The money house wants to reduce the emissions it finances in the lending business, at least in relative terms.
(Photo: dpa)
Frankfurt Deutsche Bank is specifying its climate targets in the lending business and has published emissions targets for four particularly carbon-intensive sectors. This affects oil and gas companies, energy suppliers, companies in the automotive industry and steel companies, as the institute announced on Friday. From 2050 onwards, the financial institution no longer wants to net finance greenhouse gas emissions.
With the exception of the oil and gas sector, the Bank sets relative targets. This means that it wants to reduce the emissions intensity in the energy, automotive and steel sectors, but not the absolutely financed emissions. This means that the bank can still grow in the lending business in these sectors as long as the companies it finances improve on average.
“Our emissions intensity targets will become a limiting factor over time, even without an absolute limit or exclusion criteria. Because de facto, the intensity targets also drop to zero over time, ”said Jörg Eigendorf, head of sustainability, to the Handelsblatt. “The benefit is just that we can grow more with clients who are committed to net zero.”
The four sectors affected cause a lion’s share of the greenhouse gas emissions financed by the institute. Their share of the bank’s EUR 250 billion loan book is 13 percent, but they account for around 50 percent of the emissions caused by the production process itself and the purchase of the energy required for production. In technical jargon, this is called Scope 1 and Scope 2.
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Scope 1 includes greenhouse gases that a company causes directly through its production. Scope 2 also takes into account the emissions caused by the purchase of electricity, heat and steam for production. Scope 3 also takes into account the CO2 emissions caused by the manufactured product itself. The Scope 3 calculation plays an important role in the oil and gas sector as well as in the automotive industry.
>>Read here: Deutsche Bank publishes the carbon footprint of its corporate loans for the first time
In the oil and gas sector, emissions financed by the bank are to fall by 23 percent by 2030 and by 90 percent by 2050. In the automotive sector, more precisely passenger cars and light commercial vehicles, vehicle exhaust emissions are to fall by 59 percent by 2030 and by 100 percent by 2050. When calculating CO2 emissions, the bank uses the Scope 3 calculation standard in both sectors.
For energy suppliers, the emission intensity based on Scope 1 is to fall by 69 percent by 2030 and by 90 percent by 2050. In the steel industry, a reduction in emissions intensity according to Scope 1 and Scope 2 by 33 percent by 2030 and by 90 percent by 2050 is planned.
The bank refrains from giving specific instructions to its customers to set specific climate targets, combined with the threat of terminating them otherwise. “It’s better to keep them in the regulated banking space than to manage them out and then allow them to be absorbed by less regulated banks and investors in less regulated countries, like we’re already seeing in coal,” says Eigendorf.
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