Affected communities (S3)

SBM-2 - Interests and views of stakeholders

In this section, we outline which communities are affected by Vesteda’s activities. For our DMA and salience assessments, we mapped and defined these affected communities. Affected communities focus on the impact of Vesteda’s business operations on people or group(s) living or working in the same area that have been or may be affected by Vesteda’s upstream or downstream value chain.

Vesteda developed an understanding of vulnerable groups through our initiatives on social inclusion. We recognise the critical role Vesteda plays with respect to affected communities, which represent key stakeholders in its operations. Vesteda aims to enhance social cohesion within residential communities and neighbourhoods. Vesteda takes into account the views and interests of stakeholders through various means, including a thorough assessment of potential ESG impacts through the DMA and a salience assessment. Outcomes from these assessments inform the company's strategy and business model.

SBM-3 - Material impacts, risks and opportunities and their interaction with strategy and business model

Vesteda has identified its material impacts, risks and opportunities in relation to affected communities through the DMA. The impacts, risk and opportunities that Vesteda's operations have or create with respect to affected communities are documented in the DMA; please see the section Materiality analysis and results according to the concept of double materiality. The DMA highlights impacts such as the displacement of local populations for the extraction of necessary raw materials, as well as social effects with respect to residents or communities due to the construction or renovation of buildings.

As a real estate investor, Vesteda views health and safety as a salient human rights issue, given the high risk of serious industrial accidents in real estate construction. The right to adequate housing was also identified as a salient issue, as Vesteda can impact affordable housing availability and socioeconomic group inclusion through its offerings and investment decisions. Communities at risk of negative impacts are those affected in the area in which we invest. Such investments can lead to displacement, potentially undermining social inclusion and weakening social cohesion within these communities. We recognise that marginalised groups could be impacted by Vesteda’s investment strategy; therefore, we are committed to promoting affordability, accessibility and, health and well-being through our investment decisions.

We define affected communities as those groups and individuals who are impacted by Vesteda’s business activities, which mainly refers to our residential investments and related activities. This includes residents and local neighbourhoods impacted by our residential investments, experiencing changes in housing availability, affordability and quality of life. Our business activities have a widespread impact on these communities. Urban renewal is a reoccurring and continuous theme throughout the Dutch housing market; however, this potentially impacts social housing availability.

S3-1 - Policies

Vesteda has implemented key policies to mitigate the risk of adverse impacts within its affected communities, with particular emphasis on the Human Rights Policy and the Policy on the Integration of Sustainability Risks and Factors in the Investment Decision Making Process. These policies reflect our commitment to respecting human rights and fostering inclusive practices. Oversight and accountability for both policies rest with the Management Board, which ensures their effective implementation and compliance with same.

Vesteda’s Policy on the Integration of Sustainability Risks and Factors in the Investment Decision Making Process explains how Vesteda integrates sustainability risks and principal adverse impacts on sustainability factors in the investment decision-making process regarding new acquisitions and redevelopment of real estate assets. Vesteda assesses social factors, namely affordability, accessibility, and health and well-being, during acquisitions and property reviews. Hence, in this policy we recognise our role in supporting affordable housing and socio-economic inclusion, using scoring criteria. While we do identify marginalised groups in this policy, we do not have any particular provision for addressing impacts on indigenous people.

Vesteda’s Human Rights Policy is also aimed at mitigating the risks of adverse impacts on affected communities. Given the close alignment with the salient issues with respect to tenants, we explore this topic in more detail in section S4-1 Policies.

S3-2 - Identifying and addressing impact

Vesteda is a member of the IVBN, the association for professional real estate investors, which advocates for our interests and supports sector professionalisation. The Chief Operating Officer is responsible for our engagement with our stakeholders, supervising operational and regional managers.

In the context of the DMA and salience assessment, Vesteda gains insight into the perspectives of affected communities by means of a stakeholder engagement survey. NGO representatives took part in the survey and responded as credible proxies to represent the voices of affected communities. Beyond the stakeholder engagement survey, Vesteda does not yet have a regular process for engaging with affected communities.

S3-3 - Acting on material impacts and mitigating material risks

At Vesteda, we are dedicated to continuously enhancing our ability to effectively identify and address concerns. Vesteda aims to ensure that affected communities have access to channels they can use to give input and raise concerns . The SpeakUp grievance mechanism offers affected communities a confidential environment, which is accessible to the general public and in which they can raise concerns relating to breaches of our (Supplier) Code of Conduct, including the corresponding human rights that are reflected therein.

S3-4 - Actions

Vesteda integrates considerations of affordability, social inclusion, health and safety into our investment decision-making process to ensure that these topics receive appropriate attention and that we can minimise potential adverse impacts. The Sustainability Impact Score (SIS) serves as Vesteda’s key instrument for addressing social issues, including those affecting local communities. This scoring reflects the outcomes of the salience assessment for the role of business partner/investor, in which the right to adequate housing (affordability and social inclusion) and health and safety have been identified as salient topics. The SIS is applied to every new acquisition, as well as to the existing portfolio on a three-yearly basis. The key social factors embedded in the SIS are directly aligned with these material salient topics. Moreover, Vesteda takes a number of additional actions to increase social cohesion and community. These actions have been incorporated in section S4-4 Actions, reflecting the interconnected nature of initiatives targeting affected communities and tenants. Vesteda recognises that the impact of its operations on tenants is closely aligned with broader societal considerations and therefore addresses these dimensions in an integrated manner in its sustainability disclosures.

An opportunity identified in our materiality assessment relates to creating a positive living environment through strong product–market alignment, careful tenant selection and continued investment in sustainability and maintenance. By ensuring an appropriate match between tenants and housing, and by improving the quality and performance of our complexes, Vesteda strengthens community cohesion and enhances tenant satisfaction. Through these efforts, Vesteda leverages the opportunity to deliver both societal and financial benefits by proactively contributing to high‑quality, sustainable and well‑functioning residential communities.

To date, no severe human rights issues and incidents related to Vesteda’s affected communities have been brought to Vesteda’s attention. There are currently no further financial resources or other resources allocated to the management of material impacts on affected communities.

S3-5 - Metrics and targets

Vesteda incorporates elements related to affordability and social inclusion to ensure adequate attention is paid to those topics when investment decisions are made, and adverse impacts are mitigated as much as possible. The Sustainability Impact Score (SIS) is Vesteda’s primary target for addressing social topics, including those related to affected communities. To evaluate sustainability risks and impacts, Vesteda benchmarks projects against a set of established sustainability indicators. The individual indicators are subject to a minimum target to ensure balanced performance across all areas. While no separate KPIs are currently defined for this topic, the SIS integrates key social factors—affordability, accessibility, and health and wellbeing—into investment decision-making. This ensures that social impacts are considered and mitigated, and that social inclusion is actively promoted across our investments. After Vesteda has assessed all sustainability indicators for the relevant project, these indicators will be combined into an overall SIS score. Please see our Policy on the integration of sustainability risks and factors in the investment decision-making process for further details on the SIS scoring and the related process. The following figure is a visual illustration of the SIS Model, including the defined sustainability indicators.

Sustainability Impact Score (SIS) Model

In addition to the current application of the SIS, Vesteda is further developing its approach to social performance measurement. At present, Vesteda is working on the definition and refinement of KPIs and related targets in the areas of affordability, liveability and tenant satisfaction. These topics already form an integral part of the SIS assessment framework; however, Vesteda aims to strengthen this approach by establishing clear, measurable objectives linked to these social themes. Over the coming years, Vesteda expects to formalise and disclose dedicated targets for these areas, enabling more transparent monitoring of progress and enhancing accountability in the execution of our social ambitions. Once established, these KPIs will complement the SIS by providing more detailed insights into Vesteda’s social impact and performance.