A company of LBBW
We are convinced that in order to be modern you need to be sustainable
At Berlin Hyp, we have a very clear goal, which is to become the most modern real estate financier in Germany. We understand that we can only achieve this goal by acting in accordance with the principles of sustainability and aligning all of our business activities with such principles.
We have a broad view of sustainability: On the one hand, sustainability relates to a way of thinking and doing business that helps safeguard and protect our natural resources and the environment. However, sustainability goes beyond that, as it also means taking on social responsibility and ensuring good corporate governance. This broad view of sustainability has also established itself internationally under the designation ESG, which stands for environmental, social, and governance. ESG forms the foundation for how we measure our sustainability performance, and when we talk about ESG, we are also talking about sustainability, and vice versa.
We are guided in our actions and behaviour here by the United Nations Sustainable Development Goals (SDG), whereby we are particularly committed to SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Action).
Our objective: To promote, facilitate and finance the transformation
We aim to reduce our carbon footprint and ensure that the work we do promotes, facilitates and helps finance the transition to a sustainable economy.
The key to success here, and also the biggest challenge, involves slowing the rate of global warming and preparing industry and society for the effects of climate change, which can no longer be avoided. The real estate sector has a special responsibility here, as building construction and operation account for more than one-third of global CO2 emissions. It’s also true that the manner in which buildings, neighbourhoods and cities are designed plays a key role in determining whether these can remain viable in a changed climate. In addition, the real estate sector needs to step up in terms of reducing resource consumption and waste.
To put it in a more positive way, one can say that our methods for planning, building, investing and financing give us an important and effective instrument that can help ensure a world worth living in for future generations – and we are very much aware of our responsibilities in this regard.
Our approach: Four dimensions
Berlin Hyp’s approach to sustainability encompasses four dimensions, each of which addresses all aspects of sustainability/ESG.
You can learn more about our ESG targets and sustainability strategy in our video.
Sustainability in business operations
We continue to align business operations at Berlin Hyp with sustainability principles and targets. This includes our efforts to reduce our carbon footprint as much as possible – in terms of resource consumption and other negative environmental impacts. We also act as a responsible employer and take measures to ensure that our entire supply chain is sustainable.
- We aim to continuously lower our direct CO2 emissions and become completely climate neutral in our operations by 2025 at the latest. To this end, we define implementation targets each year to help us further reduce our emissions. We offset any excess CO2 emissions that may remain by investing in certified climate protection projects, for example.
- We already obtain all of our electricity from renewable energy sources, and we are exploiting additional energy-savings potential by promoting mobile working arrangements, reducing air travel as much as possible and offering incentives for climate-friendly mobility options.
- We have committed ourselves to reducing our resource consumption and managing all resources responsibly. Within the framework of our environmental programme, we have been working continuously since 2016 on, among other things, lowering our water consumption and waste production.
- We choose our suppliers on the basis of sustainability criteria and use sustainability agreements to ensure that all suppliers comply with our standards.
- We support our employees to the greatest extent possible through family-friendly work arrangements and policies, for example, and by offering employees a range of training and continuing education opportunities and health management programmes. We are also firmly committed to diversity, equal opportunities and equal treatmenty. For example, we have set ourselves the goal of having women account for at least one-third of all managers by 2025.
Sustainable business portfolio
As one of the leading real estate financiers in Germany, we help people invest in existing real estate, the construction of new buildings and building modernisation. Our customers here include investors as well as individuals or businesses seeking to construct or purchase buildings and houses. A large number of our customers are already adopting measures to make their business activities and their properties more sustainable. We are helping such customers transform their buildings into more energy-efficient and sustainable properties and in this manner are contributing to greater sustainability in the real estate and financial sectors.
- We are also seeking to make our entire loans portfolio completely climate neutral not later than by 2050. As we move ahead on the path to achieving this goal, we plan to initially reduce the carbon footprint of our loans portfolio by 40 per cent between 2020 and 2030. Another one of our targets – this one for 2025 – is to have certified green buildings account for one-third of all the buildings we finance.
- We are one of the first banks in the world to begin moving towards complete transparency with regard to the carbon footprint of our financed real estate portfolio. We are doing this by systematically recording energy consumption figures, calculating CO2 emissions and identifying climate risks.
- We are also supporting our customers with their efforts to make existing properties more energy efficient. More specifically, we provide comprehensive advice on sustainability and energy efficiency and we also offer customers specially designed financing solutions such as transformation loans.
- We are a pioneer when it comes to issuing sustainable financial products. Indeed, Berlin Hyp invented the “Green Pfandbrief” and is one of the most active issuers of green and sustainability-based bonds. For example, we were the first bank in the world to issue a Sustainability Linked Bond (SLB), which directly links our refinancing to sustainability targets. In line with this approach, we plan to have sustainable refinancing instruments account for 40% of our capital market funding mix by the end of 2025.
ESG risk management
We are integrating ESG criteria into our risk management systems and processes in order to ensure we can identify and systematically control all opportunities and risks. These systems and processes address both financial and non-financial risks, which means we are always able to consider all relevant aspects whenever we need to make risk management decisions.
- We are currently measuring and managing material ESG risks at the portfolio level. Over the medium term, however, we plan to quantify such risks on the basis of ESG-based screenings of individual borrowers as well, and then incorporate this data into our processes for making loan decisions.
- We are developing quantitative scenario analyses and stress test methods with regard to ESG risks and systematically integrating these into our risk management systems.
- We are also working on gradually expanding our database for ESG-related risk management, which will give us a broader foundation for decision making.
Transparency and ESG capabilities
It will take a long time to create a sustainability-based economy and social structure, and many issues will need to be clarified in the interim. We are making every effort to integrate principles of sustainability into our normal business processes step by step. Consistency, competence and transparency are a must here.
- We are firmly establishing sustainability throughout the entire Bank – among other ways by defining and formalising responsibilities within our organisational structure and process organisation and by establishing our ESG targets as a key component of our business strategy.
- We also participate in discussions on the topic of ESG in both public and professional forums. Together with the Urban Land Institute, we are working on initiatives such as the sustainable development of cities.
- We report openly and transparently on the current state of affairs with regard to sustainability and the progress we have made to date. At a minimum, our ESG reporting meets the current market standard for this issue area.
- We provide data to rating agencies for use in sustainability rankings and we clearly disclose the progress we make in terms of achieving our sustainability targets.