Deutsche Bank has executed its first ever green repo transaction, joining the accelerating ESG efforts amongst the financial institutions globally.
The move is part of the bank’s strategy to expand the range of ESG fixed income products available to clients.
As part of the green repo, Deutsche transferred securities to its existing client M&G Investments and received cash in return to fund its green asset pool.
The bank’s green asset pool comprises renewable energy projects such as wind or solar power plants and the improvement of energy efficiency.
Deutsche Bank’s global head of ESG for fixed income and currencies (FIC) business Claire Coustar said: “We are proud to be one of the first banks to bring a green repo to market.
“We believe this is the first transaction to be executed by any firm in Europe, and hope it will encourage more activity so that a new source of green finance can be developed for the industry, as well as a new asset class for investors.”
Last year, Deutsche Bank set a target to offer at least €200bn in cumulative sustainable finance by 2025.
With the latest development, the bank has brought forward the target date to 2023.
The bank said that it has provided €99bn by the second quarter of the year.
Coustar further said: “The bank plans to introduce further innovative ESG financial products for clients in the coming months. “Our ambition is to be a market leader in ESG fixed income.
“We are one of the few firms to be a top tier player across the product spectrum and we want to leverage that expertise to help develop the sustainable finance market.”
Recently, reports emerged about DWS Group, the asset management arm of Deutsche Bank, being investigated by US authorities over sustainability claims.
The firm found itself in trouble after its former sustainability head said that the company exaggerated its sustainable investing criteria to manage its assets.