Creating value for all stakeholders
For Deutsche Bank, conducting business responsibly means serving the interests and meeting the needs of all our stakeholders.
’Sustainable and profitable – not a contradiction’
Sabine Miltner, Group Sustainability Officer at Deutsche Bank, and Michael Schneider, in charge of responsible investment in Deutsche Bank’s Asset Management, discuss successful interaction between ecology and economy.more
The overall benefit of our business is clear: it facilitates capital flows and fuels economic development. This, in turn, supports reaching global goals, such as increased resource productivity and greater use of clean technologies. It is our responsibility to further strengthen these benefits while also taking into consideration and curbing the possible negative consequences of our business. We have pursued this approach through a variety of activities in 2013.
Driving cultural change
Balancing stakeholder needs
Our Environmental and Social Reputational Risk Framework (ES Risk Framework) supports our efforts to respond to the sometimes conflicting interests of our various stakeholders. It enables us to integrate non-traditional criteria into our financial analyses – for example, if a profitable transaction could cause harm to communities or the environment. In 2013, the number of transactions reviewed under the Framework increased significantly, further reflecting the growing awareness of environmental and social risks among banking teams.
We continued to develop the Framework in 2013, providing additional guidance for business units to help them identify whether the environmental and social risks associated with a transaction are unacceptable or require specific mitigating action. New guidance agreed upon this year included a requirement for enhanced due diligence of any potential transaction involving fracking technology for extracting shale gas.
The bank’s position on critical issues is informed by recognized standards, principles or guidelines such as the UN Guiding Principles on Business and Human Rights and through dialogue with experts and other financial institutions. For example, we work with the Banking Environment Initiative, which analyzes ways to support efforts by the Consumer Goods Forum to drive deforestation out of consumer goods companies’ supply chains.
Ensuring client centricity
Developments in our private client relationships demonstrate how we balance the needs of shareholders and clients while creating value for both. We have been implementing a responsible approach to meeting private clients’ needs since 2008, aiming to ensure that our products are appropriate for our customers’ financial objectives.
As the latest building block of this responsible banking initiative, we implemented our FairShare™ concept in 2013. FairShare™ requires our advisors to offer solutions that benefit customers and shareholders equally. New management processes and incentives such as Key Performance Indicators (KPIs) to track the performance of our branches support the FairShare™ principle.
“Our objective is to incorporate environmental, social and governance considerations throughout our business.”
managed in assets incorporating ESG criteria and themes
Strengthening ESG investments
Interest in investment products that integrate environmental, social and governance (ESG) factors has continued to grow for private customers and among institutional clients. Portfolio managers are expected to actively demonstrate commitment to driving positive change – for example through participating at the annual general meetings of companies that do not perform well in ESG assessments.
At the end of 2013, we managed around €5.1 billion in assets incorporating ESG criteria and themes. Although this currently represents less than 1% of our total assets under management, we aim to continue growing this area. We strongly believe that an ESG approach contributes to better investment decisions, because taking non-financial factors into account helps to identify the future prospects of individual companies and the business environment as a whole. Taking these factors into consideration, we established our new ESG Head Office in 2013, which is not only responsible for the coordination, development and strengthening of our ESG investment capabilities, but also the implementation of our new ESG strategy across our entire asset and wealth management platform.
Supporting climate protection and the energy transition
We also foster sustainability in our business with corporate clients through providing financing and advisory services in support of the growth of low-carbon businesses and sustainable energy projects. In 2013, we helped finance renewable energy projects with a total volume of over US $3.6 billion and a generating capacity of more than 1,185 MW, making the bank one of the top three private-sector project financiers in the renewables sector.
Throughout the year, we also worked with other financial institutions to develop the Green Bond Principles. These support a common, voluntary framework for disclosures, ensuring transparency and integrity of this emerging market.
In our own operations, we continually seek to minimize our carbon footprint and have renewed our commitment to carbon neutrality. For the second consecutive year, our operations contributed zero net emissions to the atmosphere as a result of our investing in energy efficiency, relying on renewable energy sources and offsetting remaining emissions by buying and retiring high-grade offset certificates. Our focus on environmental sustainability has earned Deutsche Bank a place in the CDP Carbon Performance Leadership Index two years running.
Supporting our employees
Responsibility begins at home and with our employees. It is our goal to attract talented people, provide employees with rewarding careers and remunerate performance fairly. We therefore continued to develop an inclusive corporate culture and introduced a new diversity strategy. The strategy reflects our dedication to building a pipeline of future female leaders.
In 2013, we increased the share of female senior managers to 18.7% and grew the share of non-tariff female employees to 31.1%. We have thereby come one step closer to fulfilling the voluntary commitment we made alongside other DAX companies in 2011 to ensure that 25% of our Managing Director and Director positions as well as 35% of Officer positions will be held by females by the end of 2018.
To support employees in pursuing new professional opportunities at the bank, we launched our “Career Mobility” campaign this year. We also realigned our remuneration and rewards, focusing on a differentiated system that rewards people fairly.