Pfandbrief banks set Minimum Standards for Social Pfandbriefe

Berlin, March 16, 2021

Kullig: “Increase in demand for sustainable investments”

The member banks of the Association of German Pfandbrief Banks (vdp) formulate minimum standards for the issuance of Social Pfandbriefe. The initiative behind these new standards takes its cue from the Minimum Standards for Green Pfandbriefe, which were published two years ago, and goes a long way towards further establishing the market for sustainable Pfandbriefe.

The minimum standards are based on the Social Bond Principles drawn up by the International Capital Market Association (ICMA) and contain transparency requirements under which banks commit to undergo external reviews and to draw up and publish impact reports. Moreover, they take their bearings from the United Nations’ sustainability objectives (Social Development Goals, SDGs). The issuance proceeds from Social Pfandbriefe are to be used solely to (re-) finance suitable assets. These include the areas public supply, social housing, education and research as well as health and care. Deutsche Kreditbank AG (DKB) became the first vdp member back to place a Social Pfandbrief.

“We are seeing a clear increase in demand for sustainable investments in the European financial markets. We are convinced that both Social and Green Pfandbriefe are going to play a more and more important role in the refinancing mix of Pfandbrief banks,” Sascha Kullig, a member of the vdp’s Management Board, emphasized. “Our minimum standards will give new impetus to the market for Social Pfandbriefe and provide potential new issuers and investors with guidance,” Kullig added.