KfW Sustainability Report 2022: Important milestones on the way to climate neutrality have been reached

• KfW achieves top rankings in sustainability ratings
• KfW is one of the most important financiers of climate action and environmental protection
• Group-wide impact management currently being implemented

KfW aims to achieve a greenhouse gas-neutral portfolio by the end of the first half of the century. At the same time, it wants to accelerate the transition to a sustainable society while strengthening Germany as an industrial and technological hub. In 2022 it therefore bundled corresponding initiatives and focus areas in its KfWplus transformation agenda in order to make an effective contribution to the required change. KfW presents the progress it has made despite all the challenges of the past year in its Sustainability Report 2022, which is published on its website.

“This decade is crucial for preserving the livelihoods of future generations. We have reached important milestones on our way to climate neutrality through our ambitious sustainability management and commitment. We are pleased to have received top rankings by three renowned sustainability rating agencies and to be part of the leading groups of international promotional and development banks”,

said Stefan Wintels, Chief Executive Officer and Chief Sustainability Officer of KfW Group.

KfW is one of the most important financiers of climate action and environmental protection

With EUR 60.5 billion in commitments for financing climate action and environmental projects at home and abroad, KfW is one of the world’s leading financiers in these fields. Already since 2012, KfW has had an ambitious target quota for these promotional issues. The target quota has been 38% of the total promotional business volume since 2020. The designation of the environment quotas of the individual business sectors and of the group is an important part of the KfW Sustainability Report.

The Group’s 2022 environment quota in its traditional (promotional) business is 59%. Taking into account the extraordinary financings which KfW made to provide energy security amid the war in Ukraine and which were commissioned by the German Federal Government, the Group’s environment quota is 36%.

Sector guidelines aligned with 1.5 degrees Celsius climate target

In 2022, KfW completed the revision of the sector guidelines for six greenhouse gas-intensive sectors and aligned them with the 1.5°C target. These are automotive, iron and steel production, buildings, aviation, electricity generation and shipping, which together make up a significant proportion of KfW financing. In January 2023, the sector guidelines were implemented and effective.

Introduction of a KfW-wide impact management system

In 2022, KfW validated around 50 impact indicators across the group’s promotional activities and established guiding principles. In consultation with the IT department, it also developed a separate application system for the recording and analysis of impact data, to which all business sectors are connected. The aim of the impact management system, which has been introduced throughout the group, is to be able to better measure and report on the sustainability impacts of the projects (co-)financed by KfW in the future.

In the current year, work is continuing to increase data availability and quality. In order to move from impact measurement to actual impact management in the medium term, the group is also working on a strategy for developing impact-based management mechanisms.

KfW’s greenhouse gas accounting is also being developed further in order to make the progress towards a greenhouse gas-neutral portfolio transparent and to systematically review KfW’s contribution to the Paris Climate Agreement.

KfW Group’s new human rights declaration has been updated

“The policy statement of KfW and its subsidiaries on human rights and its human rights strategy” was recently adopted by the Executive Board and supersedes the human rights statement that has been in place since 2008. The updated statement meets the increased demands which many stakeholders place on KfW’s management of human rights risks as well as the requirements of the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG), which came into force on 1 January 2023.

Note:

• The KfW Sustainability Report 2022 – Data according to the GRI, German Commercial Code (HGB) and TCFD can be found
  here.
• KfW’s and its subsidiaries’ policy statement on human rights and its human rights strategy can be found
  here.