FRANKFURT, Dec 7 (Reuters) - Deutsche Bank on
Monday said it planned to join a small number of financial
institutions that link management pay to environmental, social
and governance-related (ESG) criteria.
Germany's largest bank said that from 2021 management
compensation would be tied to reaching targets on sustainable
finance investments, on the sustainability ratings it receives
from five leading ESG ratings agencies and on succeeding in
reducing the bank's own energy consumption.
Banks such as HSBC, BNP Paribas and
UniCredit also have varying models in place that link
pay to ESG, as more investors look to invest in companies that
perform better on ESG metrics.
It also comes as policymakers globally increasingly look to
banks to help to promote a transition to a low-carbon economy
and meet the goals of the Paris climate agreement.
"It is our ambition to be a leader on sustainability in the
financial sector, and contribute to an environmentally sound,
socially inclusive and well-governed world", Deutsche Bank Chief
Executive Christian Sewing said.
The bank did not disclose how much of management pay is
related to ESG. Banks such as BNP Paribas have tied around 20%
of variable pay to meeting ESG criteria.
Deutsche Bank has said that it plans investments in
sustainable financing worth more than 200 billion euros ($242.66
billion) by 2025, with more than 20 billion euros this year, and
to be carbon-neutral itself by 2025.
($1 = 0.8242 euros)
(Reporting by Arno Schuetze. Editing by Jane Merriman)
HSBC Holdings (HSBA)