Deutsche Bank announced today that it will end its global business activities in coal mining by 2025, as part of the bank’s newly adopted fossil fuel policy. According to the firm, the new policy provides its business divisions with a strict framework for their business activities involving coal, oil and gas, financing as well as capital market transactions.
Deutsche Bank’s new coal policy is a significant step-up from its prior commitment of reducing its loan exposures to coal-fired power plants by 20 percent. The bank stated that the new commitment was made in order to help drive the transformation to a sustainable economy.
Additionally, the bank announced that it has signed the “Equator Principles” – a risk management framework adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects. The principles are primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making.
Deutsche Bank CEO, and Chair of the bank’s Sustainability Council, Christian Sewing, said:
“Our new Fossil Fuels Policy sets us a strict framework for our business activities in the oil, gas and coal sector. In its current form, the Policy sets us ambitious targets and enables us to help our long-standing clients with their own transformation. It will allow us to play our part in protecting the climate and helping the EU to achieve its goal of being climate neutral by 2050.”
Deutsche Bank stated that the new policy will help to fulfil the German financial sector’s collective commitment to climate action which the bank signed in June this year, pledging to align its credit portfolios with the goals of Paris Agreement. This pledge includes a commitment to introduce methods of measuring climate impact by the end of 2022 and to regulate them in accordance with national and international climate targets.
The bank’s new policy also sets stricter targets and guidelines in other areas beyond coal mining. These include putting energy companies highly dependent on coal under review, only financing companies that are more than 50% dependent on coal if they present credible diversification plans. The bank will also not finance any new coal-fired power plants. Deutsche Bank also announced it will not finance several types of oil and gas projects, including projects that use hydraulic fracturing in countries with scarce water supplies, new oil and gas projects in the Arctic region, and new oil sands projects.
In addition, the bank announced a systematic review of all its global business activities in the oil and gas sector this year, with the aim of subsequently setting limits for its overall business activities in the coming years.