Forward-Looking Business Practices

GRI 3-3

In the concrete implementation of our sustainability goals, we align our activities with the Volkswagen Group guidelines, adopt their principles and formulate company directives that are specifically tailored to Volkswagen Immobilien. In this report, the various sections include a reference to any Group guidelines that apply, including the relevant section of the Group sustainability report. In the corresponding passages of text, we elaborate on any special actions associated with the implementation of these guidelines that are relevant in the context of our sustainability strategy.

A Sustainability Committee supported by the Sustainability business unit helps us to implement the strategy (see “Strategic Management of Focus Areas”). This acts as an interface for all sustainability-related activities and is responsible for tasks such as overseeing and coordinating sustainability ratings and producing the sustainability report. The Sustainability Committee regularly reports on the status of implementation and target achievement concerning agreed-upon measures and partnerships to the VWI Board, the highest management body at VWI, and recommends or initiates improvement measures where necessary.

GRI 2-28, 2-29

To ensure that we meet our stakeholders’ expectations, and to identify potential for further development in the field of sustainability, we pursue a strategic approach for active stakeholder dialogue. In doing so, we consider it crucial that all stakeholders are informed about all of our activities in accordance with the respective topics and are given opportunities to provide feedback. Our website serves as a central dialogue platform for all other media and channels. Clear responsibilities are assigned at VWI in connection with this. Decisions about how frequently to publish reports and information are made by the individual holders of these responsibilities and oriented on the need for dialogue.

VWI also pursues a systematic approach to public relations to ensure the targeted presentation of information that is relevant to our stakeholders. As a result, there are fixed communication goals that are based on the VWI corporate strategy and its objectives, including a continuous increase in VWI’s reputation and awareness, as well as its long-term commitment. PR topics are planned on a regular basis, taking into account current developments and relevant target groups. The focus is on topics relevant to the target groups, such as innovation or sustainability issues, and the progress of important construction projects.

Our most important stakeholders are our staff, our clients, Volkswagen AG, business partners and investors, policymakers and public authorities, and society. We want to be an excellent employer for our staff in order to retain employees and attract external applicants. For this reason, staff satisfaction is at the heart of our human resources strategy. We monitor staff satisfaction by means of surveys and feedback processes between managers and their teams. We also use tools such as the intranet, staff meetings and town hall meetings with senior management to actively inform our employees about measures and updates to our strategy. The approach also allows us to address questions from employees in direct dialogue.

In the year under review, the sections on sustainability on the Volkswagen Immobilien intranet was completely revamped and shared with employees. The individual aspects of the eight focus topics are presented in more detail there to promote better understanding. There is also a specially developed glossary in which sustainability terms are explained in more detail. The latest sustainability reports and relevant documents from the sustainability team are also available under “Reports & Useful Information.” Like the new news category #Sustainability, a separate sustainability news ticker for news and articles from the company makes information relevant to the topic quickly and concisely visible.

We have set out how important clients are for our company in our corporate strategy and defined “Excited customers” as a strategic target area. To find out how satisfied they are, we conduct regular surveys and maintain direct dialogue via various channels, such as local customer service centers, telephone helplines and our tenant magazine. Additionally, “green” tenancy agreements and alternative landlord-to-tenant electricity models strengthen the partnership between our company and its clients in the interests of sustainability. Volkswagen Immobilien offers a comprehensive range of services for the Volkswagen Group to do with residential and commercial property: from investment and concept development to maintenance. We are heavily integrated into the Volkswagen Group’s sustainability activities via our Brand Sustainability Manager and make a substantial contribution toward its targets. We are in contact with the relevant Group units concerning all sustainability initiatives via the digital knowledge-sharing network Group Connect and event formats such as Group summits. In addition, we advise the Group and its subsidiaries on sustainability in the construction and utilization of properties.

We share ideas with our business partners and investors at conferences, trade fairs or network events and inform them about our projects and initiatives with the aid of presentations, specialist articles, online news articles on our website and our sustainability report. We have long-standing business relationships with our suppliers and service providers that are founded on trust. We expect them to meet the required compliance, environmental and social standards. This is checked via a sustainability rating by the Volkswagen Group. On top of this, we are intensifying our regular dialogue with important capital market operators, rating agencies and initiatives in the field of sustainable finance to develop and optimize our green bond activities.

Our company has particularly strong roots in Wolfsburg, where it carries significance and weight among policymakers and public authorities. We support municipal interests primarily by means of our activities in the construction of new housing and modernization. For instance, we are part of the alliance “Bündnis für Wohnen und Leben in Wolfsburg” and play a major role in the city’s home-building offensive.¹² At national level, we are involved in the industry associations ZIA, VdW and GdW. As a member of these bodies, we are involved in drafting statements concerning developments in policy. Furthermore, we are actively involved in the “Initiative Wohnen.2050” and the “Immo2.Zero” forum initiated by Deutsche Unternehmensinitiative Energieeffizienz e. V. (DENEFF) to support the decarbonization of buildings.

As one of the biggest landlords in Wolfsburg, we take responsibility for society in the region. We support numerous activities that promote social cohesion, good health and education. In conjunction with the charity ready4work e. V., for instance, we back the creation of additional traineeships in the region and the integration of socially disadvantaged young people. As part of the Wolfsburger Aktionsbeirat, which has been initiating appeals for donations and campaigns to promote ready4work since 2006, we were involved in a donation of €239,450 to the association in September 2023. Likewise, we support the Wolfsburger Tafel e.V. food bank, which operates in our neighborhood, with a regular annual donation. Supporting other charitable donation projects and promoting the sociocultural development of our home town are also important to us.

In this context, we have asked children to help us design the future climbing playground at Steimker Gärten, to name just one example. To this end, a workshop was organized in the summer of 2023 together with the City of Wolfsburg’s youth development office, in which 17 children aged between six and twelve were able to contribute their ideas and wishes. In fall, VWI and the children involved presented a preliminary design based on their work, along with a model. The new climbing playground should follow the proposals to the greatest extent possible and be completed by the end of 2024.

As part of another VWI initiative for the benefit of the urban community, we have been providing accommodation in Wolfsburg city center for students of University Medical Center Göttingen (UMG) since September 2023. Having already supported the establishment and expansion of the Medizincampus Wolfsburg, UMG’s second teaching location, we now offer medical students accommodation at our Global Inn hotel as part of a cooperation agreement with the UMG. In the first phase, 14 out of 20 Göttingen-based students who completed a four-week internship at the medical campus made use of our offer. We will expand our commitment in line with demand in order to keep up with the planned growth in training capacity at the UMG site in Wolfsburg.

We see finance as a natural part of any sustainability concept and want to use “green capital” for “green assets.” This is why we offer green bonds in the form of borrower’s note loans and registered bonds. Doing so also helps us to diversify our investor base and tap financing options. In an ESG rating by ISS ESG, we were awarded “Prime” status in 2023 for the sixth consecutive year, giving investors the confidence they need. We also implemented the Green Bond Principles of both the International Capital Market Association (ICMA) and the Climate Bonds Initiative. Detailed information is disclosed in the compulsory green bond report, which we are publishing as part of our sustainability report again this year.

To align our real estate portfolio with climate protection considerations, we take climate-related financial risks into account in our business processes. For instance, we have systematically incorporated carbon tax into our medium-term planning and into the portfolio management system as a key performance indicator for property-specific plans relating to investments and modernization work.

The Volkswagen Group Sustainability Report 2023 provides information on the risks and opportunities associated with climate change for the Volkswagen Group in the chapter entitled “Decarbonization” (VW Group Sustainability Report 2023, “Decarbonization,” pages 49-51).

GRI 2-23, 2-24, 2-25

We recognize that much of the environmental and social impact or our activities as a company results from upstream processes that do not form a direct part of our business activities. Our sustainability performance therefore also depends heavily on our suppliers, service providers, consultancy firms and construction companies. Effectively involving these groups is the only way to ensure sustainability throughout the value chain. When awarding contracts and drafting agreements for our partners, we therefore pay close attention to the compulsory guidelines and processes of Volkswagen Group (Volkswagen Group Sustainability Report 2023, “Supply Chain and Human Rights,” page 117 et seq.).

In this area, we operate within the responsible supply chain system with which the Volkswagen Group aims to prevent or minimize social or environmental risks throughout its supply chain. The Group-wide responsible supply chain system was put in place to comply with the legal requirement for human rights due diligence, to prevent violations and to continually improve suppliers’ sustainability performance in this field. The core elements of the system are a risk assessment, legal requirements such as the Code of Conduct, whistleblower systems and measures that target human rights issues, such as the human rights focus system (Volkswagen Group Sustainability Report 2023, “Supply Chain and Human Rights,” page 117; “Risk Management Focusing on Prevention”).

To help suppliers become sustainable companies and ensure that our requirements are met, the Volkswagen Group has introduced a sustainability rating (S rating) as a Group-wide process linked to the awarding of contracts. The S rating assesses suppliers’ sustainability performance with regard to social, environmental and corruption risks. The rating is based on a self-assessment questionnaire (SAQ) completed by suppliers as well as a risk assessment carried out by means of a site visit and an in-depth corruption audit. No contracts can be awarded to suppliers who do not fulfill the requirements or who are unable to provide evidence of a rating. At Volkswagen Immobilien, the S rating rules apply to contracts awarded via the Group (usually contracts worth more than €50,000).

An internal company directive stipulates the order value from which the prescribed processes apply. Generally speaking, contracts worth €50,000 or more are awarded by the Group procurement team. The procurement process is usually handled within VWI for orders worth less than €50,000. Before potential service providers and suppliers are engaged, VWI independently conducts integrity checks of business associates, known as business partner due diligence (BPDD). This assessment is completed as part of a risk-based, transparent process that is documented carefully and is subject to a predefined integration review.

To make our expectations of partners’ conduct during our collaboration clear, we include the “Volkswagen Group requirements for sustainability in relations with business partners” in our Code of Conduct for Business Partners, which forms part of their contract. The Code of Conduct plays a crucial role in our supplier management and requires adherence to environmental, social and compliance standards. The requirements are based on recommendations including the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights and the relevant Conventions of the International Labor Organization (ILO).

A responsible approach to human rights is not just embedded in the Group requirements and the Code of Conduct for Business Partners, however. A whistleblower system has also been introduced that can be used by any staff member or external individual to report potential violations of human rights or compliance/environmental guidelines in the supply chain.

¹² City of Wolfsburg (n.d.): Housing & Building Master Plan https://www.wolfsburg.de/en-us/newsroom/x/06/wohnbauoffensive.