Deutsche Bank : Non-Financial Report 2023

Deutsche Bank

Non-Financial Report 2023

Contents

3 Letter from the

Chief Executive Officer

5 Letter from the Chairman of the Supervisory Board

1. Introduction
2. About Deutsche Bank
3. About this report
4. Materiality assessment

12 Transition toward a sustainable and climate-neutral economy

1. Sustainability strategy and implementation

1. Sustainable finance

1. Climate and other environmental risks

1. Environmental and social due diligence

1. Human rights

1. In-houseecology

85 Governance and operations

87 Corporate governance

1. Stakeholder engagement and thought leadership

1. Culture, integrity and conduct

1. Public policy and regulation

1. Anti-financialcrime

1. Tax

1. Data protection

1. Product responsibility

1. Client satisfaction

129 Technology, data and innovation

1. Digitization and innovation

1. Information security

137 Employees and corporate social responsibility

1. Employment and employability

1. Corporate social responsibility

1. Art, culture and sports

1. Appendix
2. Reports of the independent auditor

170 ESG-related targets and goals

172 Tabular disclosures in accordance with Article 8 of the Taxonomy Regulation

1. GRI Content Index and UN Global Compact

1. Sustainability Accounting Standards Board (SASB) Index

1. Recommendations of the Task Force on
   Climate-related Financial Disclosures (TCFD)

1. Principles for Responsible Banking

1. Imprint/Publications

Letter from the

Chief Executive Officer

Letter from the Chairman of the Supervisory Board

Dear Readers,

On a range of fronts, 2023 was no easy year. Many urgent issues continued to dominate the agenda: inflation, supply chain issues, the wars in Ukraine and between Israel and Hamas. These posed significant challenges - for our clients, our employees and for the societies in the countries where we operate. Many of our stakeholders needed our urgent support last year - and our focus was on meeting their needs.

The geopolitical environment, marked by conflict, reinforces our conviction that comprehensive risk management is a fundamental prerequisite for Deutsche Bank's success. Non-financial risks are becoming increasingly important, whether in the area of data and IT security, protection against non-compliant employee behavior, in sustainability or in one of the other areas covered in this report.

Many of these topics are rarely discussed in public or have been somewhat overlooked recently in view of the other major challenges. This applies in particular to the topic of sustainability. It made fewer headlines in 2023, even though, according to NASA research, last year was the warmest since records began, with droughts and floods on a scale rarely seen before. This underscores just how critical the fight against climate change and environmental destruction is and how it deserves the full attention not only of society at large but also of our bank.

We are convinced that the transformation to a sustainable economy must be accelerated. And we see it as an imperative for a global bank headquartered in Europe to position ourselves as a credible leader. The term sustainability goes far beyond protecting our environment and the climate. Another element that plays into our long-term business success is when we also systematically address the threats posed by human rights being violated or by financial crime - and when we act accordingly. The non-financial risks associated with these threats are an integral part of our risk management nowadays. And we work hard to improve and tighten our controls.

We want to be a bank that contributes to an environmentally sound, socially inclusive and better managed economy, and we are committed to the Ten Principles of the UN Global Compact. Sustainability has been a priority at Senior Management level since 2019 and we have continued to make progress on all four pillars of our sustainability strategy during this time - also in 2023:

We increased the volume of sustainable financing and ESG investments by € 64 billion. Since we started reporting in 2020, we have achieved a total volume of € 279 billion, excluding DWS.

There were many impactful transactions and programs last year, among them a new risk sharing program in cooperation with the European Investment Bank to support medium-sized companies in their sustainable transformation with an expected volume of € 400 million with at least half of the loans being earmarked for financing renewable energy production.

We continue to work towards our € 500 billion target by the end of 2025, despite the recent slow-down in growth in sustainable financing and ESG investment volumes on account of reduced demand by corporates and private clients as they faced uncertain market conditions. We expect this downward trend to be temporary as environmental risks materialize more frequently and the regulatory and reporting environment reinforces the trend towards sustainable financing and ESG investments in the medium term.

In our Policies & Commitments pillar, we focused on fulfilling our commitment to achieve the Paris Agreement climate targets. We updated and tightened our Thermal Coal Policy and published our initial Transition Plan in October. The latter outlines our roadmap for achieving net-zero emissions by 2050. The plan details our approach to financed emissions for high-emitting industries in our corporate loan portfolio. The Plan also describes our net-zero targets for coal mining, cement and shipping in addition to the targets for four high-emitting sectors which we published in 2022. With these additional targets, more than half of our total financed emissions arising from our corporate loan portfolio are now covered by net-zero pathways, and we have now published financed emissions covering approximately 60% of our total loan exposure.

In order to hit these targets, our governance extends right down to the transaction level, which is why we established a Net - Zero Forum within our bank in November 2022. In 2023, the Forum discussed more than 40 transactions each with a loan volume of more than € 25 million, checking that they comply with our Transition Plan. This also helped our client advisors deepen the dialogue with our carbon-intensive corporate clients to support them on the challenging but essential transition to a low-carbon business model.

Furthermore, we enhanced the strategy, execution and control capacity in the Chief Sustainability Office, created the position of a Head of Human Rights and rolled out a regional governance program to align our set-up as well as the communication to regulators worldwide.

Finally, we demonstrated thought leadership with our 2nd Sustainability Deep Dive, our 3rd dbAccess Global ESG Conference and Deutsche Bank's event series with six German industry partners at the climate change conference COP 28.

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Another area in which we, as a bank with a global network, must be at the forefront is the fight against financial crime. Our industry faces increasingly sophisticated threat actors. Over several years, we have strengthened our anti-financial crime expertise, improved processes and established external partnerships. In 2023, our Anti-Financial Crime department grew by around 500 to over 2,400 employees. Recognizing that all our people play a key role in fighting financial crime, we continue to strengthen our risk culture, inform our employees regularly about all key regulations and encourage an environment where everyone feels comfortable to speak-up and address weaknesses, mistakes or irregularities.

We have sharpened our focus on educating our people on emerging threats and the impact these can have on individuals, institutions, and society more broadly. We held a Fighting Financial Crime week that saw strong employee participation and a range of experts from both outside the bank and from senior management.

We have made significant progress on remedying control deficiencies but understand there is more to do. We will continue to work closely with our regulators and invest the necessary resources. Establishing strong controls that can adapt to changing regulations and market conditions protects both the bank and our clients. An important example has been our ability to support our clients in an evolving sanctions landscape. Additionally, strong controls can enable business and ensure we can safely deliver new products or market opportunities for our clients.

A diverse workforce is essential if we want to provide tailored solutions for our clients worldwide. This is reflected in our employee network. Our bank is represented in 57 countries and home to 153 nationalities. In 2023, we strengthened the concept of equity within our diversity, equity and inclusion vision and initiatives. Across leadership levels we increased awareness on how we can support employees with different starting points, while continuing to invest in our equity programs for historically under-represented groups. We remain on track to achieve our gender diversity goals, including at least 35% women in our top ranks by 2025.

At the same time, we strive to create a working environment that promotes life-long learning, for instance with a learning platform that understands preferences and recommends content.

Furthermore, we encourage our employees to contribute their professional expertise and life skills to our corporate social responsibility activities. It fills us with pride that more than 23,400 employees dedicated over 212,000 hours to supporting a wide range of non-profit activities. For example, they taught financial literacy at schools and have reached 65,800 students since 2021 in Germany alone. In the future, we plan to extend our financial literacy programs to enable young people to embrace the responsibility for financial challenges.

These and other initiatives allow us to make measurable contributions to solving societal challenges and supporting people and communities. In 2023, the bank invested € 52.6 million as part of its social commitment as well as in art, culture and sp orts projects, touching the lives of 3.9 million people. A topic that is very important to us is the resolute fight against antisemitism and other forms of discrimination. We have underlined our commitment in this field by donating € 1 million to youth education projects that teach the upcoming generation tolerance, empathy and democracy.

Our clear ambition is to firmly stand at the center of society and play a part in making the world a more sustainable place. This is also a precondition for Deutsche Bank's lasting business success and therefore our non-financial and financial targets guide us equally. In 2023, we were able to prove that we are on the right track in both areas. We owe much of the progress to our clients, our shareholders and our employees, and I would like to thank them most sincerely for their loyalty and support.

Once again last year, we showed that we are a strong and reliable partner for our stakeholders. And it is our aspiration and duty to continue to be a responsible corporate citizen and the first point of contact for our clients in all their financial matters, contributing to their lasting success and financial security.

Yours sincerely,

Christian Sewing

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Dear Readers,

Transforming its business model in recent years, Deutsche Bank has built solid foundations for sustainable growth and gained further credibility and confidence among clients, shareholders and regulators. It is our responsibility to preserve this confidence. In 2023, our bank once again delivered sound financial results and demonstrated resilience in a volatile environment. However, we do not measure success by financial results alone; the bank must also achieve its ambitions and those of all relevant stakeholders when it comes to key non-financial factors. For this reason, during the past year, the Supervisory Board has been working intensively on the topics raised in this report.

Our focus in the Supervisory Board was primarily on strengthening corporate governance through reinforced controls and ensuring compliance with the bank's policies, supporting the transition to a more sustainable economy and driving digitalization in the interest of our clients.

As a global bank we are exposed to a wide range of threats, some of which are complex. Effective controls are therefore needed to protect the bank and our clients. The Management Board is continuously working to further strengthen controls and address weaknesses. In doing so, it receives advice from and is monitored by the Supervisory Board and its committees. The Regulatory Oversight Committee oversees the Management Board's actions with regard to complying with legal requirements, authorities' regulations and the company's own policies. The Committee also supports the Supervisory Board in monitoring litigation cases that are most relevant from a risk perspective. In addition, the Committee regularly reviews the bank's codes of conduct and ethics in addition to its policies.

It remains a key objective for the bank to promote diversity and inclusion. We also attach great importance to this principle in the composition of the Supervisory Board and the Management Board. We are well aware that we are currently not meeting our own standards for gender diversity in the Management Board. The Supervisory Board is focused on increasing the share of women in senior leadership positions both at Management Board level and below. Integrating gender diversity as well as our sustainability objectives even more firmly in the performance goals for our Management Board members is one of the elements of our new compensation system, which we will submit for voting at this year's Annual General Meeting. More details on this can be found in the Compensation Report, which is part of our Annual Report.

Sustainability is another top priority for the Supervisory Board, which is why we discuss it together with other strategic topics in the Strategy and Sustainability Committee. As a Global Hausbank, we support the transition towards sustainable growth and a low-carbon economy by enabling sustainable financing and ESG investments and providing advice and support to clients in their transformation. At the same time, the bank has committed to achieving a climate-neutral banking business. The initial Transition Plan published last year was a major milestone on the path to climate neutrality. It explains in detail how the Management Board intends to reduce the financed emissions for carbon-intensive industries in the bank´s loan portfolio. The Management Board also reported regularly to the Supervisory Board on the bank's progress in implementing its sustainability strategy.

The transition to a more sustainable way of life is not the only thing that will impact our clients' expectations and drive digitalization in the financial industry; technological innovations will have a similar impact. Barely any other development is expected to have as much influence as the use of artificial intelligence (AI), which was also addressed by the Supervisory Board last year. The bank launched a program in 2023 to expand the development and adoption of AI solutions across the bank and explore various use cases. In this field too, data security and appropriate controls are imperative. For this reason, the bank established an Artificial Intelligence Oversight Forum, whose task it is to ensure bank-wide supervision and governance as well as adequate monitoring and risk assessment of AI solutions and their alignment with the bank's strategic objectives. In addition to developments in AI and machine learning, advances in cloud transformation and IT security were key topics in the Supervisory Board's Technology, Data and Innovation Committee. A regular topic of discussion in the Committee was the impact of the geopolitical situation on our cyber and information security.

A more detailed report on the work of the Supervisory Board on these and other issues can be found in Deutsche Bank's Annual Report.

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In recent years, Deutsche Bank has built solid foundations to help clients navigate geopolitical uncertainties and support the transformation to a more sustainable and digital economy. As a responsible corporate citizen, the bank is closely connected to society and all its stakeholders. We want to support people and help strengthen local economies. The Supervisory Board will support the Management Board to continue along this direction, strengthening controls and helping Deutsche Bank live up to its social responsibilities.

Yours,

Alexander Wynaendts

Chairman of the Supervisory Board

Deutsche Bank AG

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Introduction

1. About Deutsche Bank
2. About this report
3. Materiality assessment

Deutsche Bank

Non-Financial Report 2023

About Deutsche Bank

Since its founding in 1870, Deutsche Bank has been Germany's leading bank. It has a strong market position in Europe and a significant presence in the Americas and Asia-Pacific. For more than 150 years Deutsche Bank has been connecting worlds to help people and businesses to achieve their goals. What inspired our founders still drives us: we are here to enable economic growth and societal progress by creating a positive impact for our clients, our people, our investors, and our communities.

Our global network

		57
		Countries
		90,130
		Employees
		153
		Nationalities
	11%	Loan book
17%	Regional	€ 479 bn
18%	revenue	44%

	split	AuM Private Bank
	€ 559 bn
28%		AuM Asset
		Management

Germany Americas

EMEAAPAC

€ 896 bn

Our values

We want to foster an open and diverse work environment in which staff opinions and speaking up are valued, and in which our employees and the firm's success is built on teamwork and mutual respect in serving our clients, stakeholders and communities. We expect all our employees to embrace our corporate values: integrity, sustainable performance, client centricity, innovation, discipline, and partnership.

Our business

We focus on four client-centric businesses: Corporate Bank, Investment Bank, Private Bank and Asset Management. We provide corporate and transaction banking, lending, focused investment banking, retail and private banking as well as asset and wealth management products and services to private individuals, small and medium-sized companies, corporations, governments and institutional investors.

Our strategy

As the leading bank in Germany with deep European roots and a global network, we accompany our clients wherever they need us. As Global Hausbank we aim to be their first point of contact in all financial matters - with unique risk management, modern technology platforms, a strong product suite and access to markets worldwide. We aspire to help our clients navigate through geopolitical and macroeconomic shifts and accelerate their transition to a more sustainable and digitized economy.

Selected ESG ratings and assessments 20231

CDP Climate Change	ISS ESG Corporate	MSCI ESG Ratings	S&P Global CSA	Sustainalytics ESG Risk
	Rating			Rating
B	C+(prime status)	A	54	27.9
2022: B	2022: C (prime status)	2022: A	2022: 59	2022: 27.9
2021: B	2021: C (prime status)	2021: A	2021: 60	2021: 27.4
Scale2: A to D-	Scale2: A+ to D-	Scale2: AAA to CCC	Scale2: 100 to 0	Scale2: 0 to 100
Sector average: B	Decile-rank3: 1/10	Sector average4: -	Sector average: 34

1. For further details please see theinvestor relations website.
2. From best to worst
3. A decile rank of 1 indicates high performance relative to industry peers

3 The assessment is explicitly relative to the standards and performance of a company's industry peers, therefore there is no industry average

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Deutsche Bank	Introduction
Non-Financial Report 2023	About this report

About this report

GRI 2-3

This annual Non-Financial Report 2023, which covers the reporting period from January 1, 2023, to December 31, 2023, communicates Deutsche Bank's group-wide management approaches for a set of non-financial topics, major activities, and the related progress made in 2023. It also describes Deutsche Bank's related governance, policies, and set-up for these topics. The Non-Financial Report is prepared on a consolidated basis and the scope of consolidation is the same as for the Group's consolidated financial statements. This means that the Non-Financial Report covers Deutsche Bank Aktiengesellschaft, Taunusanlage 12, 60325 Frankfurt am Main, Germany (the parent) together with all entities in which the parent has a controlling financial interest (the consolidated subsidiaries). Where necessary specificities for certain consolidated subsidiaries, for example DWS, are separately highlighted.

Content within the report marked by a line in the margin corresponds to the mandatory "Non-Financial Statement" within the meaning of Section 315b German Commercial Code (Handelsgesetzbuch, HGB). The "Non-Financial Statement" complies with Section 315c (1) HGB in conjunction with Section 289c HGB. The mandatory description of the business model to which this report refers can be found in the Annual Report - Combined Management Report - Operating and Financial Review - Deutsche Bank Group. This section of the Annual Report and the Non-Financial Report are prepared in accordance with the Global Reporting Initiative (GRI) and the GRI Sustainability Reporting Standards. References to show compliance with GRI Standards are indicated in the respective chapter and/or sub-chapter heading. In addition, a GRI table is published in the Appendix. Certain information required by GRI 207 Tax is part of the Country-By-Country Reporting in the Notes to the Annual Report of Deutsche Bank Group to which this report refers. Furthermore, the "Non-Financial Statement" complies with the disclosure obligations under Article 8 (1) and (3) of the Taxonomy Regulation and the respective specifications in Articles 4 and 10 (5) of the associated Disclosures Delegated Act ((EU) 2021/2178).

The Non-Financial Report 2023 is subject to a limited assurance engagement as seen in the Reports of the Independent Auditor. Disclosures for prior years and references to additional information beyond the scope of the Non-Financial Report (for example, external websites) are not subject to the limited assurance procedures for the 2023 reporting period. References to websites or other publications of Deutsche Bank are not subject to independent verification and are indicated by an asterisk (*).

The Non-Financial Report 2023 uses reporting metrics of the Sustainability Accounting Standards Board (SASB) Standards and includes a table that indicates which of its chapters and sub-chapters contain disclosures recommended by the Task Force on Climate-related Financial Disclosures (TCFD).

The report discusses the topics required for Deutsche Bank's communication on progress for the UN Global Compact (see GRI Content Index and UN Global Compact in the Appendix).

For the financial year starting January 1, 2024, Deutsche Bank will be required by the Corporate Sustainability Reporting Directive (CSRD) to report sustainability information according to the European Sustainability Reporting Standards (ESRS) as part of its annual report. The Group runs a centrally managed CSRD/ESRS implementation project for the new sustainability disclosure requirements. The project, which is part of the "Key Deliverable Sustainability Strategy", is sponsored by the Group's Chief Sustainability Officer and the Group's Chief Financial Officer and includes all business divisions and infrastructure functions.

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