Climate Change and Environmental Impact of Our Funding

The city of Berlin has set a goal to become climate-neutral by 2045. As a partner in this transformation process, the IBB Group supports Berlin's efforts to reduce its ecological footprint and adapt to climate change. Our commitment aligns with the 1.5-degree target of the 2015 Paris Climate Agreement.

As a development bank, we promote economic growth and invest in real estate—both playing crucial roles in shaping Berlin's economy and community. Simultaneously, we recognize the environmental impacts of these activities, including their CO₂ footprint. Accordingly, we develop and implement strategies that enable us to continue achieving positive economic outcomes while adhering to the 1.5-degree target of the Paris Climate Agreement.

In economic promotion, we focus on fostering economic growth that benefits both Berlin’s economy and its residents. Supporting small and medium-sized enterprises (SMEs) is particularly crucial during challenging economic times. However, we are also aware that economic growth can have negative environmental impacts, including CO₂ emissions. The transition to a sustainable economy is a gradual and collaborative process that we facilitate through our financing offerings, ensuring sustainability considerations are integrated at every stage—from initial consultation to credit evaluation.

Our collaboration with borrowers not only allows us to verify compliance with sustainability criteria but also to inform clients about programs that support sustainable business practices. This cooperative approach ensures that our financing promotes both economic resilience and ecological responsibility.

The real estate sector is a significant contributor to Berlin’s greenhouse gas emissions. While acknowledging that construction and renovation activities can generate short-term emissions, we focus on long-term solutions to reduce the CO₂ footprint of Berlin’s building stock. Through our real estate financing, we support energy-efficient new constructions and energy renovations to achieve sustainable CO₂ reductions while ensuring affordable housing for low- and middle-income households. Balancing ecological responsibility with social integration lies at the heart of our mission.

We embed sustainability in our projects by making advanced efficiency standards mandatory. Energy data is critical for assessing the sustainability profile of our portfolio and plays a central role in financing decisions.

Our climate strategy is based on the prototypical climate balance of 2023, which provides a comprehensive analysis of the emissions caused by our financing activities and highlights the sectors with the greatest climate impact. Based on this analysis, we developed our climate strategy, including specific climate targets, reduction pathways, decarbonization measures, and a transition plan to be published in 2025. This transition plan outlines clear reduction pathways for the emissions-intensive energy and real estate sectors, developed according to scientifically based standards and aligned with the 1.5-degree target.

Emissions Reduction and Compensation

Our long-term goal is to prevent emissions and minimize resource consumption in our core business and operational areas. However, certain emissions from our banking operations are unavoidable. We compensate for these emissions through a peatland rewetting project in Brandenburg, implemented in partnership with the Berlin Brandenburg Area Development Company GmbH (BADC). This project provides hydrological benefits such as water retention and partial storage while promoting biodiversity in the region.

Challenges

Our path to climate neutrality is influenced by factors such as the quality of available data, customer behavior, and market conditions. Balancing the promotion of social housing with our climate goals presents a unique challenge in the real estate sector, underscoring the need for strategic collaboration with the city of Berlin and other partners.

Strategic Priorities

1. Data Management
   Improving the quality and scope of our climate and environmental data is crucial for informed decision-making. We enhance data acquisition processes and integrate comprehensive data management systems to better monitor and verify our ecological footprint.
2. Process Optimization
   Climate goals are integrated into our operational planning and control processes. Aligning our business activities with these goals ensures sustainability is embedded into our regular operations for long-term impact.
3. Monitoring and Oversight
   Achieving our climate goals requires robust monitoring and control systems. We develop mechanisms for regular progress reviews, identify deviations, and implement corrective actions when necessary. This ensures we remain on track to achieve our medium- and long-term climate objectives.

Climate Goals

Our analysis identifies the energy supply and real estate sectors as key areas within the IBB Group’s portfolio, where the majority of financed emissions originate. Our focus is on reducing physical intensity in both sectors by 2030 and achieving net-zero emissions by 2045.

To support these goals, we have developed sector-specific reduction pathways with 5-year climate targets aligned with the 1.5-degree Celsius target. Based on these pathways, we have established a transition plan that includes decarbonization measures for both sectors. We will conduct annual climate balances to assess our compliance with these targets. If any deviations occur, we will adjust our reduction pathways, transition plans, and measures accordingly. This information will be integrated into both our climate strategy and overall business strategy.

To achieve our established goals, we also aim to improve data quality and implement strategic control measures within the climate strategy process. Continuous collaboration with stakeholders is essential, and we are committed to investing in training for our staff to enhance their expertise their in climate data analysis and planning.