Deutsche Bank Launches Sustainability-Linked Overdrafts to Help Corporate Clients Meet their ESG Goals

Published: November 30, 2021

Deutsche Bank announces the launch of sustainability-linked overdrafts to help meet a growing demand for innovative ESG products in the cash management space.

The new solution is designed to encourage businesses to improve their ESG performance by providing a pricing incentive related to an ESG KPI. For the pilot stage, this KPI will be the client’s ESG rating, as determined by a third-party ESG rating specialist. If a client’s ESG rating changes above or below a certain threshold, their pricing will be adjusted accordingly. While offering this innovation Deutsche Bank considers the clients overall sustainability strategies and targets.

The Bank has already gone live with the first implementation, converting a client’s existing

€10m overdraft facility into a sustainability-linked overdraft – offering flexibility in the usage of funds, with rewards tied to improvement in its overall ESG score.

“We are proud to confirm the first sustainability-linked overdraft arranged by Deutsche Bank, which highlights our commitment to finding new and innovative ways to offer sustainable finance,” says Johnny Grimes, Global Head of Liquidity at Deutsche Bank. “After launching our green deposits programme earlier this year, we are delighted to continue building our sustainability offering to further support corporate clients with their ESG goals.”

The launch of this sustainability-linked overdraft solution is part of Deutsche Bank's wider sustainability strategy. It follows the announcement of the bank’s green deposits programme in March 2021, where deposited funds contrast with an equivalent amount of Deutsche Bank’s green asset pool. The bank also set itself several targets to reduce its environmental footprint, paying particular attention to energy efficiency and energy consumption. With its own operations carbon neutral since 2012, the bank aims to maintain this and to source 100% renewable electricity by 2025.