DDV Annual Report 2021

Last year, the DDV introduced a sustainability code for structured
products. The DDV Sustainable Finance Code of Conduct is
based on and supplements the current version of the "Typology
for sustainable financial instruments" (ESG target market) of the
German Banking Industry Committee (Deutsche Kreditwirtschaft,
DK), the German Investment Funds Association (Bundesverband
Investment und Asset Management, BVI), and the DDV.
Investing with a
clear conscience
Sustainable finance: Strengthening sustainable investments
DDV SUSTAINABLE FINANCE
CODE OF CONDUCT
In offering sustainable structured products, the
members of the DDV place the protection of
natural resources and universal human rights at
the centre of their business activities.
The members of the DDV undertake to label structured
products as sustainable only if they meet
comprehensible sustainability standards.
The members of the DDV shall only label sustainable
structured products as "ESG Products" if they
themselves or the group to which they belong
have achieved the status of a sustainable company
with at least one recognised rating agency and
consider the UN Principles for Responsible Banking
and/or the UN Global Compact and/or equivalent
principles.
The members of the DDV shall label sustainable
structured products as "ESG Impact Products"
only when the products pursue one or more
measurable sustainability objectives.
Leverage products are, in principle, not to be
labelled as sustainable structured products.
The members of the DDV shall not label as
sustainable any structured products relating to
companies that exceed certain thresholds in
the production and/or distribution of military
equipment or coal, or from tobacco production.
Companies that produce or distribute controversial
weapons are also to be excluded.
Investors need to have the assurance that sustainable
structured products do not encourage
speculation with important foodstuffs.
The members of the DDV shall not label as
sustainable any structured products relating to
companies that violate the ban on child labour,
do not respect human rights, or cause massive
damage to the environment or natural resources.
The members of the DDV undertake to publish all
relevant information on the sustainable structured
products issued by them on a website so that investors
can inform themselves about the products.
This Sustainable Finance Code of Conduct shall
be regularly reviewed and adapted to the applicable
legal framework.
Thinking about tomorrow today: Many people are now convinced of the need for
sustainable business activities – both in Germany and around the world. Consideration
of environmental, social, and governance aspects is thus becoming
increasingly important to them. As such, sustainability has also become highly
relevant when it comes to investing money – investors now ask not only about
maturity, risk, and return, but also about how sustainable an investment is.
The latest DDV issuer survey shows that two thirds of the issuers of structured
products in Germany see sustainable investments as a driver of innovation for
the industry in the coming five years – more so than any other issue. Around 74
percent want to expand their product range in this segment in the coming year,
and another 13 percent will potentially look into this.
Sustainable finance as a core component of advisory services
Many legislative projects pursue the objective of advancing the sustainable
transformation of the economy. Among their goals, European countries want to
promote a shift towards reduced carbon emissions. In concrete terms, companies
are to use facts and data to clarify how their business is performing in terms of
environmental and social issues, as well as corporate governance. On the basis
of the information these companies provide, the financial industry will in future
report the extent to which they have implemented key sustainability criteria.
In any case, the financial industry plays a key role in the transition to sustainability
due to the high level of investment this transition requires. With sustainable
finance, the green economy has finally secured its place in the financial markets.
From August 2022, sustainability will also be a core component of advisory
services – investors will then have to be asked whether and to what extent they
attach importance to sustainability in their investments.
Investing sensibly – based on personal decisions
People want to decide for themselves whether and how to pursue different sustainability
strategies with their investments. A key prerequisite for this is that they
are able to choose from all competitive investment solutions. There are often
a range of different securities that can fit both the risk-reward profile and the
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