Deutsche Bank – Responsibility

Risk management: Managing environmental and social risks

Risks are part of our business. For us, dealing with them responsibly means carefully weighing the anticipated added value against possible hazards and simultaneously considering the concerns of our various different stakeholder groups. In addition to the classic banking risks, it is therefore absolutely necessary for us to look at social and environmental risks.

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What do we want to achieve?

Financial and investment risks are additionally heightened by more stringent environmental and social standards that are placed on companies. Therefore, more than ever we have to focus our attention on risks relating to environmental, social or governance aspects (ESG) that may become risks affecting public trust in the bank. We want to make sure that the negative impact of our business activities on society and the environment is as minimal as possible: therefore, we systematically integrate ecological and social aspects into our approval processes. The awareness of every employee must be raised accordingly.

How are we implementing that?

We already introduced a group-wide reputational risk management program in the year 2005. It ensures effective processes that contribute towards identifying and minimizing the risks that may damage the bank’s reputation at an early stage and includes escalation to the Group Reputational Risk Committee at the group level if need be.

Since 2011 our framework for dealing with environmental and social risks has been a key element of our risk process. It integrates environmental and social factors into the approval processes for all transactions. It serves as an especially important guideline for activities in sensitive sectors that are exposed to significant environmental or social risks, such as the extractive industry, utilities, agriculture, forestry and defense.

What have we achieved?
Exemplary steps

All customer relationships, transactions or products are systematically reviewed with regard to environmental and social risks. The Risk Executive Committee, the uppermost risk committee of Deutsche Bank at the executive level, is informed about potential reputational risks continuously.

We ensure that our employees’ awareness of environmental and social risks is improved steadily by establishing our framework for dealing with environmental and social risks and implementing appropriate training measures for our staff worldwide: Between January and December 2012, the number of transactions that were escalated to our sustainability team for review and assessment increased by 480% year-on-year.

We have explained our standpoint and the reasons for our business decisions relating to a number of issues involving potential risks for the environment or society that are the subject of controversial public debate. That includes the issues of cluster munitions, agricultural commoditiespalm oil and nuclear power.

Our specific measures

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