2011 Corporate Social Responsibility Report

We take responsibility 2011 Corporate Social Responsibility Report

Contents

Anyone considering the question of responsibility must be prepared for change. Hans Joachim Reinke

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Union Asset Management Holding AG

4

Letter from the CEO

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The Union Investment Group in figures

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Taking responsibility

14 16

2011 Corporate Social Responsibility Report

We entrust Work/life balance It isn’t easy to combine work and family life. Union Investment helps employees with personalized solutions.

20

HR development The financial industry is constantly changing, so Union Investment encourages lifelong learning.

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Satisfaction Union Investment employees score their employer highly – and give helpful feedback.

24 26

30

We represent Customer profile How Union Investment supported the renovation and reconstruction of Hildesheim Cathedral.

30

Investment criteria Union Investment checks very closely whether countries and companies meet sustainability criteria.

34

Real estate Union Investment’s sustainable approach to construction and refurbishment benefits everyone involved.

38 40

We improve Environmental management Sustainability is a collection of small parts that all have to be constantly examined and adjusted.

44 46

We transform

46

Retirement pensions Many people fear for their savings because of the Euro crisis. Union Investment experts explain the facts.

50

Objectives, key facts and figures

52

The real-estate portfolio

66

GRI report

67

About this report

68

Sustainability program 2011–2015

71

GRI Index

79

Editorial Information

3

Dear readers, Business can be seen as a simple binary code: black or white, profit or loss. And ultimately, success is indeed measured against fixed parameters that at first glance appear far removed from the issue of responsibility toward society, the environment and the people connected with the company. However, responsibility is exactly what supports sustainable corporate success. Anyone considering the question of responsibility must be prepared for change, because responsibility is not subject to set criteria: the demands change according to the environment, the market situation or the perspective from which it is observed. Employees want a robust company that offers job security and career opportunities, while shareholders want a profitable company that pays consistently high dividends. Society wants a socially responsible company that helps to promote the common good and protect the environment. All these demands have to be integrated into the closely interwoven structure needed for commercial success. Responsibility is not an end in itself, but is the real objective of business activities, because companies can only safeguard their future viability if they take a responsible attitude toward people and resources, society and the environment. What are needed are strong social, environmental and ethical values combined with the courage to seek a balance between commercial interests and the good of society at all times. Union Investment is able to build on both of these pillars. Firmly rooted in cooperative values, our mission has always been to act in a spirit of partnership, fairness, transparency and sustainability. At the same time, for more than 55 years, we have shown that our company is always capable of change. When there are changes in customer needs, or the market environment or the regulatory framework alters, we see this as an opportunity to develop new solutions and offer customized product concepts. In 2011, we even went one step further and focused our corporate values and mission statement on the new

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Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

requirements. Our new mission statement, “We make more of investors’ money, so we merit their trust,” only works if we meet the responsibilities that we have as a company and as a trustee. Differentiating between the two is vital, because it highlights the special role an asset manager plays and the social responsibility that goes hand-in-hand with this. As a trustee, our task is to act sustainably on behalf of our customers, which means making capital-market investments that comply with clearly defined social, environmental and ethical criteria. At the same time, we represent investors’ interests by maintaining a dialog with companies. This in no way conflicts with our company’s focus on sustainability. On the contrary – the intensive discussions about sustainability issues we have when devising our investment strategies provide us with numerous opportunities for improving our own behavior, and for making an even greater contribution to society, to the environment, and to the future we all share. This report shows you the areas in which we are taking action – HR management, portfolio management and environmental management. We have called it “We take responsibility,” because we want to send a clear signal that we take our responsibilities seriously and consider them to be our primary duty.

Hans Joachim Reinke Chief Executive Officer of Union Asset Management Holding AG

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The Union Investment Group in figures

Companies in the Union Investment Group included in this report Union Asset Management Holding AG, Frankfurt am Main

Union Investment Privatfonds GmbH, Frankfurt am Main

Union Investment Service Bank AG, Frankfurt am Main

6

Union Investment Institutional GmbH, Frankfurt am Main

UIR Verwaltungsgesellschaft mbH, Hamburg

Union Investment Real Estate GmbH, Hamburg

Union IT-Services GmbH, Frankfurt am Main

Union Investment Institutional Property GmbH, Frankfurt am Main

Union Service-Gesellschaft mbH, Frankfurt am Main

Union Asset Management Holding AG

Organizational structure The Union Investment Group consists of Union Asset Management Holding AG, headquartered in Frankfurt am Main, and numerous subsidiaries in Germany and abroad. The core is formed by six independent asset management companies that are all generally accepted specialists in their particular field and whose activities are strategically coordinated by Union Asset Management Holding. Products and services With assets of around 170 billion under management at the end of 2011, Union Investment is one of the leading fund management companies in Germany – and the cooperative financial network’s fund management expert. Its 2,443 staff members manage more than 980 funds for private and institutional investors. A total of four and a half million customers entrust Union Investment with their investments. Union Investment Privatfonds GmbH focuses on retail investor business. The company’s experts develop and create marketing concepts for their distribution partners and provide a wide range of specialist training courses. They also provide support for strategies, planning, financial control and sales management. The customers of our partner banks in the cooperative financial network benefit every day from the 670 or more retail funds that are available. Our products for retail investors are sold exclusively via these banks. Union Investment Institutional GmbH caters for institutional investors such as insurance companies, pension funds and charitable foundations. Its portfolio managers discuss investment objectives, investment styles and the key features of their investment policies

2011 Corporate Social Responsibility Report

with their customers, then they devise tailor-made solutions and manage their customers’ portfolios. At the end of 2011, over 1,400 institutional investors had invested in around 310 special funds and in selected mutual funds.

Group’s asset management company for open-ended special real-estate funds. Its real-estate portfolio consists of 70 properties in three real-estate fund products for institutional investors and it holds fund assets in excess of one billion euros.

Union Investment Real Estate GmbH is Germany’s second biggest company offering open-ended real-estate funds and one of the leading real-estate investment managers in Europe. Its real-estate portfolio encompasses 237 properties in five open-ended real-estate funds for private and institutional investors and it includes prime real estate in the world’s top locations. The company operates as an investor, vendor, property developer and landlord.

The Union Investment Group outside Germany

Union Investment Institutional Property GmbH is the Union Investment

Alongside its activities in Germany, the Union Investment Group also offers selected funds via its parters in the cooperative financial network and third-party distributors in Luxembourg, Poland, Austria, Italy, Spain and Switzerland. BEA Union Investment Management Ltd., a joint venture between Union Investment and the Bank of East Asia, is exclusively dedicated to the fast-growing Asian market. This report focuses on the Union Investment Group within Germany.

Ownership structure and legal form Union Investment has been fully integrated into the Volksbanken Raiffeisenbanken cooperative financial network since 1999. The network’s two central institutions are the main shareholders of Union Asset Management Holding AG – with DZ BANK AG holding the majority of its shares followed by WGZ BANK AG and VR GbR.

3.59%

24.25%

DZ BANK AG WGZ BANK AG VR GbR, consisting of DZ Bank AG, WGZ BANK AG and R+V Personen Holding GmbH Local cooperative banks, including the holding companies of the primary banks, trade associations and specialpurpose entities of the German cooperative financial network and others

17.72%

54.44%

7

8

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Responsibility is our goal The time is ripe for more sustainability. Nowadays, customers, employees, counterparties, shareholders and society in general – all expect companies to behave sustainably. Sustainability has very different aspects: environmental, business-related and above all social. Approaches toward more sustainability are equally varied, yet they all have the same goal, for companies to take responsibility for their own conduct.

If they are to do more than merely pay lip service to responsibility, all companies have to focus their structures and processes rigorously on improved sustainability. And they have to provide proof of how their conduct is taking effect. Union Investment’s business model has always been founded on a sense of responsibility toward its business partners and a sense of accountability toward its employees and society as a whole. Hans Joachim Reinke, Chief Executive Officer of Union Investment, largely attributes this stance to its cooperative roots: “Cooperative companies see taking responsibility as part of their identity.” Reinke firmly believes that sustainable practices and financial success are not mutually exclusive. In fact, he says: “For us, the two are inextricably linked. We create value without jeopardizing the financial and societal foundation of future benefit. That has been the basis of Union Investment’s success for over 55 years.”

What does sustainability mean? When Union Investment talks about sustainability, it not only means behaving responsibly as a company, it also means dealing responsibly with the monies with which it has been entrusted by its customers – and this is of prime importance for an asset manager. “We have a special role,” explains Alexander Schindler, the member of Union Investment’s Board of Managing Directors responsible for institutional business. “Investors instruct us to invest their money sustainably in the equity, bond and real-estate markets, which is why we have established a broad range of different products and services.” Union Investment now has over 20 years experience in this field and today it is one of the biggest managers of sustainable investments in Germany. For many investors, Schindler reports, sustainability is now an essential objective of every investment strategy. The results

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For us, financial success and sustainable practices are inextricably linked. Hans Joachim Reinke

The claim for responsible investment stands above all investment decisions at Union Investment. Jens Wilhelm

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Union Asset Management Holding AG

of a study by Union Investment show that over 60 percent already take sustainable criteria into consideration. “It starts with the exclusion of armaments and extends across a range of strict specifications regarding the use of resources, pollution, working conditions and social acceptability,” he adds. Responsibility on behalf of investors Jens Wilhelm explains in detail how Union Investment implements these demands for sustainable management at product level. He is the member of the Board of Managing Directors responsible for portfolio management and real-estate business. “The claim for responsible investment stands above all investment decisions at Union Investment. Stringent selection criteria are integral elements of the investment process for our sustainable funds. We use various analysis tools and scoring models to determine whether equities, bonds and real estate meet strictly defined sustainability criteria, and we base our investment decisions on them,” says the investment strategist. He believes it is particularly important that portfolio managers do not simply assess the status quo but enter into intensive dialog with companies in which they have invested. “Every year, we hold more than four thousand meetings with companies from all over the world. And we use them as opportunities to encourage companies to actively drive forward their commitment to sustainability,” says Wilhelm. In its real-estate business, Union Investment sets high sustainability standards for the properties in its various open-ended realestate funds. “This applies as much to the acquisition of new property as to improving the sustainability of properties in our portfolio,” explains Wilhelm, referring to the corporate social responsibility Union

2011 Corporate Social Responsibility Report

Investment assumes as one of the biggest players in the real-estate sector. High standards for our own behavior Anyone who scrutinizes others has to have high standards for their own sustainable behavior. “This is another reason why the issue of social, environmental and financial responsibility is of key importance to all of Union Investment’s commercial decisions,” explains Chief Executive Officer Reinke. Whether it concerns HR management, infrastructure or environmental management – the responsible treatment of people and resources is the top priority. Reinke knows that sustainability is of great value to a business: “Responsible behavior not only safeguards the future viability of our business, it also provides tangible economic benefits for our current operations.” Ulrich Köhne highlights the way in which these economic benefits are further developed as part of a sustainability strategy. His responsibilities as a member of the Board of Managing Directors include infrastructure and procurement management, and he is directly responsible for implementing numerous measures. “By 2015, Union Investment will have positioned itself as a focused, sustainable asset manager and will have established standards for managing and developing sustainability within the company,” explains Köhne, referring to the system for environmental management and sustainable procurement management that Union Investment introduced in 2010. The environmental management system is a component of the company-wide commitment to the preservation of resources. Action is also being taken with regard to green IT, intelligent building engineering, the vehicle fleet and carbon-neutral travel.

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Investors instruct us to invest their money sustainably. Alexander Schindler

Dealing responsibly with people Sustainable human resource management is a particularly high priority. “Our employees are our most important asset,” explains Reinke. Flexibility, scope and personal development are the key words for the various personal development programs and for creating a work/life balance. Reinke recognizes that “there is a particular need for us to take corporate social responsibility in this area.”

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Last but not least, Union Investment assumes responsibility for society – sometimes in the background by generating maximum, consistent returns for funded pension schemes or pension funds, insurance companies and other pension providers, thus securing the retirement pensions of thousands of people. And sometimes in the spotlight as the sponsor or initiator of numerous information and training campaigns. Also further proof that Union Investment pays far more than lip service to responsibility.

By 2015, Union Investment will have positioned itself as a focused, sustainable asset manager. Ulrich Köhne

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Sustainability management has a strong basis at Union Investment with Matthias Stapelfeldt at its head. He is an experienced manager who has been with the company for twenty years.

“Sustainability is nothing new for Union Investment.” Mr. Stapelfeldt, you have been Union Investment’s sustainability officer since 2010. What exactly does your role entail? Sustainability is nothing new for Union Investment; it has been actively promoted in individual divisions for years. However, we needed a framework for all the activities that are increasingly becoming prevalent at both product and group level. My task is to amalgamate this large number of separate activities. How do you approach that task? We have drawn up a sustainability strategy and introduced a sustainability-management system to enshrine corporate social responsibility at group level. It is also vital to promote the issue proactively within the company and outside it. In my role I am a coordinator, a communicator and a point of contact for technical issues. What do you consider your most important tasks? My most important task is to work with specialists in the company’s individual units to find as many starting points as possible for making our practices comply even more closely with our responsibility toward investors, employees, counterparties and society – and then to develop these ideas into strategies and processes that can be put into practice in day-to-day business. Talking to different stakeholders about sustainability is also extremely important. Let me give you an example. Since 2010, we have held an intensive dialog with experts from a United Nations initiative who want to establish their principles for responsible investment more firmly in Europe. What form does this dialog take? Union Investment was one of the first German asset managers to sign up to these principles – the UN Principles for Responsible Investment – and to apply them as a standard for the practices of all its corporate divisions. We also organize investor events with the UN initiative to raise public awareness of the idea of responsible investment. Our claim for sustainable practices at product and group level is intended to set a good example. And we want to inspire as many people as possible to help us on our way.

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Frank Besemer, Group Manager HR Development at Union Investment. Constant dialog with employees helps him and his team to invest in targeted staff development.

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Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

We entrust Create a culture of cooperation. Advance employees according to their talents. Enable a balance between work and private life. Develop innovative working models. Seek dialog with staff.

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Finding a balance Companies need to find a balance for employees who want to be challenged and promoted but also need the latitude to reconcile the demands of work and family life. Union Investment’s solution is to use personalized advisory and support services. This pays dividends – for us as an employer and for our staff. Four practical examples:

Sabine Knöß

Nadine Egerer-Bareit

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Dr. Martin Grottke

Stefan Judt

Union Asset Management Holding AG

Sabine Knöß (35), Communications Manager As a communications manager, Sabine Knöß normally finds it easy to say the right thing, but when her father was diagnosed with bipolar disorder ten years ago, words failed her. “I thought his condition would settle down again,” says Sabine. Today she knows that is not the case, because her father has manic depression. When he is on a high, he is full of exuberance but when he is down, he needs medical assistance. “Unfortunately, I don’t know in advance when a low phase will start or how long it will last,” explains the 35-year old. “ Fortunately, my boss lets me take as much time off as I need in these situations.” Once, Sabine’s father needed a doctor urgently. Because she couldn’t find one, Sabine contacted the Employee Assistance Program (EAP), an external information centre where Union Investment staff can get professional, career or personal advice. “I had a very capable contact who listened to me and did some research for me,” recalls the communications manager. “Just a day later, a doctor contacted me.” Following this positive experience, Sabine is now planning to attend a skills training course for carers: “After all, I know that my father’s condition will continue to deteriorate.”

2011 Corporate Social Responsibility Report

Dr. Martin Grottke (40), Risk Control Departmental Manager Martin Grottke knows all about stress tests, in his own life as well as at work. In 2007, “just as the financial crisis entered its hot phase,” his first daughter came into the world. Daughter number two followed three years later in December 2010. Everything was going to plan, but there was one thing he hadn’t reckoned on. Shortly after the birth of his younger daughter, Martin found out that he was to be promoted to head of department with effect from January 1, 2011 – and he was faced with a dilemma. Although, he was pleased with his promotion, he also wanted to take parental leave. He thought that as a departmental head it would be very difficult to get approval for parental leave, but he was wrong. “Fine, go ahead,” was all his line manager said. However, they agreed to postpone the period of parental leave for a time because there was so much to do in the new department. “For me, it went without saying that I would support my employer at this time, just as he has supported me with my plans for parental leave,” says Martin. The timing was right in August and November 2011, when the departmental head took two periods of four weeks leave. “Of course, I could still be contacted by my staff and I came into the office from time to time,” says Martin. “But I still spent some quality time with my family.”

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Nadine Egerer-Bareit (37), Group Strategic Management Assistant In mid-2009, Nadine experienced the inner anxiety that sometimes afflicts her: “I need to be busy all the time, to develop and to have prospects,” says Nadine Egerer-Bareit. “Otherwise, I get bored.” When her boss offered her the opportunity to study part-time for an Executive MBA at Durham University and the European Business School with the support of her employer, the 37-year old jumped at the chance. That was in January 2010, but just a few weeks later she found she was pregnant. She and her husband wanted a child, but the timing was unexpected. “Of course, I felt under pressure but at the same time I believed I would be able to combine having a child, studying and working.” She actually managed it by studying during her ten-month maternity leave and subsequently Union Investment provided her with a nursery place that gave her even greater flexibility. “Without the nursery place and the knowledge that I could stay at home occasionally if absolutely necessary if my child was sick, I could not have been a working mother,” says Nadine. Which would have been unthinkable for the new MBA graduate.

Ideal conditions Union Investment offers its 2,443 employees advisory and care services that are tailored to meet their individual needs, regardless of whether they work full time or part time or are temporary employees. For parents, emergency childcare, subsidized nursery places and parent-and-child offices are available. Employees with relatives requiring care can attend the “Skills training for carers” course. All employees are entitled to flexible working-time models as and when needed. Flu shots, vitamin C doses, mobile massages, back exercise classes, yoga courses and subsidized gym memberships are also available. In 2011, Union Investment received the BestPersAward and the Work and Family Audit certificate for its employee-friendly HR policies.

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Stefan Judt, (46), Group Head of Data Management, CRM Systems and Reporting Where there’s a will there’s a way. For Stefan Judt this saying has almost become his philosophy for life. “When my son was born in August 2007, my wife and I had naturally thought it over a great deal,” says the 46-year old. “However, we were sure that we both wanted to continue working.” There was only one possibility: “We needed to keep our working hours as flexible as possible.” Three months after the birth, when his wife returned to work for three days a week, Stefan took parental leave, but continued to go into the office on the two days that his wife was at home. At the age of five months, his son was given a place in the Union Investment nursery and the group manager was able to increase his hours to four days a week. Now that his little boy attends the kindergarten, Stefan is back at 90 percent of his regular working hours. “Full-time work will not be possible for the next few years though, because when you have a child you need the option of leaving early if necessary.” His boss accepts this, provided the work gets done. Stefan is not worried, saying: “When you have less time, you automatically concentrate much harder on your work.” And just to prove that where there’s a will there really is a way, the data manager often fits running into his lunch break.

Union Asset Management Holding AG

Total workforce by employment type, employment contract, and gender

2011 Corporate Social Responsibility Report

Injuries, occupational diseases, lost days, absence and work-related fatalities Industrial accident rate

1. Number of employees at the year end by gender (Including the following subsidiaries: UMH, UIP, UIL, UIT, UFS, TFI, USG, UIN, UIR, UII, USB, QAM, attrax)

0.96%

Sickness rate

4.1%

Industrial accidents

5 (plus 2 during company football matches)

Men

1,351

Commuting accidents

15

Women

1,092

Fatalities

None

Since 2011, Union Investment has offered a return-to-work and disability management scheme for all employees who were repeatedly absent through illness or were unfit for work for an uninterrupted period of over six weeks in the preceding 12 months. The aim of the scheme is to work with employees to find ways in which fitness to work can be restored and permanently maintained, and good health can be promoted.

2. Number of employees by NCN/CN contract and full/part-time contract Non-collectively negotiated contracts

1,544

Collectively negotiated contracts

899

Full-time employees

2,009

Part-time employees

434

Composition and breakdown by employee category and gender

3. Number of permanent and temporary/ fixed-contract employees by gender Permanent employees (male)

1,332

Permanent employees (female)

1,046

Temporary employees (male)

19

Temporary employees (female)

46

Total proportion of women at Union Investment

44%

Proportion of women in managerial positions at Union Investment (group managers and above)

17%

Number of employees by age group (50) and gender 50

Male

96

1,124

131

Female

103

875

114

Staff turnover broken down by age group and gender 1. New recruits in 2011 by age group (50) and gender (’New recruit’ only applies to the first period of employment at Union Investment)

50

Male

19

82

0

Female

24

44

1

Ratio of basic salary for men to basic salary for women by employee category Remuneration at Union Investment is based on performance not gender.

2. Number of employees recruited in 2011 who had previously left the company – broken down by age group and gender 50

Male

2

6

0

Female

3

0

0

3. Number of employees who left Union Investment in 2011 broken down by age group and gender 50

Male

7

45

6

Female

6

39

4

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Union Investment’s declared objective is to understand its customers and always to offer them the best solution for making more of investors’ money. The way to achieve this is undoubtedly to ensure that employees are always up to date on markets and customer requirements, so Union Investment provides its employees with personalized development programs under the banner of lifelong learning. This is certainly also one of the reasons why Union Investment retains its staff for longer than other companies in the same sector. “On average, our employees stay with the company for eight and a half years,” reports Sonja Albers, Head of the Group HR division, not without some pride. This figure also sends a clear signal to the outside world: Union Investment provides its employees with reliable structures, precisely because the financial sector offers few constants in an ever changing world. Union Investment employees think flexibly and are open to new ideas, qualities that are vital in a competitive environment.

Sharp minds learn for longer “An investment in knowledge always pays the best interest.” Statesman Benjamin Franklin’s comment, made in the 18th century, is more relevant than ever today – and for Union Investment it means providing every employee with personalized training and development at every stage of their career.

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The times when what you learned as an apprentice would see you through to retirement are long gone. A fact that Union Investment has known for a very long time, and is reflected in its state-of-theart approach to HR management which ensures that each employee – from intern to senior manager – is able to develop his or her skills and knowledge appropriately. Employees such as Knut Pfeiffer prove that this is no empty promise. After joining the asset management company as an administrative clerk, he climbed the career ladder to become head of the commercial project management group at Union Investment Real Estate. Today, the former clerk manages five staff members. “Unusual career paths, continued professional development and management seminars create unique prospects, as you can see from my résumé,” Pfeiffer proudly declares.

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Average number of hours per annum spent by each employee on training/professional development Divisional heads

30 hours

Departmental heads

38 hours

Group heads

41 hours

Employees

25 hours

“Union Investment employees benefit from HR management’s focus on the individual,” stresses Sonja Albers. Each development training course is preceded by meetings about the employee’s current development status. The Union Investment personal development program (UniPEP), for example, highlights personal strengths and areas that need development. This fruitful dialog between staff and managers ultimately results in an individual development plan with targets and actions tailored precisely to the needs of each employee. The objective of a development program may be to optimize a specialist’s technical knowledge or to prepare staff for more senior (managerial) roles by means of the UniPotenzial I and II programs. Even after staff have taken on more responsible positions, new managers receive help with their professional development. As well as specialist support, sharing information with colleagues in the same situation is particularly valuable at this point. According to Sonja Albers this is another special feature at Union Investment, allowing colleagues to learn from one another.

Waldemar Kosubek, Manager of the Internal Performance Analysis Group has also benefited, commenting: “Intensive dialog with my mentor was extremely productive for me. We met regularly for two years. It is a great idea that experienced managers pass on their knowledge and experience to younger colleagues in this way.”

Programs for knowledge management and lifelong learning that develop job skills and help staff with their career advancement:

• Professional development scheme, selected by independent panels of judges to receive numerous

Naturally, lifelong learning at Union Investment is not a one-way street. As well as encouraging staff to improve their knowledge for their own benefit and for that of the company, the fund management company itself is learning all the time how to further improve its staff training and motivation to contribute to job satisfaction and contentment. In this way, both parties benefit. Each employee has the opportunity to develop personally and professionally, and Union Investment retains extremely well qualified staff for the long term. This puts the company far ahead of the game, because future demographic change will make competition for the sharpest minds even tougher.

awards (Top Employer 2007–2012; BestPersAward 2006–2011; Personalwirtschaft magazine German HR prize 2006, 2007, 2009)

• Target-group-specific analysis of potential (analysis of strengths/ areas for development) including the creation and implementation of individual development plans (Management Audit, Career Architect, UniPEP)

• Development programs (management development program, group head development program, UniPotenzial, UniProfessional, specialist instructor scheme)

• Internal seminar program/UniKompetenz

• Support for various part-time development programs/degree courses

Sonja Albers, Head of the Group HR division, and her team ensure that each employee is offered personal development and training at every stage of their career.

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Satisfied employees = satisfied customers This equation holds true at Union Investment which does a great deal to motive its staff. But do they appreciate it – and are they satisfied with the working environment in the company?

Union Investment poses this question every two years – and its employees respond. Union Investment knows that only motivated, healthy staff are willing and able to do their best to fulfil the company’s mission to make more of investor’s money. The HR division carries out an anonymous,

online survey covering a total of eleven subject areas relating to the working environment and general satisfaction among employees. The information they gain helps with the constant development of HR management and with any improvements that may be needed.

Union Investment Climate Barometer Average scores on a scale of 1 (entirely applicable) to 5 (does not apply at all).

1.93 1.99 2.08

with the results of the 2008 survey. Commitment index: 77 (+1)

Union Investment as an employer (+0.03) Workplace (+0.04) Job content (-0.01)

2.13

Management (-0.02)

2.21 2.27

Work/life balance (-0.01) Remuneration and additional benefits (-0.06)

2.31

Information (+0.23)

2.43

Partnership (-0.05) / culture (not surveyed in 2008)

2.53

Development prospects (+0.07)

2.74

22

2

The figures in brackets indicate changes compared

3

Change and innovation (+0.05)

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Customer satisfaction Union Investment has a wide range of customer groups that include client advisors at the local cooperative banks, retail investors, institutional investors and tenants as well as intermediary banks and customers of the Luxembourg-based attrax fund platform. All these customers have different needs and Union Investment conducts telephone interviews every two years to measure the extent to which they are met.

The results of the 2011 survey show that there is scarcely any need for optimization. The commitment index, which measures the extent to which employees identify with their company, stood at 77 points for Union Investment, far above indices for comparable companies. The high participation rate means that the results are meaningful, with eight out of ten taking part in the survey in 2011, more even than in 2008 when the response rate was 71.2 percent. A total of 1,888 staff members took part in the online survey, recording on a scale of one to five whether statements about subjects such as job content and responsibility, remuneration or even corporate culture applied to them “entirely” (one) or “not at all” (five).

The last survey showed that the client advisors at its partner banks in the cooperative financial network were particularly satisfied, with 84 percent saying that they were ’extremely satisfied or very satisfied’ with Union Investment. They benefit most from constant updates about investment products, which mean that they can organize their work efficiently – essential for their relationships with retail investors. Aside from its two-yearly surveys, Union Investment also values the feedback it receives from its customers so it frequently conducts market research. And all customer contact is subject to quality assurance, whether it happens via the website, email, letter or at events.

“I am extremely satisfied or very satisfied with Union Investment.” Percentage who agree

Institutional clients

Union Investment received the best scores in the employer (1.93) and workplace (1.99) categories. By contrast, employees gave the subject area “Change and innovation” a score of 2.74 – still a good result but the lowest in the survey – which was particularly interesting for the results analysis used to identify areas requiring action. The outcome was that innovation is now being specifically promoted. The first joint workshop with external innovation specialists has taken place and Group Strategic Management has set up a new innovations management unit. These are the initial steps toward ensuring that staff give “Change and innovation” an even better score in 2013.

78 Intermediaries in the cooperative financial network 84 Managers 74 UnionDepot customers 41 Tenants of real estate held by funds 60

“I am extremely satisfied or very satisfied with attrax.” Percentage who agree

Cooperative financial network intermediaries 73 Institutional clients 71

Union Investment asked its customers how satisfied they were. The figures refer to statements that they were “extremely satisfied” or “very satisfied”.

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Caroline Lang, Portfolio Manager at Union Investment. She monitors customer requirements as closely as developments in the capital markets because responsible investment means making more of investors’ money.

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Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

We represent Take responsibility in day-to-day business. Act in the interest of our customers. Regard sustainability as an investment criterion. Use good judgment when investing. Initiate our own socially relevant projects.

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Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Sustainability is our maxim The refurbishment and remodeling of Hildesheim Cathedral has been under way for almost three years. This UNESCO World Heritage site is set to become a magnificent centerpiece. Union Investment is a partner in the project – and therefore also a frequent visitor to the site.

An excavator creaks into life and moves building rubble into a red skip in front of Hildesheim Cathedral. Where you would expect to hear organ music, the sound of drilling fills the air. Wheelbarrows stand around where the congregation normally gathers for services. It is the biggest church construction site in Germany – Hildesheim Cathedral is being completely refurbished and remodeled. This action was urgently needed. Although the cathedral was rebuilt after being destroyed by bombs in the Second World War, nothing other than minor repairs to the plasterwork had been done since 1960. In 1985, the cathedral, its treasury and St. Michael’s Church became the second site in Germany to be added to the UNESCO World Heritage list. “The interior of the cathedral is now being sympathetically restored,” said Vicar General Dr. Werner Schreer, the construction project’s manager. For example, a large amount of marble was used during the reconstruction phase. “In the time of Germany’s economic miracle, that was a sign that the country was back on its feet, but marble is completely inappropriate for a Romanesque church,” he explains. A new episcopal crypt is also being constructed

Vicar General Prelate Dr. Werner Schreer, the cathedral restoration project manager, in the church’s main nave (top). Hildesheim is the first diocese to invest its capital according to a fully sustainable model. This is the result of intensive collaboration between Helmut Müller, the diocese’s finance director (below left), and Union Investment’s investment experts. Site visit by Achim Philippus and Marc-André Köhler (below right, from the left).

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because graves are currently still scattered beneath the entire floor of the cathedral. The main work is to move the altar closer to the congregation to reduce the physical distance between the priests and the people. “It should not be the bishop’s cathedral or the city of Hildesheim’s cathedral or even the whole diocese’s cathedral,” explains the dean, Hans-Georg Koitz, who acts as the client for the project. “People should say ’It is our cathedral.’ The church is set to become a modern symbol of faith, a gleaming new centerpiece.” Sustainable, low-risk, high-yield The refurbishment work also has to be sustainable, so, when the work is finished, the cathedral will be heated using natural energy sources. Eighty percent of the energy will come from a wood-fired power plant which will reduce the diocese’s CO2 emissions. After all, the preservation of creation is one of the church’s particular responsibilities. This is also why the diocese pays special attention to sustainability when investing its capital. “This issue now plays an important role in all churches and dioceses,” says Helmut Müller, the diocese’s financial director. “There has definitely

Dean and auxiliary bishop emeritus Hans-Georg Koitz, who acts as client for this large-scale project, explains the ideas behind the alterations, saying that the church was set to become a modern symbol of faith, a gleaming centerpiece for the whole diocese.

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2011 Corporate Social Responsibility Report

People should say ‘This is our cathedral.’ Hans-Georg Koitz

been a shift in values.” Müller is proud that the Diocese of Hildesheim succeeded in investing its capital according to a fully sustainable model at an early stage – with Union Investment as its partner. Around 130 million, or 80 percent of its capital, is now invested with the fund management company. However, sustainability is just one of the maxims the diocese adopts as an investment strategy. It must also ensure that its money is invested in low-risk investments that generate a return. The diocese manages capital generated by church taxes to provide retirement pensions, so it is particularly important for it to be invested responsibly.

with abortion, animal experimentation, gambling, pornography or armaments are out of the question from the outset. Pharmaceutical firms that produce contraceptive pills are also filtered out. The right concept Union Investment uses a total of 280 criteria to review firms. Just a few meet the strict specifications and the companies

Facts about the cathedral restoration: The cathedral has been a massive construction site since 2010. In addition to the work being carried out to

Union Investment has therefore worked out an investment strategy together with the Diocese of Hildesheim in a number of workshops held for this purpose. Positive and negative criteria are used to assess the degree to which equities and bonds comply with ethical criteria. If, for example, companies produce goods with the minimum possible social impact, they are awarded plus points, but if companies breach employee rights, minus points are applied. Specific exclusion criteria have been devised so that companies connected

preserve the substance of the building, the episcopal church is also being

selected from this small group are those that generate the best returns while fitting into the overall strategy. “We have created a completely individual filter for the Diocese of Hildesheim,” is how Achim Philippus, Executive Director in the Special Funds division, explains the investment strategy. “As well as sustainability, capital preservation was also very important. An institutional investor such as the diocese is not permitted to be exposed to large losses.” The strategy has been tremendously successful, with the diocese suffering virtually no losses during the financial crisis when stock markets around the world were crashing. The investments are yielding roughly À5 million to À6 million per year, money that is also used to help with the restoration of the cathedral.

fundamentally redesigned. The aim of Cologne-based architect Johannes Schilling was to make the medieval feel of the space more accessible and to display the cathedral’s artworks, such as the Bernward doors and the medieval font, to better advantage. The works are scheduled to be completed in time for the 1,200th anniversary of the diocese in 2015. The total cost will be roughly À30 million. More than

Union Investment and the Diocese of Hildesheim have been working together successfully for ten years. “Union Investment’s concept was an exact fit with the diocese’s desire to preserve the value of its capital while addressing sustainability,” says the diocese’s finance director. “In the end, it was also a gut decision. We just felt that we were in good hands with Union Investment.”

half of this amount (À17 million) is being contributed by the German federal government, the European Union, charitable foundations, and support organizations. Approximately À2.3 million is coming from donations, and À7.3 million from the diocese itself.

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A question of responsibility Investment performance is primarily measured in terms of return, but that alone is not enough for investors. The question of how their money is invested is becoming increasingly important for many people, particularly with regard to environmental, ethical and social criteria.

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Circumstances are constantly changing, so we have to question our processes for sustainable investment and improve them all the time. Ingo Speich

It started with a small circle of church banks, charitable foundations and nonprofit organizations who were among the pioneers of sustainable investment. Today, the majority of institutional investors are interested in sustainable investment solutions. The same applies to private investors who want to be sure that their money is being invested responsibly. Fund manager Ingo Speich goes on the road on their behalf, attending companies’ annual general meetings to campaign for the interests of shareholders. “Sustainability is a key theme. We want to encourage companies to focus their strategies more closely on environmental, social and ethical criteria as well as traditional corporate governance issues,” he explains. There is particular interest in companies that still have some catching up to do where sustainability is concerned, because this has the potential to generate future returns. The RWE energy group is a good example. Ingo Speich has been taking the floor at the company’s annual shareholders’ meeting since 2009. Together with his colleagues he also meets the group’s senior managers on a regular basis to discuss its recent business performance. Issues that are critical from an investor’s perspective are also addressed, including nuclear energy and CO2 emissions. “For us, it is

important to have discussions with RWE’s management team about how the company could focus more closely on projects that safeguard the future viability of its business model while not running undue risks of compensation claims or damage to its reputation,” explains Speich. For power utilities, this is an extremely complex issue. “Most of them are having to take a critical look at their business model and having to develop credible alternatives for the period after the switch to renewable energy sources,” he continues. The will to change can clearly be seen at RWE and the group takes criticism from investors seriously. “Projects that we have also addressed when attending recent shareholders’ meetings – such as building nuclear power plants in regions of Bulgaria and Romania that may be susceptible to earthquakes – have now been canceled,”

Fund manager Ingo Speich (right) regularly represents the interests of investors at shareholders’ meetings. Here, he is at the RWE annual shareholders’ meeting in Essen. He maintains close contact with Dr. Stephan Lowis, Head of Investor Relations at RWE.

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sentatives every year. Constructive debate about the sustainability of their business models regularly features on the agenda. Every year, Speich and his colleagues hold around 250 special sustainability meetings with companies, often in person at their corporate headquarters to get a direct impression of production processes and new projects.

explains Speich. RWE’s group management board is working rigorously on past shortcomings and it has launched a capital investment offensive for renewable energies. Today, RWE is focusing more strongly on power generation using wind and biomass and it is also endeavoring to make its coal-fired power plant complex more efficient and less emissions-intensive. “We want to support RWE on this journey toward more sustainability and a futureproof business model,” comments Speich on Union Investment’s strategy. As one of the biggest shareholders in Germany, Union Investment certainly has an enormous amount of influence. It exerts this influence on a variety of companies around the world. Attending annual shareholders’ meetings is one element but it is supplemented by more than 4,000 meetings with company repre-

Extensive preparations and detailed analysis of the companies, their competitors and the market environment are required to ensure that these company meetings, each visit and every appearance at a shareholders’ meeting run to plan. Assessing business models according to strictly defined sustainability criteria also plays a key role in this analytical process. That’s why Michael Schmidt, Head of Equity Fund Management at Union Investment, places great importance on the systematic expansion of sustainability expertise. After all, he is well aware of the huge importance of sustainability for investment: “As asset managers, we represent the interests of our investors, so we receive implicit or explicit instructions to encourage companies to operate sustainably.” Implicit instructions, because the ultimate aim of all investors is to invest in business models that are future-proof and generate rising returns. Explicit instructions, because more and more investors have also placed strict requirements on their investment strategies – in the form of clearly defined sustainability or exclusion criteria. Fund manager Ingo Speich explains how this is implemented in the investment process: “As part of our analysis for sustainable products, every company in which we invest is scrutinized using a sustainability filter.” To do this, Union Investment uses its own model called UniCube which screens equities according to environmental, social and corporate governance

2011 Corporate Social Responsibility Report

criteria. Union Investment also investigates whether countries comply with sustainability standards and it has developed a new country rating model for this purpose. Corruption, democratization and CO2 emissions are some of the most important parameters. The results of this analysis are closely integrated into our investment processes. On this basis, we are able to implement different sustainability strategies – depending on the preference of the investor or fund concerned,” concludes Speich. Union Investment has twenty years experience in this area and today it is one of the leading sustainable investment houses. This expertise also sets high standards for the future. “Circumstances are constantly changing, in the capital markets and in the real economy, so we have to question our processes for sustainable investment and improve them all the time,” says the fund manager. Union Investment’s policy of increasing shareholder engagement has achieved a great deal to date, but it still has a long way to go. “It is the same for us as for every company – a detailed, lengthy and complex process,” says Speich, speaking from his own years of practical experience. Together with his colleagues he continues to work every day on providing companies with new impetus for their journey toward more sustainability. And he gladly takes advantage of the public awareness generated at annual shareholders’ meetings to highlight the requirements.

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Green investments that pay off For the past five years, Union Investment has systematically applied a philosophy of sustainability to new buildings and refurbishments. This benefits the environment, users, and investors.

“Sustainability in the real-estate business not only benefits the environment, it also helps tenants and the investors on whose behalf we invest in real estate,” says Dr. Reinhard Kutscher, Chief Executive Officer of Union Investment Real Estate GmbH with conviction. For this reason, Union Investment’s real-estate subsidiary has applied sustainability criteria to the development of its portfolio since 2007 – for new builds, conversions and when refurbishing property in its portfolio. The EMPORIO on Dammtorwall, one of Hamburg’s landmark buildings, is a good example. Unilever, which commissioned the construction of the high-rise in 1963 and was later a long-term tenant, moved out in 2009. Union Investment investigated all the options for the building, which has been part of the portfolio in its UniImmo: Deutschland open-ended realestate fund since 1989. It quickly realised

that selling or re-letting the property in a prime location in Hamburg’s Neustadt district without refurbishing it was out of the question. Complete revitalization was needed. The challenge was that the EMPORIO Tower was under a preservation order. “In the space of three years, the building was gutted from top to bottom and the interior completely rebuilt with cavity floors, a warm and cold ceiling system and state-of-the-art lighting and plumbing,” explains Dr. Bernd Schade, Head of Real Estate Project Management at Union Investment Real Estate. The appearance of the heritage-listed exterior remained intact – although it was brought up to the latest energy standards with a double-skin façade that even allows windows to be opened for ventilation. The painstaking revitalization enabled heating costs to be cut by up to 60 percent and CO2 emissions to be reduced by around two thirds. A peak value of 90 percent

The heritage-listed EMPORIO on Dammtorwall is one of Hamburg’s landmark buildings.

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Sustainability in the real-estate sector benefits more than just the environment. Dr. Reinhard Kutscher

should be possible for energy recovery, which is good news for the new tenants whose utility costs, previously more than À10 per square metre, are expected to fall by around 50 percent. The sustainable philosophy was not restricted to the building itself: the fact that only environmentally friendly, ISO 14001 certified service providers were employed shows that a holistic approach is taken to sustainability. Everything points to this well planned refurbishment receiving LEED Core and Shell 2.0 certification in 2012.

ants. “We required tenants to use things like the built-in cooling equipment and we also created a kind of instruction book for the tenants,” says Schade. Most of them have met this requirement to use environmentally friendly materials.

Sustainability is enshrined in Union Investment’s plans for new buildings – such as the Rhein-Galerie shopping mall in Ludwigshafen. The fund management company purchased the real estate at the development phase and used it as a pilot project for certification during the development of the project. Union Investment met the highest requirements for the building’s outer shell, insulation and air conditioning system, and set new standards in terms of its end-to-end approach to sustainability that included the involvement of the ten-

Compared with Germany, the idea of sustainability is much less prevalent in other countries. Despite this, Union Investment launched a model project in the Turkish city of Kayseri where a shopping mall was built on the old site of a premier-league football stadium. Union Investment started the certification process for the Forum Kayseri during the construction phase, but the Turkish construction and process standards had to be brought in line with the requirements of the UK’s BREEAM certification. The ambitious project suc-

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Eighteen months after its opening, the shopping mall, which covers an area of almost 40,000m², is fully let. The German Sustainable Building Council (DGNB) has awarded Union Investment its gold certificate for the project.

ceeded so well in meeting requirements for energy efficiency, natural ventilation, natural lighting and the use of rainwater and local materials that BREEAM awarded the building its ’very good’ rating in March. The retail tenants also appreciate its central location, large catchment area and low utility costs. When the center opened in December 2011, all 161 shops had been fully let. Although the EMPORIO, Rhein-Galerie and Forum Kayseri projects are all very different – they demonstrate what is environmentally possible and financially viable. In 2011, Union Investment Real Estate received the Scope Special Award in the sustainability category for its relentless pursuit of sustainability. For Chief Executive Officer Kutscher, the idea of sustainability remains the gold standard for business activities: “The aims of the environmental management system we introduced in 2011 include exceeding minimum legal requirements, achieving continuous improvements and acting as a role model in the real-estate sector.”

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2011 Corporate Social Responsibility Report

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We improve Proactively protect the environment. Review and optimize internal processes. Strive for sustainable procurement. Use resources sparingly. Always seek to improve.

Christoph Drewek, Senior Account Manager, signs up new institutional customers and manages relationships with religious institutions and church banks throughout Germany. Business trips are part of his day-to-day job, because personal contact is the only way to obtain the information he needs for customized, solutions-based investment strategies.

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From a simple idea to a huge impact Double-sided printing, using hydroelectric power, traveling by train to visit customers – just some of the many simple improvements that together bring about sustainability.

Smoking chimneys and toxic waste water are nowhere to be seen at Union Investment. Its day-to-day business revolves around the financial markets, funds and making more of investors’ money. The most important tool used by its 2,443 employees is the computer: fund managers analyse global markets; backoffice units manage customer data and investors’ deposits; communications and marketing departments write copy and design brochures. Meetings with institutional investors and partner banks in the cooperative financial network are also everyday occurrences. One thing is for sure: Union Investment has a significantly lower direct impact on the environment than the manufacturing sector, but the power for the computers and buildings, the CO2 emissions attributable to staff business trips, the consumption of paper and other raw materials all definitely have consequences for the environment. What’s more, the companies in which Union Investment invests

on behalf of its investors also affect the environment. Pollution can quickly create cost pools on companies’ balance sheets as the result of regulatory pressure alone, such as the plan to force CO2 emitters to purchase certificates to offset their carbon emissions. Union Investment therefore has a whole range of reasons for close scrutiny. The sparing use of resources in day-to-day business is vital from a responsibility perspective as well as for financial reasons. In summer 2010, the Board of Managing Directors approved a company-wide environmental policy. Its six principles serve as guidance for the use of resources within the company and the procurement of services from external providers. A short time later, the company introduced an environmental management system to monitor the use of energy sources, from hydroelectric power to the fuel for company cars. The survey was carried out at both company and product level. Following the review, Union Investment laid down

specific targets and measures for environmental protection in its 2011–2015 environmental program. Finally, in May 2011, the environmental management system was certified compliant with the ISO 14001 international standard which means that the sparing use of resources is continuously improved and documented. Responsible product ecology Many of the targets and measures defined in the 2011–2015 environmental program are not scheduled for full implementation for three years. However, Union Investment is already well positioned in terms of responsible product ecology. As an active shareholder, it conducts over 4,000 meetings a year with the companies in which its funds are invested. It also focuses on issues of social, environmental and regulatory corporate management. In the interest of its investors, the fund management company alerts manage-

Direct and indirect energy consumption broken down by source Year

Natural gas

Long-distance heating

Electricity

Total

Positions occupied

2007

7,888,006 kWh

974,422 kWh

9,149,012 kWh

18,011,441 kWh

2,044

2008

6,887,352 kWh

869,266 kWh

9,393,980 kWh

17,150,598 kWh

2,148

2009

5,665,548 kWh

971,595 kWh

9,636,604 kWh

16,273,747 kWh

2,140

2010

5,324,886 kWh

849,496 kWh*

9,353,001 kWh

15,527,384 kWh

2,196

Total

25,765,792 kWh

3,664,779 kWh

37,532,597 kWh

66,963,169 kWh

-

*

Excluding site at Hamburg/long-distance heating 2010

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In 2011, the power consumption for PC operating systems was cut by 60 percent. Jens Müller

ment boards to environmental impacts and risks that they should avoid if they are to be well equipped for the future. Union Investment’s equity fund management specialists have frequently managed to influence companies’ strategies so that they take greater account of environmental and social criteria. For example, they persuaded a major power utility to reject a high-risk project for the construction of a nuclear power station, thereby averting environmental risks. The power supplier also complied with their recommendation to record and cut its CO2 emissions. This had both environmental and financial benefits for investors, because emissions trading will become a legal requirement in 2013 when carbon emission rights will have to be purchased – resulting in additional costs that would ultimately reduce shareholders’ earnings. A good reason for campaigning on behalf of investors for companies to cut their carbon emissions. In general, the equity fund managers only award excellent ratings to business models that stand up to sustainability analysis as well as financial analysis. The funds themselves also prove how seriously Union Investment takes the issue of product ecology. It has been offering institutional

clients products with a sustainable focus for over 20 years. UniNachhaltig Aktien Global, the first mutual fund to incorporate environmental and social criteria alongside financial aspects, was added in October 2009.

Awareness of paper consumption Energy efficiency in the workplace Just as Union Investment has high demands of others, it is also able to demonstrate measurable success for itself. Since 2009, over a third of the direct energy needs of all Union Investment Group offices in Germany have been met by gas and longdistance heating; and only hydroelectric power has been used since January 2011. Measured against its previous electricity consumption, a saving of 2,467.3 tonnes of CO2 has been made within one year. That’s not all though: “Last summer, all workplaces were supplied with new computers, monitors and printers,” says Jens Müller, a member of the environmental management team. “In line with our policy of sustainable procurement management, we made it a specific requirement of the tendering process that the new hardware had to be as environmentally friendly as possible and have EPEAT Gold

Year-on-year energy savings resulting from environmentally aware usage and efficiency enhancements

*

Level or Blue Angel certification. In 2011, our power consumption for PC operating systems was cut by 60 percent, simply by replacing hardware and optimizing energy settings!”

Union Investment’s annual paper consumption has virtually halved. Since 2007, the amount of paper used has fallen from 2,007 tonnes to 1,114 tonnes. “Most messages, loan applications and documents are created digitally,” says Müller. Even minor improvements have a major impact: “Many staff members already use double-sided printing, which saves a huge quantity of paper and has made these enormous savings possible.” Most of the paper Union Investment now buys is FSC or PEFC certified, or is recycled. In 2011, the proportion of recycled paper to total paper consumption was 11 percent. Carbon-neutral business travel Signing up new customers is one of Union Investment’s key goals but as the number of customers grows so does the

Paper consumption and use of recycled paper at Union Investment

Year

Natural gas

District heating

Electricity

Total

Year

2009

2008

1,000,654 kWh

105,156 kWh

No saving

860,843 kWh

Total paper consumption (t)

1,114

2009

1,221,804 kWh

No saving

No saving

876,851 kWh

FSC or PEFC certified (t)

600

2010

340,661 kWh

–*

283,603 kWh

746,363 kWh

Recycled paper – excluding paper hygiene products (t)

120

Uncertified, non-recycled paper (t)

394

Cannot be shown, as offices in Hamburg were not recorded in 2007

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Union Asset Management Holding AG

number of business trips. In order to keep CO2 emissions as low as possible, the company has reached a carbon-offsetting agreement with the German railways. For around 1 percent of travel costs, Deutsche Bahn feeds the same amount of power from regenerative sources into the rail power network as each business trip consumes. In this way, 112.9 tonnes of carbon was offset for business travel alone in 2011.

for making Union Investment even more environmentally friendly – within reasonable limits, of course!”

with legal requirements, the waste is sorted into hazardous and non-hazardous substances.

Sustainable procurement

Eco-aware employees Greater consciousness of the environment starts with each individual staff member, so Union Investment has developed an online training course to raise awareness. “Over 90 percent of the workforce have already used the voluntary training course,” says Müller. “We have also set up an email address to which staff members can send suggestions for further action.” Regular internal audits also take place in environmentally relevant departments. Checks are made to determine whether they comply with DIN EN ISO 14001 specifications. As Ansgar Löb, one of twelve internal auditors, explains: “Together, we try to find out where there is further potential

Union Investment also focuses on sustainable procurement management in its purchasing activities. Selecting a third party from which to buy a product or service involves more than just financial and content-related criteria. Sustainability is also incorporated into an evaluation matrix. If analysis shows that two firms are equally well qualified and their pricing is similar, Union Investment selects the company with the more sustainable product or service. Considerate waste disposal

Environmental management at every stage of the process chain These examples alone demonstrate that Union Investment’s environmental management system is very quickly taking effect at every stage of the process chain, from tendering and procurement to use and disposal. The company is not resting on its laurels, though: “Having successfully introduced the environmental management system, it is now a matter of continuous improvement,” says Peter Hasselbach, Union Investment’s environmental officer. Staff members and internal auditors will also play a key role in the future.

Waste disposal also complies with strict environmental requirements. The disposal of all waste is noted in a waste register and given a unique reference number. An exact description of the waste, the date, quantity, waste disposal company and expiry date of the waste disposal company’s environmental certificate is recorded in the register. In accordance

Total direct, indirect and other greenhouse gas emissions by weight

Waste produced by Union Investment broken down by type

CO2 (tonnes)

Scope*

2009

Vehicle fleet (fuel consumption)

1,709.7

Scope 1

Waste paper (t)

Electricity consumption

4,400.4

Scope 2

Mixed packaging (t)

3.38

Consumption of natural gas and long-distance heating

1,565.4

Scope 2

Residual waste (t)

90.5

194.9

Scope 3

Other

1,485.4

Scope 3

Florescent tubes (kg)

Letter mail

620.2

Scope 3

Used batteries (kg)

15

Parcel mail

146.3

Scope 3

Bulky waste (t)

9.4

2009

Paper consumption Business travel

Total carbon footprint *

2011 Corporate Social Responsibility Report

10,122.3

Data storage media (120-liter container)

Waste 134.2

60

1

As defined by Greenhouse Gas Protocol (GHG Protocol)

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We transform Be committed to corporate social responsibility. Allow others to share in our success. See the company as part of a whole. Share our knowledge.

Margarita Ahrweiler, Senior Communications Manager, is involved in the mitMenschen initiative that has been established at Union Investment since 2006. Union Investment employees have joined over 100 projects to support children, young people and others whose life is not always easy.

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Retire without worrying As one of Germany’s biggest asset managers, Union Investment is not only responsible for its own investors and partners, it also has a duty toward society in general. For this reason, the company supports socially relevant projects, and retirement pensions are of vital importance.

At present, virtually nothing preoccupies German citizens as much as their retirement pensions. Surveys show that many people fear for their financial security in retirement due to uncertainty over the future of Europe and concerns about inflation. At the same time, the majority of people in Germany avoid thinking too hard about the issue – often because they feel insufficiently informed about it. Now is the time for more people to take out private pensions, because the state is gradually withdrawing from pensions and making private citizens increasingly responsible. “Unfortunately, many people in our society have not yet realised they have to take action themselves,” says Hans Joachim Reinke, Chief Executive Officer of Union Investment. Work is urgently needed to educate them. “We want to do our bit to raise awareness,” continues Reinke. Consequently, the company published its second “Pensions Atlas” for Germany last year. The level of response to the study, which was produced by Freiburg University’s Research Center for Generational Contracts, took all those involved by surprise. Thanks to extensive media coverage, more than 30 million German citizens were aware of the Pensions Atlas and there was

great interest from several government ministries. Created by Professor Bernd Raffelhüschen, a leading researcher into the ageing population, and his co-author Dr. Jörg Schoder, the atlas illustrates the current status of Germans’ pension provisions in the form of a map showing differences by region, age, gender and income. The study showed that Union Investment customers take greater advantage of subsidized Riester pensions than all other investors in Riester savings products. “This result shows us that we have given our customers comprehensive, indepth advice about a subject as important as retirement pensions,” enthuses Reinke. However, it also demonstrates that the extent to which Germans pay attention to their retirement pension largely depends on how well their financial advisor has explained the subject. Detailed information and customer contact are essential. In addition to sponsoring academic studies, Union Investment also organizes around a thousand customer events every year in conjunction with its local partner banks. “For us and our partner banks in the cooperative financial network, this is a crucial contribution to establishing and maintaining long-term customer relation-

Professor Bernd Raffelhüschen presents the results of his pensions study produced by Freiburg University’s Research Center for Generational Contracts. Together with Union Investment, the research professor is committed to improving pension provision among the general population.

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ships,” says Reinke. The events across the regions are enormously popular. Between 200 and 1,000 investors attend them to meet and talk to professionals such as fund managers, capital-markets and pensions specialists and even members of Union Investment’s Board of Managing Directors. They explain the subject of retirement pensions and its many aspects and are on hand to answer questions about appropriate funds-based products. An informative evening with a panel of high-caliber experts run by the Volksbank credit cooperative in Weiden, Bavaria, in early February was a good example. It attracted an audience of a thousand to hear speeches about the future of Europe by Jens Wilhelm, a member of Union Investment’s Board of Managing Directors, and economist Professor Wolfgang Gerke. Events such as this clearly add value for customers but ultimately both parties benefit: “Face-to-face contact enables our specialists to get a much more accurate view of what is currently concerning investors,” stresses Chief Executive Officer

Reinke. This dialog has also revealed that women approach the subject of investment and retirement pensions quite differently from men. Consequently, Union Investment supports special events tailored to the needs of female investors, such as one run by Volksbank Lahr. In 2011, 1,600 women attended Ladies Night in the unusual surroundings of Europapark Rust theme park, where families usually enjoy a day out. The company also explains the subject of retirement pensions to specific target groups such as school students. “Fit for funds,” a board game developed by Union Investment management trainees, is one method used. A cross between Monopoly and Who Wants to be a Millionaire, its intention is to teach young people about finance in an entertaining way. Two teams compete with each other and test their knowledge in seven different areas, including retirement pensions and savings. It was tested out by the twelfth grade at a commercial high school in Dreieich, Hessen.

Left-hand page: Union Investment fund manager Nicole Wichmann at the Ladies Night customer event (top). Member of Union Investment’s Board of Managing Directors Jens Wilhelm at an information evening organized by Volksbank Weiden (below, second from the right). Right-hand page: Twelfth-grade students at a commercial high school in Dreieich have fun increasing their knowledge of retirement pensions.

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We want to do our bit to raise people’s awareness. Hans Joachim Reinke

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Objectives, key facts and figures of Union Investment’s real-estate portfolio

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1. The goal is transparency “Attend the present to deal with the past; thus you grasp the continuity of the way.” Although it dates back to ancient times, Chinese philosopher Lao Tzu’s statement gets to the heart of sustainable real-estate management today. To achieve continuous improvement in the sustainability of a real-estate portfolio, consumption data for heat, power, water and waste has to be recorded and analyzed, which enables areas with the potential for improvement to be identified. This is not an easy undertaking for Union Investment Real Estate, Germany’s second biggest open-ended real-estate fund manager, which has a global portfolio of 301 properties. But the effort is worthwhile, because a real-estate portfolio with a sustainable focus creates added value for both investors and tenants. This is why Union Investment’s real-estate subsidiary has set itself the following targets as part of the Group’s CSR strategy: it aims to have reviewed the sustainability of its widespread real-estate portfolio by 2015, to make continuous improvements in its real-estate holdings and to publish the results of its actions every year. In order to achieve these targets, Union Investment is focusing more closely on obtaining certification for its properties in line with national and international standards. It consistently reviews its existing real-estate portfolios and new purchases in terms of sustainability criteria. The findings of experts in sustainable real estate have been incorporated into the management systems and evaluation tools it has developed. These tools are used for the systematic analysis of its real-estate portfolio in terms of both quality and quantity. Only by recognizing the inherent potential of a real-estate portfolio is it possible to identify the right measures for each property at the right point in time to achieve a sustainable focus for the entire portfolio – thereby reducing utility costs for tenants and optimizing returns for investors. A real-estate portfolio with a sustainable focus not only benefits tenants and investors, it also helps the environment: the developed proprietary portfolio sustainability management (PSM) system captures all property-specific consumption data and highlights areas where properties have the potential for optimization, such as energy and water consumption. It also enables Union Investment to introduce measures for a more efficient use of resources. Portfolio sustainability management forms the foundation on which the longterm sustainability of Union Investment’s real-estate portfolio is based.

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PSM is firmly integrated into standard asset and property management processes at Union Investment, and it ensures that the portfolio is analyzed on an annual basis. The management system follows up property-specific targets and the effect of optimizing the operation of properties. Experts constantly monitor consumption data for buildings, as well as the achievement rates for the agreed targets and measures and their impact.

2. Portfolio sustainability management 2.1. Methodology and initial portfolio review Using its portfolio sustainability management system, Union Investment aims to have collected consumption data for 75 percent of its entire portfolio in an incremental basis by 2015. During the first stage, in 2012, it selected a subportfolio of 187 properties for review. They were representative of the portfolio as a whole in terms of use, age category of building and fund membership. Properties that were under construction or being remodeled were not included in the analysis, nor were residential buildings because they accounted for a very small proportion of the overall portfolio. Data for final energy consumption, primary energy consumption, CO2 emissions, water consumption and volume of waste was computed for 168 properties in the real-estate portfolio. The data for 19 of the properties in the selected subportfolio was extrapolated because there was insufficient information for analysis. The portfolio under review thus provided specific key performance indicators (KPIs) that could be used as reference material for extrapolation to reflect the entire portfolio of 282 properties with a market value of À18.7 billion. It was also possible to extrapolate absolute values. Given the international orientation of the portfolio, Union Investment has adjusted the consumption data for aspects that were specific to countries, properties and uses. A wide range of building characteristics, such as occupation density, time in use, climate, vacancy rates and special uses that affect the environmental performance of a property, were also taken into account when capturing and analyzing the data. The consumption data below was prepared in this way and it can be evaluated with reference to benchmarks. Carbon footprints and water footprints can be displayed at property, fund or portfolio level. The data used for the analysis of environmental performance was captured for the entire floor area of each building and includes consumption by tenants.

Union Asset Management Holding AG

The subportfolio reviewed…

2011 Corporate Social Responsibility Report

Key Figures

The subportfolio’s carbon footprint was 279,263.6 t CO2e/year (absolute CO2 emissions) and it comprised the carbon emissions attributable to the buildings’ heat and power consumption. This was equivalent to annual emissions of 62.9 kg CO2e per square meter. Extrapolated to reflect the total portfolio, absolute CO2 emissions equated to 351,487.0 t CO2e/year.

… comprised 187 properties. … was equivalent to a total area of 4,274,253 m² (around 78 percent of the area of the entire portfolio). … included 125 office buildings, 31 retail buildings, 19 hotel buildings and 12 logistics buildings. … was estimated by experts to have a market value of around À14 billion (approx. 75 percent of the value of the entire portfolio).

Portfolio under review Type of use

Number Appraised of prop- value*) erties (Àmillion)

Floor area*) (m²)

Floor area*) (%)

Office buildings

125

8,457

2,363,372

55

Retail buildings

31

3,715

891,507

21

Hotel buildings

19

1,450

432,464

10

Logistics buildings

12

385

586,910

14

187

14,007

4,274,253

100

Floor area*) (m²)

Floor area*) (%)

Total

Extrapolated portfolio Type of use

Office buildings

189

11,200

2,975,101

54

Retail buildings

53

5,381

1,224,053

22

Hotel buildings

22

1,556

466,496

9

Logistics buildings

18

543

793,531

15

282

18,680

5,459,181

100

Total *)

Number Appraised of prop- value*) erties (Àmillion)

At December 31, 2011

2.2 Material findings The 187 buildings reviewed required a supply of 686.1 GWh/year for energy and power (absolute final energy consumption). Consumption per square meter was therefore equivalent to 242.3 kWh. Office buildings accounted for about 62 percent of total energy consumption (427.5 GWh/year). The proportion consumed by retail buildings was 22 percent, while hotels and logistics buildings accounted respectively for 11 and 5 percent of final energy consumption. Extrapolating these figures to reflect the whole portfolio of 282 properties produces an absolute final energy consumption rate of 862.2 GWh/year. The absolute primary energy consumption rate for the portfolio under review was 1,583.3 GWh/year, which reflected the buildings’ direct and indirect primary energy consumption, and equated to consumption of 570.1 kWh per square meter. Extrapolated to reflect the entire portfolio, consumption amounted to 1,985.1 GWh/year.

Total water consumption by the subportfolio under review, including all supply sources, amounted to 1,873,556.9 m³/year (absolute water consumption). On an annualized basis per square meter, this was equivalent to consumption of 0.538 m³, which represented an absolute water consumption rate of 2,356,006.7 m³/year when extrapolated to reflect the portfolio as a whole. The total amount of waste produced by all the buildings reviewed that was recycled, sent to landfill sites or incinerated, amounted to 28,075.6 t/year (absolute volume of waste). This was equivalent to an annual waste volume of 6.46 kg per square meter. Extrapolated to reflect the whole portfolio, the absolute waste volume was 35,097.7 t/year. 2.3 KPIs in detail The five KPIs listed below were selected with the aim of producing the most comprehensive possible environmental assessment of the real-estate portfolio. They comply with the internationally recognized sustainability reporting standards of the Global Reporting Initiative (GRI) and the relevant supplement for companies in the real-estate sector (Construction and Real Estate Sector Supplement, CRESS). Accordingly, the KPIs have been presented as absolute values (total consumption with no reference to area) and specific values (quotient of quantity and consumption divided by area). Percentage of total portfolio floor area reviewed 22%

Number of buildings in total portfolio reviewed 78%

36%

Q Floor area reviewed

Q Buildings reviewed

Q Not reviewed

Q Not reviewed

64%

53

Breakdown of total portfolio floor area by building use

Breakdown of floor area in portfolio under review by building use 0.2% 54.4%

14.5% 8.5%

13.7%

0.0% 55.3%

Specific final energy consumption Office buildings (125 properties) by type of consumption and age of building All values in kWh/(m²/year) 500

10.1%

408.7 kWh/ (m²/year)

400 300

22.4%

53.6%

200

181.2 kWh/ (m²/year)

100

45.9%

20.9%

46.4% 54.1%

0

Q Office Q Logistics

Q Retail Q Hotel Q Residential

Q Office Q Logistics

Office buildings: Pre-1970 14 properties

Q Retail Q Hotel Q Residential

Office buildings: 1970 –1989 17 properties

275.3 kWh/ (m²/year)

275.5 kWh/ (m²/year)

40.0%

40.9%

60.0%

59.1%

Office buildings: 1990 –1999 32 properties

Office buildings: 2000 to date 62 properties

Retail buildings (31 properties) by type of consumption and age of building Breakdown of total portfolio floor area by year of construction

Breakdown of floor area of portfolio under review by year of construction

500

59.3%

58.0%

10.5%

400

377.7 kWh/ (m²/year)

13.3%

300

25.5%

10.2% 12.2%

All values in kWh/(m²/year)

202.6 kWh/ (m²/year)

196.1 kWh/ (m²/year)

210,3 kWh/ (m²/year)

33.2%

27.9%

28.6%

66.8%

72.1%

71.4%

Retail buildings: 1970 –1989 6 properties

Retail buildings: 1990 –1999 2 properties

Retail buildings: 2000 to date 18 properties

200 100

74.5%

0 18.3%

Q Pre-1970 Q 1990 –1999

Q 1970 –1989 Q 2000 to date

Retail buildings: Pre-1970 5 properties

18.2%

Q Pre-1970 Q 1990 –1999

Q 1970 –1989 Q 2000 to date

Hotel buildings (19 properties) by type of consumption and age of building All values in kWh/(m²/year)

Breakdown of total portfolio floor area by fund

Breakdown of floor area of portfolio under review by fund

1.3% 8.2% 16.3%

0.4% 6.6% 17.2%

22.5%

500 400 300

24.2%

221.4 kWh/ (m²/year)

200 46.4% 100 0

53.6% Hotel buildings: Pre-1970 3 properties

14.4% 1.2%

248.3 kWh/ (m²/year) 44.4% 55.6% Hotel buildings: 1970 –1989 5 properties

265.6 kWh/ (m²/year)

313.3 kWh/ (m²/year) 41.1%

46.2% 53.8%

58.9%

Hotel buildings: 1990 –1999 3 properties

Hotel buildings: 2000 to date 8 properties

11.9% 36.1%

0.3%

39.4%

Logistics buildings (12 properties) by type of consumption and age of building Q UniImmo: Deutschland Q UniImmo: Europa Q DIFA Fonds Nr. 3 Q UniInstitutional European Real Estate Q UniImmo: Global Q DEFO Immobilienfonds 1 Q UII Shopping Nr. 1

Q UniImmo: Deutschland Q UniImmo: Europa Q DIFA Fonds Nr. 3 Q UniInstitutional European Real Estate Q UniImmo: Global Q DEFO Immobilienfonds 1 Q UII Shopping Nr. 1

At December 31, 2011

All values in kWh/(m²/year) 500 400 300

54

69.9 kWh/ (m²/year)

n.a.

36.4% 63.6%

12.4% 87.6%

Logistics buildings: Pre-1970 0 properties

Logistics buildings: 1970 –1989 2 properties

Logistics buildings: 1990 –1999 1 property

100 0

Specific final energy consumption (kWh/m²/year) Specific final energy consumption represents the energy consumed for heat and power relative to the energy reference area of the buildings. Adjusting the final energy consumption data for climatic and user differences enabled the values for each property in the total portfolio to be compared with each other. They

54.8 kWh/ (m²/year)

200

93.7 kWh/ (m²/year) 31.4% 68.6% Logistics buildings: 2000 to date 9 properties

Q Energy consumption figure for power Q Energy consumption figure for heat

are broken down by building type. Analysis by type of use shows that specific final energy consumption is almost four times higher for newer hotels as for logistics buildings in the same age category. Final energy consumption in hotels and office buildings had continued to rise to the reporting

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date, although specific final energy consumption in retail buildings remained consistent over time. While energy consumption in hotel buildings was equally distributed between heat and power, power consumption in retail and logistics buildings generally averaged at about 70 percent, due to the increased use of electricity for air conditioning and lighting in retail buildings and extremely high consumption for the operation of power-generating plants in logistics buildings. However, the figure for logistics buildings was below the average for the portfolio as a whole, while those for buildings in the hotel and office categories were above the average.

Breakdown of absolute final energy consumption (686.1 GWh/year) of portfolio under review (187 properties) by type of consumption and building use All values in GWh/(/year)

Specific primary energy consumption Office buildings (125 properties) by type of consumption and age of building All values in kWh/(m²/year) 1,000 800

670.4 kWh/ (m²/year)

600

21.8%

400

100

51.6%

0 Office buildings 125 properties

26.3%

70.6%

73.7%

Office buildings: 1970–1989 17 properties

Office buildings: 1990-1999 32 properties

Office buildings: 2000 to date 62 properties

All values in kWh/(m²/year) 966.4 kWh/ (m²/year) 1,000 16.8%

490.8 kWh/ (m²/year)

489.1 kWh/ (m²/year) 83.2%

10.1%

24.0%

560.5 kWh/ (m²/year) 26.1%

89.9%

73.9%

Retail buildings: 1990 –1999 2 properties

Retail buildings: 2000 to date 18 properties

76.0%

0

48.4%

200

29.4%

380.6 kWh/ (m²/year) 35.0%

617.1 kWh/ (m²/year)

Retail buildings (31 properties) by type of consumption and age of building

200

400 300

Office buildings: Pre-1970 14 properties

400

427.5 GWh/year

692.3 kWh/ (m²/year)

65.0%

600

600 500

78.2%

0

800

700

Key Figures

Specific primary energy consumption (kWh/m²/year) Specific primary energy consumption is the total of all direct and indirect primary energy consumption relative to the energy reference area. The total figures

200

Absolute final energy consumption (GWh/year) Absolute final energy consumption is the total volume of energy used for supply buildings with heat and power. The chart illustrates the breakdown between

2011 Corporate Social Responsibility Report

140.5 GWh/year 42.9%

86.0 GWh/year 62.8%

57.1%

37.2%

40.3% 59.7%

Retail buildings 31 properties

Hotel buildings 19 properties

Logistics buildings 12 properties

Retail buildings: Pre-1970 5 properties

32.1 GWh/year

Retail buildings: 1970 –1989 6 properties

Hotel buildings (19 properties) by type of consumption and age of building All values in kWh/(m²/year) 1,000

Breakdown of absolute primary energy consumption (862.2 GWh/ year) for total portfolio (282 properties) by type of consumption and building use (extrapolated)

800 600

All values in GWh/year

400

700

200

600

48.4%

300

187.0 GWh/year

200 100

51.6%

42.9% 57.1%

0 Office buildings 189 properties (extrapolated)

Q Total power

47.9%

860.6 kWh/ (m²/year)

720.0 kWh/ (m²/year)

615.5 kWh/ (m²/year)

45.8%

40.0%

44.8%

52.1%

54.2%

55.2%

Hotel buildings: Pre-1970 3 properties

Hotel buildings: 1970 –1989 5 properties

Hotel buildings: 1990 –1999 3 properties

60.0%

0

538.0 GWh/year

500 400

649.7 kWh/ (m²/year)

Retail buildings 53 properties (extrapolated)

92.5 GWh/year 62.8%

44.7 GWh/year

37.2%

40.3% 59.7%

Hotel buildings 22 properties (extrapolated)

Logistics buildings 18 properties (extrapolated)

Q Total heat

Logistics buildings (12 properties) by type of consumption and age of building All values in kWh/(m²/year) 1,000 800 600

200 0

186.2 kWh/ (m²/year) 6.1%

125.8 kWh/ (m²/year)

400

heat and power. Energy consumption in office buildings was disproportionately higher than the reference area of the portfolio attributable to them, while energy consumption in logistics buildings was significantly lower.

Hotel buildings: 2000 to date 8 properties

n.a.

20.9% 79.1%

Logistics buildings: Pre-1970 0 properties

Logistics buildings: 1970 –1989 2 properties

238.5 kWh/ (m²/year) 16.3%

93.9%

83.7%

Logistics buildings: 1990 –1999 1 property

Logistics buildings: 2000 to date 9 properties

Q Specific primary energy consumption for power Q Specific primary energy consumption for heat

55

for specific primary energy consumption reflect the data for specific final energy consumption. The ratio of primary energy consumption for power to final energy consumption for power had risen by an average of approximately 10 –15 percent, with the exception of office buildings in which the ratio of primary energy to final energy remained unchanged. Logistics buildings were generally below the portfolio average, while office buildings and hotels were above the average. Absolute primary energy consumption (GWh/year) broken down by direct and indirect primary energy sources Absolute primary energy consumption shows the quantity of primary energy consumed both directly and indirectly. It is calculated by multiplying the final energy consumption data by the relevant primary energy factors.

Specific CO2 emissions (kg CO2e/m²/year) Specific CO2 emissions relates the absolute CO2e emissions to the energy reference area. The CO2 emissions factors used refer to the Greenhouse Gas Protocol. Specific CO2 emissions Office buildings (125 properties) by type of consumption and age of building All values in kg CO2e/(m²/year) 125 100 75 50

78.1 kg CO2e/(m²/year) 40.9%

49.0 kg CO2e/(m²/year) 26.5%

25

59.1%

59.6 kg CO2e/(m²/year)

69.9 kg CO2e/(m²/year) 18.3%

23.5%

81.7%

73.5%

76.5%

Office buildings: 1970 –1989 17 properties

Office buildings: 1990 –1999 32 properties

0 Office buildings: Pre-1970 14 properties

Office buildings: 2000 to date 62 properties

Retail buildings (31 properties) by type of consumption and age of building All values in kg CO2e/(m²/year)

Breakdown of absolute primary energy consumption (1,583.3 GWh/year) of portfolio under review (187 properties) by direct and indirect primary energy source All values in GWh/year

100

18.1% 75

27.6%

514 kg CO2e/(m²/year)

81.8%

18.7% 72.4%

81.3%

0 353.7 GWh/year 11.7%

200

Retail buildings: Pre-1970 5 properties

236.5 GWh/year 7.5%

88.3%

92.5%

Retail buildings 31 properties

Hotel buildings 19 properties

0 Office buildings 125 properties

88.8 kg CO2e/(m²/year)

18.2%

25

11.9%

88.1%

52.1 kg CO2e/(m²/year)

81.9%

600 400

103.7 kg CO2e/(m²/year)

50

1,000 917.4 GWh/year 800

125

75.6 GWh/year 22.3% 77.7% Logistics buildings 12 properties

Retail buildings: 1970 –1989 6 properties

Retail buildings: 1990 –1999 2 properties

Retail buildings: 2000 to date 18 properties

Hotel buildings (19 properties) by type of consumption and age of building All values in kg CO2e/(m²/year) 125

Breakdown of absolute primary energy consumption (1,985.1 GWh/year) of total portfolio (282 properties) by direct and indirect primary energy source (extrapolated)

100 75

59.4 kg CO2e/(m²/year)

50

27.4%

All values in GWh/year 25 1,200 1,154.6 GWh/year 1.000

Hotel buildings: Pre-1970 3 properties

80.5 kg CO2e/(m²/year) 21.8%

37.1% 77.0%

78.2%

62.9%

Hotel buildings: 1970 –1989 5 properties

Hotel buildings: 1990 –1999 3 properties

Hotel buildings: 2000 to date 8 properties

470.6 GWh/year

600 88.1%

200

11.7% 88.3%

0 Office buildings 189 properties (extrapolated)

Q Indirect primary energy

Retail buildings 53 properties (extrapolated)

254.4 GWh/year 7.5% 92.5% Hotel buildings 22 properties (extrapolated)

105.3 GWh/year 22.3% 77.7% Logistics buildings 18 properties (extrapolated)

Q Direct primary energy

Logistics buildings (12 properties) by type of consumption and age of building All values in kg CO2e/(m²/year) 125 100

54.4 kg CO2e/(m²/year)

75 18.1 kg CO2e/(m²/year)

50

Broken down by user group, the percentage of primary energy consumed in virtually all cases was slightly above that attributable to the portfolio area occupied by each user group. Logistics buildings were again the exception, with their percentage share of absolute primary energy consumption accounting for just a third of the percentage of the portfolio area attributable to logistics.

56

23.0%

72.1 kg CO2e/(m²/year)

0

11.9%

800

400

72.6%

80.4 kg CO2e/(m²/year)

25 0

24.8 kg CO2e/(m²/year)

10.0% 90.0%

21.6%

7.8%

n.a.

78.4%

92.2%

Logistics buildings: Pre-1970 0 properties

Logistics buildings: 1970 –1989 2 properties

Logistics buildings: 1990 –1999 1 property

Logistics buildings: 2000 to date 9 properties

Q Specific CO2 emissions for power Q Specific CO2 emissions for heat

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Like the evaluation of final and primary energy consumption, analysis of CO2 values showed a rising trend for relatively new office and logistics buildings. Retail and hotel buildings, where values were relatively stable, were the exception in this case. The proportion of CO2 used for power had risen by about 10 to 20 per cent for office, hotel and retail use compared with the quantity of primary energy used for power. The logistics category was again the exception, with its proportion remaining similar. The CO2 values for hotels were below the portfolio average and those for logistics buildings were above it. Absolute carbon emissions (t CO2e/year) Absolute carbon emissions show the quantity of direct and indirect CO2e emissions generated by the consumption of heat and power, known as the carbon footprint. The carbon footprint is calculated by

2011 Corporate Social Responsibility Report

Key Figures

multiplying final energy consumption data by the relevant CO2e emissions factors as defined by the 2010 Greenhouse Gas Protocol. Measured across all user groups, the proportion of energy used for power had a direct impact on absolute CO2 values. While the percentage attributable to ‘power’ in the consumption of final energy averaged 50 – 60 percent, the ratio varied within the carbon footprint. The effective proportion attributable to ‘power’ is at 75 – 80 percent. Specific water consumption (m³ / m² / year) Specific water consumption represents water consumption divided by the energy reference area. All sources of supply were included. Specific water consumption Office buildings (125 properties) by age of building All values in m³/(m²/year) 1.50 1.00

Breakdown of absolute CO2 emissions (279,263.6 t CO2e/year) for the portfolio under review (187 properties) by type of consumption and building use

0.50 0

Office buildings: Pre-1970 14 properties

All values in t CO2e/year

0.52

0.48

0.50

Office buildings: 1970 –1989 17 properties

Office buildings: 1990 –1999 32 properties

Office buildings: 2000 to date 62 properties

0.32

180,000 160,000 158,645.4 t CO2e/year 140,000

Office buildings (31 properties) by age of building 23.6%

120,000

All values in m³/(m²/year)

100,000

1.50

80,000 60,000

1.00 60,857.0 t CO2e/year 76.4%

0.50

20.0% 34,568.5 t CO2e/year 25,192.7 t CO2e/year

40,000 80.0%

20,000 0 Office buildings 125 properties

Retail buildings 31 properties

25.4%

10.5%

74.6%

89.5%

Hotel buildings 19 properties

Logistics buildings 12 properties

0

0.45

0.42

Retail buildings: Pre-1970 5 properties

Retail buildings: 1970 –1989 6 properties

0.22

0.72

Retail buildings: 1990 –1999 2 properties

Retail buildings: 2000 to date 18 properties

Hotel buildings (19 properties) by age of building Breakdown of absolute CO2 emissions (351,487.0 t CO2e/year) for the total portfolio (282 properties) by type of consumption and building use (extrapolated)

180,000

1.0 1.0 0.0

All values in t CO2e/year 200,000

All values in m³/(m²/year)

1.14

1.11

1.06

Hotel buildings: Pre-1970 3 properties

Hotel buildings: 1970 –1989 5 properties

Hotel buildings: 1990 –1999 3 properties

1.25

0

198,926.9 t CO2e/year

23.6%

160,000

Hotel buildings: 2000 to date 8 properties

140,000

Logistics buildings (12 properties) by age of building

120,000 100,000 80,000

All values in m³/(m²/year) 80,284.4 t CO2e/year 76.4%

60,000

1.50

20.0% 37,082.1 t CO2e/year

40,000 80.0%

20,000 0 Office buildings 189 properties (extrapolated)

Q CO2 emissions for power

Retail buildings 53 properties (extrapolated)

35,193.6 t CO2e/year 10.5%

25.4% 74.6%

89.5%

Hotel buildings 22 properties (extrapolated)

Logistics buildings 18 properties (extrapolated)

Q CO2 emissions for heat

1.00 0.50 0

n.a.

0.03

0.10

Logistics buildings: Pre-1970 0 properties

Logistics buildings: 1970 –1989 2 properties

Logistics buildings: 1990 –1999 1 property

0.25 Logistics buildings: 2000 to date 9 properties

Q Specific water consumption

57

In a comparison of age categories, specific water consumption was higher for new buildings in virtually all the types of use reviewed. Only consumption in office buildings remained consistent across age categories. Consumption by hotels was approximately 50 percent higher than the portfolio average while that of logistics buildings was around 75 percent lower.

Absolute volume of waste (t/year) The absolute volume of waste is the total quantity of waste produced in the categories of recycled waste, landfill waste and incinerated waste. Breakdown of absolute volume of waste (28,075.6 t/year) for portfolio under review (187 properties) by type of disposal and building use All values in t/year

Absolute water consumption (m³/year) Absolute water consumption comprises the total quantity of water consumed and it includes all sources of supply. When extrapolated to reflect the entire portfolio, it forms the water footprint. Breakdown of absolute water consumption (1,873,556.9 m³/year) for portfolio under review (187 properties) by building use

16,000 14,000

10,000

1,000,000

51.8% 7,507.3 t/year

8,000

5,656.5 t/year

6,000

2.3%

4,000

18.1%

62.7%

27.8%

0.6% 11.7% 25.0%

Office buildings 125 properties

Retail buildings 31 properties

2,000

All values in m³/year

13,005.9 t/year

12,000

0

800,000

34.9% 1.1%

1,905.9 t/year

%

25.4%

14.8% 8.0% 18.5% 58.6%

Hotel buildings 19 properties

Logistics buildings 12 properties

38.6%

600,000 400,000

972,629.3 583,766.6

200,000

272,985.0

44,176.0

Hotel buildings 19 properties

Logistics buildings 12 properties

0 Office buildings 125 properties

Retail buildings 31 properties

Breakdown of absolute volume of waste (35,097.7 t/year) for total portfolio (282 properties) by disposal method and building use (extrapolated) All values in t/year 16,369.2 t/year 16,000

Breakdown of absolute water consumption (2,356,006.7 m³/year) for total portfolio (282 properties) by building use (extrapolated)

14,000

All values in m³/year

10,000

12,000

51.8% 9,987.3 t/year

1,200,000

8,000

2.3%

1,000,000

6,000

18.1%

800,000

4,000

600,000

2,000

1,224,138.7

400,000 200,000

293,722.0

61,538.3

Hotel buildings 22 properties (extrapolated)

Logistics buildings 18 properties (extrapolated)

0 Retail buildings 53 properties (extrapolated)

27.8%

0

776,607.7

Office buildings 189 properties (extrapolated)

62.7%

Office buildings 189 properties (extrapolated)

6,086.3 t/year 34.9% 1.1%

25.0%

25.4%

2,654.9 t/year 14.8% 8.0% 18.5% 58.6%

Retail buildings 53 properties (extrapolated)

Hotel buildings 22 properties (extrapolated)

Logistics buildings 18 properties (extrapolated)

0.6% 11.7%

Q Waste, no disposal method indicated Q Waste incinerated

38.6%

Q Waste taken to landfill Q Waste recycled

QAbsolute water consumption

When consumption for different building uses was compared with the percentage of the portfolio area attributable to them, it was found that consumption was higher for retail buildings. Logistics properties, whose absolute values fell far below the percentage of the portfolio area attributable to them, again represented the use type with the lowest use of resources in this category.

58

The analysis demonstrated that waste separation and recycling is carried out in all the usage categories. The proportion of waste generated by office and retail buildings that was recycled was significantly above 50 percent. Hotels and retail buildings generated a significantly higher volume of waste compared with the percentage of the portfolio area attributable to them, which contrasted with logistics buildings where the pro-rata waste volume was well below the percentage of portfolio area these properties occupy.

Union Asset Management Holding AG

2.4 Total values and conclusion Extrapolation to reflect the entire portfolio produced the following values for the five KPIs under review: Absolute values for all KPIs Values for portfolio Values for total portfolio under review (282 properties) (187 properties) Final energy [GWh/year] Primary energy [GWh/year] CO2 emissions [t CO2/year] Water consumption [m³/year]

686.1

862.2

1,583.3

1,985.1

279,263.6

351,487.0

1,873,556.9

2,356,006.7

28,075.6

35,097.7

Volume of waste [t/year]

The specific values across all usage types represented the averages for the portfolio as a whole:

2011 Corporate Social Responsibility Report

Key Figures

The environmental performance of the portfolio can only be evaluated objectively by measuring it against standard, recognized benchmark values, provided that they exist. To date, it has not been possible to compare the data collected with objective values for thirdparty portfolios, because suitable benchmarks have yet to be identified. Ideally, there would be benchmarks for all usage types and performance values. For this reason, Union Investment, with its expertise in real estate and sustainability, actively supports initiatives that seek to develop sophisticated analysis methods and robust benchmarks. Together with external organizations it is working on a benchmarking system geared toward robust analysis methods that can be applied globally. The reference portfolio described above, based on independently computed, qualityassured data, is available for use as a benchmark.

Specific values Notes about data quality: Values for portfolio under review (187 properties)

Quality assurance – As part of a process-defined, quality assurance process conducted by independent

Final energy consumption [kWh/(m²/year)]

242.3

third parties, a manual review of data completeness

Energy consumption for power [kWh/(m²/year)]

145.4

and plausibility was carried out. Because values were

Energy consumption for heat [kWh/(m²/year)]

96.9

Total specific primary energy consumption (kWh/m²/year) Specific primary energy consumption for power (kWh/m²/year) Specific primary energy consumption for heat (kWh/m²/year) CO2 emissions [kg CO2/m²/year]

570.1 411.2 158.9

calculated automatically by the software, the minimum level at which data could be input was building or usage level. Data completion – In cases where meaningful consumption data was unavailable, it was added on

62.9

the basis of the average values for the relevant usage

Specific CO2 emissions for power (kg CO2/m /year)

49.1

category. The mechanism developed for this purpose

Specific CO2 emissions for heat [kg CO2/(m²/year)]

13.8

incorporated averages from different sources (such as

2

Water consumption [m³/(m²/year)] Volume of waste [kg/(m²/year)]

0.538 6.46

the German Energy Conservation Act (EnEV)). Extrapolation – To streamline the recording of tenants’ consumption data, 70 percent of rental space was analyzed and the results extrapolated to reflect

The absolute, extrapolated value for water reflected the water footprint of the entire portfolio. The carbon footprint provided the absolute extrapolated value for CO2 emissions.

the total rental space. Single-tenant properties were an exception. In general, the absolute consumption data for the portfolio under review was extrapolated to reflect the total portfolio using formulas developed inhouse and built into the software for this purpose.

The analysis of the real-estate portfolio for the 2009 accounting period produced the first detailed summary of emissions and the use of resources for the representative portfolio under review. One of the first steps toward focusing Union Investment’s entire portfolio on sustainability was to set targets at property, fund and portfolio level on the basis of the data collected, with the aim of continuously improving the environmental performance of the buildings, and therefore that of the total portfolio.

Adjustments – In order to compare values for different properties, data relating to vacancy rates, time in use, occupation density and climate was adjusted to bring it in line with property located in Germany. Exceptions were the absolute and specific values for CO2 equivalents – which were not adjusted because country-specific emissions factors had been applied – and the values for water and waste, neither of which were adjusted.

59

3. Sustainability process

the case, a detailed examination is carried out using financial and environmental factors.

3.1 Analysis and evaluation tools

Survey

…

Survey

Energy

Operational costs

Energy

Resource saving

Predicted saving

Predicted saving

Consumption of energy and water, waste generated

Reduction in operational costs (DIN 18960)

Predicted efficiency saving/cost for all resources and operational costs Impact of saving

The combination of SI checks for qualitative assessment and PSM for quantitative analysis guarantees that Union Investment conducts a comprehensive annual review of its real-estate and portfolio data. At the same time, it follows up the impact of the actions it has taken – and it is gradually integrating this performance measure into work processes as a standard requirement. Union Investment also encourages its service providers to make improvements that focus on sustainability when buildings in its portfolio are being converted or refurbished or major maintenance work is being carried out. Together with the parties involved in a project, it formulates binding sustainability targets and finalizes them in a position paper. However, even minor improvements can have a major impact. Whenever the analytical tools described above recognize individual properties with the potential for greater energy efficiency, a carbon due diligence process is carried out to identify the measures to be taken to save energy and cut carbon emissions in the operation of the building. Union Investment compares the capital expenditure required with the effect of the potential energy savings on operational costs; because energy costs often push up operational costs. If that is

60

Cleaning

Monitoring resources/overheads

Water

Union Investment helps them by supplying the sustainable investment check (SI check) that it already uses when carrying out its annual property quality assessment. Criteria relating to energy and the environment, water consumption, waste and recycling, efficiency and flexibility, location quality, health and well-being are recorded. These criteria are then assigned different weightings depending on building use, and this enables Union Investment to determine and record the qualitative performance of its real-estate portfolio. The SI check is adapted and refined on an ongoing basis to bring it in line with the prevailing criteria for international certification systems. Conducting an SI check is a mandatory part of the due diligence process for new purchases. The check must show that minimum values are being achieved and that efforts are being made to meet predefined targets.

Union Investment is currently developing a system for conducting this examination at property and portfolio level. It compares the capital expenditure with the savings made on operational costs and also clearly shows the predicted savings on resources and the reduction in carbon emissions. Combined with the capture of consumption data described above, during the capital expenditure and operational costs monitoring process the forecast will be used to formulate measures that will be implemented using the findings, and their impact will be monitored.

Waste

Union Investment involves all parties in its end-to-end sustainability strategy for its real-estate portfolio. As part of its property-management activities it imposes contractual requirements on service providers to identify quick-fix improvements for fitting out or operating portfolio properties.

on real consumption of resources

on real operational costs

Source: Drees & Sommer, Union Investment – PSM module, December 1, 2011

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Key Figures

Example of actions taken at Jägerstrasse 58–60 in Berlin

[À]

[year]

[À]

Static ROI

CO2 emissions

[À/year]

Tenants’ utility costs

[kWh]

Present value over 10 years incl. power paid by tenants (LCC)

[kWh]

Present value over 10 years

Operational costs

[kWh]

Capital expenditure

Fuel saving to 0

[kWh/year]

Fuel requirement

Power requirement

Environment

Fuel saving

Efficiency

Energy type heating & hot water

See table below

Variant*

Energy data

[À] [À/m2/month]

[t/year]

0

Dist. htg./power

451,960

–

162,730

–

231,190

–

–

1,906,320

2,323,600

5.75

193.3

1

Dist. htg./power

451,960

0

154,330

8,400

229,790

150

0.1

1,894,210

2,311,500

5.72

188.6

2

Dist. htg./power

451,960

0

160,930

1,800

230,350

2,470

2.9

1,900,830

2,318,120

5.73

192.3

3

Dist. htg./power

451,960

0

162,330

400

230,900

1,500

5.2

1,904,870

2,322,150

5.75

193.1

4

Dist. htg./power

451,960

0

157,690

5,040

230,170

200

0.2

1,897,700

2,314,990

5.73

190.5

5

Dist. htg./power

384,170

67,790

160,560

2,170

220,800

48,930

4.7

1,845,370

2,262,660

5.49

176.5

6

Dist. htg./power

395,470

56,490

129,500

33,230

224,620

97,850

14.9

1,919,940

2,334,230

5.59

161.9

6A

Dist. htg./power

448,340

3,620

159,760

2,970

228,510

3,800

1.4

1,885,190

2,302,470

5.69

190.8

6B

Dist. htg./power

395,470

56,490

129,500

33,230

224,620

97,850 (3 years)

14.9

1,907,390

2,324,670

5.50

161.9

7

Dist. htg./power

384,170

67,790

144,920

17,810

217,260

53,250

3.8

1,817,720

2,235,010

5.41

168.0

8

Dist. htg./power

336,150

115,810

108,690

54,040

210,690

151,100

7.4

1,831,340

2,248,630

5.24

136.8

S

Dist. htg./power

451,960

0

161,830

900

230,870

9,600

30.0

1,909,350

2,326,640

5.75

192.8

*

Variant

Action

0

Starting point

1

Heating for exterior stairwell shut down

2

Water feature removed/shut down

3

Pressurization equipment removed/shut down

4

Lighting in stairwells reduced/exterior LED lighting

5

Heating system refurbished, hydraulic control

6

Lighting in stairwells reduced/exterior LED lighting

6A

Instrumentation and control equipment refurbished, switching times adjusted

6B

Instrumentation and control equipment refurbished, EMS installed // capex in year 3

7

Combination of variants 1 to 5

8

Combination of variants 1 to 6

S

Hot water supply in rental space replaced

Efficiency calculation – determining operational costs Comparison of operational costs for office space – Variant 8//OSCAR

0 Public charges

Q Variant 8

Insurance

Q OSCAR

Maintenance

Electricity

Water/sewage

Cleaning

Administration

Janitor

Security/ information

0.13

0.09

0.29

0.24

0.29

0.47

0.31

0.70

0.34

0.19

0.15 Heating

0.14

0.61

0.60

0.40

0.29

0.51

0.57

0.13

0.03

0.30

0.51

0.60

0.70

Specific operational costs/m2/month (À)

Other ancillary costs

Source: GMW-Ingenieurbüro GmbH; property developer: Union Investment Real Estate GmbH; Project UIR 8093, Jägerstrasse 58 – 60 in Berlin; At November 2011

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It is becoming increasingly apparent in the sector that, in the future, real estate which fails to meet sustainability standards will be marked down by the market. Consequently, it is even more important to highlight sustainable characteristics when valuing real estate. Union Investment’s intention when devising a sustainable valuation scoring system was to drive forward and broaden the debate among real-estate appraisers about the importance of sustainability. Its objective is clearly to make the inclusion of transparent sustainability criteria a standard component of real-estate appraisal reports. 3.2 Investment strategy and due-diligence process Union Investment’s objective is to integrate sustainability fully and systematically into its business processes. This includes permanently reducing the environmental impact of its real-estate portfolio while generating long-term financial returns and gradually working its way toward a sustainable real-estate portfolio. As part of its environmental management system, sustainable processes are quality assured and their progress monitored. A sustainability team of inhouse real-estate specialists also ensures compliance with self-imposed sustainability standards. Sustainability has been firmly established in Union Investment’s business strategy for many years in the interest of preserving the value of its real-estate portfolio. Independently of the 22 properties in the portfolio currently certified as sustainable, many of the buildings are of proven sustainable quality. Certification helps to create a clearer understanding of sustainability in the real-estate sector, and at the same time it provides investors and property users with greater transparency for assessing the sustainable qualities of properties. It also provides a frame of reference for the sustainable optimization of buildings, which is why Breakdown of portfolio properties certified and pre-certified according to power supply value at Dec. 2011

Breakdown of properties certified/undergoing certification according to power supply value, Jan. 2009 to Dec. 2011

20%

Q Certified/pre-certified properties Q Non-certified properties At December 31, 2011

62

32%

Q Certified/pre-certified properties Q Non-certified properties

Union Investment focuses its investment strategy on properties that have evidence of their sustainability. Ideally, new buildings should have a sustainability certificate. It is also pursuing a policy of incremental certification to optimize its portfolio, and this includes a mandatory SI check as part of the due diligence process for new purchases. 3.3 Raising stakeholder awareness Real-estate management can only be fully sustainable if all those involved play their part, so Union Investment raises awareness by means of a variety of media and events that provide its employees, market participants, customers and tenants with information about the opportunities and needs created by sustainability. As well as publishing ENTRÉE, a magazine for tenants, Union Investment also provides its rental partners in Germany with a practical guide to protecting the environment and cutting costs. It contains practical information about how to make cost savings during daily office life and it is specifically aimed at tenants’ employees. Union Investment has run the online ‘Sustainable RealEstate Investment Knowledge Portal’ since 2010. It uses numerous examples from its own portfolio to illustrate how to put sustainability successfully into practice. Union Investment’s Prime Property Award is conferred every two years. It rewards investors in Europe whose consideration of sustainability aspects when developing or refurbishing buildings for commercial or private use is exemplary. 3.4 Obligations placed on property users As well as the fabric of a building, the use to which it is put is also a major factor that determines its ecological footprint. Consequently, more and more sustainable criteria are being incorporated into lease agreements to ensure that buildings are operated sustainably. Like all standard, institutional leases, Union Investment’s standard leases already contain a series of sustainable components. In Germany, separate consumption-based billing for heating, air conditioning, other utility costs and proper waste disposal are also standard for commercial leases, and in many cases they are a legal requirement. On the tenants’ side, legislation such as the German Workplaces Ordinance ensures that conditions are user friendly. In other jurisdictions, many of these requirements are not yet compulsory and are currently regarded as ‘green’ innovations. Union Investment aims to expand its standard leases to include further basic, sustainable criteria. It will be possible to use a list of standard clauses to add

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Key Figures

Certified properties in Union Investment’s real-estate portfolio Asset

City

Country

Type of use

Fund membership

Current certification

CityQuartier DomAquarée

Berlin

Germany

Office/hotel

UniImmo: Deutschland

German Sustainable Building Council (DGNB) silver certificate

Rhein-Galerie

Ludwigshafen

Germany

Retail

UniImmo: Deutschland

DGNB gold

Nord 1

Frankfurt am Main

Germany

Office

UniImmo: Deutschland

DGNB silver

Laim 290

Munich

Germany

Office

UniImmo: Deutschland

DGNB silver

Atmos

Munich

Germany

Office

UniImmo: Deutschland

DGNB silver

Arc de Seine

Paris

France

Office

UniImmo: Deutschland

HQE

Rund Vier

Vienna

Austria

Office

UniImmo: Deutschland

DGNB silver

Logpark Rade

Neu-Wulmstorf

Germany

Logistics

UniImmo: Deutschland

DGNB gold

Equinox

Glasgow

United Kingdom Office

UniImmo: Deutschland

BREEAM In-Use Very Good (P1) & Good (P2)

600 13th Street

Washington D.C.

USA

UniImmo: Europa

LEED silver

Office

Adobe Buildings

Seattle (Washington) USA

Office

UniImmo: Europa

LEED platinum

111 South Wacker

Chicago

Office

UniImmo: Europa

LEED CS gold & EB gold

USA

51 Fifty-One

Zurich

Switzerland

Office

UniImmo: Europa

LEED gold

Central Seine

Paris

France

Office

UniImmo: Europa

HQE

1 Coleman Street

London

United Kingdom Office

UniImmo: Global

BREEAM Very Good

1 Kingdom Street

London

United Kingdom Office

UniImmo: Global

BREEAM Excellent

Whirlpool RDC

Denver

USA

UniImmo: Global

LEED certified

Logistics

Woodland Pointe

Herndon (Virginia)

USA

Office

UniImmo: Global

LEED certified

3

Katowice

Poland

Retail

UniImmo: Global

BREEAM In-Use Good

Westpark

Zurich

Switzerland

Office

UniImmo: Global

BREEAM In-Use Good

Zebra Tower

Warsaw

Poland

Office

Bell Trinity Square

Toronto

Canada

Office

UniInstitutional European Real Estate UniInstitutional European Real Estate

LEED gold LEED gold

Pre-certified properties in Union Investment’s real-estate portfolio Asset

City

Country

Type of use

Fund membership

Current certification

Scandic Hamburg EMPORIO Riem Büro West Centurion Commercial Center

Hamburg

Germany

Hotel

UniImmo: Deutschland

DGNB silver pre-certification

Munich Hamburg

Germany Germany

Office Office

UniImmo: Deutschland UniImmo: Deutschland

DGNB silver pre-certification DGNB NBV09 gold pre-certification & HafenCity Ecolabel gold pre-certification

At December 31, 2011

property-specific features and Union Investment plans to apply this template by 2013. Union Investment is also a member of a ‘green leases’ working group whose objective is to create sample clauses for leases. At present, green leases are used for 8 percent of the area of Union Investment’s real-estate portfolio. 3.5 Obligations placed on service providers The environmental management system introduced in 2010 creates an obligation for environmentally relevant criteria to be incorporated into the development of products and services, into new contracts for tender and into the selection of business partners. In the case of real-estate asset management, this applies to the selection of property and facility managers, who

are required to sign service contracts containing the sustainability criteria that enable Union Investment to meet its voluntary commitment. The selection of business partners is based on specially developed profiles that are an integral part of the systematic evaluation process. Because it aims to improve its environmental performance on an ongoing basis, Union Investment requires its service providers to apply sustainable principles to their activities.

3.6 Transparency in the sector Union Investment is striving to create transparency in the real-estate sector so that it will be possible to measure the sustainable quality of properties.

63

It therefore makes its findings, progress and approaches publicly available by providing aggregated consumption data for its properties and information about the methods it uses to analyze buildings. Union Investment encourages transparency about sustainability in the real-estate sector by working with numerous initiatives and research projects such as the S-I-R-E – Sustainable Investment in Real Estate study. The objective of this study is to identify the measurable impact of sustainability criteria on the financial performance of retail and office buildings in Europe. Union Investment is also an active participant in the CCRS Economic Sustainability Indicator (ESI) project for developing forward-thinking valuation systems that incorporate sustainability criteria. 3.7 Information sharing and benchmarking As part of its involvement in numerous initiatives, Union Investment maintains a regular dialog with other real-estate portfolio holding companies. It has been a member of the Urban Land Institute (ULI) since 1999. The ULI campaigns for the sustainable development of living environments and Union Investment plays a particularly active role in its LessEn initiative. Its connection with HypZert GmbH relates primarily to the specialist energy and environment group. The HypZert study on the sustainability of buildings and its role in valuation was compiled in 2011 with the support of Union Investment. It was one of the first steps toward documenting, analyzing and comparing the various methods for valuing real estate while addressing sustainability that have been under discussion in the market. As a founding member of the German Sustainable Building Council (DGNB), Union Investment has been contributing its expertise to wide-ranging working groups and expert panels since 2007. The DGNB certification system was established with the help of closely allied pilot certification projects. As an active member of the German Property Federation (ZIA), Union Investment cooperates with its sustainability, energy, technology, environment and real-estate valuation working groups. 3.8 Holistic sustainability philosophy Union Investment applies its sustainability philosophy at company, portfolio and individual asset level. By

64

adopting this uncompromising position, it helps to disseminate the principles of sustainability across the real-estate sector and beyond. This holistic view complies with the real-estate sector’s sustainability code (industry code of conduct) that Union Investment has played an active part in developing. This report meets the reporting requirements placed on Union Investment by the industry code of conduct.

4. ZIA-compliant sustainability reporting ZIA’s position on sustainability As a unified, comprehensive advocacy organization under the umbrella of the Federation of German Industries (BDI), the German Property Federation (ZIA) is responsible for the social, financial and environmental aspects of the real-estate sector and it steadfastly pursues the objectives and actions it has laid down. Structure of the sector/clustering Real estate itself is the key reference value for commercial activity in the real-estate sector. Along its life cycle, there are many tasks that in their totality constitute the range of business processes that are ongoing within the sector. Structural analysis of the sector produces a breakdown by cluster that covers the individual subsections of the overall process chain as well as each area of the sector as a whole. The areas of activity of a single real-estate company may be allocated to several clusters if it carries out more than one of the specific business activities.

Relevant to Union Investment

Cluster 1: Creation Cluster 2: Operation & leasing Cluster 3: Investment Cluster 4: Finance Cluster 5: Uses Cluster 6: Consultancy Cluster 7: Research and education

Reporting cycle The ZIA Sustainability Code requires companies to publish information about targets, actions, activities and progress every year in a sustainability report or in their annual report.

Union Asset Management Holding AG

Mandatory reporting structure References in the report have to be made for all key points of the code and all relevant clusters. Real-estate sector sustainability code (industry code of conduct) The signatories to this code undertake to comply with the following principles when carrying out their business activities.

2011 Corporate Social Responsibility Report

Key Figures

The code is a list of the key points forming a voluntary undertaking by companies to focus their value systems, structures and processes on sustainability, with special emphasis on environmental and social concerns and requirements. The industry code of conduct also reflects how the real-estate sector’s proactive business practices go beyond what is required by law.

Real-estate industry voluntary sustainability code References in report 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

We are aware of the huge significance of the real-estate sector for sustainable development and we accept the corporate social responsibility associated with that role. The principles of sustainability are integral elements of the value systems, strategies and structures of our company. We are guided by the principles of sustainability when setting and pursuing our short, medium and long-term goals. We take into account sustainable principles when developing products and services and when selecting our business partners. When selecting, developing, training and managing our employees, we are guided by the principles of sustainability. We actively include our employees in our efforts to achieve sustainability and our intention is to encourage them in this respect. We aim to exceed minimum legal requirements, to achieve continuous improvements and thus act as role models. We will publish our targets, actions, activities and progress on an annual basis in a sustainability report or in our annual report. When doing so, we will focus on verifiable facts and we will operate on the basis of an industry standard which we will actively help to disseminate. We will provide the general public and independent institutions with the information needed to create transparency and to enable sustainability measures to be evaluated across the sector. By positioning ourselves as a sustainable company, we are helping to disseminate information about the principles of sustainability across the real-estate sector and beyond.

Pages 8–13; 34–37; 51–65 Pages 8–13 Pages 8–13; 68–70 Pages 40–43; 51–65 Pages 16–23 Pages 40–43 Pages 34–38; 51–65 Pages 68–70 Pages 51–65 Pages 51–65

Clusters relevant to Union Investment Cluster 2: Written evidence that buildings are operated and leased in accordance with the code and the clusters 1. 2. 3.

We will create transparency and produce a detailed database of the core asset data relevant to sustainability that will enable us to provide our owners, clients and users with the best possible advice. We will invest in our employees by providing specific training and development. Our aim is to develop high-quality expertise in advising our customers and property users on sustainability. Sustainability considerations will become fundamental elements in the operation and maintenance of our properties and in our asset optimization targets.

Cluster 3: Investment 1. 2. 3. 4. 5. 6. 7. 8. 9.

Sustainability is a key criterion in our investment strategy and in the due-diligence process for real estate purchases or for indirect investments in real estate. We will instruct our property managers to collect consumption data for properties, to record changes in the data and to report to us on a regular basis. Minimum annual targets for improving consumption data with also be agreed with property managers and the achievement of these targets will be monitored. When selecting our asset and property managers and other service providers, we will give preference to companies that explicitly adopt sustainable principles and actively support our efforts in this respect. Our service providers will be required to identify and achieve quick-fix improvements in sustainability when fitting out or operating portfolio properties. We will be proactive in raising awareness of the sustainable operation of our properties among our asset and property managers, their employees and our tenants. We will endeavor to introduce green leases into our portfolio on a gradual basis and/or we will require more of our service providers to sign them. We will commission reviews of our real-estate portfolios to determine whether they are eligible for certification and we will have them certified if financially viable. When converting, restructuring or carrying out major maintenance work on portfolio properties, we will instruct our service providers to achieve significant improvements in sustainability. We will regularly share information and the opportunities for further improving sustainability in our portfolios with other real-estate portfolio holding companies, and we will create increased transparency in the sector.

References in report Pages 51–65 Pages 16–23 Pages 51–65

References in report Pages 51–65 Pages 51–65 Pages 40–43; 51–65 Pages 51–65 Pages 51–65 Pages 51–65 Pages 51–65 Pages 51–65 Pages 51–65

65

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Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Supplementary Information

About this report This 2011 CSR report is Union Investment Group’s first sustainability report. It encompasses all the Group’s companies in Germany and covers the key developments in environmental, social and corporate governance issues during the 2011 financial year. The performance figures also relate to 2011 and to the German offices. Only the environmental figures refer to 2009, the base year, unless otherwise specified. Together with the annual report, the online annual report (www.wir-vermoegen.de) and the online sustainability report (www.wir-verantworten.de), it provides a fully integrated set of reports on the Company and its activities. We refer to additional information contained in other Union Investment Group publications at various points in this report. Transparency and comparability of reporting The report is based on the Global Reporting Initiative (GRI) guidelines, version G3.1. Union Investment also takes account of sector-specific requirements which are documented in the additional protocols for the financial sector and the construction and real estate sector (Financial Service Sector Supplement; Construction & Real Estate Sector Supplement). The report also complies with the requirements of the German Property Federation (ZIA) for sustainability reporting in the realestate sector. Materiality analysis Union Investment has adopted a structured approach to identify the key topics to be addressed in this report. A standardized questionnaire was sent to all members of the ‘CSR Communications’ committee to establish which stakeholders the company units communicated with on the subject of sustainability at the time of the survey. The questionnaire also sought

to establish which additional stakeholders would be included in these communications within the next two years, what were the key communication issues in the stakeholder dialogs in the area of sustainability, and what expectations stakeholders had with regard to Union Investment’s commitment to CSR. The results obtained were then verified and discussed in more depth in individual interviews, and stakeholder mapping was used to perform a materiality analysis. The following groups were identified as stakeholders for whom this sustainability report is intended: employees, institutional clients and real-estate investors, end investors, shareholders, partner banks, the cooperative financial network, tenants, CSR interest groups and the general public. The following key themes were identified as relevant to the stakeholder groups: products and services, dealing responsibly with employees, impact of business operations on the environment and society, and transparent communications. These are the issues on which this CSR report focuses. Formal aspects of the report Wherever possible, gender-neutral wording has been used in this report. Where the masculine form has been used, it is of course also intended to include females. To improve readability, repeated use throughout the report of the full legal form of the names of Group companies or not-for-profit institutions has been avoided. The 2011 CSR report can be accessed on the internet at www.wir-verantworten.de, either as an interactive report or as a PDF download. The Union Investment Group CSR report is published every two years; the next report will be published in 2014. In the intervening years Union Investment publishes key performance indicators and relevant developments in an online status report.

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Union Investment sustainability program 2011–2015 1. Strategy/organization Objectives and actions

Timetable

Status Notes

Introduction of a sustainability management program • Definition of the organizational responsibilities and provision of the staff required for CSR management • Introduction of an environmental management system and certification to ISO 14001 standards • Development of a sustainability policy • Implementation of a database for IT support of the sustainability management system (key figures, internal reporting, document management) • Compliance with the German Sustainability Code and the German Property Federation (ZIA) Sustainability Code for the real-estate sector

2015 2011 2011 2012 2013

done done planned new

2013

new

Integration of sustainability into corporate management • Development and agreement of a market and production strategy for SRI products • Introduction of a regular sustainability progress report to the Board of Managing Directors • Integration of sustainability targets in the balanced score cards • Integration of sustainability targets in personal target agreements

2015 2011 2011 2014 2014

done done new new

2. Communication Objectives and actions Establishment of a systematic process of communication on sustainability issues • Development of and decision on a communications strategy for sustainability issues • Development and implementation of a concept for regular internal and external communication on sustainability issues • Increased communication via Union Investment’s active engagement strategy • Establishing a committee to evaluate and deal with SRI reputational risks • Publication of the second sustainability report

Timetable 2014 2011 2012 2014 2012 2014

Status Notes done new planned new new

Active engagement means that we exert influence over the companies we invest in, both through dialog and through exercising our voting rights. In doing so we represent the interests of our investors.

3. Environment Objectives and actions

Timetable

Status Notes

Reduction of energy consumption by 6 percent and of carbon emissions by 7 percent (base year 2009) • Sourcing of carbon-neutral electricity introduced at all German offices • GoGreen mail despatch introduced for all German offices • Switch to carbon-free train travel • Review and amendment of the travel policy for carbon-free travel (checking suppliers for the offsetting of CO2 emissions during business trips) • Calculation of a carbon footprint for the Union Investment Group

2015 2011 2011 2011 2012

done done done planned

2012

planned

Reduction of water consumption by 3 percent (base year 2009) • Installation of sensor-controlled faucets • Use of new cooling towers and increase in the room temperature in technical rooms (which will reduce the energy and water consumption of the air conditioning systems)

2015 2011 2011/ 2012

done done

Reduction of total paper consumption by 8 percent, and, as an interim target, reduction of the use of printer and photocopying paper by 2 percent by 2012 (base year 2009) • Extensive replacement of desktop printers with central printers • Optimization of the printing process (double-sided printing) • Analysis and identification of further potential for optimization

2014

Increase in the proportion of recycled paper to 17 percent and the proportion of certified paper (preferably FSC, or PEFC) to 80 percent, based in each case on total paper consumption • Switch to certified paper as standard material for commercial printing (flyers, brochures, posters etc.) and enshrine in corporate design policy • Initial switch of paper for printing internal documents on recycled or certified paper • Check where there is further potential for replacing virgin fiber paper with recycled paper or paper with an appropriate recycled content • Development of a concept for adapting procurement guidelines for all product groups involving paper or cardboard items

2014

68

2011 2013 2014

done planned new

2011

done

2011 2012

done new

2012

new

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Supplementary Information

4. Employees Objectives and actions Maintaining and improving employee job satisfaction levels • Carrying out staff surveys (Climate Barometer)

• Implementing the conclusions drawn from the findings of the 2011 staff survey • Carrying out a management feedback process

Timetable 2013 2011 and 2013 2013 2012

Status Notes planned

new planned

Improving employee retention • Addition of further staff development tools to identify staff with high potential and keep them within the company (talent management) • Development of information and training programs on the subject of sustainability

2012 2012

new

2012

planned

Promoting a balance between career and family • Establishment of parent-child offices at all Union Investment Group’s German sites • Implementation of an Employee Assistance Program at Union Investment • Introduction of a sabbaticals policy • Training courses and seminars for employees with relatives requiring care • Creation of an intranet portal dealing with work/life balance issues

2015 2012 2012 2012 2012 2013

planned planned new new new

Management feedback involves asking employees to rate their line manager’s managerial style. This is a structured process in which employees give their feedback anonymously.

The Employee Assistance Program (EAP) is an independent advisory service for all employees. It is staffed by experienced experts who can be contacted in confidence to give advice on both personal and professional matters.

5. Corporate citizenship Objectives and actions

Timetable

Status Notes

Continued development of Union Investment’s corporate citizenship • Creation of a plan to further develop corporate citizenship • Establishment of a partnership with a charitable organization

2015 2013 2013

new planned

Furtherance of sustainability and investor-oriented interests in the finance industry and on regulatory issues • Joining and working on important committees in the area of sustainability • Assisting with the development of the BVI guidelines for responsible investment • Introduction of a system for identifying, assessing and dealing with regulatory issues of relevance to investors • Representing the investor viewpoint in discussions concerning the introduction of a financial markets transaction tax • Disclosure of our activities aimed at representing investor-oriented interests • Assisting in the development of the ADG (German Cooperatives Academy) training courses on the issue of sustainability for cooperative banks • Chairmanship of the UN-PRI Sovereign Bonds working group

2013 2011 2012 2011 2012 2012 2012

done planned done new new new

2012

new

In 2010 and 2011 we were involved, among other things, in drafting the German Sustainability Code and developing a sustainability code for use in the real-estate sector.

6. Institutional clients Objectives and actions

Timetable

Increasing institutional clients’ SRI assets under management by 50 percent (base year 2010) • Establishing our own range of products and services for advising and supporting institutional investors, including a total of 29 sustainable products • Market launch of ‘UniEngagement’ (see also Portfolio Management) • Introduction of a renewable energy product for institutional clients

2015

Expansion of communication on sustainability issues and SRI within our institutional business • Development of external communication on sustainability products to customers and the public • Implementation of marketing and sales initiatives to gain customers for UniEngagement • Organizing a customer event together with the Principles for Responsible Investment Initiative (UN PRI), to inform customers about the importance of responsible investing and engagement

Status Notes

2011

done

2011 2012

done planned

2014 2012 2013 2012

planned new planned

The Principles for Responsible Investment were developed in 2005 at the initiative of the UN Secretary General and are a voluntary undertaking for investors to take systematic account of environmental, ethical and corporate governance aspects in their investment decisions. www.unpri.org

69

7. Retail clients Objectives and actions

Timetable

Increasing assets under management in the area of sustainable investment by 50 percent by 2015 (base year 2010) • Development of the SRI product range for retail clients to include a total of 15 sustainability funds (incl. private label products) • Establishment of regular reporting on sustainability issues to banks and investors • Creation of a sustainable mixed fund (UniRakNachhaltigkeit) • Creation of a savings plan range (UniNachWuchs) with a donation element from Union Investment • Checking whether it is possible to include SRI funds in Union Investment retirement planning products

2015

Increase the support for bank advisors to include investment funds in investment and investor-focused advice • Training and ongoing advisory support (e.g. Investment TV, UniPro: fund newsletter (Sonderticker) updates) for sales partners since the start of the financial crisis • Helping the cooperative banks to implement the Investor Protection and Functionality Improvement Act (AnsFuG) in a fair and transparent way

Status Notes

2011

done

2011 2012 2012 2013

done new new new

2015 2008

started

2012

planned

8. Securities portfolio management Objectives and actions

Timetable

Status Notes

Expansion and refinement of investment processes • Establishing particularly sustainable investment processes by systematically integrating ESG criteria into the investment processes for the equity and fixed-income asset classes • Designing a proprietary ESG research database • Expanding the ESG team and formally enshrining it in the portfolio management process • Starting UN-PRI reporting ahead of schedule • Adopting a responsible investment policy (RI policy) that will be valid for all Union Investment securities funds • Introducing a policy for a responsible investment strategy for commodities • Increasing sustainability analysis in the portfolio management process • Expanding SRI concepts and asset classes for different areas of expertise

2015 2011

done

2012 2011 2011 2012 2013 2013 2014

planned done done planned new new new

Expansion of our active engagement policy • Expansion of collaborative engagements • Introduction of ‘UniEngagement’ portfolio management processes. As an active shareholder we represent customer interests and exercise voting rights for customers’ portfolios regardless of whether Union Investment acts as depositary for their special funds

2012 2012 2011

new done

To develop UN-PRI reporting, we made a start on reporting and benchmarking a year before it became obligatory.

Collaborative engagements are joint initiatives with other international asset management companies concerning environmental, social and macroeconomic issues.

9. Real-estate funds Objectives and actions

Timetable

Status Notes

Development of sustainable investment processes for real-estate funds • Devising and introducing ‘green due diligence’ for real-estate purchases • Adoption of sustainable requirements for property managers • Implementation of sustainability profiles for managers of office and hotel properties (actions in Germany and France) • Introducing processes for issuing and administering energy performance certificates for real estate • Introduction of a service provider qualification which would include investigating the environmental stance of major service providers • Introducing criteria that take account of environmental factors when awarding contracts to service providers in Germany • Creating a concept for integrating sustainable criteria into German real-estate leases (‘green leases’) • Integrating sustainability criteria into leases whenever leases for portfolio properties are renewed

2015 2013 2011 2012

planned done new

2013 2013

planned planned

2013

planned

2013 2014

new planned

Increasing energy efficiency and improving the environmental protection of portfolio properties • Recording energy, CO2, water and waste data for the representative real-estate portfolio and analyzing the potential for environmental improvements to the properties in this portfolio • Setting specific targets for improving energy, CO2 and water consumption and waste generation in portfolio properties • Checking whether a responsible investment policy is possible for real-estate business

2014 2012

planned

2013

new

2013

new

Developing and increasing commitment to sustainability across the real-estate sector • Creating the Prime Property Award for sustainable real-estate projects in 2007 • Publishing the Green Leases magazine for tenants • Introducing a sustainable real-estate investments knowledge portal • Developing other activities to promote sustainability initiatives in the real-estate sector

2015

70

2010 2012 2014

done done planned new

The Prime Property Award is conferred every two years and it is one of the leading European accolades of its kind. See www.prime-propertyaward.de

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Supplementary Information

GRI Index reported in full

partly reported

not reported

CSRR = 2011 Corporate Social Responsibility Report

AR = 2011 Annual Report

Internet = www.union-investment.de > (reference in each case is made to the relevant navigation path)

GRI indicator

Page/Reference/Comment

Application level

1. Strategy and analysis 1.1

Statement from the most senior decision maker

CSRR p. 4–5

1.2

Key impacts, risks, and opportunities

CSRR pages 8–13, AR pages 66–68

2. Organizational profile 2.1

Name of the organization

CSRR title page

2.2

Brands, products, and/or services

CSRR p. 7, AR p. 2

2.3

Operational structure of the organization including the main divisions, operating companies, subsidiaries and joint ventures

CSRR pages 6–7

2.4

Location of organization’s headquarters

CSRR pages 6–7

2.5

Countries where the organization operates

CSRR pages 6–7

2.6

Ownership structure and legal form

CSRR pages 6–7

2.7

Markets

CSRR pages 6–7

2.8

Scale of the organization

CSRR pages 6–7

2.9

Significant changes regarding size, structure, or ownership

No changes during the reporting year (2011).

2.10

Awards

www.union-investment.de > About Union Investment > Awards

3. Report parameters 3.1

Reporting period

CSRR p. 67

3.2

Publication of most recent previous report

Not applicable, as this is the first report.

3.3

Reporting cycle

CSRR p. 67

3.4

Contacts

CSRR Cover page 3

3.5

Process for defining report content

CSRR p. 67

3.6

Boundary of the report

CSRR pages 6–7; 67

3.7

Limitations on the scope of the report

There are no particular limitations.

3.8

Joint ventures, subsidiaries, outsourced operations

CSRR pages 6–7

3.9

Data measurement

The procedures and specifications concerning measurement laid down in the GRI G3.1 guidelines have been applied, so far as the data allowed.

3.10

Re-statement of information provided in earlier reports

Not applicable, as this is the first report.

3.11

Changes in the scope, boundary, or measurement methods applied in the report

Not applicable, as this is the first report.

3.12

GRI Content Index

CSRR pages 71–77

3.13

External assurance for the report

No external assurance for the report.

71

reported in full

partly reported

not reported

CSRR = 2011 Corporate Social Responsibility Report

AR = 2011 Annual Report

Internet = www.union-investment.de > (reference in each case is made to the relevant navigation path)

4. Governance, commitments, and engagement 4.1

Governance structure of the organization

CSRR pages 6–7

4.2

Indicate whether the chair of the highest governance body is also an executive officer

AR pages 154–155

4.3

Independent members of the highest governance body

AR p. 153

4.4

Mechanisms for shareholders and employees to make recommendations to the highest governance body

AR pages 92–93

4.5

Linkage between compensation for members of the highest governance body, senior managers, and executives, and the management of the organization.

AR p. 152

4.6

Processes in place for the highest governance body to ensure conflicts of interest are avoided

AR pages 92–93

4.7

Qualifications of the members of the highest governance body regarding sustainability issues

CSRR pages 9–13

4.8

Statements of mission, codes of conduct, and principles

CSR policy at www.union-investment.de > About Union Investment > CSR; CSRR pages 40–43

4.9

Procedures of the highest governance body for overseeing sustainability performance

CSRR pages 9–13

4.10

Processes for evaluating the highest governance body’s sustainability performance

CSRR pages 9–13

4.11

Precautionary approach

CSRR pages 9–13

4.12

Externally developed agreements, principles or initiatives.

Union Investment is involved in the implementation of a number of externally developed agreements, principles and initiatives. Key examples include: UN Principles for Responsible Investments; Sustainable Investment Forum; German Property Federation.

4.13

Membership of organizations

cf. 4.12

4.14

Stakeholder groups

CSRR p. 67

4.15

Basis for selection of stakeholders

CSRR p. 67 Union Investment is in continuous dialog with relevant stakeholder groups. It has set up an email inbox which employees can use to contact the sustainability team. Every year, Union Investment holds more than 4,000 meetings to discuss ESG issues with the companies in which it invests, as part of its active engagement strategy; it also represents the interests of its investors at annual shareholders’ meetings.

4.16

Stakeholder engagement

Union Investment also regularly communicates with customers and end investors through its website, by email and letter, and through various events. The environmental management system and associated obligations ensure that there is continuous dialog with tenants and service providers on sustainability issues. Lines of communication between the organization and its institutional clients and real-estate investors are also kept open through Union Investment’s involvement in initiatives such as the UN PRI, the Sustainable Investment Forum and the German Property Federation.

4.17

Questions and concerns of stakeholders

CSRR p. 67

Financial service sector supplement (FSSS) FS1

Policies with specific environmental components

CSRR pages 40–43

FS2

Procedures for assessing and screening environmental and social risks in the most important business lines

CSRR pages 34–37; 30–33; 40–43; 52–65

72

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Supplementary Information

FS3

Monitoring of clients’ compliance with agreed environmental and social requirements

FS4

Processes for improving staff competency to implement the environmental and social policies and procedures

Union Investment offers its fund managers Certified Sustainability Investment Manager (CSIM) training, an internal course developed in collaboration with the Frankfurt School of Finance. For information for all employees, see CSRR p. 40–43

FS5

Interactions with stakeholder groups regarding environmental and social risks

CSRR pages 30–37; 40–43; 52–65

FS6

Percentage of the portfolio for business lines by region, size, and sector

FS7

Value of products and services designed to deliver a social benefit broken down by purpose

CSRR pages 30–33

FS8

Value of products and services designed to deliver an environmental benefit broken down by purpose

CSRR pages 30–33

FS9

Coverage and frequency of audits to assess implementation of environmental and social policies

CSRR pages 16–23; 30–33; 40–43; 52–65

FS10

Percentage and number of companies held in the institution’s portfolio with which the reporting organization has interacted on environmental or social issues.

All wholly owned subsidiaries of UIG in Germany take environmental factors (energy, water and paper consumption) into account in investment decisions and in operational procedures.

FS11

Percentage of assets subject to positive and negative environmental or social screening.

CSRR pages 30–33; 52–65

FS12

Voting policies applied to environmental or social issues for shares over which the reporting organization holds the right to vote.

CSRR pages 30–33; Proxy voting policy on the internet: http://www.union-investment.com > About Union Investment > Policies > Voting Guidelines

FS13

Access points to the organization’s services for persons in low-populated or economically disadvantaged areas

FS14

Initiatives to improve access to services for disadvantaged people

FS15

Policies for the fair design and sale of financial products and services

FS16

Initiatives to enhance financial literacy by type of beneficiary (sup.)

Union Investment does not operate in economically disadvantaged regions or regions with a low population.

The Union Investment Group is committed to abiding by the code of conduct laid down by the federal association of German fund management companies (BVI). Is also respects the standards of the code when reporting on the performance of its funds.

Construction & Real Estate Sector Supplement CRESS CRE1

Energy consumption of buildings

CRE2

Water consumption of buildings

CSRR pages 52–65 CSRR pages 52–65

CRE3

Greenhouse gas emissions from buildings

CSRR pages 52–65

CRE4

Greenhouse gas emissions from new construction and redevelopment activity.

CRE5

Land and other assets redeveloped or scheduled for redevelopment for the existing or intended land use according to applicable legal provisions

CRE6

Percentage of the organization operating in compliance with an internationally recognized health and safety management system.

CRE7

Number of persons voluntarily and involuntarily displaced and/or resettled by land development, broken down by project.

CRE8

Type and number of sustainability certification, rating and labeling schemes for new construction, management, occupation, and redevelopment.

CSRR pages 52–65

Economic performance indicators Management approach

CSRR pages 9–13

EC1

Direct economic value generated and distributed

CSRR pages 74 (EC8); 76 (SO6); AR p. 94

EC2

Financial implications due to climate change

73

reported in full

partly reported

not reported

CSRR = 2011 Corporate Social Responsibility Report

AR = 2011 Annual Report

Internet = www.union-investment.de > (reference in each case is made to the relevant navigation path)

EC3

Coverage of defined benefit plan obligations

All employees on permanent contracts at Union Investment receive a pension commitment. AR p. 114

EC4

Financial assistance received from government

No significant financial assistance received from government during the 2011 reporting period.

EC5

Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.

EC6

Policy, practices, and proportion of spending on suppliers

EC7

Procedures for local hiring 1. Via the Union Investment Foundation we regularly support projects in the fields of science and research, education and training – particularly those concerning financial investment and the cooperative movement. The foundation was also established to promote culture and the arts, and for charitable purposes.

EC8

Infrastructure investments and services for public benefit

EC9

Explanation and description of the type and scope of activities with significant indirect economic impact

2. Since 2006, Union Investment employees have been involved in the mitMenschen project for people whose life is not always easy. As part of the project, they carry out voluntary work for organizations in and around Frankfurt, Hamburg and Luxembourg for the benefit of children, young people and senior citizens in need.

Environmental performance indicators Management approach

CSRR pages 40–43

EN1

Materials used

CSRR pages 40–43

EN2

Recycled materials

CSRR pages 40–43

EN3

Direct energy consumption

CSRR pages 40–43; pages 52–65 (Scope 3 as defined by the GHG Protocol)

EN4

Indirect energy consumption

CSRR pages 40–43

EN5

Energy saved

CSRR pages 40–43

EN6

Initiatives for energy-efficiency and renewable energies

CSRR pages 40–43

EN7

Initiatives to reduce indirect energy consumption

EN8

Total water withdrawal

EN9

Groundwater sources significantly impacted by the withdrawal of water

EN10

Water recycled and reused

EN11

Land in, or adjacent to, protected areas

EN12

Material impact of activities in protected areas

In its buildings, Union Investment uses only drinking-quality water supplied by municipal water companies. In 2009, consumption was 20,708 cubic meters (2008: 29,612 m3; 2007: 30,.017 m3)

EN13

Habitats protected or restored

EN14

Strategies, ongoing measures and future plans for managing impacts on biodiversity

EN15

Number of species on the IUCN Red List and on national lists whose natural habitat is in areas that are affected by the organization’s business activities, broken down by level of threat

EN16

Greenhouse gas emissions

CSRR pages 40–43; pages 52–65 (Scope 3 as defined by the GHG Protocol)

EN17

Other greenhouse gas emissions

CSRR pages 40–43

EN18

Initiatives to reduce greenhouse gas emissions

CSRR pages 40–43

EN19

Emissions of ozone-depleting substances by weight

EN20

NO, SO, and other air emissions by weight

74

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Supplementary Information

EN21

Total water discharge by type and destination

Water used for drinking, cooking, cleaning, sanitation and building engineering resulted in Union Investment discharging approximately 19,370 cubic meters of waste water into the sewage system. This quantity differs by about 6.5 percent from the figure stated in EN8 (total water withdrawn). The difference from the figure stated for total water withdrawn was due to water used for cooking, water heaters and for watering plants that was not drawn from the water supply.

EN22

Waste by type and disposal method

CSRR pages 40–43; pages 52-65 (Scope 3 as defined by the GHG Protocol); the total quantity of waste in tonnes broken down by disposal method was not available at the time of going to press. Disposal methods are the responsibility of the waste disposal company.

EN23

Spillages of pollutants such as oils, chemicals etc., by number and volume

EN24

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention, annexes I, II, III, and VIII, and percentage of transported waste shipped internationally

EN25

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff.

EN26

Initiatives to mitigate environmental impacts

EN27

Percentage of products whose packaging can be recycled

EN28

Sanctions for non-compliance with environmental laws

EN29

Impacts of transportation

EN30

Total environmental protection expenditures and investments broken down by type

CSRR pages 40–43 None in 2011.

Social performance indicators: Labor practices and decent work Management approach

CSRR pages 16–23

LA1

Total workforce by employment type, employment contract and region

CSRR pages 16–19

LA2

Employee turnover

CSRR pages 16–19

LA3

Benefits provided to full-time employees

CSRR pages 19–21 1. Internal policies apply to all employees. 2. All contracts of employment for our employees are modeled on the collective pay agreement for the private-sector banking industry (e.g.: 30 days’ annual leave; 39-hour regular working week); with the exception of UIT employees (40-hour regular working week).

LA4

Employees covered by collective bargaining agreements

LA5

Minimum notice periods regarding operational changes

LA6

Workforce represented on health & safety committees

LA7

Occupational diseases, lost days, and work-related fatalities

CSRR pages 16–19

LA8

Education and training regarding serious diseases

CSRR pages 16–19

LA9

Formal agreements on health and safety at work

LA10

Training per employee

CSRR pages 19–21

LA11

Programs for skills management and lifelong learning

CSRR pages 19–21

LA12

Percentage of employees receiving regular performance and career development reviews

All employees on collectively and non-collectively negotiated pay scales receive an annual performance review – which has been IT-based since 2011.

LA13

Ratio of basic salary of men to women

CSRR pages 16–19

LA14

Average compensation by gender and employee category

CSRR pages 16–19

75

reported in full

partly reported

not reported

CSRR = 2011 Corporate Social Responsibility Report

AR = 2011 Annual Report

Internet = www.union-investment.de > (reference in each case is made to the relevant navigation path)

Social performance indicators: Human rights Management approach HR1

Investment agreements

HR2

Suppliers that have undergone screening on human rights

HR3

Total hours of employee training on the organization’s policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

HR4

Incidents of discrimination

HR5

Freedom of association and collective bargaining

HR6

Child labor

HR7

Forced labor

HR8

Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations

HR9

Total number of incidents of violations involving rights of indigenous people and actions taken

CSRR pages 16–23; pages 40–43; CSRR pages 40–43

No incidents in 2011.

Social performance indicators: Society Management approach

CSRR pages 47–49

SO1

Impacts of operations on communities

SO2

Risks related to corruption

In the year under review, eleven companies were investigated with regard to the risk of corruption.

SO3

Training in anti-corruption policies and procedures

The internal guideline ‘Preventing and averting financial crime’ is binding upon all employees of the Union Investment Group. Training to prevent other criminal offenses will be carried out from 2012 in accordance with the German Banking Act (KWG).

SO4

Actions taken in response to incidents of corruption

There were no incidences of corruption in 2011.

SO5

Lobbying

SO6

Total value of contributions (financial or benefits in kind) made to political parties, politicians, and related institutions listed by country

The Union Investment Group does not contribute financially or make benefits in kind available to political parties or politicians.

SO7

Total number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices and their outcomes

There were no legal actions brought in 2011.

SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations

There were no fines in 2011.

Social performance indicators: Product responsibility Management approach PR1

Health & safety impact of products and services

PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services, broken down by type of outcome

PR3

Product information

PR4

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, broken down by type of outcome

PR5

Customer satisfaction

76

CSRR pages 9–13

CSRR pages 22–23

Union Asset Management Holding AG

2011 Corporate Social Responsibility Report

Supplementary Information

PR6

Standards related to advertising

The Union Investment Group is committed to abiding by the code of conduct laid down by the federal association of German fund management companies (BVI). It also respects the standards of the code when reporting on the performance of its funds.

PR7

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, sales promotion, and sponsorship, broken down by type of outcome

No incidents in 2011.

PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

In one case, a complaint was made about account documents having been put in the wrong envelope and sent to the wrong address due to human error.

PR9

Fines for non-compliance with regulations concerning products and services

There were no fines in 2011.

77

78

Editorial Information

Note on forward-looking statements The group management report and other sections of this annual report contain forward-looking statements that are based on current planning, assumptions,

Publisher Union Asset Management Holding AG Wiesenhüttenstrasse 10 60329 Frankfurt am Main Tel.: +49 (0)69 5899 86060 Fax: +49 (0)69 5899 89000 Email: [email protected] Website: www.union-investment.de Board of Managing Directors Hans Joachim Reinke, Chief Executive Officer, Ulrich Köhne, Alexander Schindler, Jens Wilhelm Editors Katja Eck, Corporate Communications, Stefan Kantzenbach, Corporate Communications, Union Asset Management Holding AG, Frankfurt am Main, Esther Baumann, Communications Consultant, Mainaschaff Design G + J Corporate Editors GmbH, Hamburg Photographs Andreas Fechner, Fritz Philipp, Andreas Reeg Photo credits Corbis, F1online, Getty Images, Kaleidomania, Mauritius Images, Plainpicture, Union Investment Group Revision Ulrich Paasch, Hamburg Lithography MWW Medien GmbH, Hamburg Printed by Görres-Druckerei und Verlag GmbH, Koblenz

and estimates rather than on historical facts. In all cases, the forward-looking statements apply at the time the statements are made and we give no undertaking to update the content on the basis of new information or future events after publication of this report. We have derived our assessments and conclusions from these forward-looking statements, expectations, and forecasts. We explicitly draw attention to the fact that all our forward-looking statements are subject to known or unknown risks and uncertainties and are based on conclusions that relate to future events. These in turn are subject to risks, uncertainties, and other factors outside our control. Such risks, uncertainties, and other factors may arise, among other things, from changes in general economic conditions or the competitive environment, trends on the capital markets, changes in the tax/legal framework, and other risks. Actual events in the future may therefore differ substantially from our forward-looking statements, expectations, forecasts, and conclusions. We can accept no liability for the accuracy or completeness of the information provided and can make no warranty that future situations will occur as described.

General disclaimer Unless otherwise stated, the past performance of the funds has been determined on the basis of Union Investment’s own calculations using the BVI method (front-end fees not included, where applicable). Past performance is not necessarily a guide to future performance. For extensive product-specific information and details of the opportunities and risks attaching to Union Investment Group funds, please refer to the latest sales prospectuses, the Company’s terms and conditions or the annual and half-yearly reports that can be obtained free of charge from the client service offered by Union Investment Service Bank AG at Wiesenhüttenstrasse 10, 60329 Frankfurt am Main, Germany. These documents constitute the sole binding basis for the purchase of funds. The content of this annual report does not constitute a recommendation to take a specific course of action; it is not a substitute for personal investment advice from the Bank or for expert personal tax advice. Although Union Asset Management Holding AG has taken due care in preparing and producing this document, Union Investment gives no guarantee that the information contained therein is up to date, accurate, and complete. Revision date of all information, disclosures, explanations, charts, and diagrams: March 7, 2012 (unless stated otherwise)

Formal aspects of the report Wherever possible, gender-neutral wording has been used in this report. Where the masculine form has been used, it is of course also intended to include females. To improve readability, repeated use throughout the report of the full legal form of the names of group companies has been avoided. The 2011 Corporate Social Responsibility Report is available in both German and English. It can be accessed on the internet at www.wir-verantworten.de, either as an interactive report or as

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a PDF download.

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