Interview
, The transition to sustainability – where to begin and how to make it happen

With a comprehensive range of products and advisory services on offer and reliable cooperation partners at its side, Commerzbank is a valuable partner to German mid-market companies embarking on a sustainable transition.

While most corporate clients have long understood the need for a sustainable transition, many are unsure how to go about the process: that is where to start and how to implement it. This is where Commerzbank comes into play, offering far more than just traditional banking services. We spoke to Michael Kotzbauer, Member of the Board of Managing Directors responsible for the Corporate Clients segment, to find out how companies benefit from the Bank’s first-class advisory and financing expertise during the transition process.

Mr Kotzbauer, what drives Commerzbank’s firm commitment to helping German SMEs in their sustainable transition, going far beyond traditional banking services?

We, as the bank of choice for the German Mittelstand, have a specific responsibility in this area. The transition to sustainability is one of the biggest and most complex challenges facing businesses everywhere. Many require assistance in tackling these challenges – starting from evaluating the status quo and asking questions like: where do we stand compared with peers in our sector? What does a profitable climate transition plan look like? How big is our current ecological footprint? Which measures can we take to effectively reduce our footprint and how can we finance them? Keeping track of everything and finding knowledgeable partners who can support the implementation of action in these areas isn’t easy. Commerzbank is the ideal choice for mid-market companies looking for a bank that offers outstanding advisory and financing expertise. Sustainability is firmly embedded in our strategy. We have dedicated sustainability teams at six German locations to provide advice on sustainable financing and the sustainable transition to corporate clients. On top of this, carefully selected, trusted cooperation partners offer our clients a wide range of advisory and engineering services, from tailored sustainability strategies and transition solutions to assistance with the topic of energy more broadly. As such, our partners are the perfect addition for our own advisory services and sustainable products. Our combined wealth of expertise allows us to find solutions for practically any challenge that may crop up on the road to sustainability.

Even the best implementation plan requires financing ...

Providing finance is traditional banking business and our core competence. We know who can supply near-term financing for green projects in the mid-market sector, whether subsidies are currently available and how to apply for subsidised funds if applicable. Options include programme loans and global loans offered by Kreditanstalt für Wiederaufbau (KfW, Germany’s largest development bank), Landwirtschaftliche Rentenbank (LRB) and federal state development banks. Commerzbank is one of the largest partners of KfW and the European Investment Bank (EIB). What’s more, our investment loan for sustainable projects is available for selected investments and facilities, designed to finance, for example, the construction, expansion or acquisition of plants to generate heat or electricity or to produce hydrogen – naturally always using renewable resources.

What other financing options are available?

Clients can also opt for lease financing for sustainable investments to protect their equity and secure liquidity. We are therefore expanding our range of innovative, environmentally friendly products and additional services to cater to our mid-market clients’ needs. Most importantly, we remain at our clients’ side, providing strategic advice at every step of the transition process. With our advisors and specialists knowing the companies and sectors we work with like the back of their hand, they always find the solutions needed for our clients to achieve their goals.

What role does the EU’s Omnibus initiative play?

The European Union (EU) has proposed adjustments to the Corporate Sustainability Reporting Directive (CSRD) under its Omnibus initiative that would see the number of companies subject to CSRD reporting reduced drastically. However, the business case for increased sustainability efforts – such as in the area of on-site electricity production – very much remains intact, and mid-market companies still have to meet very strict requirements, for example in the automotive industry.

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