Deutsche to halt coal financing by 2025
Deutsche Bank said it plans to stop funding activities in coal mining by 2025 and immediately stop financing oil and gas projects in the Arctic region as part of a revised sustainability strategy.
Deutsche said on Monday it has tightened its fossil fuels policy with a new framework for business activities involving oil, gas and coal. The revised policy covers financing and all capital market transactions.
In oil and gas, it will no longer finance new projects in the Arctic region or oil sand projects and will stop financing projects that use hydraulic fracturing in countries with scarce water supplies. It plans to review all activities across the sector by the end of this year, with the aim of reducing its activities.
In coal power, it will review by the end of this year all activities in Europe and the US and clients' plans to diversify. It will start reviewing activities in Asia in 2022 - later due to the region’s high dependency on coal power. Deutsche said it will not finance any new coal-fired power plants, and set guidelines on dealing with businesses that are more than 50% dependent on coal power - and only offer them financing "if they present credible diversification plans."
Other banks are making similar moves on coal power to show they are taking action against global warming. A handful of European banks, including ING, BNP Paribas, Credit Agricole and Societe Generale, have committed to reducing their lending to coal-burning power producers down to zero or almost zero over coming years.
Deutsche previously set a target of reducing its loan exposures to coal-fired power plants by 20%, and said it had achieved that by the end of 2019.
The German bank said it had also signed the Equator Principles, the risk management framework for assessing environmental and social risks of financing projects.
Deutsche set out sustainability targets in May and issued its first own green bond in June.