Deutsche Bank has adopted a new Fossil Fuels Policy which aims to end its global business activities in coal mining by 2025 in a bid to drive the transformation to a sustainable economy. Previously, the bank had set a three-year objective of reducing its loan exposures to coal-fired power plants by 20 per cent which it had achieved by the end of 2019.
In addition, Deutsche Bank has signed the Equator Principles which is a risk management framework for assessing the environmental and social risk of financing projects. The principles ensure that strict environmental and social standards are applied during the project development and construction process. The revised Fossil Fuels Policy and signing the Equator Principles are both in line with Deutsche Bank’s sustainability strategy.
The Deutsche Bank is also reinforcing its commitment to not finance any new coal-fired power plants. The policy contains new guidelines for coal power plants that prescribe how the bank must treat business activities with energy companies that are more than 50 per cent dependent on coal (measured either in terms of their energy capacity or the amount of energy actually generated). The bank will only offer financing to these companies in future if they present credible diversification plans. The bank will review its client relationships in this context in Europe and the US by the end of 2020. In Asia, the review will start in 2022 as the bank believes the clean transition in Asia will take longer owing to the region’s high dependency on coal power.
“Our new Fossil Fuels Policy sets us a strict framework for our business activities in the oil, gas and coal sector,” said Christian Sewing, chief executive officer, Deutsche Bank who also chairs the bank’s Sustainability Council. “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 European Union to achieve its goal of being climate neutral by 2050,” he added.