Increasing resource productivity and identifying clean sources for growth are essential in the face of increasing energy demand and resource scarcity as well as the impact of greenhouse gas emissions. In 2011, our Environmental Steering Committee, with the support of the external Climate Change Advisory Board, continued to work with business heads to align our business strategy with these long-term economic trends. This will ensure that Deutsche Bank supports the emerging needs of clients in their transition to a low-carbon, resource-efficient global economy.
We are building on a climate change strategy which identifies three mutually reinforcing roles: our core businesses are supporting investments in energy and resource efficiency; we are using our influence to encourage action on energy and environmental security; and we are reducing our own environmental impacts. Our certified Sustainability Management System proves the envelope for our activities in these areas.
Our approach to managing environmental and social risks was strengthened further in 2011 when we introduced the Environmental and Social Reputational Risk Framework. It is a part of our due diligence process and focuses on activities in sensitive sectors such as Metals and Mining, Oil and Gas as well as agriculture.
The Framework provides guidance on evaluating the risks of transactions, counterparties and business practices and how these risks should be managed and mitigated within the business. Furthermore our new policy on cluster munitions demands to exit existing relationships and not to engage in new business with cluster munitions manufacturers, distributors and companies that produce key components of cluster munitions.
Core business activities
Sustainability provides opportunities in areas including emissions trading, sustainable fund management, and financing and advisory services for clean-tech businesses.
Corporate & Investment Bank
Corporate & Investment Bank is building on its leadership in carbon offsets and emissions trading as well as finance and advisory for clean energy companies and low carbon energy infrastructure.
We maintained our leading role in the international emissions trading market, being involved in more than 85 Clean Development Mechanism and Joint Implementation projects. These projects are expected to generate 215 million emission credits by the end 2012. One notable project was the purchase of Certified Emission Reductions from Henan Province in China that will help finance geothermal heat pump technology in up to 40 million square meters of real estate over five years. Energy Risk magazine recognized Deutsche Bank as “European Emissions House of the Year”.
Despite the challenging market and regulatory environment, we were active throughout the year in advising, arranging or financing nearly 3 gigawatts of renewable energy projects in North America, Europe and the Middle East. An example of our innovative financing was a non-recourse revolving construction finance facility that will allow US-based company SunEdison to expand to 1.1 gigawatts of solar projects across North America. We also played key roles in the first in a series of major wind farm deals in Québec, Canada by financing 373 megawatts of generation capacity - the project Seigneurie de Beaupré was named “PFI 2011 Americas Renewables Deal of the Year”. Deutsche Bank was also named “Best Renewable Energy Finance House - Europe” by Environmental Finance and Carbon Finance magazines for the second consecutive year.
Our ability to help clean-tech companies to raise capital saw several landmark deals over the past year. They included co-advising on the U.S.$ 2.3 billion sale of smart meter company Landis+Gyr to Toshiba and the sale of 60 % of Sunpower to Total for U.S.$ 1.3 billion. Our securities joint venture in China, Zhong De, completed the largest IPO on the Shanghai Stock Exchange with a U.S.$ 1.43 billion deal for Sinovel, one of the leading producers of wind power machinery.
Private Clients and Asset Management
We are integrating environmental, social and governance (ESG) issues in our asset management business. As of December 2011 we managed € 2.52 billion in ESG-related and climate change focused funds, further implemented the ESG policy for European funds and adopted ESG into the proxy voting policy in Germany.
Through these funds, we help finance sustainable energy investments to address climate change globally. Some of these funds also are targeted to improve living conditions in developing countries. We also invest directly in sustainable businesses through RREEF Capital Partners and RREEF Sustainable Advisors – both part of Asset Management’s alternatives investment platform. The two will make either public securities or private equity investments in sustainable and climate change-related projects and companies around the world. Launches in 2011 included the € 265 million European Energy Efficiency Fund, sponsored by the European Investment Bank, and the Africa Agriculture and Trade Investment Fund which has € 85 million to invest in enhancing the competitiveness of African export producers and manufacturers, and is sponsored by the German Government and Kreditanstalt für Wiederaufbau (KfW). These funds complement the Global Climate Partnership Fund launched in 2010, which made investments in 2011 in Europe, Asia and Latin America.
DB Advisors was named “Best ESG Asset Manager in Germany” by World Finance magazine, recognizing its leadership in integrating ESG strategies in investment decision making. New institutional product launches included ESG Emerging Markets External Debt and ESG Total Return AAA High Grade Fixed Income.
DWS Investments launched several new retail products, including two closed-end “green” funds. Furthermore it is enhancing consideration of ESG risks in the investment process, including several ESG training workshops and seminars for Asset Management staff in 2011.
Our over 2,800 retail branches worldwide also distribute green credit products and offer sustainable investment opportunities. Loans and credit lines allow private and business clients to finance energy efficient and renewable energy technologies as well as the purchase of low emission vehicles.
Minimizing our direct environmental impacts supports our business objectives by increasing energy efficiency and cutting costs. We also benefit by applying the knowledge gained in managing our own properties efficiently to our property investment activities.
We continued the process of reducing our carbon footprint by 20 % per annum. This policy has been in place since 2008 and will achieve carbon neutrality for our operations from 2013. Two-thirds of the energy used in our operations came from renewable sources in 2011 and we purchased 295,000 t carbon offsets to complete the 20 % emissions reduction.
Improved energy efficiency of our buildings is the main way to reduce costs and emissions. Our progress in this area is symbolized by the Deutsche Bank Towers in Frankfurt. We completed the move of Group Headquarters back into the refurbished towers, whose high environmental performance was confirmed by Platinum certification on the international LEED standard. The building’s energy consumption will be 55 % lower than previously and with a third of the energy from renewable sources. The US Green Building Council awarded Deutsche Bank its inaugural International Leadership Award, recognizing our industry-leading work in delivering LEED facilities around the world, our advances towards carbon neutrality and our investment in alternative energies and low-carbon technologies.