Sustainability in the Financial Markets Department

With its business activities specifically targeting sustainability objectives, KfW Group aims to channel capital into sustainable and environmentally sound projects, thereby living up to its social responsibility in the capital market too. This also includes taking sustainability aspects into account when dealing with business partners. The holistic sustainability approach in the Financial Markets department refers to responsible action in the capital markets and comprises three components:

1. Integration of ESG criteria

Within KfW’s strategic tranSForm project KfW has strengthened its ESG (ESG: environment, social, governance) risk management. The central instrument for ESG risk management at KfW is the so-called “ESG risk profile”. The tool is used to consider and evaluate E-, S-, and G-risks in a structured manner and take them into account in the internal rating process. The internal rating is the basis for business activities with the respective business partners.

2. Exclusion criteria and human rights screening

In addition to the consideration of ESG criteria as part of the internal rating process, the business counterparties are also monitored for compliance with KfW’s bank-wide Exclusion List and KfW’s Policy Statement on Human Rights. This regular monitoring is provided by an external service provider.

3. Engagement

The Financial Markets department maintains a regular dialogue with its business partners; sustainability topics are part of this dialogue.