Around 122 million tonnes of CO₂e: that was KfW Group's greenhouse gas (GHG) emissions in the 2025 financial year. The figure comprises not only GHG emissions from the Group's buildings, business travel and energy consumption, but also the GHG emissions associated with KfW’s financing activities. This is precisely where the distinctive nature of a carbon footprint in a banking context becomes apparent: while around 0.1 percent of emissions result from banking operations — namely from energy consumption in buildings, business travel and the vehicle fleet — more than 99 percent are attributable to financed GHG emissions, i.e. to loans, equity investments, project finance and other forms of financing.

The calculation is based on established frameworks for corporate and financed GHG emissions. Since the 2024 financial year, KfW Group has been calculating its GHG emissions in accordance with the GHG Protocol and the Partnership for Carbon Accounting Financials (PCAF). In the 2025 financial year, KfW Group’s carbon footprint covered a total of 80.0 percent of the Group’s total assets, amounting to EUR 432 billion. This coverage was achieved through reported GHG emissions data from the financed companies and projects, as well as modelled data and sectoral emission factors.

In 2025, financed GHG emissions fell by around 22.6 million tonnes of CO₂e, or 15.6 percent, compared with 2024. At the same time, the financing volume relevant to the calculation declined by around one percent. This resulted in a lower overall emissions intensity, i.e. the emissions attributable to each EUR 1 million of financing: in 2025, it stood at 282 tonnes of CO₂e per EUR 1 million of financing volume, compared with 331 tonnes of CO₂e per EUR 1 million in the previous year. This was primarily driven by lower Scope 1 and Scope 3 emissions, particularly in the manufacturing, energy supply, transportation and storage, and real estate sectors (Scope 1 covers the direct emissions of the financed companies, Scope 2 emissions from purchased energy and Scope 3 emissions along their value chains.).

The development, however, cannot be interpreted solely in terms of the real economy — better data quality and updated sectoral data sources also influenced the results. A more precise data basis for financing in the renewable energy sector, for example, led to more meaningful calculations — and can therefore result in either lower or higher financed GHG emissions in accounting terms. The carbon footprint is therefore not a simple performance indicator, but a monitoring instrument whose informative value increases with the quality of the underlying data.

To gain a portfolio view from individual figures, financed GHG emissions are broken down according to the European classification of economic activities, NACE Rev. 2. This sectoral perspective is crucial because it makes visible where emission hotspots are located: in 2025, 60.1 percent of financed GHG emissions were attributable to energy supply and transportation and storage. Manufacturing, or the production of goods, accounted for the third-largest share at 10.9 percent. This breakdown helps to put the large overall figure into perspective. It shows that a significant proportion of the footprint is attributable to emission-intensive sectors — precisely those areas in which transition finance is particularly relevant. At the same time, the sectoral perspective avoids an overly narrow view of individual exposures. It creates transparency at a level that enables robust and tangible statements.

KfW Group generally uses the highest data quality available for its calculations, as reflected in the PCAF standard through the Data Quality Score (DQS). The scale ranges from 1 (emissions data reported by business partners) to 5 (sectoral averages). For the financing portfolio relevant to the calculation, the average DQS was 4.47 in 2025, compared with 4.55 in the previous year. The lower the value, the better the data quality. The share of financed GHG emissions based on primary data from business partners increased to 20.3 percent, compared with 14.1 percent in the previous year. The more primary data are available, the less reliance is placed on industry averages and approximations. This not only improves the accuracy of the carbon footprint but also enables more robust and granular statements about the structure of the portfolio.

The carbon footprint creates transparency about the GHG emissions resulting from financing decisions and their development. The challenge in the coming years will be to derive increasingly robust insights from an improving data basis and thereby further enhance transparency about the emissions development of the financing portfolio. The Sector Guidelines are an instrument for steering KfW’s new financing and set the framework for financing in emission-intensive sectors.