All major suppliers of products and services to Deutsche Bank will be required to undergo an ESG assessment, according to a new policy unveiled by the bank, with new contracts only approved for vendors that meet a minimum sustainability score starting next year.
With over €8 billion in third-party vendor spend annually, Deutsche Bank stated that it aims to use its purchasing power to drive greater supply chain ESG accountability and transparency, and ensure that suppliers meet high ESG requirements.
Alf Noto, Chief Procurement Officer at Deutsche Bank, said:
“Sustainability is a collective responsibility. We want to collaborate with suppliers to help make a positive impact to extend the reach and impact of our ESG footprint.”
Deutsche Bank stated that it is partnering with business sustainability ratings provider EcoVadis on the new initiative. Beginning in July, all suppliers for new or extended contracts worth over €500,000 with the bank will require an external vendor sustainability rating from EcoVadis, or from another eligible rating agency, including MSCI ESG, Sustainalytics, ISS ESG, S&P Global and CDP.
Starting next year, Deutsche Bank will only grant these contracts to vendors who have sufficient sustainability rating.
Jörg Eigendorf, Head of Sustainability at Deutsche Bank, said:
“Global Procurement is a great example of how we are moving from ambition to impact and partnering with our vendors to cover our whole value chain. This is a big step to gradually improve the sustainability of our value chain.”