Aareal Bank : CDP-Fragebogen 2020

Aareal Bank AG CDP Climate Change Questionnaire 2021 Thursday, October 14, 2021

Welcome to your CDP Climate Change

Questionnaire 2021

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization.

Aareal Bank Group is a leading international provider of smart financing, software products, digital solutions and payment transaction applications in the property sector and related industries. We manage, act and decide sustainably - out of conviction. Aareal Bank AG, whose shares are included in Deutsche Börse's SDAX index, is the Group's parent entity and is headquartered in Wiesbaden.

Our goal is to provide clients with forward-looking solutions that offer them competitive advantages and enable their long-term business success. We have grouped our portfolio of services into three business segments.

In the Structured Property Financing segment, we support our clients in making large-volume commercial property investments. The investment properties mostly comprise office buildings, hotels, shopping centres, logistics and residential property, as well as student apartments. Our clients include institutional investors, private equity firms, family offices, financial institutions, private individuals, listed property companies, pension funds, and sector-specific investors.

In the Consulting/Services Bank segment, we support businesses from the housing, property management and energy industries, as a digitalisation partner - combining extensive advisory services and product solutions with traditional corporate banking services and deposit-taking. We also ensure that these clients' business processes and payment systems are optimised and efficiently designed.

Our subsidiary Aareon - a leading consultancy and IT systems house for the European property industry and partner for the digital transformation - forms the third business segment. It offers pioneering and secure consulting, software and service solutions as well as innovative administration, management and digitalisation products for properties. The digital ecosystem Aareon Smart World links property companies with their customers, staff and business partners, as well as with technical devices in apartments and buildings.

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Aareal Bank AG CDP Climate Change Questionnaire 2021 Thursday, October 14, 2021

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

	Start date	End date	Indicate if you are providing emissions data for
			past reporting years
Reporting	January 1,	December 31,	No
year	2020	2020

C0.3

(C0.3) Select the countries/areas for which you will be supplying data.

France

Germany

Ireland

Italy

Netherlands

Norway

Poland

Russian Federation

Singapore

Spain

Sweden

Turkey

United Kingdom of Great Britain and Northern Ireland

United States of America

C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your response.

EUR

C0.5

(C0.5) Select the option that describes the reporting boundary for which climate- related impacts on your business are being reported. Note that this option should align with your chosen approach for consolidating your GHG inventory.

Financial control

C-FS0.7

(C-FS0.7) Which organizational activities does your organization undertake?

Bank lending (Bank)

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Aareal Bank AG CDP Climate Change Questionnaire 2021 Thursday, October 14, 2021

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your organization?

Yes

C1.1a

(C1.1a) Identify the position(s) (do not include any names) of the individual(s) on the board with responsibility for climate-related issues.

Position of	Please explain
individual(s)
Chief Executive	At an organizational level, Aareal Bank Group has assigned responsibility for
Officer (CEO)	climate-related issues and sustainability management to Investor Relations - with
	a direct reporting line of the Group Sustainability Officer to the CEO. This
	underlines the strategic importance of climate-related issues and sustainability for
	our corporate philosophy and allows steering its practical implementation at the
	highest level and ensuring that material ESG information is incorporated in the
	communication with our stakeholders. Required decisions were made by the
	whole Executive Board.
Chief Risk	Our Chief Risk Officer is the Board member responsible for identifying, analysing
Officer (CRO)	and mitigating internal and external events that could threaten the successful
	continuation of the Company. The Chief Risk Officer ensures that the Company
	complies with government regulations, and reviews factors that could negatively
	affect investments or our Company's business units. This involves the
	responsibility for ESG risks, including climate-related issues.

C1.1b

(C1.1b) Provide further details on the board's oversight of climate-related issues.

Frequency	Governance	Scope of	Please explain
with which	mechanisms into	board-level
climate-related	which climate-related	oversight
issues are a	issues are integrated
scheduled
agenda item
Scheduled -	Reviewing and guiding	Climate-related	Risk management is a core priority at
some meetings	strategy	risks and	Aareal Bank Group - as a strong risk
	Reviewing and guiding	opportunities to	culture is an integral part of our
	major plans of action	our own	responsible corporate management.
		operations	The following governance mechanisms
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Aareal Bank AG CDP Climate Change Questionnaire 2021 Thursday, October 14, 2021

Reviewing and guiding risk management policies

Reviewing and guiding annual budgets

Reviewing and guiding business plans

Setting performance objectives

Monitoring implementation and performance of objectives

Overseeing major capital expenditures, acquisitions and divestitures

Monitoring and overseeing progress against goals and targets for addressing climate-related issues

Other, please specify

Monitoring of the development of government regulation and other relevant developments in the field of sustainable finance

Climate-related risks and opportunities to our bank lending activities

The impact of our own operations on the climate

The impact of our bank lending activities on the climate

have been implemented:

• The Executive Board defines the business strategy (risk diversification, active portfolio management, etc.) based on our successful business model and develops the risk strategy. Climate-related issues are integrated into our overall risk management, they are normally considered within the Operational Risk and Reputational Risk Management. Climate-relatedissues are integrated in our overall riskmanagement, defined as risk factors affecting our existing financial and non-financial risk-categories
• The Executive Board monitors the risk situation on the basis of quarterly / annually risk model valuations and corresponding reports (e.g. impact and probability of risks are assessed withininventory based on expert scenarios, etc.). Independently of these regular valuations / reports, the Executive Board has implemented an ad-hoc reporting process, in case of a significant incident or new or changed major risks. The reports are sent to theresponsible heads of division, Executive Board, Supervisory Board and Banking Supervisory Authorities (ECB).
• Specific climate risks are taken into consideration within the loan approval process during the risk analysis of the property. If the risk is too high (not acceptable) - e.g. depending on the location of an object (near the waterside, potential storm warnings etc.) and on its equipment (emergency power supply, fire protection, etc.), it isan exclusion criterion for the corresponding deal.

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Aareal Bank AG CDP Climate Change Questionnaire 2021 Thursday, October 14, 2021

			- The Bank's risk appetite framework
			(approved by the Executive Board)
			includes ESG-risks (considering the
			outside-in and inside-out perspectives)
			and constitutes an end-to-end
			approach comprising guidelines,
			processes, controls and Systems for all
			employees.
Sporadic - as	Monitoring	Climate-related	Independently of the regular valuations
important	implementation and	risks and	/ reports, the Executive Board has
matters arise	performance of	opportunities to	implemented an ad-hoc reporting
	objectives	our own	process, in case of a significant
	Overseeing major	operations	incident or new or changed major risks.
	capital expenditures,	Climate-related	The reports are sent to the responsible
	acquisitions and	risks and	heads of division, Executive Board,
	divestitures	opportunities to	Supervisory Board and Banking
	Monitoring and	our bank lending	Supervisory Authorities (ECB).
	overseeing progress	activities
	against goals and
	targets for addressing
	climate-related issues

C1.2

(C1.2) Provide the highest management-level position(s) or committee(s) with responsibility for climate-related issues.

Name of the	Reporting line	Responsibility	Coverage of	Frequency
position(s)			responsibility	of reporting
and/or				to the board
committee(s)				on climate-
				related
				issues
Risk manager	Risk - CRO reporting line	Both assessing and	Risks and	More
		managing climate-	opportunities	frequently
		related risks and	related to our	than
		opportunities	bank lending	quarterly
			activities
			Risks and
			opportunities
			related to our
			own operations
Risk	Reports to the board	Both assessing and	Risks and	More
committee	directly	managing climate-	opportunities	frequently
			related to our
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