General
Basis of preparation
Vesteda’s approach to sustainability reporting
For the past few years, Vesteda has been at the forefront of reporting on sustainability topics, our approach and targets, as we believe that transparency and accountability are key drivers for moving our ESG ambitions forward. This aligns well with the transparency required under the Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS) which have now come into effect. While the scope for Vesteda is limited going forward (to be re-assessed upon the (ESG) Omnibus Simplification Package, presented by the European Commission on 26 February 2025, coming into effect later in 2025), we think it is important to comply with CSRD reporting as part of our corporate responsibility and continuous transparency. In this context, there are two important developments to mention.
Vesteda will report under the CSRD on a consolidated basis including all entities comprising Vesteda Residential Fund, please refer to the Governance chapter, which is the same scope as for the financial statements for the financial year ended 31 December 2024. We believe that complying with CSRD reporting at a consolidated level gives investors and other stakeholders comprehensive information regarding the Fund’s sustainability performance, considering this is part of our corporate responsibility and continuous transparency. The basis of preparation of these sustainability statements is therefore the same as those for the overall annual report.
Second, ahead of the CSRD requirements for the financial year ending in 2025, there are changes to the preparation and presentation compared with previous periods, as we changed the format of our reporting on ESG topics. These are now included in these Sustainability Statements to align with the upcoming CSRD requirements and are structured in the following order:
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General disclosures, including basis of preparation, governance, strategy and our approach to double materiality;
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Environmental disclosures, including our approach to climate change, waste and water management and our sustainable product portfolio;
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Social disclosures, including those related to the health and well-being of our own people, such as diversity and safety, as well as workers in our value chain;
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Governance disclosures.
The structure is matched to the CSRD standards to allow for a reporting foundation for preparation towards 2025 disclosures, as the first mandatory reporting year. Several metrics have been added versus the previous year to already disclose available metrics and targets required under CSRD.
During the preparation of these Sustainability Statements, Vesteda made no use of the option to omit any applicable specific piece of information corresponding to intellectual property, know-how or the results of innovation (in accordance with ESRS 1, section 7.7).
The limited assurance report of the independent auditor, which includes details on scoping and outcomes, is available on page 108. In light of our preparations for CSRD-related reporting over FY 2025, we have added several disclosures for 2024 versus the previous year, which are not yet in scope of the assurance engagement.
As we are preparing for the implementation of the CSRD, for the reporting year 2025, Vesteda is reporting its sustainability information for the first time taking the requirements of the ESRS into account on a ‘best effort’ basis. Making use of phase-in possibilities for 2025 and beyond, our main focus in the current Sustainability Statements is on Environmental, Own Workforce and Business Conduct. We recognise that this is a first step towards full compliance with the ESRS and that certain disclosure elements are not yet completely in line with the ESRS.
Disclosures in relation to specific circumstances
There are no specific circumstances to report that have had an effect on the preparation of these Sustainability Statements.
Time horizons
The reporting period for this Sustainability Statement is the same as the reporting period for the financial statements.
When executing our double materiality assessment, we assess material impacts, risks and opportunities over the short, medium and long term. As sustainability-related matters often materialise over time, this justifies more forward-looking reporting, whilst financial information is restricted to the annual reporting period.
For the purpose of the Sustainability Statement we define:
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Short term: 1 year
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Medium term: 1-5 years
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Long term: more than 5 years
Where our horizons deviate from these general principles, this is indicated.
Metrics and estimation uncertainty
In applying reporting requirements, Vesteda needs to make judgements and estimates that may be critical to the data reported. This includes prospective information such as ambitions, objectives, targets and expectations. Inherent to this information is the fact that the actual results may differ in the future and that information is therefore uncertain. Where feasible, the quantitative data in this report is presented alongside comparative data from the previous financial year for context and clarity.
With regard to energy data, the Fund receives anonymised consumption information from energy and network companies. This data does not cover 100% of the Fund’s residential units, but only 80-90%. The remainder is estimated based on portfolio averages.
With regard to climate risks, the accuracy and availability of risk maps for climate risks is not guaranteed, as this is a relatively new subject and insights and data are continuously evolving.
Changes in preparation or presentation versus prior periods
For 2024, there are changes to the preparation and presentation compared with previous periods, as we changed the format of our reporting on ESG topics. These are now included in these Sustainability Statements to align with the upcoming CSRD requirements and are structured in the following order:
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General disclosures, including basis of preparation, governance, strategy and our approach to double materiality;
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Environmental disclosures, including our approach to climate change, waste and water management and our sustainable product portfolio;
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Social disclosures, including those related to the health and well-being of our own people, such as diversity and safety, as well as workers in our value chain;
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Governance disclosures.
The content is matched to the CSRD standards to allow for a reporting foundation for preparation towards 2025 disclosures, as the first mandatory reporting year. Several metrics have been added that were not used in the previous year, so we can already disclose available metrics and targets required under CSRD.
Reporting errors previous periods
There are no material omissions from, or misstatements in Vesteda’s sustainability reporting for one or more prior periods to be reported.
Reporting based on other legislation
Vesteda discloses mandatory information based on Regulation (EU) 2019/2088 (Sustainable Finance Disclosure Regulation). This information can be found in Annex 3 of this Annual Report.
The sustainability information is prepared in accordance with GRI Standards. The GRI Standards used are listed in the GRI Content index as disclosed in Annex 2 of this annual report.
The reporting on sustainability is in line with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. See Annex 5 for an overview with references for the alignment with the TCFD recommendations.
Incorporation by reference
Some ESRS disclosure requirements are incorporated by reference. Where information is incorporated by reference, this is clearly indicated.
Governance of sustainability matters
This chapter sets out the governance processes and controls that are in place to manage and monitor sustainability matters.
Applying good governance benefits all stakeholders, helps to mitigate risks and safeguards Vesteda’s reputation. Governance encompasses multiple aspects, such as: the protection of participants’ rights, board independence and decision-making processes, the regulatory and legal environment, business ethics, executive/equal pay, diversity & inclusion, (personal) data integrity, tax strategy, etc.
Governance has become an ever greater focal point in recent years, as European legislation related to ESG reporting has amped up. For example, the Sustainable Finance Disclosure Regulation requires financial institutions like Vesteda to be transparent about the integration of ESG factors in their business models and to report the extent to which their portfolios are EU Taxonomy-aligned. Certain minimum safeguards, such as compliance with the OECD guidelines for multinational enterprises and the UN Guiding Principles on Business and Human Rights, which include the principles and rights set out in the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights need to be taken into account. The CSRD requires companies to disclose how governance of ESG matters is set up and how roles and responsibilities are allocated.
Composition and diversity
The composition of the Management Board and the Supervisory Committee, including the members’ relevant skills and expertise with regard to Vesteda’s overall business and sustainability matters in particular, are included in the ‘Members of the Management Board’ and ‘Our Supervisory Committee’ sections respectively. It is noted that employees and other workers are not represented in these boards. However, they are represented in Vesteda’s Works Council, which is consulted and asked for approval on specific matters in accordance with the Dutch Works Councils Act, which may include topics that are linked to sustainability matters.
Roles and responsibilities
Management Board
The Management Board is responsible for defining the fund’s overall strategy, which is set out in the business plan, as approved by the Participants. In respect of sustainability matters, the Management Board ensures that the strategy is converted into defined policies, targets and KPIs. As such, the Management Board is responsible for the oversight of sustainability related impacts, risks and opportunities. In particular, the CFO is responsible for the implementation of the CSRD, taking into account the scope as referred to in the Basis of preperation.
A more detailed description of the Management Board’s duties and responsibilities can be found in the ‘Members of the Management Board’ section.
The Management Board has not yet performed a formal assessment to evaluate whether appropriate skills and expertise are available to oversee sustainability matters, including sustainability-related expertise that the Management Board directly possesses or can leverage.
Management Team
For the day-to-day execution of the fund’s business plan, the Management Board is supported by the Management Team. This includes the implementation of defined policies, targets and KPIs.
ESG Committee
In relation to sustainability matters, the Management Board is also supported by the ESG Committee, which is chaired by the Portfolio Investment Manager ESG. The ESG Committee comprises the CEO, the Portfolio Investment Manager ESG, the COO, the Head of Portfolio Strategy, the Business Control Manager and the General Counsel. The members have been selected based on their knowledge of specific topics related to sustainability matters, such as, but not limited to, climate change, legislation, reporting and the supply chain.
The ESG Committee is charged, among other things, with the monitoring and oversight of Vesteda’s sustainability strategy and the related impacts, risks and opportunities. The ESG Committee has a direct reporting line to the Management Board in the event it has significant findings.
Supervisory Committee
The Supervisory Committee supervises the policies and functioning of the Manager in relation to the fund and the general affairs of the fund. Its supervision includes monitoring whether the objectives as set out in the Business Plan, and the related annual targets are progressing throughout the financial year. The Management Board reports on a quarterly basis to the Supervisory Committee. This reporting includes the fund’s progress with respect to its sustainability targets.
In the year under review, the Management Board reported on a range of subjects, including the CSRD implementation process and the use of the sustainability budget. In addition, the Supervisory Committee was updated on actions taken and the status of various sustainability targets, such as asset improvements to achieve the 99% green label goal, the installation of solar panels, BREEAM certifications and climate risk adaptation measures.
The Supervisory Committee conducted a self assessment, as set out in the Report of the Supervisory Committee, in which it also discussed whether it had or had access to the appropriate skills and expertise to conduct its supervisory duties. However, the Supervisory Committee has not yet performed this assessment specifically in relation to the supervision of sustainability-related matters.
Integration of ESG performance in incentive schemes
Vesteda’s policy regarding incentive schemes for members of the Management Board and Management Team is partly linked to ESG matters. Certain ESG targets are part of the incentive scheme and the performance evaluation, these being: tenant satisfaction, energy use in kWh/m2, installation of solar panels, BREEAM certificates, energy labels and GRESB score.
The proportion of variable remuneration tied to sustainability-related targets and/or impacts constitutes 40% of the overall variable remuneration.
Decisions on the Management Board’s incentive scheme are made by the Supervisory Committee, when it comes to target setting, metrics and weight. The overall remuneration package of members of the Management Board (including the percentage of variable remuneration) is determined by the shareholders of Vesteda Investment Management B.V.
Vesteda’s policy regarding remuneration for members of the Supervisory Committee does not link to sustainability matters. The members of the Supervisory Committee receive a pre-determined fee and do not receive any further incentive.
Members of the ESG Committee fall under Vesteda’s regular remuneration policy, which does not include specific incentives outside of their fixed salary.
Please see the Remuneration report for further information on remuneration.
Risk management and internal controls over sustainability reporting
General information on Vesteda’s risk management and internal control system can be found in the Risk Management chapter. With respect to sustainability reporting, the Risk Committee focuses on strategic risks, compliance and reporting.
The ESG Committee focuses on monitoring and oversight of Vesteda’s sustainability strategy and the related impacts, risks and opportunities.
A dedicated CSRD Committee has been established to oversee the implementation of the CSRD reporting requirements.
As for sustainability reporting, internal controls depend on the area of reporting, as various departments are responsible for providing input for our sustainability reporting. The majority of our sustainability KPIs are prepared by the Portfolio Strategy department. In 2025, Vesteda will appoint a sustainability reporting officer to ensure that internal controls on sustainability reporting are further aligned.
The double materiality assessment process
Description of the processes to identify and assess material impacts, risks and opportunities
Vesteda employs a comprehensive seven-step methodology for its Double Materiality Assessment (DMA), including internal and external stakeholder engagement throughout the process. A list of potentially relevant sustainability matters is created based on stakeholder insights, prior assessments, and sector analyses. The next step involves defining the impacts, risks, and opportunities (IROs) associated with these sustainability matters, identifying if they present material issues that need disclosure. These IROs are scored and assessed with attention to financial implications and the severity of potential impacts. Vesteda employs a structured ranking system to categorize these impacts, risks, and opportunities by applying specific thresholds to distinguish between material and non-material issues. This process is further refined through internal and external expert consultations and validated with external stakeholders, ensuring a comprehensive understanding of the most material issues. Lastly, the results are captured in a materiality overview and undergo external validation, where surveys are sent to stakeholders such as tenants, employees, and investors to ensure alignment and responsiveness to their key concerns, which ultimately influences the company's policy-setting for sustainability topics.
The result of our double materiality assessment
The outcomes of our double materiality assessment, which were developed as part of our CSRD implementation, are considered preliminary and represent our current understanding of material topics based on existing data and stakeholder engagement. As our business environment, stakeholder expectations, and regulatory landscapes continue to evolve, it is important to note that these results may be subject to change. We remain committed to revisiting our assessments regularly, incorporating new insights and feedback to ensure that our focus remains aligned with the most pertinent sustainability issues. This iterative approach helps us adapt to emerging challenges and opportunities, thus maintaining the relevance and effectiveness of our sustainability strategies.
Material sustainability-related impact, risks and opportunities
In this sustainability statement we provide the materiality results of our ESG (sub-)topics, as set out in the ESRS. Topic materiality is driven by impact materiality and/or financial materiality. Under the impact materiality direction, impacts can be classified as either negative or positive. For financial materiality, a (sub-)topic can be considered material either as a risk or an opportunity.
Our performed DMA forms the basis of our sustainability reporting. The following tables list our ESG related impacts, risks and opportunities we have identified and assessed as material based on our performed DMA. In these tables, each material ESRS topic is outlined, specifying the sub-topics related to our material impacts and risks, such as climate change mitigation or climate change adaptation.
Additionally, the tables indicate whether the impacts and risks occur within our own operations or across the value chain. We also specify whether an impact is positive or negative (for impact materiality) or, for financial materiality, whether it is a risk or opportunity. Unless noted otherwise, all impacts are actual impacts, rather than potential. Brief descriptions are provided for the impacts, risks or opportunities.
Environment
Climate change
Vesteda’s operations have the potential to negatively impact both people and the environment through direct greenhouse gas (GHG) emissions (scope 1 and 2) and indirect emissions (scope 3). This includes direct emissions from Vesteda’s own operations (scope 1), indirect emissions from the real estate portfolio (scope 2), and emissions associated with Vesteda’s upstream and downstream value chain (scope 3), such as business travel, employee commuting, and the procurement of goods and services. Additionally, Vesteda faces transitional and physical risks affecting its operations and supply chain, including its real estate portfolio.
Impact | Description | Score |
Climate change mitigation | ||
 | Negative impact on the climate due to CO2 emissions during the construction and/or renovation of construction companies. |  |
 | Opportunity for Vesteda to differentiate itself from competitors by becoming a leader in the field of good sustainability policy, through its GHG accounting and climate risk analyses. |  |
| Opportunity for Vesteda to reduce living costs for tenants by renovating the current homes in its real estate portfolio. | |
Climate change adaptation | ||
 | Risk of substantial damage to buildings in the portfolio due to extreme weather conditions, such as heat stress, waterlogging, drought, and flooding. |  |
| Risk that suppliers will have higher capital expenditures (capex) and operating expenses (opex) due to the greening of their supply chain and the introduction of new climate-related laws and regulations, such as CO2 taxes. | |
Energy | ||
 | Negative impact on global warming through Vesteda's own operations, direct greenhouse gas emissions (scope 1 and 2), and indirect greenhouse gas emissions such as transport (scope 3 emissions). | |
| Negative impact on the climate due to CO2 emissions during the construction and/or renovation of construction companies. | |
| Negative impact on global warming through Vesteda's real estate portfolio, the greenhouse gas emissions of tenants (scope 3). | |
Resource use and circular economy
The circular economy can be seen as an extension of the linear economy. The circular economy assumes that the products we use now are raw materials for future products or are returned to nature. It is an economy where waste no longer exists. As a commercial real estate investor focused on renovating or constructing buildings, we are aware of our role in resources use and our circular economy duty. For these real estate constructions, resources are exploited and processed. The usage of these resources could have (negative) impacts on the environment, depending on the materials used and the processing method in place. Furthermore, there are potential financial risks on the topic of resource use and circular economy, such as increased scarcity of construction resources and stricter regulation.
Impact | Description | Score |
Resource inflow, including resrouce use | ||
| Negative impact of the extraction and processing of building materials that consume finite natural resources, such as minerals, metals, wood, and water, which can lead to resource scarcity, loss of biodiversity, land degradation, and water pollution. | |
 | Positive impact on the reuse of materials during the renovation and sustainability of buildings to extend the lifespan of the buildings. | |
| Risk of a decreasing availability of resources due to climate change and resource depletion. | |
| Risk of higher costs due to increased taxes on materials. | |
| Risk that sustainability/certification laws and regulations do not align well with each other. | |
Resource outflow | ||
| Negative impact of the production, transport, and disposal of building materials that (substantially) contribute to global warming through the emission of carbon dioxide and other greenhouse gases. | |
| Risk that real estate construction projects (i.e., new construction, renovation work, sustainability projects) substantially contribute to greenhouse gas emissions (embodied carbon). | |
Waste generation | ||
| Opportunity to design and construct buildings with materials that have the potential to store carbon for a long time if they are designed and built with carbon-storing materials. | |
Social
Own workforce
The ESRS defines the own workforce as all employees and non-employees who are either people with contracts with the undertaking to supply labour (“self-employed people”) or people provided by undertakings primarly engaged in “employment activities”. As an employer we can impact our own workforce, both negatively and positively. And from the financial impact perspective, our own workforce goes hand in hand with risks and opportunities for our company.
Impact | Description | Score |
Working conditions | ||
 | Negative impact on employee development due to not offering a personal training budget and/or training programs. | |
| Negative impact on employee well-being due to potential loss of personal information from increasing digital interaction. | |
 | Positive impact on the well-being of own employees by ensuring employment, reasonable working hours, and a proper work-life balance. |  |
| Positive impact by providing flexibility to employees, such as the possibility of working from home, purchasing a home office, etc., as outlined in a telecommuting agreement. | |
| Positive impact on employees by having a strong internal speak-up process, where investigations are conducted into undesirable behavior within the own workforce. | |
 | Reputational risk for Vesteda if there are many employees with burnout. Risk that employees will drop out due to burnout and work-life balance related complaints. This can also lead to higher work pressure for the remaining employees. | |
| Risk that Vesteda's employees do not take advantage of training opportunities and courses, and therefore are not able to develop themselves as well as possible. | |
| Risk that information flows, systems, or tools are insufficiently secured, leading to the loss or theft of private data of own employees. | |
 | Opportunity for an improved image due to the good work-life balance of employees. Opportunity for increased productivity/effectiveness of employees because they are satisfied. | |
Equal treatment and opportunities for all | ||
| Risk that employees feel undervalued due to the lack of data on the ethnicity of employees and employees with disabilities. | |
| Opportunity for improved productivity of employees as a result of appreciation and equal treatment within Vesteda. | |
Workers in the value chain
Workers in the value chain are those who are not directly employed by the company but are part of the broader supply chain. These workers might be employed by suppliers, contractors, or other third parties that provide goods or services to the company. The focus of this disclosure includes ensuring fair labor practices, safe working conditions, and adherence to human rights standards across the value chain. Vesteda impacts these workers, both positively and negatively.
Impact | Description | Score |
Working conditions | ||
| Negative impact on the health of production workers, construction workers, and/or involved communities due to the choice of building materials. | |
| Negative impact on the safety and health of subcontractor employees due to price demands, resulting in the use of self-employed workers, foreign workers, and/or poorly trained workers, which can lead to accidents and injuries. | |
| Opportunity for Vesteda to attract subcontractors more easily and maintain relationships due to the positive experience of subcontractor employees. | |
Other work-related rights | ||
| Negative impact on workers at both construction sites of buildings delivered to Vesteda and subcontractors due to, among other things, price demands, which could result in workers being insufficiently paid. | |
| Positive impact on the well-being of employees of (sub)contractors as a result of a clear SpeakUp policy. Through Vesteda's SpeakUp policy, employees of (sub)contractors can safely and transparently file complaints about incidents, events, or grievances at (or about) the workplace. | |
Affected communities
Affected communities are those living near Vesteda’s operations, impacted by the company’s activities. This includes addressing environmental, social and economic concerns. Vesteda impacts these communities and, the other way around, is impacted by these communities.
Impact | Description | Score |
Communities' economic, social and cultural rights | ||
| Negative impact on the displacement of local populations for the extraction of necessary raw materials (cobalt, copper, etc.) for use in climate mitigation measures, such as solar panels and lease cars. | |
| Negative impact on social inclusion as a result of renovated homes that no longer fall into the social housing categories as part of Vesteda's policy. | |
| Positive impact on the environment and residents by guiding the type of business that settles in the respective neighborhood, taking into account standards that could promote the neighborhood. | |
| Risk for Vesteda of vacancy in commercial spaces due to the selection procedure of enterprises. | |
| Opportunity for improved relationships with neighbors & enhanced reputation of Vesteda. | |
| Opportunity for improved reputation among residents through the selection procedure of enterprises for renting commercial spaces. | |
Consumers and end-users
Consumers and end-users are individuals who purchase or use Vesteda’s products and services. Vesteda impacts these consumers through product safety, quality and customer satisfaction. Conversely, consumer feedback and behavior impact Vesteda’s operations and reputation.
Impact | Description | Score |
Access to products and services | ||
| Negative impact on end users due to focusing on a specific type of housing in a higher socioeconomic class, resulting in not all population or minority groups having access to a home. | |
| Positive impact by making homes available for middle-income earners who are currently struggling to find housing. | |
| Positive impact by indirectly contributing to a livable income for (future) pensioners. | |
| Reputation risk when it becomes known that Vesteda (indirectly) discriminates in access to a house built within Vesteda. All population groups should have access to the products that Vesteda rents/sells. | |
| Risk of non-payment due to higher rental prices or other related risks by increasing rent in favor of pensioners. | |
| Reputational opportunity by making homes available for middle-income earners. | |
Product or service conditions | ||
| Negative impact on customer well-being following potential loss of personal information due to increasing digital interaction. | |
| Risk that information flows, systems, or tools are insufficiently secured, leading to the loss or theft of private data of customers or other involved parties. | |
| Risk related to product/material quality control. Reputation risk: Incomplete analysis and quality control of Vesteda building materials can jeopardize the company's reputation. If issues come to light, this can lead to a loss of trust between customers and partners. This, in turn, can affect market position, customer retention, and future business opportunities. | |
| Risk of tenant non-payment and lawsuits in case of disputes. | |
| Opportunity related to product/material quality control. Reputation opportunity: When it is known that Vesteda's homes are of good quality, this can influence market position, customer retention, and future business opportunities | |
Governance
Business conduct
Vesteda impacts business conduct through its policies, practices, and corporate culture. This topic refers to the ethical and responsible behavior of Vesteda in its operations. Ethical business conduct could enhance Vesteda’s reputation and stakeholder trust.
Impact | Description | Score |
Corporate culture | ||
| Positive impact on reduced stress levels of employees and workplace well-being due to active communication and codes of conduct. This establishes desired behavior and makes it clear to every employee what kind of behavior is tolerated. | |
| Opportunity for reduced employee turnover due to a clear desired company culture resulting from a pleasant environment, reduced stress, and improved employee well-being. | |
| Opportunity to improve Vesteda's reputation by preventing issues related to corruption/bribery, thereby avoiding reputation risks due to incidents of corruption and/or bribery that cause negative media coverage, employee withdrawal, and loss of customers. | |
Protection of the whistleblower | ||
| Positive impact on employees' sense of safety and the ability to easily report misconduct due to a good whistleblower policy. The whistleblower policy protects employees who report dangers related to people and the environment from adverse treatment and consequences from the employer. | |
Political engagement | ||
| Positive impact on promoting/maintaining the business climate of real estate sectors due to advocacy. The impact of advocacy contributes to achieving a level playing field, an accessible and transparent decision-making process, and prevents conflicts of interest. | |
Corruption and bribery | ||
| Risk of minor cases of non-compliance with rules and regulations due to an inadequate system of rules, frameworks, and oversight of the actions of employees and suppliers. | |