New sustainability goals include ESG rating requirements for large supply chain vendors

Deutsche Bank announced today a significant acceleration in its sustainable finance goals, aiming to facilitate €200 billion in sustainable finance and investments by the end of 2023, two years ahead of its original target. The company has also set a series of ESG-focused policies and targets for its operations and financing activities, ranging from diversity goals to supply chain sustainability.

In May 2020, Deutsche Bank committed to facilitate €200 billion in sustainable finance and investments by the end of 2025. Since that time, the bank has published a Sustainable Finance Framework, setting comprehensive rules defining which financing offers and products can be classified as sustainable, has launched innovative sustainable finance products, and has tied executive compensation to its performance on its sustainable finance goal and other ESG targets. With the bank already achieving more than a third of its €200 billion goal, Deutsche Bank pulled ahead its target by two years.

Along with the new target, Deutsche Bank published sustainable finance goals for each of its divisions, with €86 billion planned to come from the Private Bank, €30 billion from the Corporate Bank and €105 billion from the Investment Bank. Other new goals include implementing an ESG advisory concept in all branches in Germany by the end of next year, making ESG investments the standard for portfolio management for international private bank clients, entering into strategic ESG dialogues with its multinational corporate bank clients, and growing its investment bank’s market share of ESG bonds and loans.

Deutsche Bank CEO Christian Sewing said:

“Since announcing our 200 billion euro target last year, we have made significantly more progress than we anticipated. We now want to achieve this volume sooner and we will report on progress transparently and in detail.”

The bank also announced a series of other sustainability-focused policies and targets. In its loan portfolio, Deutsche Bank has committed to publishing a target for its green asset ratio as a proportion of its banking book by mid-2022, and by year-end 2021, the bank expects 50% of client-facing staff to be offered training on the bank’s in-house taxonomy for sustainable finance.

In its operations, Deutsche Bank has set a target for women to represent 35% of Managing Director, Director and Vice President positions by 2025, compared to 29% today. In its supply chain, the bank will require all vendors with an annual order volume of more than €500,000 to have an external ESG rating by next year, with a minimum rating to be set by 2023. Deutsche Bank is also targeting a 30% reduction in its car fleet in Germany by 2025, with car fleet emissions reduced to zero by 2030.

Sewing said:

“Our ambition is to make ESG the new normal at Deutsche Bank – in our dialogue with our clients, in our own operations and in all our processes. Sustainability will thus become an integral part of our corporate culture”.