Deutsche Bank AG

### New Net Zero Forum established

###### High level process

Corporate Bank and Investment Bank front office staff to identify relevant high impact transactions

###### Comments

◼ Mandate and responsibilities

– The forum was established to identify, assess and discuss key transactions and client transition strategies

– The forum consists of ten senior management representatives including:

– ESG Heads of Corporate Bank and Investment Bank FIC and O&A

– Head of Enterprise Risk Management

– Chief Sustainability Officer and Head of Group Sustainability

◼ Recommendations and escalation

– The forum was established in Q4 2022 and meets on a weekly basis

– The forum provides recommendations for actions to the business

– If needed, transactions are escalated following established processes in the bank

Transaction identification

Transaction and client assessment

Discussion and decision

Engagement commitments

– Focus sectors: Oil & Gas, Power Generation, Automotive and Steel
– Threshold: Incremental / renewals >€ 25m (gross, cash limits)

Quantitative: Financed emissions and portfolio pathway alignment
Qualitative: Client's transition strategy and business rationale

Discussion and recommendation by senior management group (incl. portfolio monitoring)

– Corporate Bank and Investment Bank Business representatives
– Enterprise Risk Management
– Chief Sustainability Office

Definition of engagement commitments for coverage bankers to be followed up in client transition dialogues

Group Sustainability within the Chief Sustainability Office is responsible for designing environmental and social standards and policies, including this Framework and the Sustainable Finance Framework, and overseeing business adherence. As part of its oversight responsibility, Group Sustainability conducts transactional and client reviews pursuant to the bank's ES standards and Sustainable Finance standards. The ES due diligence process includes a discussion of critical issues with clients and remediation actions. The final ES risk profile includes an evaluation of the materiality of the identified ES risks and associated reputational risks. If the risks are deemed to pose a material reputational risk or meet one of the mandatory referral criteria, the transaction will be referred to one of the four Regional Reputational Risk Committees. If issues are not resolved at the level of a Regional Reputational Risk Committee, the governance structure requires escalation to the Group Reputational Risk Committee (GRRC); ultimately, the Management Board is accountable for the management of reputational risk. Since 2015, the entire ES risk review process has been supported by a dedicated IT application. [...] Deutsche Bank's senior management receives regular and ad hoc updates on how the bank is managing environmental and social topics covered by this Framework. Furthermore, quarterly updates on reputational risk topics, including those related to environmental and social issues, are provided to the Group Reputational Risk Committee and Regional Reputational Risk Committees. Deutsche Bank publishes information on the Framework's implementation, including the overview of "Transactions and clients reviewed under the Environmental and Social Policy Framework", in its annual Non-Financial Reports, which have received external limited assurance. In addition, as a signatory to the Equator Principles, the bank has expanded its annual reporting and provides information on project finance-related transactions within the scope of the Equator Principles.

Since its creation in November 2022, Deutsche Bank's **Net-Zero Forum** reviewed 41 transactions in carbon-intensive industries. The Net-Zero Forum assesses incremental and renewed transactions for in-scope sectors above the threshold of € 25 million and which would lead to an increase of more than 1% in the sectoral financed emissions metric and/or the net-zero target metric for target sectors. [...] **External engagement**, including Deutsche Bank's engagement with regulators as well as governmental or policymaking bodies or its membership in industry initiatives, global climate forums and other bodies

Robust governance plays an important role across Deutsche Bank's sustainability strategy, and this Transition Plan is no exception. All net-zero pathways, decarbonization targets, and enabling actions described herein have been approved by the Group Sustainability Committee, the highest decision-making body on sustainability-related matters established by the Management Board. Working closely with the bank's businesses and Chief Risk Office and through the engagement of external stakeholders, Deutsche Bank's Chief Sustainability Office drives the operationalization of the bank's initial Transition Plan and the development of the broader sustainability agenda. [...] At the highest level, the Group Sustainability Committee acts as the main governance and decision-making body for sustainability- and transition-related matters across Deutsche Bank (excluding DWS). The Management Board has delegated sustainability-related decisions to this committee, which is chaired by the Chief Executive Officer (CEO) with the Chief Sustainability Officer as Vice Chair. This committee is made up of Management Board members, the heads of the bank's business divisions, and senior representatives of the relevant infrastructure functions. Its 'run the bank' mandate has oversight of sustainability strategy implementation across divisions and ensures alignment of the sustainability strategy with the bank's corporate strategy. [...] The Net Zero Forum was established in November 2022 to discuss and opine on any incremental and renewed transactions (for in-scope sectors) above the threshold of € 25 million (gross, cash limits) and which would lead to an increase of more than 1 % in either the sectoral financed emissions metric and/or the net-zero target metric for phase one target sectors. In addition, the members of the Forum, consisting of divisional ESG Heads and Coverage Heads across Corporate Bank and Investment Bank Chief Risk Office and Chief Sustainability Office, consider the qualitative assessment of clients' transition strategies in their recommendations. [...] The Sustainable Finance Governance Forum was established in 2021. It serves as a platform for reviewing and discussing open issues related to the classification of sustainable finance transactions. [...] Initially introduced in 2011, the Environmental and Social (ES) Policy Framework covers general requirements for ES due diligence (part of the Reputational Risk Procedures) and sector-specific ES provisions, articulated in our sectoral guidelines. It defines rules and responsibilities for risk identification, assessment, and decision-making, and specifies the requirements for environmental and social due diligence. It also covers provisions for deal-independent screening and monitoring of companies from an ES perspective. The ES due diligence process includes a discussion of critical issues with clients and remediation actions. The final ES risk profile includes an evaluation of the materiality of the identified ES risks and associated reputational risks. If the risks are deemed to pose a material reputational risk or meet one of the mandatory referral criteria, the transaction will be referred to one of the four Regional Reputational Risk Committees following assessment and support at business level. If issues are not resolved at the level of a Regional Reputational Risk Committee, escalation is required to the Group Reputational Risk Committee. Ultimate accountability for the management of reputational risk lies with the Management Board.

The Political Affairs function is responsible for conducting transparent and constructive government and regulatory advocacy on behalf of the bank. Our aim is for this advocacy to support not only the bank but also the governments and regulators themselves as well as all our stakeholders: employees, clients, investors, and the countries where we operate. We intensified this advocacy throughout 2021. The Political Affairs function also monitors emerging policymaking and regulatory developments that may impact the bank and develops and coordinates the bank's position on them. In addition, it advises senior management and clients on global political trends and geopolitical risk. Effective March 2021, this function is assigned to the Chief Executive Officer (CEO) rather than, as formerly, the Chief Administrative Officer. Its responsibilities and setup did not change. [...] The global Political Affairs team is led by the Global Head of Political Affairs, who reports directly to the CEO. The team consists of around 20 FTE in key business and political hubs: Frankfurt, London, New York, Berlin, Brussels, and Washington. [...] The Political Affairs function works closely with the Regulatory Affairs function. The latter is the principle point of contact for key supervisors and is responsible for managing the bank's relationships and collaboration with them. It also supports senior management's interactions with supervisors. The Regulatory Affairs function provides insights into emerging supervisory priorities so that the bank can respond swiftly and appropriately, while ensuring continual focus on ongoing matters, such as onsite visits as well as findings and commitments. This function is led by the Global Head of Regulatory Affairs, who reports directly to the Chief Administrative Officer.

Robust governance plays an important role across Deutsche Bank's sustainability strategy, and this Transition Plan is no exception. All net-zero pathways, decarbonization targets, and enabling actions described herein have been approved by the Group Sustainability Committee, the highest decision-making body on sustainability-related matters established by the Management Board. Working closely with the bank's businesses and Chief Risk Office and through the engagement of external stakeholders, Deutsche Bank's Chief Sustainability Office drives the operationalization of the bank's initial Transition Plan and the development of the broader sustainability agenda. [...] The Net Zero Forum was established in November 2022 to discuss and opine on any incremental and renewed transactions (for in-scope sectors) above the threshold of € 25 million (gross, cash limits) and which would lead to an increase of more than 1 % in either the sectoral financed emissions metric and/or the net-zero target metric for phase one target sectors. In addition, the members of the Forum, consisting of divisional ESG Heads and Coverage Heads across Corporate Bank and Investment Bank Chief Risk Office and Chief Sustainability Office, consider the qualitative assessment of clients' transition strategies in their recommendations. [...] At the highest level, the Group Sustainability Committee acts as the main governance and decision-making body for sustainability- and transition-related matters across Deutsche Bank (excluding DWS). The Management Board has delegated sustainability-related decisions to this committee, which is chaired by the Chief Executive Officer (CEO) with the Chief Sustainability Officer as Vice Chair. This committee is made up of Management Board members, the heads of the bank's business divisions, and senior representatives of the relevant infrastructure functions. Its 'run the bank' mandate has oversight of sustainability strategy implementation across divisions and ensures alignment of the sustainability strategy with the bank's corporate strategy. [...] The Chief Sustainability Officer regularly reports on progress to the Strategy and Sustainability Committee of the Supervisory Board. [...] The Net Zero Forum has the authority to further escalate a transaction to senior management and/or the Group Reputational Risk Committee if deemed necessary.

Group Sustainability within the Chief Sustainability Office is responsible for designing environmental and social standards and policies, including this Framework and the Sustainable Finance Framework, and overseeing business adherence. As part of its oversight responsibility, Group Sustainability conducts transactional and client reviews pursuant to the bank's ES standards and Sustainable Finance standards. The ES due diligence process includes a discussion of critical issues with clients and remediation actions. The final ES risk profile includes an evaluation of the materiality of the identified ES risks and associated reputational risks. If the risks are deemed to pose a material reputational risk or meet one of the mandatory referral criteria, the transaction will be referred to one of the four Regional Reputational Risk Committees. If issues are not resolved at the level of a Regional Reputational Risk Committee, the governance structure requires escalation to the Group Reputational Risk Committee (GRRC); ultimately, the Management Board is accountable for the management of reputational risk. [...] Deutsche Bank's senior management receives regular and ad hoc updates on how the bank is managing environmental and social topics covered by this Framework. Furthermore, quarterly updates on reputational risk topics, including those related to environmental and social issues, are provided to the Group Reputational Risk Committee and Regional Reputational Risk Committees. Deutsche Bank publishes information on the Framework's implementation, including the overview of "Transactions and clients reviewed under the Environmental and Social Policy Framework", in its annual Non-Financial Reports, which have received external limited assurance. In addition, as a signatory to the Equator Principles, the bank has expanded its annual reporting and provides information on project finance-related transactions within the scope of the Equator Principles.

#### Enhanced governance to accelerate our transformation

###### Sustainability governance at Deutsche Bank [excerpt]

Supervision and escalation

###### Key changes since last SDD

− Set-up Sustainability Strategy Steering Committee to manage and oversee the bank's sustainability transformation

− Strengthened Sustainability Strategy Programme to account for the transformation progress and refined strategic priorities

− Created Chief Sustainability Office, consisting of three teams, mandated to drive the strategic transformation of the bank's business model and stringent policies and controls as well as regulatory compliance:

− Strategy and Regional Governance: developing Corporate Sustainability Strategy and enhancements to regional governance set-up

− Execution, Data and Regulatory: managing and overseeing strategy execution, identifying and assessing relevant regulations

− Group Sustainability: advancing sustainability framework and overseeing adherence to policies and commitments