Non-financial report
Foreword
It is no secret that sustainability has established itself in every major economic sector and is becoming an increasingly topical and urgent issue. In the last two years, S IMMO has intensified its efforts across the board in this area. Activities in 2021 fo-cused on putting sustainability into practice systematically and structurally. An ESG staff unit reporting directly to the Manage-ment Board was created, while an ESG Committee was estab-lished in the Supervisory Board. ESG stands for Environment, Social and Governance, meaning that it encompasses three major aspects of modern sustainability management in a corpo- rate context. We worked intensively to define an ESG strategy and set out the corresponding measures and objectives in 2022 building on these developments. Furthermore, we also drew up guiding principles that reflect the key pillars of our efforts.
Responsible interaction with our environment has been an inte-gral part of S IMMO’s operating and strategic activities for many years. The company pursues the goal of designing its proper- ties to be resource-efficient, low-emission and user-friendly. At the same time, we not only play an important role in society as an employer, but we also provide real estate that meets people’s basic need for space to live and work. In addition to encom-passing labour standards, diversity and remuneration within our company, our aspiration demands a commitment to society and the local community. Handling the capital provided to us sus-tainably and with integrity is a key part of our corporate self-image. As a listed company, we are thus obliged to our share-holders at all times, but we are naturally also responsible to all other stakeholders at all times.
Herwig Teufelsdorfer
Our ESG strategy is built on this fundamental insight. Broken down into the three core areas of “Environment”, “Social” and “Governance”, we have defined a total of 49 goals along with the corresponding measures and key performance indicators. With regard to our environmental goals, our aim is to reduce energy and water intensity and property-related greenhouse gas emissions, switch entirely to electricity from renewable energy sources and promote environmentally friendly mobility. Our social goals include a 50% share of female employees and senior managers, further progress with the introduction of green leases when concluding new contracts and an annual increase in tenant satisfaction. Healthcare and training for our team also forms part of our core objectives. In terms of governance goals, we aim to establish sustainable supply chain management, pro-vide regular compliance training and increasingly align Man-agement Board remuneration to ESG criteria. All our other goals, the measures and key performance indicators that have been defined in detail and the corresponding scheduling can be found on page 7 of this non-financial report.
We have extensively addressed risks in connection with climate change and considerably expanded our Group-wide risk management in this respect. Details can be found in the annual report starting on page 102.
There is no doubt that the current geopolitical and economic uncertainties pose challenges with regard to sustainability. Fur-thermore, the regulatory environment remains highly dynamic and is subject to rapid change. We are attempting to take this circumstance into account through ongoing adaptation within the company. The transition to a conservation-oriented mindset when it comes to our resources, the environment and society as a whole is not always easy, but there is no longer any alternative.
We firmly believe that every change and every action matters and that everyone’s efforts are required in order to achieve the necessary turnaround.
Regulatory frameworks, principles and standards
S IMMO undertakes to comply with national, international and internal principles. Since 2007, S IMMO has been committed to observing the Austrian Code of Corporate Governance, which is available on the website of the Austrian Working Group for Corporate Governance. Details on the implementation of the Code at S IMMO can be found in the annual report starting on page 22.
At an international level, the company applies various frame-works for the protection of human rights. Details of S IMMO’s activities in the area of human rights issues, and especially the scope and content of these activities and their organisational and procedural implementation, can be found in the Human rights section starting on page 12 and in the Organisational Policy for Human Rights atwww.simmoag.at/sustainability/ governance. S IMMO’s Code of Conduct for all executive bodies and employees of the company also covers human rights issues as well as compliance-related and environmental con-tent. This Code, which is publicly accessible atwww.simmoag. at/sustainability/governance, is binding for all executive bodies and employees and has been the subject of annual training since the year under review.
The Management Board of S IMMO approves of the company’s commitment to these principles and supports them fully. These frameworks currently apply only to S IMMO and all its fully con-solidated subsidiaries. The plan is for them to be expanded to include external business relationships.
To facilitate the transparency and comparability of strategies, measures and results in the area of sustainability, S IMMO has applied international frameworks for its non-financial disclo– sures since the publication of the report on the financial year 2021. In line with its ESG strategy, S IMMO prepares and pub- lishes a non-financial report in accordance with the applicable Global Reporting Initiative (GRI) Standards once a year. The GRI content index provides an overview of the standards applied in this report and the sections containing the relevant information (starting on page 51).
S IMMO has published a non-financial report annually since the financial year 2017. It contains information about environmental, employee and social issues in connection with the topics defined as material by S IMMO as well as the subject of human rights, corruption and bribery prevention. In preparing this re-port, S IMMO implements the legal requirements of section 267a of the Austrian Commercial Code (UGB) in full as required by the Austrian Sustainability and Diversity Act (NaDiVeG). In addition, information is disclosed in line with the EU Taxonomy Regulation (Regulation (EU) 2020/852).
Moreover, disclosures are made in accordance with the recom-mendations of the Task Force on Climate-Related Financial Dis-closures (TCFD), the Greenhouse Gas Protocol (GHG Protocol) and the EPRA Sustainability Best Practice Recommendations (EPRA sBPR). The EPRA Sustainability Performance Measures can be found starting on page 55. The application of additional standards in non-financial reporting is continuously examined in terms of relevance and viability.
Scope and boundaries of the report
The company publishes the non-financial report each year as part of its annual report. The reporting period for this report is identical to that of the financial report and thus covers the period from 01 January 2022 to 31 December 2022. The report in- cludes the key figures for the reporting year and, where pos- sible, for the previous year. In the future, S IMMO will endeavour to extend the non-financial reporting to two preceding periods to improve the traceability of the development of key figures. Sig– nificant events between the balance sheet date (31 December 2022) and the editorial deadline for this report (20 March 2023) are disclosed in the notes to the consolidated financial state-ments set out in section 5.7. This report was published on 30 March 2023.
This non-financial report was published in accordance with the operational control approach (for the purposes of non-financial reporting) and hence deviates from the prior-year report, which was prepared in accordance with the financial control approach.
The decision to change the reporting approach was taken in order to facilitate increased transparency and comparability with the non-financial reporting of the two controlling shareholders of S IMMO AG – IMMOFINANZ AG and CPI Property Group S.A. – both of which report in accordance with the operational control approach.
This did not affect the overall scope of reporting, which encom-passes S IMMO and all subsidiaries over whose operational decisions S IMMO can exercise a controlling influence. As in the previous year, this corresponds to all fully consolidated S IMMO companies (see annual report page 121 et seq.).
The Vienna Marriott and Budapest Marriott hotels are operated by fully consolidated subsidiaries under management agree- ments. S IMMO exercises a controlling influence over many op-erating activities in the area of hotel management, and can ex-ercise operational control with regard to environmental factors in particular. However, the management of the hotel staff is the sole responsibility of the respective hotel’s management and lies outside S IMMO’s control. Accordingly, the employees of the two hotel companies do not fall within the operational con-trol approach and, unlike in the previous year, are not included in staff-related key indicators for the purposes of non-financial reporting with the exception of the total number of S IMMO em-ployees. For this reason, the values from 2021 are presented according to the new methods excluding hotel employees.
Where reference is made to S IMMO elsewhere in the non- financial report, this should be understood to include all fully consolidated companies and properties of S IMMO and its em-ployees in Austria, Germany, Hungary, Croatia and Romania, but not the employees of the two hotels in Vienna and Budapest. If a key indicator does not refer to all locations, this is explicitly stated.
Real estate-related key indicators refer to S IMMO’s entire prop-erty portfolio. As in the past, this includes all lettable buildings and the owner-operated hotels. For the first time, leasehold properties, development projects and land banks as well as acquisitions and sales during the year are also included on a monthly basis for key indicators such as energy consumption. This means that all fully consolidated properties are covered in full. The three buildings held by associates and joint ventures and accounted for using the equity method, which are therefore not fully consolidated, are only taken into account when cal-culating greenhouse gas emissions under the category Invest-ments.
Audits
The Management Board submitted the non-financial report to the entire Supervisory Board for review. The Supervisory Board received, reviewed and discussed the non-financial report and found no reasons for objection. As part of the audit of the finan-cial statements, the disclosure of all legally required information was reviewed by the appointed auditor KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft. The non-financial report has not been subjected to any further separate external audit.
Non-financial report – ESG strategy and sustainability management
ESG strategy and sustainability management
Guiding principles
Experience shows that a company-wide approach to the topics of ESG and sustainability requires above all an intensive analy-sis of the company’s identity and values and its corporate cul-ture at the very outset. That is why S IMMO decided to revise and hone its guiding principles at the start of 2022 in a participa-tive process with its employees. The company is characterised
IMMO guiding principles
Purpose Vision
MissionValues
Materiality analysis
Investing in lasting values: people and real estate
We design valuable living environments for today and tomorrow
We use our experience, passion and local know-how to turn individual properties into a future-proof and high-performing portfolio based on forward-looking decisions
Quality: Tenant satisfaction and consistently increasing business value thanks to highest standards Tradition: Stability and reliability rooted in a successful past
Responsibility: Foresighted action for the benefit of our stakeholders and the environment Collaboration: Achieving success as a team and together with our stakeholders
This non-financial report is based on a materiality analysis con-ducted in 2021 in which potential areas of sustainable manage-ment were examined and assessed with internal and external experts in connection with the Nachhaltigkeits- und Diversi-tätsverbesserungsgesetz (NaDiVeG – Austrian Sustainability and Diversity Improvement Act) and the Global Reporting Initia-tive (GRI) Standards. The impacts on people and the environ- ment and the significance to key stakeholders such as share-holders, tenants, employees, other interest groups and busi-ness partners were addressed here. The materiality analysis was performed with assistance from the consulting firm Deloitte.
Two workshops were conducted with the responsible Manage-ment Board member and representatives of various specialist departments (Corporate Communications and Investor Rela-tions, Project Development, Portfolio Management, HR, Com-pliance, Works Council) in which stakeholder groups were iden- tified and the stakeholders were assigned a weighting based on the criteria “influence on S IMMO” and “interest in S IMMO”. As a result, the following stakeholder groups were identified as relevant:
by lean structures and open cooperation across departments. It actively designs living environments by means of its properties and acts prudently and responsibly in this process. The S IMMO guiding principles consist of four related elements: purpose, vi-sion, mission and values. Together, they describe S IMMO’s identity and how it acts.
Supervisory Board Management Board Local managing directors Employees
Works Council Tenants and brokers Core shareholders Institutional investors Small investors Banks and analysts
Given the low level of construction activity, stakeholder groups such as general contractors and suppliers were rated as non-material.
Topics for the stakeholder survey were then determined in a multi-stage process. In the first step, the external consulting firm drew up a shortlist of possible topics for the survey on the basis of sector benchmarking, an analysis of reporting standards, current trends and an analysis of current and forthcoming legal conditions relating to non-financial reporting. These topics were verified at a workshop with Deloitte, and any existing gaps were scrutinised.
The identified topics were assessed on two levels: their influ-ence on decisions of the stakeholders and their potential eco-nomic, environmental and social impacts. Stakeholder repre-sentatives were then questioned via an online survey (period: July to September 2021) and in individual interviews. The aim of these surveys was to assess the impacts of economic, environ- mental and social aspects on S IMMO and to gauge the influ-ence of these aspects on stakeholder decisions. Subsequently, the importance of the economic, environmental and social
Material topics
EnvironmentSocialGovernance
Overarching topicsClimate change adaptation
impacts of the topics was specified in the context of a workshop and a meeting with the Management Board member respon-sible for ESG.
The material topics for S IMMO are therefore the 14 aspects that have the greatest impacts on society and the environment, are the most important to stakeholders and are rated as the most significant for S IMMO’s business activities.
Energy consumption and use of resources Renewable energy sources
Sustainable operation of buildings
Maintenance, repair, modernisation and renovation Sustainable mobility
Diversity and equal opportunities
Employee satisfaction and employer attractiveness Training
Tenant satisfaction Data protection
Combating corruption
Digitalisation
Sustainable value enhancement
In this non-financial report, S IMMO details its activities and the measures adopted in relation to the topics identified as material topics. The vast majority of the material topics are dealt with in the following sections: Environment, Social and Governance. Two of the material topics, digitalisation and sustainable value enhancement, are to be considered as overarching topics that are closely linked with the development of S IMMO as a whole.
These two topics are addressed below. In order to reflect the importance of human rights, this topic is covered in detail in the section on General topics.
Digitalisation
S IMMO deals intensively with the opportunities and risks of digitalisation in light of the company’s activities and workflows.
To take account of its growing importance, the topic was inte-grated into the Management Board’s responsibilities in the financial year 2021. The aim is to continue to develop the com-pany from a process-led to a data-led organisation in the medium term. External consulting firms and IT service providers are also involved in this process in addition to the Management Board and internal experts. The scope of the project ranges from IT governance and security issues to collaboration pro-cesses and reporting routines.
competitiveness and to increase flexibility in a changing busi-ness and working world.
S IMMO also sees potential in the digitalisation measures to re-duce emissions resulting from business trips and other travel. Virtual meetings have a role to play in saving costs and emis-sions by reducing the need for travel. These meetings do not require additional IT equipment to be purchased to any signifi-cant extent, meaning that S IMMO will not make materially neg-ative contributions to electronic waste or increased energy con-sumption in this regard. If new company mobile phones, lap-tops, etc., have to be purchased, the emphasis will be placed on high-quality products with a long useful life. Old devices that are still serviceable will be given to an external company, which will refurbish and sell them to private users at affordable prices. The product lifecycle of the IT equipment can be extended in this way.
With regard to its employees, the company sees benefits in terms of the increase in efficiency and flexibility and also in the active and passive travel time that can be saved. More efficient workflows will minimise sources of errors and save time. The company is aware that the increased flexibility might also have a negative impact on work-life balance, however.
Digitalisation enables work processes and workflows to be opti-mised and automated and employees’ skills to be enhanced.
These measures aim to raise productivity and efficiency. The digitalisation initiative additionally aims to play a part in ensuring
Against the backdrop of the increasing digitalisation of com- pany workflows, IT security risks are becoming more significant. S IMMO defines IT security risks as the danger that the con-fidentiality, availability or integrity of business data may be
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S IMMO AG published this content on 30 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2023 06:30:05 UTC.
