Strategy

We are working to establish a uniform understanding of sustainability throughout the BayernLB Group. With our Group mission statement, we define a clear set of goals for the entire Group and its Group companies. The Group Sustainability Guidelines, in turn, set out the principles of BayernLB Group's sustainability strategy in concrete terms and are thus an expression of our sustainability-oriented business model.

Focus of BayernLB's sustainability strategy at a glance

• Economic, social and environmental development
• Faithfulness to the principles of sustainability in all business processes
• Compliance with regulatory requirements

By taking an unequivocal stance and setting standards, we create a binding framework for action along the entire value chain.

These Sustainability Guidelines apply for the following equity interests:

• Bayerische Landesbank Anstalt des öffentlichen Rechts (BayernLB) incl. Bayerische Landesbodenkreditanstalt (Labo) as parent company
• Deutsche Kreditbank Aktiengesellschaft (DKB) sub-group
• BayernInvest Kapitalverwaltungsgesellschaft mbH (BayernInvest)
• Real I.S. AG Gesellschaft für Immobilien Assetmanagement (Real I.S.) sub-group

They are underpinned by the proportionality and “comply or explain” approaches.

Our shared understanding of sustainability within the BayernLB Group rests on:

• the 17 global Sustainable Development Goals (SDGs) adopted by the United Nations
• the climate goals of the Paris Agreement
• the Bavarian Sustainability Strategy
• the German government’s Sustainable Development Strategy
• the goals and standards of the EU Taxonomy

With our sustainability strategy, we are forging ahead with our stricter focus on sustainable issues, which is a core feature of our extensive transformation programme. This applies to the Bank’s own operations, which have been climate neutral at all our German sites since 2015, and to our customer business.

Milestone plan for transitioning the customer portfolio to a sustainable approach

We have established a milestone plan for the next few years with a view to transforming our customer portfolio. First of all we intend to significantly increase the share of ESG-compliant financing in our portfolio by 2023 compared to the figures for 2020 (bottom-up approach). We will achieve this by increasing the sustainable impact, primarily in accordance with the EU Taxonomy, and by developing adequate risk management with the goal of establishing a well diversified and manageable ESG risk profile.

We also take into account carbon emissions. Any financing and investments the Bank enters into whose term extends past 2040 must comply with the CO² emissions assigned in the German Climate Change Act (Klimaschutzgesetz - KSG). This approach incorporates the climate goals of the German government, the EU and the goals of the Free State of Bavaria. At the same time, we are clearly committed to the Paris Agreement on Climate Protection and as such we aim to achieve a climate-neutral portfolio before 2050.

ESG assessment for sustainable further ongoing development

In addition, BayernLB has set up an ESG Assessment system. This enables sustainability risks and the positive impact of financing on the achievement of climate and sustainability goals in the portfolio to be identified at an advanced level. It also takes into account the requirements of the EU Taxonomy Regulation. BayernLB expects the ESG Assessment to provide information for managing and developing the portfolio and dynamically developing sustainable capital market business.

Strategic partner for sustainable finance and sustainable transformation processes

We serve our customers as a strategic partner for sustainable finance. We place a particular focus on supporting our clients in financing the transformation of their business models, processes and products under the auspices of decarbonisation. We are also focusing on refining our range of products and services, including green bonds and social bonds, corporate Schuldschein notes loans and sustainable funds.

BayernLB has been a signatory to the United Nations Environmental Program Finance Initiative, UNEP FI for short, established in 1992, for over 25 years. With this voluntary commitment, we have staunchly supported the integration of environmental protection into the services of the financial sector for many years. Based on the UNEP FI’s environmental guidelines, the Bank passed an environmental policy, which has since been the basis for all its measures to improve environmental performance.

As a logical next step, we also signed up to the Principles for Responsible Banking (PRB) in September 2021. This voluntary initiative was created in 2019 by member banks of the UNEP FI. With this move, we clearly demonstrate our high commitment to enshrining sustainability aspects in our business strategy.

BayernLB has implemented a sustainability programme to operationalise the objectives of the sustainability strategy, comprising targets and measures for all relevant areas. The sustainability programme is therefore a key tool to advance BayernLB's sustainability performance, because it designates objectives, measures and a deadline by which the objectives are to be achieved. In addition, objective monitoring is used to describe the extent to which the goals formulated in the current sustainability programme have already been implemented.