For HCOB, compliance with ESG criteria and their further develop­ment is a matter of course – both for reasons of social responsibility and economic sustainability. For HCOB, sustainability means future viability, which is reflected in the orientation of the bank’s business model and processes. In this context, dialogue with customers plays an important role, among other things, in order to provide them with the best possible support in the development of their business activities toward greater sustainability. In this context, it is important to take into account the various aspects related to environmental, social and governance factors, or ESG.

In 2022, HCOB continued to advance the issue of sustainability both internally and externally by identifying ESG-related market potential and organizing ESG training for employees, among other activities. HCOB’s progress in this field is reflected in the ESG self-assessment and climate stress test conducted on behalf of the European Central Bank (ECB), in which HCOB again performed well, along with its sustainability ratings which have improved continuously since 2020. As a signatory to the UN Principles of Responsible Banking, HCOB pursues the goals of the Paris Climate Agreement and the UN’s 17 Sustainable Development Goals (SDGs). In addition, the bank is a member of the Partnership for Carbon Accounting Financials (PCAF) initiative and implements the international PCAF standard for measuring and disclosing its financed greenhouse gas emissions.The issue of ESG is managed at the bank by a department set up for this purpose, which reports to the Sustainability Committee, on which the Board of Management is fully represented. The bank considers the issue of sustainability at three levels: strategy and corporate governance, at the portfolio level, and at the corporate level.

Strategy and governance The bank’s strategy is aligned with ESG aspects in order to achieve the sustainability targets it has set itself. These include reducing its own carbon footprint and strengthening ESG-related dialogue with customers. The planned development of the bank’s own Sustainable Finance Framework this year will enable the bank to anchor ESG aspects even more firmly in its strategy in the future. This will make the bank’s business model more resilient and strengthen its competitive position.

ESG at portfolio level HCOB contributes to the sustainable development of the economy through lending and investment. As early as 2020, the bank integrated ESG aspects into its lending process. In the process, all potential trans­actions undergo a multi-stage procedure in which they are screened for the three ESG dimensions. The bank also conducts a comprehensive dialogue with customers on ESG-relevant issues and possible improve­ments. To prepare employees working in sales and the back office for this dialogue, the bank has organized sector-specific training on sustainability.

ESG at the corporate level Sustainable management also relates to the bank’s own actions. This includes raising employee awareness of sustainability aspects as well as measuring and disclosing the carbon footprint resulting from the bank’s operations. In addition, CO2 emissions generated by building operations and air travel are offset through certified measures. In this context, the bank is supporting the rewetting of the Königsmoor moor in northern Germany in cooperation with the Schleswig Holstein compensation agency. Peatlands store a particularly large amount of carbon. In addition, diversity is important to HCOB, with a particular focus on the advancement of women. The bank also offers a comprehensive range of social benefits for all employees and is committed to supporting various social projects by making donations.