GOOD PRACTICE EXAMPLE

Country:	Germany
Product group:	Green Electricity
Name of the institution:	KfW Bankengruppe
CO2 savings:	9.604 tons/year

The KfW Bankengruppe took part in GreenLabelsPurchase as a pilot project and was consulted during the procurement process of green electricity.

Overview

KfW Bankengruppe (KfW banking group) gives impulses for the economy, society and ecology in Germany, Europe and the world over. It supports change and promotes promising ideas.

Institutional details

As a bank owned by the German government and the federal states, KfW gears its decisions to the federal government's sustainability strategy (in German only), which it uses as a kind of leitmotiv. This also comes through in KfW's "Statement on environmental protection and sustainable development", which it presented to the Bundestag. In that document, the Bank reaffirms its obligations arising from the "UNEP Statement by Financial Institutions on the Environment and Sustainable Development".

KfW Bankengruppe used to publish an Environmental Report once every three years. In 2006 the KfW has broadened the scope of the Environmental Report in order to produce a Sustainability Report. The report can be downloaded on: www.kfw.de.

Procurement process

KfW Bankengruppe has developed an environmental management system to ensure that environmental issues are taken into account in all business areas at the Bank. Specific guidelines have been developed for all environmentally relevant areas and in-house environmental protection. The KfW strives to realize a universally valid purchase policy for eco-friendly procurement.

CO₂ neutrality at KfW Bankengruppe

Operational CO₂ emissions are being offset as from 2006. The objective is to offset operational CO₂ emissions. CO₂ emissions produced by KfW business activities as a result of air traffic, other business trips and electricity consumption and heating in KfW-owned buildings are first calculated precisely. The second step is to use the neutralisation approach to offset these emissions: to cover the quantities of CO₂ produced, emission credits, e.g. from CDM projects, are purchased and set aside. As the impact of carbon dioxide is global, it is irrelevant, in terms of effectiveness, where the offsetting actually takes place. For example, CO₂ emissions generated by KfW in Germany can be offset through a biomass project in India. The certificates required are acquired by the KfW Carbon Fund. The aim of the third stage of the KfW strategy, however, is to achieve a further, steady reduction in the volumes of CO₂ that need to be offset. This includes, first, reducing energy consumption by achieving greater energy efficiency in the office buildings and company vehicles. Second, our aim is to use CO₂ -free energy such as “green electricity” or “green gas” as far as possible to cover the remaining energy requirements, thus minimising the number of certificates needed.

Measures

The KfW Bankengruppe has been powered with conventional power until the 30th of September 2007. Thereafter at the 1st of October 2007, all KfW facilities will be powered with 100 % green power: the headquarter in Frankfurt, branches in Berlin and Bonn as well as the KfW subsidiary DEG in Cologne (when moved into the new building, autumn 2008); plus several rented buildings.

The European call for tender was based on the brochure, published by the Federal Ministry of environment and the Federal Environment Agency „Beschaffung von Ökostrom – Arbeitshilfe für eine europaweite Ausschreibung im offenen Verfahren“ (procurement of green power – manual for an European call for tender) which is recommended by GreenLabelsPurchase. The tender was accompanied by the Berliner Energieagentur GmbH regarding the CO₂ reduction as a criterion for the assignment and CO₂ balancing of the KfW Bankengruppe.

Success

The purchase of green power consisting of water power from the NaturEnergie AG company induced a cost increase of about 4 % in comparison to the prior contract. This is still below the public price increase of current suppliers from 2004 to 2006 which results in an even economical advantage for the KfW.
To evaluate the quality of the green power, the CO₂ reduction of the power is regarded. The CO₂ reduction of new plants is rated higher than those of relatively old plants. A minimum of 30 % of CO₂ reduction was required in the tender within the supplying period. The NaturEnergie AG guaranteed a reduction of at least 42 %.
The evaluation of the KfW balance takes CO₂ reductions into account of both new and old plants similarly. As an outcome, the KfW banking group is credited for 9.604 tons saved CO₂ per year.