DB will focus on helping its shipping borrowers decarbonise their maritime operations to stay on a 1.5°C pathway and achieve net-zero emissions by 2050, it announced.

Although not a signatory to the Poseidon Principles, DB will measure and report its progress in accordance with the Poseidon Principles framework.

The Poseidon Principles aim to reduce the carbon footprint of the shipping industry by providing a framework for banks and other financial institutions to assess, disclose, and manage the environmental impacts of their shipping portfolios.

“For the Shipping sector, the bank follows the Poseidon Principles methodology where our net zero metric is expressed in the form of a climate alignment score in percentages,” it noted.

In the Poseidon Principles framework, “a positive percentage score means a vessel is above the decarbonisation trajectory while a zero or negative percentage score means a vessel is aligned on or below the decarbonization pathway.”

DB has set a 0% score for shipping scope 1 emissions both in 2030 and 2050. Scope 1 emissions are direct emissions from operations like onboard fuel combustion.

It had a €5 billion ($5.29 billion) exposure to the shipping sector as of 2022, according to the transition plan, which represents 1.9% of its overall corporate loan portfolio.

The transition plan “sets out what clients and the public can expect from us as we scope out our role in decarbonizing the economy. As the economy progresses toward net-zero, regulations, reporting standards, and the role of the banking industry will evolve,” Jörg Eigendorf, DB’s chief sustainability officer said.

Financing the shipping sector’s green transition

A bank can usually aid shipping companies in reducing their greenhouse gas emissions by helping them adopt and deploy net-zero fuels, technologies, and energy efficiency measures onboard ships.

For example, DB has helped French container liner company Hapag-Lloyd issue its first sustainability-linked bond (SLB) for a €300 million transaction. This SLB “is linked to the achievement of carbon reduction targets on an annual trajectory up to 2030 and supports the company’s ambition to reduce the carbon intensity of its fleet,” DB explained.

Hapag Lloyd used this funding to invest in 12 LNG-fuelled vessels to reduce its carbon footprint, DB added.

“The twelve ships emit up to 25% lower CO2 emissions and thereby already substantially contribute to the overall decarbonization of the Group. The vessels can also be used with CO2-neutral fuels such as bio- or e-fuels,” DB claimed.
Source: ENGINE, By Konica Bhatt, https://engine.online/news/alternative-fuels/deutsche-bank-borrows-poseidon-principles-methodology-for-shipping-portfolio-52ca