A company of LBBW
Sustainability is a central aspect of Berlin Hyp’s business approach and is therefore a firm component of the Bank’s corporate strategy. In line with our commitment to sustainability, we set new ESG targets in May 2021, whereby these targets focus on four dimensions. The Bank’s new ESG targets and future regulatory requirements were then used as a basis to define an ESG implementation roadmap that calls for the initiation of various implementation measures in the coming months and years up until 2024.
In order to ensure effective implementation in line with the roadmap, and enable the Bank to address issues that may arise in future, the Bank’s existing ESG governance system has been reviewed and revised where needed. The core elements of the future ESG governance system at Berlin Hyp are
- The decentralised assignment of basic responsibilities for integrating ESG issues and criteria into the various divisions and departments.
- The establishment of two overarching but separate cross-divisional and cross-departmental functions that will operate as corporate functions and coordinating bodies. These functions will promote the ESG agenda and ensure that all ESG-related measures at the Bank are made transparent, and that they are linked and aligned with one another whenever this might be necessary.
The ESG governance system makes use of existing governance structures and areas of responsibility. Berlin Hyp’s ESG governance targets are based on three fundamental principles:
Specialised talent and expertise
Possibilities for strong interaction across all divisions
Proximity to the Board of Management
Berlin Hyp has also used these principles as a basis for defining implied requirements for the targets:
- Principle 1 “Specialised talent and expertise” as means of making rapid progress with ESG issues and expanding the scope of ESG-related activities. This will require the appointment of ESG managers at the divisions and a formal definition of responsibilities within the divisional organisations.
- Principle 2 “Possibilities for strong interaction across all divisions” in order to fully integrate ESG issues and criteria into the Bank’s activities. This will require separate corporate functions for addressing business aspects (1st Line) and risks (2nd Line).
- Principle 3 “Proximity to the Board of Management” in order to ensure that ESG is prioritised at a sufficiently high level of the organisational hierarchy and is given the management attention it warrants. This will require the corporate functions to assume responsibility for the delegation of ESG issues to the divisions and the ECB implementation roadmap organisation.
ESG is a priority issue at the highest levels of the Berlin Hyp organisation. The Supervisory Board monitors Berlin Hyp’s climate strategy on an annual basis, while the Board of Management presents the company’s overall strategy to the Supervisory Board, is responsible for the implementation of this strategy and has the authority to make decisions regarding important aspects of implementation. The ESG Corporate Function and the ESG-Risk Corporate Function are the central cross-divisional and cross-departmental functions.
These act as a type of delegation path between the Board of Management and the ESG organisation. The separate functions for addressing business aspects and risks are meant to ensure that adequate attention is paid to all facets of ESG. Here, the analysis of the impact of climate phenomena and events on loan, market and operational risks falls under the responsibility of the Chief Risk Officer, while the identification, measurement, monitoring and management of such risks is delegated to the divisions and departments via the ESG-Risk Corporate Function. The Chair of the Board of Management and the Chief Market Officer are responsible for strategic positioning on ESG issues, while the ESG Corporate Function (Business) coordinates activities to ensure consistent implementation of the ESG strategy.
The ESG Board is the central platform for information and the exchange of knowledge on company-wide ESG issues. It also provides important information that is used as a basis for decision making. The ESG Board operates under the direction of the Chair of the Board of Management, who is assisted here by the ESG corporate functions. All organisational units are represented on the ESG Board. The ESG Board’s role and tasks are defined and documented in the Bank’s Rules of Procedure.
Data, facts and figures – selected KPIs of our target vision
Big goals are achieved in small steps – Berlin Hyp has set itself the goal of increasing its green building ratio to 33 per cent by the end of 2025, in addition to achieving complete* transparency with regard to energy values within the financing portfolio by the end of 2023. Berlin Hyp regularly publishes its current ratios here so that, throughout the year, you can track our progress towards achieving this target.
*Properties that are exempt from the energy certificate requirement, such as listed properties, are recorded or taken into account accordingly.