Coal and coal-fired power
Deutsche Bank supports a well-balanced overall energy mix that takes account of economic conditions as well as environmental and health and safety considerations and is, at the same time, future-oriented.
Renewable Energy is a crucial component in combating global warming and we support various activities in this business area. However, it is currently not possible to fulfill the substantial energy requirements worldwide solely with renewable energies. That is why we finance a diversified range of energy.
Given the increasing energy demand, we have to admit that in some regions of the world coal cannot be avoided. In those transactions that we are involved in, we make sure that the latest technology will be used and the highest efficiency levels are met.
Deutsche Bank does not provide direct financing for and is not directly involved in Mountain Top Removal, apart from providing credit support to reclamation bonds that are issued to guarantee financing for the reconstitution of disturbed land. The credit support provided to the issuance of reclamation bonds to the State where the mine is located, insures that the legally required financial resources for the rehabilitation of the specific landscape is achieved. Through these transactions we ensure that the client can comply with the important pre-requirements for getting permission for the Mountain Top Removal project and provide compensation for any environmental implications.
Deutsche Bank is ranked as the #10 coal bank by BankTrack in their report “Banking on Coal” dated December 2014; why does Deutsche Bank support this industry?
Deutsche Bank supports a well-balanced global energy system that is forward-looking and that takes account of economic conditions as well as environmental and health and safety considerations.
At present, it is still not possible to meet the substantial global energy demand solely through renewable energy sources. For this reason, we will continue to finance a diversified range of energy. Given the increasing energy demand, in some regions of the world coal cannot be avoided.
All transactions involving financial services for construction of a new or expansion of an existing coal-fired power plants require environmental and social (ES) due diligence and potential discussion in a respective regional Reputational Risk Committee.
Our ES due diligence will focus on the following:
- Current energy situation of the region and future energy demand,
- Local government energy strategy including electricity generation objectives,
- CO2 context of the region,
- Availability of alternative fuel and studies / research conducted to evaluate the options,
- Technology choice and emission performance of the project, especially if the project is designed to use the best appropriate available technology to allow for high efficiency and, therefore, lower GHG emissions intensity (also benchmarking against the current average emissions of the country).
For certain developing countries the World Bank Group Screening Criteria will be applied as additional review guidelines.
How can Deutsche Bank be involved in the mining sector given its controversial environmental and social impacts?
All transactions involving financial services for mining industry (extraction of minerals and metals and related activities) require enhanced environmental and social (ES) due diligence. In addition, for transactions involving financial services for green-field mining projects discussion in the respective regional Reputational Risk Committee might be required.
ES due diligence for mining industry consists of evaluating clients’ compliance /performance with regard to:
- local environmental and social laws and regulations and all applicable permits,
- Quality of existing Environmental and Social Risk Management incl. Governance structure, availability of Policies and Key Performance Indicators related to e.g. GHG emissions and energy efficiency, health and safety track record etc.,
- the level of transparency on Stakeholder Engagement and contribution to development of local communities,
- the level of transparency on key environmental, social including security-related and governance issues associated with the client and approach taken to resolve these issues,
- In addition and where applicable the ES evaluation will include clients’ adherence /performance with regard to best industry practices/standards such as but not limited to:
- The OECD Guidelines for Multinational Enterprises,
- The IFC Performance Standards,
- The WB/IFC Environmental, Health, and Safety (EHS) General Guidelines,
- The WB/IFC EHS Guidelines for Mining,
- The International Council on Mining and Metals Sustainable Development Principles,
- The Voluntary Principles on Security and Human Rights.
Through the active engagement process, Deutsche Bank encourages clients to move toward and apply good industry practices.