Our Strategic Foundations

GRI 3-3, 201-2

Our commitment to sustainability is embedded in the Volkswagen Group’s corporate strategy “NEW AUTO – Mobility for Generations to Come”. This Group strategy contributes towards the target dimensions of “excited customers”, “excellent employer”, “role model for environment, safety and integrity” and “competitive profitability”. It consists of 12 initiatives in total. Five technological initiatives and seven basic initiatives form the bedrock of the new strategic approach.

These include the fundamental tenets of sustainable business, referred to as ESG (environmental, social, governance). The aim of the Group’s ESG initiative is to improve Volkswagen’s ESG performance. In doing so, its goals include safeguarding its attractiveness as an investment and optimizing the cost of capital. The Group’s activities center around six focus areas relating to sustainability, which were defined in an updated materiality analysis. They are decarbonization, the circular economy, people in the transformation, diversity, integrity, and supply chain and human rights.

In addition, the Volkswagen Group sets out its commitment to sustainability in its decarbonization program and the environmental mission statement “goTOzero”.

The Volkswagen Group has already initiated a comprehensive decarbonization program with the aim of becoming a carbon-neutral company by 2050 at the latest. The Group aims to reduce the life-cycle carbon emissions of its passenger cars and light commercial vehicles by 30% compared to the benchmark year of 2018 as early as 2030. With its decarbonization index (DCI), the Volkswagen Group has a meaningful measurement tool that makes progress and interim results in this field visible and comprehensible to the public. All of the production sites along with the brands, companies and regions – including Volkswagen Immobilien – have drawn up decarbonization road maps, which were then incorporated into a corresponding Group road map.

The Group’s environmental mission statement “goTOzero” defines all of the environmental action areas that are particularly relevant for the Group. It is based on the principle of minimizing lifetime environmental impact, from sourcing raw materials to end of life. The aim is to keep ecosystems intact and have a positive effect on society. Compliance with environmental regulations, standards and voluntary commitments is a fundamental prerequisite for the Group’s activities. The environmental mission statement was revised in the year under review. The amendments include the addition of a new action area, “preserving ecosystems”, which comprises air quality (Volkswagen Group Sustainability Report 2022, “Environmental Compliance Management” section, p. 26), soil and water conservation, and biodiversity. Following the update, the mission statement therefore concentrates on the four prioritized action areas – “protecting the climate”, “conserving resources”, “preserving ecosystems” and “ensuring environmental compliance”.

The Volkswagen Group gives these requirements more concrete shape in its Group environmental policy, which rests on the five elements of leadership, compliance, environmental protection, relationships with stakeholders and continuous improvement.

Volkswagen Immobilien further developed its own corporate strategy in line with the target dimensions contained in the Group strategy “NEW AUTO – Mobility for Generations to Come” and published it in early 2022. Entitled “VWI 2030”, our new strategy is based on the target dimensions of “excited customers”, “future-proof competitiveness”, “living sustainability” and “excellent employer”. The same aspects are also at the heart of the “VWI 2025” strategy.

As part of our corporate strategy, we are pursuing seven strategic initiatives with the aim of being the leading real estate partner in the Volkswagen Group by 2030. We will achieve this by leveraging our corporate values, “innovative”, “dedicated” and “fair”. Our mission sets out how we intend to achieve our objective:

Our corporate strategy can only be implemented on the back of efficient structures and management processes. Since the beginning of the reporting period, we have been using the agile framework “objectives & key results” (OKR) to provide our staff with guidance as they work towards this goal and to enable us to respond flexibly to change. In short time frames of six months, this method defines three to five key results per initiative which make a positive contribution to the defined objective. Progress on each one is reported in regular reviews and status updates.

Like the Group, Volkswagen Immobilien is committed to the 17 Sustainable Development Goals (SDGs) adopted by the United Nations in connection with the 2030 Agenda. We incorporated the SDGs into the materiality analysis which we conducted in 2021 as an influencing factor. In the reporting year, we also analyzed which SDGs are most important for VWI (see section “Strategic Management of Focus Areas”). By doing so, we intend to link the SDGs even more visibly with our sustainability strategy and align our measures even more closely with achieving these goals.

As explained in the previous section, Volkswagen Immobilien’s sustainability activities are embedded in the Volkswagen Group’s decarbonization program and its “goTOzero” environmental mission statement.

As a wholly owned subsidiary of the Volkswagen Group, we want to take what action we can to contribute towards decarbonization. We are committed to the Paris Agreement and strive to meet a 1.5-degree target. By doing so we are not merely joining the other brands and companies in the Volkswagen Group: we are also meeting our stakeholders’ high expectations. For us, decarbonization means enhancing enterprise value with a future-proof property portfolio. It is furthermore an important means of guarding against climate-related risks which could jeopardize our business model.

Volkswagen Immobilien is also committed to implementing the Group targets set out in the “goTOzero” environmental mission statement. By making this commitment, we additionally adopted the five components of the Group’s environmental policy to further define the mission statement targets. These form part of regular training sessions and guide our actions.

To meet the specific challenges of our business model, we have been implementing our own, holistic sustainability concept called BLUE LIVING since 2019 to make the environment our focus throughout a building’s lifespan. With this concept, we want to create attractive and sustainable housing, living environments and workspace, and reduce our properties’ carbon emissions in line with the targets we have set ourselves. Via BLUE LIVING, we are both forging a link with the Volkswagen Group’s sustainability strategy, which identifies topics including decarbonization and the circular economy as key issues, as well as adapting the “Resources” action area from the Group “goTOzero” mission statement. The BLUE LIVING approach centers on the key objectives of energy efficiency, environmental awareness, cost-effectiveness and user-friendliness. With our BLUE family of brands, which has been registered with the German Patent and Trade Mark Office (BLUE BUILDING, BLUE FINANCE and BLUE LEASE), we are gearing all stages of a property’s life cycle towards sustainability aspects – from the construction of new residential and commercial properties to financing, use and disposal.

At the same time, we are continuously modernizing our existing residential portfolio of approximately 9,500 units. This brings our properties’ energy performance up to date and also makes our residential districts more attractive. In 2022, we began further developing the BLUE BUILDING standard for modernization projects. We expect to conclude this process in 2023.