German banks’ sustainability performance still lacking ambition – NGO

Banks in Germany are still not doing enough to protect the climate and biodiversity, according to a ranking by environmental organisation WWF of 15 banks’ 2025 performance. While the banking sector is “on the right track” regarding some sustainability indicators, it still has a long way to go to become truly sustainable, said WWF.

To assess the extent to which German banks are already mindful of sustainability risks, the WWF developed its rating based on information from the banks that was either self-reported or publicly available. "Not a single German bank has achieved the top rating so far," said David Knewitz, sustainable finance expert at WWF. "Climate protection is often more of a side business than a core business. And the protection of biodiversity is currently only reflected in the banking sector in isolated cases."

The WWF rating came out against the backdrop of new guidelines from the European Banking Authority (EBA) that require all European banks to adopt binding strategies for dealing with climate and environmental risks. These guidelines make it mandatory for banks to identify and examine potential sustainability risks, and to develop plans to manage these risks. The changes in regulation are part of a wider effort by the European Union and member states to better align the financial industry with climate targets.

The nature protection organisation explains that progress with regard to sustainability targets can be seen for all banks, as climate goals are becoming more common and portfolios are increasingly incorporating climate criteria more systematically. However, sustainability risk management is not yet consistently integrated in all areas of banking, especially with respect to biodiversity, WWF added. “With every loan, banks decide whether we are financing a sustainable economy – or the next crisis,” said Knewitz.

Critics say that efforts to better integrate the ESG (environmental, social, governance) criteria for sustainable finance into European climate policy have been weakened by a 2025 decision by the European Commission to soften reporting requirements for companies. Against the backdrop of pressure against integrating ESG criteria by the administration of US president Donald Trump, leading German finance companies have also begun reviewing their sustainability strategies.