Status: 11/08/2022 7:45 p.m
Sustainability and climate friendliness are also major issues for banks. However, they encounter a number of hurdles. The bureaucracy in particular makes it difficult for them, was the conclusion drawn at a conference in Frankfurt.
By Ingo Nathusius, HR
Deutsche Bank has a general representative for sustainability. Commerzbank is beginning to manage its lending business taking into account the impact on the climate. And most of the green conversion of industry is being financed by banks, said Manfred Knof, CEO of Commerzbank, at a Bundesbank conference in Frankfurt am Main. Climate protection arrives in the lending business. Companies in the cement industry and mines are having to listen to more and more critical questions from their house banks.
Banks do not become climate-friendly of their own free will. Supervision by German and European authorities is increasingly forcing them to pay attention to climate risks. This is difficult because the risks involved in individual financings are difficult to quantify and lie far in the future. The head of banking supervision at the Bundesbank, Karlheinz Walch, reported that the banks had come off the starting blocks, but were still working at a low level.
Only 0.2 percent have concrete plans
There are often green plans, but “they are not used effectively in practice.” This year, 1,299 small and medium-sized German banks were examined. Only 0.2 percent had specific sustainability plans, said Walch. In absolute numbers, that’s three Institutes.
More regulatory supervision is anathema to banks. New bureaucratic obstacles are constantly being created, said Commerzbank boss Knof. “Regulation is not an end in itself.” Internal bank risk management has improved a lot since the banking crisis of 2008. Banks currently have their hands full. “It’s about the industry and the companies and not the banks first.”
Far too much bureaucracy
Authorities burdened banks with 400,000 rules and data requirements, said the spokesman for the banking associations Hilmar Zettler. Authority departments for supervision, statistics and processing each required their own data sets. Zettler called for a uniform reporting system that the authorities can use to work better and that makes the banks less work.
“At the moment we have a lot of data,” confirmed Karen Braun-Munzinger from the Bundesbank’s banking supervisory authority. “It’s just worse data,” she says. The banks aren’t satisfied with the current quality either. “Let’s be honest,” said Thomas Lange, CEO of the Essen National Bank.”When we talk to our employees about the reaction of the regulator to our data deliveries, there is always a minor tone.” Much of what happens between banks and the bank regulator does not meet the need.
Zettler demanded that the aim must be to automatically deliver data sets that authorities could use to calculate key figures as required. A future integrated reporting system should provide details with which risks unknown today could be assessed in the future. There should no longer be ever new special queries. In this way, new environmental risks can also be identified and requirements can be checked.
Discussions in the banking world
Bank supervisor Braun-Munzinger showed how difficult it is for authorities to have clear and fast processes: “I can’t say much about that,” she said when asked about the increasing number of inquiries from Bundesbank statisticians. And about the needs of other Bundesbank departments: “We Our colleagues in monetary policy and economics must also take this with us.” Meri Rimmanen from the European Banking Authority only reported in general terms on discussions about bank reporting. You exchange perspectives. There are challenges.
Thomas Lange, head of the regional National Bank, recalled the rapid construction of the Tesla car factory in Brandenburg. If you want to and believe in the goal, you can quickly get results with the authorities. In the case of sustainability risks, the banking world has seen how quickly state supervision can work.
When asked whether there will be an integrated reporting system in state banking supervision in 2030, Bundesbanker Braun-Munzinger said: “I’m not sure.” Eurozone banking regulator Meri Rimmanen said she was sure that some will have gained experience.