2020 UPDATE | Germany

BaFin supervises some 2,700 banks, 700 insurers, and 800 other financial services firms operating in Germany. Sustainable finance is a current stated priority for BaFin. In the organisation’s second Perspectives report, President Felix Hufeld emphasizes that sustainable finance encompasses a concern for social welfare and justice, in addition to preserving ecological resources.1 He references a German Council for Sustainable Development articulation of sustainable businesses as those that are “based on a culture of sustainability characterised by a respect for nature, social knowledge and creativity,” and that work to reduce the use of natural resources “to a level that is consistent with sustainable development.”2 

Within BaFin’s Perspectives report was a featured section entitled “What has to change in the financial industry?” With a focus on care for the environment, the report states, “now more than ever, banks, insurance companies and asset management companies need people who question the existing order, [and] who are prepared to leave the mainstream path.”3 The authors go on to assert that culture is key to sustainability efforts. (See Figure 10 below) They lament, in this regard, that few leaders, “especially in the financial industry,” possess an understanding of systems theory. They also complain of a reliance on the “homo economicus” model of human behavior and a poor appreciation for the “interdependencies between the players” that are central to the management of complex systems.