Deutsche Bank publishes targets for carbon footprint reduction

Deutsche Bank today announced net zero aligned targets for 2030 and 2050 in four carbon-intensive sectors. The bank’s goal is to reduce the amount of financed emissions (Scope 3) significantly by 2030. The targets represent a core element of Deutsche Bank’s sustainability strategy and reflect the bank’s commitments as a founding member of the Net Zero Banking Alliance (NZBA).

Deutsche Bank’s methodology, which is designed to be in line with emerging best practice, aims to support a progressive and orderly phase-out of fossil fuel usage while incentivizing the financing of lower carbon-intensity technologies and clients with credible transition plans.

Net zero targets in four key sectors

Deutsche Bank’s targets cover sectors accounting for a significant proportion of financed emissions of its € 250 billion corporate loan book1 as well as key sources of global Scope 3 emissions of clients. Targets for each sector are as follows:

Oil & Gas (Upstream): 23% reduction in Scope 3 upstream financed emissions by 2030, and 90% reduction by 2050, in millions of tonnes of CO2
Power generation: 69% reduction in Scope 1 physical emission intensity by 2030 and 100% reduction by 2050, in kilogrammes of CO2 equivalent per megawatt hour
Automotive (light duty vehicles): 59% reduction in tailpipe emission intensity by 2030 and 100% reduction by 2050, in grammes of CO2 per vehicle kilometre
Steel: 33% reduction in Scope 1 and 2 physical emission intensity by 2030 and 90% reduction by 2050, in kilogrammes of CO2 equivalent per tonne

Supporting client-specific transition plans

The bank aims to achieve these targets by advising clients in carbon-intensive industries and financing their transition strategies/efforts on the path to achieving net zero emissions by 2050. “This is an important step to reduce the carbon footprint of our loan book progressively”, said Chief Sustainability Officer Jörg Eigendorf. “We are focusing on supporting our clients on their net zero journey. This is a crucial element of our sustainability strategy.”

Methodology prioritizes highest-intensity sectors

Deutsche Bank’s target-setting approach is aligned with the United Nations Environmental Programme Finance Initiative (UNEPFI) and the Glasgow Financial Alliance for Net Zero (GFANZ) principles and guidelines.

The bank’s science-based emission reduction pathways have been calculated using the International Energy Agency’s net zero emission scenario which limits global warming to no more than 1.5oC above pre-industrial levels by 2100. The scenario assumes that negative emission technologies, such as carbon capture and storage, offset small residual emissions in certain sectors.

Deutsche Bank’s impact-based approach prioritizes the highest-intensity sectors and uses sector-specific metrics covering Scope 1, 2 or 3 emissions as appropriate. The bank will continue to follow the PACTA-based approach for the automotive, power generation and steel sectors, and has switched to a Scope 3 (upstream) financed emission approach for the oil & gas sector.

These targets will be embedded into the bank’s existing governance structures and risk appetite frameworks.

Next steps

The net zero targets announced today form part of the sustainability implementation timeline outlined by Deutsche Bank at its Sustainability Deep Dive on May 20, 2021. In March 2023, Deutsche Bank intends to publish updates on financed emissions and pathway alignments for the year 2022 as part of the bank’s Non-Financial Report. Throughout 2023, the bank aims to further expand net zero target-setting to other carbon-intensive sectors.

Further information on the methodology can be found in Towards Net Zero Emissions (March 2022), available on db.com.

¹Gross loans and commitments as at December 31, 2021. Clients in scope account for approximately 13% of Deutsche Bank’s total corporate loan commitments and approximately 50% of Scope 1 and 2 financed emissions. In addition, Oil & Gas and Automotive are key sources of global Scope 3 emissions.

Disclaimer

Methodology and data: The transition to a sustainable economy is a long-term undertaking. In its current stage, we are confronted with the limited availability of climate related data. It is inevitable to use estimates and models until improved data will become available. Our expectations on the increase of data quality are based on reporting obligations as currently developed. New regulations on reporting will likely become effective in the coming years. This release is not based on the calculation methodology provided in the draft regulatory technical standards of the Sustainable Finance Disclosure Regulation (SFDR) as it is not applicable to this release. Harmonized standards and calculation methods are expected to be developed and will also improve data quality.

This release includes metrics that are subject to measurement uncertainties resulting from limitations inherent in the underlying data and methods used for determining such metrics. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary. The information set forth herein is expressed as of end of December 2021 and we reserve the right to update its measurement techniques and methodologies in the future.

We have measured the carbon footprint of our corporate loan portfolio in accordance with the standards laid out in Towards Net Zero Emissions (March 2022) available here. In doing so we used in part information from third-party sources that we believe to be reliable, but which has not been independently verified by us, and we do not represent that the information is accurate or complete. The inclusion of information contained in this release should not be construed as a characterisation regarding the materiality or financial impact of that information.

If emissions have not been publicly disclosed, these emissions may be estimated according to the Partnership for Carbon Accounting Financials (PCAF) standards. For borrowers whose emissions have not been publicly disclosed, we estimate their emissions according to the PCAF emission factor database. Since there is no unified source of carbon emission factors (including sustainability-related database companies, consulting companies, international organizations, and local government agencies), the results of estimations may be inconsistent and uncertain.

Past performance and simulations of past performance are not a reliable indicator and therefore do not predict future results.

Forward-looking statements: This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and projections as they are currently available to the management of Deutsche Bank Aktiengesellschaft. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in the light of new information or future events. By their very nature, forward-looking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. Such factors include the conditions in the financial markets in Germany, in Europe, in the United States and elsewhere from which we derive a substantial portion of our revenues and in which we hold a substantial portion of our assets, the development of asset prices and market volatility, potential defaults of borrowers or trading counterparties, the implementation of our strategic initiatives, the reliability of our risk management policies, procedures and methods, and other risks referenced in our filings with the U.S. Securities and Exchange Commission. Such factors are described in detail in our most recent SEC Form 20-F under the heading “Risk Factors”. Copies of this document are readily available upon request or can be downloaded from our website.

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