Our Clearly Defined Processes for Sustainable Lending
DZ BANK is aware of its responsibility to people, the environment and corporate governance. Lending is one of DZ BANK's most important core activities. In this area in particular, the topic of responsibility is of great importance: As a lender, we systematically check loan requests for relevant sustainability aspects as part of the loan review process.
The sustainability check in DZ BANK's lending business is carried out both for traditional lending and credit substitute business and for debt capital market business and treasury's own investments (excluding asset-backed securities). Every commitment, including corporate, project, export, foreign trade, acquisition, real estate, leasing and asset financing, must be checked for sustainability aspects.
The basis for the sustainability check in the lending process consists of five elements: our exclusion criteria, our sector policies, our RepRisk DZ BANK ESG checklist, our ESG credit risk score, and the overall assessment of sustainability risks.
Exclusion Criteria
The DZ BANK Group has adopted strict standards for its business activities in order to meet its corporate social responsibilities toward people and the environment, and comply with the principles of sustainable corporate governance. The exclusion criteria for specific business practices and sectors are an integral element of its commitment to sustainability. They are designed to ensure that the minimum requirements relating to ESG topics are met and to prevent increased risk of damage to the DZ BANK Group’s reputation.
The general exclusion criteria are enshrined in the group credit standard of the DZ BANK Group, which provides rules on the consideration of risks associated with ESG factors. Depending on the business model of the group entity concerned, the scope of application or justified exceptions (for example exceptions for cooperative banks, for DZ BANK group companies, where there is credible evidence of the borrower’s willingness to transform, or for higher-level decisions in exceptional cases) can be defined.
We do not provide direct funding for activities connected to thermal coal, such as new or existing coal-fired power plants or activities in the upstream value chain, and no indirect funding for companies involved Trading (revenue threshold: 5 percent).
We do not provide direct funding for oil extraction activities (upstream), oil and gas extraction involving fracking or oil sands / oil shale, or Arctic drilling and deep-sea mining, and no new business (direct or indirect, except refinancing) that increases the lending volume with companies involved in oil and gas extraction (upstream) (revenue threshold: 0 percent).
We do not provide direct funding for the construction of new nuclear power stations or direct funding for activities connected with the operation or maintenance of nuclear power stations, unless the activity increases security or makes a relevant positive ESG contribution.
We do not provide direct financing for the trade in endangered animal and plant species according to the CITES list (Convention on International Trade in Endangered Species).
We do not provide direct or indirect funding for companies or projects that pose significant threats to the environment, particularly uranium/asbestos extraction (revenue threshold: 1 percent), mining activities involving the mountain-top removal method, projects/assets or activities that pose a high risk of nuclear, biological, or chemical contamination (excluding biogas facilities), and hazardous goods with insufficient measures to minimize risk.
When financing companies in the conventional weapons segment, DZ BANK exercises particular care and reserves the right to exclude specific types of weapons.
We do not provide any direct or indirect financing to companies linked to the development, manufacture, maintenance or operation of conventional weapons or their material parts as defined by the German Weapons Act, and whose registered office and the majority of their business activities are located in countries outside the NATO and EEA/EFTA states, unless evidence is provided that the weapons are used exclusively by NATO, EEA or EFTA states.
We do not provide funding for transactions involving the supply of weapons in or to countries outside NATO, the EEA or EFTA, or areas of conflict, unless a government export licence has been issued by the Bundesamt für Wirtschaft und Ausfuhrkontrolle (BAFA) [German Federal Office for Economic Affairs and Export Control] or an
equivalent body in an EU, EEA, or EFTA country.
We do not provide direct or indirect funding for companies that are involved in the production or trading of controversial weapons or their core components. Controversial weapons are those that have indiscriminate effects, are excessively injurious, have a devastating impact on the civilian population, or have been internationally outlawed. These currently include anti-personnel mines (under the Ottawa Convention, 1997), cluster bombs (under the Oslo Convention, 2008), biological weapons (under the Biological Weapons Convention [BWC], 1972), chemical weapons (under the Chemical Weapons Convention [CWC], 1993), nuclear weapons for non-nuclear weapon states (under the Treaty on the Non-Proliferation of Nuclear Weapons [NPT], 1968) that are not NATO members, blinding laser weapons (under Protocol IV of the UN Convention on Certain Conventional Weapons [CCW], 1995), and ammunitions containing uranium.
We do not provide direct or indirect funding for companies involved in the development, production, maintenance, operation, or trade of controversial weapons or their core components if it cannot be ruled out that the funding may be used for these activities.
We do not provide direct or indirect funding for companies that demonstrably contravene internationally recognized standards of human rights and labor rights. Internationally recognized standards are the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the fundamental conventions of the International Labour Organization (ILO) (revenue threshold: 0 percent).
We do not provide direct funding for activities or companies in the pornography industry or similar sectors (revenue threshold: 1 percent).
We do not provide direct funding for controversial forms of gambling or indirect funding for companies involved in controversial forms of gambling. These are companies whose original business purpose is gambling, except where operated or supervised by public-sector entities (revenue threshold: 1 percent).
We do not provide direct funding for trade activities involving materials extracted in conflict regions by a conflict party in a way that breaches human rights, and which may be used to finance the conflict.
We do not provide direct funding of activities with a direct link to illegal deforestation, slash-and-burn, and/or the conversion of tropical forests, primary forests, and protected areas
Sector Principles
DZ BANK assesses loan applications from companies in sectors that are particularly vulnerable from a sustainability perspective using its sector principles in addition to the sustainability assessment. These lay down general principles for lending and ensure that minimum ESG standards are taken into account. They are applied to projects, transactions and companies that fall within the ESG scope of application and that generate more than 50 per cent of total revenue, both directly and indirectly, in the respective sector and that act as credit recipients of DZ BANK.
Sector policies are in place for the following sectors: dams and water infrastructure, extractive industries, forestry, fisheries, maritime industry, palm oil and agriculture.
The sector policies are listed in detail in the Sustainability Report 2024 and in the DZ BANK policy on exclusion criteria, sector policies and sustainability checks.
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