Deutsche Bank AG won’t move ahead with a plan to add restrictions on financing oil and gas, as it assesses the legal risks of doing so, according to its chief executive.
“The legal environment has changed, and we are currently analysing this in detail in order to minimise potential risks for the bank,” CEO Christian Sewing told shareholders at Deutsche Bank’s annual general meeting on Thursday.
At the same time, Sewing sought to reassure investors that Deutsche Bank isn’t backing away from its climate goals. Germany’s largest lender has “largely completed” an update of its guidelines for the oil and gas industry, which includes limits on the financing of oil sands, hydraulic fracking in certain geographies and Arctic exploration, he said. But the timeline of the update’s implementation is currently unclear, he said.
The finance industry is navigating a world in which banks and asset managers suspected of boycotting fossil fuels face legal retaliation in the US, where President Donald Trump has sought to bludgeon the pro-climate agenda of his predecessor. In the US, banks have responded by exiting climate alliances. In Europe, where the industry is subject to local pro-climate regulations, the response has been more nuanced.
“If we would discontinue the financing of CO2 intensive industries, we would miss our role in financing the transformation of energy systems,” Sewing said.
The overall message, however, “is clear,” he said. Since the middle of 2019, Deutsche Bank “has made sustainability a management priority and thus a central part of its strategy.”
Last year, Deutsche Bank backed out of 15 deals of the 817 it looked at based on environmental and social concerns, Sewing said. The bank’s “constantly growing knowledge of the management of physical and transition risks is decisive for our climate and environmental management,” he said.
“We remain committed to our sustainability goals,” which includes keeping its 2050 net zero target, Sewing said.
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