Deutsche Bank

Corporate Responsibility
Report 2016

ESG in Asset Management

  • €9.9 billion of ESG assets under management
  • ESG-training in active investment management
  • UN Green Climate Fund invests in African green energy access fund

Investors, clients, and other stakeholders are requesting more transparency around corporate activities and are making decisions based on a broader range of information. This includes identifying additional opportunities and risks from corporate behaviors related to environmental, social, and corporate governance (ESG) factors.

Integrating ESG factors into investment decisions

Continuing to integrate ESG factors into investment decision-making, alongside developing our sustainable and impact investment business, is fundamental to Deutsche Asset Management’s strategy. To guide us, in 2016 we developed our first Responsible Investment Statement, covering the entire Asset Management division. Developed with input from across the division, the Statement outlines Deutsche Asset Management’s position regarding ESG issues, the international principles that inform our approach, and how we incorporate ESG factors into our business and investment activities. We aim to update the Statement as we continue to make progress incorporating ESG into Asset Management.

We offer a range of products that respond to ESG issues and sustainable investment expectations — from managing assets that encompass active and passive ESG screening to sustainable investment funds (see below), ESG real estate assets, social finance innovations, and impact investments.

Managing ESG risks and opportunities across our business

For our actively managed products, we apply an integration and screening strategy. This relies on a proprietary ESG rating methodology and our ESG Engine software, which help us to rank corporations and countries on ESG issues. The Passive Asset Management division is also starting to launch new ESG index products in 2017. Our corporate governance team supports the investment platform, with proxy voting and engagement, while the Center for Sustainable Finance conducts thought leadership and coordinates efforts to integrate ESG across all divisions in Asset Management.

Our real estate investment business focuses on implementing sustainability best practices across its portfolio. This includes core, core plus and value-added real estate investments across the globe. Our infrastructure business also incorporates analysis of ESG factors into the investment due diligence process and reports on ESG development for one of our largest infrastructure funds.

Our Sustainable Investments team’s funds are aligned with the agenda of the UN Sustainable Development Goals (SDGs), achieving a “triple bottom line” approach—in other words, they offer market-based financial returns, together with positive environmental and social outcomes.

Beyond our core business, we invest in projects that are not currently being served by conventional capital markets in order to tackle key environmental and social concerns, and to address global societal challenges. For example, we focus on microfinance, as well as funds for deprived urban areas and clean low-carbon technologies in emerging markets.