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Sustainability Disclosures 2016
About these Sustainability Disclosures
The online Sustainability Disclosures for Aareal Bank Group for the 2016 financial year provide supplementary information to that presented in the “#Thinking ahead. Acting consciously." Sustainability Report. They are divided into the five categories set out by EU Directive 2014/95 EU on the disclosure of non-financial and diversity information (“CSR Directive”, 2. to 6.), supplemented by selected disclosures on economic performance (economic matters):
- General Standard Disclosures
------------------------------------------------------------------ - Anti-corruption and bribery matters
- Employee-related matters (with diversity as a sub-category)
- Social matters
- Respect for human rights
- Environmental matters
------------------------------------------------------------------ - Economic matters
Selection of the information disclosed under each of the sub-headings pursuant to the current version of the Global Reporting Initiative (GRI)’s Sustainability Reporting Guidelines, version G4, is based on core topics identified as part of the materiality analysis. These are preceded by the GRI “General Standard Dis-closures”. The management approaches include a description of the aspects that are important to ensuring the long-term success of the Company (listed at the start of each management approach), along with the concepts adopted. Areas we are pursuing as a matter of conviction are in some cases reported on without further details of the underlying concepts.
The business model is described in the 2016 Annual Report, in the section entitled “Fundamental Information about the Group”, pp. 48-51, as well as in the “Risk Report” on pp. 74-98 of the Group Management Report. Supplementary information on key aspects of sustainability are outlined in the management approaches. The “Risk Report” on pp. 74-96 of the Group Management Report provides comprehensive information on the risks identified as relevant to Aareal Bank Group. We provide more detail on risks that have an impact on sustainability in the profile of opportunities and risks presented with each management approach. Such risks are of particular importance to stakeholders with an interest in sustainability.
The “External assurance” column relates to the information presented in the “GRI disclosures” column, including the linked documents. This information was subject to a “Limited Assurance” review by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft. The “UNGC” column indicates which of the UN Global Compact’s Ten Principles the disclosure relates to, and also serves as a progress report in relation to the Global Compact.
1. General Standard Disclosures under GRI G4
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| G4-1 | Statement from the most senior decision-maker | SR 2016, p. 3 | ||
| Organisational Profile | ||||
| G4-3 | Name of the organisation: Aareal Bank Group | |||
| G4-4 | Primary brands, products and services | AR 2016, pp. 48-50 | ||
| G4-5 | Location of organisation’s headquarters: Wiesbaden, Germany | |||
| G4-6 | Countries where the organisation has significant operations | AR 2016, pp. 48-50 | ||
| G4-7 | Nature of ownership and legal form: Aareal Bank AG (public limited company under German law (Aktiengesellschaft), listed in the Commercial Register at the Wiesbaden District Court under Company Number HRB 13184) with shares held in free float. | AR 2016, p. 43 | ||
| G4-8 | Key markets served | AR 2016, pp. 48-50 | ||
| G4-9 | Scale of the organisation | AR 2016, inside cover page | ||
| G4-10 | Employees by employment type, gender and region: As at 31 December 2016 Aareal Bank Group employed 2,728 staff throughout the Group. The overview presented under Employee indicators provides detailed information on employment relationships and the distribution by sex and region. | yes | ||
| G4-11 | Percentage of employees covered by collective bargaining agreements: The interests of employees are represented by Aareal Bank and Aareon Deutschland’s General Works Councils, local Works Councils, the relevant trainee and disability representatives, the Economic Committees and the Employee Representatives on the Supervisory Boards of Aareal Bank and Aareon Deutschland. In the Group as a whole, 81 % of employees are covered by collective agreements. Employee indicators | yes | ||
| G4-12 | Description of the organisation’s supply chain: Aareal Bank Group primarily makes use of services, particularly (market) data services and consulting/auditing services. It also purchases products and services in the field of IT, including hardware, software and telecommunications, and in the areas of building management, maintenance and office fixtures and fittings. Furthermore, Aareal Bank Group purchases products and services needed for trade fairs, employee events, company representation and advertising purposes. When selecting suppliers, we assess not only their economic performance but also their ecological, social and ethical sustainability. These standards are set out within the Group guidelines on supplier management. Our Code of Conduct for Suppliers sets the standards for taking responsibility for people and the environment that govern these business relationships. It is based on the principles set out in the UN Global Compact and by the International Labour Organisation (ILO). We conduct in-house evaluations to determine whether suppliers comply with these requirements. | SR 2016, pp. 28-29 | 12 | |
| G4-13 | Significant changes during the reporting period:
| AR 2016, pp. 261-267 | ||
| G4-14 | Whether and how the precautionary principle is addressed: The “Aareal 2020 – Adjust. Advance. Achieve.” programme for the future sets forth Aareal Bank Group’s strategic measures for achieving the goal of continuing its success story and creating value for all stakeholders on a sustainable basis. Our sustainability mission statement, which is supported by an integrated sustainability management system, underpins our sustainable corporate strategy, providing a summary of the corporate responsibility principles that are aligned with our objective of doing business sustainably:
| AR 2016, pp. 74-96 Responsibility | 7 | |
| G4-15 | Support for external initiatives: See G4-16 | 1-10 | ||
| G4-16 | Memberships of associations and advocacy organisations: Aareal Bank AG memberships include:
| 7 | ||
| Identified Material Aspects and Boundaries | ||||
| G4-17 | List of entities included in the organisation’s consolidated financial statements List of shareholdings | AR 2016, p. 131, pp. 233-236 | ||
| G4-18 bis G4-21 | Process for defining report content | All material aspects | Material aspects within the organisation | Material aspects outside the organisation: A sustainable approach to doing business is a key precondition for the long-term viability of a company or organisation. Successful sustainability management therefore requires us to select and prioritise the action areas and key topics that are material to our Company’s business in its specific sector. Identifying and analysing these key topics allows us to lay the foundations for strategic sustainability management, which defines quantifiable targets and develops precisely tailored measures. We performed such an analysis of the topics material to a forward-looking focus for Aareal Bank Group in the financial year 2015, and further developed it in 2016. As part of this process we regularly speak to analysts during ratings processes, exchange views with Sustainability Officers from our competitors and in other sectors and hold targeted discussions with representatives from relevant stakeholder groups. This enables us to evaluate whether our sustainability management processes are still addressing the right areas or whether changes in the relevance of certain areas or our ability to exert an influence mean that we need to refine our focus. This dialogue has revealed that the twelve action areas that we have identified, including the associated core topics, remain of particular relevance. This also reflects the progress made in the results of the various sustainability ratings, which also verify whether we are addressing topics that are relevant to our sector in the context of our business model. Aareal Bank Group materiality matrix Allocation of major topics to GRI aspects | yes | SR 2016, pp. 4-5 SR 2015, pp. 12-15 | |
| G4-22 | Restatements of information provided in previous reports: For the first time, Aareal Bank Group’s reporting on FY 2016 is made up of two parts, in the form of the “#Thinking ahead. Acting consciously” progress report and these Sustainability Disclosures. The new structure arises as a result of the requirements of the CSR Directive (five categories) Presentation of information from a Group perspective for the first time provides focus. Only where indicators/information are not yet available for Aareal Bank Group are they reported separately for individual entities. Any additional changes or new information are clearly identified at the corresponding point in the document. | yes | ||
| G4-23 | Significant changes in the scope and aspect boundaries: None | yes | ||
| Stakeholder Engagement | ||||
| G4-24 to G-27 | Stakeholder groups engaged by the organisation | Basis for identification and selection of stakeholders | Approach to stakeholder engagement and frequency of engagement | Key topics and concerns raised through stakeholder engagement and how the organisation has responded: Aareal Bank Group is committed to active dialogue in various formats and with a range of stakeholders. This enables us to understand the requirements and expectations of different stakeholder groups, to take suggestions on board and to incorporate insights into our business and decision-making processes. The Aareal Bank Group Stakeholder Engagement diagram shows the stakeholder groups relevant to the Company and its core business, and the format that contact with these groups takes. | yes | SR 2016, pp. 4, 17 SR 2015, pp. 12-15 | 1-10 |
| Report Profile | ||||
| G4-28 | Reporting period: 1 January 2016 to 31 December 2016 | |||
| G4-29 | Date of most recent previous report: April 2016 | |||
| G4-30 | Reporting cycle: Annual | |||
| G4-31 | Contact point for questions regarding the report: Julia Taeschner, Group Sustainability Officer Paulinenstraße 15 DE-65189 Wiesbaden Tel. +49 (0)611 348-3424 E-Mail: sustainability@aareal-bank.com | |||
| G4-32 | GRI “in accordance” option and content index selected: In accordance/core, plus selected additional indicators | |||
| G4-33 | External assurance for the report: Selected disclosures (see “External assurance” column), including the linked documents, were subject to a “Limited Assurance” review by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft. Audit opinion | |||
| Corporate governance | ||||
| G4-34 | Governance structure including committees of the highest governance body: At an organisational level, Aareal Bank Group has assigned responsibility for sustainability management to the Chairman of the Management Board. The Chairman proposes relevant issues for discussion by the Management Board. Assisting the Chairman in the task of strategically enhancing Aareal Bank’s sustainability performance is the Group Sustainability Officer, who organises the meetings of the Sustainability Working Group and is the contact for all divisions within the Company. The Sustainability Working Group serves as a platform for the Management Board to enhance the sustainability programme. It is composed of representatives from Strategy, Portfolio Management & Controlling, Sales, Credit Management, Risk Management, Workout, Housing Industry, Investor Relations, Finance, Treasury, Compliance, Human Resources, Facility Management, Purchasing and Corporate Communications. | yes | See AR 2016 for general information on the management structure, AR 2016 pp. 252-254 | |
| Ethics and Integrity | ||||
| G4-56 | Values, principles, standards and norms of behaviour: See category 1: Anti-corruption and bribery matters, G4 DMA | 1-10 | ||
2. Anti-corruption and bribery matters
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| G4 DMA | Management approach (aspects: anti-corruption, compliance): Profile of opportunities and risks For Aareal Bank Group, responsible, transparent corporate governance is part of good business practice, and is firmly rooted in the work of the Management Board and Supervisory Board. Integrity and responsible conduct are also enterprise-wide duties that apply to all employees, regardless of their function or role. Contravention of these principles brings with it both the possibility of legal consequences and a high risk of reputational damage, with the accompanying financial losses. These have the potential to be substantial. Compliance is therefore of great relevance to Aareal Bank Group as a whole. Failure to comply with laws, official regulations or internal rules may also result in disciplinary action for employees. With respect to combating corruption and bribery, sound risk management can present opportunities, by establishing and maintaining the trust of our clients and other contractual partners, of supervisory authorities and other stakeholders in our society. Risk management therefore ultimately helps to secure long-term customer loyalty and continuous economic growth for the Company. Objectives Priority objectives are to maintain Aareal Bank Group’s strong reputation and protect it against financial loss by implementing an effective, Group-wide Compliance management system. This involves continuous optimisation of compliance processes, the involvement of and training for all employees, and systematic monitoring. It also includes further measures such as comprehensive checks on partners we are planning to do business with. This means that the risk of possible breaches of duty can be identified at an early stage, actual breaches can be prevented and potential losses to the Company can be averted. Activities
| yes | Includes G4-56 | 10 |
| Aspect: anti-corruption | ||||
| G4-SO3 | Total percentage of operations assessed for risks related to corruption and significant risks identified: All operations are included in the Compliance concept. | 10 | ||
| G4-SO4 | Communication and training on anti-corruption policies and procedures: All employees attend a classroom-based training course on the Company’s compliance and fraud prevention requirements as part of their induction. In addition, they are required to complete training programmes and specialist classroom courses on compliance, money laundering, other criminal acts and data protection. | 10 | ||
| G4-SO5 | Confirmed incidents of corruption and actions taken: No cases of corruption came to light at Aareal Bank Group during the year under review. | yes | 10 | |
| Aspect: compliance | ||||
| G4-SO8 | Fines and sanctions for non-compliance with laws and regulations: None – see Code of Conduct | yes | ||
| Other G4 indicators included in the report | ||||
| G4-SO7 | Legal actions for anti-competitive behaviour, anti-trust and monopoly practices: None – see Code of Conduct | |||
3. Employee-related matters & diversity
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| Employee-related matters | ||||
| G4 DMA | Management approach (aspects: employment, labour/management relations, occupational health and safety, training and education) Profile of opportunities and risks Committed, well-trained employees that are aware of their responsibilities ensure the long-term success of the Company. This is all the more true of our business given the complex nature of our client relationships, which vary widely and are often based on trust built up over many years. In addition, we need to adapt to, and to actively shape, market changes to an even greater extent – one example here are the increasingly rapid moves towards product and client digitalisation, which is leading on our part to a growing need for agile and flexible solutions. We therefore rely on employees who think and act in an entrepreneurial manner, take on responsibility and work on ideas and solutions across all business divisions and the Group as a whole. They are the decisive factor in ensuring Aareal Bank Group’s economic performance and competitiveness. As a result, a decline in our employees’ motivation or their ability to perform their duties, or the loss of talent to competitors, represent substantial risks. Demographic change also presents a medium to long-term risk, in terms of the rising average age of the workforce and the accompanying potential health risks, as well as the shortage of specialised employees in future generations. We work to avoid these factors by implementing modern HR activities that in many ways promote a corporate culture that is able to meet these challenges. These include excellent conditions of employment, targeted staff development aimed at improving the skills of managers, experts and employees, and comprehensive support and flexibility for employees. Objectives Our focus is on building and enhancing our appeal as a modern employer in order to continue to attract and retain talented staff. We support and accompany change processes, thus contributing to the performance of Aareal Bank Group. Activities
| yes | See also G4-10, G4-11 | 3.6 |
| Aspect: employment | ||||
| G4-LA1 | New employee hires and employee turnover: Aareal Bank Group appointed 240 new members of staff* during the reporting period; the overview presented under Employee indicators shows the split by gender, age and region. At 3.9%, the Group-wide staff turnover rate at Aareal Bank Group was higher than in the previous year (2.8%). * This information was collected at Group level for the first time during the reporting year. As a result, no comparative figures are available. | yes | ||
| G4-LA2 | Benefits provided to full-time employees: Remuneration systems are based on remuneration principles that apply throughout Aareal Bank Group. The Supervisory Board and the Management Board carried out the annual review of the remuneration systems, involving the Human Resources division, the Remuneration Officer and internal control units in line with their respective functions, and with the support of external legal and remuneration advisors. External advisors were retained, amongst other things, to examine the appropriateness of remuneration systems and the remuneration of members of the Management Board and employees, and to advise on the design of the Group-wide remuneration strategy. In addition to their fixed remuneration, which is paid in twelve monthly instalments, all employees receive performance-related variable remuneration. The variable remuneration for a small number of employees (senior executives and so-called risk takers) comprises a short-term and a long-term component. By capping the variable payments, we avoid creating negative incentives to take inappropriately high risks. Salaries are reviewed annually, to ensure that individual remuneration packages are appropriate. The objective is to offer a remuneration level that is both appropriate and attractive to all Group employees. Aareal Bank Group also offers its employees a range of social benefits and a deferred compensation scheme in order to contribute to their own pension provision, to take advantage of Group discounts and to optimise their tax affairs. This includes:
| Aareal Bank & Aareon websites SR 2015, pp. 24-29 | ||
| Aspect: labour/management relations | ||||
| G4-LA4 | Notice periods regarding material operational changes: In Germany, notice periods under employment law are governed by the Works Constitution Act (Betriebsverfassungsgesetz). Aareal Bank Group fundamentally respects the statutory requirements of the countries in which it operates. Where operational changes are planned, the respective Economic Committee is informed first, and negotiations then take place with the Works Councils. | 3 | ||
| Aspect: occupational health and safety | ||||
| G4-LA6 | Injuries, occupational diseases, lost days and fatalities: Aareal Bank Group operates a company health management system to promote employee health. This includes offering staff the opportunity to attend seminars and presentations on subjects including preventative healthcare, methods for “slowing down” and managing time and how to cope with large amounts of information, as well as on exercise, nutrition and mental health. Sickness rates are not yet compiled at Group level. During the reporting period, the sickness rate at Aareal Bank stood at just 4.5%. The Group-wide accident rate* (0.9%) and the number of workplace or commuting accidents* (19) are also low. No occupational illnesses became known in the reporting period. Likewise, there were no work-related deaths. Employee indicators * This information was collected at Group level for the first time during the reporting year. As a result, no comparative figures are available. | SR 2016, pp. 18-19 AR 2016, p. 69 | ||
| G4-LA7 | Workers with high incidence or high risk of diseases: No cases were reported during the year. | |||
| Aspect: training and education | ||||
| G4 -LA9 | Average hours of training per employee: Across the Group as a whole, the Bank invested an average total of 3.5 days of training and education per employee in 2016. This corresponds to 9,416 participant days across the Group (previous year: 3.2 days per employee; 9,160 participant days). Our ongoing investment in training underlines the importance Aareal Bank Group places on the technical, business and personal expertise of its employees. Employee indicators | yes | ||
| G4-LA10 | Programmes that support the continued employability of employees: Aareal Bank offers its employees a wide range of opportunities for personal and technical development. | SR 2016, pp. 18-21 AR 2016, pp. 69-74 SR 2015, p. 25 | ||
| G4-LA11 | Percentage of employees receiving regular performance and career development reviews: As part of the Structured Appraisal and Target-Setting Dialogue, every employee (100%) discusses his or her individual development and agrees specific development measures at least once a year with their manager. The Dialogue is Aareal Bank Group’s main tool for supporting its staff and planning employee development. | yes | AR 2016, pp. 69-74 | |
| Diversity | ||||
| G4 DMA | Management approach (aspects: diversity and equal opportunity, equal remuneration for women and men): Profile of opportunities and risks Aareal Bank Group firmly believes that diversity among its workforce and its committee members enriches the Group’s corporate culture and that it is a long-term success factor. By promoting diversity, Aareal Bank Group increases its attractiveness as a modern employer, strengthens employee commitment, raises employee motivation, ensures skills and competencies are fostered individually in a way that promotes employee performance, provides a response to demographic change and an ageing workforce, and takes into account individual circumstances and stages of life. In general, the more diverse the background of the employees involved, the more creativity they show when formulating approaches to solving problems, and the lower the danger of “group-think”. Diversity also has clear benefits when dealing with our international clients, e.g. in the form of language skills or an understanding of clients culture and values. Conversely, discrimination against employees on the basis of diversity factors can damage teamwork and hence results. It can also lead to inefficient working processes, demotivate talented employees and thereby cause economic harm. Aareal Bank Group must therefore find a balance between diversity, efficiency and treatment of its employees in line with their performance. Objectives Management seeks to recognise, value and promote diversity in everyday working life and to create a corporate culture that views taking an active approach to diversity as a sign of quality and something that enriches the Company. The broad international set-up of the workforce (employees from 28 nations are currently employed) and the fact that 30 % of Supervisory Board members and 25 % of Management Board members were women, even before the relevant law came into effect, are important elements of our business that we intend to maintain. In addition, the Management Board has set targets of 6.3 % for the first and 21.4 % for the second level of management below the Management Board. These must be achieved by 30 June 2017. Activities
| AR 2016, pp. 73-74, 254-256 | 6 | |
| Aspect: diversity and equal opportunity | ||||
| G4-LA12 | Composition of governance bodies and breakdown of employees by indicators of diversity: Composition of Aareal Bank AG’s Supervisory Board: Key factors taken into account for nomination to the Supervisory Board are the professional aptitude and experience of candidates. The factors are also important in the context of the Group’s international activities. Diversity in terms of educational background, the 30 % target quota for the proportion of women on the Supervisory Board and a high degree of independence are explicitly considered. In addition, there is a requirement that not every member should have gained most of his or her professional experience at a financial institution. - Diversity exists in relation to professional and educational background - Proportion of women: 33.33 % - Age: 0x < 30 / 0x 30-50 / 4x 50-60 / 8x 60-70 (age limit 70) - Number of independent shareholder representatives: 100% Composition of Aareal Bank AG’s Management Board: When selecting new members of the Management Board, the Supervisory Board considers the duties required of the candidate in the context of the overall responsibility to be assumed on the Management Board, as well as with respect to individual Management Board sections. Each candidate must be reliable and sufficiently qualified to fulfil these duties. In particular, the Supervisory Board considers the target quota of 25 % female Management Board members when selecting candidates. Moreover, where several candidates are available with equal qualifications, the Supervisory Board will also consider the objective of ensuring maximum diversity in terms of different educational backgrounds and professional experience. - Diversity exists in relation to professional and educational background - Proportion of women: 40% - Age: 1x 30-50 / 4x 50-60 Composition of the workforce: Employee indicators | yes | AR 2016, pp. 252, 254 The Management Board Suvervisory Board | 6 |
| Aspect: equal remuneration for women and men | ||||
| G4-LA13 | Ratio of basic salary and remuneration of women to men: When setting the remuneration of employees, we do not differentiate by gender but rely exclusively on aspects such as qualification, professional experience or training. Aareal Bank AG had its remuneration structures analysed as part of a study (Logib-D) sponsored by the Federal Ministry of Family Affairs, Senior Citizens, Women and Youth. The results showed that there are no significant differences in remuneration between men and women in comparable positions. The employee representative bodies regularly verify that positions are filled on the basis of applicants’ qualifications in the course of exercising their co-determination rights. Aareal Bank will report on this in its 2018 Annual Report, on the basis of the German Remuneration Transparency Act (Entgelttransparenzgesetz), which will by then have come into force. At present, only a draft version of the Act is available. | AR 2016, pp. 74, 252-253 | 6 | |
4. Social matters
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| G4 DMA | Management approach (aspects: customer privacy, product and service labelling, supplier assessment for impacts on society, supplier assessment for labour practices, compliance): Profile of opportunities and risks Aareal Bank Group’s business activities provide a wide range of opportunities to make a positive contribution to society. In its Consulting and Services business, Aareal Bank’s efficient, digital transaction and processing systems contribute to society – automated processes reduce administrative costs, which benefits our clients’ customers (generally tenants of office and residential buildings). In addition, specific projects within our portfolio of services can also make a contribution towards generating added value in society. In the Structured Property Financing segment, the sustainable value of the property financing portfolio, continuing low levels of credit risk indicators, sound and sustainable refinancing – including via the issuance of Pfandbriefe – and high levels of client deposits allocated to the C/S segment on Aareal Bank Group’s balance sheet all make an indirect positive contribution to the stability of the financial markets, particularly in the commercial property sector. In contrast, many social risks that are typical for the property sector, such as a lack of transparency in the construction business and negative impacts on local communities, are not relevant for Aareal Bank Group because we are hardly ever involved in the development of new buildings. Instead, we finance properties that are already complete. We also focus on commercial properties (hotels, offices, logistics and shopping centres) and not, for example, on industrial plants that raise serious sustainability issues. Social matters play an important indirect role within the Company, in the sense of social responsibility, particularly when it comes to managing customer satisfaction, as well as in terms of guaranteeing data security and data protection and in supplier management. Our commitment to and membership of associations, our involvement in initiatives and our voluntary charitable activities also positive contributions to society. Objectives To expand our position as the leading provider of smart financing, software products and digital solutions for the property sector and related industries. As we do so, we will keep in mind the key sustainability impacts, risks and opportunities associated with our business activities in order to make an active contribution towards promoting sustainable development in society as a whole. Activities
| yes | See also G4-12, G4-15, G4-16, G4-LA13 | |
| Aspect: product and service labelling | ||||
| G4-PR5 | Results of surveys measuring customer satisfaction: Client satisfaction surveys are an important tool in the continuous improvement of our products and services in the interests of our clients. In the Consulting/Services segment, both capacity utilisation rates and specific indicators relating to regular customer satisfaction surveys are used as performance indicators. | SR 2016, p. 13 AR 2016, p. 50 | ||
| Aspect: customer privacy | ||||
| G4-PR8 | Substantiated complaints regarding breaches of customer privacy and losses of customer data: There were no reportable data protection infringements in the period under review. | yes | ||
| Aspekt Compliance | ||||
| G4-PR9 | Significant fines concerning the provision and use of products and services: None | |||
| Aspect: supplier assessment for impacts on society | ||||
| G4-SO10 | Negative impacts on society in the supply chain and actions taken: None | |||
| Aspect: supplier assessment for labour practices | ||||
| G4-LA15 | Significant actual and potential negative impacts for labour practices in the supply chain: None | |||
| Other G4 indicators included in the report | ||||
| G4-SO6 | Total value of political contributions: None, cf. CoC | |||
| G4-SO11 | Formal grievances about impacts on society: None | |||
5. Respect for human rights
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| G4-DMA | Management approach (aspects: gender equality, supplier human rights assessment): Profile of opportunities and risks Aareal Bank Group mostly operates in countries where the human rights situation is generally understood to be unproblematic. Human rights aspects therefore play a secondary role in our operational business. In the area of purchasing and procurement, there is a risk that suppliers may violate human rights. We consider the resulting level of risk to be relevant to our reputation but manageable. A Code of Conduct is also in place for suppliers (see below). Certain human rights issues are also of relevance with respect to our employees (see “Diversity” for opportunities/risks). Objectives As a signatory to the UN Global Compact, we pledge to support the protection of international human rights and have created corresponding policies governing respect for and protection of human rights within our business processes. Activities
| yes | 1,2,4,5,6 | |
| Aspect: gender equality | ||||
| G4-HR3 | Incidents of discrimination and corrective actions taken: In line with the Code of Conduct, unequal treatment and discrimination are not tolerated and may result in disciplinary measures. No cases of discrimination came to light at Aareal Bank Group during the year under review. | yes | 6 | |
| Aspect: supplier human rights assessment | ||||
| G4-HR11 | Significant human rights impacts in the supply chain: None | 2,4,5 | ||
6. Environmental matters
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| G4-DMA | Management approach (aspects: energy, emissions, supplier environmental assessment): Profile of opportunities and risks Even though the environmental impact of our activities tends to be indirect and difficult to quantify, as is the case for most financial institutions, we aim to contribute towards achieving the 1.5° or 2° goal set by the international community for combating climate change. This is a result both of our convictions and the fact that we believe a failure to do so would present a reputational risk for Aareal Bank Group. The property sector is responsible for a considerable proportion of worldwide energy consumption and CO2 emissions, and hence there is potential for significant savings to be made. Since Aareal Bank almost exclusively finances existing properties, we are only able to influence these areas indirectly, such as by creating transparency in property valuations, which our clients can use as a basis for making their decisions, for example. We only finance properties whose value is sustainable and which live up to our strict quality requirements. We use quantitative and qualitative criteria to assess properties – deficiencies in quality such as inadequate energy efficiency have a negative impact both on the initial assessment and the subsequent reappraisals that we regularly carry out. The direct impact of our business activities on the environment include energy consumption (IT, buildings, business travel) and, to a lesser extent, use of materials and water. We make every effort to minimise these. Eco-efficiency is also an effective way to reduce costs in the areas of energy (heating, electricity) and consumption of materials. Our resource management system eliminates unnecessary costs arising, for example, from outdated systems, inefficient lighting, unnecessarily high waste disposal charges etc. Objectives A responsible approach to natural resources and environmental protection are part of our corporate responsibility. We wish to make a measurable contribution to protecting the climate and environment, and take environmental aspects into account in our business decisions. Activities Aareal Bank Group pursues three areas when dealing with environmental issues:
| yes | 7-9 | |
| Aspect: energy | ||||
| G4-EN3 | Energy consumption within the organisation: Aareal Bank Group’s total energy consumption of 115,722 GJ represents a decrease of around 7 % compared with the previous year (124,722 GJ). This saving is largely the result of the implementation of measures to improve efficiency, as well as fluctuations in the requirement for heating and air conditioning due to changing weather conditions. Environmental indicators | yes | 7 | |
| Aspect: emissions | ||||
| G4-EN15, G4- EN16 | Direct greenhouse gas (GHG) emissions (scope 1) | energy indirect greenhouse gas emissions (scope 2): Total Group-wide scope 1 emissions of CO2 amounted to approximately 3,962 tonnes during the reporting period. We reduced our scope 1 CO2 emissions by around 7 % in comparison with the previous year. Scope 2 emissions are indirectly caused by the Company in that it uses sources of energy that generate emissions elsewhere. Within the Group, this relates both to electricity procurement and to district heating. In order to implement the stricter requirements of the GHG Protocol we have reported Group-wide scope 2 emissions of CO2 since 2015, showing them separately under the location-based and market-based methods. Under the location-based approach, these amounted to 5,950 tonnes (previous year: 6,243 tonnes). The determining factor here is simply the average electricity mix in the relevant country. Under the market-based approach, however, the contractually agreed sources of supply are considered, which also takes into account the high proportion of our total consumption made up by green electricity. According to this approach, Group-wide scope 2 emissions of CO2 came to 2,955 tonnes (previous year: 3,166 tonnes). Environmental indicators, Emission figures | yes | ||
| G4-EN17 | Other indirect greenhouse gas emissions (scope 3): During the reporting period, 1,942 tonnes of emissions (previous year: 1,865 tonnes) were recorded in respect of business travel with rental cars, by air or by train. The slight increase is due to the greater internationalisation of our business and the corresponding increase in employee travel. Emissions figures | |||
| Aspect: supplier environmental assessment | ||||
| G4-EN33 | Significant negative environmental impacts in the supply chain: During the reporting period we introduced our Supplier Code of Conduct. Suppliers signing it acknowledge their obligation to comply with legal regulations and to behave in an ethically appropriate manner. A responsible approach to the environment plays a particularly important role here. Suppliers are required at all times to conserve natural resources and to find and prioritise environmentally friendly solutions as far as possible. The Code of Conduct is publicly available on our website and forms part of our General Business Conditions. Existing business partners are also signing the Code, in a gradual process that initially focuses on partners with whom master agreements exist. In the case of new business partners or service providers, the Code of Conduct forms the basis of the business relationship. | SR 2016, pp. 28-29 | 7-9 | |
| Other G4 indicators included in the report | ||||
| G4-EN1 | Materials used by weight or volume: Consumption of office and copier paper during the year amounted to 186.21 tonnes. Because of a change in the calculation method, this figure is not comparable with the previous year. Paper consumption is the largest consumables item in terms of volume at Aareal Bank Group. We only use FSC- or PEFC-certified paper for printing brochures. The copier paper used is 100% carbon neutral, thanks to our support for the ClimatePartner project (the climate protection project supported is Energy Efficiency, North Rhine-Westphalia, Germany). Environmental indicators | 7 | ||
| G4-EN8 | Total water withdrawal by source: As a result of weather conditions, our total water consumption of 24,483.62 m³ in 2016 was lower than in the previous year (27,636 m³). This is mainly due to a fall in the amount of watering needed at our head office in Wiesbaden. Environmental indicators | Source: public supply networks | 7 | |
| G4-EN23 | Total weight of waste by type and disposal method: In the reporting period, Aareal Bank Group produced 390 tons of waste (previous year: 319 tonnes). The total quantity of waste increased slightly, while we were able to maintain the proportion of recyclable waste at 50 % of the total. The increased quantity of waste is largely due to a process of streamlining our archiving (destruction of obsolete archive documents). Environmental indicators | |||
| G4-EN29 | Fines and sanctions for non-compliance with environmental laws and regulations: None | |||
| G4-EN30 | Significant environmental impacts of transport: We have issued binding travel guidelines for all German sites. These require our employees to check before every business trip whether they actually need to travel and to consider alternative means of communication. Our employees must give priority to the use of modern telephone and video conferencing technology and webinars. In addition, Aareal Bank Group has prioritised environmentally aware choices when selecting company cars: its company car policy, which was modified in 2013, caps CO2 emissions for new company cars and also sets an average upper CO2 limit for the fleet as a whole. We also create incentives for employees to select vehicles that are as environmentally friendly as possible. For example, employees’ own monthly contribution increases by € 4.00 for each 0.1 litre increase in consumption, regardless of the monthly lease payment, if fuel consumption exceeds the figures set out in the EU directives. For employees who prefer to use public transport to get to and from work, Aareal Bank makes a contribution to their annual public transport season tickets. Environmental indicators | 7 | ||
| G4-EN34 | Formal grievances about environmental impacts None | |||
7. Economic matters
| GRI | GRI disclosures | External assurance | Additional references | UNGC |
|---|---|---|---|---|
| G4 DMA | Management approach (aspect: economic performance): The 2016 Annual Report, in particular the Letter from the Management Board, deals with the business environment, general conditions, our business model and the results achieved during the reporting period (key indicators), as well as the “Aareal 2020 – Adjust. Advance. Achieve.” programme for the future and outlook. The disclosures therefore focus on direct value added, including additional relevant indicators (G4-EC3 and G4-EC4). | yes | AR 2016, particularly pp. 39-41, 116/117 | |
| Aspect: economic performance | ||||
| G4-EC1 | Economic value generated and distributed: Part of our operating profit flows back into the general economy. The measurable direct value added thus documents our importance to society as a public limited company that increases its shareholders’ capital, as an employer offering an attractive, competitive remuneration structure, as a public institution with obligations under supervisory law (banking levy, deposit protection fund, etc.), as a customer for business partners, service providers, suppliers, etc. (including legal, consulting and auditing costs, IT expenses and rental payments) and as a not insignificant taxpayer (see the table). Expenses for donations, sponsorships and memberships incurred in our capacity as a corporate citizen are reported separately. The value added in this way helps in turn to increase individual purchasing power and investment activity. | yes | AR 2016, pp. 63-66, 148-150 | |
| G4-EC3 | Defined benefit plan obligations: Aareal Bank offers all of its employees a corporate retirement plan. Employees can also make additional pension contributions using a deferred compensation model. In addition, they can stock up their pensions further using capital formation contributions that are paid by the Bank. Aareon Group offers its employees an occupational pension based on a deferred compensation model. The Group’s staff costs include payments of € 14 million (previous year: € 15 million) into defined contribution plans as well as expenses for defined benefit plans amounting to € 17 million (2016: € 20 million). | AR 2016, pp. 149, 160-162 | ||
| G4-EC4 | Financial assistance received from government: None | |||
Abbreviations
General abbreviations: AR 2016 = Aareal Bank Group 2016 Annual Report | SR = Sustainability Report | CoC = Code of Conduct | SCoC = Supplier Code of Conduct | UNGC = United Nations Global Compact
GRI-specific abbreviations: DMA = Disclosure of Management Approach | EC = Economic | EN = Environmental | FS = Financial Sector (indicators from the Financial Sector Supplement) HR = Human Rights | LA = Labour | PR = Product Responsibility SO = Social
