Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Social responsibility
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions by approximately 72% since 2005 (though 2011 showed an increase compared to 2010)
• Achieved climate neutrality at Munich offices since 2008, expanding to Nuremberg and Dornach in 2010
• Reduced energy and water consumption
• Reduced paper consumption
• Used certified hydroelectric power for electricity at most German locations

Social Achievements

• Launched Corporate Volunteering scheme, providing 500 working days per year for employee volunteering
• Supported various charitable projects (Sternstunden, Children’s Palliative Care Centre, etc.)
• Implemented health management programs, keeping sickness rate below four percent
• Improved work/life balance with various part-time options and teleworking
• Continued cross-mentoring program to support women in management positions

Governance Achievements

• Introduced a Code of Conduct in May 2011
• Implemented a Compliance Management System
• Strengthened corporate governance principles
• Improved investor protection measures
• Actively engaged in dialogue with stakeholders

Climate Goals & Targets

Environmental Challenges

• Ongoing adverse impact of the financial markets crisis and European sovereign debt crisis
• Wealth of legal and regulatory changes
• Need to adjust corporate strategy and business focus
• Increase in business travel leading to higher greenhouse gas emissions

Mitigation Strategies

• Developed a focused business model
• Implemented restructuring program
• Focused on business with corporate and real estate customers and savings banks
• Implemented a comprehensive climate protection strategy (avoidance, substitution, offsetting)
• Increased use of video conferencing and conference calls to reduce business travel

Supply Chain Management

Supplier Audits: Regular supplier audits; first internal audits conducted in 2011 at selected service providers

Responsible Procurement

• Sustainability agreements with suppliers and external service providers (minimum environmental, ethical, and social requirements)
• Preference given to regional suppliers, products with environmental certifications, and services from non-profit organizations

Climate-Related Risks & Opportunities

Physical Risks

• Climate change impacts on various economic sectors in Bavaria

Transition Risks

• Challenges related to the transition to renewable energy (reliability, affordability)

Opportunities

• Financing projects and companies in renewable energy and energy efficiency

Reporting Standards

Frameworks Used: GRI Guidelines, Version 3.0

Certifications: EMAS, ISO 14001

Third-party Assurance: Intechnica Cert GmbH (for environmental data, covering 91% of employees)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Sustainable investment products (DKB Ökofonds, DKB Zukunftsfonds, BayernInvest Aktien Sustainable Value Europa Fonds)
• Donation Bond Campaign
• Green bonds

Awards & Recognition

• Top employer in Germany in 2011 (CRF)
• Honored by the Bavarian State Ministry for the Environment and Health for long-standing involvement in the Environmental Pact

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Climate protection
• Sustainable financial solutions
• Human resources
• Integrity
• Corporate citizenship

Environmental Achievements

• Munich offices climate-neutral since 2008; Dornach and Nuremberg sites climate-neutral since 2010.
• Reduced greenhouse gas emissions by 72% since 2005 (though increased slightly in 2011-2013 due to data quality improvements and increased business travel).
• Extended contract with 100% emissions-free electricity supplier NaturEnergie until 2015.
• Installed additional photovoltaic facility.

Social Achievements

• Voted one of the top employers in Germany in 2013.
• Implemented measures to improve work/life balance, including part-time options, teleworking, and childcare support.
• Continued cross-mentoring program to increase women in management.
• Implemented amicable staff reduction plan in cooperation with the Staff Council.

Governance Achievements

• Updated corporate governance principles to reflect changes in Bayerische Landesbank Act, BayernLB’s Statutes, and German Banking Act.
• Implemented Code of Conduct covering legal, ethical, and responsible actions.
• Established compliance management system with prevention, operations, and investigation/remediation modules.
• Improved complaint management process.

Climate Goals & Targets

Environmental Challenges

• Increased greenhouse gas emissions in 2011-2013 due to improved data quality, harsh winters, and increased business travel.
• Need to reduce staff by 450-500 by 2017 due to cost-cutting program.
• Maintaining trust in the banking industry after the financial crisis.

Mitigation Strategies

• Developed comprehensive climate protection strategy (avoidance, substitution, offsetting).
• Implemented cost-cutting program with focus on overhead expenses and amicable staff reductions.
• Open communication with stakeholders, including regular reporting and dialogue.

Supply Chain Management

Supplier Audits: Regular audits conducted since 2011, predominantly by telephone.

Responsible Procurement

• Sustainability agreements with all new and existing suppliers since 2010.
• Preference given to regional suppliers, products with environmental certifications, and services from institutions for the disabled.

Climate-Related Risks & Opportunities

Opportunities

• Financing projects in renewable energy sector.

Reporting Standards

Frameworks Used: GRI Guidelines, Version 3.0

Certifications: EMAS, ISO 14001

Sustainable Products & Innovation

• Donation Bond Campaign.
• DKB ecofund.
• DKB future fund.

Awards & Recognition

• Top employer in Germany (2013)
• German Education Prize (2013)

Environmental Metrics

ESG Focus Areas

• Integrity
• Employees
• Customers
• Sustainable Financial Solutions
• Environment
• Society

Environmental Achievements

• Reduced electricity consumption by 3% year-on-year (from 13,510 to 13,156 MWh) despite expansion of the area under consideration.
• Achieved climate neutrality at its Munich site since 2008 and Nuremberg site since 2010.
• Reduced paper consumption per employee and per PC workstation to below 2010 levels.
• Reduced water consumption by around 39 percent between 2008 and 2015.

Social Achievements

• Increased the proportion of women in the total workforce to 50% and 46.2% at BayernLB Bank Germany.
• Implemented measures to promote the employment and equality of women, including seminars and cross-mentoring programs.
• Spent around EUR 560,000 on donations for charitable and non-profit organizations.
• 203 employees carried out 233 Corporate Volunteering assignments, contributing 1,519.82 hours.

Governance Achievements

• Awarded oekom prime status by oekom research for BayernLB Group, BayernLabo, and DKB.
• Maintained full compliance with relevant legal and regulatory requirements.
• Actively dealt with reputational risks through the definition and continuous further development of guidelines and processes.

Climate Goals & Targets

Environmental Challenges

• Increased regulatory requirements for banks.
• Allegations of illegal and illegitimate transactions in the banking sector.
• Demographic change affecting both employees and customers.
• Digitization of banking processes and increasing data protection requirements.
• Need to implement cost-cutting programs.
• Maintaining and promoting the health of workers.

Mitigation Strategies

• Established Group Compliance as a separate area responsible for compliance and reputational risk management.
• Implemented measures to attract and retain qualified employees, including staff development programs.
• Developed and implemented a comprehensive data protection management system.
• Implemented an integrated health management system, including company doctors, nurses, and health management training.

Supply Chain Management

Supplier Audits: Four audits each in 2015/16

Responsible Procurement

• Sustainability agreement with suppliers and external service providers.
• Preference given to products with recognised environmental labels (e.g., Blue Angel).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4

Certifications: EMAS, ISO 14001

UN Sustainable Development Goals

• 1, 4, 5, 7, 8, 9, 10, 12, 13, 16

BayernLB identified 10 SDGs to which it could make a particular contribution.

Sustainable Products & Innovation

• Green bonds
• DKB Ökofonds (DKB eco fund)
• DKB Zukunftsfonds (DKB future fund)
• Donation bonds

Awards & Recognition

• oekom prime status

Environmental Metrics

ESG Focus Areas

• Sustainable finance solutions
• Handling of environmental and social risks
• Combating corruption and bribery
• Customer satisfaction
• Data protection & data security
• Digitalisation
• Employee development
• Diversity & equal opportunities
• Health management
• Sustainable procurement
• Social commitment & dialogue
• Operational environment management
• Contribution to the regulatory framework

Environmental Achievements

• Climate-neutral at its Munich location since 2008, and at all other locations in Germany since 2015
• Reduced building energy consumption by approximately 10% due to the coronavirus pandemic.
• Reduced paper consumption by 32% compared to 2019.

Social Achievements

• Continued employee development programs, including talent management and in-service training.
• Implemented measures to reconcile work and family life, including flexible working time models and home office options.
• Successfully implemented an occupational integration management scheme.

Governance Achievements

• Established a Sustainability Executive Unit in 2020, reporting directly to the Chairman of the Board of Management.
• Implemented a whistleblowing system.
• Adopted the Principles for Responsible Banking (PRB) in September 2021.

Climate Goals & Targets

Environmental Challenges

• Significant reduction in personnel due to strategic realignment of the business model.
• Ongoing major challenges facing the entire banking sector.
• Coronavirus pandemic and its impact on business operations and employee well-being.

Mitigation Strategies

• Severance pay, early retirement, and part-time work for older employees; measures to qualify employees for other tasks.
• Focus on areas of the business with strong growth prospects; cost base reduction.
• Intensive change measures to ensure operational stability and maintain employee motivation; virtual support services; home office options; vaccination offer.

Supply Chain Management

Supplier Audits: 7 in 2020

Responsible Procurement

• Sustainability Agreement for Suppliers and External Service Providers; compliance with ecological and social standards, including ILO core labor standards.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Expansion of sustainable finance solutions; financing of renewable energy projects.

Reporting Standards

Frameworks Used: GRI

Certifications: EMAS, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17

The report highlights how BayernLB's initiatives contribute to various UN SDGs.

Sustainable Products & Innovation

• Green and social bonds; ESG-linked loans; sustainable funds.

Awards & Recognition

• Top 10 ranking in ISS-ESG sustainability rating; oekom prime status.

Environmental Metrics

ESG Focus Areas

• Sustainable finance solutions
• Handling of environmental and social risks
• Combating corruption and bribery
• Customer satisfaction
• Data protection & data security
• Digitalization
• Employee development
• Diversity & equal opportunities
• Health management
• Sustainable procurement
• Social commitment & dialogue
• Operational environment management
• Contribution to the regulatory framework

Environmental Achievements

• Climate-neutral at Munich location since 2008, all other German locations since 2015
• Reduced net carbon footprint by 30% compared to 2020
• Reduced paper consumption by 37% compared to 2020
• Increased renewable energy share in building energy consumption to 46%

Social Achievements

• Implemented an HR and diversity strategy
• Continued cross-mentoring program
• Maintained health rate at a minimum of 95%
• Implemented measures to integrate employees' perspectives into the transformation process

Governance Achievements

• Implemented a Sustainability Programme to operationalize the Sustainability Strategy
• Joined UN Global Compact and Principles for Responsible Banking
• Improved transparency in compliance management

Climate Goals & Targets

Environmental Challenges

• Significant reduction in staff (940 FTEs)
• Ongoing major challenges facing the banking sector
• Data limitations due to the pandemic and home office work

Mitigation Strategies

• Socially responsible framework for staff reduction (exclusion of redundancies, negotiated personnel management instruments)
• Intensive change measures to ensure operational stability and employee motivation
• Intensified communication and transparency regarding the transformation process
• Use of the VfU tool for more accurate CO2 calculation

Supply Chain Management

Supplier Audits: At least five key suppliers audited annually

Responsible Procurement

• Sustainability Agreement for Suppliers and External Service Providers
• Compliance with environmental and social standards, including ILO core labor standards

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and services, sustainable finance solutions

Reporting Standards

Frameworks Used: GRI Standards: Comprehensive

Certifications: EMAS, ISO 14001

Third-party Assurance: intecnica (Environmental auditor)

UN Sustainable Development Goals

• SDG 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17

BayernLB's initiatives contribute to these goals through sustainable finance solutions, environmental protection, social commitment, and responsible governance.

Sustainable Products & Innovation

• Green & Social Bonds
• Corporate Schuldschein loans
• Sustainable funds
• ESG-linked loans
• Green loans

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Sustainability
• Climate Change
• Decarbonization

Environmental Achievements

• Developed a Sustainable Lending Framework
• Expanded portfolio of sustainable funding instruments
• Extended Sustainable Financing Framework to include rail transport and real estate
• DKB financing volume of over EUR 12 billion in renewable energy

Social Achievements

• Provided EUR 600,000 for humanitarian aid in Ukraine
• Employee volunteering initiatives in support of Ukraine
• Implemented a more flexible workspace model
• Launched Workation program for employees

Governance Achievements

• Completed the Fokus 2024 staff reduction programme
• Implemented efficiency and cost-cutting measures
• Published combined separate non-financial report

Climate Goals & Targets

Environmental Challenges

• War in Ukraine
• High energy prices
• Supply chain disruptions
• Surging inflation
• Sudden jump in interest rates
• Geopolitical challenges
• Economic weakness
• High levels of inflation

Mitigation Strategies

• Evaluated impact of war in Ukraine and took appropriate measures in risk management
• Reduced net credit volume in Russia, Ukraine, and Belarus
• Implemented cost-cutting measures
• Expanded portfolio of sustainable refinancing instruments
• Implemented ESG Assessment system to identify sustainability risks
• Developed methodology for measuring financed emissions
• Working on increasing taxonomy-aligned business

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Regulatory changes
• Market shifts
• Changes in consumer and/or investor behavior

Opportunities

• Development of energy-efficient products
• Growth in renewable energy financing

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC)

Sustainable Products & Innovation

• Sustainable financing solutions
• Green, social, and sustainable bonds
• Schuldschein note loans

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Human Rights
• Economic Performance

Environmental Achievements

• Reduced CO2 footprint in own operations by 6% compared to the previous year.
• Achieved 52% renewable energy share in building energy consumption.
• Implemented modernization measures combined with energy measures at Brienner Straße 16 Munich.

Social Achievements

• Appointment of a female member of the Board of Management.
• Implementation of a human resources and diversity strategy.
• Continuation of cross-mentoring program and "Role Models" concept.

Governance Achievements

• Establishment of a Sustainability Board below Board of Management level.
• Improved transparency on compliance management.
• Intensification of dialogue with principled investors.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions (not explicitly stated, but implied through discussion of supplier audits and sustainability agreements)
• Meeting increasing stakeholder expectations and regulatory requirements regarding ESG.
• Balancing competing interests and expectations of diverse stakeholder groups.

Mitigation Strategies

• Developed alternative sourcing strategies (implied through supplier audits and sustainability agreements)
• Implemented a climate alignment methodology and expanded sustainability reporting system.
• Engaged in active dialogue with stakeholders, including rating agencies and investors.

Supply Chain Management

Supplier Audits: At least five key suppliers audited annually.

Responsible Procurement

• Sustainability Agreement for Suppliers and External Service Providers
• Preference for products with recognized environmental labels (e.g., Blue Angel).

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Financing of renewable energy projects

Reporting Standards

Frameworks Used: GRI Standards 2021

Certifications: EMAS, ISO 14001 (implied)

Third-party Assurance: Intechnica (partial assurance)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 5 (Gender Equality)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 12 (Responsible Consumption and Production)
• Goal 15 (Life on Land)
• Goal 16 (Peace, Justice and Strong Institutions)
• Goal 17 (Partnerships for the Goals)

Various initiatives contribute to these goals; specific examples are provided throughout the report.

Sustainable Products & Innovation

• Green loans
• Green bonds
• Social bonds
• Sustainability-linked loans
• Voluntary Carbon Market (VCM) product

Awards & Recognition

• Gold Certificate from Umwelt + Klimapakt Bayern

Environmental Metrics

ESG Focus Areas

• Sustainability

Climate Goals & Targets

Environmental Challenges

• Challenges on real estate markets
• Difficult situation on the real estate markets
• Tough lending criteria and economic headwinds
• Deterioration in borrower ratings
• Fraught geopolitical situation, high inflation and challenges on the real estate markets
• Still difficult situation on the real estate markets
• Gloomier economic environment in the eurozone, especially in Germany
• Higher mortgage interest rates
• Bleak economic situation and the uncertainty concerning future demand for office space
• Weak consumer sentiment
• Deterioration in credit quality
• Further price corrections
• Ongoing wars in Israel and Ukraine
• Uncertainty over the future direction of the risk factors
• Increased negative impact from risk provisions
• Higher costs for BayernLB’s project portfolio

Mitigation Strategies

• Setting aside risk provisions
• Active risk management
• Adequate risk-bearing capacity
• Good supply of liquidity
• Refined internal early warning system for real estate
• Extraordinary market value checks
• Enhanced management reporting on commercial real estate
• Deep dives into the US portfolio and into residential and commercial development projects
• Optimisation of duration periods in market risk from pensions
• Secured stable refinancing through deposits
• Project KITT (consolidation of IT Trading)
• ESG risk inventory
• ESG risk management
• ESG assessment tool for evaluation of sustainability risks and opportunities
• RSU scoring tool
• Post-model adjustment (PMA)
• Reduction in the PMA
• Adequate PMA portfolio
• Disciplined risk and cost management
• Selective, risk-oriented management of new business opportunities
• Targeted tapping of the energy sector
• Broadly diversified portfolio with a high proportion of the “residential ” asset class
• Project DORA

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, CSRD, EU Taxonomy Regulation

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft