Positions and Directives Positions and Directives

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As a leading commercial bank in Germany, and with more than 16 million clients, Commerzbank has an obligation to act responsibly, in both economic and socio-political terms, in the areas where it has an influence. It respects the rights and expectations of its various stakeholders and of society at large and ensures they are factored into company decisions.

In the light of this responsibility, the Bank is committed to the UN Global Compact and recognizes the following principles, which form part of our internal regulations and guide the day-to-day work of our staff.

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Agricultural commodities

In November 2011, Commerzbank made the decision not to issue any new exchange-traded investment products based on food staples.

Following in-depth analysis of both sides of the argument on the possible influence of financial derivatives on pricing in the commodities markets, this decision was made by an internal roundtable in which all relevant business units took part.

Since then, we have not issued any new products on basic food commodities such as wheat, corn, soy, rice or potatoes. We have also withdrawn food commodity underlyings from the only ComStage ETF which referenced them (WKN ETF090).

Commerzbank has also implemented this decision throughout its private client business. Commerzbank does not issue products that contain staple foods, nor does it actively market or recommend them. This of course also applies to third-party products.

Mining

In the case of proposed finance deals and business relationships in connection with mining, Commerzbank’s Reputational Risk Management undertakes a range of investigations including:

  • how the company concerned will operate the mine (e.g. environmental pollution from toxic chemicals or how it deals with waste);
  • whether high conservation value areas, UNESCO World Heritage sites, or other conservation areas will be protected. These checks are regularly conducted with the involvement of local specialists or non-governmental organizations;
  • compliance with human rights (especially the rights of local communities and indigenous peoples);
  • compliance with occupational health and safety minimum standards and with ILO standards on working conditions;
  • reports of corruption in the government or the companies concerned;
  • implementation of ecological restoration measures.

Gold

As one of the leading players in the precious metals market Commerzbank adopted the guidelines of the Organization for Economic Co-operation and Development (OECD) for a responsible supply chain management of minerals from conflict-affected and high risk areas and implemented them within the entire group. Argor-Heraeus which Commerzbank is a stakeholder of, is one of the world's largest producers of precious metals and has also implemented a corresponding and detailed guideline. In addition, all raw materials are purchased only from suppliers who apply to similar policies.

Diamonds

When trading diamonds the bank checks that the origin of diamonds is in accordance with the Kimberley process.

Toxic materials

There are certain sectors (such as mining, agriculture, textiles, electrical engineering, energy etc.) where toxic materials are used on a regular basis. They must therefore be used securely and sparingly for the sake of human health and the environment.

As far as proposed finance deals and companies in these sectors are concerned, investigations are conducted by Commerzbank’s Reputational Risk Management. Particular attention is paid to the extent to which the companies in question have adhered to emissions and exposure limits in the past. This is done with reference to, for example, the World Bank’s Pollution Prevention and Abatement Handbook (PPAH, 1998).

Indigenous peoples

As a signatory to the UN Global Compact, Commerzbank is committed to upholding and promoting fundamental human rights, ensuring fair working conditions, combating corruption, and protecting the environment.

This especially provides for the protection of indigenous peoples, who are often subjected to compulsory measures such as involuntary resettlement or dispersion.

Coal Power

For the coal sector, Commerzbank has implemented this guideline. It is binding for Commerzbank AG and was adopted by the Board of Managing Directors. The guideline comprises the substantial elements of the process chain, from coal extraction to coal-fired electricity generation at power plants.

1 Coal production

  • Commerzbank does not finance projects for new coal mines.
  • Commerzbank does not finance any projects related to Mountaintop Removal Mining (MTR). Companies that employ this method to produce coal are not permitted to have or establish a business relationship with Commerzbank.

2 Coal-related infrastructure projects

  • Coal-related infrastructure projects (e.g. the expansion of rail networks or ports of loading) are reviewed on a case-by-case basis in regard to environmental and social risks. This review can lead to the rejection of a transaction.

3 Coal-fired power plants

  • Commerzbank does not finance the construction of new coal-fired power plants.
  • Transactions related to the delivery of individual power plant components, in particular modernisation measures, are possible. They are critically reviewed on a case-by-case basis by the Reputational Risk Management which can lead to the rejection of a transaction. Besides environmental and social risks, the regulations of the Organisation for Economic Co-operation and Development (OECD), among others, are taken into account with regard to the power plant's efficiency level and the recipient country.

4 Energy suppliers

  • Commerzbank expects clients in Germany from the energy supply sector to limit the share of electricity generated from coal (based on their production performance) to below 30 per cent by the end of 2021.
  • A corresponding cap of 50 per cent is expected for clients based outside of Germany.
  • Commerzbank assists its clients with this strategic change.
  • For new clients the above mentioned criteria will be binding from 1 August 2016.

Further products, businesses, and customer relationships which are not covered by the coal guideline but which are linked to our sensitive topic area coal generally have to be assessed.

Conflict Zones

As a rule, when evaluating deals, Reputational Risk Management looks not just at a country’s political situation but also at potential and already existing conflicts. This involves assessing information from a range of external and internal sources.

As a rule, Commerzbank weapons guidelines do not allow armaments deals connected to conflict zones.

Land and forestry

In the case of proposed finance deals and business relationships in connection with land and forestry, Commerzbank’s Reputational Risk Management department undertakes a range of investigations including:

  • human rights compliance (especially the rights of local communities and indigenous peoples) and the adoption of measures aimed at combating discrimination against women;
  • compliance with ILO standards on working conditions;
  • whether high conservation value areas, UNESCO World Heritage sites, or other conservation areas will be protected. These checks are regularly conducted with the involvement of local specialists or non-governmental organizations;
  • the protection of water resources;
  • unfair pricing or purchasing practices by international corporations;
  • criticism concerning genetically modified organisms (GMOs) or the excessive use of pesticides;
  • compliance with minimum industry standards e.g. for palm oil (Roundtable on Sustainable Palm Oil - RSPO) or soya (Roundtable on Responsible Soy Association);
  • reports of illegal logging by companies;
  • compliance with FSC requirements for sustainable logging.

Palm Oil

Palm oil companies have to meet the following criteria: the supplier has to be a member of the Roundtable on Sustainable Palm Oil (RSPO). Additional information on how the palm oil company is already implementing sustainability criteria in its supply chain and what goals the company in this respect wants to achieve (e.g. certification) is also required. This means: If one of these criteria is injured, Commerzbank cannot finance palm oil business of the respective company.

Cotton

Commerzbank monitors forced labour in the cotton industry, which is particularly relevant to Central Asia and Africa, very closely. Relevant departments are aware of these issues. Business relationships are being intensively and critically assessed by the Reputational Risk Management department, which could even lead to rejection.

Human Rights

1 Definition of Human Rights

States have the primary responsibility for the protection and enforcement of human rights. However, in the preamble of the Universal Declaration of Human Rights by the United Nations (UN), all actors of society are asked to contribute to the realisation of these rights. Financial institutions are also expected to take responsibility for the protection of human rights.

Commerzbank’s Position on Human Rights

Commerzbank commits itself to respecting human rights. Commerzbank’s position on human rights relates to internationally accepted human rights standards including the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights (ICCP), the Inter-national Covenant on Economic, Social and Cultural Rights (ICESCR), and the International Labour Standards of the International Labour Organization (ILO). As a company headquartered in Germany, Commerzbank is tied to the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development (OECD). Furthermore, the Bank follows the United Nations Guiding Principles for Business and Human Rights.

Since 2006, Commerzbank has been participating in the UN Global Compact and thus commits itself to

  • supporting and respecting the protection of the internationally proclaimed human rights,
  • ensuring not to be complicit in human rights abuses,
  • safeguarding the freedom of association and the effective recognition of the right to collective bargaining,
  • standing up for the elimination of all forms of forced labour,
  • standing up for the abolition of child labour, and
  • promoting the elimination of discrimination in regard to employment and occupation.

2 Implementation of our Responsibility for Human Rights

Within its sphere of influence, Commerzbank contributes to the protection and promotion of human rights. Primarily, we can exert a differentiated influence in regard to the following relevant stakeholders:

  • employees
  • suppliers
  • clients

2.1 Employees

Commerzbank respects and supports the human rights of its employees. The overwhelming majority of our staff works in member states of the European Union (approximately 97 percent at the end of 2016). These states have already enshrined the UN’s and ILO’s human rights standards in law.

As well as complying with Germany’s national statutory requirements, the Bank has also introduced a Code of Conduct which, in order to safeguard human rights, is globally binding for all its employees. This Code of Conduct is part of Commerzbank’s corporate culture and documents the commitment to making integrity an active part of its daily business. The guidelines clearly formulate existing rules of conduct and thus provide all employees with a binding guidance framework for acting with integrity – amongst others in relation to human rights. The guidelines apply without exception to all Commerzbank employees, from senior management to apprentices.

Furthermore, we have implemented agreements on fair and partner-like behaviour and on the integration for people with disabilities. Commerzbank has also implemented the right to freedom of thought, conscience, and religion within the scope of Germany’s Diversity Charter. A comprehensive diversity management also promotes individuality among employees.

2.2 Suppliers

Commerzbank helps, within its scope of activity, to promote and protect human rights, e.g., when it comes to selecting service providers or suppliers. The Code of Conduct stipulates that the Bank respects human and personal rights as fundamental rules of society worldwide and expects its business partners to do the same. The adherence to social standards by our suppliers is an integral part of Commerzbank’s Purchasing and Procurement Guidelines.

The sustainable procurement standard clearly regulates the ecologic, social, and ethical requirements for Commerzbank’s suppliers and service providers. All suppliers and service providers commercially engaged with Commerzbank ensure that they comply with the specific social requirements of this regulatory system (chapter 4.2 Sustainable Procurement Standard) and guarantee to also commit their own suppliers and service providers to these standards. The compliance with social standards is part of annual meetings with our suppliers. Furthermore, when selecting suppliers, the Reputational Risk Management department conducts special-purpose analyses as needed. Breaches against the Sustainable Procurement Standard by the suppliers or service providers can lead to the termination of the business relationship.

2.3 Clients

Commerzbank also factors in human rights aspects in its business activities with its clients.

Universal human rights are protected by national and international laws. Commerzbank is vigilant about its customers not breaching any human rights when conducting business. All Commerzbank employees and the Compliance department in particular monitor that the Bank as well as its business partners observe all national and international laws and regulations. Thus, the Compliance employees contribute to the realisation of Commerzbank’s corporate responsibility. They ensure – amongst others – compliance with sanctions and embargoes against regimes which are violating human rights as well as the prevention of money laundering and terrorist financing.

Furthermore, the Reputational Risk Management department intensively researches, analyses, and assesses transactions and business relationships in which human rights play a significant role (e.g. mining, resource extraction or cotton production). This may lead to the rejection of the relevant transaction or even the termination of a relationship.

3 Complaint Procedure

Commerzbank is committed to respecting human rights. All stakeholders can get into contact with the bank if they feel that it has not adequately fulfilled its responsibilities. Clients, employees, shareholders, the general public and all other individuals and groups of people have different ways of doing so. They can either contact the local branches, via telephone, the internet pages of Commerzbank or by post with their respective request to Commerzbank.

4 Transparency and Review

Commerzbank regularly reports on the development and improvements in the field of human rights in its UN Global Compact progress report, which is published in the report on corporate responsibility.

This position on human rights is continuously reviewed and revised. The current position and information on further positions and directives of Commerzbank can be found on our website.

5 Further Information and Links (in alphabetical order)

Download Commerzbank's Position on Human Rights.

Oil & Gas

In the case of proposed finance deals or business relationships in connection with to oil and gas, Commerzbank’s Reputational Risk Management undertakes a range of investigations including:

  • how the company concerned will conduct the exploration of the oil or gas fields;
  • whether high conservation value areas, UNESCO World Heritage sites, or other conservation areas will be protected. These checks are regularly conducted with the involvement of local specialists or non-governmental organizations;
  • human rights compliance, especially the rights of local communities and indigenous peoples;
  • compliance with occupational health and safety minimum standards and with ILO standards on working conditions.

Tar Sands

Commerzbank does not finance projects relating to the exploitation of oil-bearing tar sands or similar controversial processes for extracting oil and gas.

Fracking & Liquefied Natural Gas

Commerzbank monitors these topics very closely. The relevant departments within the bank are aware of these issues. Business transactions and business relationships with companies from these sectors are assessed critically by the Reputational Risk Management department, which can lead to rejection.

Arctic Drilling

Commerzbank does not finance projects relating to Arctic Drilling. This procedure comprises drilling for oil and gas in the Arctic.

Arms trade

In 2008, we developed our own compulsory policy for the armaments sector, which was signed off by the Board of Managing Directors and implemented company-wide.

The policy is based on positions adopted by the German government, the European Union, the United Nations, other international agreements, and various NGOs.

Commerzbank recognizes the right of states to defend themselves. Therefore, our involvement in transactions that involve arms is, in principle, permissible. Transactions that involve arms must be assessed on a case-by-case basis by the Reputational Risk Management.

The four basic rules of the policy

Any involvement by Commerzbank in a financial transaction must strictly comply with the following basic rules:

  1. No financing of the supply of weapons or armaments to conflict zones or areas of tension
    To avoid the escalation of conflicts, Commerzbank does not involve itself in the supply of weapons or armaments to conflict zones or global flashpoints. When assessing the country for which the shipment is intended, we also take into account factors such as type of government and the human rights situation at the time.

  2. No financing of controversial weapons
    Commerzbank does not in any circumstances involve itself in transactions related to controversial weapons.

  3. Supply solely to clearly identifiable government purchasers
    Commerzbank only involves itself in armaments transactions where the recipient is a clearly identifable governmental body. In addition, the weapons' final destination must be guaranteed by the governmental recipient.

  4. Compliance with all applicable laws and regulations
    Commerzbank requires its business partners to comply with all applicable laws, embargoes, and regulations and carries out any checks that it requires itself.

Scope of application of the policy

The policy governs business relationships and transactions for weapons and armaments such as firearms and all military devices in the sense intended by the German War Weapons Control Act (KrWaffKontrG), which covers all means for the application of force in internal or international armed conflicts and also applies to spare parts and any other components (especially electronic parts).

Power generation

In the case of proposed finance deals and business relationships in connection with power generation (especially dams and nuclear power stations), Commerzbank’s Reputational Risk Management team undertakes a range of investigations including:

  • compliance with human rights (especially the rights of local communities and indigenous peoples);
  • whether high conservation value areas, UNESCO World Heritage sites, or other conservation areas will be protected. These checks are regularly conducted with the involvement of local specialists or non-governmental organizations;
  • carrying out environmental impact assessments as per EU regulations.

Coal-fired Power

see coal power

Hydropower

In the case of dams, we also consider

  • potential conflicts over competition for water resources (e.g. between neighboring countries) and
  • compliance with the recommendations made by the World Commission on Dams (WCD).

Nuclear Power

Commerzbank does not as a rule finance any nuclear power stations or uranium mines.

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