Deutsche Bank : Second Party Opinion - January 5, 2024

SECOND PARTY OPINION (SPO)

Sustainability Quality of the Issuer and the Green Asset Pool

Deutsche Bank AG

5 January 2024

VERIFICATION PARAMETERS

Type(s)	of
instruments		▪	Green Financing Instruments
contemplated
Relevant		▪ Green Bond Principles (GBP), as administered by the International
		Capital Market Association (ICMA) (as of June 2021 with June 2022
standards
		Appendix 1)
Scope	of	▪	Deutsche Bank's Green Financing Framework (as of June 2022)
verification		▪ Deutsche Bank's Green Asset Pool (as of June 27, 2023)1
		▪ Pre-issuance verification
Lifecycle		▪ 1st Update of SPO as of November 11, 2022
			(https://www.isscorporatesolutions.com/file/documents/spo/spo-
			20221111-deutschebank.pdf)
Validity		▪ Valid as long as the cited Framework remains unchanged

1 The Asset Pool assessed in our Second Party Opinion provides a snapshot of the assets as of December 2022. The information was shared on June 27, 2023.

© 2023 | Institutional Shareholder Services and/or its affiliates

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S E C O N D P A R T Y O P I N I O N
Sustainability Quality of the Issuer
and the Green Asset Pool
CONTENTS
SCOPE OF WORK	3
DEUTSCHE BANK BUSINESS OVERVIEW	3
ASSESSMENT SUMMARY	4
SPO ASSESSMENT	5
PART I: ALIGNMENT WITH GREEN BOND PRINCIPLES AND SOCIAL BONDS PRINCIPLES	5
PART II: SUSTAINABILITY QUALITY OF THE ASSET POOL	7
A. CONTRIBUTION OF THE GREEN FINANCING INSTRUMENTS TO THE UN SDGs	7
B. MANAGEMENT OF ENVIRONMENTAL & SOCIAL RISKS ASSOCIATED WITH THE FINANCIAL
INSTITUTION AND THE ASSET POOL	9
PART III: LINKING THE TRANSACTION(S) TO DEUTSCHE BANK'S ESG PROFILE	12
A. CONSISTENCY OF GREEN FINANCING INSTRUMENTS WITH DEUTSCHE BANK'S
SUSTAINABILITY STRATEGY	12
B. DEUTSCHE BANK'S BUSINESS EXPOSURE TO ESG RISKS	14
ANNEX 1: Methodology	17
ANNEX 2: ISS ESG Corporate Rating Methodology	18
ANNEX 3: Quality management processes	18
About this SPO	19

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SCOPE OF WORK

Deutsche Bank AG ("the Issuer", "the Bank", or "Deutsche Bank") commissioned ISS Corporate Solutions (ICS) to assist with its Green Financing Instruments by assessing three core elements to determine the sustainability quality of the instruments:

1. Deutsche Bank's Green Financing Framework (as of June 2022) - benchmarked against the International Capital Market Association's (ICMA) Green Bond Principles (GBP).
2. The Asset Pool - whether the asset categories contribute positively to the United Nations Sustainable Development Goals (UN SDGs) and how they perform against proprietary issuance-specific key performance indicators (KPIs) (See Annex 1).
3. Linking the transaction(s) to Deutsche Bank's overall Environmental, Social, and Governance (ESG) profile - drawing on the issuance-specific Use of Proceeds (UoP) categories.

DEUTSCHE BANK BUSINESS OVERVIEW

Deutsche Bank AG operates as a stock corporation company. It is classified in the Commercial Banks & Capital Markets, as per ISS ESG's sector classification.

Deutsche Bank AG engages in the provision of Corporate Banking, Investment Services, Private Banking and Asset Management. It operates through the following segments: Corporate Bank, Investment Bank, Private Bank, and Asset Management. The Corporate Bank segment includes corporate and commercial clients as well as financial institutions, small corporate and entrepreneur clients. The Corporate Bank Segment provides several services, including Cash Management, Trade Finance and Lending, Foreign Exchange, Optimization of working capital & liquidity, Securing global supply chains and distribution channels to Corporates and Commercial clients. The segment also provides services related to Correspondent Banking, Trust and Agency and Securities Services to financial institutions, and business banking services to small corporate and entrepreneur clients. The Investment Bank segment is involved in origination and advisory businesses as well as fixed-income, currency, sales, and trading. The Investment Bank segment provides these services to corporate and institutional clients. The Private Bank segment focuses on Private Bank Germany, private and commercial business international, and wealth management business units. This segment also includes International Private Bank, which also caters to commercial clients. The Asset Management segment provides investment solutions to individual investors and institutions through the DWS Group GmbH & Co. KGaA brand. The company was founded on March 10, 1870, and is headquartered in Frankfurt, Germany.

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ASSESSMENT SUMMARY

SPO SECTION

SUMMARY

EVALUATION2

Part 1:

The Issuer has defined a formal concept for its Green Financing

Instruments regarding use of proceeds, processes for asset

Alignment

evaluation

and

selection, management

of

proceeds

and

Aligned

with GBP

reporting. This concept is in line with the Green Bond Principles

and Social Bond Principles.

The Sustainable Financing Instruments will (re)finance eligible

asset categories which include:

Green categories: Renewable Energy, Green Buildings, Clean

Part 2:

Transportation.

Product and/or

service-related use

of proceeds

categories3

Sustainability

individually contribute to one or more of the following SDGs in:

Aligned

quality of the

Asset Pool

The environmental and social risks associated with those asset

pool categories are managed.

Part 3:

The key sustainability objectives and the rationale for issuing

Green Financing Framework are clearly described by the Issuer.

Consistent

Linking the

The asset

categories considered

are

in

line

with

the

with Issuer's

transaction(s)

sustainability objectives of the Issuer.

sustainability

to Deutsche

At the date of publication of the report and leveraging ISS ESG

Bank's ESG

strategy

Research, the Issuer is exposed to a controversy, in failure to

profile

prevent money laundering in the United States.

1. The evaluation is based on the Deutsche Bank's Green Financing Framework (June 2022 version), and on the ISS ESG Corporate Rating updated on May 2, 2023 and applicable at the SPO delivery date.
2. Renewable Energy, Green Buildings, Clean Transportation.

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SPO ASSESSMENT

PART I: ALIGNMENT WITH GREEN BOND PRINCIPLES AND SOCIAL BONDS PRINCIPLES

This section evaluates the alignment of the Deutsche Bank's Green Financing Framework (as of June 2022) with ICMA GBP.

GBP AND SBP

ALIGNMENT

OPINION

1.

Use of Proceeds

✓

The Use of Proceeds description provided by Deutsche

Bank's Green Financing Framework is aligned with the

GBP.

The Issuer's green categories align with the asset

categories as proposed by the GBP. Criteria are defined in

a clear and transparent manner. Disclosure of distribution

of proceeds by asset category is provided and

environmental/social benefits are described and

quantified. The Issuer defines exclusion criteria for

harmful asset categories.

The Issuer defines the exclusion criteria for harmful asset

categories in line with best market practice.

2.

Process for Asset

✓

The Process for Asset Evaluation and Selection description

Evaluation and

provided by Deutsche Bank's Green Financing Framework

Selection

is aligned with the GBP.

The asset selection process is defined and structured in a

congruous manner. ESG risks associated with the asset

categories are identified and managed through an

appropriate process. Moreover, the assets selected show

alignment with the sustainability strategy of the Issuer.

The Issuer involves various stakeholders in this process

and identifies the alignment of their green assets with

official or market-wide taxonomies and to reference any

green standards or certifications used, in line with best

market practice.

3.

Management of

✓

The Management of Proceeds provided by Deutsche

Proceeds

Bank's Green Financing Framework is aligned with the

GBP.

The net proceeds collected will be equal to the amount

allocated to eligible assets, with no exceptions. The net

proceeds are tracked in an appropriate manner and

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			attested in a formal internal process. The net proceeds are
			managed on an aggregated basis for multiple Green Bonds
			(portfolio approach). Moreover, the Issuer discloses the
			temporary investment instruments for unallocated
			proceeds.
			The Issuer has defined an expected allocation period of 12
			months and discloses the nature of temporary
			investments, in line with best market practice.
4. Reporting	✓		The allocation and impact reporting provided by Deutsche
			Bank's Green Financing Framework is aligned with the
			GBP.
			The Issuer commits to disclose the allocation of proceeds
			transparently and to report in an appropriate frequency.
			The reporting will be publicly available on the Issuer's
			website. Deutsche Bank explains that the level of
			expected reporting will be at the asset category level and
			the type of information that will be reported. Moreover,
			the Issuer commits to report annually.
			The Issuer is transparent on the level of impact reporting
			and on the information reported in the impact report, in
			line with best market practice. Additionally, the Issuer
			discloses the location and link of the report, in line with
			best market practice.

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PART II: SUSTAINABILITY QUALITY OF THE ASSET POOL

A. CONTRIBUTION OF THE GREEN FINANCING INSTRUMENTS TO THE UN SDGs4

Banks can contribute to the achievement of the SDGs by financing and/or investing in specific services/products which help address global sustainability challenges, and by being responsible actors, working to minimize negative externalities in their financing/investment activities along the entire value chain. The aim of this section is to assess the SDG impact of the Asset Pool's UoP categories financed or invested in by the Bank.

Products and services

The assessment of the Asset Pool's UoP categories for (re)financing products and services is based on a variety of internal and external sources, such as the ISS ESG SDG Solutions Assessment (SDGA), a proprietary methodology designed to assess the impact of an Issuer's products or services on the UN SDGs, as well as other ESG benchmarks (the EU Taxonomy Climate Delegated Acts, the ICMA Green and/or Social Bond Principles and other regional taxonomies, standards and sustainability criteria).

The assessment of Asset Pool's UoP categories for (re)financing specific products and services is displayed on a 3-point scale (see Annex 1 for methodology):

	Obstruction			No			Contribution
			Net Impact

Each of the Asset Pool's Use of Proceeds categories has been assessed for its contribution to, or obstruction of, the SDGs:

USE OF PROCEEDS (PRODUCTS/SERVICES)

CONTRIBUTION OR

OBSTRUCTION

SUSTAINABLE

DEVELOPMENT GOALS

		Renewable Energy - Solar
					Contribution
	Renewable Energy - Wind
					Contribution
		Renewable Energy - Biomass
		Energy generation from certified feedstock5		Contribution
	Renewable Energy - Energy Efficiency
					Contribution
	Efficient Lighting

1. The impact of the UoP categories on UN Social Development Goals is assessed with proprietary methodology and may therefore differ from the Issuer's description in the framework.
2. The assessment of this category is based on energy generation from biomass using olive waste from the olive industry as feedstock.

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Green Buildings - Commercial Real Estate

Buildings which meet at least one of the following certifications:

• LEED: Gold or higher
• BREEAM: Excellent or higher
• Green Mark: Gold Plus or higher
• Green Star: 5 Star or higher
• DGNB: Gold or higher
• HQE: Excellent or higher
• NABERS Energy "5 Star" or higher

Green Buildings - Residential Real Estate

For buildings built after 31 December 2020:

• The Primary Energy Demand (PED) is at least 10% lower than the threshold set for the nearly zero-energy building (NZEB) requirement, leveraging on a robust methodology presented by the issuer based on minimum efficiency standard KfW 40 or 55.

For buildings built before 31 December 2020:

• Buildings within the top 15% of the national or regional building stock (PED), leveraging on a robust methodology presented by the issuer based on minimum efficiency standard KfW 40, 55 or 70.

Transportation

Electric vehicles

Contribution

Contribution

Contribution

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B. MANAGEMENT OF ENVIRONMENTAL & SOCIAL RISKS ASSOCIATED WITH THE FINANCIAL INSTITUTION AND THE ASSET POOL

The table below evaluates the Asset Pool against issuance-specific KPIs. The entirety of the assets are located globally.

A S SE SSM E NT AG A IN ST K P I s

ESG guidelines into financing process

Deutsche Bank integrates the environmental and social due diligence provision as part of its Reputational Risk Framework. The due diligence provisions consist of cross-sectoral and sector- specific requirements that jointly form the Deutsche Bank's Environmental and Social (ES) Policy Framework6.

The framework was approved by the Group Reputation Risk Committee and applies to lending and trade finance activities of Corporate Bank, lending and capital market activities of Investment Bank, as well as to Private Bank's commercial lending activities.

For purpose of asset selection, the bank leverages the ES due diligence defined by the ES Policy Framework. During the environmental and social risk review process, the materiality of identified environmental and social risks will be evaluated, along with the associated reputational risks. If the risks are deemed to pose material reputational risks, 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, the governance structure requires escalation to the Group Reputational Risk Committee, who's authority is delegated by the Group Risk Committee and the Management Board. Depending on the risk profile, mitigation measures will be proposed, and the clients will be engaged. Deutsche Bank will monitor progress towards agreed-upon mitigation measures.

Deutsche Bank manages environmental and social risks in line with Deutsche Bank's Code of Business Conduct and Ethics, applicable to all employees, as well as interactions with internal and external stakeholders.

Labour, Health and Safety

✓

100% of the eligible assets are covered by Deutsche Bank's due diligence processes that focus on its clients' policies and procedures to protect the health and safety of its employees and subcontractors, including having a Health and Safety Management System that is aligned with Good International Industry Practice or OHSAS 18001.

Furthermore, Deutsche Bank is a member of the Equator Principles which apply respective labour, health and safety standards for in-scope projects. 95% of the eligible assets are located in Equator Principles Designated Countries where high health, safety and labour standards are ensured by the relevant national legislation.

6Deutsche Bank Environmental and Social Policy Framework. https://www.db.com/files/documents/csr/sustainability/Deutsche-Bank-ES-Policy-Framework-English.pdf

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Moreover, Deutsche Bank has made formal commitments to the UN Global Compact, the OECD Guidelines for Multinational Enterprises, and the UN Guiding Principles on Business and Human Rights. Deutsche Bank requires for all projects compliance with local E&S laws and regulations, and the borrowers of project in non-designated countries to comply with the requirements of IFC Performance Standards and the World Bank Group Environmental, Health and Safety Guidelines.

Deutsche Bank will not engage in business activities where DB has substantiated evidence of material adverse human rights impacts such as child or forced labour.

Biodiversity and community dialogue

✓

100% of the eligible assets are covered by Deutsche Bank's due diligence processes to ensure there's no material negative environmental and/or social impacts. According to Deutsche Bank's ES Policy Framework, the Issuer will not knowingly finance the following:

• Activities that fall within close proximity to a World Heritage Site unless there is a consensus with both government and UNESCO confirming it will not affect the value of the site.
• Projects which involve clearing forests, areas of High Conversion Value (HCV) or peatlands, or illegal use of fire.

In addition, Deutsche Bank has an objective to gradually align its environmental and social due diligence approach with the EU Taxonomy requirements for those assets in scope of the EU Taxonomy requirements in regard to the Do No Significant Harm assessment and minimum social safeguards.

Deutsche Bank requires its clients in scope of Equator Principles to represent and warrant in loan documentation that Equator principles requirements will be implemented including to develop associated Environmental and Social Management Systems and Plans, and to report on compliance with the above systems and plans. 95% of the eligible assets are located in Equator Principles Designated Countries, as such high standards with regard to environmental impacts and impacts on the communities are considered to be ensured by national legislation and European Union legislation.

Responsible treatment of customers with debt repayment problems

100% of the eligible assets are covered by Deutsche Bank's established processes to responsibly treat customers with debt repayment problems, that including a variety of steps to mitigate hardship in conjunction with nonperforming loans, notifies clients early if they fail to repay loans or repay late, and various measures to deal responsibly with

• clients having debt repayment problems.
  The Issuer's Global Client Suitability and Appropriateness Policy includes minimum standards that must be met with regards to the implementing controls related to performance, the clarity of warnings and notification provided to clients along with the effectiveness.

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