Fintech
Sustainable Finance: Deutsche Bank Issues a 500 Million Euro Social Bond
Deutsche Bank, a leading European financial institution, has announced the issuance of its first social bond of €500 million ($541.3 million), representing a significant and conscious step in its commitment to sustainable finance.
Proceeds from these social bonds will directly support the bank’s sustainable assets, funding social causes such as affordable housing and essential services for seniors and other vulnerable groups.
Deutsche Bank: Sustaining its commitment to sustainable finance
Deutsche Bank first made a commitment to sustainable finance in 2020 and is now delivering on that promise.
The bond is aligned with the bank’s Sustainable Instruments Framework, which outlines its criteria for green and social finance instruments.
In addition to supporting affordable housing and vulnerable groups, the proceeds of the Deutsche Bank fund are also intended to promote a clean and energy-efficient global economy.
Deutsche Bank still has a long way to go to reach its target of €500 billion in sustainable financing by the end of 2025.
A note from the bank reads: “With this milestone, we are expanding our ESG issuance program, which began in 2020 with our first green bond issuance.
“By issuing green and now social financing instruments, we aim to contribute to the further advancement of the sustainable finance market and to raise funds that match those we lend to our clients to achieve their goals in transforming their business in a climate-friendly and socially sustainable way.”
Impressively, the bank’s first social bond was oversubscribed by investors 13 times, highlighting the growing appetite for funding sustainable initiatives.
Exploring Deutsche Bank’s Sustainable Finance Framework
First outlined in 2020, Deutsche Bank’s Sustainable Finance Framework includes several key principles for environmental and social sustainability.
Principles for environmental sustainability:
- Climate change mitigation and adaptation: economic activities that enable, directly or indirectly, a substantial reduction in greenhouse gas emissions and/or an increase in energy efficiency. Adaptation measures to acute and chronic physical risks caused or intensified by climate change.
- Protection, restoration and promotion of natural resources and healthy ecosystems: Protection of marine and terrestrial resources [living] resources, including water, critical and high-carbon ecosystems and other primary resources. Restoration of biodiversity and ecosystems. Protection and control of pollution and general reduction of resource use.
- Transition to a circular economy: preventing waste and promoting recycling and reuse of materials.
Principles for social sustainability:
- Respect for human rights: respect, protection and enabling of fundamental human rights, e.g. food supply, labour protection.
- Favourable living conditions: access to affordable housing and infrastructure for transport, ICT and energy supply.
- Access to essential services: inclusive access to health, education and financial services.
Deutsche Bank’s Core Principles for Greater Sustainability are a key parameter for the bank to adhere to the goals outlined in the Paris Agreement. The bank continues its mission to align its sustainability initiatives with the EU Taxonomy Regulation.
The bank continues to make progress also on the technological front, collaborating with Bitepanda to provide the latter with German IBANs for real-time crypto/fiat conversions.
It also continued to finance upcoming fintechs, completing a €105 million credit line warehouse Support SaaS Company Capchase.
To learn more about the top sustainable fintech trends, check out our Top 10 Here.