Deutsche Bank AG (NYSE:DB) said it has tightened its fossil fuels policy, seeking to limit or fully cut its support to the oil, gas and coal sectors in the following years.
Financing for new oil and gas projects in the Arctic region, oil sands projects and fracking projects in countries with scarce waters supplies will halt, effective immediately. The German investment bank said it will review all of its existing business activities in the oil-and-gas sector by the end of 2020.
The bank’s global business activities in the coal mining sector will come to an end by 2025 at the latest, while new coal-fired power plants will no longer be financed.
The new fossil fuels policy also dictates how the bank intends to conduct business with energy companies that rely on coal for more than 50% of either capacity or generation output. Deutsche Bank said it will only offer future financing to those with “credible diversification plans”.
The bank’s relationship with coal-dependent energy companies in Europe and the US is up for a review by the end of 2020. The review process in Asia will start in 2022, with the bank recognising that the region’s transformation will take longer due to its high dependency on coal-based power.
Deutsche Bank also announced it will further beef up its due diligence process after signing the Equator Principles -- a risk management framework that applies strict environmental and social standards during project development and construction, including follow-up monitoring.
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