SUSTAINABILITY REPORT 2014 - DZ HYP...About this report With its Sustainability Report 2014, DG HYP provides a comprehensive presentation of all its activities dedicated to sustain-ability

SUSTAINABILITY REPORT 2014

About this reportWith its Sustainability Report 2014, DG HYP provides a comprehensive presentation of all its activities dedicated to sustain-ability. It builds on the status report 2013, and is addressed to all stakeholders.

Report Scope and BoundaryUnless indicated otherwise, this sustainability report refers to DG HYP, having its corporate headquarters in Hamburg, Germany. Qualitative and quantitative data was collected separately for each department and then combined in a central database. Responsibility for its analysis lies with the Sales Management and Investor Relations department. No material changes were registered during the period under review. Information relating to employees refers to the 2014 calendar year, pertains to all DG HYP offices, and was updated as at 31 December 2014. Results of particular relevance, however, were included up to the editorial deadline on 31 January 2015. This report was not verified externally, with the exception of material contents and indicators. All economic figures were taken from DG HYP‘s audited annual report. The calcula-tion of greenhouse gas emissions was based on the VfU indicator system (Association for Environmental Management and Sustainability in Financial Institutions).

Orientation to the GRI IndexThe sustainability report follows the G3 guidelines promulgated by the Global Reporting Initiative (GRI). For an overview of the GRI indicators and the relevant passage, please see the GRI Content Index. With this report, DG HYP also meets the requirements of UN Global Compact with regards to communication on progress. The corresponding references on the implementation of the ten principles have been integrated into the GRI Content Index.

Additional Information The sustainability report is available for download in German or English on our website (www.dghyp.de). For current trends on sustainability, please also refer to our website.

Relevant information on the economic performance and business model of DG HYP can be found in the Annual Report 2014, which is also available for download at www.dghyp.de.

3DG HYP | Nachhaltigkeitsbericht 2014

About this report 2

Letter from the Management Board 4

DG HYP Company Portrait 6

Business Model 8

Our Values and Principles 9

Stakeholder Dialogue 10

Responsible Corporate Governance 12

Sustainability Approach 16

Economic Responsibility 24

Customer Satisfaction 25

Complaints Management 25

Responsible Lending 25

Local Authority Lending 27

Public-Private Partnership 27

Risk Management 28

Employees 32

Responsible Human Resources Activities 33

Management Responsibility 33

Training and Continuing Professional Development 34

Equal Opportunities 36

Work-Life Balance 37

Performance-Based Compensation 38

Occupational Health Management and Safety 39

Social Commitment 42

Ecological Responsibility 44

Environmental Policy 45

Mobility 50

Supply Chain and Sustainability 51

GRI Content Index 52

DG HYP Contacts and Office Addresses 54

CONTENTS

DG HYP | Sustainability Report 2014

Letter from the Management Board

4

The Management Board of DG HYP: Dr Georg Reutter (Chairman) and Manfred Salber

Dear readers,

Forward-looking and future-oriented thinking, as well as sustainable, responsible practices have our utmost priority for more than ninety years. As an integral part of our business strategy, we actively pursue the concept of sustainability in our day-to-day business. Being embedded in management policy, this ensures the concept is being developed continuously.

For us, the cornerstones of sustainable development are a down-to-earth corporate culture, resource-saving banking operations, responsible human resources management, and a commitment to society. In a challenging environment of low interest rates, growing competition and stricter regulation, we have developed successfully during the year under review. Whilst the positive performance has affirmed our solid and sustainable business model, it also represents an obligation for us to establish our achievements on a permanent basis. This means remaining commercially successful in the future, whilst meeting ecological and social requirements.

5DG HYP | Sustainability Report 2014

In order to better recognise and support our employees‘ needs, and to better assess the bank‘s development from staff perspectives, we carried out an employee survey in 2014. At 81 per cent, participation was outstanding. The positive re-sults are evidence of high staff satisfaction at DG HYP – they affirm the path we have taken over recent years: to further strengthen the bank‘s inner structures, through measures of corporate culture and personnel policy. At the same time, the survey also highlighted potential for improvement, which we have taken seriously and are determined to achieve through targeted measures. Moreover, we have further expedited topics such as the work/private life balance and the promotion of young talent.

Supporting external initiatives for social, cultural and community projects forms part of our corporate culture. With the help of the Hamburg Donor‘s Parliament, we further expanded this commitment during 2014.

Moreover, we have significantly improved our environmental parameters. We have set ourselves a target of further reducing the bank‘s carbon dioxide emissions by 15 per cent between now and 2020. Compared to the reference year of 2014, the measures we have already taken have resulted in a near-60 per cent reduction of greenhouse gas emissions.

In spring of this year, oekom research – an internationally recognised rating agency – assessed our sustainability perform-ance and awarded Prime status for the first time: accordingly, we are ranked amongst the best-performing companies in terms of social and ecological performance.

Since 2012, we have been showcasing our sustainability performance in an annual Sustainability Report, which we have refined on an ongoing basis. This report shows our achievements, and makes our actions transparent. Time and again, we are facing new tasks and challenges. This makes us aware that sustainability is no frozen condition – it requires striking a steady and ongoing balance between economic, ecological and social dimensions. We are determined to continue facing these challenges, and we will consistently pursue our path of running a sustainable business.

Hamburg, June 201 5

Dr Georg Reutter Manfred Salber


Letter from the Management Board | DG HYP Company Portrait | Sustainability Approach | Economic Responsibility | Employees

6

DG HYP COMPANY PORTRAIT PART OF A

POWERFUL GROUP

DG HYP COMPANY PORTRAIT PART OF A

POWERFUL GROUP


Social Commitment | Ecological Responsibility | GRI Content Index

DG HYP – PART OF A POWERFUL GROUP

DG HYP is a member of the DZ BANK Group, which also comprises home loan savings specialist Bausparkasse Schwäbisch Hall, DZ PRIVATBANK, R+V Insurance, retail lender TeamBank, fund management specialists Union Invest ment Group, VR Leasing Group, as well as various other specialist financial services providers. The various DZ BANK Group entities are the cornerstones of a com-prehensive range of bancassurance products and services offered by the Volksbanken Raiffeisenbanken cooperative financial network. Within this strong network, DZ BANK Group entitieswork together to optimise the products and services delivered to cooperative banks and their roughly 30 million customers.

DZ BANK Group is a part of the Volksbanken Raiffeisen-banken cooperative financial network, which comprises

approximately 1,050 individual German cooperative banks and ranks among the largest financial services organisa-tions in Germany. Within the cooperative financial network, DZ BANK AG acts as the central institution for around 900 cooperativebanks with a total of 12,000 branches, and as a commercial bank.

The combining of banking services with insurance products and services, as well as real estate financing and a range of services for securities investments, has a long-standing tradition within the Volksbanken Raiffeisenbanken coopera-tive financial network. The specialist institutions within the DZ BANK Group each offer highly competitive and reason-ably-priced products in their respective area of expertise. This allows Germany’s cooperative banks to offer their cus-tomers an end-to-end range of first-rate financial services.

11DG HYP | Annual Report 2014

DG HYP is a member of the DZ BANK Group, which also comprises home loan savings specialist BausparkasseSchwäbisch Hall, DZ PRIVATBANK, R+V Insurance, retail lender TeamBank, fund management specialists Union Invest-ment Group, VR Leasing Group, as well as various other specialist financial services providers. The various DZ BANKGroup entities are the cornerstones of a comprehensive range of bancassurance products and services offered by theVolksbanken Raiffeisenbanken cooperative financial network. Within this strong network, DZ BANK Group entitieswork together to optimise the products and services delivered to cooperative banks and their roughly 30 million customers.

DZ BANK Group is a part of the Volksbanken Raiffeisenbanken cooperative financial network, which comprises approxi -mately 1,100 individual German cooperative banks and ranks among the largest financial services organisations in Ger-many. Within the cooperative financial network, DZ BANK AG acts as the central institution for around 900 cooperativebanks with a total of 12,000 branches, and as a commercial bank.

The combining of banking services with insurance products and services, as well as real estate financing and a rangeof services for securities investments, has a long-standing tradition within the Volksbanken Raiffeisenbanken coopera-tive financial network. The specialist institutions within the DZ BANK Group each offer highly competitive and reason-ably-priced products in their respective area of expertise. This allows Germany’s cooperative banks to offer their cus-tomers an end-to-end range of first-rate financial services.

DG HYP – PART OF A POWERFUL GROUP



8

Business model DG HYP is the commercial real estate bank of the Volks-

banken Raiffeisenbanken cooperative financial network and one of the leading real estate banks in Germany. Our core business segment is Commercial Real Estate Finance, where we support our clients as well as approximately 1,050 co-operative banks in Germany. The focus of our business is on financing properties in the German market. In addition, we finance our German clients‘ investment projects in se-lected international markets. The bank‘s Commercial Real Estate Finance activities are focused on the core segments of office, residential and retail properties. DG HYP is also involved in the specialist segments of hotels, logistics and real estate for social purposes, within the scope of its credit risk strategy. Target clients are private and institutional in-vestors, housing companies, as well as commercial and resi-dential real estate developers. When selecting exposures, our priorities are the quality of the customer relationship, the third-party usability of the financed property, and col-lateralisation through first-ranking liens.

The new business origination of the bank is supported by successful collaboration with German cooperative banks, to which we offer a strong range of financing solutions that are made to measure.

With six Real Estate Centres in Germany’s major cities, namely Hamburg, Berlin, Dusseldorf, Frankfurt, Stuttgart and Munich, as well as regional offices in Hanover, Kassel and Leipzig (planned for second half of 2015: plus Nurem- berg and Mannheim), DG HYP has a good presence throughout the country, which it leverages to finance suit-able properties for its commercial real estate clients. Sales and risk management are both to be found at these Real Estate Centres: DG HYP is where its clients are, laying the ground for a flexible and effectively managed lending process. We owe our success and market position to vari-ous factors: client proximity, professionalism and expertise, funding power, and a high degree of market penetration – thanks to our strong network.

REC Berlin

REC Hamburg

RO Hanover

RO LeipzigRO Kassel

REC Frankfurt

REC Stuttgart

REC Munich

REC Dusseldorf

REC = Real Estate Centre * Planned for second half of 2015RO = Regional office

RO Nuremberg*RO Mannheim*

DG HYP’S LOCATIONS



RELIABLEOur reliability value is epitomised by a rock-solid business model and conservative risk strategy – at the same

time, it is our staff that turn this value into reality. We are perspicacious, down-to-earth, and conscious of our

responsibility to society and the environment. As a Pfandbrief issuer and a member of the Volksbanken Raiff-

eisenbanken cooperative financial network, we have strong funding sources at our disposal. In the market

we are a partner that can be counted on.

A GOOD PARTNER Being in partnership requires fairness and trust; and trust requires proximity. These are principles which our

employees have adhered to for more than 90 years. We are close to our clients – be it directly, through our

Real Estate Centres and regional offices, or through approximately 1,050 individual cooperative banks. We

value respect and fairness in the way we treat others. Through joint thinking and acting in partnership, we

build the foundations for long-term business relationships.

MOTIVATED Our employees are highly motivated; they act independently and responsibly, taking the initiative. Their

actions and behaviour determine DG HYP‘s reputation and success. We all have a common goal: to sustain-

ably boost the success of cooperative banks and our clients, by offering them the best financing solutions

possible. To us, any problem represents motivation to find new ideas and better solutions. This is the only

way to continuously improve what we do.

Our Values and Principles Sustainable action and corporate responsibility are two

important pillars of our corporate culture. It is a matter of importance that the sustainable orientation of our busi-ness activities develops in line with ecological and social challenges. We act responsibly in our day-to-day business, based on our core values: being reliable, being a good partner, and being motivated.

These three core values are at the heart of our guiding principles, our leitmotif. They define the way we think, and translate into everything we do. We are close to our clients – thanks to a decentralised presence with six Real Estate Centres and regional offices, and the cooperative bank with wich we work on a successful partnership basis.

OUR CORE VALUES



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Member of the UN Global Compact In 2008, DZ BANK AG became a signatory to the Global

Compact of the United Nations, thereby committing itself to implementing the ten internationally acknowledged principles of responsible conduct, reporting on its progress thereon, and actively promoting responsible conduct.

In 2013, we followed suit in taking up these principles: they span human rights, labour norms and work against corruption. The progress made in the integration of these principles into our business divisions has been documented in our continuous sustainability reporting. We define respons ible corporate governance to include not only ad-herence to legal standards and requirements, but also to values and principles, together with clear and transparent management.

Stakeholder DialogueTrust is the fundamental basis for the feasibility and

success of cooperative projects. That is why we foster a constant dialogue with relevant stakeholders. Doing so enables us to better respond to their concerns and requests and provides us with an initial understanding as to how the opportunities and risks associated with our business activi-ties are perceived in the outside world. We endeavour to continuously and extensively improve our long-term stake-holder relationships.

Employee DialogueTransparency in cooperation plays a prominent role at

DG HYP. We foster a culture of dialogue, openness and mutual respect, and our employees play an active part in decision-making processes. In addition to extensive personal

1. Businesses should support and respect the protection of internationally proclaimed human rights; and

2. make sure that they are not complicit in human rights abuses.

3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

4. the elimination of all forms of forced and compulsory labour;

5. the effective abolition of child labour; and

6. the elimination of discrimination in respect of employment and occupation.

7. Businesses should support a precautionary approach to environmental challenges;

8. undertake initiatives to promote greater environmental responsibility; and

9. encourage the development and diffusion of environmentally friendly technologies.

10. Businesses should work against corruption in all its forms, including extortion and bribery.

www.unglobalcompact.org

THE UN GLOBAL COMPACT‘S TEN PRINCIPLES



communication, we use our intranet to keep employees constantly informed about what is going on in the bank and its divisions.

To further intensify the dialogue with our employees, we conducted an online employee survey during the year under review to assess the bank’s development from the perspective of its employees. With a high participation ratio of 81 per cent, the survey provided a representative over-view of the sentiment among the employees. Positive re-sponses from employees resulted in a good overall result, with an Organisational Commitment Index (OCI) of 78. The OCI comprises five individual indicators for the evaluation of satisfaction, retention and loyalty:

• Overall satisfaction

• Recommendation

• Reaffirmation of employment contract

• Individual commitment

• Competitiveness

The results demonstrated a high level of satisfaction among the employees, who identify themselves strongly with DG HYP thanks to responsible tasks, the challenging nature of the job and good cooperation in the team. The survey also clearly demonstrates the staff support for DG HYP’s solid and reliable business model. Our staff also value the good personal cooperation and fair working con-ditions. However, the survey also pointed out potential for improvement, which we have taken seriously, in order to exploit further opportunities in the future.

Cooperative Bank DialogueThe cooperative banks are amongst our most important

stakeholders: To support the dialogue with them, we have instituted an Advisory Council comprising representatives of the cooperative banks, in addition to personal meetings and visits with our sales staff. The Advisory Council supports DG HYP’s Management Board as part of an intensive ex-change of ideas. Another pillar of our communications strategy is the series of events that we organise, to encour-age a sense of togetherness. This includes openly discussing

Commitment

STAFF LOYALTY AND SATISFACTION

Overall satisfaction

Partial satisfaction aspects

Risk of staff leaving

Employer branding Leadership by the direct superior

Change Leadership culture

Mission statement and corporate values Strategy

FOC

AL

ISSU

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DU

RIN

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014

STRUCTURE OF THE EMPLOYEE SURVEY 2014



12

professional topics, and involving the Management Board members of the cooperative banks and our real estate cli-ents in discussions. Through our IMMO PARTNER dialogue, to name just one example, we created a concept that promotes more extensive collaboration with the coopera-tive banks and provides points of inspiration in all parts of Germany. We also organise regional real estate conferences to expand our network and client contacts, and regularly create reports, particularly on regional markets, to support cooperative banks with expertise on the markets they are active in.

With the first issue of IMMO KOMPAKT, a new publi-cation for Management Board members and employees of cooperative banks, we introduced another communication instrument in the year under review. IMMO KOMPAKT re-ports on current trends in commercial real estate financing, joint financings with our partner banks and news at DG HYP. With this new publication, we increase transparency on our business activities, expose potential for cooperation using best practices and inform readers about what is going on in the real estate markets.

Capital Markets DialogueWe aim to continuously enhance the trust of our capital

markets partners. As transparency is key to creating trust, we engage in an open dialogue with the capital markets. We place great emphasis on maintaining good investor relations, which includes both individual talks and larger events. In addition to the annual and interim report, we publish information about our business development and the markets on our website. Our Debt Issuance Programme (DIP) offers standardised documentation for the issuance of medium- and long-term bonds on the capital market. This is published with the Luxembourg Stock Exchange, the Ger-man Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or “BaFin”), and the Ger-man Federal Gazette. It is available on DG HYP’s website, amongst other places. We are also in constant and exten-sive dialogue with rating agencies and analysts for financial and sustainability ratings.

Responsible Corporate GovernanceGood corporate governance and sustainable economic

management require compliance with legal and regulatory regulations, the responsible management of risks, protec-tion of the bank’s reputation, and the implementation of transparent business processes. Our Corporate Governance policy provides a framework that spans all legal concerns and operational principles.

Corporate GovernanceAt DG HYP, we apply a model of dual leadership. Two

Managing Directors lead the company according to existing statutory provisions, ensuring compliance within DG HYP. The Supervisory Board and its committees monitor and ad-vise the Management Board. In accordance with the new features of the German Banking Act (Kreditwesengesetz – “KWG”), which came into force in early 2014, the Super-visory Board renamed the Risk and Participations Commit-tee as the “Risk Committee” and installed the Nomination Committee as well as the Remuneration Control Committee as the new committees for human resources matters, after the existing Human Resources Committee was terminated.

DG HYP’s internal regulations – for example the Arti-cles of Association and Internal Rules of Procedure – comply with legal requirements. The Supervisory Board consists of 18 members. In accordance with the German Act to Sim-plify the Election of Employee Representatives to the Super-visory Board (Drittelbeteiligungsgesetz), it comprises twelve members elected at the Annual General Meeting and six members elected by employees. The Management Board informs the Supervisory Board about relevant plans and developments at an early stage, with special attention paid to conveying the risk situation.

Remuneration Oversight Committee/ Remuneration Officer

After DG HYP was classified as a material institution pursuant to the German Regulation on Remuneration in Financial Institutions (Institutsvergütungsverordnung – “InstitutsVergV”) in 2013, the Supervisory Board estab-



lished a Remuneration Oversight Committee in early 2014. The Committee supports the Supervisory Board in monitor-ing whether remuneration systems for the bank’s staff are appropriate, and in assessing the impact of remuneration systems on the management of risk, capital and liquidity. This applies, in particular, for the Management Board as well as for those employees whose activities have a material impact on the bank’s overall risk profile, and for the heads of Risk Controlling and Compliance. Furthermore, the Re-muneration Oversight Committee prepares the Supervisory Board’s resolutions concerning the remuneration for mem-bers of the Management Board.

The Management Board also appointed a Remuneration Officer and a deputy, in compliance with the InstitutsVergV. The Remuneration Officer reports to the Management Board. He/she functions as supervisor, advisor and reporter for the Remuneration Oversight Committee. The Remu-neration Officer prepares an annual remuneration oversight report on the appropriateness of the bank’s remuneration systems.

In accordance with legal and regulatory requirements, DG HYP published information on its remuneration systems on its website in 2014. The general standards of DG HYP’s remuneration systems, including employer/works council agreements (Betriebsvereinbarungen), are transparent and accessible to all employees in the central handbook for our organisation.

Our Code of ConductTo hold us accountable beyond legal requirements and

market standards, we developed our own set of internal rules and values, on which our Guiding Principles and Management Guidelines are based, and which are also reflected in our Code of Conduct developed jointly with DZ BANK Group.

Our Code of Conduct is a risk prevention, leadership and communication tool. It documents the corporate cul-ture that defines each Group entity, and our understanding

of ethical and responsible conduct. The Code of Conduct serves as a framework of minimum standards that are then further specified through internal instructions, guidelines and the central handbook for our organisation. Apart from basic rules to counter corruption and bribery, money laun-dering, financing of terrorism and white-collar crime, our Code of Conduct provides guidelines on sustainability and responsibility vis-à-vis our clients, business partners and employees. It serves as a compass for our daily conduct.

The Code of Conduct was communicated to DG HYP’s employees using various channels, for example via the DG HYP intranet and the bank’s internet presence. (https://www.dghyp.de/en/sustainability.html)

Transparent Financial Reporting DG HYP meets applicable reporting standards to en-

sure disclosures are comprehensive and transparent in the Annual Report and Interim Reports. The financial state-ments are prepared by the Management Board and exam-ined by both external auditors and the Supervisory Board. The financial statements are confirmed by the Supervisory Board.

ComplianceSustainable economic management requires compliance

with all applicable legal requirements, regulations and self-commitments as well as internal guidelines. As a financial services provider, the trust and safety of our stakeholders are of enormous importance to us. Countering corruption and bribery, and preventing money laundering and fraud, are therefore amongst the core principles of our business model. Our Compliance Office advises and supports our business units in implementing and fulfilling legal require-ments and ensures a constant exchange of information.

It is organisationally aligned with the central office for money laundering, fraud prevention and data protection management, and has a direct organisational, substantive and disciplinary reporting line to the Management Board, to preserve its independence. The Compliance Office eval-



14

uates and monitors compliance with regulations and en-sures the proper conduct of our employees. It identifies violations, sanctions them accordingly, and is active in pre-venting money laundering, terrorism financing and fraud. Furthermore, it cooperates closely with Risk Controlling’s operational risk group to identify, assess and manage risks. With uniform instruments for the identification of opera-tional risks and processing feedback from risk analyses, DG HYP ensures that the risk of losses is minimised and eliminated at an early stage.

Prevention of Money Laundering, Terrorism Financing and Fraud

DG HYP’s anti-money laundering policies are designed to prevent the circulation of illegally obtained funds. To ac-complish this, suitable principles and procedures have been developed in line with statutory provisions that are moni-tored internally on an ongoing basis. The same applies for the financing of terrorism. Internal training raises employee awareness of these issues.

Association for Environmental Management and Sustainability in Banks (VfU)

Association of German Pfandbrief Banks (vdp)

Central Real Estate Committee (ZIA)

Cooperative Association Baden-Württemberg

Cooperative Association Bavaria

Cooperative Association, Frankfurt a.M.

Cooperative Association Rhineland-Westphalia

Cooperative Association Weser-Ems

Federal Association of German Credit Unions and Rural Banking Cooperatives (BVR)

German Cooperative and Raiffeisen Confederation (DGRV)

Urban Land Institute (ULI Europe)

DG HYP‘S ASSOCIATION MEMBERSHIPS



DG HYP considers fraud prevention to be a part of proper business organisation. The bank evaluates all po-tentially actionable, internal and external practices which could endanger its assets, and sets measures to prevent any wrongdoing.

Every two years, we train our employees on meeting applicable laws and regulations, combating money laun-dering, and fraud. The effectiveness of the aforementioned prevention measures are evaluated on an annual basis as part of the risk analysis.

Whistleblowing SystemTo prevent white-collar crime and deter unauthorised

influence from being exercised on our employees, DG HYP has instituted a whistleblowing system. As part of this sys-tem, employees can relay information about non-compliant practices, serious violations or other failings to an internal Compliance Officer – confidentially and without their name being disclosed. The Officer then investigates the incident and takes necessary measures. The Officer may also involve an emergency committee.

Data ProtectionDG HYP guarantees that personal data is protected, and

only used for specific purposes. In addition, we implement technical and organisational security measures. These are constantly improved in step with technological advance-ments, and monitored by an internally appointed Data Pro-tection Officer. In performing his data protection duties, this person is free from external influence or other instructions and reports directly to the Management Board. The Data Protection Officer is responsible for new employee induc-tion, conducting training, and providing updates concern-ing developments in data protection law. All employees are bound to confidentiality pursuant to section 5 of the Ger-man Federal Data Protection Act (Bundesdatenschutzge-setz). There are also measures in place to ensure that they are familiar with the provisions of the Data Protection Act and data protection requirements. For training and regu-lar refreshers in data protection, our employees can turn to both the intranet and the DG HYP process portal’s data protection learning programme.

German General Equal Treatment ActOur employees, especially our executive staff, receive

regular training on the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz). New employ-ees receive this training at the very start of their career with DG HYP. In the year under review, no violations or com-plaints regarding non-compliance with the German General Equal Treatment Act were registered.

Representation of InterestDG HYP communicates with society and politics mainly

via the National Association of German Cooperative Banks (Bundesverband der Deutschen Volksbanken und Raiffeisen-banken e.V. – “BVR”), the Association of German Pfandbrief Banks (Verband Deutscher Pfandbriefbanken e.V. – “vdp”) and the German Property Federation (Zentraler Immobilien Ausschuss e.V. – “ZIA”). We support efforts towards a more stable financial system as well as the interests of Pfandbrief issuers and the economic and non-economic interests of the real estate sector.

We are also an active member of the Association for Environmental Management and Sustainability in Financial Institutions (Umweltmanagement und Nachhaltigkeit in Finanzinstituten e.V. – “VfU”), a network of environmen-tal and sustainability managers at leading financial services providers. The VfU provides its members with a platform to exchange subject-matter knowledge and information, and to maintain an interesting dialogue with experts and repre-sentatives of non-governmental organisations; for example with the annual round table with the United Nations Envi-ronment Programme Finance Initiative (“UNEP FI”), where recent developments and progress made in the realms of sustainable finances and sustainability management are discussed. Together with the VfU, work groups elaborate on specific topics and concrete solutions. DG HYP was part of the forum for sustainable lending and joined the round table for the first time in the year under review.



16

SUSTAINABILITY APPROACH RESPONSIBLE

ACTION

EUREF-Campus, building 10/11, Berlin

© EUREF AG



DG HYP is the commercial real estate bank in the Volks-banken Raiffeisenbanken cooperative financial network, looking back on a corporate history spanning more than 90 years. Uniting business and social responsibility has al-ways been an integral part of our corporate culture. To us, sustainability means that we must satisfy the needs of to-day’s generations, and offer them fair opportunities for de-velopment – without compromising the chances of future generations or threatening our natural livelihood. We thus agree with the Brundtland Commission Report, published in 1987.

We believe that sustainable development requires a constant learning process, one which reveals new directions and potential for improvement as to how we can better overcome current and future challenges. This includes not only efficiently using and conserving natural resources, but also retaining our high-performing employees and facilitat-ing their development.

Sustainability ManagementSustainable growth is at the heart of our company phi-

losophy as DG HYP. Our entrepreneurial decisions are based on long-term considerations, and we use natural resources in ways that are as environmentally friendly and efficient as possible. Social aspects are especially important to us.

The responsibility for the issue of sustainability lies with the Chairman of the Management Board of DG HYP. This reflects the strategic significance we place on sustainability, and signals top management attention concerning imple-mentation. The Sales Management and Investor Relations department is in charge of coordinating all related activities: the head of this department reports to the Management Board on internal and external developments. This depart-ment is the first point of contact for all other departments when questions concerning sustainability and/or the imple-mentation of sustainability-related measures arise. It moni-tors all sustainable actions and makes suggestions regarding the expansion of the sustainability programme in coopera-tion with the affected divisions. Furthermore, it serves as first point of contact for internal and external stakeholders and is responsible for reporting.

Sustainability is a cross-section responsibility. To ensure that it is addressed across all management levels and divi-sions, various departments formally assumed responsibility for sustainability-related topics in their division. With this allocation of responsibilities, we want to raise awareness for the ecological and social consequences of our business activities and, by doing so, develop our understanding of sustainability. To achieve this goal, various measures have already been introduced and put into effect in the reporting year.

SUSTAINABILITY APPROACH RESPONSIBLE

ACTION

EUREF-Campus, building 10/11, Berlin

© EUREF AG



18

Sustainability ReportingWithin the scope of its sustainability reporting, DG HYP

informs its internal and external stakeholders about key developments and progress in this area. In regular intervals, DG HYP publishes sustainability reports prepared accord-ing to the international standards of the Global Reporting Initiative (“GRI”). These reports also provide information on the progress made by DG HYP in integrating the UN Global Compact into business practice. Furthermore, the section on sustainability on DG HYP’s website was expanded during the period under review.

DG HYP Sustainability RatingMore and more institutional investors include sustain-

ability ratings in their catalogue of investment decision criteria. Ratings are important; they make entrepreneurial actions measurable and comparable. Against this back-ground, we want to continuously monitor and improve

our sustainability performance, and therefore have our performance rated by independent rating agencies on a regular basis.

In its current rating, the sustainability rating agency oekom research AG rated DG HYP C+ on its scale from A+ to D–. This means that we exceeded the minimum re-quirements oekom research defined for financial services providers. For the first time, DG HYP’s achievements were recognised with the Prime Status. This status is awarded to companies which, according to the oekom Corporate Rat-ing for social and environmental performance, rank among the leaders in their industry. The rating reflects DG HYP’s good performance in all of the following categories: staff and suppliers, corporate governance and business ethics, as well as products and services. The rating analysis is thus an important factor for growing and improving our sustain-ability management.

12/2012 12/2013 01/2015

Stand 31.01.2015

DEVELOPMENT OF THE DG HYP-SUSTAINABILITY RATING



Sustainability Market InitiativeWith a view to integrating sustainability to an even

greater extent in the business processes, DG HYP is playing an active role in DZ BANK Group’s sustainability market initiative. This initiative aims to bundle sustainability-related activities, take advantage of market opportunities, avoid risks and foster the active exchange of knowledge and experience between the members of the Group. For this purpose, a permanent Corporate Responsibility Commit-tee was formed, of which DG HYP is a member. The bank also continued to pursue the development of a joint envi-ronmental and climate strategy, setting up an environment competence centre that convenes on a regular basis.

Sustainability Programme Our sustainability officer develops a sustainability pro-

gramme for DG HYP in cooperation with the relevant departments. The sustainability programme describes the goals that we have set for ourselves with regards to the continuous improvement of our sustainability performance, and how we want to achieve them. The goals and measures are systemised and categorised into our four sustainability dimensions: Economic Responsibility, Employees, Social Commitment and Ecological Responsibility. Achievement and implementation status of these goals and the corre-sponding measures are reviewed in internal audits. This system ensures that the sustainability programme is being put into practice consistently and in a targeted manner.

Economic Responsibility

• Sound business model, with a conservative risk strategy

• Long-term relationships with business partners

• Powerful funding options through: > the Volksbanken Raiffeisenbanken cooperative financial network > issuance of Mortgage Pfandbriefe

Responsibility for employees

• Performance-based remuneration

• Work/family balance

• Occupational health management

• Extensive continuous professional development offers

• Empowering the next generation

Ecological responsibility

• Reducing the use of energy and resources

• Reducing carbon dioxide emissions

• Enhancing employees‘ ecological awareness

CORPORATE CONTRIBUTION

Corporate Responsibility

• Support for social projects and non-profit organisations

• Promoting issues and organisations dealing with real estate topics

• Support for research institutes dealing with the cooperative sector

• Supporting employees‘ voluntary engagement

SUSTAINABLE CORPORATE GOVERNANCE



20

SUSTAINABILITY PROGRAMME

Objective Deadline Measures Status

Economic Responsibility

Expanding the external stakeholder dialogue ongoing Processing of rating and stakeholder enquiries:

• Participation in oekom and imug ratings as well as responding to additional queries

• Including sustainability topics in existing formats of communication and media

2013 Conducting a customer survey

2014 Expanding our website on sustainability

Acceding to the Global Compact 2013 Public commitment to the ten principles of of the United Nations the UN Global Compact

Further anchoring sustainability as an 2013 Implementing a sustainability strategy integral part of our business strategy

Updating and expanding a 2014 Implementing a guideline for a sustainable supply chain sustainable procurement

Establishing a coherent risk culture 2014 Implementing DZ BANK Group's Code of Conduct

Influencing our executives' actions 2014 Making sustainability an integral part positively and sustainably of target agreements




Employees

Recruiting, fostering the progress and retention ongoing Supporting bachelor and master theses; of talent continuing the trainee programme

2014 Introducing a dual Bachelors of Arts in Banking & Finance

Preserving and improving employee health ongoing Regular

• health days,

• influenza vaccinations, etc.

2014 Relaxation room

2015 Conducting a threat analysis to assess occupational stress

2015 Preparing an expert opinion on harmful substances as a preventive measure

Increasing employer attractiveness 2013 Creating a concept for bundling old and preparing the bank for the challenges and new initiatives of demographic change 2015 Increasing the share of women in executive and expert positions

Expanding the internal stakeholder dialogue 2014 Conducting an employee survey:

• Feedback on executive behaviour

• Retaining and improving employee satisfaction

Improving the compatibility of family 2014 Determining principles of a family-conscious corporate culture: and working life • Elaborating and communicating "principles of a family-canscious corporate culture" • Stay in touch programme for absent employees

2014 Expanding and intensifying offers:

• Information on the intranet and internet

• Theme week on "family and working life"

• Redesigning the parent-child office

• Expanding support offerings on life coaching

2015 Elaborating an interim report on the "career and family"audit

2015 Developing and implementing a system for the management of leaves of absence



22


Social commitment

Supporting sustainability-promoting ongoing Supporting the CLUB OF ROME institutions (e.g. CLUB OF ROME schools or the Plant for the Planet initiative through The Change Chocolate, using this chocolate as a giveaway at events)

Expanding corporate citizenship 2014 Concept for promoting social responsibility

2014 Supporting the Hamburg Donor's Parliament

Expanding corporate volunteering 2014 Activities and events:

• Charity flea market

• Christmas party for kids

Ensuring adherence to legal standards ongoing Analysing and assessing the new and and requirements changing regulatory requirements


Improving transparency and fostering ongoing Participating in the DZ BANK Group's a culture of dialogue sustainability market initiative

2014 Establishing a Corporate Responsibility Committee

Expanding the recording and improving the ongoing Tracking and publishing CO2 emissions data transparency of environmental data 2014 Expanding CO2 tracking to include all main emission sources

2014 Improving quality of relevant consumption data through new tracking media

2014 Implementing consumption monitoring

Protecting the environment and reducing 2013 100% certified sustainable energy at Hamburg headquarters carbon footprint 2014 Renewing and expanding split air conditioning systems in rental space ➞ Using waste heat for garage heating and heat recovery

2015 Starting comprehensive facade restoration at Hamburg headquarters

Conserving resources ongoing Implementing energy saving measures at Hamburg headquarters

2014 Installation of energy-saving lighting, Cut-off of barely used cold storage cells



Status: Completed Partly completed New goal Not completed

In the following, we will present each field in detail including the measures we have planned.



Conserving resources 2014 Energy-efficient commercial coffee machines and dishwashing systems for our in-house canteen ➞ Reducing power consumption by at least 3 per cent

2014 Installing LED lighting in our in-house canteen, the entrance hall and various side rooms

2014 Installing flow rate reducers in the showers of the changing rooms to reduce water consumption

2014 Issuing object-driven energy passes, identifying saving options

2014 Amount and extend of previous measures resulted in now further saving options being identified with the energy passes.

2014 Reducing print media usage:

• Avoid sending out Christmas cards

• Inventory of existing print media

2015 Starting to modernise the heating system by adjusting the boiler

Raising environmental and sustainability 2014 Extending communication on sustainability: awareness • on the intranet and internet • Integrating sustainability themes into internal information workshops

2015 Integrating sustainability themes into welcome events for new employees

Making the switch to recycled paper 2014 Reviewing the switch to recycled paper

2014 Switching to 100% recycled paper in all parts of the bank

2015 Reviewing the switch to recycled paper for envelopes 2015 Switching all printed material to FSC certified paper



24

ECONOMIC RESPONSIBILITY

TM50, Nuremberg

© BGB-Gesellschaft Thomas-Mann-Straße 50

SAFEGUARDING THE COMPANY‘S LONG-TERM SUCCESS

Märkisches Viertel, Berlin

EUREF-Campus, building 14, Berlin

Berliner Bogen, Hamburg

© EUREF AG

© Jörg Hempel © GESOBAU



Corporate governance founded on economic respon-sibility is a material basis for sustaining performance and for securing long-term success. DG HYP aims to apply this responsibility in its day-to-day business. As part of its busi-ness model, the bank applies a conservative risk strategy, forges long-term business relationships and treats clients with honesty, trust, and a sense of partnership. The bank takes its economic responsibility seriously in conjunction with financing decisions.

Customer Satisfaction Customer satisfaction, as a form of feedback on our

own performance, is of critical importance to us. This is why we engage in an active dialogue with this stakeholder group and regularly ask for their opinion. In our last survey, conducted in 2013, 76 per cent of respondents said they were completely or very satisfied with DG HYP. 96 per cent of our customers would recommend us.

Complaints ManagementTo deal with complaints in a professional manner, we

have a complaints management system in place for all of our clients, cooperative partners or other third-parties. This system lies within the direct responsibility of the Manage-ment Board. All of the complaints received, whether com-municated by phone, post, email or in person, are centrally collected and then processed directly by Complaints Man-agement. When assessing complaints, we use definitive criteria to ensure a consistent and transparent procedure. As we follow a process of continuous improvement, we aim to meet the expectations and requirements of our stake-holders even better and increase client satisfaction.

Responsible LendingReal estate represents an important economic factor in

Germany, and is of tremendous social significance. As such, commercial real estate finance is an indispensable core busi-ness area of the Volksbanken Raiffeisenbanken cooperative financial network. As a specialist centre of expertise and contact for the cooperative banks, DG HYP plays a key role in this context.

We offer the cooperative banks a high-powered and tailor-made range of products and services. We assess prop-erties according to strict risk and return criteria as part of our risk-aware approach to lending. This includes the prepa-ration of a lending and market valuation by VR WERT, a wholly-owned subsidiary of DG HYP. In this valuation, prop-erties are assessed in terms of the following aspects:

• economic quality, e.g. occupancy, flexibility of property structure, efficiency of ground plan,

• technical quality, e.g. construction, fire safety, sound-proofing, facilities engineering, room quality, demolition options, recyclability, materials employed,

• functional quality, e.g. location, accessibility for people with disabilities and the general public, space efficiency,

• socio-cultural quality, e.g. architecture, city planning, design, comfort, user satisfaction,

• ecological quality, e.g. waste and contamination audits, product selection, effects on global and local environ-ment, sustainable use of resources,

• lifecycle quality, e.g. re-lettability, stability of value in-cluding third-party usability, and costs for conserving the value of the property

The valuation of commercial real estate properties re-quires a differentiated and individual assessment of each exposure. It therefore also requires a high level of compe-tence by the valuer.

The objects to be financed generally fulfil standards such as the certificate of the German Sustainable Building Council (Deutsche Gesellschaft für Nachhaltiges Bauen e.V. – “DGNB”) or the Leadership in Energy and Environmental Design (“LEED”) of the U.S. Green Building Council. Stand-ards are frequently established for local authority compli-ance when real estate is allocated, and they are checked



26

as part of a certification process. They are also essential to the value and resale value of the property, and play an im-portant role in the lending valuation of VR WERT and in our financing decision.

Business DevelopmentAgainst the background of intensifying competition,

DG HYP‘s new Commercial Real Estate Finance business has performed positively, with € 4,941 million in new loans originated during 2014 (2013: € 5,378 million). In line with the bank‘s strategic direction, at € 4,709 million (2013: € 5,328 million) business originated in its core German mar-ket accounted for the largest part. New business of € 232 million was generated on the international markets (2013: € 50 million). DG HYP successfully maintained a high level of cooperation within the Volksbanken Raiffeisenbanken cooperative financial network during the year under re-view: joint lending with German cooperative banks totalled € 2,617 million (2013: € 2,861 million). This sustainably positive development shows that commercial real estate

finance – as part of the corporate customer business – is attracting great interest and a strong response amongst co-operative banks. At present, DG HYP cooperates with more than 400 cooperative banks in this business.

The high-powered and tailor-made range of products and services of the German cooperative banks allows them to offer their medium-sized clients larger-sized financing deals with DG HYP as a partner, or to diversify their risks. In this context, both sides benefit from joint market cover-age – DG HYP from the direct contact with regional clients, and the German cooperative banks from the business re-lationships arising from developing the market throughout Germany. In this way, they gain new clients with high de-velopment potential, generating cross-selling opportunities and strengthening their competitive position.

We have developed a web-based, comfortable rating procedure that is uniform across the cooperative network to complement our product range. The rating application

SUSTAINABLE FINANCING

Outstanding financings of the year under review include EUREF Campus, an energy-related flagship project,

financed in a consortium. The „intelligent city of the future“, centred around the famous gasometer in

Berlin, contains only buildings that produce a CO2-neutral form of energy that already meets the federal

government‘s climate protection targets for 2050. DG HYP is financing two new office buildings on the site,

and is supporting the development of the entire project. Another financing solution that is significant from

a sustainability perspective is the newly-built ‚Edeka‘ supermarket in Nuremberg. In the most technically ad-

vanced retail facility in Europe, geothermal energy, heat recycling and solar energy were deployed to achieve

a high level of energy efficiency, with energy savings of 70 per cent. The building is also distinguished by

innovative architectural features, using renewable materials, daylight, an expressive style, and artwork.



enables the German cooperative banks to measure the client-specific default risks associated with commercial real estate and provides an important foundation for joint lend-ing business within the Volksbanken Raiffeisenbanken co-operative financial network.

Local Authority LendingIn the interests of the Volksbanken Raiffeisenbanken co-

operative financial network, DG HYP supports the coopera-tive banks as they respond to financing enquiries from the public sector. In this way, the cooperative banks are able to reinforce their presence on the market and build up further business relationships with local authorities. This is a field in which DG HYP is a competent point of contact within the Volksbanken Raiffeisenbanken cooperative financial net work. Taking into account the borrowers‘ credit ratings, financing offers are prepared and submitted to the local au-

thorities via the local banks. During the 2014 financial year, DG HYP generated new business with a volume of € 359 million (2013: € 438 million) in the area of local authority lending.

Public-Private Partnership Public-Private Partnership (PPP) is a contractually agreed

cooperation between public authorities and private housing companies. As part of this process, public-sector duties are performed in collaboration with the private sector – or are transferred completely to private housing companies. Par-ticularly in the areas of transport infrastructure, construct-ing and expanding kindergartens, schools, hospitals and administrative buildings, PPP projects are of tremendous significance. DG HYP joins forces with the private sector, within the framework of PPP projects, to provide relief to city and local authority budgets.

COMMERCIAL REAL ESTATE FINANCE – NEW BUSINESS

2012

2013

2014

Total 5,256 5,378 4,941

of which: domestic 5,060 5,328 4,709

of which: international 196 50 232

2012 2013 2014€ mn



28

Rating Standard & Poor‘s (S&P) reviewed and confirmed

DG HYP‘s good rating in the 2014 financial year. S&P paid tribute to DG HYP‘s successful business model as a real estate bank deeply integrated within the strongly capital-ised, highly profitable Volksbanken Raiffeisenbanken coop-erative financial network. DG HYP‘s Pfandbrief issues have retained their top triple-A rating, thanks to the high quality of our cover assets pools coupled with low surplus cover requirements by normal market standards.

Investor Base and Funding As the provider of commercial real estate financing

within the Volksbanken Raiffeisenbanken cooperative finan-cial network, DG HYP‘s capital markets funding is based primarily on Mortgage Pfandbriefe issuance. During the 2014 financial year, DG HYP placed a total of € 1.5 bil-lion in Pfandbriefe (2013: € 1.8 billion), including a € 500 million, 7-year benchmark bond which met with strong demand from a diversified investor base. The Bank issued

€ 936.5 million (2013: € 967.0 million) in bearer Pfand-briefe by way of private placements. As at the year-end, DG HYP‘s Pfandbrief issues outstanding totalled € 24.8 bil-lion (2013: € 28.4 billion).

Risk Management

As an integral part of DG HYP‘s strategic and opera-tive management of the bank as a whole, our risk manage-ment is closely integrated into the risk management and risk control systems of DZ BANK Group. Assuming risks in a targeted and controlled manner, observing target re-turns, is an element of our enterprise management. The activities driven by the Group‘s business model require the ability to identify, measure, assess, manage, monitor and communicate risks. In addition, maintaining an adequate level of equity backing for risk exposure is a prerequisite for our business. As a guiding principle for all business activities within the DZ BANK Group – and hence, for DG HYP – the bank assumes risk only to the extent required to achieve the objectives of its business policy.

Rating overview Long/short-term liabilities/Outlook A+/A-1/stable Issuer credit ratingPublic Pfandbriefe AAA Public Pfandbriefe (Senior Secured)Mortgage Pfandbriefe AAA Mortgage Pfandbriefe (Senior Secured)Bearer bonds A+ Senior Notes (Senior Unsecured)



THE PFANDBRIEF AS A SUSTAINABLE INVESTMENT

Pfandbriefe are covered bonds with a dual recourse feature. They

are considered a safe haven in the investment universe since, in

case of the issuer becoming insolvent, investors also have recourse

to the cover assets pool. The value of the cover assets pool is de-

fined through the German Pfandbrief Act (Pfandbriefgesetz), which

establishes specific security mechanisms for investor protection and

the basis for the high quality of the Pfandbrief. To issue Pfandbriefe,

a credit institution needs to apply for a licence with the Federal

Financial Supervisory Authority (Bundesanstalt für Finanzdienstleis-

tungsaufsicht – “BaFin”) and fulfil certain minimum requirements.

Furthermore, the Pfandbrief issuer needs to have a risk management

system in place that is appropriate for Pfandbrief business and identifies, assesses, manages and monitors all

risks associated with it. The high quality of the Pfandbrief also rests in the strict requirements with regards

to the cover assets pool: Pursuant to the German Pfandbrief Act, only real estate loans, and only up to the

first 60 per cent of the mortgage lending value, are eligible as cover pool assets for Mortgage Pfandbriefe.

Therefore, the Pfandbrief is in every sense a long-term funding vehicle that meets investors‘ security and

transparency criteria – even in difficult capital market phases.

With the help of our conservative risk strategy and our internal credit guidelines, we have laid the ground-

work to continue delivering, consistently and uniquely, the high quality standards of our Pfandbrief issuance.



30

Types of Risk and Risk Management The regulatory organisational requirements and the al-

location of risk management responsibilities are set out, in particular, in the Minimum Requirements for Risk Manage-ment (Mindestanforderungen an das Risikomanagement – MaRisk). DG HYP meets these requirements, adapting its relevant processes to the specific needs of its business model. DG HYP has also developed and implemented risk management and risk control systems that fulfil the needs arising in the market and competitive environment, as well as the requirements arising from the bank‘s integration in the DZ BANK Group. This forms the basis that ensures the proper operation and efficiency of the risk management process.

As part of the credit risk strategy, the back office – to-gether with Credit Risk Controlling – is responsible for managing counterparty credit risk at an individual exposure level, and controlling risks at a portfolio level. The early iden-tification of risk potential in lending business and the inten-sive handling, restructuring and settlement of loan commit-ments are governed by strictly defined processes and control systems. The management of market and liquidity risks is the responsibility of Treasury, within the scope of asset/liabil-

ity management. Managing operational risks falls within the remit of each operational unit in performing their functions. Risk management for the investment portfolio is ensured by the Office of the Management Board. The Controlling units‘ responsibilities include current reporting and – to-gether with the respective risk management unit – moni-toring risk on a portfolio level. For this purpose, Credit Risk Controlling prepares a MaRisk-compliant credit risk report on a quarterly basis, outlining the key structural features of the lending business. To highlight concentrations of credit risk, portfolio exposure is broken down by geographic re-gion, type of property, loan-to-value ratio, remaining term and rating class. In addition, portfolio evaluations form the basis for the annual review of the credit risk strategy. The report further contains a description of the Group‘s overall risk situation and the other key types of risk.

As an independent unit, Internal Audit examines whether the demands on the internal controlling systems, the risk management and risk controlling systems, and the neces-sary reporting, are adequately met.

For more information on our risk management, please refer to our 2014 Annual Report.



SELECTED INDICATORS 2012–2014

€mn 2014 2013 2012

Development of originated new business

Commercial Real Estate Finance 4,941 5,378 5,256

– Domestic 4,709 5,328 5,060

– International 232 50 196

Treasury

– Originated loans to local authorities 359 438 327

– Pfandbrief sales and other refinancing sources 3,628 3,293 3,631

Portfolio development

Total assets 42,912 49,716 54,368

Mortgage loans 18,460 19,576 20,340

Originated loans to local authorities 6,996 7,636 8,246

Public-sector lending 9,662 12,266 15,491

Mortgage Backed Securities (MBS) 1,511 1,722 2,387

Pfandbriefe and other debt securities 25,518 29,332 34,084

Own funds*) 1,692 1,562 1,445

Total capital ratio (%) 11.2 12.6 10.1

Tier 1 ratio (%) 9.0 10.9 8.2

Common equity tier 1 ratio (%) 5.6 k.A. k.A.

Profit and Loss Account

Net interest income 264 251 241

Net commission result 37 43 37

Administrative expenses 118 117 107

Net other operating income/expenses – 6 3 – 1

Provisions for loan losses – 35 – 40 – 45

Securities and investment result 11 124 – 27

Operating result 153 264 98

Allocation to the fund for general banking risks 68 29 60

Partial profit transfer 20 20 23

Profit transfer 65 215 15

Cost/income ratio (%) 43.9 41.7 40.8

Return on equity (%) 14.8 28.8 9.4

*Previous year’s figure in accordance with the SolvV – limited comparability.



32

EMPLOYEES SOCIAL RESPONSIBILITY IS THE HEART OF OUR BASIC CULTURE



Responsible Human Resources ActivitiesSatisfied and motivated employees are crucial to the

Company‘s long-term success. We therefore provide our employees with a working environment in which everyone is treated with respect, openness and fairness – and which promotes dedication and sustained commitment. Our Hu-man Resources policy aims to fulfil our employees‘ needs whilst meeting economic requirements and acting respon-sibly. We believe in performance-based compensation; we are committed to enabling our employees to enjoy both their career and their private life, and we also provide com-prehensive occupational health management.

Management ResponsibilityGood governance calls for a corporate culture that moti-

vates and supports its employees, and offers a strong frame-work for them to hone their skills and develop new ones. Against this background and based on DG HYP‘s guiding principles, our executives jointly developed management guidelines which describe the type of management culture the bank is striving to achieve. These guidelines govern the

way we treat each other in our daily work. To facilitate their implementation, we developed a corresponding manager development programme in 2013, which we continued in the year under review. The programme aims to improve the management behaviour experienced in relation to the management guidelines, and to support managers in imple-menting this. The emphasis was on a high-need orientation and exact fit of the offer, which comprised a broad range of measures – starting with seminars through a „manage-ment“ expert forum with peer consulting, to workshop and coaching formats. Additionally, individual measures were determined in advance in individual discussions held with the human resources department.

The management development programme was also a component of the employee survey conducted in the summer of 2014. Overall, the employees stated that they could identify all guidelines in the management behaviour of direct managers. The managers found the transfer of re-sponsibility and creation of scope particularly useful in order to foster an independent work ethic.

Training days Training costs

3.6 days

€ 1,198

3.7 days

€ 1,805

2.8 days

€ 1,457

2012

2013

2014

TRAINING DAYS AND COSTS PER EMPLOYEE



34

Training and Continuing Professional DevelopmentContinuous changes in the market environment, and

the need to adapt to these changes, affect all employees of the bank – the requirements of their work are as changing as the markets themselves. DG HYP aims to maintain the professional and personal expertise of its staff and places great importance on using training measures to promote the potential of its employees in a targeted manner. We therefore offer a broad range of training and professional development options, comprising in-house seminars, de-partmental training, workshops, language classes and IT training. Our employees may also attend external seminars and visit other companies.

Annual employee discussions help us determine the kind of training our employees need. In the same interval, we conduct development discussions with our managers, in which we take a look at our individual employees, but also at the development of the team and at trends each depart-ment has to prepare for – partly through further qualifica-tion.

At almost 70 per cent, most staff members participated in at least one training measure during the year under re-view. Demand was equally strong for professional develop-ment measures, such as the impact of Basel III on DG HYP‘s business model, and for personal development, where measures included improving one‘s own sphere of influence or recognising one‘s own strengths and potential. On aver-age, our employees completed 2.8 training days in 2014, less than in the previous year, but still a high number. The decrease is mainly attributable to the end of the manage-ment development programme, which was completed after 18 months and will be continued as part of the regular per-sonnel development.

The range of CPD is complemented by the DG HYP Real

Estate Academy, which has firmly established itself since its launch in 2010. With the Real Estate Academy, we are pursuing the objective of offering our employees a high-calibre and broadly diversified level of training. The Interna-tional Real Estate Business School – IRE|BS of the University of Regensburg, is our cooperation partner. Approximately

Employees Employees with executive functions

Number of days

1,532

2012

1,460

110

1,350

2013

352

1,180

2014

1,187

239

948

TRAINING DAYS PER EMPLOYEE CATEGORY



20 members of staff work through the Academy every year, making for more than 60 graduated employees so far. The fourth class will begin in autumn of 2015.

DG HYP also plans to adjust its CPD offer to age- and aging-appropriate learning standards. Against the back-ground of demographic change, it is our goal to increase interest in training measures and benefit from the experi-ence and knowledge of older employees.

Empowering the Next Generation

Owing to demographic change and growing compe-tition for specialists and executives, the attraction of the employer has moved to the forefront of strategic human resources activities. DG HYP decided to take early action against the shortage of skilled young talent, and in 2010 developed a trainee programme tailored to the bank‘s spe-cific needs, offering in-depth training for qualified university graduates. The trainee programme comprises a six-month orientation phase at our Hamburg headquarters and a

twelve-month specialisation phase, during which trainees may broaden their practical experience in our various de-partments in Hamburg or at any one of our six real estate centres.

In the year under review, DG HYP established a second pillar to attract young talent and promote loyalty to DG HYP. A three-year dual study programme, leading to a Bachelor of Arts degree in Banking & Finance, was introduced in August; the programme consists of alternating theory and practical phases. During the practical phases in DG HYP, the students spend time in different departments, thus becom-ing familiar with the bank as a whole. The students com-plete the theory phase at the vocational academy for the banking industry (Berufsakademie für Bankwirtschaft) in Hanover. After two and a half years, the participants also have the opportunity within the framework of their stud-ies to take the Chamber of Industry and Commerce (IHK) examination. Two students attend DG HYP‘s dual study programme every year.

6.6 %6.9 % 19.1 % 29.3 % 38.1 %

60 years or older20 to 29 years 30 to 39 years 50 to 59 years40 to 49 years

EMPLOYEE AGE STRUCTURE



36

Students and pupils may also get to know DG HYP through internships, student clerkships or on their academic (thesis) work. In 2014, DG HYP joined the Fair Company network by signing the Fair Company Codex, a voluntary self-commitment.

Furthermore, in the year under review we participated in the joint booth of the Volksbanken Raiffeisenbanken cooperative fi nancial network at the graduate congress in Cologne for the 13th successive time.

Equal Opportunities Equal opportunity and anti-discrimination are integral

parts of our corporate policy and our responsible approach to how we do things. We treat all employees equally, re-gardless of their heritage, skin colour, religion, gender, age, nationality, sexual orientation, gender identifi cation, marital status or degree of disability. Our employees receive regular training on the German General Equal Treatment Act (Allge-meines Gleichbehandlungsgesetz). We value the diversity of our employees and therefore decided to sign the German Charter of Diversity (Charta der Vielfalt) in 2012.

Furthermore, we played an active role in creating DZ BANK Group‘s Code of Conduct and we support the Group‘s initiative on women in business. At the end of 2014, 41.0 per cent of our employees were female (2013: 40.7 per cent). The share of women in senior roles remained stable at 10.2 per cent in the year under review (2013: 10.2 per cent).

Our corporate culture promotes integration: as such,

severely disabled members of staff are an important part of our identity. In 2014, 4.0 per cent of our employees were severely disabled (2013: 3.4 per cent). These employees, together with their interests and concerns, have dedicated representatives.

1. Fair Companies offer internships for students; the goal of these intern-ships is to provide professional orientation and guidance.

2. At Fair Companies, the tasks and goals of interns are clearly outlined, and all interns have a fi xed contact in the company.

3. Fair Companies employ interns for a sensible period of time.

4. Fair Companies do not fob off graduates applying for a job with an in-ternship.

5. Fair Companies pay their interns an adequate allowance.

6. Fair Companies provide transparency on tasks, contacts and the goals of the internship as well as on the Fair Company Codex.

RULES OF FAIR COMPANY CODEx



At DG HYP, the principle of equal opportunity also ap-plies to wages. The remuneration of our employees consists of fi xed and variable parts. The variable component is de-termined based on the individual‘s performance assessment by reference to agreed targets, pursuant to the provisions in the employer/works council agreement (Betriebsverein-barung) on variable remuneration. When it comes to remu-neration, there are no gender-specifi c differences at DG HYP. We base compensation on the qualifi cations, experience and performance level of each employee. 256 members of staff were non-tariff employees as at 31 December 2014: 198 were tariff employees, fi ve received a trainee salary or other forms of remuneration, and three were temporary workers.

Work-Life Balance We want to create a family-friendly environment for our

employees that accomodates not only private needs, but also career plans for every individual. That is why employees with children or family members who are ill and need care receive dedicated support from DG HYP. We offer fl exitime, part-time and partial home offi ce models. Through cooper-ation agreements with pme Familienservice and Deutscher

Pfl egering, we also offer professional counselling as well as childcare support and support for employees who nurse family members. External experts are also there to help with personal emergencies or problems of all kinds. There is also a parent-child offi ce available at DG HYP at short notice, which received a complete makeover in 2014, and we offer emergency childcare where necessary.

Again in 2014, numerous human resources policy meas-ures were aimed at supporting DG HYP‘s employees to in-tegrate work and private life. The focus was on implement-ing the measures agreed within the scope of the „career and family“ audit, as well as informing employees about the offer. Against this background, a brochure was devel-oped that clearly outlines the measures taken by DG HYP, among other things. The bank also held an events week during the year under review, under the slogan „Work and Life in Healthy Harmony“. The events were met with great interest on part of employees, who learned about the op-tions our cooperation partners offer on caring for relatives and help with child care, and attended specialist lectures on nursing and childcare. In sum, we managed a marked increase in the uptake of the offers.

In 2013 ABSOLVENTA, one of the largest German employment websitesfor graduates and young professionals, awarded us their “career-promoting and fair trainee programme” seal.

In 2013, the Hertie Foundation awarded its „audit beruf undfamilie“ certifi -cate for our sustainable, family-friendly Human Resources policies, recognising our efforts in helping employees balance the demands of work and family and establishing a family-conscious corporate culture.



38

Performance-Based CompensationDG HYP‘s success hinges on the performance of the

people who work on its behalf. Part of our self-image is to adequately recognise the achievements of employees. Remuneration is based only upon qualifications and per-formance. A fixed base salary enables our employees to plan for the future and gives them a regular income upon which they can rely. We further honour their achievements by paying a performance-based bonus once a year. In addi-tion to commercial success, we honour individual and team achievements. The variable component is determined based on the individual‘s performance assessment or agreed targets pursuant to the provisions in the employer/works council agreement (Betriebsvereinbarung) on variable remu-neration.

Remuneration of the Board of Managing DirectorsThe Management Board is remunerated in accordance

with legal and regulatory requirements. The Supervisory Board is responsible for the Managing Directors‘ remu-neration and conducts regular reviews, in particular with regards to appropriateness and changes necessary to com-ply with new regulatory requirements. The remuneration is

comprised of a fixed and a variable component. Payment is dependent on a sustainable development of the bank and linked to a modified operating profit after loan loss provi-sions. Accordingly, and pursuant to the German Regulation on Remuneration in Financial Institutions (Institutsvergü-tungsverordnung – “InstitutsVergV”), as amended in De-cember 2013, the variable remuneration of the Manage-ment Board is calculated on the basis of multi-year criteria, and risk-related indicators are taken into account.

Remuneration of Risk TakersEmployees whose professional activities may have a

material impact on the bank‘s risk profile are classified as risk takers. They receive a multi-year variable remunera-tion linked to the achievement of agreed targets. Where this remuneration exceeds a certain limit, provisions in the employer/works council agreement (Betriebsvereinbarung) on retention, payment and entitlement conditions apply. 80 per cent of the variable remuneration component is retained for up to four years following determination. Dur-ing this time, a minimum of 50 per cent of the variable re-muneration depends upon DG HYP‘s sustainable perform-ance.

USE OF FLExIBLE WORKING HOURS

Employees (%) 2014* 2013 2012

Flexible hours 97.6 97.5 79.0

Full time 84.1 85.9 87.7

Part time 15.9 14.1 12.3

Virtual offices 42.7 35.5 24.4

Sabbatical 0.2 0.2 0.0

Partial retirement 1.5 2.0 2.0

Parental leave 2.4 2.3 3.5

*DG HYP‘s total workforce



Social BenefitsOn top of a performance-based compensation, we offer

comprehensive social benefits for our employees to improve their work-life balance and security. Our benefits include corporate retirement provisioning, childcare support, a transit card (“job ticket”) or transit allowance, emergency assistance, group accident insurance, a corporate sports programme, anniversary bonuses, a canteen, and financial support for next of kin.

Occupational Health Management and SafetyWe take our responsibility as an employer seriously and

aim to create a safe working environment by not only elimi-nating factors that may trigger or worsen conditions, but also taking preventive measures to preserve and improve employee health – an important cause also in economic

aspects as this means safeguarding the bank‘s ability to perform.

Occupational Health ManagementWith our comprehensive occupational health manage-

ment, we contribute to the performance, health and com-mitment of our staff. Since 2012, we have been offering various measures, which we expanded in the year under re-view. The human resources policy approach pursued in this context is complemented by a versatile range of in-house sports, healthy meals in the in-house canteen, occupational health examinations and advice from the company doctor, regular health checks and a mobile massage service. We also hosted an event week on “How to achieve a healthy work-life balance”, and continued to equip workstations with ergonomic furniture.

KEY BENEFITS AT A GLANCE

2012

2013

2014

12.4

Years

12.9

13.3

AVERAGE LENGTH OF COMPANY SERVICE

Flexible working hours without a set schedule „Stay-in-contact“ programme during family leave

Various flex-time models Possibility for employment during parental leave

Occasional mobile working Parent/child offices

Childcare support Family-friendly solutions for parental leave and care for relatives



40

HOLISTIC COMPANY HEALTH MANAGEMENT AT DG HYP

Health

promotion

Exercise/company

sports offers

Lectures, information

material

Healthy diets

Relaxation/stress

management

Vaccination campaigns

Healthcare action day

Mobile massage service

Occupational

health and safety

Risk assessment

Occupational medicine/

health check-ups

Workplace visits/

advice on workplace

ergonomics

Information

and advice

Occupational

re-integration

management

Re-integration

following longer

periods of illness

or other absence

Personal discussions

with returning

employees

Catering

Healthy meals in the

in-house canteen and

café

Workplace nutrition

Personnel

development

Occupational health

seminars for managers

CPD measures/

seminars on health-

care, stress, psycho-

logical pressure

Additionally, we offer a number of corporate sports and fitness programmes for our employees to participate in, such as complete body training, kick-boxing and running. 149 employees accepted this offer in 2014.

The average illness rate 2014 was at 3.3 per cent, slight-ly exceeding the previous year‘s value (2013: 3.2 per cent). This rise was caused by an increase in long-term illness not related to the working environment. As in the previous years, there were no work-related fatalities in 2014. Last but not least, we not only invest in preventive occupational health measures, but we also support employees returning after longer periods of illness, via an occupational re-inte-gration programme.

Occupational SafetyIn accordance with the statutory provisions and require-

ments for occupational and fire safety, all employees receive safety training when they join us. Occupational safety spe-cialists conduct these trainings. We also carry out regular workplace inspections, safety instructions and measures to raise awareness for occupational safety issues. The rate of work and commuting accidents at DG HYP was 2 per cent in 2014 (2013: 0.2 per cent).



2014 2013 2012

Employees (number) 454 440 434Temporary employees 9 18 Non-tariff employees 445 422

Expenses for compulsory social security contributions (€ mn) Wages and salaries 38.0 36.8 35.3Company pension schemes 2.9 1.5 2.9Other social security contributions 4.9 4.6 4.5 Percentage of women Total workforce 41.0 40.7 40.8Executive positions 10.2 10.2 8.2

Average age 45.7 45.4 44.9

People with disabilities (%) 4.0 3.4 3.6

Fluctuation (%) 0.9 3.1 2.8

Illness rate (%) 3.3 3.2 3.0

Workforce by type of employment (%) Non-tariff employees 56.4 53.2 53.3Tariff employees 43.6 45.2 44.7Other employees 1.5 1.6 2.0with at least 15 vacation days* 95.9 95.2 96.3with 23 vacation days or more 93.2 90.7 97.7with 30 vacation days 84.7 85.9 83.7with the option to take special leave 100.0 100.0 100.0with the option to work part time 100.0 100.0 100.0with company pensions 98.0 97.7 96.0

represented in the Works Council 97.6 97.5 97.5

*The number of vacation days depends on the level and type of employment

STAFFING INDICATORS



42

SOCIAL COMMITMENTBUILDING TRUST THROUGH RESPONSIBLE ACTIONS



Our cooperative basic values of aiding empowerment, solidarity, partnership and social responsibility are corner-stones of DG HYP‘s social commitment. Together with our staff, we pursue an active programme of social and com-munity duties, and we support a large number of social projects and third sector organisations in our fields – on top of our work connected with the Volksbanken Raiffeisen-banken cooperative financial network.

Community Service Initiated by DG HYP employees via an ideas contest,

DG HYP and the Hamburg Donor‘s Parliament (an initia-tive we support since 2014 as a fixed partner) organised a charity flea market in the year under review. The Ham-burg Donor‘s Parliament has been supporting projects and initiatives fighting homelessness, poverty and loneliness in Hamburg since 1996. Proceeds from the charity flea mar-ket went to various projects supported by the Donor‘s Par-liament. Unsold donations in kind were forwarded to the nutzmüll e.V. charity for re-use.

DG HYP also donated to its staff‘s annual Christmas col-lection in 2014 (which the bank generally doubles), for the „Children for Tomorrow“ foundation‘s refugee ambulance and the Caritas charity‘s first aid centre for the homeless. 22 members of DG HYP staff, some of them with their families, participated in a charity run through the Hamburg HafenCity. The entry fees were forwarded to “Children help children”, an initiative of the paper Hamburger Abendblatt.

Related Field Project SupportThe employees of DG HYP have been providing eco-

nomic aid by supporting the DZ BANK Microfinance Fund for several years. The Microfinance Fund makes it possible to extend small loans to people in developing countries who do not have access to conventional banks or funding of their own, mainly to women who are active in trades, crafts, agri-culture or food production. Using these loans, they are able to build a business, create jobs and independently improve

their living situations, in line with the cooperative principle of aiding empowerment. The DZ BANK Microfinance Fund was founded by DZ BANK employees more than ten years ago. In 2012, it was converted into a cooperative with over 250 members, including DG HYP staff.

DG HYP is also a proud sponsor of the CLUB OF ROME. The CLUB OF ROME advocates sustainable development that aligns the needs of today‘s and future generations to the limited availability of resources and the limited resilience of ecosystems. Last year, DG HYP began providing the CLUB OF ROME’s Germany branch with facilities at the bank’s headquarters, with the Club making a cost contribution. We also provide the Club with a forum for various client events, and we are an active supporter of the CLUB OF ROME schools project. This comprises twelve schools throughout Germany with approx. 12,000 students. CLUB OF ROME schools raise awareness for sustainable action, encouraging students to accept their responsibility as world citizens and to “make a difference” locally. DG HYP’s support contrib-uted to the expansion of the network, and to spreading the idea of sustainability to more schools. In November 2014, DG HYP was once again the host and financial backer of the annual meeting of the CLUB OF ROME schools.

Cooperative Charitable SupportOur sponsorship activities include cooperative charitable

support. In 2014, a large part of our endowment fund was used to fund research on cooperative science. The recipients of DG HYP support include the Research Institute for Co-operative Studies at the University of Erlangen-Nuremberg, the Förderverein zur Stiftung GIZ e.V. and the Gesellschaft zur Förderung des Instituts für Genossenschaftswesen at Philipps University Marburg/Lahn. Furthermore, DG HYP, DZ BANK and other companies within the Volksbanken Raiffeisenbanken cooperative financial network support the Active Citizenship Association (Aktive Bürgerschaft), which advocates civic action, non-profit organisations and a fair and powerful civic society.



44

ECOLOGICAL RESPONSIBILITYENVIRONMENTAL PROTECTION AS A COMPONENT OF COMPANY POLICY



Environmental PolicySustainable development calls for conscionable use of

the environment and natural resources. As a responsible financial services provider, we take on an active role in en-vironmental and climate protection, especially in areas we can influence directly. Our environmental management focuses on optimising the use of energy and resources at the bank, and on using renewable energy sources to con-sistently reduce our operational carbon footprint.

To further advance environmental protection at DG HYP and keep track of the effects of our business activities for the environment, we systematically record and analyse our resources consumption, and – in the year under review – we appointed an Environmental Officer. The Environmental Officer is supported by a team of two coordinators, who are included by the departments when it comes to specific questions.

To further engage our employees in the consistent pro-tection of the environment, we regularly and comprehen-sively inform our staff on the goals and achievements of our sustainable banking operations, for example during the first “DG HYP Environment Days”, an action week held in 2014. During that week, vivid representations showed what‘s be-hind the consumption data of our bank. Our staff learned many informative, funny and useful facts about energy, water, waste and paper. The CLUB OF ROME supported us and devoted a whole day to talk to our employees about the recycling economy.

During this action week, we also announced further measures:

• We set up a new office waste sorting system. All offices are now equipped with an additional dustbin to facilitate the segregation of wet or damp waste and dry paper. Furthermore, the plastic bags at the collecting

stations of our cleaning service were replaced by envi-ronmentally friendly gunny (jute) sacks.

• We joined the Writing Instruments Brigade, an initia-tive to collect pens promoted by international recycling and upcycling company TerraCycle, to reduce waste.

• We switched to recycled paper for all printers and

copiers.

Greenhouse Gas EmissionsThe calculation of CO

2 emissions (greenhouse gas emis-sions) is based on the VfU indicator system (Association for Environmental Management and Sustainability in Financial Institutions). In accordance with the Greenhouse Gas Proto-col (GHG Protocol), we differentiate between the following types of emissions in our reporting:

Scope 1: Direct emissions

Scope 2: Indirect emissions, e.g. from the generation of electricity, steam or heating/cooling purchased by the bank.

Scope 3: Other indirect emissions, e.g. related to transpor-tation and logistics, the use of products and services, supply and disposal for our service providers, and business travel.

This system allows us to identify the main sources of emissions within the bank, and to take adequate measures to increase energy efficiency, save energy and decrease GHG emissions. In the year under review, we reduced total GHG emissions by 13 per cent.

In 2015, we will elaborate our own climate strategy to further and continuously improve our ecological footprint. Between now and 2020 we will reduce our CO2 emissions by another 15 per cent.



46

CO2 EMISSIONS

Unit 2014* 2013 2012

Total electricity CO2 emissions kilogrammes (kg) 19,492 19,265 1,018,060 Specific electricity CO2 emissions kg/FTE 59 61 3,310 Total heat CO2 emissions kilogrammes (kg) 422,893 507,862 539.029 Specific heat CO2 emissions kg/FTE 1,275 1,620 1,752Total water CO2 emissions kilogrammes (kg) 4,286 4,646 7,065Specific water CO2 emissions kg/FTE 13 15 23Total paper CO2 emissions kilogrammes (kg) 24,058 25,321 28,647Specific paper CO2 emissions kg/FTE 73 81 93Total waste CO2 emissions kilogrammes (kg) 1,768 3,131 3,586Specific waste CO2 emissions kg/FTE 5 10 12 Total transport CO2 emissions** kilogrammes (kg) 367,755 405,249 482,684Specific transport CO2 emissions kg/FTE 810 921 1,112

Total CO2 emissions kilogrammes (kg) 840,252 965,474 2,079,071Total specific CO2 emissions kg/FTE 2,535 3,081 6,759

*77.3 per cent coverage per full-time employee (FTE); part-time positions are added up to a 100 per cent basis. Including permanent and temporary employees (excluding Management Board, interns, guests [CHECK], student trainees, working students and externals). We adjusted the deduction of the CO2 consumption and have reflected the VfU conversion tables in all our ratios since 2013, significantly improving the quality of the conversion. Now including the preceding and the following processes, the CO2 ratios have augmented. **coverage per full-time employee (FTE) 100 per cent.

2012 2013 2014

2,079,071 965,474 840,252

2012 2013 2014

6,759 3,081 2,535

7

6

5

4

3

2

1

0

2,500

2,000

1,500

1,000

500

0

Total

Kg. 000‘s

Specifi c

Kg. 000‘s/FTE



Electricity and Heat Consumption Total electricity and heat consumption was down by

about 9 per cent on the previous year. The weather had the largest impact on the consumption development during the reporting period, resulting in a year-on-year decrease in our heat consumption. Ongoing building energy improvements also had a positive effect.

Water ConsumptionDG HYP achieved a year-on-year reduction in its total

water consumption of approximately 8 per cent, to 5,722 cubic metres. Specific water consumption per em-ployee decreased from 20 to 17 cubic meters. This progress was achieved against various individual measures such as the updating of sanitary facilities, installing flow rate re-ducers in the mixer taps, and optimising humidification in air conditions.

Printer and Copier Paper Consumption Amongst the consumables, printer and copier paper ac-

count for the largest share in terms of volume. We therefore encourage our employees to “think before they print”, and reduce wasteful paper use. 95 per cent of the paper we use is totally chlorine-free or elemental chlorine-free. Where printing cannot be avoided – for instance, for our annual and interim reports, and our real estate market reports, we use paper certified by the renowned Forest Steward-ship Council (FSC) or the Programme for the Endorsement of Forest Certification Schemes. In December 2014, we switched all printer and copier paper to recycled, Blue Angel certified paper.

Total paper consumption decreased by 5 per cent com-pared to the previous year. This effect is mainly due to re-duced consumption of printed material and hygienic paper.

ELECTRICITY AND HEAT CONSUMPTION

Unit 2014* 2013 2012

Electricity consumption Total electricity consumption kilowatt hours (kWh) 1,651,848 1,632,596 1,798,693 of which sustainable hydroelectricity kilowatt hours (kWh) 1,651,848 1,632,596 0Specific electricity consumption kWh/FTE 4,980 5,209 5,847

Heat consumption Total heat consumption kilowatt hours (kWh) 1,638,230 1,967,392 2,088,125 Specific heat consumption kWh/FTE 4,939 6,277 6,788

*77.3 per cent coverage per full-time employee (FTE); part-time positions are added up to a 100 per cent basis. Including permanent and temporary employees (excluding Management Board, interns, guests [CHECK], student trainees, working students and externals).

WATER CONSUMPTION

Unit 2014* 2013 2012

Total water consumption cubic metres (m³) 5,722 6,203 9,433 Specific water consumption m³/FTE 17 20 31




48

PAPER CONSUMPTION

2012 2013 2014 2012 2013 2014

Total

23,816 21,051 20,001

Specifi c

77 67 60

Kg. 000‘s

25

20

15

10

5

0

80

60

40

20

0

Kg./FTE

Unit 2014* 2013 2012

Printer and Copier Paper Consumption Total paper consumption** kilogrammes (kg) 11,314 10,933 14,952 Specific paper consumption kg/FTE 34 35 49 Proportion of FSC certified paper % 27 32 44Proportion of recycled paper % 5 4 2 Proportion of paper used that was produced using elemental chlorine-free bleach % 20 61 96Proportion of paper used that was produced using totally chlorine-free bleach % 75 35 2

Printed material Total paper consumption kilogrammes (kg) 5,397 6,578 5,412 Specific paper consumption kg/FTE 16 21 18 Proportion of FSC certified paper % 35 33 27Proportion of paper used that was produced using elemental chlorine-free bleach % 65 67 73 Proportion of paper used that was produced using chlorine-free bleach % 35 33 27

Hygienic paper consumption Total paper consumption kilogrammes (kg) 3,290 3,540 3,452 Specific paper consumption kg/FTE 10 11 11 Proportion of paper used that was produced using elemental chlorine-free bleach % 86 87 86 Proportion of paper used that was produced using chlorine-free bleach % 14 13 14

*77.3 per cent coverage per full-time employee (FTE); part-time positions are added up to a 100 per cent basis. Including permanent and temporary employees (excluding Management Board, interns, guests [CHECK], student trainees, working students and externals). **Changes in data collection have resulted in different data than published with the status report 2013 (paper consumption incl. envelopes 2012-2014)



WasteWe significantly enhanced transparency on waste data

during the reporting period with more differentiated que-ries and a better integration of data providers.

Banking activities mainly generate paper waste. Confi-dential paper waste is put into centrally located data securi-ty bins at the responsibility of each employee. The contents of these bins are then disposed of in accordance with the

German Data Protection Act (Bundesdatenschutzgesetz). Our employees are also encouraged to consistently sort their waste, and the kitchens are equipped with bins for residual waste, glass and recyclable plastics.

We managed to reduce our waste by 45 per cent in 2014, mainly driven by a significant decrease in construc-tion waste from modernisation.

WASTE

Unit 2014* 2013 2012

Non-hazardous waste Total paper kilogrammes (kg) 13,700 14,498 11,019 Specific paper kg/FTE 41 46 36 Total confidential paper kilogrammes (kg) 10,044 8,006 8,910Specific confidential paper kg/FTE 30 26 29Total mixed packaging kilogrammes (kg) 2,781 3,806 3,899Specific mixed packaging kg/FTE 8 12 13Total building site waste from modernisation kilogrammes (kg) 86,027 226,275 265,350Specific building site waste from modernisation kg/FTE 259 722 863Total commercial waste kilogrammes (kg) 57,906 58,651 65,628Specific commercial waste kg/FTE 175 187 213

Total non-hazardous waste kilogrammes (kg) 170,458 311,236 354,806Specific non-hazardous waste kg/FTE 514 993 1,153

Hazardous waste Total toner waste kilogrammes (kg) 181 264 443 Specific toner waste kg/FTE 0.5 1 1 Total electronic machinery waste kilogrammes (kg) 1,684 742 741 Specific electronic machinery waste kg/FTE 5 2 2 Total lighting waste kilogrammes (kg) 236 173 272 Specific lighting waste kg/FTE 1 1 1

Total hazardous waste kilogrammes (kg) 2,101 1,179 1,456Specific hazardous waste kg/FTE 6 4 5




50

We try to avoid waste wherever we can. Where this principle cannot be applied and we generate waste, it is reused and recycled. While conducting modernisation and renovation measures, we reused as much construction ma-terial as possible, such as equipment, doors and frames, built-in furniture and lighting units. All of our waste is dis-posed of by an external contractor with most of it – 87 per cent (2013: 86 per cent) – being recycled. 11 per cent of waste is used to replace primary energy sources, and is pre-pared as substitute fuel for thermal energy generation, thus contributuing to the saving of resources, and to reduce CO2 emissions. Only 2 per cent are not recyclable.

MobilityWork-related travel contributed 44 per cent to our car-

bon footprint in 2014. Business-related travel decreased by 9 per cent year-on-year in the year under review.

To cut down on business-related travel, we are raising employee awareness and increasingly make use of video and teleconferences.

USE OF PUBLIC TRANSPORT 2014* 2013 2012

Number of employees using public transport 293 289 276

share of employees using public transport (%) 64.5 65.7 63.6

*coverage per full-time employee (FTE) 100 per cent

WORK-RELATED TRAVEL

Unit 2014* 2013 2012

Total work-related travel thousand kilometres 2,400,205 2,639,415 2,721,626 Specific work-related travel thousand kilometres/FTE 5,287 5,999 6,271 Share of travel by train % 27 22 22 Share of air travel % 21 28 30• < 500km % 43 41 n/a• > 500km % 57 59 n/a

(For DG HYP‘s work-related travel by train, the German railway company Deutsche Bahn uses sustainable energy only, making these travels climate-neutral since 1 April 2013.) *coverage per full-time employee (FTE) 100 per cent



We are further encouraging our employees to increase their use of low-emission public transport with transit cards (Jobticket) and transit allowances. In the year under review, 293 employees took advantage of these financial incen-tives. We also offer our employees and tenants of coopera-tive companies complementary bicycle parking places in the underground garage at our headquarters in Hamburg. We have more than 65 spaces for bicycles as of 2014, up from 50 the previous year.

Supply Chain and Sustainability An environmentally friendly supply chain of products

and services is also part of our sustainable corporate policy. That is why we take sustainability factors into account when choosing our suppliers. They must all meet the “Sustain-ability Standards for Suppliers” of DZ BANK Group. Above a certain total business volume, we require our suppliers to comply with legal minimum requirements for sufficient environmental protection to minimise environmental dam-age – in the form of continuously improving environmental protection measures and the commitment to organisational standards. The sustainability standards have been an inte-gral part of DG HYP‘s buying process since November 2012.

We give preference to local suppliers and service pro-viders, meaning they are located close to one of our of-fices. This results in short transportation routes and helps reduce CO

2 emissions. In 2014, we sourced 99 per cent of our products and services from German suppliers (based on our total business volume), 80 per cent thereof were locals (2013: 70 per cent). As part of a sustainable procurement, we switched all printers in the company in the year under review to certified devices that meet our requirements re-garding fine particulates, power consumption and emission.

Climate-Friendly Food ChoicesWe take our ecological responsibility seriously. This

also reflects in the food choices for our employees. Our in-house canteen offers primarily seasonal and regional food, and since July 2012 we have been part of the “KlimaTel ler” project of the charity Greenflux e.V. As such, our canteen goes without red meat and dairy products with a fat content of more than 15 per cent every Wednesday, as a particularly high amount of greenhouse gas emissions is attributable to these foods. This is due to the use of fertilisers, rainforest deforestation and the excretion of the animals involved in their production.



52

GRI CONTENT INDEx The Global Reporting Initiative (GRI) has created a standard for sustainability reporting in order to establish an international basis for comparing sustainability performance between different companies. In its reporting activities, DG HYP has used the G3 GRI guidelines – revised in 2006 – as a touchstone. The given GRI Content Index comprises the core indicators and provides references to corresponding pages in the report where the relevant information can be found. The Sector Supple-ment is currently not being offered for companies in the financial services industry.

GRI Index* Page reference

1 Vision and Strategy 1.1 Preface from the Chairman of the Management Board or Supervisory Board 4 1.2 Central sustainability risks, opportunities, effects 12 et seq., 17 et seq., 25 et seq., 28 et seq., 45 et seq.

2 Organisational Profile 2.1 Name of the company 2, 54 2.2 Most important brands, products and services 7 et seq., 25 et seq., AR 2.3 Business divisions and company structure 7 et seq., AR 2.4 Company headquarters 54 2.5 Countries of operations 8, 27, AR 2.6 Ownership structure 8, AR 2.7 Markets served 11 et seq., 27 et seq., AR 2.8 Organisation size 26 2.9 Major changes to size, structure or ownership none 2.10 Awards received 37

3 Reporting Parameters 3.1 Reporting period 2 3.2 Publication of the last report 2 3.3 Reporting cycle 2 3.4 Contact 543.5 Process of defining the content of the report 2 3.6 Report boundary 2 3.7 Limitations on the reporting scope 2 3.8 Joint ventures, subsidiaries, outsourcing not material3.9 Data measurement 2, 18 et seq. 3.10 Restatement of previously reported information 2 3.11 Changes in reporting scope, boundaries and measuring methods 2, 45 et seq. 3.12 GRI Index 52 3.13 External assurance of the report through third-parties none

4 Governance, Commitments and Engagement 4.1 Governance structure 12 et seq., 17, 28 et seq., AR 4.2 Independence of the Chairman of the Supervisory Board 12, AR 4.3 Independent members of the highest governing body 12 4.4 Mechanisms for shareholder and employee recommendations to the Management/Supervisory Board 12 4.5 Linkage between Management Board remuneration and company performance 12 4.6 Prevention of conflicts of interest 12 et seq. 4.7 Qualifications of the Management Board members regarding sustainability 17 4.8 Guiding principles, corporate values and code of conduct 9 et seq., 13 1 – 10 4.9 Procedures at the Management/Supervisory Board level for monitoring sustainability performance 12 et seq., 17 4.10 Procedure for assessing the performance of the Management Board none 4.11 Precautionary principle 12 et seq., 17 et seq., 27 et seq., 43 et seq., 45, AR 7 4.12 Participation in and commitment to external initiatives 14 et seq., 35 et seq., 43 et seq. 1 – 10 4.13 Membership of associations and interest groups 14 et seq., 43 et seq. 4.14 Engaged stakeholder groups 10 et seq., 17, 19 et seq. 4.15 Selection of stakeholder groups 10 et seq., 17, 19 et seq. 4.16 Approaches to our stakeholder dialogue 10 et seq. 4.17 Position on key areas of stakeholder interest no data

UN GlobalCompact



GRI Index* Page reference

5 Performance IndicatorsEconomic Performance Indicators – Management Approach 24 et seq., AR EC1 Value generated and distributed 31, AR EC2 Financial impact of climate change 2, 17 et seq. 7, 8 EC3 Expenditure on organisational benefit plan 33 et seq., AR EC4 Financial assistance received from government noneEC6 Policy, practices, and proportion of spending on locally-based suppliers 8, 25 et seq., 51EC7 Local hiring 41, AR EC8 Infrastructure investments and services provided primarily for public benefit 26 et seq.

Ecological Performance Indicators – Management Approach 45 et seq. 7, 8, 9EN1 Materials used by weight or volume 46 et seq. 8 EN2 Percentage of materials used that are recycled input materials 48 et seq. 8 EN3 Direct energy consumption 47 8 EN4 Indirect energy consumption 47 8 EN8 Total water withdrawal by source 47 EN11 Land in protected areas not material EN12 Impact on biodiversity not material EN16 Greenhouse gas emissions 45 et seq., 51 8 EN17 Other indirect greenhouse gas emissions no data EN19 Emissions of ozone-depleting substances no data EN20 NO

x, SOx and other air emissions no data EN21 Total water discharge none EN22 Waste by type and disposal method 49 et seq. 8 EN23 Significant spills no data EN26 Initiatives to mitigate environmental impacts 45 et seq. 7, 9 EN27 Percentage of products sold and their packaging materials reclaimed none EN28 Monetary value of significant fines for non-compliance with environmental laws and regulations none

Labour Practices & Decent Work Performance Indicators – Management Approach 43 et seq. 1, 3, 6 LA1 Workforce by employment type/region 41 LA2 Employee turnover 41 LA4 Employees covered by collective bargaining agreements 41 1, 3 LA5 Notice periods regarding significant operational changes no data LA7 Rates of injury, absence and fatalities 37, 41 1 LA8 Illness education and advisory services 37, 39 et seq. 1LA10 Training and CPD for employees 34 et seq. 1LA13 Composition of governance bodies and breakdown of employees 36 et seq. 1 LA14 Remuneration according to gender 36 et seq. 1, 6

Human Rights – Management Approach HR1 Investment decisions that include human rights clauses or screening no data HR2 Screening of suppliers for human rights enforcement 51 1 – 6 HR4 Number of incidents of discrimination and actions taken none 1, 2 HR5 Freedom of association and collective bargaining no data HR6 Child labour 10, 13, 51 1, 2, 5HR7 Forced labour 10, 13, 51 1, 2, 4

Society – Management ApproachSO1 Mitigation of negative impacts 8 et seq., 17 et seq., 25 et seq., 33, 37 SO2 Analysis of corruption risks 12 et seq. 10SO3 Anti-corruption training 12 et seq. 10SO4 Anti-corruption measures 12 et seq. 10 SO5 Public policy positions and lobbying 14 et seq. SO8 Monetary fines / sanctions for non-compliance with laws and regulations none

Product Responsibility – Management ApproachPR1 Product safety no data PR3 Product and service designation no data PR6 Standards related to marketing communications no data PR9 Monetary fines for non-compliance with laws and regulations concerning the provision and use of products and services none

Notes: *= Information incomplete based on GRI criterion.AR = Annual Report 2014

UN GlobalCompact


DG HYP Contacts and Office Addresses

54

DG HYP Regional Office Hanover Berliner Allee 5 30175 Hanover, Germany Phone +49 511 86 64 38 08 Fax +49 40 33 34-782-37 75

DG HYP Regional Office Kassel Rudolf-Schwander-Strasse 1 34117 Kassel, GermanyPhone +49 561 60 29 35-23 Fax +49 561 60 29 35-24

DG HYP Regional Office LeipzigSchillerstrasse 304109 Leipzig, Germany Phone +49 341 96 28 22-92 Fax +49 341 96 28 22-93

DG HYP CONTACTS AND OFFICE ADDRESSES

Institutional Clients

Hamburg Rosenstrasse 2 20095 Hamburg, Germany Phone +49 40 33 34-21 59 Fax +49 40 33 34-12 60

Management Board Chairman ofDr Georg Reutter (Chairman) Supervisory BoardManfred Salber Frank Westhoff

Deutsche Genossenschafts-Hypothekenbank AG Rosenstrasse 220095 Hamburg, Germany

PO Box 10 14 46 20009 Hamburg, Germany Phone +49 40 33 34-0 Fax +49 40 33 34-11 11 Internet: www.dghyp.de

DG HYP Real Estate Centre Berlin Pariser Platz 3 10117 Berlin, Germany Phone +49 30 3 19 93-51 01 Fax +49 30 3 19 93-50 36

DG HYP Real Estate Centre Hamburg Rosenstrasse 2 20095 Hamburg, Germany Phone +49 40 33 34-37 78 Fax +49 40 33 34-11 02

DG HYP Real Estate Centre Dusseldorf Steinstrasse 13 40212 Dusseldorf, Germany Phone +49 211 22 04 99-10 Fax +49 211 22 04 99-40

DG HYP Real Estate Centre Munich Türkenstrasse 16 80333 Munich, Germany Phone +49 89 51 26 76-10 Fax +49 89 51 26 76-30

DG HYP Real Estate Centre Frankfurt CITY-HAUS 1, Platz der Republik 6 60325 Frankfurt/Main, Germany Phone +49 69 75 06 76-21 Fax +49 69 75 06 76-99

DG HYP Real Estate Centre Stuttgart Heilbronner Strasse 41 70191 Stuttgart, Germany Phone +49 711 12 09 38-0 Fax +49 711 12 09 38-30

Real Estate Centres

Regional Offices

This report was prepared by: DG HYP Sales Coordination and Investor Relations E-mail: ir(at)dghyp.de

DG HYPDeutsche Genossenschafts-Hypothekenbank AG

Rosenstrasse 2 | 20095 HamburgPhone: +49 40 3334-0 l Fax: +49 40 3334-1111

www.dghyp.de

Documents

SUSTAINABILITY REPORT 2014 - DZ HYP...About this report With its Sustainability Report 2014, DG HYP provides a comprehensive presentation of all its activities dedicated to sustain-ability