Sustainable Finance

Leading underwriter of Sustainable Bonds

Sustainable acting and managing are founding principles and part of the Cooperative DNA

Corporate Responsibility has a long tradition at cooperative banks. Accordingly, at DZ BANK, as central institution of the cooperative network, sustainability is anchored in our DNA. Sustainable Finance is therefore an essential part of our core business. With our Sustainable Financing products, we take into account environmental, social and ethical criteria and thus specifically promote the sustainable development of our society and the responsible use of limited resources.

Accordingly, we at DZ BANK have a team within our Capital Markets division that is dedicated to Sustainable Finance. For many years, the bank's DCM team has been actively contributing to the further development of the market for Sustainable Finance as a reliable partner for issuers. This was done, among other things through innovations such as ESGlocate (an innovative allocation tool for issuers of Sustainable Bonds) or the KPI Library (a tool for the rapid identification of possible KPIs for Target-Linked structures). Our ESG experts provide issuers with holistic support in the context of a Sustainable Finance Transaction, i.e. in structuring, placement and reporting. In addition to our activities in the primary market, we also develop and shape the topic of Sustainable Finance in numerous national (e.g. Forum Nachhaltige Geldanlagen (FNG), Green and Sustainable Finance Cluster Germany (GSFCG), Sustainable Finance Advisory Board of the German Federal Government) and international (Climate Bonds Initiative, ICMA Green Bond Principles, UN PRB) initiatives and working groups.

Save the date – DZ BANK Sustainability Day 2021

DZ BANK Events

On 20 October 2021, the annual DZ BANK Sustainability Day will take place as a hybrid event.

Join us to discuss the latest trends & drivers of Sustainable Finance, current developments in the Sustainable Bond and Schuldschein market, financial instruments and products to support the sustain-able transformation as well as current regulatory developments.

Further details and a detailed agenda will be published in the coming weeks.

You can already register today

Sustainable Bond Market 2021 – Mid-year forecast

DZ BANK Spotlight

Source: DZ BANK (2021)

Overall market still on the upswing
Sustainable Bonds continue to be on the rise. For the full year, we forecast a global new issuance volume of USD 870 billion, which corresponds to growth of around 66% (2020: USD 525 billion). Diversification in the market continues steadily. In addition to the "green goes rainbow" trend in "use-of-proceeds" bonds, which has already been going on for around three years, so-called "target-linked" structures continue to gain in importance, especially in corporate funding.

Green Bonds as an important element of global recovery
The global new issuance volume in the Green Bond segment more than doubled in the first half of 2021 compared with the same period of the previous year, to around USD 202 billion (1H/20: USD 98 billion). This development shows once again that "build back better" only works if we consider the environmental dimension of sustainability as an important piece of the puzzle of global recovery. For the full year, we forecast an increase of the global new issuance volume in the Green Bond segment of more than 55% to USD 420 billion (2020: USD 269 billion).

Social Bonds continue with positive momentum
The Social Bond segment will continue to grow in 2021, albeit at a slower pace than in 2020, when it experienced record growth of over 700% due to the COVID 19 pandemic. In the first half of 2021, global new issuance volume of social bonds was around USD 136 billion, a threefold increase compared to the first half of 2020 (USD 41 billion). For the second half of 2021, however, we expect lower issuance activity than in the second half of 2020. Drivers in the second half of 2020 and the first half of 2021 were mainly EU Social Bonds. According to the EU, the remaining borrowing by Social Bonds under the EU SURE instrument in the amount of about EUR 4.6 billion will probably not take place until 2022. For 2021, we therefore forecast an increase in global new issuance volume in the Social Bond segment of around 30% to USD 185 billion (2020: USD 142 billion).

Sustainability Bonds with strong tailwind
The global new issuance volume in the Sustainability Bond segment of around USD 94 billion in the first half of 2021 corresponds to roughly a threefold increase compared to the same period of the previous year (1H/20: USD 31 billion). In line with the "green goes rainbow" trend, Sustainability Bonds continue to enjoy tailwind. With a forecast growth of around 140% to USD 185 billion, they have the greatest percentage growth potential among the "use-of-proceeds" segments of the Sustainable Bond market (2020: USD 69 billion).

Stay up to date on Sustainable Finance

DZ BANK Sustainable Finance Bulletin

DZ BANK's new Sustainable Finance Bulletin provides regular information on the latest developments in the Sustainable Bond market, sustainable finance initiatives, and regulatory issues. Read our latest issue here:

Did you miss an issue? In our archive you will find all the previous editions of the Bulletin

Our initiative for the markets of tomorrow

The Sustainable Finance market is characterised by innovations, both in structural and technical terms. With our innovation projects "ESGlocate" and "KPI Library", we at DZ BANK contribute to the further development and standardisation of the market and offer our customers innovative solutions for specific challenges within the issuance process. In doing so, we set new standards in the market with our ideas for solutions for both structuring (KPI Library) and placement (ESGlocate).

More and more issuers are using the option of a sustainability-focused allocation process as they are interested in putting a sustainable exclamation mark at the end of the value chain of a Sustainable Bond transaction. ESGlocate is an innovative, data-based ESG scoring tool used by investors in the context of Sustainable Bond transactions.

DZ BANK has recognised the dynamics in the Sustainable Finance Market and launched the DZ BANK KPI Library, an innovative project for issuers of so-called Target-Linked structures. Based on the economic sectors in which the issuer is active, the KPI Library provides a list of possible key performance indicators (KPIs) that could underlie such a transaction. The guidelines of the ICMA Sustainability-Linked Bond Principles, the Sustainable Development Goals of the United Nations and the EU Taxonomy, among others, serve as orientation.

ESGlocate - The first analysis and allocation Tool

Allocate your ESG Bonds efficiently and transparently

Your added value

Support for numerous inaugural transactions as well as transactions of regular issuers. In 2020: 21 Green, Social and Sustainability Bond transactions of more than EUR 27 billion for SSAs, FIGs and Corporates as issuers as well as several Sustainability-Linked Schuldscheindarlehen

One of the most established bookrunner track records among German banks since 2007. DZ BANK is one of the leading European dealer banks in its core market for Sustainable Bond transactions (Green, Social, Sustainability and Sustainability-Linked Bonds) in 2021.

 

 

DZ BANK-USP: Sustainable Investment Research with a unique EESG analysis and rating methodology; strong relationships with SRI investors in the cooperative network and beyond.

 

 

DZ BANK as an innovator in the ESG market: ESGlocate – sustainability-focused allocation of Sustainable Bonds; KPI Library - comprehensive KPI database for issuers of Target-Linked transactions.

Regular Sustainable Finance publications on structural background, market developments in the Sustainable Bond segment and the regulatory environment as well as upcoming events.

Further development of the Sustainable Finance market: DZ BANK is involved in numerous national and international initiatives and working groups to strengthen and further develop the market for Sustainable Finance.

Successful placements for ESG issuers