ESG at portfolio level
As a bank, we are aware of the impact our business activities have on the environment and therefore aim to contribute to sustainable development and the transition to a green economy through our lending and investment activities. As a staunch supporter of the green energy transition, we strive to play a leading role as an active partner. We not only pursue the goal of reducing our own carbon footprint, but also support our customers in minimising their climate impact.
As a bank, we are aware of our environmental impact and are committed to sustainable lending and investments. To this end, we follow the following approach in all lending processes in accordance with the Paris Climate Agreement, the Sustainable Development Goals (SDGs), the PRB, the EU Taxonomy and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations:
Blacklist
The first step in our credit decision process is to classify new transactions using the blacklist. The current blacklist defines areas in which we are excluded from direct financing and is divided into three levels: Country, Sector and Company.
In this way, we ensure a thorough examination of new business. We take various factors into account, such as the location of a project, the borrowers or companies and donors, as well as their fundamental ethical principles and respect for human rights.
The ESG Decision Matrix
In order to enable systematic and standardised decisions at company level, we have introduced an ESG decision matrix as a guideline for our lending. This enables the valuation of companies and financing purposes, even if they are not sustainable in some cases. Our aim is not to exclude companies from funding, but to encourage improvements and support the transition to a greener economy
The ESG decision matrix at a glance
The ESG Scoring
Our ESG scoring includes a thorough analysis of the climate, environmental, social and governance risk factors for each financing. For credit decisions, there are ESG scoring grades from one to six, with one being very good and anything after four leading to regular exclusion from the commitment.
Sustainable & Transformational Finance Framework
STFF is a classification system for categorising our lending business as “sustainable” or “transformational”. The assessment is carried out against the background of the requirements of the EU taxonomy, among other things, and creates transparency with its comprehensive and consistent approach.
Decision of the Credit Committee
Every credit decision goes through the Credit Committee at the end of the decision-making process. Every new business is presented to the committee and then either approved or rejected. In principle, an ESG scoring of 5 or 6 leads to exclusion from lending, unless risk-minimising factors are presented and the transaction is expressly accepted by members of the Credit Committee with voting rights.
ESG is an integral part of our business processes. The respective ESG potentials are continuously analysed for each of the market areas. Find best practices for our sustainability-promoting lending here.
The former Postbahnhof has been transformed into a modern business location.
Investment loan 19,196 sqmThe automated processing of a large number of individual contracts for mobile leasing goods (bikes & e-bikes) is at the heart of this customer relationship.
Financing E-bikes EUR 60 millionThe financial sector is crucial for the transition to combate climate change. HCOB committed to measuring and disclosing its greenhouse gas (GHG) emissions by signing a commitment letter to the industry-wide standards set by the Partnership for Carbon Accounting Financials (PCAF), so enhancing transparency about the Bank’s climate impact. Below is an overview of the Bank’s financed emissions as per 31.12.2023.
Financed Emissions , Sector View (31.12.2023)
| Business segment | Covered loan amount total € million | Financed emissions t CO2e Scope 1 & Scope 2 |
| Real Estate | 7,974 | 206,615 |
| Shipping | 2,432 | 2,179,084 |
| Project Finance | 3,300 | 103,164 |
| Corporates | 2,874 | 262,611 |
| Treasury | 11 | 214 |
| Total | 16,592 | 2,751,688 |