• Policies & Commitments

Integration of environmental and social matters

The systematic integration of environmental and social matters into our decision-making processes is a key component of our understanding of responsible corporate behaviour.

We have a comprehensive set of rules and guidelines in place which define the procedures and responsibilities for environmental and social risk identification, assessment and decision-making. We apply enhanced due diligence in certain sectors based on their inherent elevated potential for negative environmental and social impacts.

Our environmental and social due diligence is guided by internationally recognized principles and standards, including:

Further Deutsche Bank information

More on the subject

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    International Labour Organization (ILO) Core Labour Standards

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    International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work

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    The UN Guiding Principles on Business and Human Rights

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    The Equator Principles

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    International Finance Corporation (IFC) Performance Standards

Environmental and Social Risk Framework
The Environmental and Social Risk Framework describes our standards for the identification, assessment and management of environmental and social (ES) risks. It defines sensitive sectors we pay attention to (e.g. oil and gas, metals and mining, activities with high carbon intensity or potential for human rights’ infringements), specifies the requirements for ES due diligence and includes criteria for mandatory referral to Group Sustainability. More detailed sectoral guidelines support the general provisions.

Deutsche Bank is also developing a holistic risk management framework for climate risks. An internal working group is combining existing risk management practices with innovative approaches to ensure the bank understands, and is well protected against, potential negative impacts arising from climate-related physical or transition risk, reputational risk and/or business disruption risk.

Carbon-intensive sectors
Our Environmental and Social Risk Framework contains several restrictions regarding carbon-intensive sectors as part of our activities to contribute to climate protection.

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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.

The outlined changes to our fossil fuel policies announced in July 2020 underline Deutsche Bank’s aspiration to contribute to climate protection and to the ambition of the European Union to become net-zero carbon by 2050. They are in addition to our commitment to align the carbon intensity of our lending portfolios with the targets of the Paris Agreement, which we have pledged by joining the German financial sector’s collective commitment on climate action in June 2020.

Equator Principles

In July 2020 Deutsche Bank officially adopted the Equator Principles: an internationally recognised risk management framework, adopted by more than 120 financial institutions globally, for determining, assessing, and managing environmental and social (ES) risks in development projects.

The Equator Principles were launched in 2003 and were updated several times as part of an extensive stakeholder dialogue. The last update Equator Principles 4 came into effect in October 2020 with a range of amendments, including stronger focus on climate change, human rights, biodiversity and indigenous peoples.

Although our due diligence of client transactions has long reflected these principles and the underlying IFC Performance Standards, formally adopting and implementing the principles, underscores our commitment to managing ES risks in project finance.

Below you will find ongoing information on Equator Principles Implementation at Deutsche Bank.

Our Supply Chain

Deutsche Bank spends more than 8 billion euros a year on products and services from third-party vendors. The bank aims to use its purchasing power to drive greater ESG accountability and transparency across the supply chain and to ensure that all suppliers meet the high environmental, social and governance (ESG) requirements.

Since July 2022, every new or extended contract worth over 500,000 euros a year requires an external vendor sustainability rating from EcoVadis or another eligible rating agency. For more information, read the news article Deutsche Bank makes vendor sustainability ratings mandatory.

Deutsche Bank’s own score at EcoVadis improved from 38 (Input 2018, published 2019) to 57 (out of 100 points) in July 2022. It is ranked at the 73rd percentile, meaning that Deutsche Bank’s score is higher than or equal to the score of 73 percent of all companies rated by EcoVadis.