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At the GLS Bank, success means having a positive socio-ecological impact. That is why we pay closer attention: How do we pay into our sustainable Visions of Change in our six sectors? And how does our trade relate to our common values that we draw from? In this chapter, we take a closer look at our impact on the values Nature, Knowledge, People, Relationships, Money and Position.

GLS Bank Illustration Wirkung im Nachhaltigkeitsbericht 2020 | Gesellschaftlichen Beitrag von Unternehmen messen



We understand the value NATURE to represent all naturally occurring renewable and non-renewable resources. From water to wood to breathing fresh air, nature forms the basis for all life and all economic activity. In addition to material resources, nature also provides non-material and regulating ecosys­tem services, such as climate regulation, through which life on earth becomes possible in the first place. However, by overex­ploiting natural resources, humanity is endangering the nature’s stock: forests are shrinking, oceans are acidifying, soils are degrading and climate is changing. In its mission statement, the GLS Bank has committed itself to the protection of our natural resources. It fulfils this commitment in particular in its lending policy, as loans represent the core business of GLS Bank, and in the management of its business operations. We show how our everyday banking operations, including all financial activities, depend on nature, and what our impact is.

Division of Nature into its foundations

As part of our sustainability report, we first divide NATURE into four areas: Atmosphere, Biosphere, Soil, Water. This enables us to provide a holistic picture of our impact on and dependency from nature.


The foundation Atmosphere

The atmosphere is the mass of air that surrounds the earth like a shell. Through its composition of various gases and particles, it protects us from life-threatening radiation and regulates the climate on Earth. It also provides pollination for plants through winds or nourishment for soils through precipitation. Without the protective atmosphere and the natural greenhouse effect, our planet would be inhabitable for humans with an average temperature of -18°C! Climate regulation is sensitively influenced by humans: In particular, the burning of fossil fuels increases the concentration of CO2 in the atmosphere, which disrupts climate. The earth warms and the natural greenhouse effect intensifies. In our sustainability report, we focus on our impact on the ecosystem performance of climate regulation, as the threat of climate collapse is one of the most threatening crises of our time and requires special attention.

The function Climate Regulation

The average temperature on Earth has risen by more than 1.09°C since the beginning of industrialization. In Germany, it is already 1.5°C. If we do not drastically reduce greenhouse gas emissions, the average temperature will rise by up to 4.1°C by the end of the century. But human life is only possible in the current climate. At 4.1°C warming, life as we know it would no longer be possible. In order to preserve our livelihoods, we must therefore make every effort, collectively and internationally, to limit global warming to 1.5°C or an absolute maximum of 2°C. 197 countries have committed to this goal by signing the Paris Agreement on climate protection. The agreement requires us to reduce our greenhouse gas emissions worldwide to zero as quickly as possible. The rule is: the sooner, the better. The later, the more drastic.

What do we mean by “CO2“?

Everyone knows it: In the context of climate change, we often speak of CO2. CO2 accumulates in our atmosphere and prevents energy in the form of heat from radiating into space. However, this greenhouse gas effect is also caused by other gases (e.g., methane or nitrous oxide). Scientists calculate the climate impact of these greenhouse gases as CO2 -equivalents (“CO2e“). This means: How much CO2 would have to be emitted to achieve the same climate impact as the respective gas? Methane has about 20 times the atmospheric effect of CO2 over a period of 100 years and nitrous oxide over 300 times.

Scientifically, we would have to classify CO2 as “CO2e“ or “greenhouse gases“. To ensure easy readability, we have decided to exclusively use the term CO2.

Stabilizing vs. destabilizing influences

Any economic activity has a negative impact on nature. In its desire to make nature usable, humanity disrupts or rather destroys ecosystems. When we speak of destabilizing effects hereinafter, we describe which factors make activities have a significant negative impact on nature. Stabilizing measures are those, which reduce the negative impact of economic activities.

Budget for the function Climate Regulation

How many tons CO2 are we allowed to emit, to comply with the 1.5° goal?

To ensure that the ecosystem service CLIMATE REGULATION is not disrupted by the man-made greenhouse effect, we humans may only emit a certain budget of greenhouse gases. In order to meet the 1.5°C target, the Intergovernmental Panel on Climate Change specifies a budget of 400 gigatons of CO2 that we are still allowed to emit. If we continue as before, the budget of the 1.5°C target will be used up in seven years. These figures make it clear: We must act! Therefore, we as the GLS Bank are striving to reduce our emissions from banking operations and lending. While our banking operations are carbon neutral, we are working to take further steps to avoid emissions. In addition, we are politically committed to more climate protection and the compliance to the Paris Climate Objectives.

Influences of the GLS Bank

It is our aspiration to preserve that budget as well as possible. In many cases we are already succeeding, however, we do see ourselves confronted with certain challenges and conflicts of objective in some situations to do this aspiration justice and meet those requirements. That is why we transparently report on how we could do better, too.

External influences

External events also impact our influence on climate regulation. These influences can be stabilizing or destabilizing on the function climate regulation.

Impacts of GLS Bank on the function climate regulation

Stabilizing influences

Photo: Jäger

How do we as a company contribute to the 1.5° goal?

1.5°C compatibility of the GLS Bank

We already know that our loan portfolio is 1.5°C-compatible. But what about the internal operations of the GLS Bank? We examined this question.

Based on our emissions from 2021, we identified our status as a company together with right. based on science.

The result: We are 1.5°C-compatible! This means we are in line with the goals of the Paris Climate Agreement. In comparison to the finance sector, this result puts us into a leading position.

GRI references: GRI 302-4, GRI 302-5, GRI 305-5, GRI 201-2, GRI 102-29, GRI 102-30, GRI FS2

Dealing with emissions

Although we are a sustainable service provider, our business causes emissions. That is why we look closely. Since 2008, we are certified as a sustainable company according to the Stop Climate Change (SCC) Standard.

Following the systemic procedure of the SCC Standard, the emissions of greenhouse gases are being analysed and calculated. The operational emissions of the GLS group amount to 892,9 tons CO2 equivalents (1.192,2 tons in the previous year). Relative to the average number of employees, these are 1,3 tons (2,0 tons in the previous year). These emissions are being compensated in high-quality climate protection projects.

We constantly act according to the triad prevent - reduce – compensate. If the potential for prevention and reduction is fully exhausted, we compensate the remaining emissions by buying Gold-Standard climate protection certificates of the voluntary market, which comply with the highest requirements. This way, the GLS Bank is climate-neutral on paper. Our highest priority however is the (further) prevention or rather reduction of emissions. The 1.5°C goal also applies to our internal operations.

Focus on our core business: How do our loans become climate neutral?

Even if the reduction of emissions in our business is important, it is of even greater relevance to us as a bank to pay attention to our so-called financed emissions. By giving out loans to companies, we make projects like reconstructions or production expansions possible. These cause further emissions, which we are indirectly responsible for. This is the greatest lever for us to reduce emissions. We are the first German bank that measures its climate impact instead of solely reporting on the emissions caused by our banking business.

What are Gold-Standard climate protection certificates?

The Gold-Standard was founded by WWF in 2003 and is supported by more than 80 non-governmental organizations today. It is an award-winning certification standard for climate protection in mandatory as well as voluntary emissions trading. Its rigorous and holistic approach ensures that the reduction of emissions is verifiable, and the project activities have a measurable positive impact on the sustainable development of the respective communities.

For this purpose, we have set the following sustainability goals for the year 2022:

  • S6 1.5 °C compatibility of operational processes (2022)
  • S6-01 Reduction of emissions resulting from electricity and energy consumption by half per capita compared with the baseline year 2019 (2022)
  • S6-02 Expansion of the annual nominal output of self-produced green electricity (2022)
  • S6-03 Reduction of emissions resulting from employee travel by half per capita compared to the baseline year 2019 (2022)
  • S6-04 Further increase in the use of climate-friendly means of transport (public transport, bicycle, e-car, etc.) for business trips (2021)
  • S6-05 Eliminate flights up to 1,000 kilometres (ongoing).
  • S6-06 Reduction of flights over 1,000 kilometres by 50 percent compared to the baseline year 2019 (2022)
  • S6-07 Reduction of internal paper consumption by half per capita compared to the baseline year 2019 (2022)
  • S6-08 Reduce customer-related paper consumption by half per capita compared with the baseline year 2019 (2022)
  • S6-09 Raise awareness of climate-friendly nutrition (2021)
  • S6-10 Eliminate meat from conventional, industrial production and use organic, seasonal, and regionally or responsibly produced foods (fair trade) for catering and hospitality (ongoing)
  • S6-11 Continuation of sustainable procurement and coverage of 100 percent of suppliers (2021)
  • S6-O12: Alignment of the GLS’s own property towards the 1.5°C goal (2023)

Prevented emissions of the GLS community

What did we achieve?

To accelerate the coal phase-out, we are in need of sufficient energy from renewable sources. In 2021, the GLS Bank has issued new loans in the amount of 260 million Euros in this sector, which makes up 31% of our loan portfolio. The renewable energy power plants we newly financed in 2021 produce enough electricity to provide about 43.000 three-person households with climate friendly energy for a year. At the same time, our customers and we could prevent about 98.200 tons CO2-equivalents in 2021 alone with these investments. For comparison: A mid-size car would emit the same amount of CO2-equivalents if it drove about 1.038 times to the moon and back.

Photo: Arturo Sosa

For this purpose, we have set the following sustainability goals for the year 2022:

  • S2: Alignment of the investment and loan portfolio with the targets of the Paris Agreement on climate change (1.5°C compatibility*) (2022); baseline: 2°C (2019)
    • *1.5°C-compatible means that global warming could be limited to this level if all companies operated in the same way as those in GLS Bank's investment and financing portfolio. Methodology used: X-Degree Compatibility (XDC)
  • S2-O1: Extend coverage of XDC calculation to GLS equity fund (2022)
  • S2-O2: Extend coverage of XDC calculation to 100 percent of loan portfolio (2021)
  • S2-O3: Extend coverage of XDC calculation to proprietary investments (2021)
  • S2-O4: Matching the emissions of the security papers in the GLS own investments with the 1.5°C goal in 2022
  • S2-O5: Improvement of data quality in the XDC-survey in 2022
  • S2-O6: Dealing with methodological challenges in 2022

1.5°C compatibility (XDC) of the loan portfolio and the climate fund

In 2019, GLS Bank decided to make its entire investment and loan portfolio 1.5°C compatible – an ambitious goal. This means that global warming could be limited to this level if all companies operated in the same way as those in GLS Bank‘s investment and loan portfolio.

Our climate fund and loan portfolio once more achieved 1.5°-compatibility in 2021.

This gives us scientific certainty that our financing and investment decisions are in line with the Paris Climate Agreement. We are financing climate protection.

Currently, we are working on extending the collection of the indicator to further GLS Bank offers, while also bringing it into an annual rhythm for our loan portfolio and the GLS Bank Climate Fund.

Lending in the environmental sector, especially renewable energies

The biggest impact we have on the climate is through our investment and financing decisions. Both decisions we make according to out strict inclusion and exclusion criteria, which emphasise climate-friendly and low-emission business models as positive criteria. The lending of the GLS Bank in the environmental sector (incl. construction financing) has amounted to a volume of 2.670 million Euros (2.542 million in the previous year). As in the last year, the financing for the generation of renewable energies makes up the biggest fraction of the financing in the ecological sector. Usually, we only finance construction projects if they fulfil high energetic standards. These should exceed simply adhering to thermal insulation regulations. Unlike the financing of renewable energies, construction financing does not put its sole focus on the ecological purpose, so that these loans only partially make an ecological contribution.

Impacts of GLS Bank on the function climate regulation

Destabilizing influences

Caused, non-preventable emissions

In 2021, too, we had to continue limiting our office operations due to the pandemic. Compared to 2019, less emissions were therefore caused e.g., by employees commutes to work and back. However, it is clear that these emissions in our office operations were not cut down but shifted to the home office of our employees. Even if they did not occur on GLS property, they were emitted in connection with our work as a bank. The challenge is to quantify these emissions.

In 2021, the GLS community caused the following emissions:

Emissions resulting from employee mobility

In 2021, emissions due to employee travel decreased further - the pandemic forced us to consider working remotely and resulted in us equipping and encouraging our employees to use a mobile workplace.

This is a change we will keep after the pandemic; we will continue to offer the option of working remotely so that employees can work flexibly from home, saving both time and emissions otherwise resulting from travel.

GRI references: GRI 302-1, GRI 302-2, GRI 302-3, GRI 305-1, GRI 305-2, GRI 305-3, GRI 305-4.

What are Scopes?

Scopes is the term for different kinds of CO2-emissions and their place of origin. Especially in operational CO2-balancing the classification according to scopes is used. Scope 1 emissions are those that are directly caused by the company. Scope 2 emissions are especially “bought“ emissions through energy supply. Scope 3 emissions include further mobility, the care for employees, and our acquisition of paper and technology. For us as a bank, scope 3 emissions also include so-called financed emissions. Following the logic, that borrowers run their companies with the provided money and also cause emissions, we are jointly responsible for those emissions. We are pioneers on the market with the calculation of our financed emissions and again ensure a unique transparency.

External influences on the function climate regulation

Stabilizing influences

Climate risks threaten financial institutions

Across Europe, banking regulators and central banks are calling on financial institutions to consider sustainability and especially climate risks in their risk management. After all, climate change poses significant physical risks to borrowers and businesses by destroying assets through extreme weather events. Likewise, transitory risks as conversion costs to a climate-friendly economy threaten emission-intensive business models in particular.

The risks that companies face as a result of an increased CO2 price, technical retrofits, changes in consumer behaviour or technical innovations must be quantified and integrated into existing risk management systems. For banks, risks pose the danger of accumulating in their investment and loan portfolios. Financial institutions, including GLS Bank, need to develop methods to measure climate risks and incorporate them into existing risk processes.

Results from the IPCC Report

We want to protect the climate. To reach this goal, we have to closely take current research into consideration, that shows what CO2-budget remains for humanity to prevent exceeding the climate breakover point. We closely follow the studies of the Intergovernmental Panel on Climate Change in the design of our climate commitment – political, operational and in our lending business. We keep ourselves up to date and incorporate the findings from the IPCC Report into our processes.

External influences on the function climate regulation

Destabilizing influences

EU taxonomy

The EU-taxonomy exists to help define under which conditions economic activities are considered sustainable. Non-monetary as well as financing companies must disclose information on their activities based on this system for classification. This should enable investors to take sustainability into consideration when making their investment decisions, which is supposed to direct capital into environmentally friendly projects. Adding nuclear power and gas to the list of sustainable technologies though, the EU-taxonomy unfortunately turns into that kind of greenwashing it is trying to prevent. 

Additionally, the formal criteria for size prevent the consideration of small and medium-sized companies, so that 99 percent of companies nationwide are excluded from the EU-taxonomy, which leads to the distortion of competition. Finally, the EU-taxonomy is lacking substance, since it reduces sustainability exclusively to its climate aspects. Naturally, we will attend to our legal duties and disclose the according information. At the same time, we gear our investment and financing decisions towards significantly stricter sustainability criteria and politically advocate for a real and trustworthy label for sustainable investments.

Insufficient climate targets set by policymakers

The German government‘s current climate policy does not limit climate change to 1.5°C. The current policy strategy is insufficient. We at GLS Bank are therefore much more ambiti­ous in our commitment to climate protection both in our core business and politically.