Integrating sustainability into your financing

Corporate finance has a key role to play in the transition towards a sustainable economy. Commerzbank is actively shaping this change, and is supporting companies in their individual transformation processes.
  • Funding for sustainable projects
  • Loans linked to ESG ratings
  • KPI-linked bilateral loans

At a glance

Three forms of sustainability-linked loans:
  • Investment loans providing funding for sustainable projects
  • Loans linked to an ESG rating and intended to finance general corporate purposes
  • Loans linked to sustainability-related key performance indicators (KPIs) and intended to finance general corporate purposes

Investment loans for sustainable projects

Funding sustainable investments and facilities

This may include:

  • construction, expansion and acquisition of facilities generating electricity from renewable resources such as solar, water, wind, and geothermal energy;
  • construction, expansion and acquisition of facilities for generating heat from renewable resources such as solar or geothermal energy;
  • construction, expansion and acquisition of facilities for generating hydrogen from renewable resources (solar energy);
  • acquisition of electric- and hydrogen-powered vehicles, and construction or acquisition of related charging/fuelling stations.

Our suite of sustainable financing products also includes lease financing to protect your equity and secure liquidity.

Sustainable investments supported by public subsidies

As an alternative or supplementary means of financing environmental and economic sustainability investments, we can help you secure public subsidies under dedicated schemes or as global loans from Kreditanstalt für Wiederaufbau (KfW), Landwirtschaftliche Rentenbank and state development banks. Commerzbank is one of the largest partners of KfW, Germany’s largest development bank, and EIB, the European Investment Bank.

Eligible projects include for example:

  • sustainable investments in fixed assets (buildings, machinery/equipment);
  • energy and resource efficiency (water consumption), climate and environmental protection (plastic reduction), renewable energy;
  • emission avoidance/reduction (CO2, dust, noise);
  • cross-sectional technologies, waste heat usage.

How you can benefit

  • Underlines your sustainability commitment to customers, suppliers, and other stakeholders by linking environmental projects and services with sustainable financings
  • Our experts advise you on the financing mix that is right for you
  • Secure a low-interest loan by eliminating liquidity costs, particularly where public subsidies are available

Loans linked to ESG ratings

Companies that have secured a certain ESG rating by one of the established rating agencies may use bilateral loans linked to an ESG rating to integrate sustainability criteria in their financing strategy, even if they do not have enough green assets themselves. Their goal is to improve their ESG rating – and this is what determines the cost of financing.If the client’s ESG rating deteriorates over the loan term, the instalments will increase. And they will decrease if the client’s ESG rating improves.

How you can benefit

KPI-linked bilateral loans

Sustainable financing linked to ESG-related KPIs

Where companies have no external ESG rating and prefer to use their own sustainable key performance indicators (KPIs), they may opt for a KPI-linked bilateral loan. KPI-linked bilateral loans may be used to finance general corporate purposes.

The company and Commerzbank agree on specific KPI-based sustainability targets and milestones, such as cutting CO2 emissions, replacing fossil fuels with wind or solar energy, or lowering the incidence of workplace accidents by a certain percentage by a certain date. If the borrower fails to meet the targets, the interest rate will increase – and it will be reduced if the borrower meets the targets ahead of schedule.

How you can benefit

  • Linking loans to ESG targets provides borrowers with greater flexibility since the use of funds is not restricted to investments with a direct sustainability benefit.
  • No complex rulebook required.
  • The financing underlines a commitment to improving the company's own sustainability profile.
  • Enjoy potential financing cost benefits that reward your sustainable performance