Sustainablity-related disclosure for end-investors

In order to comply with the legal requirements pursuant to Article 3 (2) of Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector from 27 November 2019 ("Disclosure Regulation"), DZ BANK publishes information on its strategies to integrate sustainability risks in its investment advisory activities ("Strategies to integrate sustainability risks as a financial advisor").

This information on strategies to integrate sustainability risks as a financial advisor relates exclusively to DZ BANK's investment advisory activities on financial products within the meaning of the Disclosure Regulation, i.e. fund products.

DZ BANK has defined strategies to integrate sustainability risks in its investment advisory activities.

Sustainability risks are environmental, social or governance events or conditions (often also referred to as "ESG risks", in accordance with the English terms Environmental, Social, Governance), that, if they occur, could cause an actual or a potential material negative impact on the value of the investment (cf. Art. 2 No. 22 Disclosure Regulation).

Sustainability risks are factors of the already known risk types such as market (price) risk, liquidity risk, counterparty risk and operational risk. Sustainability risks can have a significant impact on all risk types and influence the materiality of these risks.

In 2008, DZ BANK signed up to the United Nations Global Compact Initiative and has since committed itself to ten globally valid principles for responsible conduct. These include respect for human and labour rights, commitment to environmental protection and the avoidance of corruption and bribery. The principles of the Global Compact are an important guideline for DZ BANK in its actions. They are fully supported by the bank and applied in all business areas. In March 2020, DZ BANK signed the Principles for Responsible Banking (hereinafter referred to as "PRB") - an initiative for responsible banking launched by UNEP FI, the finance initiative of the United Nations Environment Programme. With its commitment to the PRB, DZ BANK commits itself to greater sustainability and transparency. Based on the six principles of the PRB framework, sustainability is to be integrated into the main business areas. DZ BANK thus aligns its commitment to sustainability with the Sustainable Development Goals of the United Nations and the Paris Climate Agreement.

As a result, DZ BANK has made the strategic decision not to offer any products with inappropriately high sustainability risks in its investment advisory services.

As part of the implementation of the strategic decision it has made, DZ BANK generally pursues the following strategies to integrate sustainability risks in its investment advisory activities:

A central aspect of the inclusion of sustainability risks by DZ BANK is the product selection prior to the respective advisory activities. The organisational unit responsible for this decides which products are included in DZ BANK's advisory universe as part of the product selection process. Overall, the product selection process makes a significant contribution to ensuring that only products that do not pose unreasonably high sustainability risks are included in the advisory universe.

In particular, fund companies are selected that have a sustainable track record, adhere to recognised guidelines and / or follow a recognised industry standard.

When providing investment advice, DZ BANK will only offer fund products from fund companies that, in DZ BANK’s opinion, take sustainability risks into account in their investment decision-making processes and publish corresponding information.

In exceptional cases, however, if there is sufficient demand, fund products can also be recommended where sustainability risks are not taken into account or are only taken into account to a limited extent in the investment decision-making processes. In such cases, DZ BANK will respond to the demand that arises from the special customer group of eligible counterparties and will serve these counterparties.

The information provided here on strategies to integrate sustainability risks relates exclusively to financial products within the meaning of the Disclosure Regulation, i.e. fund products.

Status: 25/2/2021

In order to comply with the legal requirements pursuant to Article 4 (5) of Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector from 27 November 2019 ("Disclosure Regulation"), DZ BANK publishes information on why it does not take into account adverse effects of investment decisions on sustainability factors in its investment advice ("Failure to take adverse effects on sustainability factors into account as a financial advisor").

This information on the non-consideration of adverse effects on sustainability factors as a financial advisor relates exclusively to DZ BANK's investment advisory activities on financial products within the meaning of the Disclosure Regulation, i.e. fund products.

At present, DZ BANK does not take into account the adverse effects of investment decisions on sustainability factors in its investment advice.

Sustainability factors mean environmental, social and employee concerns, respect for human rights, anti-corruption and anti-bribery matters (cf. Art. 2 No. 24 Disclosure Regulation).

In 2008, DZ BANK signed up to the United Nations Global Compact Initiative and has since committed itself to ten globally valid principles for responsible conduct. These include respect for human and labour rights, commitment to environmental protection and the avoidance of corruption and bribery. The principles of the Global Compact are an important guideline for DZ BANK in its actions. They are fully supported by the bank and applied in all business areas. In March 2020, DZ BANK signed the Principles for Responsible Banking (hereinafter referred to as "PRB") - an initiative for responsible banking launched by UNEP FI, the finance initiative of the United Nations Environment Programme. With its commitment to the PRB, DZ BANK commits itself to greater sustainability and transparency. Based on the six principles of the PRB framework, sustainability is to be integrated into the main business areas. DZ BANK thus aligns its commitment to sustainability with the Sustainable Development Goals of the United Nations and the Paris Climate Agreement.

Furthermore, DZ BANK has decided, however, not to take the adverse effects of investment decisions on sustainability factors into account separately in its investment advice at present. In view of the current regulatory status in the context of the Disclosure Regulation and the limited availability of reliable and meaningful data on the one hand, and the limited comparability of this data on the other hand, DZ BANK is of the opinion that comprehensive consideration of adverse effects on sustainability factors in investment advice, which both meets DZ BANK's quality standards and offers actual added value to the special customer group of eligible counterparties, is not yet feasible at present. DZ BANK will monitor further developments on this issue and explicitly reserves the right to reassess this position in the future.

Status: 25/2/2021

In order to comply with the legal requirements pursuant to Article 5 (1) of Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector from 27 November 2019 ("Disclosure Regulation"), DZ BANK publishes information on the extent to which its remuneration policy is in line with the integration of sustainability risks ("Consideration of sustainability risks in the remuneration policy as a financial advisor").

DZ BANK incorporates sustainability risks into its remuneration policy and the DZ BANK Group's remuneration is in line with its sustainability goals. Further details can be found in the Regulatory Risk Report and the disclosure on the remuneration policy as of the 2020 financial year. These can be found here.