Sustainable financial products

Future-oriented investments:

Sustainable financing products at DZ BANK

Bank values

Through our sustainable financing products, we take account of environmental, social, and ethical criteria in our investment decisions. This enables us to promote the sustainable development of our society and a responsible use of limited resources in a targeted way.

Approx €5 billion worth of project financing deals in the renewables sector in 2017
€11.1 billion worth of ‘green’ projects realized through DZ BANK development loan brokerage
One of the leading underwriters

Development loans

Investing in improved energy efficiency is becoming increasingly important for retail and corporate customers alike. Another focus is on action plans for coping with demographic change, including socially oriented programs that encourage the adaptation of housing and other buildings for older people. DZ BANK promotes environmentally and socially sustainable development trends by facilitating access to public-sector financial assistance at favorable interest rates, mainly in the form of development loans in the areas of environmental protection and sustainability.
In 2017, DZ BANK’s development lending amounted to €11.1 billion, which was slightly above the 2016 level of €10.9 billion. This was primarily due to strong demand for affordable finance for private house-building. The volume of new business generated by DZ BANK and the cooperative banks for development loans from Germany’s KfW development bank came to €8.1 billion (2016: €7.9 billion). With a share of 22.0 percent of all loans made by KfW, DZ BANK was again the development bank’s biggest single customer. Measured by volume with KfW, DZ BANK has a 16.9 percent market share of the commercial environmental sector and a 28.8 percent share of the retail sector.

Project finance

In 2013, DZ BANK officially recognized the Equator Principles, which were drawn up by international project finance institutions, and made a voluntary commitment to act environmentally and socially responsible in its project financing business. As part of this acknowledgement and commitment, our already long-established practice of taking sustainability standards into account in project finance transactions was publicly formalized. This step also ensures that DZ BANK fulfills its duty to manage risks proactively, particularly in relation to high-volume project finance.

Renewable energies

Renewable energies

Our focus in the project finance segment is on the renewable energies sector in Germany. In 2017, the volume of project finance credit limits approved by DZ BANK for wind, solar, and biogas/biomass came to around €4.8 billion. Of these, wind power remains the most important renewable energy source.

Public Private Partnership

Public Private Partnership

Partnerships between the public and private sector, known as public-private partnerships (PPP), have in recent years become one of the most successful ways to obtain funding for major public service projects in Europe. DZ BANK regularly works with partners in the cooperative financial network to facilitate, for example, the construction of roads and other transport infrastructure, schools, hospitals, and administrative buildings.

Sustainable investment products

At the end of September 2018, DZ BANK placed the very first issue of its own green bond. The total volume of the placement was €250 million. The design of the bond complies with the Green Bond Principles of the International Capital Markets Association (ICMA) and was given the highest overall score of E1 in a ‘green evaluation’ conducted by sustainability experts from Standard & Poor’s Global Ratings (S&P). The capital raised by the placement will be used to finance onshore wind power projects in Germany. A pool of 60 projects in need of funding is linked to the green bond. These projects will reduce harmful CO2 emissions by around 790,000 kilograms per year.

 

More information can be found in the Green Bond Framework, the Green Bond Investor Report, and the S&P Green Evaluation.

 

DZ BANK has been active in the sustainable bonds segment since 2013 and is one of the leading European underwriters for these assets. Issuers can use these sustainable bonds to raise capital for socially responsible, environmentally friendly, or sustainability-oriented projects and markets. Issuance activity is focused on investment projects in the areas of renewable energies and climate change. In 2017, the total volume of bond issues with environmental, social, and/or sustainable objectives that were supported by DZ BANK as the lead underwriter amounted to €3.75 billion. Based on issues from financial institutions, development banks, and other public organizations only, DZ BANK is the leading player in this segment in Germany and ranks fifth at European level.

The finance industry plays a key role as a financing partner and catalyst for a greener economy

Wolfgang Köhler, member of the Board of Managing Directors of DZ BANK with responsibility for capital markets

No products based on agricultural commodities

The entire DZ BANK Group stopped offering products based on agricultural commodities in spring 2013. However, DZ BANK, with its long tradition of serving the agriculture sector, continues to help its corporate customers to hedge prices through the use of standardized products.