Our approach to climate change
Sustainability covers a broad spectrum of environmental and social matters, with climate change being one of the defining challenges of our time. Deutsche Bank recognized the risks of climate change and, as a leading global financial institution, we acknowledge the role we have to play in shaping the global transition to a sustainable and climate-friendly economy.
By signing the Paris Pledge for Action in 2015, we demonstrated our commitment to contribute to the goals of the Paris Agreement. We reinforced this statement by joining German Financial Sector’s collective commitment to Climate Action in June 2020.
In April 2021 Deutsche Bank became a founding member of the Net Zero Banking Alliance (NZBA), convened by the United Nations Environment Programme Finance Initiative as part of the Glasgow Financial Alliance for Net Zero (GFANZ). As part of this, we pledged to align our operational and attributable greenhouse gas emissions in our portfolios, with pathways to net zero by 2050 or sooner.
In March 2022, we disclosed for the first time data on our financed greenhouse gas emissions. Deutsche Bank will provide further disclosure on financed emissions of its loan portfolio and sector-specific decarbonisation targets by the end of 2022.
Managing climate risks is a key component of our wider response to climate change and we have group-wide frameworks and processes in place for this purpose. Our Climate Risk Management Framework, which has four key elements: risk identification; risk measurement and monitoring; pathway alignment, scenario analysis and stress testing; and risk appetite.
We have significantly reduced our loan exposure in highly carbon-intensive sectors. Our Environmental and Social Policy Framework sets us a strict framework that governs our transactions, including our business activities in the oil, gas and coal sector.
In 2020 we tightened our sector guidelines for coal mining and coal power and set a target to end the bank’s financing of thermal coal mining by 2025 at the latest.
Since 2016, we have had a policy in place prohibiting the financing of the development of new coal-fired power plants and the expansion of existing coal-fired power plants, irrespective of their location. In addition to this commitment, in 2020 we are reviewing our coal power exposure in Europe and the USA.
For all clients depending more than 50% on coal – be it energy capacity or energy output – we will subject the provision of financial services to the availability of credible diversification plans. If there are no diversification plans in place, we will aim at gradually phasing out the exposures. Starting in 2022, we will extend this review and phase out to Asia and selected developing markets.
Starting July 2020, we will not finance:
- Oil and gas projects via hydraulic fracturing in countries with extremely high water stress
- New oil and gas projects in the Arctic region
- New projects involving exploration, production, transport/processing of oil sands
In addition, we are systematically reviewing our entire existing exposure in the oil and gas industry worldwide by the end of 2020 in order to set upper limits for the total exposure in the coming years.