Compliance and Risk Management

GRI 2-15, 2-16, 2-23, 2-24, 2-25, 2-26, 2-27, 3-3, 205-2

Integrity and ethical behavior are an utmost priority at Volkswagen Immobilien. The Volkswagen Group’s Code of Conduct is the central means of strengthening employees’ awareness of how they should behave, guiding staff and directing them to people who can provide help if it is needed. We are firmly integrated into the compliance and integrity management systems of the Volkswagen Group. The Group guidelines which apply to us include those on:

In addition to this, the compliance management system at Volkswagen Immobilien is laid out in a separate guideline.

Volkswagen Immobilien has established a Governance Committee. By doing so, it is following the requirements of a Volkswagen AG Group guideline. The committee consists of representatives of the risk management, integrity, compliance and legal units, who are responsible for the early identification, assessment and management of risks. The committee’s remit also includes ensuring effective information sharing, efficient cooperation between the units, avoiding operational redundancies and fulfilling reporting obligations to executive management.

At VWI, the Compliance Officer coordinates interdisciplinary collaboration between departments with the aim of recognizing and avoiding misconduct. The Compliance Officer reports regularly to the VWI Board of Management and senior management about all material changes and developments regarding relevant compliance issues. Both the Compliance Officer and a dedicated compliance assistant who can be contacted by email are also available at any time to handle more in-depth questions. The company informs all staff about new topics and updated guidelines each quarter. Our employees take the opportunity to ask the integrity and compliance team about adherence to guidelines and possible breaches of the rules. If these discussions result in misconduct being identified, appropriate remedial action is initiated, such as meetings with a manager, official warnings or additional training. Misconduct can also be identified via spot checks, which are carried out by Volkswagen Immobilien at least once a year. In the 2022 reporting year, a total of 13 incidents were reported at VWI which resulted in action being taken. These did not include any fines or other sanctions, however. Overall, there has been a substantial increase in the uptake of compliance advice at the company. We see this – combined with the low number of violations – as a positive development and a result of our wide-ranging training activities. If employees become aware of a possible violation of the Code of Conduct or any other form of misconduct by a member of their team, they can also report it – anonymously, if they wish – using the Volkswagen Group’s whistleblower system.

The integrity team at Volkswagen Immobilien is responsible for this field as a whole and for the company’s implementation of the “Together4Integrity” (T4I) program. T4I – which is a fixed part of Group-wide integrity and compliance requirements – pools 11 key initiatives and more than 100 packages of measures to deliver on the Volkswagen Group’s promise of being a role model for integrity. With the rollout of T4I at Volkswagen Immobilien, numerous training and communication measures were completed and workshops were held with staff involvement. VWI now has a complete toolbox with packages of measures that will also be implemented continually in the future. The company has introduced an integrity index for the purpose of quantifying success, monitoring and transparency. This is calculated based on an annual representative survey as part of the T4I perception workshops. The target is to achieve an index rating of at least 4.0, which corresponds to 80%. In 2022, an overall index rating of 4.7 (94.4%) was achieved at the perception workshops.

In addition to this, Volkswagen Immobilien focused on the topics of taxation and the environment within its compliance management in the year under review.

To ensure that tax obligations are fulfilled properly, senior management commissioned the Finance and IT department to set up a tax compliance management system. Among other things, the system should help to prevent tax risks, safeguard the company’s own tax position with regard to high-risk matters and identify commercial opportunities arising from appropriate tax planning.

With its environmental compliance management system (ECMS), the company is taking a systematic approach to ensure that it fulfills the Volkswagen Group’s environmental targets and obligations while complying with legal requirements. The system contains minimum requirements for the management of environmental impacts, assesses risks, sets out prevention and control mechanisms, provides guidance on measuring effectiveness, and defines standardized reporting both within VWI and vis-à-vis the Volkswagen Group. This rests on a regular survey of each department concerning possible environmental risks, which are subsequently compiled in an environmental risk register. In connection with the introduction of the ECMS, a register of all legislation relating to the environment (UIS) was also introduced. This provides staff with information on all relevant legislation and ensures that steps are taken to comply with it.

Information is shared with our employees via compliance and integrity training courses online or in person, extensive literature, talks by the Compliance Officer and intranet posts. VWI employees are trained in line with Group standards and sensitized to both legal and ethical issues. All members of staff receive a certificate when they complete their Code of Conduct training. Twice a year, onboarding sessions are held to inform new employees and trainees about all relevant compliance issues. The compulsory training courses on the Code of Conduct are refreshed every two years (indirect areas) or four years (direct areas). Every six months, we check the completion of staff training on the Code of Conduct and report our findings to the Volkswagen Group as part of the T4I program. Staff in our estate agency unit are additionally required to undertake training on the prevention of money laundering. In 2022, we held an anti-corruption training course which was attended by 180 people, corresponding to 100% of the staff members for whom it was compulsory. An antitrust law risk analysis was also conducted by an external consultant with the involvement of various departments at Volkswagen Immobilien.

GRI 3-3

The lasting success of our company rests on taking a responsible approach to the risks arising from our business activities and the changing political, environmental and economic landscape. As a wholly owned subsidiary of the Volkswagen Group, we are incorporated into its extensive risk management and internal control system (RMS/ICS) and covered by corresponding guidelines. We implement these requirements by means of a company directive at VWI. In risk management, we focus on the ongoing monitoring of processes to ensure compliance and integrity. Property-specific risk analyses are used to strengthen our methodology. In project management, the need to balance time-critical deadlines and client care on the one hand with compliance risks and due diligence on the other can lead to conflicts of aims.

Based on an external compliance risk analysis, we made ongoing improvements in the reporting year.

At the beginning of 2021, a compliance, integrity and data protection task force was set up and the positions on it were filled. Comprehensive documentation of the new VWI Board’s agenda and resolutions was introduced.

We see it as our duty to prevent violations of human rights principles and to minimize corresponding risks. To safeguard human rights, we observe international, European and national standards and treaties along with the various charters and declarations signed by the Volkswagen Group and the European and global Group works councils. As part of its sustainability strategy, the Volkswagen Group has defined safeguarding human rights as an action area within its focus topic “supply chain and human rights”. We are forging ahead with the establishment of a business and human rights management system in all Group units that fall within the scope of compliance. Additionally, in accordance with the UN Guiding Principles, the Volkswagen Group has developed nine work priorities for “business and human rights” in the three categories of labor rights, tolerance, and safety. Volkswagen Immobilien is concentrating on preventing discrimination, violations of the child labor prohibition, and breaches of occupational health and safety regulations. To ensure that measures are always in line with the latest legal requirements, the company continuously screens the relevant legislative matters pertaining to human rights.

GRI 3-3, 403-1, 403-2, 403-3, 403-7

A Group guideline provides uniform information about who is responsible for health care and occupational safety at all companies within the Group. We have taken up these specifications and incorporated them into a company guideline for Volkswagen Immobilien. As well as having a head of health care and occupational safety, we fulfill our legal obligations by appointing a safety officer, having a cross-structural occupational safety committee, and designating an occupational safety officer. The occupational safety committee is the highest occupational safety body. It is responsible for defining targets and measures along with submitting recommendations to senior management. The works council represents the employees with its seat on the occupational safety committee.

Key requirements for systematic health and safety management include conducting risk assessments for each workplace. We use a system-supported means of recording risk assessments with a central data storage facility. In connection with the risk assessments, hazards should be identified at an early stage and briefings conducted to help reduce workplace accidents and work-related illnesses. There is a greater risk of injuries and illnesses for depot and gardening staff because their jobs entail heavy physical labor and the use of machinery. We analyze the causes of each accident in detail and take steps to prevent them in the future. A standard Group process has been introduced at Volkswagen to ensure that information about serious or fatal accidents involving employees or staff from partner companies is disseminated throughout the company. This ensures that specific steps can be taken at all sites to prevent similar accidents.

We also fulfill our responsibilities as an operator and client. We often work with specialist firms on newbuild, modernization and maintenance projects, so we demand a high level of occupational safety from the external contractors we hire. As part of these efforts, we appoint an external health and safety coordinator for work at construction sites, as required by law. The coordinator is present on site for large construction projects and when building work is done at a great height. Among other things, their remit includes issuing instructions to companies before work commences at the construction sites and supervising compliance with regulations. At smaller construction sites where no health and safety coordinator is required by law, this responsibility usually lies with the client. Monitoring is performed with the aid of specifications developed by VWI which set out how the collaboration will be documented, how information about risks on each side will be shared and how safety measures will be put in place. In accordance with this, the contractor undertakes to inform its staff about the risks and agreed safety precautions before they start work and to provide the same information to any subcontractors it hires. We reserve the right to monitor compliance with the requirements.