Deutsche Bank Executes First ESG Repo Trade
Posted by Colin Lambert. Last updated: August 16, 2021
Deutsche Bank has executed an ESG-linked repo transaction with Turkey’s Akbank – building on its work in FX markets where it has executed ESG derivatives and hedging structures – and extending its efforts in meeting a self-imposed target of facilitating EUR 200 billion in sustainable finance and investments by 2023.
The $300 million transaction is the first time ESG and sustainability targets have been attached to interbank financing in repo format in Central and Eastern Europe, Middle East and Africa (CEEMEA). The transaction is aligned to Akbank’s existing sustainability efforts with its financing strategy and links the repo interest rate to Akbank’s performance with respect to three areas of ESG key performance indicators: 1) gender balance, 2) electricity sourcing of Akbank from renewable resources, and 3) no greenfield coal power plant loan origination.
Claire Coustar, global head of ESG for fixed income & currencies (FIC) and vice chair of Deutsche Bank AS Turkey board of directors, says, “Akbank has been a leader in sustainability for many years. As the first ESG-KPI linked repurchase agreement in CEEMEA, this transaction demonstrates our joint ability to innovate in ESG as well as stand behind our ESG ambitions through economic alignment. We look forward to further opportunities to collaborate on sustainability initiatives with Akbank and its parent, the Sabanci Group, in the future.”