GOV-2– Information Provided to and Sustainability Matters Addressed by the Undertaking’s Administrative, Management and Supervisory Bodies

The Strategy, Corporate Development & Sustainability department reports to and coordinates its operations directly with the CEO in terms of sustainability topics related to the company’s strategy and business model. The Head of this area regularly exchanges views with the CEO (at least once a month) and the sustainability committee on current developments and issues. These include the identification of material impacts, risks and opportunities, further development of the sustainability strategy, the implementation of appropriate measures, the definition and monitoring of sustainability objectives and metrics, and the implementation of sustainability projects. This also includes the implementation of sustainability-related due diligence.

The Audit, Risk and Compliance Committee within the Supervisory Board addresses sustainability topics at least twice a year, once when adopting the annual financial statements (including the sustainability statement) and once to assess the impacts, risks and opportunities in the context of the risk report.

When overseeing the company’s strategy, making decisions on major transactions and in the risk management process, impacts, risks and opportunities – including trade-offs – are taken into account as follows:

Vonovia is adapting to the constant changes in the market environment and in the overall statutory and regulatory framework by developing its strategy and, within this context, its business activities on an ongoing basis. Vonovia also reacts to ESG influences from a wide variety of stakeholders by adjusting its corresponding ESG targets, which also involves using suitable KPIs to continually monitor the progress made towards achieving these targets. Conflicting targets, such as the extent of energy-efficient refurbishment to achieve climate objectives versus the associated costs and impacts on housing affordability, are also taken into account in the strategic focus. These changes mean that additional impacts, opportunities and risks arise on a regular basis, and that the extent of existing impacts and resulting opportunities and risks can change at any time.

As a result, Vonovia has implemented a comprehensive risk management system that ensures that all of the risks that are relevant to the company (and to the environment and society at large) can be identified, evaluated and managed. This risk management system also explicitly takes into account impacts, opportunities and risks related to sustainability. These are assessed both in terms of their impact on Vonovia (outside-in perspective) and also – in line with the concept of ESG due diligence – in terms of their impact on the environment and society (inside-out perspective). This means that potential risks which might impair the value and/or development of the company, or the environment and society, can be identified at an early stage.

In organizational terms, risk management is assigned directly to the Management Board. It has overall responsibility and decides on the organizational structures and workflows of risk management and provision of resources. The Management Board approves the documented risk management findings, takes account of them in steering the company and reports them to the Supervisory Board. The Audit Committee of the Supervisory Board monitors the effectiveness of the risk management system and is informed of any changes in the assessment of impacts, risks and opportunities.

In the 2024 fiscal year, the Sustainability Committee – and as a result the Management Board – and the Strategy, Finance and Sustainability Committee within the Supervisory Board addressed the material impacts, risks and opportunities listed in ESRS 2 SBM-3 and validated the results of the materiality assessment. The Group Works Council was also informed of these results.