Deutsche Bank established a number of goals to reduce its sponsored emissions in carbon-intensive industries such as Oil & Gas, Power Generation, Automotive, and Steel.
Typically, financing activities account for the significant majority of the climate effect of financial organizations, with funded emissions being hundreds of times bigger than operational emissions. The majority of Deutsche Bank's Scope 3 emissions, which are beyond its direct control, are financed emissions, which the bank plans to cut significantly by 2030.
According to Deutsche Bank, the increased targets for the four industries represent a substantial share of the bank's €250 billion loan portfolio. The bank said that it will advise clients in carbon-intensive businesses and finance their transition strategies and activities on the path to net-zero emissions by 2050.
The new objectives include a 23% reduction in Scope 3 upstream financed emissions by 2030 and a 90% reduction by 2050 for the upstream Oil & Gas industry, as well as a 69% decrease in the physical emission intensity of Scope 1 by 2030 and a 100% reduction by 2050 for Power Generation. Deutsche Bank aims for a 59% decrease in tailpipe emission intensity for the Automotive light duty vehicles sector by 2030 and a 100% reduction by 2050, and for Steel, a 33% reduction in Scope 1 and 2 physical emission intensity by 2030 and a 90% reduction by 2050.
Deutsche Bank is a founding member of the Net Zero Banking Alliance (NZBA), a United Nations-convened consortium of institutions committed to furthering global net-zero goals through their financing activities. Members of the NZBA pledge to transition operational and attributable greenhouse gas (GHG) emissions from their loan and investment portfolios to net zero pathways by 2050 and to setting 2030 targets, first centered on priority sectors where the bank may have the greatest impact.
As a member of the Partnership for Carbon Accounting Financials (PCAF), a global partnership of financial institutions that started in 2019 with the goal of creating and implementing a harmonized way to measure and report the greenhouse gas (GHG) emissions from loans and investments, the bank has also promised to report the GHG emissions from its loan portfolio.
In the future, Deutsche Bank plans to disclose updates on financed emissions and pathway alignments for 2022 in March 2023 and will expand its net zero target setting to other carbon-intensive sectors over the course of the next year.
Jorg Eigendorf, Chief Sustainability Officer at Deutsche Bank, said:
This is a significant step towards progressively reducing the carbon footprint of our loan portfolio. We are committed to assisting our clients on their path to net zero. This is a fundamental component of our sustainability approach."