LEG IMMOBILIEN SE LEG IMMOBILIEN SE Geschäftsbericht 2023
NON-FINANCIAL REPORT
LEG IMMOBILIEN SE Annual Report 2023
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Non-financial report in accordance with section 315b HGB | EU Taxonomy |
Non-financial report in accordance with section 315b HGB
EU Taxonomy
In accordance with the EU Taxonomy (Regulation (EU) 2020/852), companies subject to reporting obligations in conjunction with the Non-Financial Reporting Directive (NFRD)¹ must also include Taxonomy disclosures in their non-financial reporting. As a listed company with more than 500 employees, LEG Immobilien SE is also subject to these reporting requirements. The EU Taxonomy is the first "green" classification system for defining whether or not an economic activity is environmentally sustainable. The main objective of the EU Taxonomy is to help achieve the goals of the Paris Agreement through improved transparency on the capital market. The comparability of sustainability data across different industries is an essential part of this. The companies concerned must therefore disclose the shares of their revenue, capital expenditure (Capex) and operating expenditure (Opex) that relate to environmentally sustainable economic activities. The EU Taxonomy has defined the six following environmental objectives:
- Climate change mitigation
II. Climate change adaptation
- Sustainable use and protection of water and marine resources IV. Transition to a circular economy
V. Pollution prevention and control
VI. Protection and restoration of biodiversity and ecosystems
For 2023, the reporting is to be expanded to cover environmental objectives III to VI as well as environmental objectives I and II. The EU Taxonomy has defined economic activities that are potentially environmentally sustainable and consistent with all its environmental objectives.
Taxonomy eligibility
In the context of Taxonomy eligibility, the revenue, Capex and Opex of all economic activities for which the EU has issued technical screening criteria must be reported. It is not yet necessary to indicate whether the economic activity satisfies the technical screening criteria stipulated in the Delegated Acts (cf. Delegated Regulation supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council, Annex 1 & 2).
For the housing industry, for example, this includes all revenue from the rental and letting of residential buildings, regardless of whether the building in question is a low-energy house or is in the lowest energy efficiency class (H). To begin with, what matters is that these activities essentially have a direct link to EU environmental objective I ("Climate change mitigation").
Identification of Taxonomy-eligible economic activities
For the 2021 financial year², LEG conducted a review of its Taxonomy- eligible economic activities for the first time, i. e. it identified those activities of the company for which the EU Taxonomy has defined technical screening criteria. The results of the analysis show that selected economic activities in section 7 "Construction and real estate activities", which relate to our core business, as well as section 4 "Energy" and section 9 "Professional, scientific and technical activities" are considered Taxonomy-eligible. Regarding section 4, besides its obvious energy-related economic activities, such as photovoltaic electricity generation on the roofs of properties, LEG also operates its own biomass cogeneration plant. In the following section, we report on the economic activities in numerical order.
In the 2022 and 2023 financial years, LEG validated these results and determined their Taxonomy alignment. The company did this using the technical screening criteria published by the European Commission and currently applicable, including the "do no significant harm" (DNSH) and "minimum safeguards" criteria (MS) as well as relevant FAQ documents published by the European Commission. Further- more, various current best practices of listed German companies were taken into account. The exact procedure is described under "Identification of Taxonomy-aligned economic activities".
Mainly on account of the entry into new business areas, the Taxonomy- eligible economic activities were reassessed, resulting in no changes here compared to last year. The consideration of environmental objectives III to VI for the first time in 2023 resulted in no additions. Essentially, all revenue, Capex and Opex from economic activities for which there are technical screening criteria are Taxonomy- eligible. In the 2023 financial year, the inclusion of the technical screening criteria again primarily related to economy activity 7.7 "Acquisition and ownership of buildings" in Annex I and II, with which almost all of LEG's consolidated revenue is generated from rental and leasing, though it also had implications for the disclosures for other economic activities.
The results of this year's analysis and central changes are as follows.
- In accordance with the CSR Directive Implementation Act in Germany.
- LEG's reporting period is from 1 January to 31 December.
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Results of the qualitative analysis of Taxonomy eligibility
LEG has identified three Taxonomy-eligible economic activities in Annex I with which the company generates revenue. These include
- 4.1 "Electricity generation using solar photovoltaic technology",
- 4.20 "Cogeneration of heat/cool and power from bioenergy" in the "Energy" sector and (iii) 7.7 "Acquisition and ownership of buil- dings" in the "Construction and real estate activities" sector.
In addition to the revenue from these three economic activities, relevant Capex was identified in the following economic activities:
- 4.1 "Electricity generation using solar photovoltaic technology",
- 4.16 "Installation and operation of electric heat pumps" and (iii) 7.7 "Acquisition and ownership of buildings". This also included invest- ments that could lead to future revenue.
On Opex: For the purposes of the EU Taxonomy, the denominator used to determine the share of Opex includes direct costs relating to research and development, short-term lease, maintenance and minor repairs, as well as all other direct expenditures relating to day-to-day servicing. The numerator equates to the part of the operating expenditure included in the denominator that relates to Taxonomy-eligible economic activities. Taxonomy-eligible Opex was assigned to the following economic activities: (i) 4.1 "Electricity generation using solar photovoltaic technology", (ii) 4.20 "Cogeneration of heat/cool and power from bioenergy", (iii) 7.7 "Acquisition and ownership of buildings" and (iv) 9.1 "Close to market research, development and innovation".
Further Taxonomy-eligible economic activities arising from environmental objectives III to VI newly added in 2023 - in particular 3.1 Construction of new buildings - are reported on in 7.7 Acquisition and ownership of buildings, in order to avoid dual reporting.
The identification of Taxonomy-eligible economic activities is followed by the analysis of Taxonomy alignment, as a result of which Taxonomy -eligible revenue, Capex and Opex could be found to be non- Taxonomy-aligned.
Taxonomy alignment
LEG is required to report on the Taxonomy alignment of relevant economic activities in addition to their Taxonomy eligibility. Revenue, Capex and Opex are deemed Taxonomy-aligned if they satisfy the technical screening criteria defined by the EU. Based on these criteria, it must be indicated whether an economic activity is Taxonomy -aligned for achieving the above-mentioned environmental objectives I to VI for the 2023 reporting year. Given its business ope- rations, only environmental objective I ("Climate change mitigation") is relevant to LEG. It also has to be ensured that these economic activities do no significant harm (DNSH) to any of the other environmental objectives and that they satisfy certain minimum social safe- guards.
Identification of Taxonomy-aligned economic activities
To determine Taxonomy alignment, LEG has analysed the above economic activities according to the technical screening criteria. As stated above, these include criteria from the "Construction and real estate activities" sector in section 7 as well as economic activities from the "Energy" sector in section 4 and from the "Professional, scientific and technical activities" sector in section 9.
A structured approach was used to analyse the Taxonomy alignment of revenue, Capex and Opex as follows: Capex and Opex that contribute to Taxonomy-aligned buildings follow the revenue-generating activity 7.7 "Acquisition and ownership of buildings" and are generally considered Taxonomy-aligned. They do not require a review of the technical screening criteria (Delegated Regulation 2021/2178; cat. a)).
The majority of the Taxonomy-eligible Capex and Opex relates to activity 7.7. According to the European Commission, the date for assessing Taxonomy alignment is the date of the construction permit. Revenue, Capex and Opex from or in buildings for which a construction permit was issued before 31 December 2020 must satisfy the technical screening criteria for economic activity 7.7 - all those buildings for which a construction permit was issued after 31 December 2020 must satisfy the criteria for economic activity 7.1 "Construction of new buildings" in order to qualify as Taxonomy-aligned.
All KPIs are calculated and published using the principles applied in preparing the consolidated financial statements. As LEG Immobilien SE prepares its financial statements in accordance with IFRS, "environ- mentally sustainable" revenue, Capex and Opex are therefore also calculated in accordance with IFRS, whereby Opex only comprises maintenance and repairs in conjunction with the Taxonomy Regulation. This also applies to our subsidiaries whose single-entity financial statements are incorporated into LEG's consolidated financial state- ments.
Substantial contribution
In order to determine Taxonomy alignment, on the basis of the above technical screening criteria, LEG analyses the extent to which the economic activity makes a contribution to the environmental objective "climate change mitigation". The technical screening criteria have to be applied to all material economic activities, though at LEG this primarily relates to economic activity 7.7 "Acquisition and ownership of buildings", as rental and lease revenue accounts for almost all of LEG's consolidated revenue. A majority of LEG's business model therefore falls within the scope of the Taxonomy.
The technical screening criterion relevant to economic activity 7.7 "Acquisition and ownership of buildings" states that only the revenue generated with buildings in Energy Performance Certificate (EPC) class A (+) or buildings within the top 15 % of the regional or national building stock as per PEB2 can be reported.
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The room for interpretation stems from the reporting requirement in relation to the "national or regional building stock" without further reference to a database that could be used for this purpose. Also, the Delegated Acts do not provide any further definition of "regional" or differentiate between residential property types (e. g. between detached houses and apartment buildings). The definition thresholds for the individual EPC classes also differ considerably throughout Europe and therefore cannot be compared, which minimises the information value of the Taxonomy disclosures in a pan-European context. As the basis for calculating the top 15 % of the regional building stock for the current reporting of Taxonomy alignment, we therefore used the study by the German Ministry for Economic Affairs and Energy¹ (BMWi) for 2021.
The BMWi analysis indicates that buildings up to EPC class B satisfy the material screening criteria as they are among most efficient 14 % of the housing stock in Germany. The corresponding share of especially energy-efficient EPC C buildings with a final energy demand of around 77 kWh per square metre per year was used as a reference for one percent of the top 15 %. Based on the current values for our portfolio as a whole, there is an average primary energy factor of 1.18 and therefore a threshold for primary energy demand of 90.8 kWh per square metre per year.
Frequency distribution of EPC classes of German residential buildings (in %)
100
Substantial contribution to climate | |
change adaptation: < 30 % | 74 |
75 | ||||
50 | ||||
Substantial contribution to climate | ||||
change mitigation: < 15 % | ||||
25 | 7 | 12 | ||
4 | 3 | |||
A+ | A | B | C | D to H |
Source: Sven Bienert/Irebs, German Ministry for Economic Affairs and Energy (BMWi), 2021
LEG IMMOBILIEN SE Annual Report 2023
Do no significant harm
Compliance with the DNSH criteria for environmental objective I and the other five environmental objectives in the 2023 reporting year was assessed on the basis of the specific Taxonomy requirements for the respective economic activities.
In order to counteract the significant harm in relation to environmental objective II ("Climate change adaptation"), all identified economic activities must undergo a climate risk and vulnerability assessment according to the Taxonomy. This was performed at the level of LEG as a whole and the result was taken into account in the reporting of Taxonomy alignment > see tables Taxonomy alignment.
No further DNSH criteria apply to economic activity 7.7 "Acquisition and ownership of buildings".
As the percentage share of the KPIs for other Taxonomy-eligible and Taxonomy-aligned economic activities is in the per thousand range for the 2023 reporting year, a more detailed description of the DNSH criteria associated with these activities and any compliance by LEG has been dispensed with, and this is also indicated in the table below and the associated footnotes. For economic activity 4.20 "Cogene ration of heat/cool and power from bioenergy", it must be pointed out that the associated revenue and Opex account for more than 1 % of the reportable KPIs.
To prevent activity 4.20 from causing significant harm to environmental objective III ("Sustainable use and protection of water and marine resources"), risks to water quality and in connection with water shortages must be calculated and surveyed. This necessitates disclosures on the water consumption of the equipment installed. A risk analysis is also required for environmental objective VI ("Protection and restoration of biodiversity and ecosystems"). The priority here is the conservation and protection of environmental resources. In Ger- many, the conservation and protection of environmental resources is ensured by regulatory standards without which a facility will not be granted an operating permit. In addition, the facility has been declared sustainable by means of a SURE certificate. As for the fuel used, the environmental objective is taken into account by the fact that only certified scrap wood is burned in our biomass cogeneration plant.
For compliance with the DNSH criterion for environmental objective V ("Pollution prevention and control"), various statutory parameters and targets concerning emissions, air quality and digestate must be adhered to for activity 4.20. An environmental impact assessment is required to determine noise, dust and pollutant emissions, though in Germany this is a requirement for an operating permit under the German Pollution Protection Act and therefore can be taken as given.
1 Since 2022: German Federal Ministry for Economic Affairs and Climate Action.
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Compliance with minimum safeguards
Another criterion for the Taxonomy alignment of individual economic activities is ensuring that companies comply with the minimum social safeguards. These include due diligence within the company and in outsourced value chains by implementing suitable processes. Besides the issues of bribery and corruption, taxation and fair com- petition, human rights are essentially also addressed.
LEG uses a Group-wide approach to ensure that the MS criteria are fulfilled, which is also reflected in the corresponding reporting and further external documentation, such as the Code of Conduct and the Anti-Corruption Policy.
Results of the qualitative analysis of Taxonomy alignment
The following section presents and explains the material findings of the alignment analysis. Taxonomy-eligible and Taxonomy-aligned economic activities must be analysed with regard to the development of revenue and of Capex and Opex for the 2023 reporting year.
LEG reports an aggregate percentage value pro rata for the Taxonomy -eligible and Taxonomy-aligned share of economic activities in revenue, Capex and Opex. Only Taxonomy-eligible and Taxonomy -aligned revenue, Capex and Opex relevant to environmental objective I "climate change mitigation" are shown. The Taxonomy-eligible and Taxonomy-aligned revenue, Capex and Opex for environmental objective II "climate change adaptation" are a subset of the values under environmental objective I "climate change mitigation". This prevents revenue, Capex and Opex from being counted more than once in the numerator for multiple economic activities in calculating the KPIs.
In total, the share of consolidated revenue generated by letting buildings with a primary energy use of less than 90.8 kWh/m²/a was around 11.1 %.
If possible, the KPIs were allocated directly to the respective economic activities. If this was not possible, an allocation mechanism was used instead.
For the minor part of the LEG portfolio for which EPC certificates were not necessary/available (799 out of 25,446 buildings), it is assumed that the consumption and usage data break down in line with the rest of the portfolio.
A Capex plan has to be prepared for Capex and Opex that lead to an increase in Taxonomy-aligned economic activities or contribute to a transfer from Taxonomy-eligible to Taxonomy-aligned economic activities. As there is no Capex plan as referred to by the EU Taxo- nomy, this is not taken into account.
Reporting of the quantitative results of the EU Taxonomy analysis > see tables Taxonomy alignment.
Excursus: Establishment and financing of joint ventures as solution providers for decarbonisation of our building stock
To comply with the German and European climate regulations and meet our own decarbonisation targets, the company pursues a three-step approach in founding its joint ventures.
Faster decarbonisation of our existing buildings is a key factor in achieving the climate objectives in the building sector. LEG has made it its mission to promote "serial energy-efficiency impro- vement" throughout the DACH region. With this in mind, at the end of 2021/start of 2022, the company founded a joint venture, Renowate GmbH, with the Rhomberg Group fromAustria. In addition, LEG is focused on cost-effective replacement of heating systems, especially gas central heating systems, with air-to-air heat pumps: To this end, in March 2023, the company entered into a partnership with Mitsubishi Electric as a major supplier of the systems. In September 2023, in conjunction with the Dusseldorf-based family company Soeffing, LEG founded the joint venture dekarbo, which installs the devices and provides digital maintenance across the entire life cycle as a one-stop solution. The service is to be used in LEG's own properties and offered to third parties. With the joint venture termios, LEG is optimising the use of existing heating systems by using AI-controlled thermostats and creating a scalable solution for the legally required hydraulic balancing in the property industry.
However, reporting in conjunction with the EU Taxonomy is not possible at this point, as RENOWATE, dekarbo and termios are not included in LEG's consolidated group. In theory, this could change with full consolidation. Instead, only the expenses for the implementation of energy-efficiency improvements in LEG properties by RENO- WATE have been and will be included in the Taxonomy reporting in the coming years. For the young joint ventures dekarbo and termios, expenses will be included in the Taxonomy reporting for the installation of air-to-air heat pumps and the installation of AI-controlled thermostats in the LEG portfolio respectively. The associated Taxonomy -aligned Capex will then be reported by the respective contractor of the joint ventures. LEG's efforts to promote climate change mitigation throughout the property sector are therefore not included in its EU Taxonomy reporting.
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Environmentally sustainable turnover related to taxonomy-aliged economic activities - disclosure for the 2023 financial year | ||||||||
Absolute | Proportion | Minimum | Proportion of | Category | Category | |||
turnover | of turnover | social | Taxonomy-aligned | (enabling | (transition | |||
standards | (A.1) or Taxonomy- | activities) | activities) |
Economic activities | Code | (€ thousand) | (in %) | eligible (A.2) | |||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | 124.68 | 0.0 | Y | |||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 43,455.44 | 3.3 | Y | |||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | 145,554.99 | 11.0 | Y | |||||||||||||
CCA 7.7 |
Turnover of environmentally sustainable activities (Taxonomy-aligned) | 189,135.12 | 14.3 | |||||||||||||||||||||||||||||||
of which enabling | E | ||||||||||||||||||||||||||||||||
of which transitional | T | ||||||||||||||||||||||||||||||||
A.2 Taxonomy-eligible, but not environmentally sustainable activities | |||||||||||||||||||||||||||||||||
(non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | 0.00 | 0.0 | ||||||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 0.00 | 0.0 | ||||||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | 1,114,448.72 | 84.4 | ||||||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
Turnover of Taxonomy-eligible, but not environmentally sustainable | 1,114,448.72 | 84.4 | |||||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||||
A. Total (A.1 + A.2) | 1,303,583.83 | 98.8 | |||||||||||||||||||||||||||||||
B. Non-Taxonomy-eligible activities | |||||||||||||||||||||||||||||||||
Turnover of non-Taxonomy-eligible activities (B) | 16,079.11 | 1.2 | |||||||||||||||||||||||||||||||
Total (A. + B.) | 1,319,662.95 | 100.0 | |||||||||||||||||||||||||||||||
Substantial Contribution Criteria | |||||||||||||||||||||||||||||||||
Economic activities | Code | Climate change | Climate change | Water and | Circular | Pollution | Biodiversity and | ||||||||||||||||||||||||||
mitigation | adaptation | marine resources | economy | ecosystems | |||||||||||||||||||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
of which enabling | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
of which transitional | 0 | ||||||||||||||||||||||||||||||||
A.2 Taxonomy-eligible, but not environmentally sustainable activities | |||||||||||||||||||||||||||||||||
(non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
"Do no significant harm" (DNSH) criteria | |||||||||||||||||||||||||||||||||
Economic activities | Code | Climate change | Climate change | Water and | Circular | Pollution | Biodiversity and | ||||||||||||||||||||||||||
mitigation | adaptation | marine resources | economy | ecosystems | |||||||||||||||||||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | - | Y | - | Y | - | - | ||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | - | Y | Y | - | Y | Y | ||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | - | Y | - | - | - | - | ||||||||||||||||||||||||||
CCA 7.7 |
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Environmentally sustainable Capex related to taxonomy-aliged economic activities - disclosure for the 2023 financial year | ||||||||||||||||||||||
Absolute | Proportion | Minimum | Proportion of | Category | Category | |||||||||||||||||
Capex | of Capex | social | Taxonomy-aligned | (enabling | (transition | |||||||||||||||||
Economic activities | Code | (€ thousand) | (in %) | standards | (A.1) or Taxonomy- | activities) | activities) | |||||||||||||||
eligible (A.2) | ||||||||||||||||||||||
A. Taxonomy-eligible activities | ||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | ||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | 2,860.80 | 0.6 | Y | ||||||||||||||||||
Installation and operation of electric heat pumps | CCM 4.16 | 154.80 | 0.0 | Y | ||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | 205,689.64 | 45.6 | Y | ||||||||||||||||||
CCA 7.7 |
Capex of environmentally sustainable activities (Taxonomy-aligned) | 208,705.24 | 46.2 | |||||||||||||||||||||||||||||
of which enabling | E | ||||||||||||||||||||||||||||||
of which transitional | T | ||||||||||||||||||||||||||||||
A.2 Taxonomy-eligible, but not environmentally sustainable | |||||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | 0.00 | 0.0 | ||||||||||||||||||||||||||||
Installation and operation of electric heat pumps | CCM 4.16 | 0.00 | 0.0 | ||||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | 235,641.94 | 52.2 | ||||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||
Capex of Taxonomy-eligible, but not environmentally sustainable | 235,641.94 | 52.2 | |||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||
A. Total (A.1 + A.2) | 444,347.17 | 98.4 | |||||||||||||||||||||||||||||
B. Non-Taxonomy-eligible activities | |||||||||||||||||||||||||||||||
Capex of non-Taxonomy-eligible activities (B) | 7,049.35 | 1.6 | |||||||||||||||||||||||||||||
Total (A. + B.) | 451,396.53 | 100.0 | |||||||||||||||||||||||||||||
Substantial Contribution Criteria | |||||||||||||||||||||||||||||||
Economic activities | Code | Climate change | Climate change | Water and | Circular | Pollution | Biodiversity and | ||||||||||||||||||||||||
mitigation | adaptation | marine resources | economy | ecosystems | |||||||||||||||||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||
Installation and operation of electric heat pumps | CCM 4.16 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||
of which enabling | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
of which transitional | 0 | ||||||||||||||||||||||||||||||
A.2 Taxonomy-eligible, but not environmentally sustainable | |||||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||
Installation and operation of electric heat pumps | CCM 4.16 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||
"Do no significant harm" (DNSH) criteria | |||||||||||||||||||||||||||||||
Economic activities | Code | Climate change | Climate change | Water and | Circular | Pollution | Biodiversity and | ||||||||||||||||||||||||
mitigation | adaptation | marine resources | economy | ecosystems | |||||||||||||||||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | - | Y | - | Y | - | - | ||||||||||||||||||||||||
Installation and operation of electric heat pumps | CCM 4.16 | - | Y | Y | Y | Y | Y | ||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | - | Y | - | - | - | - | ||||||||||||||||||||||||
CCA 7.7 |
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Environmentally sustainable Opex related to taxonomy-aliged economic activities - disclosure for the 2023 financial year
Absolute | Proportion | Minimum | Proportion of | Category | Category |
Opex | of Opex | social | Taxonomy-aligned | (enabling | (transition |
standards | (A.1) or Taxonomy- | activities) | activities) |
Economic activities | Code | (€ thousand) | (in %) | eligible (A.2) | |||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | 34.57 | 0.0 | Y | |||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 2,253.57 | 2.0 | Y | |||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | 8,841.86 | 7.7 | Y | |||||||||||||
CCA 7.7 | |||||||||||||||||
Close to market research, development and innovation | CCM 9.1 | 2,133.67 | 1.9 | Y |
Opex of environmentally sustainable activities (Taxonomy-aligned) | 13,263.67 | 11.5 | |||||||||||||||||||||||||||||||
of which enabling | E | ||||||||||||||||||||||||||||||||
of which transitional | T | ||||||||||||||||||||||||||||||||
A.2 Taxonomy-eligible, but not environmentally sustainable | |||||||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | 0.00 | 0.0 | ||||||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | 0.00 | 0.0 | ||||||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | 99,341.69 | 86.4 | ||||||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
Close to market research, development and innovation | CCM 9.1 | 0.00 | 0.0 | ||||||||||||||||||||||||||||||
Opex of Taxonomy-eligible, but not environmentally sustainable | 99,341.69 | 86.4 | |||||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||||
A. Total (A.1 + A.2) | 112,605.37 | 97.9 | |||||||||||||||||||||||||||||||
B. Non-Taxonomy-eligible activities | |||||||||||||||||||||||||||||||||
Opex of non-Taxonomy-eligible activities (B) | 2,399.20 | 2.1 | |||||||||||||||||||||||||||||||
Total (A. + B.) | 115,004.57 | 100.0 | |||||||||||||||||||||||||||||||
Substantial Contribution Criteria | |||||||||||||||||||||||||||||||||
Economic activities | Code | Climate change | Climate change | Water and | Circular | Pollution | Biodiversity and | ||||||||||||||||||||||||||
mitigation | adaptation | marine resources | economy | ecosystems | |||||||||||||||||||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
Close to market research, development and innovation | CCM 9.1 | Y | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
of which enabling | 2 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
of which transitional | 0 | ||||||||||||||||||||||||||||||||
A.2 Taxonomy-eligible, but not environmentally sustainable | |||||||||||||||||||||||||||||||||
activities (non-Taxonomy-aligned activities) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
Close to market research, development and innovation | CCM 9.1 | EL | N/EL | N/EL | N/EL | N/EL | N/EL | ||||||||||||||||||||||||||
"Do no significant harm" (DNSH) criteria | |||||||||||||||||||||||||||||||||
Economic activities | Code | Climate change | Climate change | Water and | Circular | Pollution | Biodiversity and | ||||||||||||||||||||||||||
mitigation | adaptation | marine resources | economy | ecosystems | |||||||||||||||||||||||||||||
A. Taxonomy-eligible activities | |||||||||||||||||||||||||||||||||
A.1 Environmentally sustainable activities (Taxonomy-aligned) | |||||||||||||||||||||||||||||||||
Electricity generation using solar photovoltaic technology | CCM 4.1 | - | Y | - | Y | - | - | ||||||||||||||||||||||||||
Cogeneration of heat/cool and power from bioenergy | CCM 4.20 | - | Y | Y | Y | Y | - | ||||||||||||||||||||||||||
Acquisition and ownership of buildings | CCM 7.7/ | - | Y | - | - | - | - | ||||||||||||||||||||||||||
CCA 7.7 | |||||||||||||||||||||||||||||||||
Close to market research, development and innovation | CCM 9.1 | - | Y | - | - | - | - |
LEG IMMOBILIEN SE Annual Report 2023
109 | GROUP MANAGEMENT REPORT |
Non-financial report in accordance with section 315b HGB | Notes on content of report and framework |
Notes on content of report and framework
LEG Immobilien SE is publishing a non-financial declaration in accordance with section 315b HGB for the 2023 financial year. It comprises key non-financial aspects that have a significant impact on the HGB aspects of environmental, social and employee concerns, combating corruption and bribery and human rights issues and that are relevant to LEG Immobilien SE's financial position and financial performance for the 2023 financial year.
The non-financial declaration provides information on key non-financial performance indicators, individual targets figures and the concepts, initiatives and objectives underpinning these. The measures introduced in 2022 to save energy and costs must also be taken into account when assessing the non-financial key figures, especially as compared to the previous year. The standard of the Global Reporting Initiative (GRI) served as the general framework for the structure of the materiality analysis and the description of concepts. Further information can be found in > section GRI key figures. This is not the subject of the company audit.
LEG regularly reviews and optimises the processes for collecting non-financial key figures, i. e. ESG data. ESG key figures are given equal importance to financial key figures the reporting. LEG has been using a partially automated data collection system to collect and archive all relevant non-financial key figures since 2021. The data owners enter their data into the database, which is then reviewed by the ESG department or Controlling to ensure consistency and to automatically guarantee two-person integrity. In preparation for reporting under CSRD starting in 2024, the previous database - the ESG cube - is currently being moved to a new and more comprehensive data warehouse system. In this transition phase, data owners, the ESG department and Controlling coordinate the preparation of this report using standard programmes.
Preparation for the CSRD also includes integrating the non-financial declaration as a separate section of the Group management report for the first time. With the exception of the disclosures marked as "not audited", it was subject to a voluntary limited assurance audit by the audit firm Deloitte. The recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) expand the reporting standards listed. They are published online at the same time as the annual report. References to disclosures not included in the Group management report or the consolidated financial statements constitute additional information and are not part of the non-financial declaration. EPRA key performance figures for sustainability and SASB reporting will be published online in May 2024.
Business model
With around 166,500 rental properties (previous year: 167,000),
approximately 500,000 tenants (previous year: 500,000) and 2,003
employees (as at 31 December 2023; previous year: 2,040), Dussel dorf-based LEG is one of Germany's leading listed housing companies. The company is listed on the MDAX and generated rental and lease income of around EUR 1,241 million in the 2023 financial year (2022: EUR 1,149 million).
As the biggest landlord in Germany's most populous federal state, North Rhine-Westphalia, as well as operating in other states in Ger- many, LEG helps meet rising demand for affordable housing. A consistently value-driven business model with a focus on resilience and customers combines the interests of shareholders and tenants.
Further information on LEG's business model can be found in the chapter > business activities and strategy.
Below, we report on key issues for the LEG Group. The non-financial declaration is structured in line with the aspects determined in conjunction with the materiality analysis.
Material topics
The LEG Group conducted a materiality analysis in 2020 to identify material non-financial topics in accordance with the Handelsgesetz- buch (HGB - German Commercial Code) and taking into account the requirements of the GRI standards. For the 2020 materiality analysis, non-financial topics that may be relevant to the LEG Group were initially identified on the basis of a field analysis, which took capital market requirements and various industry and reporting standards into account.
These topics were then assessed regarding the LEG Group's potential impact on the matters, their business relevance and with regard to the associated expectations of internal and external stakeholders. Tenants, employees and executives at the LEG Group, as well as external experts, were involved in the assessment, contributing points of view from civil society, academia, the capital market and politics.
The results were consolidated and translated into a materiality matrix. The following report sets out our position on the six topics that were identified as high or very high regarding their business relevant to the LEG Group and the company's potential impact:
1. Sustainable growth and resilience
2. Customer satisfaction and participation 3. Corporate culture and values
4. Reduction of energy use and emissions 5. Fair and affordable rent
6. Neighbourhood development
LEG IMMOBILIEN SE Annual Report 2023
110 | GROUP MANAGEMENT REPORT |
Non-financial report in accordance with section 315b HGB | Notes on content of report and framework |
We have not identified any other material topics within the meaning of HGB. We did not add or remove any issues in the 2023 reporting year. Our analysis determined that the aspects of the law "respect for human rights" and "combating corruption and bribery" are not material for the LEG Group in the strict sense of the law and so these are not discussed in detail here. Nevertheless, these are key issues for the industry, which is why they are briefly addressed under "Sustainable growth and resilience". The LEG sustainability strategy considers "respect for human rights" as well. We also signed the United Nations Global Compact in 2021 and support the ten principles of the United Nations Global Compact on human rights, labour, environment
and anti-corruption. We have regularly published our progress reports on the UN Global Compact website since May 2022. We have been a member of the UN Global Compact Netzwerk Deutschland e. V. since August 2023.
This non-financial declaration is structured in line with the five action areas set out in our sustainability strategy, to which we have assigned the material topics detailed above. These five action areas are "busi- ness", "tenants", "employees", "the environment" and "society". They form the structural basis of our sustainability strategy and the targets identified by way of this.
Materiality analysis
very high | |
RELEVANCE | high high - |
STAKEHOLDER | medium medium - |
- | |
low |
13 | ||||
12 | ||||
14 | ||||
3 | 11 | |||
10 | 16 | |||
4 | ||||
5 | 15 | |||
17 | ||||
1 | 6 |
- 7
9
8
low | medium | BUSINESS RELEVANCE | high | very high | |
Material in accordance with HGB¹ | Extent of economic, environmental | ||||
and social impact | |||||
1 | Human rights standards in the supply chain | 7 | Local social dialogue | 12 | Fair and affordable rent |
2 | Social commitment | 8 | Transparent financing and liquidity strategy | 13 | Customer satisfaction and participation |
3 | Land use and nature conservation | 9 | Good governance and compliance | 14 | Reduction of energy use and emissions |
4 | Health protection and occupational safety | 10 | Sustainable construction materials and | 15 | Neighbourhood development |
5 | Training and professional development | 11 | environmental management | 16 | Corporate culture and values |
6 | Diversity and equality of opportunity | Work-life-balance and family friendly policies | 17 | Sustainable growth and resilience |
¹ Materiality threshold (very) high business relevance and (very) high impact
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LEG Immobilien SE published this content on 08 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 March 2024 09:12:03 UTC.
