Germany’s development bank KfW names new Chief Sustainability Officer

German state-owned investment and development bank KfW has created a new department to strengthen its focus on sustainability strategy. Jürgen Kern will head it as the bank’s new Chief Sustainability Officer.

Kern is a KfW veteran, having joined the bank in 2007 and worked in its Brazilian office for four years. He went back to Germany in 2014 to head the energy and transport division before being appointed Director of Corporate Strategy and Sustainability in 2018.

Now, as Chief Sustainability Officer, Kern will be responsible for integrating sustainability criteria into KfW’s financing activities, as well as developing the newly formed sustainability strategy department.

“The sustainable orientation of our financing is at the centre of our strategic transformation agenda and we also want to be a driving force in this area,” said Stefan Wintels, KfW’s CEO, who also exercised the function of Chief Sustainability Officer until now.

KfW fossil fuel financing policy

As Germany’s main public investment and development bank, KfW has a mandate to execute the country’s climate commitments through financing, but a 2023 analysis of the bank’s “Paris-compatible” electricity, oil and gas policy by NewClimate Institute deplored its misalignment with net zero goals.

Among other issues, the bank’s new policy appeared to allow for continued wide-ranging fossil fuel financing despite Germany’s commitment to phase out fossil fuel financing as part of a COP26 pledge, according to the think tank.

“Implementation of these guidelines in their current form would seriously undermine the KfW’s climate efforts, undermine Germany’s commitment under the Glasgow statement, and more broadly undermine Germany’s leadership,” NewClimate Institute wrote.

KfW sustainability strategy

KfW, which held €560.7 billion in assets in 2023, has been gradually increasing its sustainable financing activities. Last year, it provided €111.3 billion of development finance – €1.5 billion of which was offered to SMEs through its Climate Action Campaign.

In June 2023, the bank published sustainability guidelines to “define a common binding framework to incorporate environmental, social and climate standards into the planning, appraisal, implementation, and monitoring of financial cooperation measures”. Its stated goal is to focus 38% of its annual new commitment volume on climate action and environmental protection – a continuous target that was met in 2023.

KfW’s reported carbon footprint stood at 17,266 tonnes of CO2 equivalent last year – up from 10,820 tonnes in 2022 – but the bank does not disclose financed emissions.