SUSTAINABILITY REPORT 2016€¦ · We collected individual qualitative and quantitative statements and data for each DG HYP department, and then combined them in a central database

SUSTAINABILITY REPORT 2016

About This ReportIn this report, we relate the central activities dedicated to sustainability that we engaged in during 2016. We outline the economic, ecological and social implications of our business, disclosing the measures we have taken and the progress we have made.

Report Scope and BoundaryWe collected individual qualitative and quantitative statements and data for each DG HYP department, and then combined them 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. GRI G4-23

All metrics refer to DG HYP's headquarters in Hamburg, unless otherwise stated, and were updated as at 31 December 2016. Results of particular relevance, however, were included up to the editorial deadline on 31 March 2017. 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 calculation of greenhouse gas emissions is based on the VfU indicator system (Association for Environmental Management and Sustainability in Financial Institutions), which is in turn based on the Greenhouse Gas Protocol (GHG Protocol).

GRI CriteriaThe Sustainability Report follows the G4 guidelines promulgated by the Global Reporting Initiative (GRI). For an overview of GRI indicators and the relevant passage, please see the GRI Content Index. GRI indicators GRI G4-17 to G4-27 are shown directly in the text at the end of the respective paragraph.

To better understand which topics matter most to our stakeholders, we engaged in a materiality analysis throughout DZ BANK Group in 2015. As a result, we revisited the structure and thematic priorities of this Sustainability Report, creating a separate chapter on the banking business and the relevant sector-specific sustainability requirements. GRI G4-18, GRI G4-22

We also reviewed our sustainability programme to ensure more transparency on target corridors and the implementation status of our measures in 2016. GRI G4-22

Global Compact This report meets the requirements of UN Global Compact for a Communication on Progress report. The corresponding references on the implementation of the ten principles have been integrated into the GRI Content Index. Our parent com-pany, DZ BANK, publishes a dedicated Communication on Progress report.

DZ BANK AG’s Communication on Progress for UN Global Compact can be found here 3 http://dghyp.de/UNGC

Additional Information This 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. Further information on the economic performance and business model of DG HYP can be found in the 2016 Annual Report, which is also available for download as PDF at www.dghyp.de.

Disclaimer We took great care in the elicitation of data for this report, but we cannot rule out any mistakes. Forward-looking state-ments are based on the information and forecasts available at the time of publication. There are many factors, some of which were unforeseeable at the time of publication, that may cause actual results to differ.

DG HYP’s next Sustainability Report is scheduled to be published in 2018.

3DG HYP | Sustainability Report 2016

About This Report 2

Letter from the Management Board 4

Our Company About DG HYP 7

Values and Principles 9

Member of the UN Global Compact 10

Our Business Model 10

Business Development 12

Sustainability Strategy Our Approach to Sustainability 15

Sustainability Management 15

Stakeholder Dialogue 16

Stakeholder Focus and Materiality 19

Responsible Corporate Governance 20

Sustainable Banking Business Our Core Business 27

Reinforcing Sustainable Lending 30

Client Satisfaction 30

Complaints Management 30

Protection of Client Data 30

Employees Responsible Human Resources Activities 33

Corporate Culture and Management Principles 34

Employee Survey: Develop Together, Change Together 35

Training and Continuing Professional Development 35

Empowering the Next Generation 37

Equal Opportunity 38

Performance-Based Remuneration 41

Health and Safety in the Workplace 42

Ecological Responsibility Group-wide Environmental and Climate Strategy 47

Organisation and Management 47

Engaging Our Employees 47

Greenhouse Gas Emissions 48

Electricity and Heat Consumption 50

Water Consumption 51

Paper Consumption 51

Mobility 53

Waste 53

IT 55

Environmental Protection Along the Supply Chain 55

Climate-Friendly Food Choices 55

Social Commitment Our Beliefs 57

Community Service 57

Related Field Project Support 58

Cooperative Charitable Support 59

Sustainability Programme 60

GRI Content Index 67

Contacts and Office Addresses 72

CONTENTS

DG HYP | Sustainability Report 2016

Letter from the Management Board

4

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

Dear readers,

Responsible conduct is the cooperative principle we act upon. It has provided us with a solid ground to build our business on, and the past year marks no exception. It is in this tradition that our understanding of what constitutes sustainable corporate governance finds its roots. We combine this with an active approach to sustainability management, and have set goals for all divisions; we have defined indicators and got initiatives under way – and we have made progress, as we would like to illustrate in this report.

Various sustainability ratings confirmed once again that DG HYP ranks among industry leaders when it comes to social and environmental performance. As in the previous year, we led the field in the ranking for “Public-sector Pfandbriefe”, published by imug, a research and rating agency. We ranked amongst the top three German institutions in the “Uncovered bonds” category and in the top two for Mortgage Pfandbriefe. oekom research AG, another rating agency, has awarded us with its prime status “C+” in its most recent corporate rating.


2016 was a good business year for DG HYP. Despite the challenges we continued to face because of increasing regulatory requirements and stiff competition, we succeeded in reinforcing our leading position in the market with a strong result in terms of new business originated. We continued to pursue a conservative approach, pursuing and concluding financing solutions that are in line with our risk strategy. The positive development is based on a clear business model, long-standing client relationships, great reliability as a financing partner and a high degree of continuity in our client relationships. Close cooperation and joint market coverage with the cooperative banks, which we developed further during the year under review, contributed significantly to this performance.

Our highly qualified, dedicated employees play a significant role in the success of our business, and we know that we can count on them. During the year under review, we continued to press ahead with the “Develop together, change together” initiative, launched in 2015. Following the employee survey we conducted in 2014, all departments of our bank developed ideas and measures to improve our leadership and team culture. At the same time, we continued to improve our offering for further qualification, based on what our employees are interested in and what they need.

Further proof of the high level of quality in our educational work: ABSOLVENTA, a leading employment website, once more awarded our trainee programme their “career-promoting and fair trainee programme” seal. Our family-oriented human resources policy also hit another milestone during the year under review, when the non-profit Hertie Foundation awarded us its prestigious “audit berufundfamilie“ certificate following an extensive re-audit process.

In terms of environmental management, we continue to work towards the goal of reducing our greenhouse gas emissions by 15 per cent between 2012 and 2020. Construction activity such as the comprehensive retrofit measures at our Hamburg offices will play a major part in that, as we expect significant energy efficiencies.

An essential part of our identity as entrepreneurs is our social commitment. During the year under review, we continued to support seasoned projects such as the CLUB OF ROME. We are particularly committed to “Wir zusammen”, or “We together”, an initiative by German businesses that share efforts to help refugees make a good start in German professional and social life. Within the scope of this initiative, DZ BANK Group opened its door to two young Syrians, who successfully completed a multi-week work placement at DG HYP. We also supported the efforts of STADTKULTUR HAMBURG e.V., the governing body for all cultural-social organisations in Hamburg, with its “BFD Welcome Hamburg” project. Within this project, refugees can take up regular volunteer work in the domains of culture and education.

Sustainability is a never-ending journey of experience and learning, and we look forward to continuing it – together with our employees and stakeholders. This report is part of that journey, as it marks the milestones we have passed, document-ing our efforts and creating transparency. At the same time, it is an offer we extend to our stakeholders – to engage with us, talk with us and accompany us on our way to sustainable, socially and ecologically responsible corporate governance.

Hamburg, June 2017

Dr Georg Reutter Manfred Salber


Letter from the Management Board | About DG HYP | Sustainability Strategy | Sustainable Banking Business | Employees

6

OUR COMPANY PART OF A STRONG GROUP


Ecological Responsibility | Social Commitment | Sustainability Programme | GRI Content Index

BerlinReal Estate Centre

Hamburg Real Estate Centre

Hanover Regional Office

Leipzig Regional OfficeKassel

Regional Office

Frankfurt Real Estate Centre

Stuttgart Real Estate Centre

Munich Real Estate Centre

Dusseldorf Real Estate Centre

Nuremberg Regional Office

Mannheim Regional Office

About DG HYPDG 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 real estate investors as well as approxi-mately 1,000 cooperative banks in Germany.

The focus of the business activities is on financing properties in the German market. In addition, we finance our German clients’ investment projects in selected international mar-

kets. We are present all over Germany, with six Real Estate Centres (Hamburg, Berlin, Dusseldorf, Frankfurt, Stuttgart and Munich), as well as five regional offices (Hanover, Kas-sel, Leipzig, Mannheim and Nuremberg).

As a member of DZ BANK Group and partner to the Volks-banken and Raiffeisenbanken cooperative banks, we are part of a strong financial network We owe our success to various factors: client proximity, professionalism and exper-tise, funding power, and a high degree of market penetra-tion backed by an efficient network.

DG HYP LOCATIONS

PART OF A STRONG GROUP



8

DG HYP – PART OF A POWERFUL GROUP

DG HYP is a member of the DZ BANK Group, which also comprises Bausparkasse Schwäbisch Hall, DZ PRIVATBANK, R+V Insurance, TeamBank, Union Investment Group, VR Leasing Group, WL BANK as well as various other specialist financial services providers. DZ BANK Group is itself a part of the Volksbanken Raiffeisenbanken cooperative financial network, which comprises approximately 1,000 individual cooperative banks. In terms of total assets, it ranks among the largest financial services organisations in Germany. Within the Volksbanken Raiffeisenbanken cooperative fi-nancial network, DZ BANK acts as the central institution, tasked with supporting the local cooperative banks' trans-actions as well as strengthening their competitive position. It also operates as a commercial bank, and exercises the holding entity function for DZ BANK Group.

The various DZ BANK Group entities are the cornerstones of a comprehensive range of bancassurance products and services offered by the Volksbanken Raiffeisenbanken co-operative financial network. DZ BANK Group has organised its strategy and range of services for the cooperative banks and their customers along the lines of four strategic busi-ness segments: Private Customers, Corporate Clients, Capi-tal Markets and Transaction Banking.

Combining banking services with insurance products, home loan savings and a range of investment services has a long tradition within the German cooperative banking sector. The specialist institutions within the DZ BANK Group each offer highly competitive and reasonably-priced products in their respective area of expertise. This allows Germany’s cooperative banks to offer their customers an end-to-end range of first-class financial services. GRI G4-17

STRONG BRANDS – STRONG PARTNERS



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 1,000 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.

Values and Principles Sustainable action and corporate responsibility are two im-portant pillars of our corporate culture. In light of ecological and social challenges in our society, it is a matter of im-portance that the sustainable orientation of our business activities grows more pronounced. We act responsibly in our day-to-day business.

Our actions are based on our core values: being reliable, being a good partner, and being motivated. These 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 banks with which we work on a suc-cessful partnership basis.

Our practical understanding of integrity and ethical busi-ness is clearly stated in our Code of Conduct. All employees are bound by the Code, which combines our internal prin-ciples with external market standards and reaffirms our commitment to sustainability.

3 http://dghyp.de/missionstatement (only available in German) 3 http://dghyp.de/codeofconduct/3 Responsible corporate governance, p. 20 et seq.

OUR CORE VALUES



10

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 prin-ciples stipulated by the initiative for responsible conduct. In 2013, DG HYP followed suit in taking up these principles: they span human rights, labour norms and work against corruption. We also let our actions be guided by the Sus-tainable Development Goals adopted by the United Nations in 2015.

The progress made in the integration of these principles into our business divisions is documented in our continuous sustainability reporting. We define responsible corporate governance to include not only adherence to legal stand-ards and requirements, but also to values and principles, together with clear and transparent management. DZ BANK AG’s Communication on Progress for UN Global Compact can be found here 3 http://dghyp.de/UNGC

Our Business ModelAs part of the DZ BANK Group, DG HYP is committed to the fundamental cooperative concept of sustainable and re-sponsible business practices. As part of our business model, we apply a conservative risk strategy, forge long-term busi-ness relationships and treat clients with honesty, trust, and a sense of partnership.

Focus on the Traditional Lending Business As a real estate bank, DG HYP focuses on the traditional lending business, whereby the loans it grants lay the foun-dation for long-term partnerships. The bank’s Commercial Real Estate Finance activities are focused on the core seg-ments 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 institu-tional investors, housing companies, as well as commercial and residential real estate developers. When selecting expo-sures, our priorities are the quality of the client relationship, the third-party usability of the financed property, and col-lateralisation through first-ranking liens.

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

WE SUPPORT



Close Cooperation with Cooperative BanksDG HYP offers the German cooperative banks a high-per-formance range of products and services tailored to meet their specific needs. With this offering and DG HYP as a partner, the cooperative banks are in a position to realise greater financing solutions for their medium-sized custom-ers as well as diversifying their own risk. With DG HYP as a partner, new business activities in commercial real estate financing are bound to be successful.

The German cooperative banks contribute their regional market knowledge, and use the real estate and financing expertise of their partner within the cooperative banking sector. In this context, both sides benefit from joint mar-ket coverage – DG HYP from the direct contact with re-gional clients, and the German cooperative banks from the business relationships arising from developing the market throughout Germany. Further services in the financial net-

work comprise the rating of real estate clients and the valu-ation of properties through VR-WERT, a wholly-owned sub-sidiary of DG HYP. GRI G4-17

3 Annual Report 2016, p. 18 et seq.

Good Ratings Confirmed Standard & Poor’s (S&P) reviewed and confirmed DG HYP’s good ratings in the 2016 financial year. It paid tribute to DG HYP’s successful business model as a real estate bank deeply integrated in the strongly capitalised, highly profit-able Volksbanken Raiffeisenbanken cooperative financial network. DG HYP’s Pfandbrief issues have retained their top triple-A rating, thanks to the high quality of our cover as-sets pools.

3 Annual Report 2016, p. 10

Rating overview (Standard & Poor’s) Long/short-term liabilities/outlook AA-/A-1+/stable Issuer credit ratingPublic-sector covered bonds AAA Public Pfandbriefe (Senior Secured)Mortgage Pfandbriefe AAA Mortgage Pfandbriefe (Senior Secured)Senior Unsecured (subordinate) A+ Senior Unsecured Non-PreferredTier 2 A Tier 2



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Business development DG HYP was once again able to continue the positive de-velopment in Commercial Real Estate Finance during the year under review. The positive macroeconomic fundamen-tals led to continued intensive demand for commercial-use properties and residential real estate. Against this back-ground, investment turnover in Germany reached another high in the 2016 financial year. The fact that transaction volumes fell short of the extraordinary levels seen in the previous year was down to a limited supply of attractive properties and portfolios. Competition for financing attrac-tive commercial real estate intensified even further in this environment.

DG HYP continued to develop its business activities during the year under review, reaching a volume of € 7,418 million in Commercial Real Estate Finance (2015: € 5,722 million) – a growth rate of 29.6 per cent. The German core market accounted for € 7,140 million thereof (2015: € 5,637 mil-lion), in line with DG HYP’s strategic focus. New business of € 278 million was generated on the international markets (2015: € 85 million).

Joint lending with German cooperative banks expanded DG HYP successfully maintained cooperation within the Volksbanken Raiffeisenbanken cooperative financial net-work during the year under review. Joint lending business with the cooperative banks totalled € 3,159 million during the year under review (2015: € 2,825 million). This develop-ment shows that Commercial Real Estate Finance – as part of the corporate client business – is attracting great inter-est and a persistently strong response amongst cooperative banks. At present, DG HYP is working together with more than 400 cooperative banks in this business.

Development in Other SegmentsIn the interests of the Volksbanken Raiffeisenbanken coop-erative 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 fur-ther business relationships with local authorities. During the 2016 financial year, DG HYP generated new business with a volume of € 257 million (2015: € 378 million) in the area of local authority lending.

There have been no new investments in Mortgage Backed Securities (MBS) since mid-2007. Moreover, within the framework of its strategic realignment, DG HYP suspended its public finance and interbank lending activities in 2008. The related portfolio of sovereign and bank loans has been reduced as planned, from € 38.5 billion at the end of 2007 to € 7.6 billion as at 31 December 2016. The mortgage backed securities (MBS) portfolio was cut from € 4.5 billion to € 963 million during the same period. DG HYP will con-tinue to adhere to this strategy – implementing the sched-uled portfolio reduction – in the years to come.

Also in the context of the bank's strategic realignment, DG HYP has been winding down its private home loan financing portfolio continuously since 1 January 2008. In mid-November 2016, the bank resumed processing of the residual housing sector exposures that it had previously out-sourced to Hypotheken Management GmbH, Mannheim. As at 31 December 2016, DG HYP’s portfolio included some 32,000 retail customers (2015: 41,000), accounting for lending volume of approximately € 1.7 billion (2015:€ 2.3 billion).

3 More on the business development in 2016: Annual Report 2016, p. 26 et seq.



VR WERT VR WERT, a wholly-owned subsidiary of DG HYP, performed well during the 2016 financial year: it issued 2,591 expert valuations during the 2016 financial year, up from the pre-vious year's figure of 2,370. Revenues were € 9.4 million (2015: € 8.8 million). GRI G4-17

Investor Base and FundingAs the provider of commercial real estate financing within the Volksbanken Raiffeisenbanken cooperative financial network, DG HYP’s capital markets funding is based pri-marily on Mortgage Pfandbriefe issuance. During the 2016 financial year, DG HYP placed three benchmark bonds with a total volume of € 1.5 billion. With terms of 6.6 years,

8.1 years and 9.9 years, demand for the Mortgage Pfand-briefe was exceptionally buoyant. In addition, DG HYP managed to sell € 137.5 million in private placements (2015: € 207 million). At the year-end, DG HYP's outstand-ing Pfandbrief issues totalled € 18.4 billion (31 December 2015: € 22.4 billion).


3 Economic environment and development of the real estate markets in general: Annual Report 2016, p. 22 et seq. and p. 26 et seq. 3 More on our banking business: p. 26 et seq.

THE COOPERATIVE BASIC VALUE OF AIDING EMPOWERMENT

When Friedrich Wilhelm Raiffeisen and Hermann Schulze-Delitzsch founded the first financial cooperatives – in Germany, about 160 years ago – little did they know that they were writing the first pages of a tremen-dous success story. Today, financial cooperatives are deeply rooted in many markets. While they come in dif-ferent structures, they have one thing in common: their members are owners and clients at the same time. This principle is the main differentiation between cooperatives and other forms of cooperation.

In cooperatives, people unite voluntarily to engage in economic activity together and advance their mem-bers’ business activities in their own right, i.e. not accepting third-party or governmental support. It is this advancement – and not the distribution of yield – that is given priority.

Fundamental decisions are taken by the general meeting, where every member has one vote, irrespective of their equity stake. This is to protect democratic principles, to avoid individual majority owners dominating and to prevent an unsolicited takeover.

Every cooperative is also a member of an Auditing Association. These associations advise their members where needed, and audit the financial condition as well as the regularity of the management. Against this background, cooperatives have been the by far most bankruptcy-proof legal structure that Germany has to offer for many years.

3 www.genossenschaften.de (only available in German)



1414

SUSTAINABILITY STRATEGY A VALUE COMPASS

AND CLEAR GOALS



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Our Approach to Sustainability As the commercial real estate bank in the Volksbanken Raiff eisenbanken cooperative financial network, we look back on a corporate history spanning more than 90 years. Uniting business and social responsibility has always been an integral part of our corporate culture. To us, sustainabil-ity means that we must satisfy the needs of today’s genera-tions, and offer them fair opportunities for development – without compromising the chances of future generations or threatening our natural livelihood. We thus agree with the Brundtland Commission Report, published in 1987.

To us, sustainable development is a constant learning proc-ess, one which helps reveal potential for improvement in various businesses, as well as providing direction as to how we can better overcome current and future challenges and seize new chances in new ways. This not only includes a risk-aware banking business, but also efficiently using and conserving natural resources and a forward-looking HR ap-proach to demographic change. GRI G4-18, GRI G4-19

We define responsible corporate governance to include not only adherence to legal requirements, but also to values and principles. In 2013, we committed ourselves to the ten internationally acknowledged principles stipulated by the Global Compact of the United Nations. We look to the Sus-tainable Development Goals adopted by the United Nations in 2015 for guidance. In 2014, we introduced a Code of Conduct for the Group. All employees are bound by this Code, which clearly states our practical understanding of integrity and ethical business.

3 Values and principles: p. 9 3 Responsible corporate governance, p. 20 et seq.

DG HYP is confident that by acting sustainably, we will gain a competitive edge in the medium term. For a Pfandbrief issuer that specialises in commercial real estate, the effects felt in direct competition in the market should be less pro-nounced. Open communications, attractive working condi-tions and a fair, appreciative approach to all stakeholders help us to create and maintain relationships that are built on trust, to avoid risk-taking and to use opportunities when

they arise. Regular communication with our stakeholders and transparent reporting are key elements of our sustain-ability strategy. GRI G4-26

3 Materiality: p. 24

Sustainability ManagementThe responsibility for the issue of sustainability lies with the Chairman of the Management Board of DG HYP. This re-flects the strategic significance we place on sustainability, and ensures top management attention concerning imple-mentation. The Sales Management and Investor Relations department is in charge of coordinating all activities related to sustainability; the head of this department reports inter-nal and external developments to the Management Board. This department is the first point of contact for all other de-partments when questions concerning sustainability and/or the implementation of sustainability programme measures arise. It monitors all sustainable actions, and makes sugges-tions regarding the advancement of the sustainability pro-gramme together 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-divisional responsibility. To ensure that it is addressed across all management levels and di-visions, various departments formally assumed responsibil-ity for sustainability-related topics and implementation of measures in their division. This approach has proven a suc-cess in anchoring sustainability all over the bank.

With this allocation of responsibilities, we want to raise awareness in all divisions for our understanding of suc-cessful business operations: we believe that success is not defined by economic metrics only, but also by a conscious take on the ecological and social consequences of our daily activities.

DG HYP also applies economic, environmental and social criteria when choosing its suppliers, based on Group-wide sustainability standards for suppliers established in 2012. We give preference to local suppliers and service providers, meaning they are located close to one of our offices.


All suppliers with an aggregate turnover that exceeds a fixed threshold will be reviewed by our procurement de-partment for sustainability criteria and and how open they are towards taking further measures to meet or improve upon these criteria. Using a list of criteria that stretches from critical human rights issues to black labour, minimum wage infringement and improper disposal of construction materials, each supplier is assigned a score. A medium score will lead us to request an extensive self-declaration. This al-lows us to spot risks in the supply chain at an early stage and react quickly in case of infringements. In this context, we keep a particularly close eye on construction, security and cleaning companies.

3 http://dghyp.de/suppliers3 Human rights: p. 243 Environmental protection along the supply chain: p. 55

Sustainability Programme In close cooperation with the relevant departments, our Sustainability Officer develops a sustainability programme for DG HYP that documents the goals we have set for our-selves in individual areas, and how we want to achieve them. Current and planned measures to continuously im-prove our sustainability performance are linked to a sched-ule. Achievement and implementation status of these goals – and the corresponding measures – are reviewed in

internal audits. This system ensures that the sustainability programme is being put into practice consistently and in a targeted manner.

When reviewing our sustainability programme, we incorpo-rated the issues both we and our stakeholders had deemed material in the corresponding 2015 analysis. As such, we split the “Economic Responsibility” dimension in our sus-tainability report during 2015, and added two new areas – “Sustainability Strategy and Corporate Governance” and “Sustainable Banking Business” – to better reflect the im-portance of our core business of banking in our sustainabil-ity programme. GRI G4-19, GRI G4-22

3 Our sustainability programme: p. 603 Stakeholder focus and materiality: p. 19 et seq.

Stakeholder DialogueTrust is fundamental for the feasibility and success of co-operative projects, and an important factor in stakeholder communications. It shows in the strength of the dialogue we foster with our stakeholders, which include clients, business partners, employees, analysts and investors, but also associ-ations, political decision-makers, media and academia. We also regularly communicate with non-governmental organi-sations, whose queries and issues we address. GRI G4-24, GRI G4-25

DZ BANK GROUP’S CORPORATE RESPONSIBILITY COMMITTEE (CRC)

With 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 Committee (CRC) was formed in 2014, of which DG HYP is a member. The results of this collaboration are, for example, the introduction of a Group-wide database structure, common supply standards and a coordinated environmental and climate strategy.



Being in dialogue enables us to better respond to the vari-ous stakeholders’ concerns and requests and provides us with an initial understanding as to how the opportunities and risks associated with our business activities are per-ceived in the outside world. The importance of building lasting relationships with our stakeholders is therefore also a strategic one; it lays the groundwork for the continuing development of our sustainability programme. GRI G4-26

3 Stakeholder focus and materiality: p. 19 et seq.3 Client dialogue and complaints management: p. 30

Employee Dialogue We foster a culture of dialogue, openness and mutual re-spect in our bank, and our employees play an active part in decision-making processes.

In addition, we use our intranet to keep employees con-stantly informed about what is going on in the bank. To further intensify the dialogue with our employees, we regu-

larly conduct online employee surveys to assess the bank’s development from the perspective of its employees. The most recent survey, held in 2014, provided a representative overview of the sentiment among the employees, with a participation ratio of 81 per cent. A good way of measuring employee satisfaction is the Organisational Commitment Index (OCI) indicating an employee’s attachment to their company. DG HYP achieved a good result, with a score of 78. However, the survey also pointed out potential for im-provement, which we have been addressing systematically ever since. GRI G4-24, GRI G4-26

Employees also have a powerful voice in the materiality analysis, whose results influence our sustainability report-ing and the further development of our sustainability pro-gramme.

3 More on the employee survey: p. 35 3 Stakeholder focus and materiality: p. 19 et seq.


Anchoring sustain-ability in business strategy

Transparent reporting

Regular stakeholder communications

Adherence to legal requirements, and to values and principles

Sound business model, with a conservative risk strategy

Long-term relationships with business partners

Powerful funding options through

> the Volksbanken Raiffeisenbanken cooperative fi nancial network

> issuance of Mortgage Pfandbriefe

SUSTAINABLEBANKING

EMPLOYEES

Performance-based remuneration

Work/family balance

Occupational health management

Extensive CPD offers

Empowering the next generation

ECOLOGICAL RESPONSIBILITY

Reducing the use of energy and resources

Reducing CO2 emissions

Enhancing employees’ ecological awareness

SOCIAL COMMITMENT

Support for social projects and non-profi t organisations

Promoting issues and organisations with real estate topics

Support for research institutes dealing with the cooperative sector

Supporting employees’ voluntary engagement

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SUSTAINABILITY STRATEGY AND

CORPORATE GOVERNANCE


Cooperative Bank Dialogue The 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. GRI G4-24, GRI G4-25, GRI G4-26

We discuss professional topics openly, and involve the Managing Directors of the cooperative banks in discussions with our real estate clients. Through our IMMO PARTNER dialogue, we created another nationwide concept that pro-motes more intensive collaboration with our partner banks. We also organise regional real estate conferences and a va-riety of events to expand our network and client contacts. With regular reports on real estate markets, particularly regional ones, and our IMMO KOMPAKT publication, we increase transparency on our business activities to support cooperative banks in their daily work on the markets they are active in.

Capital Markets and Rating Agencies DialogueWe strive for transparency in all communication with part-ners in the capital markets. We cultivate investor relations intensively, with both larger-scale events and one-on-one briefings. In addition to the annual and interim reports, we publish market-relevant information. 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 Ex-change, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – "BaFin"), and the German Federal Gazette (Bundesanzeiger). It is available on DG HYP's website, amongst other places. We are also in constant and extensive dialogue with rating agencies and analysts for financial and sustainability ratings. GRI G4-24, GRI G4-25, GRI G4-26


“DG HYP Investors’ Open Table“ – a client event hosted by DG HYP


Dialogue with Society and PoliticsDG HYP communicates with social and political decision-makers mainly via associations it holds a membership with. These include the National Association of German Coopera-tive Banks (Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. – “BVR”), the Association of German Pfandbrief Banks (Verband Deutscher Pfandbriefbanken e.V. – “vdp”), the German Property Federation (Zentraler Immobilien Ausschuss e.V. – “ZIA”) and the German Inves-tor Relations Association (Deutscher Investor Relations Ver-band e.V. – “DIRK”). 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. GRI G4-24, GRI G4-26 We are also an active member of the Association for En-vironmental 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, and engaged intensively in its forum for sustain-able lending in the year under review. The VfU provides its members with a platform to exchange subject-matter knowledge and information, and to maintain an interesting dialogue with experts and representatives of non-govern-

mental organisations. We also take part in a round table with the United Nations Environment Programme Finance Initiative (“UNEP FI”), where recent developments and progress made in the realms of sustainable finances man-agement are discussed.We consider ourselves an independent, politically neutral institution, and ceased supporting any political parties in 2005. Stakeholder Focus and MaterialityOur reporting on sustainability is designed to meet our stakeholders’ information requirements on the one hand, and to reflect the sustainability issues that are of major im-portance to us as a bank on the other. This is what the Glo-bal Reporting Initiative (GRI) – the standard our reporting is based on – defines as the principle of materiality. While in the past we regularly requested feedback from our stake-holders to help us identify “relevant” or “material” topics, in 2015 we also conducted a systematic materiality analysis to determine which sustainability-related aspects are con-sidered important by DG HYP and various stakeholders. The analysis was designed as an online survey, in which we and DZ BANK Group invited external and internal stakeholders to participate.GRI G4-18, GRI G4-23

DG HYP’S ASSOCIATION MEMBERSHIPS

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

• Cooperative Association Weser-Ems

• Cooperative Association, Frankfurt/Main

• Cooperative Association Rhineland-Westphalia

• Cooperative Association Baden-Württemberg

• Cooperative Association Bavaria

• German Cooperative and Raiffeisen Confederation (DGRV)

• Association of German Pfandbrief Banks (vdp)

• Association of German Pfandbrief Banks (vdp)

• Urban Land Institute (ULI Europe)

• Association for Environmental Management and Sustainability in Banks (VfU)

• German Investor Relations Association (DIRK e.V.)



When selecting the stakeholders to participate in the survey, we took various aspects, such as diversity and relevance for our bank, into account: GRI G4-25

• Our most important stakeholders are our clients, own-ers and partners in commercial real estate finance, the cooperative banks as well as our employees.

• Suppliers and service providers, as well as associations and investors, are of high economic relevance as well.

• Criticism voiced by non-governmental organizations

(NGOs), rating agencies, policy makers and academia reflects the social environment we are active in.

GRI G4-24

The 2015 survey spanned five areas with subordinated as-pects and was based on an analysis of sustainability trends we are currently witnessing in our society. With a response rate of 46 per cent, it yielded valuable indications as to what we should report and work on. GRI G4-18 The results on DZ BANK Group-level were then evaluated by each entity, the external stakeholders’ responses compared to internal perceptions, and displayed in a materiality matrix (see chart). The matrix shows that both surveyed groups at-tribute “Sustainable Corporate Governance” and “Sustain-able Products and Services” the highest level of relevance.

Within these areas, they ranked “Cooperative Principles and Values” and “Corporate Strategy and Success” highest. The results confirm the need for sustainability to be approached as a strategic cross-divisional responsibility, and to be sys-tematically integrated into the core business. For DG HYP, this means that the principle of sustainability, already en-shrined in the cooperative model, needs to be worked out more clearly. GRI G4-27

For the future, we will conduct such materiality analyses on a regular basis, as they provide us with valuable information on the scope we should aim for in our sustainability report-ing. They help us review our strategy and, where necessary, rework our sustainability programme. GRI G4-26

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 Governance At DG HYP, we apply a model of dual leadership. Two Man-aging Directors lead the company according to existing stat-utory provisions, ensuring compliance within DG HYP. The Supervisory Board and its committees monitor and advise the Management Board.

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 Simplify the Election of Employee Representatives to the Supervisory Board (Drittelbeteiligungsgesetz), it comprises twelve members elected at the Annual General Meeting and six members elected by employees. As in the previous year, 22 per cent of Supervisory Board members are female.

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.

3 Target quota for women on the Supervisory Board, the Management Board and the upper management: p. 38



Risk ManagementAs an integral part of DG HYP’s strategic and operative 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 returns, is an element of our enterprise management. The activi-ties driven by DG HYP’s business model require the ability to identify, measure, assess, manage, monitor and com-municate 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 of its business ac-tivities, DG HYP assumes risk only to the extent required to

achieve the objectives of its business policy and where the risks seem controllable.

To implement this principle, DG HYP’s Management Board has defined risk strategies for material risks which are in line with Group guidelines, and which are based on the bank’s business strategy. Each of these sub-risk strategies comprises the business activities exposed to risk, the risk management objectives (including provisions concerning risk acceptance and avoidance), and the measures designed to achieve these objectives. The business and risk strategy, as well as the sub-risk strategies, were discussed with the Supervisory Board.

MATERIALITY MATRIxGRI G4-19, GRI G4-21


Relevance for external stakeholders

3,5 4,0 4,5 5,0 5,5 Relevance for DZ BANK Group

1

3

4

5

2

3,5

4,0

4,5

5,0

5,5

Corporate governance

Employee responsibility

Ecological responsibility

Products and services

Social commitment


The regulatory organisational requirements and the allo-cation 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. We have also implemented risk management and risk control systems that fulfil the needs arising in the market and competitive environment. This forms the basis that ensures the proper operation and efficiency of the risk management process.

3 More information: Report on Expected Developments, Opportunities and Risks, Annual Report 2016, p. 49 et seq.

Remuneration Oversight Committee and Remuneration Officer After DG HYP was classified as a material institution pur-suant 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. This committee monitors whether remuneration systems for the Management Board and for the bank's employees are appropriate – particularly for those employees whose activi-ties have a material impact on the bank's overall risk pro-file, and for the heads of Risk Controlling and Compliance. In this context, the Remuneration Committee assesses the effects of the remunerations systems on the Group’s risk, capital, and liquidity management. Furthermore, it prepares the Supervisory Board’s resolutions concerning the remu-neration for Managing Directors.

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 require-ments, we publish information on our remuneration sys-tems on our website.

The general standards of these systems, including employ-er/works council agreements (Betriebsvereinbarungen), are transparent and accessible to all employees in the central handbook for our organisation.

3 Performance-based remuneration: p. 413 Remuneration systems: http://dghyp.de/remuneration

Transparent Financial Reporting DG HYP meets applicable reporting standards to ensure dis-closures are comprehensive and transparent in the Annual Report and Interim Reports. The financial statements are prepared by the Management Board and examined by both external auditors and the Supervisory Board. The financial statements are confirmed by the Supervisory Board.


Compliance Sustainable economic management requires compliance with all applicable legal requirements and provisions, regu-lations and self-commitments as well as internal guidelines. For financial services providers, reputational protection is of particular importance. Countering corruption and bribery, and preventing money laundering and fraud, are therefore amongst the core principles of our business activity.

As a tool to ensure good corporate governance, and in sup-port of our risk management and internal control system, we established an independent Compliance Office, which reports directly to the Management Board. The Compli-ance Office comprises all compliance functions in accord-ance with the minimum requirements for risk management and set out in the German Securities Trading Act (Wert-papierhandelsgesetz), the Central Office (for the prevention of money laundering, terrorism financing and fraud), data protection management and IT security. It has sufficient re-sources in order to fulfil its various tasks.



Our Compliance Office advises and supports business units in implementing and fulfilling legal requirements. It ensures a constant exchange of information, and makes sure our employees’ conduct is appropriate.

In the year under review, no complaints regarding anti-competitive conduct, cartelisation or monopolisation were registered.

Prevention of Money Laundering, Terrorism Financing and Fraud The responsibilities of our Compliance Office include taking actions to prevent money laundering and fraud. Further-more, it cooperates closely with Risk Controlling’s opera-tional risk group to identify, assess and manage risks. With uniform instruments for the identification of operational risks and processing feedback from risk analyses, DG HYP ensures that the risk of losses is minimised and eliminated at an early stage.

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.

Where it comes to the prevention of fraud, the bank evalu-ates all potentially actionable, internal and external prac-tices which could endanger its assets, and sets measures to prevent any wrongdoing. Every two years, we train our employees on meeting ap-plicable laws and regulations, as well as combating money laundering and fraud. The effectiveness of the aforemen-tioned prevention measures are evaluated on an annual basis as part of the risk analysis.

While suspicious activity reports were filed, they did not result in incidents relevant under criminal law in 2016.


At EXPO REAL trade fair, Munich



24

Whistleblowing SystemTo prevent white-collar crime and deter unauthorised in-fluence 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.

Our Guidelines also make reference to the central whistle-blowing platform launched by the Federal Financial Supervi-sory Authority (Bundesanstalt für Finanzdienstleistungsauf-sicht – “BaFin”), which allows whistleblowers to report tips of regulatory abuses anonymously.

Human RightsAdhering to and honouring human rights is a prerequisite for DG HYP’s day-to-day business. As our business activities are focused on Germany, human rights abuses such as child and forced labour are not an issue. Further topics such as equal treatment, anti-discrimination or data protection are

addressed in internal regulations, prevailing principles and the Group’s Code of Conduct.

DG HYP has pledged to ensure that human rights are ad-hered to along its supply chain. In 2012, the Group elabo-rated sustainability standards that require suppliers to meet certain social and environmental requirements. All suppliers are aware of these standards, which are based, amongst others, on the principles stipulated by the Global Compact of the United Nations, the Code of Conduct published by the German Association Supply Chain Management, Pur-chasing and Logistics (Bundesverband Materialwirtschaft, Einkauf und Logistik e.V. – “BME”), as well as on the rel-evant conventions of the International Labour Organisation (ILO). All suppliers with an aggregate turnover that exceeds a fixed threshold will be reviewed by our procurement de-partment for sustainability criteria and how open they are towards taking further measures to meet or improve upon these criteria. A medium score will lead us to request an extensive self-declaration.

3 More on sustainability management: p. 15

New Year's Reception, Munich



Data Protection Through appropriate technical and organisational security measures, DG HYP guarantees that personal data is pro-tected, and only used for specific purposes. As the number of working steps being digitalised and the amount of in-formation provided electronically are on the rise, such data is growing in importance and sensitivity. We therefore as-sign a high priority to data protection in our ongoing digi-talisation campaigns and continuously advance our security measures to remain on top of technological developments.

Monitoring data protection is the responsibility of an in-ternally appointed Data Protection Officer. In performing their data protection duties, this Officer is free from ex-ternal influence or other instructions, and reports directly to the Management Board. They are responsible for new employee induction, conducting training, and providing updates concerning developments in data protection law. In addition, all employees are bound to confidentiality, pursuant to section 5 of the German Federal Data Protec-tion Act (Bundesdatenschutzgesetz), and are familiar with the provisions of the Data Protection Act and data protec-tion requirements. For training and individual refreshers in data protection, they can turn to both the intranet and the DG HYP process portal’s data protection learning pro-gramme.

There were no relevant infringements of data protection regulations during 2016.

3 Protection of client data: p. 303 Digitalisation: Annual Report 2016, p. 12

German General Equal Treatment Act Our employees, especially our executive staff, receive regu-lar training on the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz). New employees receive this training at the very start of their career with DG HYP. In the year under review, no violations or complaints regarding non-compliance with the German General Equal Treatment Act were registered.

3 Equal opportunities: p. 38

Our Code of Conduct To hold us accountable beyond legal requirements and mar-ket standards, we have committed ourselves to our own set of internal rules and values, upon which we built our Guiding Principles and Management Guidelines, and which are also reflected in our Code of Conduct developed jointly with DZ BANK Group. Our Code of Conduct is a risk preven-tion, leadership and communication tool, and documents 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 laundering, financing of terrorism and white-collar crime, our Code of Conduct provides guidelines on sustain-ability and responsibility vis-à-vis our clients, business part-ners and employees. It serves as a compass for our daily conduct, and has been communicated to all employees, who can access the Code via our intranet as well as other means.

3 http://dghyp.de/codeofconduct/



2626

SUSTAINABLE BANKING BUSINESS A RESPONSIBLE APPROACH

TO FINANCING



27

Our Core BusinessReal estate represents an important economic factor in Ger-many, and is of tremendous social significance. As such, commercial real estate finance is not only an indispensable core business area of the Volksbanken Raiffeisenbanken cooperative financial network, but also highly relevant in terms of sustainability – with DG HYP as the specialist, cen-tre of expertise, and first point of contact for cooperative banks playing a starring role.

3 Business model: p. 10 et seq.

Every day, when making financing decisions, we are facing questions of sustainability. The criteria we apply to each real estate project comprise both strict risk and return consid-erations, and social and environmental aspects. According to these criteria, VR WERT, a wholly-owned subsidiary of DG HYP, prepares lending and market valuations that assess properties in terms of the following aspects: GRI G4-17

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

The high quality of VR WERT’s valuations was confirmed for another three years in 2015 by HypZert GmbH, an entity established by major associations of the German financial sector to be the leading national organisation for real estate valuers, with the “Approved by HypZert” hallmark.

12.2012 12.2013 01.2015


imug results 2014 rating 2015 rating 2016 rating Public-sector Pfandbriefe very positive (A) very positive (AA) very positive (AA)Mortgage Pfandbriefe neutral (CC) positive (BB) positive (BB)Uncovered Bonds positive (B) positive (BB) positive (BBB)


AA imug Rating for DG HYP Pfandbrief IssuesIndependent sustainability ratings have not only become part of the decision criteria for many institutional investors, they also help us to continuously review our sustainability performance and improve it where needed.

The sustainability rating issued by imug, a research and rating agency, showed DG HYP at top rank in 2016 (as of December 2016). We led the field in the ranking for “Public-sector Pfandbriefe” (N=44), ranked amongst the top three German institutions in the “Uncovered bonds” category (N=42; 2015: top four), and amongst the top two for Mortgage Pfandbriefe (N=30; 2015: top six).

oekom research AG, another rating agency, awarded DG HYP “Prime Status”, with “C+” on a scale from A+ to D–, in its most recent sustainability rating from January 2015. The Prime Status is awarded to companies which, according to the oekom Corporate Rating for social and environmental performance, rank among the leaders in their industry. DG HYP performed well in all of the following categories: staff and suppliers, corporate governance and business ethics, as well as products and services. A re-rating is planned for the second half of the current year 2017.

oekom results

THE PFANDBRIEF: 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 is defined through the Ger-

man 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 licence is

needed, which the Federal Financial Supervisory Authority (Bun-

desanstalt für Finanzdienstleistungsaufsicht – “BaFin”) grants only

when certain minimum requirements are fulfilled. 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.




Reinforcing Sustainable Lending Over the next five years, we want to shape our lending process to fit the mould of sustainability criteria even bet-ter. This is what the “Sustainability and Lending” working group – established in September 2015 within DZ BANK Group’s Corporate Responsibility Committee (CRC) – is working on, having drawn up a first draft for a Group-wide policy on “Sustainability and Lending” and now focusing on the next steps.

Client Satisfaction Client satisfaction is a major success factor for our business. This is why we regularly review our performance and en-gage in dialogue with our clients, who include investors, residential and commercial real estate developers, as well as housing companies. We present our products and serv-ices extensively with information materials, in personal dis-cussions, regular meetings, a series of events, and on our website.

3 Stakeholder dialogue: p. 16 et seq.

Recognising our performance as a bank once more, during 2016 the European Real Estate Institute (EUREB-Institute) named us as the third most powerful real estate brand of 2015 in the “Banking” category. The annual award is based on a representative survey of [CHECK] the most powerful real estate brands in ten categories. The main reasons for our high ranking were the “regional competence”, “client loyalty” and “recommendation intention” performance cri-teria.

Complaints Management A key indicator for the quality of our work is client satisfac-tion. It shows where we are fulfilling and surpassing our clients’ expectations, but also where we need to improve. To capture and manage complaints systematically, we devel-oped a complaints management system that lies within the direct responsibility of the Management Board. Our clients, cooperative partners and other third parties may contact Complaints Management by phone, email or in person. All complaints received are reviewed in the divisions in a timely manner, and assessed according to definitive criteria to en-sure that effective measures can be developed. In general, we seek to resolve misunderstandings and difficulties at an early stage and in direct talks with our clients – and to find individual solutions, so as to avoid complaints altogether.

Protection of Client DataPursuant to our internal Data Protection Policy, which is mandatory for all employees, we guarantee our clients that their personal data will be protected and only used for spe-cific purposes.

Protecting our clients’ data is also central to our projects for digitalising the client interface: We want to fulfil our clients’ demands for quality-enhanced processes, higher efficiency and speed, while at the same time complying with the high-est standards on data protection and security.

Consumer protection requirements do not apply to DG HYP due to the nature of the bank’s product portfolio and the bank’s client target groups. As we do not offer products in the traditional sense, we do not engage in advertising ac-tivities that could be defined as product marketing.

3 Data protection: p. 253 Digitalisation: Annual Report 2016, p. 12



FINANCING SUSTAINABLE PROPERTIES

2016 was another year of flagship projects in sustainable construction that DG HYP supported through a

financing. One of these projects was EUREF Campus in Berlin, where we financed the fourth new office

building for the same client. This “intelligent city of the future”, centred around the famous gasometer,

contains only buildings that are largely CO2-neutral and already meet the federal government's climate

protection targets for 2050.

DG HYP also provided a real estate fund catering exclusively to the needs of institutional investors with the

acquisition financing for the “Leopold 250” office building in Munich. The six-storey building with its large

inner courtyard and three rooftop terraces was certified “Gold” by the German Sustainable Building Council

(Deutsche Gesellschaft für Nachhaltiges Bauen e.V. – “DGNB”). With bright offices of three metres height

and automated ventilation, it meets the high demands of a state-of-the-art working environment. “City-

Plaza“ in Stuttgart and “Berliner Bogen“ in Hamburg are further examples of sustainable office buildings

financed by DG HYP and certified by DGNB (“Silver”). The “Europe Plaza” new office building in Stuttgart

has been pre-certified, with a “Gold” certification as the final goal.

3 www.euref.de


EUREF-Campus 21–22, Berlin/GermanyStriving to be certified as a KfW Efficiency House 55.

Europe Plaza, Stuttgart/GermanySeeking DGNB certification “Gold”, pre-certified.

© FAY Projects GmbH© EUREF AG



EMPLOYEES SOCIAL RESPONSIBILITY IS AN INTEGRAL PART OF OUR CORPORATE CULTURE


Responsible Human Resources ActivitiesMotivated and skilled employees are our most vital resource because it is their commitment and dedication that decide whether the bank’s activities will render success from an economic point of view. It is not only for ethical and legal reasons that we provide a working environment in which everyone is treated with respect, openness and fairness. It is also because with such an environment we lay the ground-work for long-term entrepreneurial success.

We purse a responsible human resources policy, one that aims to fulfil our employees’ needs, whilst meeting eco-nomic requirements. We offer our staff performance-based remuneration, flexible working hours without a set sched-ule, and a family-conscious corporate culture. Our attractive offer is complemented by extensive continuing professional development offers, social benefits, plus comprehensive occupational health management. We also place great em-

phasis on a trusting cooperation with the works council, as evidenced by successfully executed joint projects – for example, in the realm of promoting women in business, or health management.

Demographic change and competition for specialists and executives will present major challenges in the years ahead. An ageing working population and a looming shortage of skilled labour present the bank with the aim of retaining more experienced staff longer and fostering their commitment.

At the same time, we need to increase our attractiveness as an employer for potential employees, and make an effort to recruit more female talent. We aim to future-proof our hu-man resources management with an approach that reflects the needs of different stages in life, strengthening our repu-tation as an employer and our competitiveness.

0.2 % 7.2 % 16.6 % 34.7 % 34.1 % 7.2 %

below 20 20 to 29 years 30 to 39 years 40 to 49 years 50 to 59 years 60 years or older

EMPLOYEE AGE STRUCTURE


SOCIAL RESPONSIBILITY IS AN INTEGRAL PART OF OUR CORPORATE CULTURE


Corporate Culture and Management PrinciplesOur managers are responsible for upholding a corporate culture that motivates and supports our staff and creates a stable atmosphere for them to work in. Against this back-ground, and taking our Guiding Principles and core values as a compass, in 2012 they developed management guide-lines. After the guidelines were published, our executives embarked on an 18-month development programme de-voted to those guidelines and to the practical skills of good leadership.

During our employee survey conducted in 2014, we asked our employees whether they felt the management guide-lines were put into practice in everyday operations, and the feedback we received was extremely positive. We also dealt with these questions as we followed-up on the employee survey (see below).

3 Values and principles: p. 9

KEY BENEFITS AT A GLANCE


PERFORMANCE-BASED REMUNERATION

FLEXIBLE WORKING HOURS WITHOUT A SET SCHEDULE

VARIOUS FLEX-TIME MODELS

EMPOWERING THE NEXT GENERATION

EXTENSIVE CPD OFFERS

EXTENDED SOCIAL BENEFITS

POSITIVE, FAMILY-FRIENDLY WORK ENVIRONMENT

COMPREHENSIVE OCCUPATIONAL HEALTH MANAGEMENT


Employee Survey: Develop Together, Change Together In order to establish a dialogue with our employees, and re-ceive feedback on the working atmosphere and the bank’s development, we regularly organise employee surveys. The most recent survey was conducted online, in 2014, and its findings show above-average employee satisfaction and a high level of organisational identification. In particular, em-ployees value fair working conditions, independent work ethic, good teamwork, and a positive, personal tone. The survey also showed that DG HYP’s employees back the bank’s solid and reliable business model.

The survey also identified potential areas for improvement that we aim to unlock through our “Develop together, change together” initiative, which began in 2015. Around one quarter of our staff got their teeth into the results of this survey and identified primary need for action in the fol-lowing areas: the tempo of change processes, the clarity of goals, the way we deal with conflicts and errors, as well as the personal development prospects of our staff.

During the year under review, all of the bank’s teams were asked to discuss these topics relating to leadership and team culture, and to define how they can contribute. The discus-sions took different forms and formats, from small team workshops to large-scale coaching and workshop events to improve cooperation across all divisions.

At the same time, we adjusted our training and continuing professional development (CPD) offering, in order to reflect the survey results. We held a total of 15 in-house seminar and training events for employees that centred around questions of “communications and conflict” and “taking ownership in driving your career advancement”. Our seven in-house executive events focused on “transformational leadership”.

In 2017, we will introduce “The DG HYP Dialogue – Insights into our Business”. Based on the idea of “employees for employees”, this initiative will contribute to a better un-derstanding of and for each other – across divisions –, to strengthening the community spirit and fostering collabora-tion.

With structural changes on the agenda, triggered by the reorganisation of the real estate finance activities within DZ BANK Group, the date for another employee survey has yet to be set.

Training and Continuing Professional DevelopmentDG HYP aims to maintain the professional and personal expertise of its staff and on promoting their potential, not least because the job requirements in our industry are changing rapidly. We offer a broad range of training and continuing professional development (CPD) options, com-prising in-house seminars, departmental training, team-building measures, workshops, language classes and IT training, and continuously adapt this range to meet current requirements, for example with regards to regulation. Our employees may also attend external seminars and visit other DZ BANK Group entities.

Employees regularly sit down with their manager to dis-cuss what kind of training they need. These discussions go above and beyond the annual performance agreements. In addition, there are annual development review meetings in which we take a look at the individual development of each employee, and also at the development of the team and at trends each department has to prepare for – partly through further qualification.



During the year under review, DG HYP’s employees com-pleted 4.0 training days on average (2015: 3.4). 90 per cent of employees, stemming from all teams and division of the bank, have taken part in at least one training meas-ure (2015: 73 per cent), underscoring the importance that DG HYP and its employees attach to education.

34 per cent of the trainings and seminars held in 2016 focused on professional development measures; 5 per cent dealt with leadership. The number of management semi-nars remained stable vis-à-vis 2015, whilst the number of general trainings increased. In absolute terms, the number of seminars rose by 30 on the previous year.

As the evaluation of the employee survey (p. 35) has shown, measures focusing on soft skills – personality issues, team spirit and cooperation as well as target-group-specific development (business empowerment in sales, support for female talent) – have gained in significance, with a share of 21 per cent.

Further to existing measures, DG HYP plans to expand its CPD offering towards age-appropriate learning. Against the background of demographic change, it is our goal to increase interest in training measures and benefit from the experience and knowledge of older employees.

DG HYP Real Estate AcademyA fixture in our CPD programme is the DG HYP Real Estate Academy, which we established in 2010 in cooperation with the International Real Estate Business School (IRE|BS), Regensburg. 2016 was the fourth year for the Academy, with 23 participants completing the programme, which for the first time included six Volksbanken Raiffeisenbanken colleagues. The programme comprises three modules, with a total of twelve days of lecture on the real estate business as well as a demanding project to be completed in small teams. In 2016, participants in the programme assumed the role of an advisory firm that would present a concept for an office development in Berlin to a private investor. The fifth year for the DG HYP Real Estate Academy will commence in autumn of 2017.

3 CPD for women: p. 39


6

Je nach Ihrer Zielposition werden die einzelnen Phasen

in der Hamburger Zentrale oder an einem unserer

attraktiven Standorte stattfinden.

Ihre praktische Ausbildung ergänzen wir durch maß-

geschneiderte Theorieeinheiten mit der Bildungs-

akademie. Unser Kooperationspartner ist die Inter-

national Real Estate Business School IRE|BS

Immobilienakademie der Universität Regensburg,

einer der renommiertesten Weiterbildungsträger in

der Immobilienbranche. Beleuchtet werden ganz

bewusst Inhalte, die weit über das Finanzierungsge-

schäft hinausgehen. Ihr Nutzen dabei: Ein Blick über

den Tellerrand und ein wertvoller Beitrag zur Stärkung

Ihres fachlichen Profils.

Participants of the current course at DG HYP Real Estate Business School


Empowering the Next GenerationOwing to demographic change and growing competition for specialists and executives, developing and maintaining 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 an 18-month trainee pro-gramme, offering vocational training for qualified univer-sity graduates. 2016 was the programme’s fifth year. Five trainees were enrolled, four of whom are working in Com-mercial Real Estate Finance, and one in Project Manage-ment/Bank Management. ABSOLVENTA, the leading online jobs portal for young academics, once again awarded us a seal of quality for our "career-promoting and fair trainee programme", affirming DG HYP's high-quality trainee scheme.

Dual-Study Programme In addition to our trainee programme, we also offer a three-year dual study programme, leading to a Bachelor of Arts degree in Banking & Finance – a second pillar to attract young talent. This dual-study programme consists of alter-nating intensive practical phases in different departments

of the bank, and theoretical studies at the vocational acad-emy for the banking industry (Berufsakademie für Bankwirt-schaft) in Hanover. After two and a half years, participants also have the opportunity to take the Chamber of Industry and Commerce (IHK) examination. There are currently three students attending DG HYP's dual study programme. InternshipsStudents and pupils may also get to know DG HYP through internships, student clerkships or their academic (thesis) work. When designing such projects, we adhere to the Fair Company Codex, a voluntary self-commitment we made in 2014 and for which we were awarded the corresponding seal.

To help refugees integrate into German society and help them get an understanding of German professional life, in 2016 we committed to offering two internships for a period of two years. Many DG HYP colleagues have voiced their willingness to support this project as mentors. During the year under review, we have already provided six-week placements for two Syrian refugees; similar placements are planned for 2017.


2.8 days

€ 1,457

3.4 days

€ 1,504

2014

2015

4.0 days

€ 1,647

2016

Training days Training costs

TRAINING DAYS AND COSTS PER EMPLOYEE


Equal OpportunityEqual opportunity and anti-discrimination are cornerstones of our corporate policy and our human resources manage-ment. We treat all employees equally, regardless of their heritage, skin colour, religion, gender, age, nationality, sexual orientation, gender identification, marital status or degree of disability, and make sure that they receive regular training on the German General Equal Treatment Act (All-gemeines Gleichbehandlungsgesetz).

We value the diversity of our employees and therefore de-cided to sign the German Charter of Diversity (Charta der Vielfalt) in 2012. During the year under review, we and other companies became first-time supporters of the Ger-many-wide diversity movement associated with the Charter,

and initiated a Group-wide campaign on the 4th German Diversity Day by giving our employees involved in charity a platform to present causes close to their hearts. With inspir-ing presentations they not only managed to enlist further support for their causes, but with just a little bit of luck they would win direct financial support in a lottery drawing.

The principles of equal treatment and anti-discrimination also apply to questions of wages and salaries.

Our corporate culture promotes integration: as such, se-verely disabled members of staff are an important part of our workforce. In 2016, 5.1 per cent of our employees were severely disabled (2015: 4.7 per cent). DG HYP thereby complies with the legally binding quota of 5.0 per cent of employees being severely handicapped (section 71 of the German Social Code Ix). Severely handicapped employees, together with their interests and concerns, have dedicated representatives.

3 Performance-based remuneration: p. 41


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 fixed 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 internship.

5 Fair Companies pay their interns an adequate allowance.

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

THE FAIR COMPANY CODEx


Promoting Women in BusinessResearch has shown that mixed executive teams are more successful. Women bring specific qualities to the team, most notably communication skills. We see women in exec-utive positions as playing a major role for the future of our bank, and promote them with a strategy that starts with the grassroots and, at the same time, raises awareness with the management.

To help women advance in business, we fleshed out the related training offers during the year under review, add-ing specific in-house seminars targeting female employees, as well as recommending external seminars and coopera-tions with womens’ networks within the real estate sector. Strong interest for this topic within the bank was evident, judging from the proportional attendance of these events by female colleagues.

The Act on Equal Participation of Women and Men in Ex-ecutive Positions in the Private and the Public Sector (Gesetz für die gleichberechtigte Teilhabe von Frauen und Män-nern an Führungspositionen in der Privatwirtschaft und im

öffentlichen Dienst) came into effect on 1 May 2015, re-quiring us to determine a gender quota for the Supervisory Board, the Management Board, as well as the tier one and tier two management levels below the Management Board. Against this background, in accordance with section 111 (5) of the AktG, on 19 June 2015 DG HYP's Supervisory Board set a target quota of 22 per cent for the share of women on the Supervisory Board, and a target quota of zero per cent for the share of women on the Management Board. In accordance with section 76 (4) of the AktG, on 2 June 2015 the Management Board of DG HYP agreed upon a target quota of 9 per cent for the share of women on the first management level below the Management Board (B1), and on a target quota of 13 per cent for the share of women on the second management level below the Management Board (B2). The target date for implementation of all these quotas is 30 June 2017.

After this date, new targets for the next five-year horizon will be fixed. At the end of 2016, 41.1 per cent of our staff were female (2015: 40.5 per cent). In executive positions, the share of women was 8.3 per cent (2015: 10.3 per cent).


During 2016, ABSOLVENTA, one of the largest German employment websites for graduates and young professionals, again awarded us their “ career-promoting & fair trainee programme” seal.

In recognition of our family-oriented human resources policy, the non-profit Hertie Foundation awarded us the “audit berufundfamilie“ certificate in 2013, and confirmed it during the year under review – following an extensive re-audit process – for another three years.


Making Life SimplerAchieving a proper work/life balance can be a challenge, especially where there are children to take care of or family members to nurse, but also where staff dedicate a share of their free time to charity. With a broad range of meas-ures, we aim to make life easier for our staff, and repre-sent a corporate culture that reconciles family needs with career planning. This is the high standard that we have set ourselves. Together with our employees, we are always in search of individual solutions to personal matters.

Flexible working hours are an integral part of these solu-tions. Instead of setting a core time, we run time-savings accounts and reach agreements on team and department levels to make sure that the needs of both the individual employee and the workplace are met. In addition, we offer various part-time models and occasional mobile working.

All full-time employees are entitled to 30 vacation days. For part-time employees, the number of vacation days is sub-ject to the working days per week that have been agreed upon individually. This pro-rata calculation is also based on an annual vacation entitlement of six weeks.

berufundfamilie certificate In recognition of our family-oriented human resources policy, the non-profit Hertie Foundation awarded us the “audit berufundfamilie“ certificate in 2013, and confirmed it dur-ing the year under review following an extensive re-audit process. Above and beyond our flexible working hours, we also offer professional counselling as well as childcare sup-port and support for employees who nurse family members, through cooperation agreements with pme Familienservice and Deutscher Pflegering. External experts are also there to help with personal emergencies or problems of all kinds. There is also a parent-child office available at short notice, and we offer emergency childcare where necessary.

The “berufundfamilie” auditors evaluated DG HYP and confirmed that we are a family-friendly employer with many practices and policies that allow individuals to balance work and family commitments. Over the course of the audit, which took various months, we developed more measures to further help our employees address work-life balance is-sues. These new initiatives will be put into practice step by step over the coming three years. As we successfully completed the re-audit process, we are now entitled to bear the seal “berufundfamilie” for anoth-er three years.


USE OF FLExIBLE WORKING HOURS

Employees (%) 2016* 2015* 2014

Flexible hours 100.0 100.0 97.6

Full time 78.5 81.4 84.1

Part time 18.1 18.5 15.9

Occasional mobile working 61.9 48.8 42.7

Sabbatical 0.0 0.7 0.2

Partial retirement 0.8 1.5 1.5

Parental leave 2.9 1.5 2.4

* DG HYP's total workforce, as at 31 December 2016


Performance-Based Remuneration Our remuneration strategy observes our business and risk strategies, whilst also adequately and transparently recog-nising the achievements of our employees. Remuneration is based only upon qualifications and performance; gender-related aspects are not taken into account. A fixed base sal-ary 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 addition to commercial success, we honour individual and team achievements. The variable component is determined based on the individual’s per-formance assessment, or the achievement of agreed targets pursuant to the provisions in the employer/works council agreement (Betriebsvereinbarung) on variable remunera-tion.

282 members of staff were non-tariff employees as at 31 December 2016 (2015: 267); 193 were tariff employees (2015: 192), three (2015: eight) received a trainee salary or other forms of remuneration.

Remuneration of the Management Board The Management Board is remunerated in accordance with legal and regulatory requirements. The Supervisory Board is responsible for the Managing Directors’ remuneration and conducts regular reviews, in particular with regard to ap-propriateness and changes necessary to comply with new regulatory requirements. The remuneration is comprised of a fixed and a variable component. Payment of the variable component is dependent on a sustainable development of the bank and linked to enterprise value. Accordingly, and pursuant to the German Regulation on Remuneration in Financial Institutions (Institutsvergütungsverordnung – “InstitutsVergV”), as amended in December 2013, the vari-able remuneration of the Management Board is calculated on the basis of multi-year criteria, and risk-related indicators are taken into account.

3 Remuneration oversight committee: p. 22


SOCIAL BENEFITS

On top of a performance-based remuneration, we offer comprehensive social benefits for our employees to enhance their social protection and improve their work/life balance. Our ben-efits include corporate retirement provisioning, childcare support, a transit card (“job ticket”) and transit allowance for public transport, group accident insurance, a corporate sports programme, anniversary bonuses, a canteen, and financial support for next of kin. DG HYP also contributes to employees’ capital-building payment schemes.


Remuneration of Risk Takers Employees whose professional activities may have a mate-rial impact on the bank’s risk profile are classified as risk takers. Where the individual remuneration for the 43 risk takers at DG HYP (including Managing Directors) exceeds a certain limit, provisions in the employer/works council agreement (Betriebsvereinbarung) on retention, payment and entitlement conditions apply. 80 per cent of the vari-able remuneration component is retained for up to four years following determination. During this time, a minimum of 50 per cent of the variable remuneration depends upon DG HYP’s sustainable performance.

Health and Safety in the Workplace As we take our responsibility as an employer seriously, we 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 DG HYP’s ability to per-form.

Occupational Health Management Our comprehensive occupational health management con-tributes to the performance, health and commitment of our staff. It also comprises a versatile range of in-house sports, healthy meals in the staff restaurant, advice from the com-pany doctor, regular health checks and seminars to promote employee health.

Our health management measures were expanded and developed further during the year under review. As in the previous year, we made the threat of work-related mental stress a priority. To identify and reduce contributors to occu-pational stress, we had conducted a threat analysis in 2015. The objective was to identify and mitigate any factors in our work arrangements which might have a negative im-pact. With the results of the threat analysis prepared on team level, every executive was able to develop appropriate measures together with their staff during the year under review. Additionally, we equipped all workstations with height-adjustable desks in 2015 and 2016.

COMPREHENSIVE HEALTH MANAGEMENT


PROMOTION OF HEALTH

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 discussi-ons with returning employees

CATERING

Healthy meals in the in-house restaurant and café

Workplace nutrition

PERSONNEL DEVELOPMENT

Occupational health seminars for managers

CPD measures/seminars on

healthcare, stress, psychological pressure



During the year, 163 employees took up our offer of cor-porate sports and fitness programmes, such as complete body training, boxing and running (2015: 149). In the sum-mer months, we took part in the “Cycle to work” initiative,

started by the German Cycling Club (“ADFC”) and the AOK health insurer. Around 40 colleagues

participated, cycling almost 15,630 kilome-tres between 1 May and 31 August 2016,

alone or in teams. DG HYP run-ning teams participated in sporting events such as the MOPO relay race in Hamburg’s

city park.

The average illness rate 2016 was at 3.8 per cent, slightly exceeding the previous year’s value (2015: 3.6 per cent), but still at an acceptable level. The rise was caused by an increase in long-term illness not related to the working en-

vironment. Last but not least, we not only invest in pre-ventive occupational health measures, but we also support employees returning after longer periods of illness, via an occupational re-integration programme.

Staff members at the MOPO relay race in Hamburg

DG HYP’s company dragon boat team



44

Occupational Safety In accordance with the statutory provisions and require-ments for occupational and fire safety, all employees receive safety training when they join us, which are conducted by our occupational safety specialist. We also carry out regular workplace inspections, safety instructions and measures to raise awareness for occupational safety issues.

As in the previous years, there were no work-related fatali-ties in 2016. The average annual rate of work and commut-ing accidents at DG HYP was 2.1 per cent in 2016 (2015: 2.4 per cent), based on an employee population of 475 as at year-end (2015: 459).

Years

201513.8

201613.7

201413.3

AVERAGE LENGTH OF COMPANY SERVICE

DG HYP at the Graduate Congress 2016



2016 2015 2014

Employees (number)* 465 459 454 Temporary employees 19 10 9 Permanent employees 446 449 445

Expenses for compulsory social security contributions (€ mn)** Wages and salaries 41.6 39.9 38.0Company pension schemes 6.1 0.8 2.9Other social security contributions 5.4 5.2 4.9 Percentage of women Total workforce 41.1 40.5 41.0Executive positions 8.5 10.3 10.2

Average age 46.1 46.0 45.7

Employees with disabilities (%) 5.1 4.7 4.0

Fluctuation (%) 1.8 3.7 0.9

Illness rate 3.8 3.6 3.3

Workforce by type of employment (%) Non-tariff employees 59.4 58.2 56.4Tariff employees 40.6 41.8 43.6Other employees _ – 1.5with 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 95.4 97.8 98.0

represented in the Works Council 97.7 97.6 97.6

* Average for the year ** Reported in accordance with IFRS for the first time with this Report

STAFFING INDICATORS



ECOLOGICAL RESPONSIBILITY AWARE OF ECOLOGICAL

CONSEqUENCES


Group-wide Environmental and Climate Strategy A sound and stable environment is the basis of human exist-ence; it is also a basic requirement for every type of business activity. Systematic environmental and climate protection take a major role in our day-to-day work, with our focus being on those areas where we have a direct influence. Our environmental management focuses on optimising the use of energy and resources at the bank, and on using renew-able energy sources to consistently reduce our operational carbon footprint. Facility management, in particular, holds very specific potential for minimising negative contribu-tions. We also seek to reduce mobility-related emissions such as those resulting from business travel. An environ-mentally friendly supply chain of products and services is also part of our sustainable corporate policy.

As part of DZ BANK Group’s Corporate Responsibility Com-mittee (CRC) and together with the other units represent-ed there, we developed a Group-wide environmental and climate strategy in 2014 that sets standards for a compel-ling environmental policy, efficient environmental organisa-tion, and appropriate processes. In order to exchange kno-whow and expertise, and improve strategy, the experts of a dedicated “knowledge centre” meet regularly. In addition, we are currently working on a climate strategy specific to DG HYP, aimed at reducing greenhouse gas emissions by 2050.

Organisation and ManagementTo 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. This makes it easy to identify where

action needs to be taken, and where there is room for im-provement. In accordance with our environmental policy, we derive environmental targets and fix the measures we need to take in order to meet them. These efforts are coordinated by DG HYP’s Environmental Officer, who is responsible for further advancing the bank’s environmental management system. Together with her team of two coordinators, the Environmental Officer ensures that the departments are in-cluded in the process. The departments formally assume re-sponsibility for certain environmental topics and successful implementation of our measures.

3 Sustainability programme, ecological responsibility: p. 65

Engaging Our EmployeesFor environmental management to bear fruit, it needs to be supported by all colleagues. This is why we place great importance on engaging our employees and keep them up-dated about goals and results in the realm of environmental and resource protection. We want to motivate our employ-ees and make them see environmental protection as their own cause, both in their professional and private lives. More and more of our tenants and service providers are following suit and engaging their employees.

We regularly hold theme weeks, during which staff learn interesting and useful facts about energy, water and waste. The CLUB OF ROME provides support in this respect; during our 2014 event week, representatives devoted a whole day to speaking with our employees about the recycling econ-omy. For 2017, we have another set of “DG HYP Environ-ment Days” planned.



Greenhouse Gas Emissions Our calculations of greenhouse gas emissions (CO2 emis-sions) are based on the VfU indicator system (Association for Environmental Management and Sustainability in Finan-cial Institutions). In accordance with the Greenhouse Gas Protocol (GHG Protocol), we differentiate between the fol-lowing types of emissions in our reporting:

• Scope 1: Direct emissions.

• Scope 2: Since 2015, the GHG Protocol asks for data to be reported in two ways: one based on a so-called location-based method, and one based on a market-based method (“dual reporting”). Pursuant to the VfU

we continue to allocate scope 2 emissions based on supplier- and product-specific emission factors (market-based method).

• Scope 3: Other indirect emissions, e.g. related to trans-portation and logistics, the use of products and services, supply and disposal for our service providers, and busi-ness travel.

This system allows us to identify the main sources of emis-sions within the bank, calculate our carbon footprint, and take dedicated measures within our environmental man-agement system to increase energy efficiency, save energy, and decrease greenhouse gas emissions.

DG HYP'S CARBON FOOTPRINT

SCOPE 3*SCOPE 20 tonnes (indirect)

SCOPE 1652.28 tonnes (direct) 335.36 tonnes (extended)

987.64 tCO2 SF

8 CH

4 N

2O HFCs PCFs

PURCHASED ELECTRICAL POWER FOR OWN CONSUMPTION

FUEL COMBUSTION (FLEET) BUSINESS TRAVEL | VEHICLES USED BY CONTRACTUAL PARTNERS | PRODUCTION OF PURCHASED MATERIALS | RAW MATERIALS

PROCESSED | PRODUCT USE AND CONSUMPTION

*Scope 3 takes into account the use of resources for paper, water, waste, and business travel.



CO2 EMISSIONS

Unit 20161 20151 20141

Total electricity CO2 emissions kilogrammes (kg) 11,850 11,234 19,492Specific electricity CO2 emissions kg/FTE 35 34 59 Total heat CO2 emissions kilogrammes (kg) 522,454 464,014 422,893 Specific heat CO2 emissions kg/FTE 1,530 1,384 1,276Total water CO2 emissions kilogrammes (kg) 3,930 3,789 4,286Specific water CO2 emissions kg/FTE 12 11 13Total paper CO2 emissions kilogrammes (kg) 24,323 23,294 24,058Specific paper CO2 emissions kg/FTE 71 69 73Total waste CO2 emissions kilogrammes (kg) 1,329 898 1,768Specific waste CO2 emissions kg/FTE 4 3 5Total transport CO2 emissions2, 3 kilogrammes (kg) 423,753 477,4324 367,755Specific transport CO2 emissions4 kg/FTE 1,241 1,0404 810

Total CO2 emissions kilogrammes (kg) 987,639 980,6524 840,251Total specific CO2 emissions kg/FTE 2,893 2,9254 2,535

1 78 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, those on placements, trainees, working students and externals). Our calculations are based on the VfU indicator system; they therefore include preceding and following processes as well. 2 100 per cent coverage per full-time employee (FTE) 3 including private vehicle usage 4 Following a change of the leasing company in 2015, we are now able to indicate the real annual mileage of vehicles. CO2 indications therefore are more accurate than in previous years; however, the indications for 2016 can only be compared with those of 2015.

Total

Kg. 000‘s

Specifi c

Kg. 000‘s/FTE

987,639

20152014 2016 2015

2,893

20162014

2,535 2,925

3

2

1

0

1,000

600

200

0

840,251 980,652



ELECTRICITY AND HEAT CONSUMPTION

Unit 2016* 2015* 2014*

Electricity consumption Total electricity consumption kilowatt hours (kWh) 1,740,028 1,649,690 1,651,848 of which sustainable hydroelectricity kilowatt hours (kWh) 1,740,028 1,649,690 1,651,848Specific electricity consumption kWh/FTE 5,097 4,920 4,980

Heat consumption (natural gas) Total heat consumption kilowatt hours (kWh) 2,039,966 1,811,782 1,638,230 Specific heat consumption kWh/FTE 5,975 5,403 4,939

* 78 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, those on placements, trainees, working students and externals).

Electricity and Heat Consumption Since 2013, DG HYP has sourced 100 per cent of its elec-tricity from renewable energy sources. To be precise, the bank consumes certified hydroelectricity only. During the year under review, electricity consumption amounted to 1,740,028 kWh, and was slightly up on the previous year. On FTE basis, electricity consumption increased by 4 per cent.

We have taken a number of measures to reduce our elec-tricity consumption. Apart from raising awareness with our employees, for example concerning the avoidance of standby power loads, enhancing energy efficiency is a ma-jor topic. We are increasingly combining energy-efficient LED with movement-sensitive lighting and demand-based lighting controls (e.g. for timing and intensity).

The heat consumed by DG HYP in Hamburg is generated with natural gas. On the back of a relatively harsh winter – overall average temperature in Hamburg in 2016 was ob-served to be 0.7 °C lower than the prior year’s level – and a wider regular working timeframe, which resulted in air conditioning times being expanded as well, absolute con-sumption rose by approximately 13 per cent on the previous year in 2015 to 2,039,966 kWh.

In the year under review, we put the refurbishment of the façade covering our Hamburg offices into more concrete terms with a model façade. As energy-related improve-ments are a central theme to this project, we will also mod-ernise our central heating system and chimneys. By install-ing a cogeneration unit and replacing the existing furnaces with state-of-the-art condensing technology we will be able to cover practically the entire base load of the build-ing. Peak electricity demand will be met with a photovoltaic system, enabling us to generate part of the energy we use ourselves. Parts of the air conditioning and air handling sys-tems will also be upgraded to state-of-the-art technologies in energy consumption and air quality control.

As in other buildings, air scrubbers will be equipped with germicidal UV light waves, and water purification systems will be added, making chemical supplements redundant and significantly reducing water consumption.

We aspire to be certified “Silver” by the German Sustain-able Building Council (Deutsche Gesellschaft für Nachhal-tiges Bauen e.V. – “DGNB”) following completion of these measures, and have already completed the pre-certification stage.



WATER CONSUMPTION

Unit 2016* 2015* 2014*

Total water consumption cubic metres (m³) 5,590 5,390 5,722 Specific water consumption m³/FTE 16 16 17


Water withdrawn from the public drinking water system. Waste water is fed into the local sewerage system; it is not discharged directly into streams and rivers. Waste water produced by DG HYP does not affect biodiversity due to its characteristics.

Water Consumption DG HYP sources water from the public utility for the Ham-burg region, HAMBURG WASSER. Total water consump-tion during the year under review was 5,590 cubic metres, up from 5,390 cubic metres in 2015 due to an increase in headcount. Specific water consumption per employee was flat at 16 cubic meters.

Paper ConsumptionAmongst the consumables, printer and copier paper ac-count for the largest share in terms of volume. In December 2014, we switched all printer and copier paper to recycled, Blue Angel certified paper. In 2016, 98 per cent of the paper consumed at DG HYP carried that label (2015: 97 per cent). For marketing material and publications, since 2015 we have only been using paper certified by the Forest Steward-ship Council (FSC). Absolute paper consumption rose 4 per cent on the previous year.


2015 2015

Total

21,051

Specifi c

61

20162014

6560

20162014

21,45720,001

25

20

15

10

5

0

80

60

40

20

0

Kg. 000‘s Kg./FTE

PAPER CONSUMPTION


PAPER CONSUMPTION

Unit 2016* 2015* 2014*

Printer and copier paper consumption Total paper consumption** kilogrammes (kg) 12,638 11,092 11,314 Specific paper consumption kg/FTE 37 34 34 Proportion of recycled paper % 98 97 5 Proportion of totally chlorine-free (TCF) paper % 2 3 75

Printed material Total paper consumption kilogrammes (kg) 5,319 5,436 5,397 Specific paper consumption kg/FTE 16 16 16 Proportion of FSC certified paper % 100 100 35

Hygienic paper consumption Total paper consumption kilogrammes (kg) 3,493 3,783 3,290 Specific paper consumption kg/FTE 10 11 10 Proportion of elemental chlorine-free (ECF) paper % 91 86 86 Proportion of totally chlorine-free (TCF) paper % 9 14 14


** Changes in data collection have resulted in different data than published with the status report 2013 (paper consumption incl. envelopes 2013-2014)

“Printer and Copier Paper” no longer lists FSC certified and elemental chlorine-free paper due to low volumes. “Printed Material” no longer lists ECF and TCF paper as these types of papers are no longer used.

WORK-RELATED TRAVEL

Unit 2016* 2015* 2014*

Total work-related travel km 2,525,199 2,561,863 2,400,205 Specific work-related travel km/FTE 5,316 5,581 5,287 Share of travel by train % 29 27 27 Share of air travel % 19 22 21• < 500 km % 87 84 43• > 500 km % 13 16 57

For DG HYP’s work-related travel by train, it is worth noting that the German railway company Deutsche Bahn uses sustainable energy only, making this form of travel climate-neutral since 1 April 2013. * 100 per cent coverage per full-time employee (FTE).



MobilityWork-related travel decreased by 36,600 kilometres vis-à-vis 2015. To cut down on business-related travel, we are raising employee awareness and increasingly making use of video and teleconferences. We are further encouraging em-ployees to increase their use of low-emission public trans-port wherever possible, providing transit cards (Jobticket) and transit allowances for existing season tickets as a finan-cial incentive. In the year under review, 328 employees took advantage of these financial incentives (2015: 320).

The share of business air travel decreased by three percent-age points to 19 per cent in 2016, while the share of cli-mate-friendly rail travel increased even though overall travel volumes remained at a particularly elevated level. We are currently evaluating whether to compensate for emissions caused by air travel with climate protection projects. Complementary bicycle parking places are available to em-ployees, and also to commercial tenants of our cooperative companies, at our headquarters in Hamburg. Since 2014, we have more than 65 spaces for bicycles, 30 of which are in the underground garage. As demand is growing, we will further expand this offer.

We set great store by a fuel-efficient and low-emission vehicle fleet. Following a change of the leasing company in 2015, we are now able to indicate the real annual mile-age of our cars. CO

2 indications therefore are more accurate than in previous years; however, they cannot be compared with previous periods. When compared to 2015, emissions from work-related travel decreased by 11 per cent during the year under review.

Going forwards, we would like to offer our employees with a company car some training on fuel-efficient driving tech-niques, in cooperation with our leasing partner. Implemen-tation of this plan is currently being discussed on a Group level. Should no coherent solution be found, DG HYP will work toward an independent solution.

In pursuit of our goals of environmental protection and resource efficiency, we acquired a BMW i3 electric car (see picture), which is available for all employees at our Hamburg offices to use for business-related travel. This offer has resonated across our staff, with 3,500 kilo-metres having been put on since the first quarter of 2016. The vehicle can be charged fully within the course of two hours using our very own charging stations located in the underground garage. A possible expansion of our electric car pool is currently being discussed.

Waste We try to avoid waste wherever we can. Where this princi-ple cannot be applied and we generate waste, it is reused or recycled. All of our waste is disposed of by an external contractor with most of it – 88 per cent (2015: 88 per cent) – being recycled. 10 per cent of waste is used to replace pri-mary energy sources, and is prepared as substitute fuel for thermal energy generation, thus contributing to the saving of resources, and to reduce CO

2 emissions. Only 2 per cent are not recyclable. Transparency of waste data has increased considerably over the past years, as queries have become more differentiated and data suppliers are more involved.



WASTE

Unit 2016* 2015* 2014*

Non-hazardous waste Total paper (excluding confidential paper) kilogrammes (kg) 12,130 12,279 13,700 Specific paper (excluding confidential paper) kg/FTE 35 37 41 Total confidential paper kilogrammes (kg) 29,393 12,658 10,044Specific confidential paper kg/FTE 86 38 30Total mixed packaging kilogrammes (kg) 2,797 2,790 2,781Specific mixed packaging kg/FTE 8 8 8Total building site waste from modernisation kilogrammes (kg) 44,157 47,577 86,027Specific building site waste from modernisation kg/FTE 129 142 259Total commercial waste kilogrammes (kg) 37,314 48,887 57,906Specific commercial waste kg/FTE 109 146 175

Total non-hazardous waste kilogrammes (kg) 125,759 124,191 170,458Specific non-hazardous waste kg/FTE 368 370 514

Hazardous waste Total toner waste kilogrammes (kg) 387 175 181 Specific toner waste kg/FTE 1 0.5 0.5 Total electronic machinery waste kilogrammes (kg) 1,030 1,127 1,684 Specific electronic machinery waste kg/FTE 3 4 5 Total lighting waste kilogrammes (kg) 212 237 236 Specific lighting waste kg/FTE 1 1 1

Total hazardous waste kilogrammes (kg) 1,629 1,539 2,101Specific hazardous waste kg/FTE 5 5 6

* 78 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, trainees, working students and externals).

Our amounts of waste rose slightly in 2016, by 1 per cent compared with the previous year. This is primarily attrib-utable to the disposal of confidential papers: during the year large volumes of documents requiring approval were scanned, electronically processed and placed in electronic files. As we destroyed the paper versions of these files, the volume of confidential waste disposed of in accordance with the German Data Protection Act more than doubled, rising by 132 per cent. With the introduction of electronic files in 2015, we significantly reduced future paper consumption and advanced paperless communication. Increased usage

of toner cartridges during the year under review can be at-tributed to the fact that many of the printers introduced in 2014 required new toner cartridges for the first time.

Batteries, electronic scrap, wires, aluminium and copper waste are disposed of individually. The contractor reim-burses these materials in accordance with market stand-ards; credit is applied against disposal costs and distributed separately. It is in particular the recirculation of sorted scrap copper that has a positive economic effect.



Our employees are also encouraged to consistently sort their waste, and the kitchens are equipped with bins for residual waste, glass and recyclable plastics. At the end of 2014, all offices were equipped with an additional dustbin to facilitate the segregation of wet or damp waste and dry paper. The plastic bin liners used in the cleaning company’s collection areas were replaced by environmentally friendly jute sacks.

Also at the end of 2014 we joined an initiative to collect pens, promoted by international recycling and upcycling company TerraCycle: biros, felt pens, and synthetic office utensils are collected and reused.

ITAs IT is a major influence upon energy consumption and CO2 emissions, we place great importance on improving energy efficiency when procuring new equipment. In gen-eral and where available, we prefer devices with an environ-ment mark such as Blue Angel or Energy Star.

In 2015, we replaced 150 computers with new, energy-efficient models; in 2016, 60 more followed. In 2014, we switched all printers in the company to Blue Angel certified devices that meet our requirements regarding fine particu-lates, power consumption and emission.

During 2016, we equipped seven meeting rooms in Ham-burg with new, energy-efficient flat screens. An additional video conference system was installed in one of the rooms, providing us with further opportunities for meetings across locations without the need for travel.

Environmental Protection Along the Supply ChainWhen selecting suppliers, we abide by DZ BANK Group’s sustainability standards for suppliers. These standards have been an integral part of our procurement process since

2012. Suppliers exceeding a fixed threshold must commit themselves to reduce environmental impact beyond legal minimum requirements, and have organisational structures for a systematic environmental management in place. We give preference to local suppliers and service providers, meaning they are located close to one of DG HYP’s of-fices. This results in short transportation routes and helps reduce CO

2 emissions. In 2016, we sourced 98 per cent of our products and services from German suppliers (based on our total business volume), 81 per cent thereof were locals (2015: 84 per cent).

Climate-Friendly Food Choices Nothing has changed regarding our staff restaurant’s com-mitment to primarily offering seasonal and regional food, using high-quality products, whose origins and production chains are transparent. We prefer humanely raised meat and MSC-certified fish for our meals. Fruit and vegetables mainly come from our region as well, and are offered ac-cording to seasonality. Dairy products are mainly provided by a small local creamery cooperation that joined us in summer of 2016 for an info day at our staff restaurant. This was a chance for our employees to ask questions regarding the origins of our food and humane husbandry.

Since July 2012 we have been part of the “Klima-Teller” project of the char-ity GreenFlux e.V.: every Wednesday, in our canteen, we offer no red meat prod-ucts, nor any dairy products

with fat content above 15%. This is because the produc-tion of such foods usually entails application of fertilizers, destruction of rainforests to create pasture land, and sig-nificant greenhouse gas emissions emanating from animal digestive processes.

ÖKOLOGISCHE VERANTWORTUNG

UMWELTSCHUTZ ALS TEIL DER UNTERNEHMENSPOLITIK




SOCIAL COMMITMENTTOGETHER FOR THE COMMON GOOD


Our BeliefsWe, as a company, are part of society and want to promote development and foster the public good in the areas we are active in. And that is what we do – as an employer, a trainer, a client, and a taxpayer, but also through our commitment to society. The cooperative basic values of aiding empow-erment, solidarity, partnership and social commitment are the cornerstones of our activities. Together with our staff, we pursue an active programme of social and community duties, and we support a large number of social projects, third sector organisations in our fields, as well as the social involvement of the Volksbanken Raiffeisenbanken coopera-tive financial network.

Community ServiceDuring the year under review, we again provided financial support to the Hamburg Donor’s Parliament, a grassroots charity fighting homelessness, poverty and loneliness. We also assisted the Donor’s Parliament when it celebrated its 20th anniversary in DG HYP’s winter garden, an event that received considerable media coverage. Approximately 250 guests from the worlds of politics, administration, indus-try and social organisations gathered to pay tribute to the Parliament’s work, including Aydan Özoˇguz, the German Federal Government’s Commissioner for Immigration, Refu-gees and Integration, who stressed the importance of the Donor’s Parliament for the City of Hamburg.

In continuation of our support for refugees, we patron-ised the “BFD Welcome Hamburg” project created by STADTKULTUR HAMBURG e.V., the governing body for all cultural-social organisations in Hamburg, and – together with the NORDMETALL Foundation, the Alfred Toepfer Foundation and supported by government funding – pro-vided financing for the first year of this project. Within this project, refugees can take up regular volunteer work in the domains of culture and education.

During our regular Social Day, when we make staff avail-able to engage in social projects as volunteers, 15 DG HYP employees helped spruce up the rambling gardens of the “Sternenbrücke” children’s hospice in Hamburg in 2016.

Our employees’ 2016 Christmas donations – as always, doubled by DG HYP – were given to two institutions: “Jen-felder Kaffeekanne”, serving a free student breakfast to children and teenagers, and “Verein Mehrblick”, who pro-vide help to homeless people suffering from poor vision. As in previous years, in December 2016 DG HYP refrained from sending Christmas cards for ecological reasons. The amount saved was used to support the Diakonie’s "Midnight bus” in Hamburg, run by volunteers, which provides homeless people with blankets, food and warm drinks every night.


DG HYP employees help spruce up the gardens of the Sternenbrücke children’s hospice in Hamburg during our Social Day

DG HYP makes a Christmas donation to the Diakonie’s "Midnight bus” in Hamburg


Related Field Project SupportThe 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. Promoting the Club and its mission state-ment is an important cause to us. Since 2013, we have been providing the CLUB OF ROME’s German charter with facili-ties at DG HYP House at no charge, with the Club only mak-ing a cost contribution.

Also since 2013, we have been actively supporting the CLUB OF ROME schools network as an education partner, with an annual donation that helps to significantly enhance the network of schools. The CLUB OF ROME children’s initiative

Plant-for-the-Planet initiated The Change Chocolate: for every five bars sold, the initiative plants one tree. DG HYP has been handing out The Change Chocolate to clients and business partners for many years now, single-handedly dis-tributing more than 5,000 chocolate bars – that makes over 1,000 trees, planted all over the world.

The employees of DG HYP have been providing aid to the DZ BANK Microfinance Fund for many years, and contin-ued to do so in 2016. The Microfinance Fund extends small loans to people in developing countries who have neither access to conventional banks nor funding of their own, mainly to women who are active in trades, crafts, agricul-ture or food production. With 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.


The Change Chocolate at the Paris Climate Change Conference in November of 2015



Together with 15 other companies, DG HYP has been a member of the Real Estate and Leadership Foundation since 2015. The joint goal of the association is to promote science, research and education relating to interdisciplinary and cross-interface leadership issues of the real estate busi-ness. For 2017, the foundation is looking to start cooperat-ing with the Hamburg School of Business Administration (HSBA) to launch a Master’s programme on “Real Estate and Leadership”. Last but not least, in 2016 DG HYP again provided two students at HafenCity Universität Hamburg (HCU) with scholarships.

Cooperative Charitable SupportOur sponsorship activities include cooperative charitable support. The recipients of DG HYP support include organi-sations promoting or researching the idea of cooperative banks and the cooperative movement, such as the Re-search Institute for Cooperative Studies at the University of Erlangen-Nuremberg, the Förderverein zur Stiftung GIZ e.V. and the Gesellschaft zur Förderung des Instituts für Ge nossenschaftswesen at Philipps University Marburg/Lahn. Furthermore, DG HYP, DZ BANK and other companies with-in the Volksbanken Raiffeisenbanken cooperative financial network support the Active Citizenship Association (Aktive Bürgerschaft), which advocates civic action, non-profit or-ganisations, and a fair and powerful civic society.

DG HYP HOSTS CLUB OF ROME SCHOOL MEETING FOR THE FOURTH TIME

For the fourth year running, DG HYP hosted the CLUB OF ROME network’s annual meeting, with around 100 students, teachers and parents gathering in the bank’s conference facilities to enjoy a colourful programme entitled “Educa-tion is the Future”.

The CLUB OF ROME network currently comprises 15 schools with over 10,000 students. CLUB OF ROME schools advocate innovative learning approaches and encourage students to think in an international con-text, following the “Think globally, act locally” mantra. With its current “World Citizens Welcome” initiative, the schools support young refugees.

3 www.club-of-rome-schulen.org


SUSTAINABILITY PROGRAMME

Objective Period Measures Status

Sustainability strategy and corporate governance

Expanding the external stakeholder dialogue Ongoing Processing of rating and Objective for 2016 metGRI G4-26 stakeholder enquiries

Analysing rating results and defining departmental responsibilities to unlock optimisation potentials

Adding further supplier requirements 2018 Updating and reviewing the buying policy Partial objective metand consulting with departments with regards to sustainability criteria

Communicating the reviewed policy to the departments for consideration when placing decentralised orders

Training employees on compliance issues, and ongoing/ 100% of department heads received Objective for 2016 metthe prevention of money laundering and fraud every other training in 2015. year More training planned for 2017

Improving data protection measures to keep ongoing Internally appointed Data Protection Officer Objective for 2016 metup to date with technological advancements (direct reporting line to Management Board) instructs new employees, provides training and is responsible for conveying latest developments in data protection. Implementing highest security standards for handling client data


pending/new target being implemented annually/regularly concluded in 2016



Sustainable banking business

Adding further sustainability criteria 2021 Defining exclusion criteria in the context Partial objective metto the lending process of our reputational risk strategy

Regularly attending and actively contributing to DZ BANK Group’s “Sustainability and Lending” working group (ESTABLIShED in 2015)

Developing a sustainability check list/ a list of criteria for clients and properties

high rankings in sustainability ratings Ongoing Excellent results in the imug sustainability Objective for 2016 met rating: best sustainability ranking of all issuers in the “Public-sector Pfandbriefe” category

top 3 (2015: top 4) amongst German financial institutions in the „Uncovered Bonds“ category, top 2 (2015: top 6) for Mortgage Pfandbriefe

Monitoring client satisfaction Ongoing Based on complaints, Complaints Objective for 2016 met Management (direct reporting line to Management Board) is continuously looking for ways for us to improve

Financing sustainable buildings Ongoing DG hyp is currently providing financing for Objective for 2016 met four buildings on EUREF Campus in Berlin already meeting the federal government’s climate protection targets for 2050

Acquisition financing for the “Leopold 250” office building in Munich, which was certified “Gold” by the German Sustainable Building Council “DGNB”

“CityPlaza“ in Stuttgart and “Berliner Bogen“ in hamburg are further examples of sustainable office buildings financed by DG hYP and certified by DGNB (“Silver”)






Employees

Recruiting, fostering the progress and Ongoing Continuing the trainee and dual study Objective for 2016 metretention of talent programmes

Trainee programme: 2016 was the programme’s fifth year: five trainees enrolled During the year under review, ABSOLVENTA, the leading online jobs portal for young academics, once again awarded us for our "career-promoting trainee programme”

Dual study programme: three students enrolled

Ongoing Providing internship and working students vacancies

Adhering to the “Fair Company Codex”

Dedicated internship for refugees since 2016; two internships for a period of two years, further work placements planned for 2017

Girls‘ and Boys‘ Day

Preserving and improving employee health Ongoing Regularly: Objective for 2016 met

health days

Influenza vaccinations

Dedicated initiatives (2016: “Cycle to work”)

Offering seminars to preserve employee health (2016: “Staying calm when things get rough”, etc.)

Adding more options to our corporate sports offering (hatha yoga, boxing, etc.)

Ongoing Reduction of mental stress at the workplace

Conducting threat analyses to assess occupational stress on a team level, every 2–3 years

Concluding and bundling measures from these threat analyses

Increasing the share of women Ongoing Programme to increase the share of women holding senior management positions in executive and expert positions

2017 Increasing the share of women at department head level to 13% by 30 June 2017

2017 Defining new targets regarding the share of women in executive positions (in accordance with the Act on Equal Participation of Women and Men in Executive Positions)





Employees

Promoting women in the workplace Ongoing Specifying our CPD offering (in-house seminars, external seminars, cooperations with women’s real estate networks)

Increasing employer attractiveness and Ongoing Further strengthening DG hYP’s employer brand Partial objective met preparing the bank for demographic change Continuously evaluating communication channels

Optimising employer communications

Establishing a single employer brand for DZ BANK Group in the labour market

2017 Further strengthening flexible work models

Developing various full-/part-time and vacation models

Implementing the models

Encouraging employees to take CPD courses Ongoing 2016: 4.0 training days on average (2015: 3.4)

2016: 90% of employees took part in at least one training measure (2015: 73%)

Expanding the internal stakeholder dialogue Ongoing Further improving employee satisfaction Objective for 2016 met GRI G4-26 Regular employee surveys

Concluding and implementing measures based on survey results

2016 “Develop together, change together” initiative Partial objective met

Analysing critical issues identified in the

employee survey, in workshops attended by all executives and employees from all departments; groups of executives and employees to be equal in size (15 seminar and training events for employees, 7 for executives)

Aligning CPD offering with initiative

2017 Discussing the workshop’s results structurally, in all teams; transferring to working environments

Concluding and implementing measures

New format: “The DG hYP Dialogue – Insights into our Business” to strengthen the community spirit and foster collaboration (“employees for employees”)






Employees

helping employees balance Ongoing „Embedding the principles of Objective for 2016 met their work and family commitments family-friendliness in our corporate culture, and living them on a daily basis

2016 Expanding the working time frame (employees may work any time between 6.00 a.m. and 8 p.m.)

Providing childcare support and support for employees who nurse family members via external service providers

Organising theme weeks on “family and work life” on a regular basis

Consciously using the “audit berufundfamilie”, undertaken every three years, to review progress and develop new measures

Signing a new target agreement on optimising the compatibility of family and working life, in the course of the 2016 re-audit process



Ecological Responsibility

Expanding the recording of, and improving Ongoing Continuously improving data quality of Objective for 2016 metthe transparency of environmental data relevant consumption files by installing new and additional data acquisition tools

Expanding consumption monitoring (selectively; upon requirement and findings)

Protecting the environment and reducing 2020 Construction measures (until 2017) in accordance Partial objective metcarbon footprint with DGNB sustainability requirements

Reducing CO2 emissions by 15% Comprehensive façade and heating-

between 2012 and 2020 refurbishment at hamburg headquarters

Pre-certified by DGNB (“Silver”)

Renewing and expanding split air conditioning systems to permit heat recovery, allowing waste heat to be used for garage heating

Switching to climate-neutral post and parcel shipments

Expanding sustainable mobility

Expanding electric car fleet

Reviewing and developing mobility alternatives for employees

Conserving resources Ongoing Implementing energy saving measures Objective for 2016 met at the hamburg headquarters

Switching from conventional to energy-efficient lighting

Reducing water consumption in air conditioning devices by switching to fully softened water

Raising environmental and sustainability awareness Ongoing Integrating sustainability themes Objective for 2016 met into welcome events for new employees

Making the switch to recycled paper 2016 Switching envelopes to recycled paper Partial objective met

Switching all printed material to FSC certified paper






Social Commitment

Supporting sustainability-promoting institutions Ongoing Supporting CLUB OF ROME Objective for 2016 met Supporting CLUB OF ROME schools

Using the Plant-for-the-Planet initiative’s The Change Chocolate as a giveaway at events

Supporting DZ BANK Microfinance Fund

Providing two students at hafenCity Universität hamburg (hCU) with scholarships

Expanding corporate citizenship Ongoing Providing aid to refugees: Objective for 2016 met Patronising the “BFD Welcome hamburg“ project of STADTKULTUR hAMBURG e.V.

Supporting the hamburg Donor’s Parliament

Commissioning of charity organisations for work, e.g. Rauhe haus

Doubling employee’s Christmas donations

Avoid sending out Christmas cards – donation to charity instead

Supporting real estate associations such as IMMOEBS e.V.

Supporting cooperative charitable initiatives

Research on cooperative science

Supporting the Active Citizenship Association (“Aktive Bürgerschaft”)

Expanding corporate volunteering Ongoing Activities and events Objective for 2016 met

Cooking for the homeless

Regular Social Day – DG hYP lending a hand to the “Sternenbrücke” children’s hospice with gardening

Christmas party for kids




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. The report follows the G4 guidelines in its “core” option. 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.

GRI Indicator Page(s)

Strategy and Analysis G4-1 Statement from the most senior decision-maker 4, 5G4-2 Key impacts, risks, and opportunities concerning sustainability 4, 5, 9, 10, 15, 17, 20, 21

Organisational Profile G4-3 Name of the organisation front cover, 4, 7, 8, 72, back coverG4-4 Primary brands, products, and services 7, 8, 10, 11, 27, AR (p. 11)G4-5 Location of the organisation’s headquarters 72G4-6 Countries with significant operations 7, AR (p. 19)G4-7 Nature of ownership and legal form 8, 13, 21, AR (p. 10)G4-8 Markets served 7, 12, 16, 18, 19G4-9 Scale of the organisation 7, 12, 13, 41, 45G4-10 Employees by employment type, gender and region 39, 41, 45G4-11 Percentage of employees covered by collective bargaining agreements 45G4-12 Description of the supply chain 16, 24, 55, http://dghyp.de/suppliersG4-13 Significant changes during the reporting period 5, 12G4-14 Implementation of the precautionary principle 10, 15, 21, 47, 57, AR (p. 49 et seq.) 7G4-15 External initiatives that the organisation endorses 2, 10, 15, 22, 25, 35, 38, 47, 48, 58 1-10G4-16 Significant memberships in industry and business associations 18, 19, 20, 27, 58

Identified Material Aspects and Boundaries G4-17 Entities included in the consolidated financial statements 8, 10, 11, 13, 27, AR (p. 33, 74 et seq.)G4-18 Process for defining the report content 2, 15, 19, 20G4-19 Material aspects identified 15, 16, 21G4-20 Aspect boundaries within the organization 21G4-21 Aspect boundaries outside the organization 21G4-22 Restatement of information provided in previous reports 2, 16G4-23 Significant changes in the scope and aspect boundaries 2, 19

Stakeholder Engagement G4-24 Stakeholder groups engaged 17, 18, 19, 20G4-25 Identification and selection of stakeholders 17, 18, 19, 20G4-26 Approach to stakeholder engagement and frequency 15, 17, 18, 19, 20, 60, 63G4-27 Key topics and concerns raised through stakeholder engagement and response 20

Report Profile G4-28 Reporting period 2G4-29 Date of most recent previous report 2G4-30 Reporting cycle 2G4-31 Contact point for questions regarding the report 72G4-32 „In accordance“ option with GRI and Content Index chosen 2, 67 et seq.G4-33 External verification of the report 2

UN GlobalCompact



Governance G4-34 Governance structure, incl. committees of the highest governance body 15, 16, 20, 21, 22, AR (p. 4 et seq.)G4-35 Process for delegating authority for economic, environmental and social topics 15, 16G4-36 Executive-level position with responsibility for economic, environmental and social topics 15, 16, 22G4-37 Processes for consultation between stakeholders and the highest governance body 15, 16G4-38 Composition of the highest governance body and its committees 15, 16, 20, AR (p. 101)G4-39 Independence of the Chair of the highest governance body 15, 16, 20, AR (p. 6)G4-40 Nomination and selection processes for the highest governance body and its committees 20G4-41 Process for avoiding conflicts of interest 20, 21, 22G4-42 highest governance body’s role concerning strategy and goals 15, 20, 21G4-43 Measures taken concerning the highest governance body’s knowledge in sustainability issues 34G4-44 Evaluation of the highest governance body’s performance concerning sustainability 41, 42, http://dghyp.de/remunerationG4-45 highest governance body’s role concerning sustainability impacts, risks, and opportunities 15, 16, 20, 21, 22G4-46 highest governance body’s role concerning the effectiveness of the risk management 21, 22, AR (p. 49 et seq.)G4-47 Frequency of the highest governance body’s review of sustainability impacts, risks, and opportunities 21, 22, AR (p. 49 et seq.)G4-48 highest committee that formally reviews and approves the sustainability report 15, 16G4-49 Process for communicating critical concerns to the highest governance body 22, 23, 30G4-50 Critical concerns that were communicated to the highest governance body 22, 23G4-51 Remuneration policies for the highest governance body and senior executives 21, 41, 42, AR (p. 102), http://dghyp.de/remunerationG4-52 Process for determining remuneration 22, http://dghyp.de/remunerationG4-53 Stakeholder’s views regarding remuneration 22G4-54 Ratio of the highest annual total compensation to the median annual total compensation http://dghyp.de/remunerationG4-55 Ratio of percentage increase in the highest annual total compensation http://dghyp.de/remuneration

Ethics and Integrity G4-56 Values, principles, standards and norms of behaviour 9, 10, 15, 16, 20, 22, 23, 25, 34, 38, http://dghyp.de/codeofconduct 1-10G4-57 Mechanisms for seeking advice on ethical and lawful behaviour 10, 24, 25G4-58 Mechanisms for reporting concerns about unethical or unlawful behaviour 24

AspectsCategory: Economic Management Approach Economic Performance 12 et seq., AR (p. 32 et seq.) G4-EC1 Direct economic value created and distributed 12 et seq., 41, 45, AR (p. 2, 32 et seq., 73 et seq.)G4-EC2 Financial implications and other risks and opportunities due to climate change 15, 31 7, 8G4-EC3 Coverage of benefit plan obligations 41, 45, AR (p. 74)G4-EC4 Financial assistance received from governance 19 (not applicable)

Management Approach Market Presence 41 G4-EC5 Ratios of standard entry level wage compared to local minimum wage 22, 41G4-EC6 Proportion of senior management hired from the local community AR (p. 71)

Management Approach Indirect Economic Impacts 30, 31G4-EC7 Infrastructure investments and services provided 27, 31G4-EC8 Indirect economic impacts 58, 59

Management Approach Procurement Practices 16, 55G4-EC9 Proportion of spending on local communities 16, 55

Category: Environmental Management Approach Materials 47 8 G4-EN1 Materials used by weight and volume 49, 50, 51, 52 8G4-EN2 Percentage of materials used that are recycled input materials 50, 51, 52 8

Management Approach Energy 47, 50 8G4-EN3 Energy consumption within the organization 50 8G4-EN4 Energy consumption outside of the organization 50G4-EN5 Energy intensity 50G4-EN6 Reduction of energy consumption 50 G4-EN7 Reductions in energy requirements of products and services 50

UN GlobalCompact





Management Approach Water 37, 51 G4-EN8 Total water withdrawal by source 51G4-EN9 Water resources significantly affected Not reportedG4-EN10 Water recycled and reused Not reported

Management Approach Biodiversity Not applicable G4-EN11 Not reported Not applicableG4-EN12 Impacts on protected areas or areas of high biodiversity value Not applicableG4-EN13 habitats protected and restored Not reportedG4-EN14 Affected endangered animal and plant species Not reported

Management Approach Emissions 5, 47, 48, 49 8G4-EN15 Direct greenhouse gas (GhG) emissions (Scope 1) 48, 49, 55 8G4-EN16 Energy indirect greenhouse gas (GhG) emissions (Scope 2) 48, 49, 50G4-EN17 Other indirect greenhouse gas (GhG) emissions (Scope 3) 48, 49G4-EN18 Greenhouse gas (GhG) emissions intensity 48, 49G4-EN19 Reduction of greenhouse gas (GhG) emissions 5, 47, 48, 49, 55, 65 G4-EN20 Emissions of ozone-depleting substances Not applicableG4-EN21 NO

X, SOX and other significant air emissions Not applicable

Management Approach Effluents and Waste 47, 53, 54, 55G4-EN22 Total water discharge by quality and destination 51G4-EN23 Total weight of waste by type and disposal method 54 8G4-EN24 Total number and volume of significant spills Not reportedG4-EN25 handling of hazardous waste 54 G4-EN26 Water bodies significantly affected by discharges of water and runoff Not applicable

Management Approach Products and Services 5, 47G4-EN27 Mitigation of environmental impacts of products and services 5, 31, 47, 50, 53, 61 7, 9G4-EN28 Reclaimed products and services Not applicable

Management Approach Compliance 47G4-EN29 Fines and sanctions for non-compliance with environmental regulations None

Management Approach Transport 47, 52, 53G4-EN30 Significant environmental impacts of transporting products 52, 53

Management Approach Overall Not reportedG4-EN31 Environmental protection expenditures and investments Not reported

Management Approach Supplier Environmental Assessment 16, 51, http://dghyp.de/suppliersG4-EN32 Percentage of new suppliers that were screened using environmental criteria 16, 24, 55, http://dghyp.de/suppliers G4-EN33 Significant environmental impacts in the supply chain 55

Management Approach Environmental Grievance Mechanisms NoneG4-EN34 Grievances about environmental impacts None

Category: Social Labour Practices and Decent WorkManagement Approach Employment 33 G4-LA1 New employee hires and employee turnover 33, 41, 44, 45G4-LA2 Benefits provided to full-time employees 41G4-LA3 Return to work and retention rates following parental leave 40

Management Approach Labour/Management Relations 17, 33, 34G4-LA4 Minimum notice period(s) regarding operational changes Not reported

Management Approach Occupational Health and Safety 42, 43, 44G4-LA5 Percentage of total workforce represented in health and safety committees 45G4-LA6 Injuries, occupational diseases, lost days, and work-related fatalities 44, 45 1G4-LA7 Workers with high incidence or risk of diseases 44, 45 1G4-LA8 health and safety topics covered in formal agreements with trade unions Not reported 1

UN GlobalCompact


UN GlobalCompact



Management Approach Training and Education 35, 36 1G4-LA9 Average hours of training 35, 36G4-LA10 Programs that support the continued employability of employees 35, 36G4-LA11 Percentage of employees receiving regular performance and career development reviews 35

Management Approach Diversity and Equal Opportunity 38 G4-LA12 Composition of governance bodies and breakdown of employees by aspects of diversity 20, 38, 45, 62 1

Management Approach Equal Remuneration for Women and Men 33, 41, http://dghyp.de/remuneration 1, 6G4-LA13 Ratio of basic salary and remuneration of women to men 41 1, 6

Management Approach Supplier Assessment for Labour Practices 16, http://dghyp.de/suppliersG4-LA14 Percentage of new suppliers that were screened using labour practices criteria 16, 24, http://dghyp.de/suppliers G4-LA15 Percentage of new suppliers that were screened using labour practices criteria 24

Management Approach Labour Practices Grievance Mechanisms 33, 34, 35G4-LA16 Formal grievances concerning impacts on labour practices None

Human Rights Management Approach Investment 24 G4-hR1 Significant investment agreements and contracts that include human rights clauses or screening 10, 24, AR (p. 18) G4-hR2 Employee training on human rights issues 24, 38

Management Approach Non-Discrimination 10, 24G4-hR3 Incidents of discrimination and corrective actions taken 24 1, 2

Management Approach Freedom of Association and Collective Bargaining 10 G4-hR4 Operations and suppliers identified in which the right to exercise freedom of association may be violated or at risk, and measures taken 10

Management Approach Child Labour 10, 24 1, 2, 5G4-hR5 Operations and suppliers having significant risk for incidents of child labour, and measures taken 10, 24, http://dghyp/suppliers 1, 2, 5

Management Approach Forced and Compulsory Labour 10, 24 1, 2, 6G4-hR6 Operations and suppliers having significant risk for incidents of forced or compulsory labour, and measures taken 10, 24, http://dghyp/suppliers 1, 2, 6

Management Approach Security Practices 10 G4-hR7 Percentage of security personnel trained in the field of human rights 10

Management Approach Indigenous Rights Not applicableG4-hR8 Violations involving rights of indigenous peoples and actions taken Not applicable

Management Approach Assessment 10, 24 G4-hR9 Operations that have been subject to human rights review 24

Management Approach Supplier Human Rights Assessment 24, http://dghyp/suppliers 1-6G4-hR10 Percentage of new suppliers that were screened using human rights overview 16, 24, http://dghyp/suppliers 1-6G4-hR11 Significant human rights impacts on the supply chain 16, 24, 55

Management Approach Human Rights Grievance Mechanisms 23 G4-hR12 Grievances about human rights impacts 23




Society Management Approach Local Communities 5, 57 G4-SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs 5, 57, 58, 59G4-SO2 Operations with actual and potential negative impacts on local communities 13, 58

Management Approach Anti-Corruption 10, 22, 25 10G4-SO3 Percentage of operations assessed for risks related to corruption and risks identified 10, 22, 25 10G4-SO4 Communication and training on anti-corruption 10, 22, http://dghyp/suppliers 10G4-SO5 Confirmed incidents of corruption and actions taken 22, 23, none 10

Management Approach Public Policy 19G4-SO6 Total value of political contributions 19

Management Approach Anti-Competitive Behavior 19G4-SO7 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices 22, 23

Management Approach Compliance 22, 23G4-SO8 Fines and sanctions for non-compliance with laws and regulations 22, 23, none

Management Approach Supplier Assessment for Impacts on Society 15, 16, http://dghyp/suppliersG4-SO9 Percentage of new suppliers that were screened using criteria for impacts on society 15,16, 24, http://dghyp.de/suppliersG4-SO10 Negative impacts on society in the supply chain, and actions taken 15, 16, 24, none

Negative impacts on society in the supply chain and actions taken 22, 23G4-SO11 Number of grievances about impacts on society 22, 23

Product Responsibility Management Approach Customer Health and Safety 30 G4-PR1 Percentage of significant product and service categories for which health and safety impacts are assessed Not reportedG4-PR2 Incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services Not reported

Management Approach Product and Service Labelling 30G4-PR3 Principles/procedures for product and service information and labelling 30G4-PR4 Incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling 30G4-PR5 Results of surveys measuring customer satisfaction 18, 30

Management Approach Marketing Communications 30G4-PR6 Sale of banned or disputed products 30G4-PR7 Incidents of non-compliance with regulations and voluntary codes concerning marketing communications 30

Management Approach Customer Privacy 25, 30G4-PR8 Substantiated complaints regarding breaches of customer privacy 25, none

Management Approach Compliance 30G4-PR9 Significant fines concerning the provision and use of products and services None

AR = 2016 Annual Report

UN GlobalCompact


DG HYP Contacts and Office Addresses

72

DG HYP Regional Office Hanover Berliner Allee 5 30175 Hanover, Germany Phone +49 511 86643808 Fax +49 40 3334-782-3775

DG HYP Regional Office Mannheim Augustaanlage 61 68165 Mannheim, Germany Phone +49 621 728727-20 Fax +49 621 728727-21

DG HYP Regional Office Kassel Rudolf-Schwander-Strasse 1 34117 Kassel, Germany Phone +49 561 602935-23 Fax +49 561 602935-24

DG HYP Regional Office Nuremberg Am Tullnaupark 4 90402 Nuremberg, Germany Phone +49 911 94009816 Fax +49 40 3334-782-4711

DG HYP Regional Office LeipzigSchillerstrasse 304109 Leipzig, Germany Phone +49 341 962822-92 Fax +49 341 962822-93

Regional Offices

DG HYP CONTACTS AND OFFICE ADDRESSES

Institutional Clients

Hamburg Rosenstrasse 2 20095 Hamburg, Germany Phone +49 40 3334-2159 Fax +49 40 3334-1260

Management Board Chairman of theDr 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 3334-0 Fax +49 40 3334-1111 Internet: www.dghyp.de

DG HYP Real Estate Centre Berlin Pariser Platz 3 10117 Berlin, Germany Phone +49 30 31993-5101 Fax +49 30 31993-5036

DG HYP Real Estate Centre Hamburg Rosenstrasse 2 20095 Hamburg, Germany Phone +49 40 3334-3778 Fax +49 40 3334-1102

DG HYP Real Estate Centre Dusseldorf Steinstrasse 13 40212 Dusseldorf, Germany Phone +49 211 220499-10 Fax +49 211 220499-40

DG HYP Real Estate Centre Munich Türkenstrasse 16 80333 Munich, Germany Phone +49 89 512676-10 Fax +49 89 512676-30

DG HYP Real Estate Centre Frankfurt CITY-HAUS 1, Platz der Republik 6 60325 Frankfurt/Main, Germany Phone +49 69 750676-21 Fax +49 69 750676-99

DG HYP Real Estate Centre Stuttgart Heilbronner Strasse 41 70191 Stuttgart, Germany Phone +49 711 120938-0 Fax +49 711 120938-30

Real Estate Centres

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 2016€¦ · We collected individual qualitative and quantitative statements and data for each DG HYP department, and then combined them in a central database