Deutsche Bank has joined the new Net Zero Banking Alliance (NZBA), whose signatories commit to reaching carbon neutrality by 2050.
The NZBA was recently formed with 43 banks from 23 countries joining the pact convened by the United Nations Environment Program Finance Initiative as part of the Glasgow Financial Alliance for Net-Zero.
These banking institutions have pledged to align the operational and attributable greenhouse emissions from their portfolios with pathways to net-zero by 2050 or sooner.
Commenting on the move, Christian Sewing, Chief Executive Officer, Deutsche Bank, said, “Banks will play a crucial role in the fight against climate change, and the creation of the NZBA is an important step forward to developing coordinated, accelerated action. We are proud to be a founding member of the NZBA and to commit to making our portfolio net-zero carbon by 2050 at the latest. We look forward to playing an active role in the work of the alliance.”
Deutsche Bank made sustainability a strategic priority in 2019, setting a target of lowering its loan exposures to coal-fired projects by 20%. The bank achieved its goal by the end of 2019. The latest development is one of the many actions taken by the bank since then to further develop sustainability within its operations and those of its clients, it said.
In August 2020, Deutsche Bank had said that it would not finance projects in the oil and gas sector that use hydraulic fracturing in countries with scarce water supplies, new projects in the Arctic region, and new oil sand projects, framing a stricter Fossil Fuels Policy.
The bank had said it was likely to end its global business activities in coal mining by 2025 to facilitate the transformation to a sustainable economy. The policy drew guidelines on how the bank would deal with energy companies that are more than 50% dependent on coal. It also stated that it would finance companies in the future if they provide relevant diversification plans.
Back in 2017, Deutsche Bank had revised its approach to coal financing and amended its guidelines to coal power and mining. The bank had said it would not grant any financing to new coal-based power plant construction and gradually decrease its exposure to the thermal coal mining sector.
Deutsche Bank issued its first green bond in June 2020 and followed this up with an inaugural US dollar green bond in March 2021. It was one of the top five arrangers of green bonds globally in Q1 2021 and has been active in developing new green derivative products, such as the first green hedging transaction with a second-party opinion based on a specially designed green hedge framework.