ESG Conform Credit Standards

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Guidelines for sustainable lending

The Hamburg Commercial Bank aspires to become one of the leading banks in the field of sustainability. Sustainability is becoming increasingly important to its clients, something that holds true with regard to both assets and liabilities. As of 1 October 2020, all relevant sustainability criteria are an integral part of all lending processes at the Hamburg Commercial Bank. The ESG criteria – the acronym stands for environmental, social and governance – will play an ever greater role at the Hamburg Commercial Bank in future. For each individual business, these will be analyzed and evaluated against clear benchmarks, specific to the respective business area. What is most significant here: It isn't just prospective loans that must adhere to ESG standards – the existing portfolio will likewise be examined with regard to sustainability and reevaluated where necessary.

In real terms, in future the evaluation of ESG criteria for real estate financing, for example, could play out as follows: The bank examines the energy consumption of the project with regard to environmental criteria, evaluates the building materials and the emissions during the construction phase and subsequent operation of the building. With a view on the social issues, experts at the HCOB are increasing their efforts to ensure that the rights of employees are taken into consideration. As for governance, the goal here is to ensure that all legal regulations are complied with and ideally that business partners have an established „Code of Conduct“ .

The ESG commitment of the Hamburg Commercial Bank is not limited to its own dealings, it extends to the actions of its business partners, too. This includes compiling a blacklist of countries and business areas, which will be prohibited from acquiring financing from the outset: among which are countries with high levels of corruption and business areas such as weapons production and the nuclear industry. Likewise, companies who do not conform to minimum social requirements will simply not be considered as potential business partners for the bank.

In addition, the bank developed a Blacklist, which has been integrated into the credit standards to ensure an ESG conform portfolio expansion and the overall compliance with the ESG standards. Therefore, a comprehensive ESG scoring of new business is conducted on a deal-by-deal basis since October 1st 2020.

The bank uses the Blacklist to exclude business relations with companies that do not comply for example with human rights or violate human dignity. In addition, the bank decided not to do business in countries with either a high level of corruption or a very low level of peacefulness, whereby the assumptions underlying this decision are based on the Global Peace Index and the Corruption Perception Index .

In context of the Blacklist, HCOB excludes direct financings in:

• Coal mining and its use for energy production including related businesses
• Upstream oil- and gas industry including oil sands as well as oil shales and respective power production
• Nuclear energy
• Deforestation and non certified wood products from rainforest
• Unsustainable palm oil production
• Fishing with drift net or dynamite fishing, shark finning, other harmful fishing techniques
• Embryonic stem cell research
• Non mandatory animal testing e.g. for cosmetic purposes
• Manufacturing, supply, or development of weapons and munitions, any other highly controversial weapons
• Client in production, manufacturing of tobacco products and vaporizer (e-cigarettes)
• Problem gambling and its development
• Pornography and brothels

To ensure a successful and sustainable implementation of the sustainability guidelines, HCOB ensures an appropriate training of the relationship managers and an ongoing communication to all clients and relevant internal and external stakeholders.

Further topics in the area of sustainability

We are here for you

your contact person for sustainability

Martin Jonas

Head of Investor Relations

Phone: +49 40 3333-11500
Fax: +49 40 3333-611500
Contact

Dr. Matthias Umlauf

Phone: 040 3333-13135
Fax: 040 3333 -613135
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