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.
Deutsche Bank published the carbon footprint of its corporate loan exposure to, and financed emissions of, key carbon-intensive industries as well as quantitative 2030 (interim) and 2050 decarbonization targets for four carbon intensive sectors in the Group’s corporate lending book. These targets cover the sectors of Oil and Gas (upstream), Power Generation, Automotive (light duty vehicles) and Steel and aim to significantly reduce the amount of financed emissions (Scope 3) by 2030, reflecting the bank’s commitments as a founding member of the NZBA.
The white paper "Residential Real Estate – Leading to Net Zero”, published in June 2023, provides first-time disclosure of financed emissions in the residential real estate sector in Deutsche Bank’s loan portfolio. It also sets out pathways to net zero emissions in residential real estate by 2050 under different scenarios, making clear the scale of the challenge for the wider economy.
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 has four key elements: risk identification and materiality assessment; integration into risk type frameworks and processes; scenario analysis and stress testing; and integration into risk appetite via utilization of a range of risk metrics and targets.
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.
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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 from 2025 onward for clients in scope of the policy.
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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, the review of our coal power clients in the United States and Europe led to insights into the clients’ progress with regard to their carbon footprint and existing transition plans. Building on this, a process for a client transition dialogue is being developed to support clients on their way to a more sustainable business model.
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No financing of:
- Oil and gas projects via hydraulic fracturing in countries with extremely high water stress
- New oil and gas projects in the Arctic region (as demarcated by the 10° C July Isotherm boundary)
- New projects involving exploration, production, transport/processing of oil sands
In addition, we are systematically reviewing our global business activities in the Oil and Gas sector, set a target to significantly reduce the volume of financed emissions (Scope 3) by 2030 for the sector, and started the dialog with its clients on their decarbonization strategies.