Climate Protection and Decarbonization

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In Germany, real estate accounts for around a third of total CO₂ emissions. Direct emissions from properties make up 14% of this. Climate policy at both national and European level is therefore placing a particular focus on the real estate sector. As part of its climate protection program, the German government has set a savings target for final energy consumption of 36% by 2030 for the building sector, with the 2018 figures serving as a baseline. As part of the Green Deal, the European Union has set itself the goal of reducing buildings’ greenhouse gas emissions by 60%, cutting their energy consumption for electricity by 14% and lowering their energy usage for heating and cooling by 18%.

The aim of our climate strategy is to align our corporate activities with the German government’s climate protection program. Our strategy rests on three pillars: transparent energy and CO₂ reporting, optimizing the building stock, and the necessary financing instruments. These three pillars are to serve as a starting point for defining climate pathways for the residential and commercial divisions at Volkswagen Immobilien.

Developing climate pathways is a component of our sustainability road map. In the 2022 reporting year, climate pathways were developed for residential and commercial properties based on the CRREM tool (Carbon Risk Real Estate Monitor). An interdisciplinary team was also established in the residential division in the year under review. Its members are currently discussing, testing and defining measures for achieving the target. There are plans to complete a corresponding process for the commercial division in the first half of 2023.

Building on the first pillar of the climate strategy – energy and CO₂ reporting – we aim to reduce the carbon intensity of our new and existing residential and commercial buildings. We have set ourselves the goal of reducing carbon emissions by at least 35% based on intensity – throughout their entire life cycle – by 2025, using the 2015 figures as a baseline. We prioritize measures based on the three hierarchical elements of the Volkswagen Group’s decarbonization program: reduction, transformation and offsetting.

Reduction: Lowering CO₂ Emissions Effectively and Lastingly

We established BLUE BUILDING in 2019. Geared towards sustainability and climate protection, this is our own standard for newly built residential and commercial properties. As scheduled, we revised it again in the year under review. BLUE BUILDING 2022 requires buildings to comply with the EG40EE energy efficiency standard, which features a 35% lower primary energy demand than that specified by legal requirements. Other important aspects were also incorporated, such as requirements to fulfill the EU Taxonomy Regulation, use renewables for heat and power, and pay closer attention to circularity and biodiversity.

With its specifications for energy-efficient modernization, materials efficiency and the supply of heat, BLUE BUILDING goes far beyond the legal requirements. It is based on sound science and has been tried and tested in practice. It also follows the methodology used for recognized property certification systems. With BLUE LEASE, we are designing our tenancy agreements to encourage users to conserve resources in the day-to-day running of properties. Meanwhile, BLUE FINANCE safeguards financing for a climate-friendly real estate portfolio. We also minimize the climate impact of our own corporate processes (logistics, fleet, business trips).

Transformation: Switch to Renewable Energies

We have been using renewable energy for common areas and landlord-to-tenant electricity at properties occupied by Volkswagen for a number of years already. All of this is Volkswagen Naturstrom® supplied by VW Kraftwerk GmbH.

The use of photovoltaic panels is now a fixed part of the BLUE BUILDING standard. In the commercial sector, we have already implemented lease models to supply autonomously generated power to our business customers using photovoltaic technology. These systems include one for Brose Sitech in Emden with an output of 330 kWp and another for the Porsche center in Stuttgart (90 kWp). A further photovoltaic system is due to become operational at the new Volkswagen dealership in southern Hanover in 2023.

In the residential sector, work continues to install battery storage with a capacity of 2 MWh at Steimker Gärten. This is due to be completed in 2023. The storage system is designed to help cushion energy use peaks, which are costly and place a strain on the grid. There are plans to install PV panels within the framework of the project as well.

As part of our overall charging infrastructure concept, we are ensuring connectivity at the properties in our portfolio by means of infrastructure solutions which are also based on Volkswagen Naturstrom®. In the residential division, we had more than 70 charging points in the car parks next to domestic properties in various parts of the city at the end of 2022. We plan to increase the total number of charging points to 100 in 2023.

In the commercial sector, access to an existing transport infrastructure plays a role in the selection of sites. At present, VWI provides access to 146 charging points at its commercial sites. There are 70 charging points at the Bürozentrum Nord office complex alone. Four high-power chargers (HPC) are also available there; these were installed by Ionity, a joint venture involving the Volkswagen Group and other car makers. In 2022 alone, 46 charging points were set up by VWI and taken into operation. An additional 12 charging points are currently planned or under construction.

Offsetting: Compensating for the Remaining Emissions

We have produced a tree register for our properties to enhance transparency and pave the way for offsetting via our green space management. At the same time, we are promoting land restoration and measures to enhance biodiversity (see section “Biodiversity”).

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The real estate sector has a responsibility to develop forward-looking building concepts which conserve resources in order to minimize the environmental impact of properties. To do this, we need to gain a comprehensive understanding of the environmental footprint of our properties. We are pursuing this goal by assessing the environmental footprint of our construction projects, using a material-efficient building structure and optimizing the end-of-life phase of our properties.

We use a project-specific environmental footprint assessment as per the DGNB requirements to assess, optimize and document the materials usage of construction projects and the environmental impact of our properties. We have already completed two environmental footprint studies for our residential and office portfolio. This enabled us to analyze the key carbon drivers for the operating and construction phases and examine measures for optimizing future newbuild projects during conceptualization. We also gained valuable experience for the development of a corresponding carbon footprint assessment tool from our newbuild projects, such as the Audi dealership in Munich Trudering or the new Škoda office complex in Mladá Boleslav.

A material-efficient building structure and a high degree of flexibility are key factors for us so that we can adapt our properties to changing usage requirements. This means focusing on sortable, recyclable solutions even in the early stage of planning. We are already using products made from recycled materials for certain residential projects, such as paving stones at Steimker Gärten. In addition, we choose products with a longer lifespan than other materials, like mineral wool insulation. Historic materials are sometimes reused for buildings subject to a preservation order.

At the same time, optimizing the buildings’ end-of-life phase is steadily gaining in importance for Volkswagen Immobilien. For commercial newbuilds, Volkswagen Immobilien uses an environmental footprint assessment, an environmental product declaration and a recovery analysis to establish a reliable set of data enabling it to record the quantities of materials used for construction and return them to the materials cycle at the end of the building’s useful life. The environmentally and socially responsible sourcing of raw materials plays a major role in this. For that reason, we only use FSC- or PEFC-certified materials for wooden structures and products which carry the CE label for constructions made from natural stone.

Furthermore, the BLUE BUILDING 2022 standard and DGNB certification contain clear specifications concerning recovery and recycling. These include minimizing construction site waste, sorting it into separate materials and documenting it, as well as ensuring that commercial newbuilds are convertible. In line with this, at least 70% of construction and demolition waste (by mass) is processed for reuse, recycling or recovery, including filling. We expect the so-called building materials passport to be established by law in 2023 based on a DGNB draft. As per our BLUE BUILDING standard, we already produce a component catalog for each newbuild project. This contains information about the construction products used, the cubic capacity and the end-of-life scenario, and can serve as a basis for a building materials passport in the future.