In September 2018, DKB launched another sustainable refinancing programme for capital market products: a social bond programme. Therefore we can issue so-called social bonds. These are based on loans in the areas of social housing, public supply, health and care, education and research and inclusion. The detailed conditions of the programme are described in the Social Bond Framework.
DKB has been awarded an outstanding sustainability rating by the ESG Research & Rating Agency ISS-ESG. The grade "B-" currently represents the highest among all national and international commercial, state and regional banks within the peer group of DKB.
Since 2016, DKB has issued green bonds. The basis for this is DKB's loan portfolio in renewable energies - with a volume of around EUR 10 billion, it is one of the largest in Germany. DKB's green bonds are currently the best rated green bonds worldwide (Sustainability Bond Rating by ISS-ESG).
DKB has over 20 years’ experience in the renewables sector, building up a loan volume of some EUR 10 billion during this time – a volume which continues to increase. The portfolio consists mainly of funding for projects in the wind power, solar power, and bioenergy sectors in Germany.
Part of the portfolio has been refinanced through the DKB’s Green Bond programme.
DKB’s green bonds follow the Green Bond Principles and are based on four pillars:
DKB issued its first unsecured green bond in June 2016. The bond, with a volume of EUR 500 billion and a term of 5 years, was very well received by the market and signed by over 200 investing institutions.
The high sustainability of the green bond prompted sustainability rating agency oekom research to award the bond an “A” (excellent) rating – the highest rating it has ever awarded, out of approximately 250 green bonds that it has evaluated.
The bank detailed the long-term effects of the bond in its Green Bond Report, which was published in June 2017 for the first time.
DKB launched its second green bond programme in September 2017, underlining its aspiration to be a regular issuer of green bonds.
The Green Bond Pool underpinning the programme consists of some 200 loans used to finance wind power and solar power projects in Germany (onshore). The starting volume of this pool is almost EUR 900 billion, but this can be increased further over the duration of the programme.
In September 2018, the DKB published its social bond programme. Based on this, the DKB will soon be able to issue so-called social bonds, which are used to refinance loans with social added value. This makes it the first bank in Germany to have launched both a Green and Social Bond programme.
Details on the concept and the underlying social aspects can be found in the documents listed below:
DKB is committed to further developing the green bond market. To this end, we participate in events, dialogue with investors and business partners, and support the topic within various organisations.
We are also a member of the Green Bond Principles and work actively with the Social Bond Working Group as part of this membership.
DKB is committed to further developing the green bond market in a variety of ways. To this end, we participate in events, dialogue with investors and business partners, and support the topic within various organisations. We are a member of the Green Bond Principles, and as a result we are actively involved Social Bond Working Group, among other things.
The bank also invests in green bonds itself, as part of its own equity investment, which also contributes towards strengthening the green bond market.
Green bonds are interest-bearing securities whose issue proceeds are used to finance business models that promote sustainability such as energy-efficient buildings, public transport, hydropower, other forms of renewable energy and waste management. DKB's green bonds are only used to refinance solar and wind power projects.
Green bonds are a relatively new asset class. They differ from conventional bonds primarily in terms of the specific requirements governing the allocation of funds as well as applying special reporting rules.
DKB's main sources of refinancing are deposits from its customers, its Pfandbrief issues and its development loan business. Issuing green bonds gives DKB a further refinancing tool underpinned by one of the largest renewable energy portfolios in Germany and over 20 years of experience.
It is also a logical step in terms of sustainability as it allows the interests of green investors to be met while also delivering projects with a sound environmental or social purpose.
The funds contributed are only used to refinance loans in the German solar and wind power sector.
Yes. DKB will be reporting on the scope of the projects being refinanced, their environmental impact and other key indicators at least once a year and publishing its findings on its website.
DKB's green bonds are designed for institutional investors. They are issued in denominations of EUR 100,000.