Deutsche Bank publishes details of its sustainability strategy in residential real estate
The financed emissions from Deutsche Bank’s European residential real estate loan portfolio were 3.9 million tonnes of CO2 equivalent per year (MtCO2e/y) in 2022, as disclosed today in Residential Real Estate – Leading to Net Zero, a white paper outlining the role of residential real estate in Deutsche Bank’s sustainability strategy.
Financed emissions: disclosures now cover 60% of Deutsche Bank’s loan book
The white paper provides first-time disclosure of financed emissions in the residential real estate sector in Deutsche Bank’s loan portfolio. As at year-end 2022, this portfolio stood at € 175 billion¹, or approximately 40% of the bank’s total loan book. The bank has now published financed emissions data for around 60% of its total loan book. This follows the disclosure, in 2022, of the financed emissions in its € 107 billion1 corporate loan portfolio of 30.5 MtCO2e/y.
Renovation: the € 80 billion challenge facing residential real estate clients
Residential Real Estate – Leading to Net Zero sets out the financial impact on homeowners of meeting future EU energy efficiency requirements for their residences. The cost to renovate an individual residence to the highest energy performance level (EPC Class A) can exceed € 100,000. To meet these requirements, the cost to Deutsche Bank’s residential real estate clients could reach around € 80 billion, at today’s prices. This is equivalent to nearly 50% of the bank’s existing real estate loan portfolio and makes clear the enormous investment requirements for German and European economies. Deutsche Bank’s analysis also shows that around two-thirds of the bank’s private clients have the financial resources to undertake energy-efficient home renovations, while the remainder will need additional financial assistance. This analysis reinforces Deutsche Bank’s conviction that the banking industry and national governments must work in partnership to support homeowners in financing the renovation of existing residences and reducing greenhouse gas emissions.
The white paper also sets out pathways to net zero emissions in residential real estate by 2050 under different scenarios, making clear the scale of the challenge for the wider economy.
Shoulder to shoulder with clients on the path to net zero: financing of € 12 billion by end-2023
Residential Real Estate – Leading to Net Zero sets out Deutsche Bank’s sustainability strategy with private clients. The Private Bank’s target is for € 12 billion in new business volumes (gross volume, cumulative since January 1, 2020) by year-end 2023.
Deutsche Bank aims both to support energy-efficient new-build home construction and help homeowners address the challenge of historically low energy efficiency standards in existing residences, and thereby meet the EU Parliament’s energy performance requirements. Financial support, both through tailored lending products and access to grants, incentives and subsidies, plays a vital role in this strategy.
This strategy leverages services already offered through Deutsche Bank’s German mortgage subsidiary, BHW. Deutsche Bank estimates a financing requirement for energy modernization in German residential real estate of around € 600 billion by 2045.
Partnering with clients on the path to more sustainable residential real estate
Residential real estate plays a key role in the economy’s transition to becoming climate neutral, given that buildings account for 40% of energy usage and 36% of carbon emissions across the EU².
Deutsche Bank’s residential real estate strategy takes account of the complete building life cycle and includes the following objectives:
To provide private clients with a holistic offering of support, information and financing services for the construction and renovation of energy-efficient homes, to reduce operational (Scope 1 and 2) emissions
To partner with corporate clients on decarbonization pathways in ‘upstream’ industries, including power utilities and manufacturers of construction materials to the real estate sector, to reduce embodied (Scope 3) emissions
To engage with policymakers, banking sector peers, industry alliances and other public and private bodies to define sector-wide strategies and financial assistance mechanisms to accelerate the reduction in emissions from residential real estate
To contribute to the harmonization of methodologies, data quality and reporting standards in the sector-wide effort to manage and monitor the energy efficiency of residential real estate and compliance with EU legislative frameworks and the requirements of national governments
Net zero pathways under different scenarios
Residential Real Estate – Leading to Net Zero sets out Deutsche Bank’s methodological approaches to the International Energy Agency’s roadmap to net zero emissions by 2050. Deutsche Bank calculates net zero pathways for its European residential real estate portfolio under three different IEA scenarios: the Stated Policies scenario (STEPS), the Announced Policies scenario (APS), and the Net Zero Emissions by 2050 scenario (NZE), together with an outlook for Scope 3 emissions.
¹ Total loans at amortized cost as at 31.12 2022 ² Source: Energy Performance of Buildings Directive 2010/31/EU
About Deutsche Bank
Deutsche Bank provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.
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. 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 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 SEC Form 20-F of 17 March 2023 under the heading “Risk Factors”. Copies of this document are readily available upon request or can be downloaded from www.db.com/ir
Disclaimer
There are currently no uniform criteria nor a common market standard for the assessment and classification of financial services and financial products as sustainable or green. This can lead to different parties assessing the sustainability of financial services and financial products differently. In addition, there are various new regulations on ESG (environment, social, and corporate governance) and sustainable finance, which need to be substantiated, and further draft legislation is currently being developed, which may lead to financial services and financial products currently classified as sustainable or green not meeting future legal requirements for qualification as sustainable. Harmonized standards and calculation methods are expected to be developed and will also improve data quality.
The transition to a sustainable economy is a long-term undertaking. In its current stage, we are confronted with the limited availability of reliable data, esp. 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 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 2022 and we reserve the right to update its measurement techniques and methodologies in the future.
In addition, this release contains financial and other information which has been derived from publicly available information disclosed by persons other than us (“external data”). In particular, external data has been derived from industry and customer-related data and other calculations taken or derived from industry reports published by third parties, market research reports and commercial publications. Commercial publications generally state that the information they contain has originated from sources assumed to be reliable, but that the accuracy and completeness of such information is not guaranteed and that the calculations contained therein are based on a series of assumptions. The external data has not been independently verified by us. Therefore, we cannot assume any responsibility for the accuracy of the external data taken or derived from public sources.
Past performance and simulations of past performance are not a reliable indicator and therefore do not predict future results.
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 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 USA, 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.
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The financed emissions from Deutsche Bank’s European residential real estate loan portfolio were 3.9 million tonnes of CO2 equivalent per year (MtCO2e/y) in 2022, as disclosed today in Residential Real Estate – Leading to Net Zero, a white paper outlining the role of residential real estate in Deutsche Bank’s sustainability strategy.
Financed emissions: disclosures now cover 60% of Deutsche Bank’s loan book
The white paper provides first-time disclosure of financed emissions in the residential real estate sector in Deutsche Bank’s loan portfolio. As at year-end 2022, this portfolio stood at € 175 billion¹, or approximately 40% of the bank’s total loan book. The bank has now published financed emissions data for around 60% of its total loan book. This follows the disclosure, in 2022, of the financed emissions in its € 107 billion1 corporate loan portfolio of 30.5 MtCO2e/y.
Renovation: the € 80 billion challenge facing residential real estate clients
Residential Real Estate – Leading to Net Zero sets out the financial impact on homeowners of meeting future EU energy efficiency requirements for their residences. The cost to renovate an individual residence to the highest energy performance level (EPC Class A) can exceed € 100,000. To meet these requirements, the cost to Deutsche Bank’s residential real estate clients could reach around € 80 billion, at today’s prices. This is equivalent to nearly 50% of the bank’s existing real estate loan portfolio and makes clear the enormous investment requirements for German and European economies. Deutsche Bank’s analysis also shows that around two-thirds of the bank’s private clients have the financial resources to undertake energy-efficient home renovations, while the remainder will need additional financial assistance. This analysis reinforces Deutsche Bank’s conviction that the banking industry and national governments must work in partnership to support homeowners in financing the renovation of existing residences and reducing greenhouse gas emissions.
The white paper also sets out pathways to net zero emissions in residential real estate by 2050 under different scenarios, making clear the scale of the challenge for the wider economy.
Shoulder to shoulder with clients on the path to net zero: financing of € 12 billion by end-2023
Residential Real Estate – Leading to Net Zero sets out Deutsche Bank’s sustainability strategy with private clients. The Private Bank’s target is for € 12 billion in new business volumes (gross volume, cumulative since January 1, 2020) by year-end 2023.
Deutsche Bank aims both to support energy-efficient new-build home construction and help homeowners address the challenge of historically low energy efficiency standards in existing residences, and thereby meet the EU Parliament’s energy performance requirements. Financial support, both through tailored lending products and access to grants, incentives and subsidies, plays a vital role in this strategy.
This strategy leverages services already offered through Deutsche Bank’s German mortgage subsidiary, BHW. Deutsche Bank estimates a financing requirement for energy modernization in German residential real estate of around € 600 billion by 2045.
Partnering with clients on the path to more sustainable residential real estate
Residential real estate plays a key role in the economy’s transition to becoming climate neutral, given that buildings account for 40% of energy usage and 36% of carbon emissions across the EU².
Deutsche Bank’s residential real estate strategy takes account of the complete building life cycle and includes the following objectives:
Net zero pathways under different scenarios
Residential Real Estate – Leading to Net Zero sets out Deutsche Bank’s methodological approaches to the International Energy Agency’s roadmap to net zero emissions by 2050. Deutsche Bank calculates net zero pathways for its European residential real estate portfolio under three different IEA scenarios: the Stated Policies scenario (STEPS), the Announced Policies scenario (APS), and the Net Zero Emissions by 2050 scenario (NZE), together with an outlook for Scope 3 emissions.
For further information please contact:
Deutsche Bank AG
Media Relations
Christopher R. Springer
Phone: +49 69 / 910 48935
Email: christopher-renz.springer@db.com
Stefanie Duennwald
Phone: 069 910 / 40839
Email: stefanie-a.duennwald@db.com
Investor Relations
+49 800 910-8000 (Frankfurt)
db.ir@db.com
¹ Total loans at amortized cost as at 31.12 2022
² Source: Energy Performance of Buildings Directive 2010/31/EU
About Deutsche Bank
Deutsche Bank provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.
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. 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 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 SEC Form 20-F of 17 March 2023 under the heading “Risk Factors”. Copies of this document are readily available upon request or can be downloaded from www.db.com/ir
Disclaimer
There are currently no uniform criteria nor a common market standard for the assessment and classification of financial services and financial products as sustainable or green. This can lead to different parties assessing the sustainability of financial services and financial products differently. In addition, there are various new regulations on ESG (environment, social, and corporate governance) and sustainable finance, which need to be substantiated, and further draft legislation is currently being developed, which may lead to financial services and financial products currently classified as sustainable or green not meeting future legal requirements for qualification as sustainable. Harmonized standards and calculation methods are expected to be developed and will also improve data quality.
The transition to a sustainable economy is a long-term undertaking. In its current stage, we are confronted with the limited availability of reliable data, esp. 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 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 2022 and we reserve the right to update its measurement techniques and methodologies in the future.
In addition, this release contains financial and other information which has been derived from publicly available information disclosed by persons other than us (“external data”). In particular, external data has been derived from industry and customer-related data and other calculations taken or derived from industry reports published by third parties, market research reports and commercial publications. Commercial publications generally state that the information they contain has originated from sources assumed to be reliable, but that the accuracy and completeness of such information is not guaranteed and that the calculations contained therein are based on a series of assumptions. The external data has not been independently verified by us. Therefore, we cannot assume any responsibility for the accuracy of the external data taken or derived from public sources.
Past performance and simulations of past performance are not a reliable indicator and therefore do not predict future results.
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 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 USA, 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.
Further links on the topic
Residential Real Estate – Leading to Net Zero
Sustainability strategy
Sustainability and environment
Towards net zero emissions Deutsche Bank’s March 2022 white paper
Sustainability Deep Dive, including videos and management presentations
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