Deutsche Bank, one of two European banks allowed to tap the Chinese central bank’s green finance funding pool, is seeking to form partnerships with institutions in China to drive transactions that meet European climate standards.
The German bank aims to help Chinese companies selling to the European market meet standards for sustainability and climate transition, the most stringent in the world, said Kamran Khan, the bank’s head of environment, social and governance (ESG) for Asia-Pacific.
“Deutsche Bank is looking to partner with local Chinese financial institutions so that they can lead on the financing side, while Deutsche Bank can lead on the advisory side,” he told the Post via video link from Singapore on the sidelines of a conference on Tuesday.
“This way the Chinese companies can show that their products are sustainably procured and manufactured, with key performance indicators built into their financing that allow them to substantiate those claims.”
The People’s Bank of China, China’s central bank, has allowed Deutsche Bank and Societe Generale to tap into the green finance scheme offered to Chinese commercial banks in 2021. Photo: Reuters
Such advisory service is attractive to Chinese clients, and Deutsche Bank will also seek to support them with their foreign exchange and other cross-border transactions, he said.
The scheme offers subsidised loans at an interest rate of 1.75 per cent, equivalent to a discount of 72 basis points in the funding cost of green loans, according to a China International Capital Corporation report.
Advertisement
It allows major banks to first lend to qualified carbon-reduction projects at the prime lending rate. The banks can then borrow up to 60 per cent of the project loan principal from the PBOC at a cheaper interest rate.
Last week, Deutsche Bank published its climate transition plan, which contains additional net-zero targets for the coal mining, cement and shipping sectors.
01:07
US climate envoy John Kerry meets China’s top diplomat Wang Yi in latest bid to repair frayed ties
Advertisement
US climate envoy John Kerry meets China’s top diplomat Wang Yi in latest bid to repair frayed ties
For coal mining clients, it aims to slash financed emissions by 49 per cent by 2030, rising to 97 per cent by 2050. For cement clients, the goal is a 29 per cent reduction in greenhouse-gas emissions per unit of output by 2030, rising to 98 per cent by 2050.
The release of the plan is the second phase of the bank’s effort to set net-zero pathways for carbon-intensive industry sectors financed through its €107 billion (US$113 billion) corporate loan book.
The bank’s fossil fuels-related financing to group-level companies has fallen steadily to US$7.5 billion last year, from US$21.2 billion in 2016 when the global Paris Agreement on climate change came into force, according to a report published last August by a group of non-government organisations, including Reclaim Finance and BankTrack.
Total financing by the world’s 60 largest commercial banks fluctuated between US$738 billion and US$801 billion between 2016 and 2021, before declining to US$668 billion last year.
Advertisement
A year ago, Deutsche Bank reviewed 41 transactions in carbon-intensive industries that were above €25 million, and which would lead to an increase of more than 1 per cent in financed emissions in a sector.
Green fintech ecosystem in Hong Kong, Apec needs standardisation, collaboration
Some 150 client groups in the sectors with the highest emission intensity made up nearly all of the banks’ financed emissions from fuel combustion and bought energy in those sectors, said Joerg Eigendorf, Deutsche Bank’s global chief sustainability officer.
The bank engages with these clients to agree on key performance indicators and targets aligned with the bank’s decarbonisation targets, he added.
“Now we can have a dialogue with these clients based on clear indicators,” Eigendorf said. “That means we can start to manage down [our financed emissions] via emission budgets.”
Advertisement
The bank is also helping clients to raise financing to adapt to the impacts of climate change. For example, in Asia it has helped real estate firms work with government entities to collaborate on projects to repair receding shorelines due to storms and floods.
“On our part, this involves adjusting the financing and setting up the repayment plan so that the costs are manageable,” Khan said.
CHARLESTON, W.Va. — House Finance Committee Chairman Vernon Criss says state lawmakers should consider a tax cut proposal by Gov. Jim Justice before a new administration takes over.
Vernon Criss
“I think it’s prudent to do it now. I do, along with the other things of the surplus dollars that we have left over that we need to take a look at,” Criss (R-Wood) said on Monday’s MetroNews “Talkline.”
Justice announced earlier this month he wants to follow up an automatic reduction in the personal income tax with another 5% on top of that.
Senate Finance Chairman Eric Tarr (R-Putnam) came out against the proposed cut and said doing so could get the state out of balance with other tax cuts already going into place alongside the state’s projected expense obligations.
Criss said the reduction is worth exploring.
Advertisement
“I still think giving back the people their money so they can do what they want to do with it actually increases the economy and will boost revenues down the road,” Criss said.
Even with the changes to the automatic reduction and the governor’s tax cut, Criss said the state income tax in West Virginia still won’t be competitive enough with neighboring states. He said he knows what that’s like as a representative of an area that borders Ohio.
“We’re going to be at 4.5% so we’re still outside the range in our market conditions for our employees to be able to be competitive with somebody from the living conditions in West Virginia versus Ohio, especially in our area,” he said.
Criss added it’s important to be smart about this and not let history repeat itself.
“I want to make sure that we do not invade any cash-flow problems and to be able to pay our bills because I was there in the late 80s and early 90s when we couldn’t pay the electric bill,” he said.
Advertisement
Tarr previously said another 5 percent equals about $100 million. That’s on top of a tax cut automatically triggered by economic indicators of 3% or 4% for this coming year, amounting to about $90 million. He said lawmakers also agreed to phase out the state income tax on Social Security benefits, equating to about $10 million this year.
The most recent fiscal year resulted in revenue of $826 million above the estimate set annually by the governor. The difference came as the state instituted a 21.25% personal income tax cut this year.
Justice plans to call lawmakers in for a special session in August.
New UK finance minister Rachel Reeves vowed Monday to immediately “fix the foundations” of Britain’s economy, fuelled by onshore wind power and house building, after her Labour party won power.
In her first major speech since being appointed the UK’s first woman chancellor of the exchequer by new Prime Minister Keir Starmer, Reeves said there was “no time to waste” on reversing “the legacy of fourteen years of chaos and economic irresponsibility” under Conservative rule.
Reeves, 45, takes over as chancellor with Britain’s economy recently out of recession, the country’s inflation rate back to normal levels and as the Bank of England prepares to cut interest rates.
Centre-left Labour, which had put growing the UK economy at the heart of its manifesto, won last Thursday’s general election with a sizeable majority.
Advertisement
“New Treasury analysis I requested over the weekend exposed the opportunities lost” under the Conservatives, Reeves told business leaders in London.
She said weak growth meant Britain last year missed out on £58 billion ($74 billion) in tax revenues, impacting public services.
But Reeves stressed that growing the economy would occur alongside “robust fiscal rules”, with Britain’s debt having ballooned in recent years owing to huge state spending caused by the Covid pandemic and surging energy prices.
The chancellor said Labour would double onshore wind energy by 2030, helping the island nation move closer to net zero carbon emissions.
“That means immediately removing the de facto ban on onshore wind in England, in place since 2015,” the government said in a separate statement Monday.
Advertisement
Reeves said the reform of planning rules would hasten infrastructure building across sectors, helping it to also construct 1.5 million “affordable” homes in partnership with the private sector.
High risk warning:
Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading and seek advice from an independent financial or tax advisor if you have any questions.
Advisory warning:
FOREXLIVE™ is not an investment advisor, FOREXLIVE™ provides references and links to selected news, blogs and other sources of economic and market information for informational purposes and as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically hereby acknowledges clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided on an “as-is” basis as a general market commentary and does not constitute investment or trading advice, and we do not purport to present the entire relevant or available public information with respect to a specific market or security. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information, or with respect to any of the content presented within its website, nor its editorial choices.
Disclaimer:
FOREXLIVE™ may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
