S1-1 – Policies Related to Own Workforce

Working Conditions (Shortage of Skilled Workers)

As part of the materiality assessment, Vonovia identified material impacts and a financial opportunity with regard to the issues of the “Working Conditions / Shortage of Skilled Workers” and “Equal Treatment.” Both subtopics are embedded in, and addressed by, our long-term HR strategy. This supports Vonovia’s new business strategy, which aims to offer state-of-the-art, customer-centric products and services. This strategy will be realized through future-oriented HR management, which is to be implemented in the company.

Vonovia has identified a material financial opportunity related to achieving a high level of appeal as an employer in order to counter the prevailing shortage of skilled workers. This opportunity is directly linked to the material impacts of ”promotion of employees’ professional development” and “employee (dis)satisfaction due to (lack of) co-determination”. Dissatisfaction can arise in this regard due to inadequate representation channels/opportunities, such as works councils and employee representative structures, as well as due to limited feedback opportunities and opportunities for employees to have their say (consultation and co-determination). This can create risks with regard to working conditions, such as inadequate wages or remuneration conditions, excessive workloads for employees due to inflexible working hours regulations or limited work-life balance opportunities. These impacts can ultimately affect Vonovia’s appeal as an employer, which can, in turn, translate into increased staff turnover or make it more difficult to recruit new hires, further intensifying the negative effects of the shortage of skilled workers.

Our HR strategy addresses these identified effects described above, as well as the opportunities, through its various subcomponents. The strategy was approved at Management Board level and is implemented, monitored and managed centrally throughout the Group by the HR department. This also includes all current business areas, including the Care segment, as well as the business areas in Austria and Sweden. The overarching objectives of this strategy are to secure the long-term success of Vonovia’s business and the associated jobs and, as a result, to attract qualified employees to Vonovia and keep them with the company in the long term. This overarching strategic concept for HR has been integrated into our corporate management via the Sustainability Performance Index (SPI), which includes, among another four, two subindicators: employee satisfaction and the proportion of women in management positions at the first and second level below the Management Board. For detailed information on the SPI and the tracking of targets, refer to ESRS 2 GOV-3 and S1-4 and S1-5. In our quest to achieve these goals, we are using recruitment, targeted HR resource planning and the insourcing of skilled workers in technical areas and the trades to counteract the shortage of skilled workers and demographic change. Part of the concept also involves promoting the development of skilled workers and employees and retaining them at the company (talent management). At the same time, we are working on our organizational development and on establishing an innovative, open and dynamic corporate culture. This includes short, medium and long-term implementation and management phases embedded in a steering cycle at Management Board and Supervisory Board level that is supported by an overarching internal strategy process and is monitored by both this entity and the HR department with regard to the progress made. Vonovia’s new business strategy is to be bolstered by corresponding strategic HR modules in three “horizons” running in tandem: Initially, this entails prioritizing and addressing immediate requirements, such as remuneration and recruitment issues, as well as the topic of equality and equal opportunities (first horizon). In the medium term, the aim is then to gradually strengthen the employer brand and adapt employer branding to reflect HR resource planning, roll out talent and performance management and provide existing employees with even more targeted training, support and development opportunities as they progress on their individual career paths (second horizon). In addition, strategic recruitment is to be used to attract further qualified specialists for new roles in the company’s core business, for example in procurement, sales, modernization and development, in order to provide HR support to Vonovia’s growth strategy (third horizon). In the long term, our HR strategy will focus on further developing and further establishing those aspects that promote leadership and corporate culture, in particular moves to promote gender equality and equality of opportunity within the company, as well as creating links with leadership concepts.

The HR strategy is presented and made available as part of the steering cycle and in the corresponding implementation phases at management level. The responsible managers are tasked with implementing the measures derived from the strategic components referred to above in their business areas. Affected employees are also informed about relevant strategic developments, changes and innovations relating to their jobs before they are implemented at regular works council meetings and via the available information channels, such as the intranet and Management Board emails.

Equal Treatment and Opportunities for All

Vonovia uses the Code of Conduct, as the basis for the material positive impact and the associated strategy for “Promoting Workforce Diversity,” as a central guideline for behavior that is consistent with the Vonovia Group’s values and regulations. The Code of Conduct sets out provisions governing aspects such as conduct, preventing corruption, conflicts of interest, information and data protection, discrimination, environmental protection and protecting company property. It applies to all Vonovia employees in Germany and has also been adopted in Austria and Sweden, with modifications to take account of country and organization-specific differences. The correct implementation of the Group policy is reviewed by Internal Audit in line with a risk-based approach. In addition, reports of non-compliance (e.g., in suspected cases of discrimination or violence in the workplace) are submitted using the relevant whistleblowing channels (see S1-3) and, if the facts are confirmed, sanctions are imposed based on formalized processes. The content and specific sub-dimensions – particularly with regard to preventing discriminatory or violent behavior in the workplace – are made available to all employees, managers and members of the Management Board in a mandatory training session. Our established grievance and reporting mechanisms ensure that any violations of the Code of Conduct are systematically investigated and that appropriate sanctions imposed, helping to contain and combat any cases of discrimination that arise. Operational responsibility for the implementation, monitoring and further development of this concept is shared between the HR, Legal, Compliance, Corporate Communications and Internal Audit departments. Ultimate responsibility lies with the Management Board.

The European legal framework in which Vonovia operates with its business model is strictly regulated and overseen in the markets in Germany, Austria and Sweden. This applies in particular to fundamentally enshrined human rights, to which Vonovia attaches great importance, irrespective of the legal framework. Compliance with, and the fostering of, these rights is reflected in our ethos and mission statement. We adapt our guidelines to changing conditions as needed on a case-by-case business. Due to the Supply Chain Due Diligence Act and the announced European regulation, the way in which supply chains are structured and the due diligence obligations associated with this are of increasing importance to the company.

In our Declaration of Respect for Human Rights, which applies throughout the Group, we communicate our clear conviction for a pluralistic democratic society and zero tolerance of human rights violations and our commitment to respect human rights in all aspects of our business. We adhere to the core labor standards of the International Labour Organization (ILO), the UN Guiding Principles on Business and Human Rights and the principles of the UN Global Compact, which we committed to in 2020. Our Code of Conduct also takes account of our stance regarding respect for human rights.

Vonovia’s business model includes the construction, maintenance and modernization of homes. From a human rights perspective, compliance with labor and social standards on construction sites in the course of these activities is of particular relevance. Some trade/construction activities in Germany are carried out by the company’s own technical service – and therefore by our employees. This lessens both dependency on the services of external construction companies and – thanks to the measures established in the company’s own business area – the risk of non-compliance with labor and social standards.

A due diligence process to avoid scenarios in which business activities have negative impacts on people and the environment forms the core of compliance with the minimum safeguards. Taking the OECD Guidelines as a basis, Vonovia has implemented all of the recommended due diligence steps. In the reporting year, we conducted a human rights and environmental risk analysis for our own business and the supply chain.

To address risks identified in relation to topics, such as fair working conditions (adequate remuneration and social protection), freedom of association or anti-discrimination and equal treatment, we develop measures that we regularly review for appropriateness and effectiveness. As part of the German Supply Chain Due Diligence Act (LKSG), which came into effect in 2023, we held a kick off workshop for employees in the Procurement department last year. In addition, in 2023 we introduced an e-learning program to raise awareness of our human rights due diligence obligations among our employees. This was also freely accessible to all our employees with access to the Vonovia Academy during the reporting year. We initiated a comprehensive supplier survey in 2023 to further boost transparency regarding activities in the supply chain and dialogue with our business partners. This survey was conducted again during the reporting year, and appropriate follow-up measures were derived from the results. We answer human rights-related questions from our business partners via the mailbox humanrights@vonovia.de, among other channels.

Vonovia has set up various procedures that allow reports on potential abuses (such as human rights violations) by both internal and external parties, including anonymous reports. We conduct in-depth investigations into indications of human rights violations within our own business or in the supply chain that come to our attention via the various reporting channels (see S1- 3).

As Vonovia operates in geographical areas (Germany, Austria and Sweden) where child labor, human trafficking and forced labor are prohibited and punishable by law, these issues are considered to entail low risks for the company based on a due diligence analysis. Consequently, these issues are not the main focus of Vonovia’s HR strategy. Vonovia complies stringently with the statutory provisions that apply in its business areas and explicitly rules out these forms of human rights violations by means of corresponding Group policies. As a result, there is no risk of human trafficking, forced labor or child labor at Vonovia or in its value chain. Nevertheless, we carry out regular risk analyses, and ad hoc risk analyses if required, for our own business and for our supply chain. We describe our approach to risk analysis and the risk areas in our Declaration of Respect for Human Rights, which we update on a regular basis.

The company uses its professional health and safety management policy to minimize potential hazards and promote a working atmosphere that effectively protects all employees from health risks in the workplace. We design working processes and structures that are conducive to good health and offer preventive health care programs as part of our corporate approach to health management.

Our Group guideline on occupational safety defines the occupational safety standard that applies throughout the Group. The company undertakes to assess health hazards in the workplace and to implement the necessary safeguards based on this assessment. The guideline thus serves to protect employees from possible risks and hazards, as they go about their individual, day-to-day work as well as to prevent potential hazards in advance to the greatest extent possible. It defines the associated responsibilities and duties at Vonovia. The resulting instructions help managers to live up to their occupational safety responsibilities. In line with our Group policies, the Management Board is informed once a year about all occupational health and safety measures and the accident figures for the previous year.

Vonovia’s HR strategy, which explicitly includes preventing discrimination, covers the following grounds for discrimination: ethnic origin, skin color, gender, sexual orientation, gender identity, disability, age, religion, political opinion, national origin or social background, as well as other forms of discrimination covered by EU and national law.

A general ban on discrimination against people with disabilities is enshrined in Article 3 (3) of Germany’s constitution, the Basic Law (Grundgesetz), and in the Federal Participation Act (Bundesteilhabegesetz). This ban is substantiated by the objective of enabling participation and self-determination for people with disabilities, including in areas relevant to the labor market.

The German General Act on Equal Treatment (AGG) provides a framework for access to advertised jobs through the prohibition of discrimination under labor law. As a result, it also influences the management of recruitment and hiring processes, working conditions and the area of continuing professional development at Vonovia by virtue of the ban on discrimination under labor law. The Federal Disability Equality Act (BEinstG) in Austria, which provides special security of tenure for people with disabilities, and the Swedish Anti-discrimination Act (Diskrimineringslag), apply in a comparable framework and impose a ban on discrimination that covers the employees of Vonovia’s subsidiaries. In addition to a strict ban on discrimination, Vonovia, as a private-sector company, is obliged to implement appropriate strategies to promote the employment of individuals with disabilities in its own operations. These are set out in a corresponding Group works agreement (the ”Inclusion Agreement”) between the Group Works Council and the Group with regard to various areas of application (e.g., integration and employment of people with disabilities, management training, workstation design and professional development). The various Group companies (e.g., the holding company, customer service, engineering, etc.) also have dedicated representatives for severely disabled employees who are on hand to answer formal or work-related questions. If cases of discrimination arise, individuals with disabilities can use our reporting channels (e.g., AGG mailbox, hotline, ombudsperson), which are used to record and investigate suspected cases and take appropriate action, if a case of discrimination or harassment is confirmed (see also G1-3).