Non-financial Reports
Combined Sustainability Statement 2024 (referring to CSRD) as part of Group Management Report
The combined Sustainability Statement for Aareal Bank AG and Aareal Bank Group is published as part of Aareal Bank Group’s Management Report. In line with the Separate Combined Non-financial Report of previous years, it describes the goals and policies pursued by Aareal Bank AG and Aareal Bank Group for the five matters required by law (environmental matters, employee-related matters, social matters, respect for human rights, and anti-corruption and bribery matters). As the parent undertaking of Aareal Bank Group, Aareal Bank AG defines and monitors the global concepts and rules. Aareal Bank AG does not use a framework for preparing the sustainability statement within the meaning of section 289d of the HGB. Furthermore, there is no difference in the key performance indicators for Aareal Bank Group and Aareal Bank AG, since Aareal Bank AG accounts for over 90% of Aareal Bank Group’s total assets.
The combined sustainability statement was prepared on the basis of the requirements of the HGB. The European Sustainability Reporting Standards (ESRS) were used as a framework. The change in the framework compared to the 2023 financial year is due to the expected national implementation of the CSRD and mandatory application of the ESRS. The structure of the report therefore follows the instructions of the ESRS. The topics to be reported were identified using the double materiality analysis pursuant to the ESRS. In addition to general information set out in the ESRS 2 standard, the report also covers information on the topic-specific standards identified as material: E1 climate change, S1 own workforce, G1 business conduct, and the company-specific issue of information security. Information on the anti-corruption and bribery matters was included in accordance with the HGB despite the issue having been assessed as immaterial according to the double materiality analysis. In line with the ESRS, the disclosure obligations set out in the Taxonomy Regulation are integrated into chapter E1. The entire report was subjected to a limited assurance review.
The objective of EU Regulation 2020/852 (the EU Taxonomy Regulation) is to allocate funding to sustainable activities and hence to promote the transition to a sustainable economy. It aims to achieve this by defining guidance and criteria for economic activities qualifying as sustainable. Economic activities should promote the following environmental objectives:
• Climate change mitigation: An economic activity qualifies as contributing substantially to climate change mitigation if it contributes substantially to the stabilisation of greenhouse gas concentrations in the atmosphere.
• Climate change adaptation: Adaptation solutions that either substantially reduce the risk of the adverse impact of the current climate and the expected future climate on the economic activity, or that substantially reduce the adverse impact.
• The sustainable use and protection of water and marine resources: An economic activity qualifies as contributing substantially to the sustainable use and protection of water and marine resources where that activity either contributes substantially to achieving the good status of bodies of water, including bodies of surface water and groundwater, or to preventing the deterioration of bodies of water.
• The protection and restoration of biodiversity and ecosystems: Nature and biodiversity conservation, including achieving the good condition of natural and semi-natural habitats and species or preventing their deterioration
• Pollution prevention and control: Preventing or reducing pollutant emissions into air, improving levels of air quality, cleaning up waste, etc.
• Transition to a circular economy: The use of natural resources, including sustainably sourced bio-based and other raw materials, in production more efficiently by increasing the durability, reparability, upgradability or reusability of products Aareal Bank has reported on the EU Taxonomy since 2021, initially in qualitative form in 2021 and 2022, and in the mandatory tables since 2023.
The green asset ratio (GAR) in Aareal Bank AG’s portfolio stood at 0.21% for turnover KPI and 0.22% for capex KPI and GAR inflows at 0.23% and 0.19%, respectively. Aareal Bank AG’s business model with its Structured Property Financing segment provides support for domestic and international clients investing in property in Europe, North America and Asia/Pacific; consequently, a significant proportion of its business is outside the EU. In addition, a large proportion of the financings are attributable to counterparties that are not subject to NFRD or CSRD reporting, and therefore cannot be included in the numerator of the green asset ratio.
Combined Sustainability Statement 2024 (based on CSRD) as part of the Group Management Report
PCAF report on financed carbon emissions
By signing the ‘PCAF Commitment Letter’, Aareal Bank has committed itself to work together with other market participants to continuously improve CO2 transparency in the financial sector.
To this end, we regularly publish our PCAF report on financed CO2 emissions in the Commercial Real Estate Financing portfolio. In addition to an overall view of the carbon performance of the loan portfolio, this report also provides deeper insights into the carbon footprint and carbon intensity of individual building types and regions in Aareal Bank's loan portfolio. The consistent application of the PCAF Data Quality Scores defined by the PCAF standard also makes it possible to better assess the underlying data quality and make it more comparable with other market participants.
