E1-3 – Actions and Resources Related to Climate Change Policies
Vonovia implemented the following measures in the reporting year to address the policies described in E1-2 and the material impacts and opportunities described in that section:
Climate Change Mitigation
Energy-efficiency modernization to improve energy efficiency is an essential pillar of Vonovia’s climate pathway. Using our decarbonization tool (DCT), an overall plan is prepared featuring an individual energy refurbishment and energy concept solution plan for each specific building. The energy efficiency measures, in particular insulating facades, cellar ceilings and lofts, and replacing windows, are implemented as part of the Upgrade Buildings investment program. As part of the strategic growth initiatives that we refined in 2025 (see chapter on Corporate strategy), conventional modernization is to be supplemented by scaling up serial modernization. Following pilot projects in 2024, this approach was expanded further in the reporting year and is expected to lead to greater cost efficiency and shorter construction times in the medium and long term. 145 residential units underwent serial modernization work in the reporting year.
Another measure involves the digitalization of heat supply. In the reporting year, a further 1,800 gas-fired heating systems had already been connected to a digital solution developed in collaboration with the company 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 our customers. A total of 4,000 systems had been connected to the digital system by the end of the reporting year.
Another aspect of implementing the climate pathway is increasing energy generation from renewable sources. In particular, this includes the electrification of heat generation by using highly efficient air-to-water heat pumps. As well as installing heat pumps in boiler rooms, another strategic initiative was driven forward with the heat pump cube approach. The heat pump cube is a compact heat pump center that combines all of the necessary components in an external module, supplies several buildings and can be installed outside the buildings in a short space of time. During the reporting year, 29 heat pump cubes were installed in our neighborhoods. Vonovia’s growth strategy envisages the large-scale use of heat pump cubes over the next few years. With this goal in mind, Vonovia entered into a strategic partnership with the companies EnerCube and DFA Demonstrationsfabrik Aachen in the reporting year that aims to mass-produce 1,000 cubes in the period leading up to 2029. These cubes are to be installed in Vonovia neighborhoods throughout Germany and will be able to supply around 20,000 residential units with heat and hot water. Vonovia is also continuing the program to expand electricity generation using photovoltaics. The focus here is on ensuring that the electricity generated is used directly in the neighborhood – by our customers and to operate heat pumps. The installation of these systems is therefore also closely interlinked with the heat pump initiative and the modernization program.
Our own energy supply company Vonovia Energie Service GmbH (VESG) provides our customers with electricity from renewable energies. Sales efforts will be stepped up as part of the growth strategy and additional sales capacity will be created in customer service. 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. By providing solar power or certified green energy that has been generated in the neighborhood, we are supplying over 52,000 households with reasonably priced electricity and helping them to reduce greenhouse gas emissions. In this context, we concluded two power purchase agreements in 2024, from which we obtained 27.4 million kWh of electricity generated from wind turbines in the reporting year. This equates to a avoidance of around 20,700 tons of CO₂ equivalents.
In the course of the reporting year, Vonovia installed around 1,750 new photovoltaic systems with an installed output of more than 53.4 MWp. Vonovia owns a total of more than 5,300 photovoltaic systems with an installed output of around 188 MWp. This fell short of the target of 213 MWp. We will continue to forge ahead with the expansion of photovoltaics going forward and are aiming for additional capacity of more than 94 MWp in the 2026 fiscal year. We aim to have installed around 400 MWp of capacity by 2028 and up to 700 MWp in the long term.
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 meet the targets set by policymakers for phasing out coal and increasing the share of renewable energies. Municipal heat planning will create both long-term security for planning and obligations to decarbonize heating networks.
Where it makes commercial sense, and provided that utility companies systematically decarbonize their heat generation systems, we are looking into connecting additional properties to district heating networks. This is an area in which Vonovia is working closely with major district heating providers and integrating their strategies into its own neighborhood planning.
The ability to implement the measures described depends on the availability and allocation of the corresponding investment funds and access to funding at affordable capital costs.
Like the climate pathway, the measures described refer to the housing stock in Germany and, as a result, largely to Vonovia’s own operations. As the climate pathway also includes GHG emissions from the upstream chain involving the energy sources used (Scope 3.3), the measures also relate to part of the upstream value chain. Part of the downstream value chain is also included, as the expansion of photovoltaic capacity in conjunction with tenant electricity models also reduces our tenants’ GHG emissions (Scope 3.13).
The implementation of the measures is designed to be permanent until the overarching climate target for 2045 is achieved.
The CapEx spent on the measures described in the reporting year consists of the investments within the Upgrade Buildings energy-efficiency modernization and heating replacement program, including investments in photovoltaic power generation capacity, and amounts to € 700.9 million. This equates to a 25.6% share of total CapEx in the reporting year.
Annual CapEx of around € 400 million to € 500 million a year has been earmarked for the implementation of all measures in the transition plan. In the reporting year, Vonovia expected the CO₂ intensity of its housing stock in Germany to fall slightly by -0.3 kg CO₂e/m² to 30.9 kg CO₂e/m² of rental area. This reduction target was achieved.
CapEx of € 700.9 million and OpEx of € 390 million were spent on implementing the climate protection measures in the reporting year.
Climate Change Adaptation
Vonovia systematically analyzes the relevant climate risks, which are mapped in an IT tool using the relevant climate scenarios developed by the IPCC (Intergovernmental Panel on Climate Change), assessing them with regard to the impact on our portfolio. During this process we also take into account the particular characteristics of the respective buildings and neighborhoods, such as existing sun protection or the degree of surface sealing.
Climate change adaptation is also taken into account in the planning guidelines for sustainable residential environment, which describe various components that can contribute, for example, to reducing heating in the neighborhood or improving drainage options. These guidelines must be taken into account as a mandatory requirement when planning open spaces in new neighborhoods.
We are taking various measures to make our existing neighborhoods more climate-resilient. These include, for example, the targeted planting of climate change-resistant tree species, the unsealing of parking areas and the establishment of seepage areas, as well as the creation of landscaped roofs.