a climate-neutral housing stock by 2045. Vonovia has set itself the target of reducing the greenhouse gas (GHG) intensity of its housing stock in Germany to below 25 kg CO₂e/m2 of rental area by 2030, and to less than 5 kg CO₂ equivalents per m2 of rental area by 2045 (based on Scopes 1, 2 and 3.3). The unavoidable emissions remaining in 2045 are to be offset by suitable measures that the company is still to define, achieving a CO₂ intensity of net zero.

Binding interim targets have also been defined for each of the next five years. Vonovia’s climate change mitigation targets are based on long-standing measures to reduce greenhouse gas emissions.

Vonovia has also set itself the target of reducing absolute Scope 1 and 2 greenhouse gas emissions by 42% by 2030 compared to the base year 2021. This applies to the GHG emissions from the housing stock in Germany, Sweden and Austria, which together account for around 97% of the Vonovia Group’s total GHG emissions (based on the base year 2021, excluding discontinued operations and Synvia). Vonovia is also committed, by 2030, to reducing absolute Scope 3 greenhouse gas emissions from the categories “Fuel and energy-related activities,” “Use of sold products” and “Downstream leased assets” by 25% as against 2021. The Scope 3 categories included in this target cover around 80% of the total Scope 3 GHG emissions in the 2021 base year. The Science Based Targets initiative (SBTi) confirmed in March 2024 that the targets set and submitted by Vonovia SE (near-term targets) are in line with the 1.5-degree goal of the Paris Agreement. Further information on the company’s climate targets can be found in Disclosure Requirement E1-4.

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

1. Increasing efficiency and thus reducing energy demand for heat and warm water supply by way of energy-efficient refurbishment of the building envelope
2. Increasing the share of renewable energies in the neighborhood by installing heat pumps and expanding power generation using photovoltaic systems on our buildings, and
3. Comprehensive transformation of the energy sector and supply of sufficient quantities of GHG-free district heating and electricity by the energy sector.

The CO₂ intensity of the housing stock 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 remuneration paid to the Management Board and senior management.

Further information on the concepts and measures for implementing the transition plan can be found in Disclosure Requirements E1-2 and E1-3 .

To support and implement our transition plan, we invested a total of € 1,162 million in the reporting year, or 96.3% of our total capital expenditure in the reporting year. This amount represents the taxonomy-eligible CapEx in accordance with Delegated Regulation (EU) 2021/2178 in the business activities of energy-efficient renovation of existing buildings (7.2/CE3.2), the installation, maintenance and repair of energy-efficient equipment, the installation, maintenance and repair of charging stations for electric vehicles in buildings, the installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings, and the installation, maintenance and repair of renewable energy technologies (CCM 7.3 – 7.6).

The GHG emissions that can already be predicted to be emitted by the time the targets are reached in 2045 are to be understood as “locked-in GHG emissions.” By 2045, GHG emissions of around 8.8 million metric tons of CO₂e (Scope 1+2+3.3) are expected to be generated following the implementation of the transition plan. Around 49 thousand metric tons of CO₂e also come from Scope 3.11 “Use of sold products.” This category contains the GHG emissions from the new residential units built for sale that were completed in the reporting year. A lifespan of 50 years has been applied.

Vonovia is continuously reducing greenhouse gas emissions in its housing stock and in its operations thanks to the GHG emission reduction targets it has set itself and the corresponding measures to boost energy efficiency and make the switch to renewable energies. The plans to reduce “locked-in GHG emissions” are described in detail in the transition plan. There is no threat to the reduction targets or any promotion of transition risks.

Vonovia has not set any target values for the key figures referred to in the EU taxonomy for 2025 or 2030. We are aiming to increase the proportion of taxonomy-aligned business activities (sales, CapEx, OpEx) on an ongoing basis.

Taxonomy-aligned capital expenditure is as follows, based on Vonovia’s business model: capital expenditure associated with the renovation of existing buildings (activity 7.2) that contributes to the transition plan always relates to energy-efficient modernization at Vonovia. We take the required 30% reduction in primary energy demand into account when designing projects. Capital expenditure on heating modernization, charging stations and wall boxes, metering technology and smart metering, and photovoltaic systems is generally treated as a direct climate change mitigation measure and is allocated to activities 7.3, 7.4, 7.5, and 7.6. Activity 7.7 “Acquisition and ownership of buildings” includes capital expenditure from acquisitions, Development to hold, investments not including energy efficiency measures (e. g., refurbishment of vacant apartments or major maintenance measures) or other internal expenses that can be capitalized. These qualify as taxonomy-aligned if the building-related technical screening criteria are met. The proportion of taxonomy-aligned activities will be steadily increased as the transition plan is implemented as a result of ongoing modernization measures. Vonovia did not make any significant investments in connection with economic activities related to coal, oil or gas in the reporting year. Vonovia is not excluded from the EU Paris-aligned benchmarks.

The transition plan has been fully integrated into the company’s business strategy and financial planning. The GHG emission reduction targets have been integrated into the management system as a subindicator of the Sustainability Performance Index (SPI). The SPI and all of its subindicators, such as CO₂ intensity, form part of the planning process, and the progress made as well as the forecast value for the fiscal year concerned are calculated and reported to the Management Board on a quarterly basis.

The neighborhoods and buildings to be modernized are selected in a targeted manner in cooperation with the regional business areas, 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 use of the investment funds required to implement the measures is mapped out as part of the five-year plan and the budget prepared for the following year, and is adopted by the Management Board before being confirmed by the Supervisory Board. The Supervisory Board discusses and approves the SPI targets proposed by the Management Board for the 2024 budget and the period covered by the Long-Term Incentive Plan (LTIP) (for four years in each case).

In the reporting year, the CO₂ intensity for our housing stock in Germany was 31.2 kg CO₂e/m² of rental area, down by around 1.6% year-on-year (2023: 31.7 kg CO₂e/m²), and 2.5% below the target for the reporting year (32.0). In addition to the modernization measures implemented in the reporting year despite the lower investment volume (building envelope + replacement of heating systems), this reduction can also be traced back to numerous energy certificate updates.