Q. How else do you think the pandemic has played into this?
HP: The pandemic has moved us closer to a stakeholder economy. There are more conversations now about the purpose of companies and we’re seeing ESG factors have a material effect on their relationships with all stakeholders. Furthermore, the pandemic has brought into sharp focus the fact that E, S and G are all interlinked, such as the social impact of pollution or the loss of biodiversity.
TD: Climate change is becoming increasingly visible with unprecedented forest fires and record-breaking temperatures in areas such as Siberia, and again the pandemic showed clearly our effect on the environment. More companies are now looking to invest in a recovery that is as green as possible as employees, consumers and regulators increasingly demand measures to combat climate change. But we’ve also seen an increased focus on the Social part of ESG, particularly as the pandemic has highlighted the importance of human health and wellbeing, and on the G because governance really feeds into resilience –risk management, supply chain planning, resilient revenue and funding models for example, are all part of good governance.
Q. What does all this mean for corporate trust service providers?
HP: Sponsors and investors that are focused on ESG look to partner with those with the same engagement in sustainable finance. So, we regard ourselves as a bank as a strategic partner for our clients in the economy’s transition to sustainable development and climate targets. Deutsche Bank has defined sustainability as one of its core strategic priorities, with a particular focus on sustainable finance. We have quantified a target of having over €200 billion in Sustainable Finance by 2025, and devised a framework for those activities that is aligned with regulations. We issued our inaugural green bond in early 2020 and we’ve sought to empower every employee to work through what ESG means for clients.
That means our trust and agency service can support clients end-to-end in sustainable finance across a range of asset classes, including water, clean energy and clean tech.
TD: In the renewables space alone, our project finance agency service teams are supporting over 20 GW of capacity globally.
For example, we worked in the past few months in roles ranging from account bank collateral agent, to facility agent, administrative agent and inter creditor agent on the financial closing of the construction financings for BayWa r.e. 250MW Amadeus wind farm in Texas and X-Elio 58MW solar voltaic plant in Chile as well as the green bond refinancing of CPP Investments’ minority interest in the Hohe See and Albatros 609MW offshore wind farms in Germany Just these three projects are expected to keep close to 2.65 million metric tons of carbon dioxide from being released into the air each year and generate enough power to meet the demand of 800,000 local homes.
And, back to the point that Henrike just made about partnerships between organisations with the same attitude towards sustainability, for all these projects we worked in close collaboration with sponsors and developers with high ESG standards in the renewable energy space.