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19 Feb 2021, 14:03
Sören Amelang

German banks underestimate and neglect topic of sustainability - report

Clean Energy Wire

Many German banks fail to realise their crucial role in the transformation towards a sustainable economy and neglect the topic of sustainability, a report by consultancy Zielke claims. The issue "is often not yet anchored in the corporate strategy," the consultancy said, following an analysis of mandatory sustainability reports. "Above all, an overall strategy with clearly defined goals is missing." Zielke concluded that: "Out of 119 credit institutions evaluated, only five banks are very detailed and transparent in their presentation of sustainability in their lending policy,” with reference to development bank KfW, Landesbank Baden-Württemberg, GLS Gemeinschaftsbank, ING Group and UBS Group.

"The financial sector has a special responsibility to ensure that the goals of the Paris Climate Agreement become reality. Because it grants loans and invests funds and thus has influence," said consultancy head Carsten Zielke. He added some of the sustainability reports are difficult to locate, suggesting that some banks do not want interested parties to find these publications. "Many a financial institution says that as a service provider it has little opportunity to become more sustainable, in contrast to the manufacturing industry, for example by reducing paper consumption or green electricity, but fails to recognise its responsibility, for example in lending and investment policy," Zielke said.  

Germany and the EU are working on regulation to better align financial markets and corporate and public investment decisions with emissions reduction targets. Germany has stated the aim to become a "leading location" for the budding green and sustainable finance sector, after having been a laggard for many years and will present a strategy on how to fulfil this ambition in the first half of 2021. Banks so far have been wary of attempts to make the appliaction of ESG (environmental, social & governance) sustainability criteria mandatory in their business activities and argue that an international or at least European framework is needed.

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