4. Depth of the Value Chain

The company states what significance aspects of sustainability have for added value and how deep in the value chain the sustainability criteria are verified.

Added value
Deutsche Wohnen’s supply chain centres on our core line of business: residential property management. We purchase energy, procure services from both tradespeople and technical firms, and award contracts for supply and disposal activities. Building materials are procured by the construction and planning companies we hire. 

Overall, our supply chain can be broken down into nine sections: 
- Ongoing maintenance and tenant turnover
- Refurbishment and modernisation projects
- Development and planning for new construction and redensification
- Energy management
- Multimedia
- Insurance policies
- Sub-metering
- Waste management
- Infrastructural facility management
(A breakdown of the supply chain as well as additional information on this topic can be found in our Sustainability Report 2017, p. 36.)  

Ecological challenges primarily relate to resource consumption in our portfolio, in particular energy, heat and water, which depend to a large extent on the individual consumption and user behaviour of our tenants, which we have only little influence on. Additional challenges relate to maintenance and modernisation projects in the form of pre-existing site contamination, planning of new construction projects including sustainability criteria, and management of our residential properties (energy, waste and facility management). Social aspects that increasingly need to be taken into consideration during the planning and implementation of modernisation measures as well as in new construction and redensification projects, are mainly due to the megatrend of urbanisation. For further information on the measures we are taking, see Criterion 10, Innovation and Product Management, and Criteria 11 to 13, which deal with environmental aspects. 

Supplier relationships
We primarily source services from Germany or the respective region. The uppermost level of our supply chain (tier 1) is located solely in Germany. 

We use supplier scorecard software to assess our partner’s environmental and social performance. Scorecards are produced by DWB as part of its procurement and investment management processes. We have approximately 1,400 agreements with service providers, which are recorded and managed centrally in a Web-based contract management system. As well as enhancing transparency and efficiency, this digitised process improves our partner management through its flexible reminder mechanisms and escalation levels.  As Deutsche Wohnen only operates in Germany, our suppliers’ business conduct is governed by the extensive legislation which applies here concerning ecological aspects, human rights and working practices. In addition to this, we have incorporated human rights and social issues such as preventing illicit work and ensuring payment of the minimum wage into our general agreements.
In future, environmental and social checks will not only be run on companies offering their services for the first time for new construction projects but also for refurbishment and modernisation work on existing holdings. 

Additional information on our relationships with suppliers can be found under Criterion 17, Human Rights, and the corresponding performance indicators.