Corporate Sustainability and Social Responsibility

General

Corporate Sustainability and Social Responsibility (CSSR) is of vital importance for the long-term value development of the portfolio of Vesteda and our organisation as a whole. We believe that our efforts in the field of CSSR improve and strengthen Vesteda, both directly and indirectly. And that they result in future-proof returns on our investments. Our CSSR targets are an integral part of our Business Plan and are therefore firmly embedded in our business operations.

To shape our CSSR strategy, we use the three pillars of the ESG model: Environmental, Social and Governance. We defined six projects in the context of these pillars in 2016: Organisation / Behaviour, Portfolio Sustainability Improvement, Procurement, Mobility, GRI G4 and GRESB.

Environmental - Improve sustainable performance

As a fund, we seek to constantly improve our performance in the field of sustainability. We believe that this helps us safeguard the attractiveness of the fund and optimise our long-term risk return ratio. Our objective is to reduce our consumption of energy and water, and cut waste and CO2 emissions as much as possible. We also aim to use materials that have no harmful effect on the environment, and we want to work with business partners who share our own high standards in terms of sustainability.

Strategic project: Portfolio Sustainability Improvement

In 2015, Vesteda’s participants approved a plan to allocate € 23 million over five years to improving the energy performance of Vesteda’s complexes, with the ultimate aim of surpassing the agreements laid down in the Dutch government’s Energy Agreement for 2020. By the end of 2020, at least 80% of Vesteda’s houses will have energy label A, B or C; no more than 20% of Vesteda’s houses will have energy label D; and Vesteda will have zero houses with labels E, F, or G.

In 2016, we improved the energy performance of the first 15 complexes, which include a total of 1,161 houses. We spent € 1.9 million of the budget of € 23 million on these improvements.

  • The percentage of houses in our portfolio with a green energy label (A++, A+, A, B, of C) increased to 75% in 2016 from 68% the previous year. This meant that we exceeded our target of 74% for the end of 2016.

  • The percentage of houses with a D level declined to 17%, from 24% the previous year.

  • The percentage of houses with an E or worse energy label remained at 8%. This is due to the acquisition of the Olympia portfolio (205 houses). At the end of 2016, Vesteda had 1,709 houses with energy label E or worse.

Changes energy labels houses 2012 through 2016

In 2016, Vesteda introduced the following measures to improve the energy performance of the houses in its portfolio:

Overview of energy performance measures 2016

 

2016

2015

2014

2013

2012

High efficiency boilers

1564

1026

663

489

746

DC ventilators

550

364

-

-

-

High efficiency glazing

531

555

481

186

402

Roof insulation

273

-

74

57

100

Cavity-wall insulation

87

-

66

-

1

Under-floor insulation

21

1

-

8

40

LED lighting (complexes)

2

    

Solar panels (complexes)

3

    

In 2016, we fitted solar panels at three complexes.

  • At the Rechterenborg complex in Renkum, we fitted 128 solar panels to supply sustainable energy for the public spaces.

  • At the 14Noord complex in Amsterdam we fitted 56 solar panels for the energy supply to the houses (four solar panels per house).

  • At the De Hagen complex in Amsterdam we fitted 158 solar panels for the energy supply to the houses (four solar panels per house), and 30 solar panels for the energy supply of the public spaces.

We allocated an additional sum of € 10.0 million to the Schuilenburg complex in Amersfoort, to make this complex energy-neutral. Thanks to these efforts, this complex will make the leap to energy label A++. The necessary work will be carried out in 2017.

In 2016, we applied for the SDE grant for the exploitation of solar panels. This subsidy was allocated to 12 complexes for a total of € 0.10 per kWh. We are currently drawing up an implementation plan for the fitting of the solar panels.

Healthy and safe houses

Our aim is to provide our tenants with safe and healthy houses. To ensure we do this as effectively as possible, we have taken a number of precautionary measures, which are described below.

Asbestos

Up until 1994, the use of materials containing asbestos was very common in the construction industry. Despite the fact that there is no legal obligation for asbestos-related inspections, beyond roofs and in the event of any plans for demolition or renovation work, Vesteda plans to conduct asbestos inspections at all the properties in its portfolio that have not already been inspected. If any asbestos is found during these inspections, Vesteda will take appropriate action, including potential clean-ups and providing information for tenants and third parties.

Asbestos inspections

 

Status end-2016 based on number of complexes

Status end-2015 based on number of complexes

No inspection necessary based on construction year

40%

39%

Inspected

47%

34%

To be inspected

13%

27%

The percentage of complexes yet to be inspected amounts to 13% at year-end 2016.

In 2016, we carried our various asbestos clean-up activities at 10 complexes. These involved clean-up operations in a total of 257 houses and two public spaces.

Central heating installations

We have signed maintenance contracts with a number of specialist technical installation companies, for periodic maintenance of the boilers to make sure all our individual central heating installations operate as smoothly and safely as possible. Periodic means once or twice a year in the case of closed installations and once every 18 months for open combustion devices.

In 2016, we used statements from the specialist technical installation companies over 2015 and 2016 to determine the percentage of central heating installations and combined heat and power installations (see below) that received timely maintenance.

These percentages are not yet at the desired level of 100%. One of the problems the technical installation companies encounter is that they cannot always plan maintenance appointments with all of our tenants on time. We will now work with the installation companies to determine what measures we can take to improve this process. For instance, we can stress the importance of timely maintenance work in our communications with tenants. We can also look at how we can simplify the process for tenants to make appointments with the specialist technical installation companies.

Combined heat and power installations

To ensure the smooth operation of its combined heat and power installations and a healthy interior climate, Vesteda has signed maintenance contracts with specialist technical installation companies, which carry out periodic maintenance and checks on these installations. This maintenance includes cleaning the exchanger, the replacement of the filter set, plus checks on spare filter sets and the replacement of sets if necessary.

Lifts

Vesteda has closed a contract with a certified inspection firm, which conducts periodic inspections and issues inspection reports. Legislation stipulates that lifts must be inspected and certified once every 18 months.

In 2016, Vesteda closed a contract with a Dutch specialist firm in the field of lift safety. The company tests the correct operation of the speak-listen connection in the elevator every three days. This means that in the event of someone getting stuck in a lift, it is possible to reassure them and call in assistance to free them. In 2016, more than 100 lifts were inspected and tested. We will continue the roll out of this system in 2017.

Legionella

Vesteda has drawn up general instructions on how to deal with legionella.

Risk map

Vesteda uses an internal risk map to identify potential risks of our complexes. The subjects covered in this map include construction safety of facades, concrete gallery floors, Manta and/or Kwaaitaal concrete floors and fire safety. The completed risk map provides input for the residential complex policy plan and the related multi-year budget, so that we can draw up budgets to deal with risks in the future.

Fire safety

In 2016, Vesteda had a total of 48 complexes surveyed by an organisation specialised in building safety and regulations, based on the risks identified in the risk maps. The outcome of these surveys has been incorporated in the maintenance plans and the maintenance budgets of those complexes.

This survey was in addition to the structural maintenance and checks Vesteda has carried out annually in the field of fire safety. These include annual visual inspections of fire extinguishing equipment, water pipes and emergency lighting. On top of this, the dry risers are pressure-tested every five years.

Replacement of steel gas pipes

The steel gas pipes in three complexes were replaced with copper pipes as a preventative measure by order of the Lelystad municipal authorities. In addition, we also replaced the steel gas pipes in a complex in Leeuwarden. In total, we had gas pipes replaced in more than 200 houses in 2016.

Sustainability in the chain

At the end of 2016, we asked our largest suppliers and a number other preferred suppliers to sign the sustainability declaration suppliers (duurzaamheidsverklaring leveranciers) of the association of institutional property investors in the Netherlands (IVBN). We consider suppliers to include parties who are under contract with the Operations department and who provide goods and services that have an impact on one or more complexes. This may involve either one-off activities or recurring periodical activities. By signing the IVBN declaration, our suppliers endorse and declare they will act in accordance with the IVBN’s vision of sustainability and social responsibility.

We have asked a total of 34 suppliers to sign the IVBN’s sustainability declaration for suppliers. These suppliers represent more than 80% of the activities the Operations department contracted out in 2016. Of the 34 suppliers, 31 signed the declaration (score in February 2017). We will enter into a dialogue with those suppliers who have not yet signed the declaration. If the consultations do not lead to a satisfactory outcome, Vesteda may decide to terminate the cooperation.

In 2017, Vesteda’s procurement department was given a more central role within our organisation. On the basis of our top 20 suppliers in terms of revenues in 2016, we see that suppliers who have not signed the IVBN declaration are mainly suppliers whom we gave one-off assignments.

We have therefore decided that in 2017, the IVBN sustainability declaration will be an integral part of our tender process and part of Vesteda’s standard conditions for one-off assignments for work in our buildings. This means that at the start of the process Vesteda will determine and consider whether it is important that the supplier underwrites the sustainability terms for the outsourced work in question or whether Vesteda can deviate from this condition in this particular instance.

In 2016, we introduced fixed suppliers criteria for the signing of new (framework) contracts. Sustainability is now one of the standard criteria for these contracts.

Strategic project: Mobility

The goal of this project is to reduce our CO2 emissions due to mobility. In 2015, the total CO2 footprint of our organisation was 805 tonnes of CO2, which was a reduction of 1% compared to 2014. Transport accounted for 59% of our CO2 footprint, or a total of 478 tonnes of CO2. This was an increase of 14% compared to 2014, and was probably due to an increase in employee traffic between our offices in Amsterdam, Maastricht and the regions. The figure below shows the transport-related CO2 emissions between 2010 and 2015. The results for 2016 were not available at the writing of this report.

Transport-related CO2 emissions between 2011-2015

  • In 2016, we made a start with a modified mobility policy. Our new organisational structure will lead to less employee traffic.

  • We modified our parking policy to stimulate the use of public transport.

  • We improved our use of teleworking, based on the ‘anytime, anywhere’ principle.

  • We developed a business case for the use of electric cars at our future Amsterdam head office De Boel. The electric cars will be operated on the basis of a ride sharing principle, and will be available for both our employees and our tenants.

Strategic project: Sustainable procurement

Our goal is to manage and reduce our use of resources (energy, water) and to reduce the production of waste and greenhouse gases. In order to measure our use of resources, we initiated a project to install smart meters in the common areas of our complexes so that we can acquire data of the highest possible quality. We have now installed smart meters in approximately 70% of the common areas of the complexes in which we are the sole owner, and in approximately 40% of complexes in which we are not the sole owner. These complexes are operated by the residents' association (VVE), which means that the association must approve any measures. We expect to increase the number of smart meters in 2017. In addition, we have initiated a process to centralise our energy procurement. This will enable us to choose the suppliers with the most sustainable energy sources for our entire portfolio.

We aim to reduce the energy consumption of the common areas in our investment portfolio by 20% between 2016 and 2020. In 2016, our energy use decreased by 3.2% on a like-for-like basis. The results are shown in the figure below.

Energy, GHG and Water public areas

 

absolute

like-for-like

Δ %

 

2016

2015

2016

2015

 

Energy (common areas)

     

Total energy consumption (x 1,000 kWh)

12,879

11,886

10,929

11,293

(3.2%)

Corresponding properties

163

134

   

Percentage covered in investment portfolio

78%

64%

   

Greenhouse gas emissions (x 1,000 kg CO2)

1,696

1,344

1,004

1,133

(11.4%)

      

Water (common areas)

     

Total water (x1,000 m3)

124

78

74

74

0.1%

Corresponding properties

74

26

   

Percentage covered in investment portfolio

35%

12%

   
      

Natural gas (residential units)

     

Total natural gas consumption (x 1,000 m3)

2,638

2,322

2,309

2,185

5.7%

Corresponding properties

27

20

   

Percentage covered in investment portfolio

87%

65%

   

Greenhouse gas emissions (x 1,000 kg CO2)

4,978

4,382

4,358

4,123

5.7%

99.8% of the natural gas consumption in 2016 relates to complexes in which heating of the residential units is provided by a central installation.

Social - Engaged stakeholders and socially engaged organisation

We believe it is important to engage in sustainable relationships with our tenants, participants, employees and our other stakeholders. We communicate openly and transparently about our activities in the field of CSSR and consider it a part of our social responsibility to encourage and increase the awareness, engagement and responsibility of both our employees and our other stakeholders in the field of sustainability. In addition, as a fund we want to contribute to society as a whole and to the neighbourhoods where our complexes are located in particular.

Strategic project: Organisation / Behaviour

In 2016, we integrated CSSR fully into our Business Plan and used the Vesteda Verbetert (Vesteda Improves) programme to make CSSR an integral part of our new organisational structure. This yielded a number of sustainability initiatives, such as the fitting of smart meters in all our public spaces and the kick-off of a process of transition towards centralised energy purchasing. We also launched the following initiatives in 2016:

  • We organised a residential conference with two residential real estate investors from the UK and one from Finland. The purpose of the conference was to exchange best practices in various fields, including sustainability.

  • We signed a covenant with the Blue Building Institute, in which we pledged to help implement the WELL Building Standard™[1] in the Netherlands via a pilot project. We have since launched the first phase of this pilot project.

  • We organised a workshop on sustainability, with the purpose of developing 10 ‘rules of the game’ that can serve as a guideline for our employees in the execution of their tasks. Some examples:

    • Vesteda is working on energy-neutral complexes and neighbourhoods

    • Vesteda focuses on healthy living

    • Vesteda adds green

    • Vesteda encourages social cohesion

  • We installed a roof garden that enables social interactions between our tenants and also acts as a water reservoir, on the roof of our future head office De Boel. We developed the roof garden in close consultation with the local water board and the Amsterdam city council.

  • 1"The WELL Building Standard™ is an evidence-based system for measuring, certifying and monitoring the performance of building features that impact health and well-being. WELL is administered by the International WELL Building Institute™ (IWBI), a public benefit corporation whose mission is to improve human health and well-being through the built environment.” (source: www.wellcertified.com).

Governance - Responsible business and transparent organisation

Our aim is to be open and transparent about our progress on the sustainability front, and we strive to meet the highest possible standards in reporting on CSSR-related activities.

Strategic project: GRI-G4

In both 2015 and 2016, Vesteda used the GRI-G4 standards to report on its CSSR policy in its annual report. For more information, please see the section About this report.

Strategic project: GRESB

Since 2010, the Global Real Estate Sustainability Benchmark (GRESB) has provided a tool to compare the sustainability of property investment funds. GRESB is designed to identify the sustainability performance of the real estate sector and is now a widely-recognised and well-respected initiative. The environmental benchmark rates environmental management practices and their implementation, making it possible to compare the ratings of different real estate investments with both their national peer group and the GRESB global average. Vesteda has been a part of the Benchmark since its inception. Vesteda believes that GRESB is helping to increase transparency in terms of the sustainability of real estate funds. To contribute to the continued evolution of the benchmark, Vesteda joined GRESB as a member in 2013. After successfully implementing the action plan to enhance overall GRESB performance, in 2016 Vesteda was awarded a ‘Green Star’ classification by GRESB, with three stars out of a maximum of five.

Vesteda remains committed to being in the top quartile nationally by 2020.

In 2016:

  • Our ranking increased to 5th out of 10 from 11th out of 11.

  • Our overall score increased by 76% to 67 points out of 100 (peer average: 67 points, global average 60 points).

  • Our Environment score increased by 264% to 51 points out of 100 (peer average 53, global average 53 points).

  • Our Social score increased by 24% to 78 points out of 100 (peer average 82, global average 64 points).

  • Our Governance score increased by 32% to 95 points out of 100 (peer average 86, global average 74 points).

ESG breakdown GRESB 2016

GRESB uses the ESG model in order to rank the environmental score of the participating entities. The ESG model is further divided into eight aspects in order to calculate the overall GRESB score.

Our GRESB score 2016 per aspect is visible in the graph below.

GRESB score 2016