Deutsche Bank needs more ESG expertise, CEO Sewing says

Deutsche Bank chief executive Christian Sewing said that all 22,000 client-facing staff at the German lender need to be versed in ESG, but admitted that the bank needs more specialists in order to prepare for the coming boom in the sector.

Sewing said he is receiving requests from the bank’s environmental, social and governance teams for more budget for people, which is “clearly on the table”, as the bank has seen a surge in interest from clients across its investment bank and other departments.

“You need to be very careful and very diligent in your processes and reporting, deciding whether something conforms to ESG or not, and therefore we need the people,” he said, speaking at the JPMorgan CEO conference.

The Deutsche boss said that an understanding of ESG should be a “normal demand of people” in client-facing roles, but suggested the bank still needs extra resources.

“From a client demand point of view, [ESG] is the number one topic,” he said. “And not only for 2022, but for the next five years at least.”

READ Banks snap up ESG hires as Covid turns $3tn market into ‘competitive necessity’

In August, Deutsche Bank’s asset management arm, DWS, came under fire when a whistleblower claimed it was overstating the amount of assets that complied with ESG criteria.

Sewing reiterated DWS’s statement that they “reject the accusations”.

Investment banks have hired teams of specialist bankers to work on advising clients on sustainability and environmental issues, with Citigroup, Deutsche Bank, JPMorgan, and Goldman Sachs among those forming specialist units of dealmakers to capitalise on an expected boom in deals.

Nomura’s hiring spree will be focused on sustainability, its new co-head of investment banking, Jeff McDermott told Financial News.

Sewing reiterated comments made by Deutsche’s chief financial officer, James von Moltke on 23 September that the investment bank is likely to match the €9.3bn in revenues it made in 2020 this year, adding that he would be a “bit disappointed” if the unit didn’t hit at least €8.7bn 2022.

Sewing said that “clients are back” after the bank was upgraded by ratings agency Moody’s last month.

READ Could investment firms’ ESG claims do more harm than good?

Deutsche Bank is recovering after a sweeping overhaul in 2019 that prompted Sewing to announced 18,000 job cuts and pull back from non-core business lines, including many within its investment bank. Sewing said that employees had “pride” working for Deutsche Bank again.

“And I don’t mean arrogance, that was our big mistake,” he said. “We were arrogant — the worst thing you can be as a banker — but you can be proud of working for your institution.”

To contact the author of this story with feedback or news, email Paul Clarke

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