Treasury Management Internation Logo

Deutsche Bank and Primetals Technologies Establish First Ever ESG-linked FX Derivative Framework

Published 

Deutsche Bank and Primetals Technologies have collaborated on the world’s first hedging framework linking currency options to sustainability goals. The agreement will see UK-based international engineering and plant construction company, Primetals Technologies, hedge its currency risk using ESG-linked FX options with the bank over a period of four years.

Currency hedges executed by the company as part of the agreement must comply with the criteria of the new Sustainable Finance Framework published by Deutsche Bank in July. This framework aligns on a ‘best-effort’ basis with the latest EU Taxonomy Regulation which entered into force on 12 July 2020 with the aim of establishing a framework to facilitate sustainable investment.

A spokesperson from Deutsche Bank told TMI that assessment will be yearly, over the life of the contract, and that depending on whether Primetals Technologies matches its ESG KPIs or not, a pricing advantage may be achieved. Failure to meet sustainability targets will make the company liable to a fee to be paid to a pre-agreed non-governmental organisation.

The agreement links Primetals Technologies’ currency hedges to a number of sustainability targets. One ratio measured will be revenues relative to R&D expenditure resulting in improved resource efficiency. Another will be based on the promotion of a safe and healthy work environment for all the company’s staff.

Both partners were advised on ESG target selection by Environmental Resources Management. This independent consultancy will validate each option for the life of the agreement.

Most recent episodes

HSBC’s Sibos Spotlight: Investing in the Future – from Diversity to Green Deposits

In the final instalment of HSBC’s Sibos Spotlight, Eleanor Hill (TMI) invites Nadine Lagarmitte and Suraj Kalati (HSBC) to consider how corporates’ attitudes to...

25:12

HSBC’s Sibos Spotlight: The ESG Landscape – what every treasurer needs to know

In the third edition of HSBC’s Sibos Spotlight Podcast series, TMI’s Eleanor Hill invites Farnam Bidgoli (HSBC) to provide an in-depth overview of the current ESG...

16:24

The Path to Transformational Global Cash Visibility

Davina Bradley (CEVA Logistics) and Conor Deegan (CashAnalytics) join TMI’s Eleanor Hill to explore how treasurers can transform their cash visibility and forecasting within their business in a matter of weeks using a...

33:16

HSBC’s Sibos Spotlight: Embedding ESG in Trade and Supply Chains

In the second podcast from HSBC’s Sibos Spotlight series, TMI’s Eleanor Hill speaks to Surath Sengupta (HSBC) about embedding ESG into trade and supply chains....

20:58

Lost in Transaction: Overcoming Payments Pitfalls

From simple errors to duplicates, fraud and sanctions violations, there are a number of areas where payments can go wrong – especially in the real-time environment. In this podcast, TMI speaks to Andrew Ferrao...

34:25

HSBC's Sibos Spotlight: Central Bank Digital Currencies

The first edition of HSBC’s Sibos Spotlight series sees TMI’s Eleanor Hill joined by Mark Williamson and James Pomeroy (HSBC) to discuss the hot topic of Central Bank Digital Currencies (CBDCs). Our guests discuss...

25:48

Payments Vision 2025: The Inside Track

Wim Grosemans, Steven Lenaerts (BNP Paribas) and Wim Raymaekers (SWIFT) join TMI’s Eleanor Hill to outline their vision for the payments landscape in 2025. Our guests consider how recent developments such as instant...

28:21

Stepping Out from the Shadows

“Treasurers needs to step out of the shadows and into the sunshine in terms of their strategic contribution.” claims Zitah McMillan, Co-Founder and CEO, Predictive Black. In this podcast, hosted by TMI’s Eleanor Hill, our guest declares that the...

16:54

Why the ‘One Size Fits All’ Approach is Outdated - A Cash Segmentation Treasury Masterclass

With the ongoing low interest-rate environment and increasing regulatory change, it’s more important than ever for treasurers...

23:55

Instant Payments: Instant Rewards

TMI’s Eleanor Hill sits down in the virtual TreasuryCast studio with J.P. Morgan’s Global Head of Real-Time Payments, Cyrus Bhathawalla, to discuss how treasurers can capitalise on the evolving nature of real-time payments. Our guest contemplates the elements...

23:55