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In May 2021, the Deutsche Bank announced that it would accelerate it’s sustainable finance goals, and aim to facilitate €200 billion in sustainable finance and investments by the end of 2023. While the Deutsche Bank had already been involved in various sustainability initiatives, like publishing a Sustainable Finance Framework and launching a range of innovative sustainable finance products, they have recently decided to increase their measures in order to meet the growing demand for companies to be more sustainable. Other new goals include implementing an ESG advisory concept in all German branches by next year, making ESG investments the standard for portfolio management, facilitating ESG dialogues with its multinational corporate bank clients, and growing its own share of ESG bonds and loans.
Chief Executive Officer of Deutsche Bank, Christian Sewing, stressed the importance of accelerating their sustainability progress in a press release, stating “we have to progress as quickly as possible from ambition to impact.” Part of the reason may be due to the fact that the bank is currently seeking to become a sustainability leader in its field, but it may also have to do with accusations it has faced from various environmental groups claiming it wasn’t doing enough on the issue of climate change. Environmental groups, such as Urgewald, have said the promises the bank has made were underwhelming compared to other banks with similar initiatives. Greenpeace, another environmentalist group, also pointed out that the French BNP Paribas had already financed more than €200 billion on sustainable projects and therefore this new goal wasn’t as ambitious as the Deutsche Bank made it out to be.
Regardless, it’s becoming increasingly obvious to global leaders that sustainability will become an important implementation into their operations as pressure continues to escalate to support the transition to a low-carbon and more environmentally-friendly economy. As investors become more concerned about the sustainability of the companies they’re investing in, companies will become concerned as well and change their current mode of operations to align with the sustainable and environmental interests of their clients.
As more global leaders raise the alarm on issues pertaining to sustainability, other companies will follow suit in order to not be left behind. Sustainable and ESG investing has a major impact on changing the fundamental operations of companies for the better, and encourages companies who have a broad outreach to beneficially impact the environment around them. More banks will follow the lead of Deutsche Bank as long as the growing demand for sustainability measures increases and is reflected in investors’ portfolios.
At Physis, we work diligently with banks around the world to ensure that portfolios align with sustainable and environmental standards. Join us today!