CO₂ offsetting for banking operations

On the way to Net Zero

Climate protection is an important aspect of Commerzbank's corporate responsibility. On the one hand, this is reflected in our core business through our Net Zero strategy and our decision not to engage in certain business activities, such as the financing of fossil fuels. On the other hand, however, it is also reflected in our efforts to continually reduce our own ecological footprint.

Commerzbank AG's banking operations in Germany have been climate-neutral since the beginning of 20151. Since 2021, this has also applied to Commerzbank AG's international locations. Remaining greenhouse gas emissions are offset by the purchase and retirement of high-quality CO₂ certificates. With respect to the compensation, the integrity of the emission reduction projects and the certificates generated from them is essential to create an appropriate CO₂ offset. We have therefore defined clear principles for the selection of projects.

To achieve the net zero target2 in banking operations by 2040, we are always working to reduce our CO₂ footprint.

The general rule at the bank is: "Reduction comes before compensation." After all, the best emissions are those that do not occur in the first place.

Offsetting our CO₂e footprint

The calculation basis for the compensation is the annually recorded, externally verified direct and indirect greenhouse gas emissions - published in the Group Sustainability Report. This includes the directly caused emissions as well as the indirectly caused emissions arising from the purchase of energy and the upstream and downstream value chain. These include paper and water consumption, waste generation, activities related to fuels and energy, business travel and logistics trips, commuting employees, and electricity in home offices.

Until 2020, this applied to the domestic locations; since 2021, the foreign branches have also been recorded. 80% of the CO₂e emissions expected for the current year are already offset in the course of the year. The remaining amount follows after submission of the verified CO₂e emissions data in the following year.

Supported offsetting projects

Mangroves in Pakistan

Delta Blue Carbon-1 | 886 tons offset

Mangroves in Pakistan

Delta Blue Carbon-1 | 16,331 tons offset

Biogas in Brazil

CTL Landfill Gas Project | 30,000 tons offset

Overview of past compensation projects

Project selection criteria

The integrity of the emission reduction projects and the certificates generated from them is essential to create an appropriate CO₂ offset. We have therefore adopted clear principles for the selection of projects. They relate to the quality of the certificates, the technologies used for CO₂ avoidance and removal, and the countries in which the projects are located.

Certificate quality

For the compensation, the ecological integrity of the offsetting projects and the certificates generated from them is essential. Accordingly, as part of the Commerzbank climate strategy, the following minimum standards are set for compensation projects and the CO₂ certificates generated from them:

  • It must be ensured that the greenhouse gas reductions occur additionally and would not have been realised anyway. ("Additionality")
  • It must be ensured that the greenhouse gas reductions have actually occurred or will occur in the future.
  • Proof of the (calculated) extent of the greenhouse gas reductions requires validation, verification, or certification by independent third parties.

To ensure this, compensation is carried out through CO₂ certificates generated according to voluntary mechanisms. Additionally, the certificates should have a maximum age of 5 years at the time of purchase. Projects can be used for compensation if they are permissible under our internal guidelines for the selection of offestting projects.

Technologies for CO₂ offsettings

As part of its compensation strategy, Commerzbank pursues a diversified portfolio approach, meaning that the utilised project activities stem both from project activities aimed at future CO₂ avoidance as well as CO₂ removal. Removal projects include activities for the long-term binding and storage of CO₂ using both nature-based (e.g. afforestation) and technological (e.g. Direct Air Capture) project activities. To achieve our climate goals, the proportion of removal offsets will be continuously increased.

Projects countries

Industrialised nations are the main contributors to climate change. However, the consequences of climate change impact developing countries most severely. Therefore, the focus for selecting the locations of emission offsetting measures is on countries in the Global South. This approach redirects financial resources and facilitates CO₂ reduction measures. At the same time, it is ensured that the projects support as many other SDGs (Sustainable Development Goals) as possible beyond “climate protection measures.”

Climate protection in banking operations
, Our memberships and initiatives

Initiative

, Science Based Targets Initiative (SBTi)

We have set ourselves the goal of reducing the CO₂ footprint of the bank's entire loan and investment portfolio to net zero by 2050 at the latest. To make this approach comprehensible, we have joined the Science Based Targets Initiative (SBTi). The SBTi advocates the reduction of greenhouse gases on the basis of scientifically calculated targets. This enables companies to align their climate policies with the goals of the Paris Climate Agreement and effectively counteract climate change.

Initiative

, Net-Zero Banking Alliance (NZBA)

In April 2021, we joined the Net-Zero Banking Alliance, the financial initiative of the United Nations Environment Programme (UNEP FI) and are one of its first signatories. The goal of the voluntary commitment as a member bank of the NZBA is to reduce the CO₂e balance of the bank's entire loan and investment portfolio to net zero by 2050 at the latest.

  1. 1

    Commerzbank defines climate neutrality as follows:
    Climate neutrality is achieved as soon as an organization fully offsets its existing greenhouse gas emissions in arithmetical terms. This complete compensation is achieved through the purchase of so-called CO₂ certificates. CO₂ certificates refer to climate protection projects that can serve both CO₂ avoidance and CO₂ removal.

  2. 2

    Net Zero: State in which an organization, after all technically and scientifically possible efforts to reduce greenhouse gas emissions, arithmetically has no more greenhouse gas emissions. Unavoidable emissions are offset exclusively by CO₂ removal measures.