Deutsche Bank announced today that it has joined the Partnership for Carbon Accounting Financials (PCAF), a global partnership of financial institutions with a mission to develop and implement a harmonized approach to assess and disclose the greenhouse gas (GHG) emissions associated with loans and investments.
By signing onto the PCAF, Deutsche Bank has committed to disclose the greenhouse gas emissions in its loan portfolio by the end of 2023. The bank stated that it intends to achieve this before that date.
Gerald Podobnik, CFO of the Corporate Bank and a member of the Sustainable Finance Committee of the German government, said:
“Reporting the carbon footprint of loan portfolios is rapidly becoming an industry standard among banks. Joining PCAF enables banks to report emissions on a comparable basis. As sustainable financing scales up, transparency and standardisation are all-important.”
The PCAF is a global collaboration of more than 100 financial institutions, representing over $21 trillion in total assets. In November, the initiative launched the Global GHG Accounting and Reporting Standard for the Financial Industry, designed to provide a standardized, robust and clear way for banks, asset managers and asset owners to measure and report the GHG emissions impact of their loans and investment portfolios.
The announcement marks the latest move by the bank to manage the climate impact of its financing activities. In July 2020, Deutsche Bank adopted a new fossil fuel policy, providing its business divisions with a strict framework for their business activities involving coal, oil and gas, financing as well as capital market transactions, and announced plans to end its global business activities in coal mining by 2025. The bank also recently announced that it will begin linking executive compensation with progress on ESG and sustainable finance goals.
Chris Jaques, Head of Credit and Enterprise Risk Portfolio Management and Stress Testing, said:
“Being able to consistently identify carbon intensity and emissions concentrations in our portfolios is an important part of our risk management. Our ambition is to make rapid progress in this field.”