Covivio : 2020 – Sustainable Performance Annual Report Download the pdf

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CONSOLIDATED STATEMENT

OF EXTRA-FINANCIAL PERFORMANCE

Each year, Chapter 2 of the Covivio Universal Registration Document (URD) reflects the company's sustainable development strategy. This chapter is part of the Statement of Non-Financial (or extra-financial) Performance (SNFP) of the Covivio group for the year 2020 and presents all the information required by Articles L. 225-102-1, R. 225-104, R. 225-105, R. 225-105-1 and R. 223-105-2 of the French Commercial Code. This SNFP was prepared with support from the Group's functional and operational departments. It is shared by the Executive Committee and then by the Board of Directors, which is particularly attentive to the social and environmental issues related to the company's business and Covivio's Purpose. Unless otherwise specified, the data presented in the SNFP is provided on a current basis. The reporting scope and methodology for the information in this chapter are presented in Section 2.7.1.

Chapter 2 also explains how Covivio's low-carbon strategy and objectives and initiatives align with the goal of limiting global warming to 2°C as enshrined in the Paris Agreement of December 2015. In particular, it presents energy consumption and CO2 emissions related to building use corrected for climate conditions. Every year, Covivio presents an accurate report on greenhouse gas emissions for each activity, by describing the challenges associated with climate, in compliance with the provisions of Article 173 of the Energy Transition and Green Growth Act and its Decree of 29 December 2015. Covivio includes the recommendations made by the group of climate experts that make up the Task Force on Climate-related Financial Disclosures (TCFD).

Since 2017, this reporting has been aligned to the 17 Sustainable Development Goals (SDGs) defined by the United Nations. It contains information on how the company takes the social and environmental consequences of its activity into account, as well as an analysis of the consequences of this activity on climate change.

The financial risks inherent in the effects of climate change seem limited in the short term. However, since 2017, Covivio has conducted various specific and more in-depth evaluations to this subject. The action already taken, in coordination with key tenants, associations, initiatives (IFPEB, Sekoya, etc.), and organisations such as the Building Scientific and Technical Centre (CSTB) or MSCI, aims to control these risks.

In accordance with the GRI Standards framework, the SASB(1) framework and the EPRA 2017 Best Practices Recommendations on Sustainability Reporting, two reporting controls are carried out by an independent third party (2.8): the first relating to Green Bonds issued in 2016 and 2019 and the second relating to other aspects addressed in Chapter 2.

This information is also contained in Covivio's Annual Report on Sustainable Performance (www.Covivio.eu/fr).

A GLOBAL REPORTING

For many years, Covivio publishes different types of documents, which offer complete information, subject to verification by independent third parties. These documents are available on the company's website (covivio.eu/en), and are completed with press releases: quarterly results publications, occasional information, etc.

(1) Sustainability Accounting Standards Board.

SUMMARY

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Assert a role of responsible real estate operator	14
	Promoting a resilient economic model	20
	A performance built jointly with stakeholders	24
	Identifying risks and seizing opportunities	28
	Putting CSR at the heart of the business model	30
	An ambitious European CSR action plan	34

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5

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Sustainable building	41
Key performance indicators for sustainable buildings
(at 31 December 2020)	43
Alignment with the recommendations of the TCFD	44
Asset obsolescence/Green value/Products anticipating societal changes	48
Managing operating expenses (energy, waste, certifications)	57
Security/Environmental safety/Regulatory compliance	67
Participate in the implementation of sustainable finance	72

Accelerating regional transformation	81
Key societal performance indicators (at 31 December 2020)	83
Integration within the sustainable city	84
Responsible supply chain	96
Quality of relations with external stakeholders (customers, suppliers, etc.)	100

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Key social performance indicators (at 31/12/2020)	107
Health, safety and well-being at work: a year marked by the management of the health crisis	108
Skills/Attractiveness/Diversity	110
Other issues identified in the CSR risk mapping	118

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Effective governance tailored to the corporate strategy	124
Ethics and the fight against fraud and corruption, foundations of Covivio's governance	131
Protection of corporate/smart building data	136

CSR performance	139
Environmental indicators	140
Social indicators	148
Concordance table - regulatory obligations	150
Index SASB - Real Estate Standard	152
Cross-reference table between Covivio's materiality matrix and GRI Standards	154
Verification of corporate, environmental and societal information	156
Verification of an independent third-party - Green Bond	159

R A P P O R T A N N U E L D E P E R F O R M A N C E D U R A B L E 2020 01

SUSTAINABLE DEVELOPMENT

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	2008	•	Delivery of DS Campus, first development project and first asset certified HQE
		• Adoption of the Afep-Medef Code as a corporate governance framework
03/08		• Environmental and energy mapping of the portfolio
Grenelle I Law	2009	•	Definition of the Sustainable Development strategy
		• Launch of the Passerelle programme in relation with Sciences Po
12/07		• Signing of the first environmental annexes
Grenelle II Law	2010	•	Realisation of the Life Cycle Analysis (LCA)
		•	Signing of the Diversity Charter
		• First SD Report, in addition to the CSR chapter
31/12		•	New Governance form, creation of a Board of Directors
Decree on environmental annexe	2011	• Covivio selected for the first time in the FTSE4Good index
	•	Signing of the UN Global Compact
		•	Signing of the HQE Performance Charter
		• Definition, then launch of the Responsible Purchasing Charter
24/04		• The 2011 SD Report obtain the level GRI B+
Decree on CSR transparency	2012	••	Tie first place in the Novethic Barometer
	1st COP in-line on the UN Global Compact website
		• Implementation of the Responsible Purchasing Policy: 107 suppliers rated at the end of 2012
Charter for energy efficiency		• Covivio is selected in the DJSI and 4 Vigeo indexes
of the tertiary buildings	2013	•	First LCA on a Covivio Hotels development project: B&B	Porte des Lilas
	•	First LCA on an office development project: Paris Steel
		•	Delivery of the first "green" hotel for Covivio Hotels: B&B	Porte des Lilas
		•	Signing of the Charter for energy efficiency of the tertiary buildings
		• 7 first assets certified under BREEAM In-Use
22/10		• Writing of two technical specifications on biodiversity
EU CSR transparency Directive	2014	•	Covivio received the GBC France prize, category "Stakeholders"
		• The 2013 SD Report is awarded by an EPRA Gold
22/07		•	Responsible Purchasing: White Paper and signing of the Sustainable Suppliers'
French Law on the energy	2015	•	Relations Charter
	Realisation of the study "Buildings and culture"
12/12		•	Carré Suffren, first asset in use to obtain the BiodiverCity Label
Paris Agreement		•	Covivio, lone French REIT on the Carbon Disclosure Project "A-List"
		• First cost-shared study about the immaterial value with Goodwill
		•	Covivio receives the "Best COP" Award from the Global Compact France
		•	(category <500 employees)
	2016	Success of the first "Green Bond"
		•	Circular economy: work in relation with the University La Sorbonne,
			first "Cradle-to-Cradle" study
		• Cube 2020 Award (energy efficiency - Carré Suffren)
19/07		•	Implementation of the reporting on the "Green Bond" portfolio
Ordinance	2017	•	Technical specifications on Building Management systems
	•	Consideration of a monitoring device for energy and water consumptions
09/08		• Writing of the "Mobility Plan"
Decree on CSR transparency
Statement of Non-Financial		•	Finalisation of the 2°C trajectory approved by the SBT initiative 6 months later. CDP:
Performance made mandatory		•	Climate A-List
		Update of the Sustainable Purchasing policy tools: charter, questionnaire…
	2018	•	2018 General Meeting Grand Prix - "Jury Prize" for the CSR component
		•	Realisation of a CSR risk mapping at the Group level
		•	"Best Statement of non-financial performance, environmental component"/
			PEE-Pollutec 2018
22/05		• Covivio expresses its Purpose: Build sustainable relationships and well-being
Implementation of the PACTE law	2019	•	Vigeo-Eiris Sustainability Rating: A1+ and Sector Leader
	•	Success of the second €500 M Green Bond emission in September
23/07		•	Launching of the supervision platform on the managed portfolio
Tertiary Decree		•	Obtention of the HQE Exploitation certification on the whole German residential
			portfolio
09/03		•	Creation of 2 monitoring tools for the carbon trajectory + 1 European LCA
Report on the EU green taxonomy		•	specifications
		Creation of a European risks mapping of procurement
10/04	2020	•	GRESB: Covivio obtains the status Global «Sector Leader», in the category
"Method" order related to the	•	Diversified Offices/Residential - listed companies».
tertiary decree		Organisation of the European Air Quality Challenge, in partnership with EDF
		•	Drafting of the European tertiary specifications summarising Covivio CSR standards
		•	Resilience: Mapping on the European office park (France, Germany, Italy)
		• Anticipation of the implementation of the tertiary decree and European taxonomy

02				2020 A N N UA L R E P O R T O N S U S TA I N A B L E P E R F O R M A N C E

EDITORIAL BY THE CHIEF

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CSR, A LEVER FOR RESILIENCE IN THE FACE OF THE HEALTH AND ECONOMIC CRISIS

2020 will go down as the year of an international health crisis of unprecedented magnitude, with considerable social and economic consequences for several months and for a period that no one can determine. It is still too early to quantify the changes that this crisis will cause to our lifestyles and our businesses. For some, this shock is only a foretaste of the greater upheavals that our civilization will encounter due to climate change. Even if these two shocks are different, in practice, they have consequences that impact simultaneously and in an interlinked manner, the economy, society, the environment and public health.

Placing the health and safety of its customers, employees and suppliers at the centre of its concerns, Covivio has endeavoured to deploy best practices both internally and externally from the start of the epidemic. In order to ensure the safety of its customers' workplaces, Covivio has implemented a rigorous health protocol in its offices, supplemented by audits, which has resulted in a certification developed with Bureau Veritas, as part of the Covivio CARE program. In addition, in view of the urgency of the situation, Covivio has made several of its hotels available to serve as emergency accommodation, in particular to accommodate caregivers. As we started to come out of the crisis and as soon as its franchised hotels reopened, Covivio offered, among other initiatives, nearly 2,000 free overnight stays to hospital caregivers in Metz, the historical cradle of the company and a region particularly affected by the crisis.

This health crisis, which quickly became an economic and social crisis, once again confirmed the resilience of the Covivio model and the relevance of our CSR policy. This was enriched at the end of 2019 with the expression of our Purpose: "Building well-being and lasting ties". Covivio, as a responsible property developer and owner, with all its stakeholders, is devoted to this purpose, as well as to a number of commitments and concrete objectives expressed in a charter published on the company's website. In 2020, Covivio created a Corporate Foundation to bring together all of our initiatives promoting equal opportunities and environmental protection. In addition, in order to monitor, challenge and renew the commitments associated with our Purpose, Covivio has also decided to create a Stakeholders' Committee, bringing together customers, suppliers and partners, local authorities, urban planners, sociologists, etc. Each year, this Committee will make public the conclusions of its work.

The following pages provide an overview of the extensive work carried out by our Group in the area of sustainability over the past year, covering many of the United Nations 17 Sustainable Development Goals (SDGs) to be achieved by 2030: low-carbon construction and low energy consumption, health and safety, biodiversity, resilience, digital transition, circular economy, green finance, local roots and culture, ethics and transparency, our actions consistently cover all aspects of sustainable development, and help the Group progress every year in each of these challenges. These actions embody the values of our Group and are at the heart of our business model and our asset management policy, which they help to develop. At the end of 2020, 88% of our buildings were green, that is to say certified HQE, BREEAM, LEED etc. with performance levels still improving across all our portfolios.

This year, we conducted several studies on climate change and resilience, including an analysis of the portfolios based on IPCC criteria, as well as initial mapping focused on our European office assets portfolio, thus enriching our TCFD (Task Force on Climate-related Financial Disclosures) reporting. In 2020, we also created a map of the risks related to purchases and three European specifications: one concerning the CSR standards of our buildings, another one on life cycle analyses (LCA) in order to make them more comparable from one country and one product to another, and a third dedicated to BIM: work that will provide further structure to the ambitions of our projects and facilitate the achievement of our objectives in these areas.

The participation in initiatives concerning carbon and the circular economy, such as the "Low-carbon specifiers hub" and Sekoya, or the organisation of the "Air Quality challenge" in Europe, in partnership EDF; these are some of the examples showing the achievements made jointly with our stakeholders. It is the sum of these actions and the results obtained that reinforce the solidity and relevance of our sustainable development policy. This was once again praised this year by extra-financial rating agencies, with ratings still rising.

Covivio obtains the status of "Sector Leader" World from GRESB, in the category "Diversified portfolio of Offices/Residential - listed companies"; Vigeo-Eiris gives Covivio the highest rating of A1+ in the framework of its requested rating, thus ranking first among real estate operators and the fifth worldwide, all sectors combined. Similarly, the ratings obtained from MSCI (AA), ISS-ESG (top 5% worldwide), DJSI Europe and World (top 4%), EcoVadis (top 1% worldwide), and the A- rating awarded by the CDP for our policy and our results in terms of carbon, confirms Covivio's position among the world benchmark groups in terms of CSR.

In addition to these excellent results, we must face new challenges such as the acceleration of teleworking and the development of the use of shared office space (hot desking/desk sharing) or the development of demand for more flexible formulas in office rental. Our response is based in particular on our global approach, including our Wellio proworking offer, which enables us to offer tailored and flexible solutions to these new challenges. They will not distract us from our CSR concerns, on the contrary, since they are one of the keys to the response. More than ever, the fight against climate change, the ecological and digital transition and the fight against inequalities are major and structural challenges for a responsible player like Covivio.

It is in this context, involving uncertainties and major challenges, but also exciting projects, that Covivio is approaching the new decade, with renewed enthusiasm and ambition. It is essential that this decade be one which sees the advent of a circular and low-carbon economy, a sustainable and more responsible city, and more resilient and inclusive regions. Covivio, through its activity, its will and its history, is at the heart of these transformations!

Christophe Kullmann

Chief Executive Officer

2020 A N N UA L R E P O R T O N S U S TA I N A B L E P E R F O R M A N C E 03