Sustainability in the lending process
Sustainability is embedded in the strategy of DZ BANK at several different levels: as a priority topic for the strategic planning process, as a groupwide area of potential, and as a self-contained implementation package under the ‘Verbund First 4.0’ initiative.
DZ BANK has defined quantitative goals and targeted improvements to the quality of every aspect of ESG within the organization. The Board of Managing Directors and the Supervisory Board are updated regularly on progress with the achievement of these goals. The ESG goals were achieved in 2023. Financial services provider MSCI confirmed DZ BANK’s MSCI ESG Research rating of AA.
DZ BANK made good progress toward achieving its goals in relation to the business portfolio. For example, the lending volume in the field of renewable energies increased to €7.38 billion as at December 31, 2023, which was higher than the target formulated for 2026 of €7.1 billion.
Sustainability aspects are also playing an increasingly important role in the traditional lending business. Whether the aim is to channel as much funding as possible into sustainability-oriented projects and investments, to support the transition to greater sustainability, or to assess risks in this area more extensively, new ESG key figures, an appropriate user interface, and underlying data management are required in the lending process. In 2023, the foundations for this were laid as part of a number of projects included in DZ BANK’s sustainability program. The new lending workflow went live in October 2023.
The ESG-Data tool is the main user interface for entering ESG data relating to funding projects and supports the structured capture of sustainability data using intelligent data entry screens. The next steps build on this. The RepRisk ESG checklist is used to record the impact of a lending exposure on DZ BANK’s reputation, the ESG credit risk score measures the change in credit risk on the basis of ESG factors, and the ESG vote provides an overall assessment of ESG risk and thereby creates transparency for decision-makers. The Equator Principles are integrated into the process and form part of the data entry and approval workflow. Around 800 employees in Germany and abroad were trained before the ESG-Data platform went live and, since then, have been using it as standard in the lending process.