EPRA Sustainability Best Practice Recommendations

 

Overarching recommendations

Organisational boundaries

We have adopted the operational control method in determining our organisational boundaries. Consequently, we only report on properties for which we have full management control, and utilities that we purchase directly as a landlord for use in common areas, shared services, and/or tenant areas. The scope of properties included our organisational boundaries for each performance measure are as follows:

  • Electricity: We purchased/obtained electricity consumption for the complete portfolio under management.
  • fuels and District Heating and Cooling: We purchased/obtained fuels and/or district heating at approx. 59 % of our portfolio under management in 2017 and 61 % in 2018 and 2019. The tenants at the remaining apartments have signed individual contracts with local suppliers therefore this consumption is outside of our organisational boundaries.
  • Water: We purchased/obtained water for the complete portfolio under management.
  • Waste: We are responsible for the collection and disposal of tenant waste for the complete portfolio under management.
  • Employees: We report on all employees directly employed by the LEG Immobilien, including the wholly-owned Group subsidiaries LEG Wohnen NRW (which is responsible for the operational management of our properties) and LEG Management (which oversees all corporate management functions). Staff employed at joint ventures such as TechnikServicePlus (TSP) and EnergieServicePlus (ESP) are excluded as they fall outside the scope of our full operational control.
  • Asset health and safety and community engagement: We are responsible for health and safety assessments, compliance and community engagement at all properties under management.
  • Governance data relates to the Supervisory Board and Management Board of LEG.

Coverage

Unless otherwise stated, absolute performance measures relating to the consumption of fuels, district heating and cooling, building certifications, asset health and safety and community engagement cover 100 % of the apartments that fall within the organisational boundaries defined above.

Like-for-like performance measures include apartments for which we have collected two years’ worth of consistent, non-estimated data, and therefore exclude properties sold, acquired or under develop- ment during 2018 and 2017. Our like-for-like portfolio therefore includes 129,309 apartments and 1,300 commercial units.

Coverage for electricity consumption represents 97 % of the apartments included in our organisational boundaries (98 % for Like-for-Like).

Coverage for water data represents 44 % of the apartments included in our organisational boundaries (43 % for Like-for-Like). The remaining 56 % and 57 % are excluded as we are not able to collect accurate consumption data because individual meter readings are not available.

Coverage for waste data represents 29 % of our portfolio under management (25 % for Like-for-Like). At these apartments we employ an individual waste contractor to manage tenants’ waste and report data on the volume of waste that is collected, which is subsequently converted into tons using a conversion factor (> see ‘Estimations’, page 67).

Estimation of landlord-obtained utility consumption

All portfolio data for 2017 and 2018 (and 2019 for waste) is 100% based on invoices/meter readings and therefore represents actual consumption within the scope of our organisational boundaries.

2019 data relating to electricity consumption, heating, fuels and water is 100 % estimated as actual consumption data is not available at the time of going to print. Estimations were carried out according to the following methodology:

  • Electricity and water: Absolute and intensity performance data are calculated based on 2018 consumption figures, and extrapolated according to changes in the number of apartments and floor area respectively included in the organisational boundaries.
  • Heating: In addition to the methodology outlined above, heating data is adjusted based on climatic conditions for each postcode.

Waste data is provided by a contractor that manages waste for approximately 29 % of our portfolio. The data is calculated based on the combined volume of waste containers provided by LEG at these properties, but may not always correspond to containers’ actual filled volumes. furthermore, the data do not represent the total volume of waste generated at these properties, as a proportion of waste is disposed of in public waste containers that are collected directly by the local municipality.

The volumes collected in LEG waste containers are converted into tons based on general conversion factors for the various types of waste, and 10 % is added to these conversion factors as the containers hold above-average volumes due to the contractor’s active waste management practices (with the exception of biodegradable waste). The conversion factors used are: Residual waste: 0.11 tons/m³; recycled materials: 0.033 tons/m³; paper, card, carboard packaging: 0.22 tons/m³; and biodegradable waste: 0.25 tons/m³.

Boundaries – reporting on landlord and tenant consumption

Electricity, fuels, district heating and cooling, and water only include consumption (based on meter readings and invoices) which we purchase as landlords for use in either common areas/shared services and/or private apartments (and which is subsequently recharged to tenants). Tenant obtained data (i. e. from bills that the tenants receive directly from the utility supplier) is excluded.

Analysis – Normalisation

We have calculated intensity indicators using floor area (m2) for whole buildings, including tenant apartments. We are aware that there is a mismatch between the nominator and denominator in our methodology for calculating intensities, as we receive utility bills for electricity consumed only in common areas, but we receive utility bills for fuels, district heating and cooling and water consumed in both common areas/shared services and tenant areas (it is not possible to separate these consumptions).

Health and safety performance measures are calculated using the following formulae:

  • Injury rate = Number of reportable injuries/Total number of working days
  • Lost Day Rate = Number of days lost (three days or longer) due to workplace injuries/Total number of working days
  • Absentee rate = Number of days absent due to illness/Total number of working days

Analysis – Segmental analysis (by property type, geography)

Segmental analysis is organised by the property classification used in our financial reporting (see our Annual Report 2019) which defines our investment portfolio as residential properties comprising approximately 134,000 apartments and 1,300 commercial units.

We do not provide segmental analysis between residential and commercial units as they are located in the same buildings and it is not possible to separate their landlord obtained consumption.

Additional segmental analysis by geography is not relevant as our apartments are all located within North Rhine-Westphalia and adjacent federal states in Germany, and therefore in the same climatic zone.

Reporting period

Absolute performance measures and intensity metrics are reported for the most recent reporting year (2019). Like-for-like performance measures are reported for the two most recent years that we are able to collect actual consumption data (2018 and 2017). Using only actual consumption data means we are able to analyse the impact of efficiency improvements across our Like-for-Like portfolio, which would not be possible using estimated data. Please see ‘Estimation of landlord-obtained utility consumption’ for more information.

Disclosure on own offices

Data for our own office utilities consumption relates to our headquarters in Dusseldorf where we occupy seven floors of a building in which we are a tenant. for this reason, we report our own office consumption separately to our owned portfolio.

In addition to our headquarters which cover approx. 10,000 m², we rent a further three offices which are substantially smaller, and are therefore excluded from our reporting as consumption is not considered material.

Coverage is therefore 75 % of our rented floor area, and as with our portfolio, all data for energy and water is estimated for 2019 using the same methodology outlined above.

Data verification and assurance

All data generated is reviewed for consistency and coherence before released into the company reporting database. External verification or assurance by a third party is not currently undertaken.


Narrative on performance

Environmental performance

Energy & emissions

In 2019, landlord obtained energy consumption increased marginally across our portfolio, with a 0.05 % increase in landlord obtained electricity consumption, and a 1.27 % increase in landlord obtained consumption from fuels and heating. Together, these translated into a 1.7 % increase in the energy intensity of our portfolio compared to 2018.

We saw a corresponding 1.27 % increase in Scope 1 emissions due to the consumption of fuels, and a 1.13 % increase in Scope 2 emissions which includes emissions from the onsite boilers that are operated by a third party. On an intensity basis, overall Scope 1 and 2 emissions per kg CO2e/m2/year increased by 1.6 %.

On a like-for-like basis (which is calculated using actual consumption data between 2018 and 2017), the energy intensity of our portfolio decreased by 2.6 % from 143.3 kWh/m²/Jahr in 2017 to 139.6 kWh/m²/Jahr in 2018. The decrease was due to a 1.06 % reduction in landlord obtained heating, and a 3.15% reduction in landlord obtained fuels that more than offset a 1.1 % increase in landlord obtained electricity consumption.

These reductions were mirrored by our GHG emissions on a like-for-like basis, with Scope 1 emissions dropping by 3.8% and Scope 2 emissions by 1.94 %. On an intensity basis, like-for-like Scope 1 and 2 emissions per kg CO₂e/m²/Jahr reduced by 2.9 % between 2017 and 2018.

for more information on our initiatives to reduce energy consumption and GHG emissions across our portfolio, please see > Environment area of action, page 35f. of our Sustainability Report.

Water

Absolute water consumption decreased marginally by 0.48% between 2019 and 2018. On a like-for-like basis, consumption increased by 2.79 % between 2017 and 2018. Despite this increase, the water intensity of our portfolio remained largely unchanged on both and absolute and like-for-like basis. All water is sourced from the municipal supply.

for more information on our initiatives to water consumption across our portfolio, please see > page 35ff. of our Sustainability Report.

Waste management

The total weight of waste across the 29 % of apartments that we collect data for decreased by 4.15 % between 2018 and 2019. Of this, 63 % is classified as residual waste of which only a small proportion (approximately 8%) is sent to landfill, with the major part of the remaining proportion sent for energy recovery from incineration. On a like-for-like basis, the total weight of waste increased by 0.93% between 2017 and 2018 across the 25 % of apartments that LEG is able to collect waste data from.

Due to the relatively low coverage of our waste data, and the calculation methodologies employed, it is difficult to draw conclusions about our overall performance. We nonetheless employ a variety of tools to reduce waste. for more information, please see > page 38 of our Sustainability Report.

Building certifications

Building certifications relate to energy performance certificates which are currently in place across 99 % of our portfolio by floor area. Based on individual apartments, the majority (90 %) have an energy performance certificate between D and H. This reflects the relative age of our apartments. This has reduced slightly since 2017 due to the energy modernisation program that is currently underway across our portfolio. for more information, see > page 36 of our Sustainability Report.

Social performance

Diversity

LEG strives to have a balanced workforce characterised by gender equality. Approximately 46 % of our direct employees are female, and 22 % at senior management level (up from 19 % in 2018). The ratio of basic salary and remuneration of women to men across all employees is 87.4 %, and this rises to 92.9 % at senior management level. Any difference is due to length of service and seniority alone.

for more information on our approach to diversity, please see > page 33 of our Sustainability Report.

Training and development

LEG actively promotes vocational training and professional development opportunities for our employees. During 2019, we provided an average of 10.37 hours of training per employee covering a range of compliance and vocational training and development opportunities. In addition, over 50 % of employees participated in an annual development review. These reviews take the form of a dialogue between employees and managers, and provide an insight into employees’ skill levels. Employees also have the opportunity to talk to their supervisors about the support they would like, their satisfaction with their job and their further development within the company.

for more information on our approach to employee training and development, see > pages 28, 29 and 34 of our Sustainability Report.

Turnover

During 2019, 144 new employees joined the company, which equates to a new hire rate of 13.9 %. At the same time, 120 employees left the company meaning we experienced a turnover rate of 11.6. for more information in our employee initiatives, including engagement, satisfaction and retention, please see > page 28ff. of our Sustainability Report.

Health and safety

Given the nature of our workforce, employee health and safety is generally aconsidered a low-risk area for LEG Immobilien. This is evidenced by an injury rate of 0.01 % in 2019, and a lost data rate of 0.03 %. The most common cause of workplace absences are illnesses due to sickness, and in 2019 we recorded an absentee rate of 6.5 %.

LEG maintains site safety systematically and comprehensively, with its own employees and also service providers performing building and facility inspections and checks. Approximately 98.5 % of our portfolio underwent such a health and safety assessment in 2019. This led to a low number of three administrative orders (‘Ordnungsverfügungen’) were issued as a result of these inspections in 2019. In the event of notices, defects or accident hazards, tradespeople are contracted immediately. Once the work has been completed, the elimination of the defect is inspected and documented.

for more on our approach to employee and tenant health and safety, please see > pages 23 and 31f. of our Sustainability Report.

Community engagement

We currently organise community engagement activities across 100 % of our portfolio under management. Included in the scope of these activities are a broad spectrum of measures that aim to strengthen social cohesion, maintain stable neighbourhoods, promote local communities and respond to societal challenges. In 2019 LEG organized more than 120 activities spread across all 8 branches. These included for example festivals, holiday programmes, planting activities and Christmas fairs.

for more information on our approach, and an example of the many initiatives undertaken across our portfolio in 2019, please see > pages 24ff. and 42ff. of our Sustainability Report.

Governance

for full background information on our Governance performance measures, including a profile of the Supervisory Board, a description of our nomination procedures and processes for managing potential conflicts of interest, please see > page 30 of our Annual Report.

Michael Zimmer, the Chairman of the LEG Supervisory Board is Chairman of the Board of Trustees of the Cornelius foundation and the “Der bewohnte Garten” foundation and thus has competency in the area of environment and society.

EPRA Sustainability Performance Measures (Social and Governance)

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EPRA Sustainability Performance Measures (Environmental Portfolio)

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EPRA Sustainability Performance Measures (Environmental rented offices)

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