BayernLB

RATING

SECTOR

Banking

WEBSITE

CONTACT

Brienner Straße 18, 80333 Munich, Germany

Tel: +49 89 2171-01
Fax: +49 89 2171-23579

STOCK EXCHANGE

LISTING

  • # 7 largest financial institution in Germany

EMPLOYEES

8, 316

SUSTAINABILITY TEAM SPECIALIST

Astrid Bontzek

AWARDS

CONTENT SOURCE

FURTHER READING

Report created by

Madeleine Bruce 

 

BayernLB

SECTIONS :  Sustainability •  Targets    Evaluation  •  Key Points  •  Overview

 

Company Activity

Bayerische Landesbank (BayernLB) is a publicly-managed bank in Munich, Germany. It is one of the six German Landesbanken, which are government-run banking institutions nationwide. The bank was officially founded in 1972 after the merging of two prior banking institutions, the Bayerische Gemeindebank and  the Bayerische Landesbodenkreditanstalt. 

BayernLB Group offers private and commercial customers a wide range of financial services in private, industrial, foreign, and investment businesses. Such services include loans, asset management, securities trading, and mid and long-term bond issuance. The bank is also occasionally involved in retail banking as well.

Company Sustainability Activity

BayernLB’s sustainability strategy focuses primarily on the issue of climate change and consists of three components.

The first, ‘Avoidance’ represents the bank’s continuing avoidance of operational CO2 emissions through active energy and resources management.

The second, ‘Substitution’, refers to the substitution of BayernLB’s electricity needs using certified hydropower since 2007.

The third, ‘Compensation’, represents the bank’s decision to compensate for “unavoidable” resource uses/CO2 emissions with a climate-neutral strategy to paper usage, specifically within company operations. 

BayernLB is also active in the increasingly demanding sustainable investments sector. With “Value-Sustainability-Funds” and a “Value-Sustainability-Certificate”. BayernLB offers its customers the possibility of bringing socio-political meaning into harmony with superior return expectations.

Lastly, BayernLB focuses on the financing of renewable energies in its fight against climate change. The bank has positioned itself very well in this field, as BayernLB, together with the Kreissparkasse Munich Starnberg, has taken over the financing of the largest geothermal project in Germany in Unterhaching.

Additionally, BayernLB undertakes climate protection projects which are in accordance with the Kyoto Protocol;  these projects are related to the reduction of greenhouse gas emissions.

Highlights

  • Implemented green policy through a structured management system accredited under the Environmental Management and Audit Scheme (EMAS) Ordinance since 1999
  • Responsibility for sustainability management was transferred from a decentralised support unit to what is currently the “Group Development & Transformation Division” which reports directly to the CEO
  • Regarding the ‘Avoidance’ piece of climate strategy, a wide variety of measures have been initiated and implemented such as the use of energy-efficient devices or the upgrading of the energy efficiency of buildings
  • Since 1998 BayernLB’s Brienner Strasse location has been using power from a photovoltaic (PV) plant installed at one of its buildings in Munich and a second PV plant has since been added
    • The remaining energy needs of the Munich site are covered by electricity from 100% certified hydroelectric power
  • Key performance indicators and greenhouse gas emissions (GHG) are calculated by BayernLB’s metrics system from the Association for Environmental Management and Sustainability at Financial Institutions (Verein für Umweltmanagement und Nachhaltigkeit in Finanzinstituten – VfU) in the 2018 version 
  • Reducing the impact on the environment from commuting by concluding an agreement with the Munich public transport association Münchener Verkehrs- und Tarifverbund (MVV) and the Deutsche Bahn railway securing employees reduced-price tickets 
  • Observation of the World Bank’s Environmental and Social Standards in all relevant financing transactions since 2004; standards include criteria for respect of human rights, protection of indigenous peoples, biodiversity, and any other company stakeholders
  • Decrease in absolute greenhouse gas emissions 
 

Targets

GHG Emissions/ Company Travel:

  • Maintain 100% renewable energy at Munich location using certified hydroelectric power stations on the High Rhine
  • Continue to cover the electricity requirements of buildings exclusively from renewable energy sources through long-term contracts 
  • Decrease company travel emissions (especially that of air travel), after 2018 sharp increase
  • Decrease Scope 3 CO2 emissions

Paper Consumption

  • Stabilise relative paper consumption per employee/PC workstation to the 2010 level by next year
  • Switch major financial publications, such as the annual report or the HR report, to electronic form
  • Reduce the number of office printers available for use and replacing some of them with inkjet printers, thereby cutting power consumption and fine dust pollution

Energy Consumption

  • Stabilise power consumption at 13,000 MWh within next year 
  • Overall decrease in heating and electricity use in locations (number not specified)

Water Consumption

  • Reduce excess water usage (number not specified) 

Waste 

  • Dispose of all waste fractions in an environmentally-friendly way (no definition of this provided) 
  • Increase diversion of operational waste from landfill 

Sustainable Investments

  • Continue to increase sustainable investment products for retail and institutional investors (number not specified)
  • Continue to finance companies and projects to address societal challenges such as climate change and the energy transition
  • Further intensify the Green Finance Initiative
  • Defund/decrease investments in fossil fuel-producing firms and companies

Progress

GHG Emissions/ Company Travel

  • 3 part Climate Strategy for reducing emissions and aiding climate mitigation 
  • Reduction of 415 tonnes of CO2 emissions or 6.5% of total emissions from the previous year, over the 2017 year
  • Continued use of hydroelectric power stations to power Munich offices 
  • Road journeys were further reduced in 2018 
  • Staff provided with the technical infrastructure to hold video conferences and conference calls to avoid unnecessary travel
  • Since 1 April 2013, the Bank has participated in carbon-free travel by train, i.e. since 1 April 2013, all BayernLB employees can travel as bahn.corporate customers on long-distance trains using 100 percent green energy

Paper Consumption

  • Paper consumption at the Bank has appeared to rise sharply in recent years but is slowly returning to 2016/2017 levels
  • All paper (fresh fibre or recycled) used in BayernLB is now either “Blue Angel”, FSC or Ecolabel-certified
  • The goal of cutting absolute paper consumption by 10% from the 2013 level was achieved and significantly exceeded despite the changed basis for the calculation
  • Restricting paper use to only one type at the beginning of 2012, so that a wide variety of printing errors could be avoided and hence reducing paper waste
  • The company reports that there exists no further potential for significantly reducing paper consumption over the next few years but BayernLB is consulting the help of the “New Work – Work 4.0”  platform, a programme designed to lead a further reduction in paper consumption through increased use of digitalisation

Energy Consumption

  • A 4% reduction (487 MWh) of energy use was conducted  from the previous year
  • The objective of stabilising power consumption at 13,000 MWh was achieved
  • Power consumption at the Brienner Strasse 18 site was down by around 422 MWh in 2018 as compared with the 2016 figure

Water Consumption

  • Water consumption in 2018 stood at 57,174 m3 – a 758 m3, or 1.48%, increase from 2017
  • Drinking water utilisation went down by 166 m3 – from 29,770 m3 to 29,604 m3
  • Above average water consumption was recorded at three operational locations

Waste

  • BayernLB’s volume of waste in 2018 totaled around 887 tonnes, an increase of 73.3 tonnes or 8.8 percent on the previous year. 
  • The amount waste destined for recovery/recycling increased 
  • Construction-related landfill waste increased as a by-product of renovation work done on the canteen/kitchen area at the Bank’s head office in 2018

Sustainable Investments

  • Continuance of ‘sustainable investing’ and in environmentally-friendly companies (no list of which companies provided)
  • The bank is currently conducting a review with regard to its nuclear-fossil fuel policies, including the incorporation of the value chain

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

BayernLB does not clearly align with specific Sustainable Development Goals. Therefore, the Impakter Index team aligns current company-wide sustainability initiatives with the UN Sustainable Development Goals in the following section.

SDG 8: Decent Work and Economic Growth

  • BayernLB maintains a stable operating performance and provides its customers with a high number of subsidized loans
  • To date, the bank posted a good profit before taxes of €158 million in the first half of 2020 despite increased risk provisions and challenges in connection with the coronavirus pandemic
  • BayernLB’s 2020 net interest income was on par with 2019’s figures
  • Despite necessary employment terminations, cuts were carried out in a socially responsible manner in addition to redundancies being ruled out until autumn 2022
  • The company has restated continuously they are expanding their involvement and/or investments with sustainable organisations  

SDG 12: Responsible Consumption and Production

  • BayernLB’s use of hydroelectric power shows commitment to responsible ways of consuming energy
  • The company’s targets to reduce paper and landfill waste also follows in line with SDG 12 (Responsible Consumption and Production)
  • BayernLB has installed more eco-friendly infrastructure such as lighting and cooling fixtures in their offices 

SDG 13: Climate Action

  • BayernLB has been climate-neutral at its Munich site since 2008
  • BayernLB seeks to offset the CO2 emissions caused by the unavoidable use of resources 
  • BayernLB is actively working to reduce their overall GHG emission levels 
 

Evaluation

Upon first glance, BayernLB appears to be very committed to sustainable objectives. There is no doubt that sustainability is a priority for the publicly-managed German bank.

The company prides itself on its Climate Strategy, which outlines in three components how BayernLB is tackling the issue of climate change and monitoring its emission levels. The company also very clearly makes an effort to be involved in sustainable investment/funding deals. 

Internally, BayernLB produces direct action through reducing their paper consumption by making more digital decisions; this is the same case for reducing company travel and the Scope 3 emissions produced by such. 

However, despite these stats, BayernLB has been linked to several “Dodgy Deals“, or deals that indicate the bank currently or in the past has financed actions/organizations that are harmful to the environment or society in some way. While the company does show small progress of rectifying such deals, there still exist projects that fit this negative criterion. Such are, for example, the Mochovce nuclear power plant (units 3 & 4) in Slovakia and Mining in Goa/ Sesa Goa India. Other damaging companies BayernLB is known to finance/be associated with include Vedanta Resources as well as SUEK by Russian Federation

Additionally, the sustainability information available has not been updated for the last year, as all stats in this index report are based on the BayernLB Environmental Statement 2019. And within the said statement, there is little evidence of certificates, awards, and specified targets. The company actually cites they use a metric system to calculate “Key Performance Indicators” but yet fail to disclose them fully. 

However, the transparency and accountability of the bank is admirable. The company certainly holds itself to high standards but several of the goals/targets (when actually specified) were not reached and various forms of consumption were actually increased as opposed to decreased. 

For the extensive reasons listed here, BayernLB has been rated a C (mediocre) on the Impakter Index

Analyst Outlook: Negative

Given that sustainability/CSR takes up a decent part of the company’s website, it is unfair to say that BayernLB is an unsustainable institution. There exists promising evidence that the German bank prioritizes sustainable objectives, as they demonstrate in their commitments to combating climate change and increasing usage of renewable energy. 

However, the company’s inability to update its sustainability information and specify the information they do provide is very problematic. Further, the bank mentions its alignment with the SDGs (but one time in their BayernLB Environmental Statement 2019) and yet never specifies which ones. 

Lastly, the aforementioned acts coupled with very bad press (association with/funding of unsustainable organizations) could indicate evidence of greenwashing, although this is not certain.  Overall, BayernLB should strive to do better in the coming years in all areas of its suitability protocols. Thus, a C grade is warranted, if not generous for this institution. 

Key Points

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