Corporate Sustainability and Social Responsibility

General

Vesteda sees Corporate Sustainability and Social Responsibility (CSSR) as vitally important for the long-term value development of our portfolio, our organisation as a whole and the society in which we operate. We believe that our efforts in the field of CSSR improve and strengthen Vesteda, both directly and indirectly, that they result in future-proof returns on our investments, and that they help us to create value for all our stakeholders. 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 five strategic projects in the context of these pillars in 2018: Measuring and managing resource consumption of tenants and common areas, Portfolio Sustainability Improvement, Engage Stakeholders, Implement Health & Well-being and Achieve five green stars in GRESB 2018.

Our sustainability programme manager is responsible for the strategic planning and operations of our CSSR policies. The sustainability programme manager reports directly to the CEO.

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 CO2 emissions as much as possible. We also aim to use materials that have no harmful impact on the environment, and we want to work with business partners who share our own high sustainability standards.

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 buildings, 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 homes will have energy label A, B or C; no more than 20% of Vesteda’s homes will have energy label D; and Vesteda will strive to have zero homes with labels E, F, or G.

Portfolio Strategy is responsible for the progress in and monitoring of our energy labels. The labels are updated according to energy-related measures and based on expiry dates (10 years). An overview is reported each quarter and reported to Operations. These reports are used to monitor if the progress we made during the quarter is in line with our targets for the year. Vesteda plans to use this investment to improve the energy labels of the homes in the portfolio that do not meet the Energy Agreement norms yet. This ambitious package of measures includes building insulation, the replacement of installations with energy-efficient variants and the generation of sustainable energy through the placement of solar panels. We will make these changes on a building by building basis and in phases through 2020.

In 2018, we made good progress and improved the energy performance of 1,474 housing units. In addition, we fully integrated our portfolio improvement initiatives in our regular maintenance planning, leading to increased efficiency in the long term.

  • The percentage of homes in our portfolio with a green energy label (A++, A+, A, B, of C) increased to 84% in 2018, from 81% the previous year.

  • The percentage of homes with a D label declined to 10%, from 13% the previous year.

  • The percentage of homes with an E or worse energy label declined to 6%, from 7% the previous year.

  • The newly acquired portfolio of Delta Lloyd is included in the overview.

Changes energy labels homes 2011 through 2018

In 2018, Vesteda introduced the following measures to improve the energy performance of the homes in its portfolio:

Overview of energy performance measures 2018

Years (in number of properties)

2018

2017

2016

2015

2014

2013

High efficiency boilers

822

1,010

1,564

1,026

663

489

DC ventilators

1,670

481

731

364

-

-

High efficiency glazing

442

891

439

555

481

186

Roof insulation

24

-

273

-

74

57

Cavity-wall insulation

318

64

87

-

66

-

Under-floor insulation

92

23

21

1

-

8

LED lighting (complexes)

13

5

2

-

-

-

Solar panels (complexes)

2

2

3

-

-

-

In 2017, we applied for the SDE+ operating grant (Stimulation of Sustainable Energy Production) for the exploitation of solar panels. This Dutch government subsidy was allocated to eight complexes. In 2018, the solar panels have been installed on two complexes, and the installation of panels on the other six complexes is in progress. The total number of solar panels that will be installed on these eight complexes is 1,476.

Healthy and safe homes

Our aim is to provide our tenants with safe and healthy homes. This implies that they are free of high-risk asbestos, that central heating boilers are checked regularly, lifts are checked regularly, that combined heat and power installations are provided with new filters and that risk maps have been drawn up for every residential building. Although these measures are of a more technical nature, their impact can have a major positive influence on the lives and well-being of our tenants. To ensure the health and safety of our homes as effectively as possible, we have taken a number of precautionary measures which are monitored or executed by our Operations department. These measures 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-2018 based on number of complexes (including the former Delta Lloyd portfolio)

Status end-2018 based on number of complexes (Vesteda only)

Status end-2017 based on number of complexes

No inspection necessary based on construction year

39%

42%

40%

Inspected

52%

58%

53%

To be inspected

10%

0%

7%

The percentage of complexes yet to be inspected stood at 10% at year-end 2018. This amount has increased in comparison to 2017 due to the acquisition of the former Delta Lloyd portfolio. The full Vesteda portfolio has been inspected in 2018. The complexes that remain to be inspected in the future come from the acquired portfolio.

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 2018, we used statements from the specialist technical installation companies over 2017 and 2018 to determine the percentage of central heating installations and combined heat and power installations (see below) that received timely maintenance.

This percentage (70%) is not at the desired level of 100%. This is due to one of our partners unexpectedly ending their contract with Vesteda in June 2018. As maintenance of central heating installations is usually conducted during the summer months, the departure of one of our installation partners is reflected in the maintenance percentage. A new partner was engaged as per 1 October 2018 (after the maintenance season). This partner will start its maintenance activities in 2019. Due to the arrears that we have incurred in 2018 we have made a thorough assessment of how we can overcome the arrears and at the same time achieve our maintenance target for 2019. We have mapped all homes in need of maintenance and actively monitor the planning of the maintenance performed by our partners.  

Combined heat and power installations

To ensure the smooth operation of its combined heat and power installations and a healthy interior climate in its homes, 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.

This percentage (39%) is not at the desired level of 100%. As with central heating installations, this low score is is due to the abrupt termination of the contract by one of the specialist technical installation companies that Vesteda had engaged. This is the same partner as with the central heating installations. To overcome the arrears that we have incurred for these installations during 2018, we have done the same assessment as for the central heating installations as mentioned above. We also perform the same active monitoring in the planning of our maintenance partners to ensure we achieve our targets this year.

Lifts

Vesteda has a contract with a certified lift inspection firm, which conducts periodic inspections and issues inspection reports. Legislation stipulates that lifts must be inspected and certified once every 18 months. In 2018, 284 lifts were inspected and 273 lifts (96.1%) were inspected and approved. The remaining 11 lifts (3.9%) that had not been approved in 2018, had the required maintenance carried out in the first months of 2019 and have now been approved.

Vesteda also engaged a Dutch specialist firm in the field of lift safety. The company tests the correct operation of the speak-listen connection in our lifts every three days. This means that if someone gets stuck in a lift, it is possible to reassure them and call in assistance to free them. In 2018, 208 lifts (100%) were inspected and tested.

Risk map

Vesteda uses an internal risk map to identify potential risks in our complexes. The subjects covered in this map include construction safety of facades, concrete gallery floors, Manta and/or Kwaaitaal concrete floors, as well as fire safety. The completed risk map provides input for the residential complex policy plan and the related multi-year budget, so we can draw up budgets to deal with risks in the future. We aim at updating our risk maps once every 3 years. So a third of the complexes’ risk maps should be updated on an annual basis. In 2018, little over a third of the risk maps (36%, 132 complexes out of 367, excluding the former Delta Lloyd portfolio) were updated.

Fire safety

In 2017 and 2018 combined, Vesteda had a total of 33 complexes surveyed for fire safety by an organisation specialised in building safety and regulations, based on the risks identified in the risk maps. We have incorporated the outcome of these surveys in the maintenance plans and the maintenance budgets for those complexes. For 2019, 38 surveys are planned. Part of these have started already. 

This survey was in addition to the structural maintenance and checks Vesteda carries 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.

In 2018, 88% of the planned maintenance and checks in the field of fire safety were carried out. We plan on getting this number to 100% by more active monitoring.

Sustainability in the chain

Sustainability is an integral part of our organisation and we aim to improve our performance every year. Because a large part of our impact lies outside our organisation, for example at our partners and tenants, we believe it is also necessary to take steps within our supply chain.

As of 2016, we started asking our significant suppliers and a number of other preferred suppliers to sign the IVBN’s sustainability declaration suppliers. This sustainability declaration covers environmental, social and ethical topics. We have embedded the sustainability declaration in our internal processes in such a way that all new suppliers sign and work in accordance with the IVBN declaration before engaging with Vesteda. We use the term suppliers for parties that have a contract with our Operations department and that deliver goods and services that have an impact on one or more of our buildings.

Our goal is to have at least 85% of our expenditures represented by suppliers who signed the sustainability declaration. The responsibility for this process is part of the Operations department and specifically of the team leader contract management and procurement. In 2018, Vesteda decided to make the IVBN sustainability declaration an integral part of the tender process for new (master) service agreements. All our new suppliers are now screened and asked to sign the IVBN sustainability declaration. This has led to a significant increase in the number of signed declarations.

A total of 177 suppliers have so far signed the declaration. These suppliers represent more than 89% of the activities that our Operations department outsourced in 2018.

Now that we have embedded the sustainability declaration in our processes, the next step will be to improve our influence and impact. A first start is the rollout of a sustainability scan with questions on policies, targets and results. This results in a sustainability score per supplier. In case of underperformance, we will start a constructive dialogue to look for points of improvement. The sustainability scan will also be integrated in the monitoring and evaluation of our supplier partnerships. Our target for the future is to assess the sustainability performance of our key suppliers. In the longer term we want to encourage our suppliers to engage their suppliers on responsible production as well. 

CO2 footprint

Vesteda’s aim is to reduce its CO2 emissions from the organisation. In 2018, the total CO2 footprint of our organisation was 531 tonnes of CO2, a reduction of 26% compared to 2017. This was mainly due to employee transportation. In the year 2017, we moved from our former three offices to the new office De Boel in Amsterdam which caused a peak in the CO2 emission from mobility in that year. From 2018, all our electricity is from renewable wind energy which resulted in zero CO2 emission from electricity. The figure below shows the total CO2 per FTE.

Although the CO2 emission from mobility decreased, the majority of our total CO2 footprint still comes from this component. In 2018 the total CO2 caused by mobility decreased with 28% in comparison to 2017 while the organisation grew with 4% FTE. The second figure below shows the transport-related CO2 emissions between 2012 and 2018 per FTE in further detail.

CO2 emissions (kg) per FTE in the period 2012-2018
Transport-related CO2 emissions between 2012-2018

Measuring & Managing Resource Consumption

Our goal is to manage and reduce our use of resources (energy, water) and to reduce the production of greenhouse gases. In order to measure our use of resources, we initiated a project to install smart meters[1] in the common areas of our buildings so that we can acquire data of the highest possible quality. In 2018, we increased the number of smart meters to 78%, from 71% in 2017. This are the meters of which we have access to the data. This percentage includes buildings in which Vesteda is not the sole owner. These buildings are operated by residents associations (VVEs), which means that the association must approve the placement of these meters. We expect to increase the number of meters in 2019 once we have full insight in the newly aquired former Delta Lloyd portfolio. When meters are not automatically metered yet, Vesteda aims at converting them into a smart version when possible.

We aim to structurally reduce the energy consumption in the common areas in our investment portfolio. We started this project in 2016. In 2018 our electricity use decreased by 2.6% compared to 2017. When compared to 2016 on a like-for-like basis we have managed to decrease our electricity use by 9.1%. Our natural gas consumption increased by 0.1% compared to 2017 on a like-for-like basis. The natural gas consumption is mostly related to tenant consumption since our common areas are not heated. The results of 2018 versus 2017 are shown in the figure below.

Energy, GHG and Water public areas
 

Absolute

like-for-like

 
 

2018

2017

2018

2017

Δ %

Energy

     

Total energy consumption (x 1,000 kWh)

11,239

11,604

10,381

10,660

(2.6%)

Corresponding properties

168

167

   

Percentage covered in portfolio

60%

60%

   

Total heating consumption (x 1,000 GJ)

1,5

1,4

1,5

1,4

7.4%

Corresponding properties

1

1

   

Percentage covered in portfolio

25%

25%

   

Total natural gas consumption (x 1,000 m3)

1,603

1,437

1,439

1,437

0.1%

Corresponding properties

22

19

   

Percentage covered in portfolio

88%

76%

   
      

Greenhouse Gas

     

Indirect greenhouse gas emissions (x 1,000 kg CO2)

1,811

1,919

2,020

2,092

(3.4%)

Direct greenhouse gas emissions (x 1,000 kg CO2)

3,030

2,717

2,720

2,717

0.1%

Total greenhouse gas emissions (x 1,000 kg CO2)

4,841

4,636

4,741

4,809

(1.4%)

      

Water

     

Total water (x1,000 m3)

72

70

68

66

1.4%

Corresponding properties

77

75

   

Percentage covered in portfolio

28%

27%

   

Social - Engaged stakeholders and socially engaged organisation

We believe it is important to engage in sustainable relationships with our tenants, our participants 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 in general and to the neighbourhoods where our complexes are located in particular.

Stakeholder Engagement

In 2018, we organised various initiatives with and for our stakeholders.

  • We implemented a communication plan to increase the engagement with our stakeholders. This will help us to better understand their needs and provide a platform to inform them of our initiatives.

  • We organised eight GoGreen events (DoeGroen dagen), with a minimum of one in each region. The purpose of these events is to strengthen the bond with our tenants, and to inspire both our tenants and our employees to go green. During these events, we distributed and planted garden plants, and worked jointly with our tenants to improve the public spaces through various gardening initiatives.

  • We contributed to the Voedselbank food bank and hosted a dinner with refugees, under the umbrella of the Havendiner Foundation.

  • We hosted a meeting from the Embassy of Finland for a networking seminar for smart building solutions.

Health & Well Being

Our aim is to have a positive impact on the health and well-being of our tenants and employees. In order to do this, we organised various initiatives:

  • We participated for the second time in the Health & Well Being module of GRESB 2018 and scored second place in our peer group.

  • We continued to develop our Health & Well-Being policy, in which we outline our goals and methods to increase the health of both our tenants and our employees.

  • We created a vitality program for Vesteda employees, which will be implemented in 2019.

  • We registered our project ‘Aan de Rijn’ in Arnhem for a WELL-certification. We want to obtain WELL certification for the first residential building in the Netherlands in 2019.

  • In 2018, we started a collaboration with the Dutch Society for the Protection of Birds (Vogelbescherming Nederland). This collaboration will enable us to use the knowledge of the DSPB to make our complexes more sustainable and bird friendly. We will also try to get our tenants involved, too.

Governance - Responsible business and transparent organisation

Our aim is to be seen as a sustainable investment by our participants. We are 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. We have also deployed the following activities:

  • We monitor all CSSR KPIs in a transparent and unified system. This is the first pilot version and we will finish the definitive version in 2019.

  • We have updated the sustainability declaration that we require our suppliers to sign.

  • We launched a programme to redefine 10 rules of Vesteda and to create sustainability goals. We will complete the definition of these goals in 2019.

  • We made preparations to embrace the UN’s Sustainable Development Goals and the Principles of Responsible Investment in 2019 (see below).

Our impact on the Sustainable Development Goals

In 2015, the United Nations adopted 17 Sustainable Development Goals (SDGs), defining global sustainable development priorities and aspirations for 2030. This common set of 17 goals and 169 sub-targets calls for worldwide action among governments, business and civil society to end poverty, ensure prosperity for all, and protect the planet.

Vesteda has decided to embrace the Sustainable Development Goals. In 2018 we have conducted an analysis to determine which SDGs are most relevant for our activities. For this analysis we have used the approach specified by the SDG Compass. The SDG Compass is a guide for business action developed by GRI, the UN Global Compact and the World Business Council for Sustainable Development (WBCSD).

To determine which SDGs are most relevant for our organisation we conducted an assessment on the current, potential, positive and negative impacts that our activities have on the SDGs throughout our value chain.

Our approach

We rated each of the 169 SDG sub-targets according to two dimensions:

  • Our contribution to the SDG sub-targets. A score was attributed for each SDG sub-target for which our contribution is considered either not relevant or limited (low), indirect in nature (medium, i.e. not directly linked to our core business), or directly linked to our core business (high).

  • The magnitude of impact, both positive and negative, of our contribution to the SDG sub-target.

Outcome

Based on this assessment, the SDGs we consider as most important in relation to our activities are:

  • SDG 7: Affordable and clean energy

  • SDG 11: Sustainable cities

  • SDG 12: Sustainable consumption and production

Most relevant SDG's for Vesteda

For the three most material SDGs we have described our actions and ambitions. In the coming year we plan to develop SDG-proof indicators to measure and monitor our progress.

SDGs along our value chain

We have mapped our SDG actions along our value chain. 

SDG actions along our value chain

GRI

Since 2015, Vesteda has used the GRI-G4 standards to report on its CSSR policy in its annual report. For 2018, Vesteda is once again reporting on the basis of GRI Standards. For more information, please see the section About this report.

Achieved five stars in GRESB 2018

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.

In 2018, Vesteda was awarded five out of five stars and was ranked in the global top 20% for its sustainability performance. Vesteda is committed to remaining a top player in the field of sustainability at a national level.

In 2018:

  • Our ranking rose to 2nd from 6th out of 13.

  • Our overall score increased to 85 points from 76 out of 100 (peer average 77 points, global average 68 points)

  • Our Environmental score increased to 78 points from 62 out of 100 (peer average 68, global average 61 points)

  • Our Social score increased to 92 points from 90 out of 100 (peer average 88, global average 71 points)

  • Our Governance score declined slightly to 98 points from 99 out of 100 (peer average 90, global average 82 points)

ESG breakdown GRESB 2018
 

Vesteda

Peer group

GRESB Average

Environment

78

68

61

Social

92

88

71

Governance

98

90

82

GRESB score 2018
  • 1 A smart meter makes it possible to automatically measure the consumption of small meter consumer connections, maximising the quality of the acquired data