Decarbonisation at the Intersection of Climate and Market Forces

• In the currently challenging environment, Commerzbank still remains committed to its goal of decarbonising its portfolio.
• Internal control parameters, however, are being partially adjusted for particularly affected sectors.
• This gives clients more time for their transformation.

The fight against climate change must not waver. Scientific reports, such as those from the World Meteorological Organisation¹, warn that the concentration of greenhouse gases in the atmosphere continues to rise and that global warming is accelerating more than previously anticipated. In addition, the challenging geopolitical environment complicates international coordination on effective climate protection measures, and European policy increasingly focuses on competitiveness, demanding more market-based solutions.

We Stand by Our Clients

In this complex landscape, we at Commerzbank aim to position ourselves as active partners in supporting our clients through their transformation journey. We remain at the side of our clients – and on course. By 2050, we aim to reduce CO2 emissions to net zero in our lending and investment portfolio². For this, we will utilise internationally recognised standards such as the Science Based Targets initiative (SBTi).

CO2 Reduction Targets Must Be Ambitious yet Realistic

Effective steering towards net-zero CO2 emissions must be based on ambitious yet realistic interim targets. This is particularly relevant for sectors such as the construction sector and aviation. In these areas, decarbonisation heavily depends on political and technical frameworks. For instance, the construction sector in Germany is currently encountering challenges in achieving the required energy and heating transition, due to complex political requirements and a growing shortage of skilled workers. In aviation, the availability of low-carbon fuels plays a central role. Significant emission reductions in this sector can only be achieved if innovations are advanced, and the production of renewable fuels is considerably increased.

With this in mind, we will adjust our internal steering targets in these two sectors as of 2026, without compromising compliance with the Paris climate target. This provides our clients with more time for their transformation and ensures a balance between ecological requirements and economic feasibility.

There are also new developments for the fossil fuel sector. In this area, we have adjusted our guidelines on certain aspects aligned with the political frameworks established by the German federal government. In particular, this means:

• It is our expectation that our existing coal sector clients exit coal-fired power generation no later than 2038, in accordance with the German Coal Phase-out Act.
• New business relationships with companies that generate more than 20% of their revenue or electricity from coal, or are expanding their operations in the coal sector, will be restricted to the financing of projects that, in accordance with our ESG framework, have a direct positive impact on the decarbonisation of the economy, the protection of biodiversity, or the promotion of social equity.
• This also applies to new business relationships with companies expanding in the gas sector in upstream operations.
• In the oil sector, we have strenghtened our conditions and now exclude the financing for oil transportation activities, such as pipelines and oil tankers.

Furthermore, we are developing a quantitative CO2 reduction interim target for our fossil fuel portfolio, which we aim to implement as a steering metric in the coming year. This will support us to consistently advance towards our goal of achieving net-zero CO2 emissions by 2050.

Focused on the Long-Term Success of Our Clients

Decarbonising the economy is a marathon, and every piece of distance covered sharpens our view of the opportunities and challenges that lie ahead. A secure energy supply from renewable sources and efficient use of resources can play a crucial role for the competitiveness of our corporate clients. Both issues are becoming increasingly significant, particularly in the context of geopolitical tensions and remain key components of our advisory efforts in this area. A deliberate engagement with these developments can contribute significantly to long-term business success. It can support the achievement of climate objectives while enhancing companies’ resilience in the face of crises.