Deutsche Bank lays out tighter stance on coal, oil and gas – Citywire

Deutsche Bank has unveiled a tighter fossil fuels policy, to reflect its views on business activities in the coal and oil and gas sectors. 

The German bank plans to end business activities in coal mining by 2025. It will review activities in Europe and the US by end-2020, and in Asia starting 2022.

Asia’s longer timeline is given ‘the fact that the transformation in Asia will take longer owing to the region’s high dependency on coal power,’ Deutsche said Monday.

Exceptions may be made for coal-dependent companies seeking financing with ‘credible diversification plans,’ it said.

Going forward, the bank will also stop financing some oil and gas projects. These include projects using hydraulic fracturing – a drilling method used to extract the commodities – in countries with scarce water supplies. 

It will avoid new projects in the Arctic region, and new oil sand projects involving exploration, production, transport or processing.

Deutsche intends to review its oil and gas activities by the end of the year ‘with the aim of subsequently reducing these’, under its tighter policy.

CEO Christian Sewing, who also chairs the bank’s sustainability council, said: ‘In its current form, the policy sets us ambitious targets and enables us to help our long-standing clients with their own transformation. 

‘It will allow us to play our part in protecting the climate and helping the EU to achieve its goal of being climate neutral by 2050.’

Deutsche will build on earlier commitments in the days ahead. It had looked to reduce its loan exposures to coal-fired power plants by 20%, that was achieved in 2019.

In May, the bank set quantifiable sustainable targets, including having at least €200bn ($234.7bn) of sustainable financing and investments by 2025. 

It issued its first own green bond a month later, with a six-year tenor and a volume of €500m ($586.8m).

Other banks have reined in on fossil fuels. Credit Suisse has vowed to stop financing new coal-fired power plants, while Pictet Group will remove fossil fuel producers and extractors from its balance sheet this year.

Pictet’s fossil fuel assets, including exposure to thermal coal and oil and gas extractors, amounted to CHF 250m ($271.1m) as of 31 December 2019. 

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