Sustainable Finance: Deutsche Bank Issues €500m Social Bond

Leading European financial institution Deutsche Bank has announced the issuance of its inaugural €500m (US$541.3m) social bond, representing a significant, deliberate step in its commitment to sustainable finance. 

The proceeds of these social bonds will directly support the bank’s sustainable asset pool, funding social causes such as affordable housing and essential services for the elderly and other vulnerable groups. 

Deutsche Bank: Backing its sustainable finance commitment 

Deutsche Bank first made its commitment to advancing sustainable finance in 2020, and it is now making good on its promise.

The bond aligns with the bank’s Sustainable Instruments Framework, which outlines its criteria for green and social finance instruments.

As well as supporting affordable housing and vulnerable groups, proceeds from Deutsche Bank’s fund are also aimed at promoting a clean, energy-efficient global economy. 

Deutsche Bank still has some way to go to meet its 2025 aim of €500bn in sustainable financing by the end of 2025.

A statement from the bank reads: “With this milestone, we expand our ESG issuance programme, which began in 2020 with our first green bond issuance. 

“With the issuance of green and now social financing instruments, we aim to contribute to the further advancement of the sustainable finance market and 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 manner.”

Impressively, the bank’s inaugural social bond was oversubscribed by more than 13 times by investors, highlighting the growing clamour to support funding for sustainable initiatives. 

Exploring Deutsche Bank’s Sustainable Finance Framework

First outlined in 2020, Deutsche Bank’s Sustainable Finance Framework includes several core principles for environmental and social sustainability. 

Principles for environmental sustainability: 

1. Climate change mitigation and adaptation: Economic activities enabling, directly or indirectly, a substantial reduction of GHG emissions and/or increase of energy efficiency. Measures adapting to acute and chronic physical risks caused or intensified by climate change. 
2. Protection, restoration and promotion of natural resources and healthy ecosystems: Protection of marine and terrestrial [living] resources including water, critical and high-carbon stock ecosystems, and other primary resources. Restoration of biodiversity and ecosystems. Pollution protection and control and general reduction of resource use. 
3. Transition to a circular economy: Prevention of waste and promotion of recycling and reuse of material.

Principles for social sustainability:

1. Respect for human rights: Respect for, protection and enablement of basic human rights, e.g. food provision, labour protection. 
2. Enabling living conditions: Access to affordable housing and infrastructure for transportation, ICT, and energy provision.
3. Access to essential services: Inclusive access to health, education, and financial services.

Deutsche Bank’s core principles for increased sustainability are a core parameter for the bank to adhere to goals underlined by the Paris Agreement. The bank continues in its mission to align its sustainability initiatives with the EU Taxonomy Regulation. 

The bank continues to take forward leaps on the technology front too, partnering with Bitpanda to provide the latter with German IBANs for real-time crypto/fiat conversions. 

It has also continued its funding of upcoming fintechs, leading a €105m credit facility warehouse to support SaaS company Capchase. 

For more on the leading sustainable fintech trends, see our Top 10 here. 

**************

Make sure you check out the latest edition of FinTech Magazine and also sign up to our global conference series – FinTech LIVE 2024. 

**************

FinTech Magazine is a BizClik brand.