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BayernLB – Financial Data

Earnings*

EUR million 1.1. – 31.12.2009 1.1. – 31.12.2008 Change in %

Net interest income 1,410 1,394 1.2

Net commission income 146 292 – 50.1

Gross profit 1,556 1,686 – 7.7

Staff costs – 380 – 459 – 17.2

Operating expenses – 371 – 491 – 24.4

Administrative expenses – 751 – 950 – 20.9

Net income/losses from financial

transactions 612 – 1,066

Net balance of other operating

expenses and income 185 – 3

Risk provisions – 849 – 1,737 – 51.1

Gains or losses on measurement – 2,555 – 1,351 89.1

Operating profit/loss – 1,803 – 3,421 – 47.3

Extraordinary expenses – 347 – 80 > 100.0

Income taxes – 445 – 417 6.6

Partial profit transfer – –

Net profit/loss for the financial year – 2,595 – 3,919 – 33.8

Withdrawals from reserves 1,661 3,919 – 57.6

Withdrawals from profit participation

capital 187 –

Withdrawals from silent partner

contributions 747 –

Net retained profit – –

Figures in the tables may be rounded up or down to the next unit

* Figures taken from 2009 financial statements drawn up under the German Commercial Code (HGB)

Balance sheet figures under the German Commercial Code

EUR million 31.12.2009 31.12.2008 Change in %

Total assets 267,653 318,168 – 15.9

Credit volume 199,605 235,332 – 15.2

Total deposits 135,766 179,412 – 24.3

Securitised liabilities 98,388 103,288 – 4.7

Reported equity 20,655 18,145 13.8

[ BayErnLB | SUSTAINABILITY REPORT 2009 ]

Bayerische Landesbank

Brienner Strasse 18

80333 Munich

Germany

www.bayernlb.de

Publisher


Brienner Strasse 18

80333 Munich

Reuters Dealing BLAM, BLAS, BLAX

BIC/SWIFT-Code: BYLA DE MM

[email protected]

www.bayernlb.de

Text/editorial staff/production

BayernLB

Corporate Center Central Area

Corporate Development & BoM Support

Marketing & Internal Communications Department

Contacts

Matthias Patzelt Jörg Widemann

Corporate Development & Corporate Development &

Sustainability Management Sustainability Management

Brienner Strasse 18 Brienner Strasse 18

80333 Munich 80333 Munich

Tel.: +49 89 2171-26955 Tel.: +49 89 2171-24892

mailto: [email protected] mailto: [email protected]

Concept and layout

dassel & schumacher werbeagentur gmbh, Munich

Printed by

Lipp GmbH, Graphische Betriebe, Munich

Picture credits

Images: Christoph Gramann, Studio Gramann

Board of Management photographs: Antje Meinen, Meinen Fotografie GmbH

We would like to thank our staff for their kind support.

Closing date for submissions: 30 July 2010

This sustainability report is printed on climate-neutral FSC paper. The CO2

emissions resulting from the production of the BayernLB sustainability report

have been offset by the purchase and invalidation of emission certificates from

a certified climate protection project.

A PDF version of the sustainability report is available online at www.bayernlb.de/

sustainabilitymanagement.

Publishing details

Responsibility Sustainability Future.

BayernLB – Environmental Data* BayernLB – Social Data

2009 2008 2007

Energy (in MWh)

of which• Electricity

• District heating

Paper (in tonnes)

of which• Recycled paper

• ECF paper

Water (in m³)

42,267

22,379

19,888

217.3

76.2

141.1

86,085

41,349

23,224

18,125

268.8

86.5

182.3

98,628

43,728

24,910

18,818

305.9

118.9

187.0

93,015

in tonnes 2009 2008 2007

Waste

of which

• For recovery/recycling

• For incineration

• For landfill

• Hazardous waste

1,753.7

847.3

481.2

38.5

386.8

1,783.0

761.2

588.6

81.5

351.6

1,511.5

683.2

445.3

33.5

349.5

in km 2009 2008 2007

Business travel

of which

• By road

• By train

• By air

12,518,972

4,126,100

1,583,319

6,809,553

17,437,964

4,674,284

1,698,366

11,065,314

19,080,488

5,206,990

1,747,099

12,126,399

in MJ 2009 2008 2007

Energy use

Direct energy use absolute

Indirect energy use absolute

152,161,697

216,108,570

148,856,962

239,517,305

157,422,308

248,606,884

in tonnes 2009 2008 2007

Greenhouse gas emissions

Absolute greenhouse gas emissions 6,133 7,363 7,354

* Please see page 5 for the scope covered by this report

number of employees*

2009 2008 2007

Year-end headcount at BayernLB in

Germany and abroad 4,472 4,980 5,170

of which • Germany 4,048 4,425 4,604• Abroad 424 555 566

of which • BayernLB excluding BayernLabo

and LBS Bayern 3,509 4,020 4,283• BayernLabo 248 246 227• LBS Bayern 715 714 660

of which • Male 2,287 2,537 2,647• Female 2,185 2,443 2,523

of which • Full-time employees 3,568 4,035 4,227• Part-time employees 904 945 943

Average length of service in the

Bank (in years)** 14.2 13.7

14.5

Average age (in years)** 42.1 41.6 41.7

Covered by environmental

management under EMAS 3,743 3,972 4,329


** Averaged figures relate to all active members of BayernLB staff in Germany and abroad (2009: 4,472; 2008: 4,980; 2007: 5,170)

Junior staff headcount*

2009 2008 2007

Year-end junior staff headcount at

BayernLB in Germany and abroad 101 149 186

of which • Banking trainees 39 68 104• Students on a vocationally

integrated course at a vocational

academy 40 47

48• Graduate trainees 22 34 34


4.14 List of stakeholder groups engaged by the organisation pp. 19 – 22

4.15 Basis for identification and selection of stakeholders with whom to engage p. 5; p. 19

4.16 Approaches to stakeholder engagement pp. 19 – 22

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns

pp. 19 – 22

5. Management approach and performance indicators

Sector-specific criteria

FS1 Policies with specific environmental and social components applied to business lines

p. 10; p. 22

FS2 Procedures for assessing and screening environmental and social risks in business lines

p. 52f.

FS3 Processes for monitoring customers’ implementation of and compliance with environmental and social requirements included in agreements or transactions

p. 52f.**

FS4 Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines

p. 19; p. 22; p. 36

FS5 Interactions with customers/investees/business partners regarding environmental and social risks and opportunities

p. 19ff.

FS6 Percentage of portfolio for business lines by region, size and sector See 2009 Annual Reports and Account 2009 – Individual Report,, pp. 38 – 42; consolidated annual financial statements, pp. 70 – 74** and pp. 89 – 99**

FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose

p. 51**

FS8 Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose

p. 49f.**

FS9 Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures

p. 10**

FS10 Percentage and number of companies held in the institution’s portfolio with which the reporting organisation has interacted on environmental or social issues

Not applicable

FS11 Percentage of assets subject to positive and negative environmental or social screening

Not applicable

FS12 Voting policy/policies applied to environmental or social issues for shares over which the reporting organisation holds the right to voting shares or advises on voting

Not applicable

FS13 Access points in sparsely populated or economically disadvantaged areas p. 50ff.**;Basic access across Bavaria assured by the SFinanzgruppe

FS14 Initiatives to provide access to financial services to disadvantaged people Not applicable

FS15 Policies for the fair design and sale of financial products and services p. 16**

FS16 Initiatives to enhance financial literacy, by target group p. 16**6; p. 24f.; p. 36f.

Economic

EC1 Direct economic value generated and distributed See key figures/inside front cover

EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change

p. 6f.; p. 21f.; pp. 45 – 52

EC3 Coverage of the organisation’s defined benefit plan obligations See key figures/inside front cover; p. 33ff.

EC4 Significant financial assistance received from government, e.g. subsidies See 2009 Annual Reports and Account 2009 – Individual Report, p. 18

EC6 Supplier management p. 22

EC7 Local employees in management positions Not applicable

EC8 Investments and services provided for public benefit p. 23ff.; p. 50ff.

Environmental

EN1 Materials used by weight or volume See key figures/inside front cover; p. 41

EN2 Percentage of materials used that are recycled input materials See key figures/inside front cover

EN3 Direct energy consumption See key figures/inside front cover

EN4 Indirect energy consumption See key figures/inside front cover

EN8 Total water withdrawal by source See key figures/inside front cover**

EN11 Land in protected areas None

EN12 Significant impacts of activities, products and services on biodiversity in protected areas

p. 52f.

EN16 Total direct and indirect greenhouse gas emissions See key figures/inside front cover**

EN17 Other indirect greenhouse gas emissions, for example produced by business travel See key figures/inside front cover**

EN19 Emissions of ozonedepleting substances n/a

EN20 NOx, SOx and other significant air emissions n/a

EN21 Total water discharge Only sanitary wastewater

EN22 Total weight of waste by type and disposal method See key figures/inside front cover; p. 42

EN23 Total number and volume of significant spills None

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

pp. 45 – 53

EN27 Products whose packaging materials are reclaimed n/a

EN28 Monetary value of significant fines for noncompliance with environmental laws and regulations

None

Labour practices and decent work

LA1 Total workforce by employment type, employment contract and region See key figures/inside front cover**

LA2 Total number and rate of employee turnover by age group, gender and region p. 32**

LA4 Percentage of employees covered by collective bargaining agreements Depends on type of collective bargaining agreement: workingtime regulations, for example, apply to all employees

LA5 Minimum notice periods regarding significant operational changes Not applicable

LA7 Rates of injury and sickness p. 37

LA8 Prevention and riskcontrol programmes regarding serious diseases p. 37

LA10 Average training per year per employee by employee category p. 36

LA13 Composition of governance bodies and breakdown of employees See key figures/inside front cover**; p. 34f.

LA14 Ratio of basic salary of men to women Wage category depends entirely on function and not on gender

Human rights

HR1 Investment agreements that include human rights clauses p. 52f.

HR2 Percentage of suppliers and contractors that have undergone screening on human rights

100%

HR4 Total number of incidents of discrimination and actions taken No incidents

HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights

p. 22; p. 52f.

HR6 Operations identified as potentially involving incidents of child labour, and measures taken to contribute to the elimination of child labour

p. 22; p. 52f.

HR7 Operations identified as potentially involving incidents of forced or compulsory labour, and measures taken to contribute to the elimination of forced or compulsory labour

p. 22; p. 52f.

Society

SO1 Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities

p. 13**

SO2 Percentage of business units analysed for risks related to corruption 100%

SO3 Percentage of employees trained in organisation’s anticorruption policies and procedures

100%

SO4 Actions taken in response to incidents of corruption Not applicable

SO5 Participation in public policy development and lobbying p. 19f.; p. 23f.

SO8 Monetary value of significant fines for noncompliance with laws and regulations Not applicable

Product responsibility

PR1 Customer protection pp. 13 – 16

PR3 Type of product and service information required by law p. 15f.**:

PR6 Programme for adherence to laws, standards and voluntary codes related to marketing communications

Not applicable

PR9 Monetary value of significant fines for noncompliance with laws and regulations concerning the provision and use of products and services

Not applicable

Application level under GRI: B (self-declaration)

* Only mandatory indicators are included. Consequently, the numbering is not sequential.

** GRI indicator only partially met

2009 Sustainability Report

Environmental and social considerations have been standard factors in our business

activities for years. In this way we seek to meet our corporate responsibilities and make

our contribution to sustainable development.

This ambition presents us with major challenges we are happy to accept. However, the

goal of sustainable development also opens up business opportunities we wish to

exploit with our customers.

Our successes in the past indicate that we are on the right path. This does not mean,

though, that we are resting on our laurels. In fact, we are well aware that we must con-

tinue firmly along the route we have chosen and will steadily improve our sustainability

performance.

In this report we show where BayernLB stands in all matters relating to sustainability.

We also point out where there is room for improvement and how we are going about

enhancing our performance.

Corporate responsibility. Corporate success.

[ C

on

te

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BayernLB . Sustainability Report 2009

< 2

Profile

Parameters of this report

Foreword

Sustainability management

Integrity

Dialogue with stakeholders

Corporate citizenship

Human resources

Environmental protection at BayernLB

Sustainable financial solutions

Sustainability performance at selected subsidiaries

4

5

6

9

13

19

23

29

39

45

54


3 >›› Contents

Regional strength and international expertise

BayernLB is the leading Bavarian commercial bank for large and Mittelstand customers in Germany

and Europe and also for retail customers. It is a member of the Sparkassen-Finanzgruppe in

Bavaria and is a high-performance regional bank with a European focus and international

expertise.

BayernLB Holding AG holds 100 percent of BayernLB’s nominal capital. Due to the capital meas-

ures that took place in the reporting period, the Free State of Bavaria’s share in BayernLB Holding

AG was around 94 percent and the Association of Bavarian Savings Banks’ (Sparkassenverband

Bayern) share was around 6 percent as at the 2009 balance sheet date.

Clear business strategy and close customer relationships raise the Bank’s profile on the market

BayernLB pursues a forward-looking strategy under which it offers a streamlined and customer-

oriented range of products and services in corporate and retail banking, in commercial real estate

and in its role as central bank to the Bavarian savings banks. The Bank gears its corporates busi-

ness towards large and in particular Mittelstand customers. This strategy, combined with an effi-

cient retail business conducted in cooperation with the savings banks and subsidiaries, provides

a solid basis for BayernLB to succeed in the long term. Together with the Bavarian savings banks,

BayernLB stands for high customer proximity and orientation, solidity and a strong sense of

responsibility towards customers, business partners, owners and employees.

Concentrating on proven core competences and customer groups, and with a regional focus on

Germany and Europe and selected international financial centres, BayernLB is well placed to meet

future challenges in the banking business. Its clear business strategy is a solid foundation for

future operations.

BayernLB’s customers and business areas

BayernLB has clearly-defined business areas centred on four customer segments: large corporates,

financial institutions and the German public sector; customers in the commercial real estate busi-

ness; Mittelstand companies; and retail customers.

Profile


< 4

Parameters of this report

The 2007 sustainability report was the first time BayernLB provided a comprehensive insight into

how it takes account of the environmental and social aspects of its business activities. In keeping

with a biannual reporting cycle, interested stakeholders can now see in the 2009 sustainability

report how the sustainability management system has been refined, along with details of

planned changes.

The 2009 sustainability report is based on the internationally recognised Global Reporting Initia-

tive (GRI) sustainability reporting guidelines. Thus the content has been selected to cover topics

of particular significance with regard to sustainability. They deal with issues relating to staff, cli-

mate protection and sustainable financial solutions. The GRI index on the inside back cover shows

an overview of all the issues treated in this report.

Unless indicated otherwise, the content of this report refers to BayernLB and its legally depen-

dent institutions BayernLabo and LBS Bayern. The sustainability performance of the two subsidiar-

ies Bayern Facility Management GmbH and Bayern Bankett Gastronomie GmbH is shown in addi-

tion at the end of the report. Both of these companies follow the BayernLB sustainability manage-

ment system very closely and reflect the idea of taking the entire value chain into account when

considering sustainability issues. Contrary to what was stated in the first sustainability report,

there is no intention in future to produce a report covering the whole Group including strategic

subsidiaries. This is due firstly because there is still a discrepancy in actual performance, which

means it will be necessary to bring sustainability performance into line in future. Secondly, the

strategic subsidiaries practise sustainability management in different areas, and this should be

reflected in other, separate forms of communication.

The data shown in this report mainly covers the years 2007, 2008 and 2009. The environmental

data was gathered as part of the Environmental Management and Audit Scheme (EMAS) at loca-

tions in Munich covering roughly 83.7 percent of staff. Greenhouse gas emissions caused by

operations are calculated using environmental data validated by the certification organisation

Intechnica Cert GmbH. These calculations are based on the data system of the Association for

Environmental Management in Banks, Saving Banks and Insurance Companies (Verein für Umwelt-

management in Banken, Sparkassen und Versicherungen). This ensures that the information is

methodologically justified.

As successfully developing and implementing strategies towards sustainable corporate develop-

ment requires close cooperation between the real economy and the financial sector, this sustain-

ability report is primarily aimed at customers and investors. At the same time, the hope is that

other stakeholders particularly interested in potential markets related to sustainability will find

it of interest.


5 >›› Profile · Parameters of this report

Gerd Haeusler,

CEO

The issue of sustainability in the broader sense, i.e. taking environmental and social aspects into

consideration when pursuing economic objectives, has certainly not become any less significant.

Quite the contrary, in fact – precisely in times of financial market crisis it has become increasingly

clear that lasting business success is closely associated with corporate management focused on

sustainability. This is only underlined by the fact that the biggest social challenges of the 21st cen-

tury, megatrends such as a shortage of resources and climate change, cry out for just this. Conse-

quently, all those involved in the markets are increasingly aware that the apparent contradiction

between environmental, social and economic objectives has been resolved. Owners and inves-

tors, as well as increasing numbers of customers, consider how and to what extent companies

pay attention to sustainability issues to be very important.

There has also been significant political interest recently in the interplay between positive social,

environmental and economic aspects leading to healthy sustainable development. There have

been numerous initiatives in the recent past at different levels ranging from the UN and the EU

to national, regional and local government, which have often interacted with each other in many

ways. Although opinions still diverge to some degree, as was seen at the UN climate summit in

Copenhagen at the end of 2009, the view that sustainable activity is essential is gaining ground

across the world. It is becoming ever clearer that today the key foundations are being laid which

will determine how future generations will have to organise their lives. The Free State of Bavaria

as the main shareholder of BayernLB is committed to showing political leadership here, and has

made sustainability one of the guiding principles in all it does. Both the coalition agreement for

the 16th electoral term of the Bavarian state parliament (2008-2013) and the December 2008 polit-

ical manifesto of Bavarian Minister-President Horst Seehofer, “Winning the future together – with

courage and self-confidence”, have made sustainability a central element in government policy.


< 6

Naturally, BayernLB fully backs the sustainability policy of its major shareholder: it adopted

sustainability as a guiding principle voluntarily and at an early stage on its own initiative. In the

midst of a persistent financial markets crisis, it feels more obliged than ever to show ethical and

corporate responsibility in terms of the key principles of economic, environmental and social duty

at all stages of the value chain.

To put this approach into practice, BayernLB has developed a sustainability strategy covering all

aspects of corporate activity. For its internal activities, it has not only optimised operations in

terms of environmental efficiency and tackled the social concerns of staff through, for example,

work-life balance improvement programmes, but has also installed an entire environmental

management system. At the heart of this system is a sophisticated three-step climate protection

strategy aimed at reducing direct and indirect CO2 output.

At product level, too, BayernLB corporate policy emphasises sustainability issues when setting

the range of offerings. It seeks contact with selected companies in an area in which Germany is

well placed – clean technologies, which help to deal with the social challenges of climate change

and scarcer resources and provide solutions to questions threatening the existence of mankind.

Furthermore, BayernLB is also interested in the overriding issues that go beyond any one specific

customer. It is driving forward the “climate dialogue” within the financial services industry and

plays a leading role in the Association for Environmental Management in Banks, Savings Banks

and Insurance Companies (Verein für Umweltmanagement in Banken, Sparkassen und Versiche-

rungen). It is also a member of the Environmental Cluster Initiative Bavaria (Umweltclusterinitia-

tive Bayern) and the Environmental Pact of Bavaria (Umweltpakt Bayern) agreed between the

Bavarian government and business community. Worthy of special mention is the work organising

the annual climate conference, a meeting of experts under the motto “Protecting the climate –

creating values” (Klima schützen – Werte schaffen), and chairing the German government’s

“Climate Change Finance Forum” (Finanz-Forum: Klimawandel) in 2009.

This 2009 sustainability report documents and summarises the deep commitment BayernLB shows

to sustainability. BayernLB can look back with pride on what it has achieved. The task now is to

maintain this course and make further strategic developments. Whatever happens, BayernLB will

continue to make its contribution to sustainable development in Bavaria, Germany and the world.

Yours faithfully,

Gerd Haeusler,

CEO


7 >›› Foreword

Karlheinz Müller (54), Senior Executive Vice President, Mittelstand Division Manager | Responsibilities

Mittelstand corporate banking | Qualifications degree in banking management, banking training at

Kreissparkasse Nürnberg | Interests tennis, golf, skiing, travelling

A structured approach to management is essential if sustainability

management is to be continually improved. Sustainability manage-

ment is a cross-functional task that has to be pursued on all levels

and across all divisions. A bank’s strategic orientation, its coordina-

tion of individual tasks and the measures it chooses to take are all

key factors.

Sustainability management as an integral element of BayernLB’s business model

Responsibility for managing the environmental and social aspects of achieving economic objec-

tives lies with the Corporate Development and Sustainability Management Department, which

reports via divisional management to the CEO. The fact that sustainability is located organisation-

ally with Management Support reflects the strategic approach to sustainability management.

BayernLB regards continuous improvement of sustainability performance as both part of its pub-

lic mandate and a way of leveraging business opportunities and minimising risks – fully in line

with the interests of stakeholders such as shareholders, investors and customers.

The BayernLB sustainability strategy is not purely altruistic, but rather reflects strategic business

considerations as well. Global megatrends such as climate change and the shortage of resources

are placing increasing pressure on the real economy to react and adapt. BayernLB wishes to assist

customers in overcoming these challenges. This approach was confirmed once again in 2007

when the Board of Management of BayernLB approved a comprehensive sustainability strategy,

underscoring the significance of sustainability as an issue. It forms an integral part of the busi-

ness model.

Sustainability policy provides the normative framework for measures to be adopted

A structured management approach is required if sustainability performance is to be continually

improved. The framework for this comes from the Group-wide sustainability policy – which in

turn is embedded in a legislative framework – that is specified through internal guidelines and

external commitments.

Sustainability management


9 >›› Sustainability management

To rise to the challenges of the sustainability policy formulated, the sustainability programme

sets out specific objectives and appropriate measures. The extent to which objectives are

achieved and specific objectives implemented is checked in internal audits carried out by sustain-

ability management staff with the relevant operational managers. This procedure ensures the

sustainability programme is implemented in a consistent and focused manner. The sustainability

report plays an important part in this. The editorial part of the report is not, as is frequently the

case, produced by a communications agency, but in close cooperation between Corporate Devel-

opment and Sustainability Management and operational managers. The strategic orientation and

specific measures are coordinated in personal reporting meetings, future tasks agreed and clear

Legislative framework

• Landesbank Act

• Environmental legislation

• Social legislation etc.

BayernLB’s sustainability policy

BayernLB is convinced that by merging its economic, ecological and social goals it will increase its market value long-term. For this reason, the Bank plans to commit itself ever more to a sustainable environment.

As one of Germany’s largest international banks, BayernLB is a major force in the Bavarian econo-my, and intends to meet the responsibility that goes along with this through the development and widespread sale of sustainable banking products.

BayernLB sees itself as a member of society and recognises the corporate responsibility placed on it officially through its public sector mandate, with its unwavering commitment to projects of particular ecological and social benefit.

Aware of its responsibility towards nature, BayernLB endeavours to minimise – and, where possi-ble, prevent altogether – any negative impact, whether direct or indirect, on the environment.

BayernLB is aware that its employees play a central role in the Bank’s long-term success. It there-fore attempts to meet the welfare needs of employees as far as possible.

BayernLB regards discussions with others about sustainability as an opportunity to enhance its own development and increase society’s awareness for sustainability.

The Bank’s goals are to be achieved in compliance with all legal regulations and in consideration of all human rights, whereby, as far as BayernLB is concerned, these requirements pose minimum standards.

Voluntary external undertakings

• UNEP FI declaration

• Environmental Pact of Bavaria (Umweltpakt

Bayern)

• Climate Alliance (Bündnis für Klimaschutz)

etc.

Internal guidelines

• Corporate mission

• Group Reputational Risk Guideline

• Environmental policy etc.


< 10

responsibilities defined. The sustainability report is not merely a communication tool for inform-

ing widely differing stakeholders about sustainability performance; it is a fixed and integral part

of the management system for continually improving sustainability performance.

Experience and findings relating to sustainability are also passed on to subsidiaries. These

exchanges will be deepened in future so the sustainability performance of the entire BayernLB

Group can be gradually expanded in an effective and efficient manner.

Sustainability programme

Objective Measures Deadline Status

Management

Sustainability as an integral

element of BayernLB’s

business model

Draft a sustainability strategy and obtain Board of Ma-

nagement approval

07/2007 4

Increase communication with

strategic stakeholder groups

Handle rating requests, committee work

Intensify dialogue with SRI investors

Information events for staff

Set up a platform for dialogue with NGOs

Carry out a study on the impact of climate change on

different industries in Bavaria

Ongoing

12/2011

Ongoing

12/2011

06/2010

4

–

4

–

4

Certification of management

systems

Check on the introduction of a social management

system

Revalidate environmental management system according

to EMAS

12/2011

Annually

–

4

Expand scope of consolidation Integrate strategic Group subsidiaries

Intensify cooperation to improve Group sustainability

performance

Gradual

Ongoing

(4)

(4)

Sustainable financial

solutions

Increase efficiency in the

observation of environmental

and social standards in export

financing

Draft checklists

Model processes with information flow modelling

Annually review and, where necessary, revise the process

Revise/update checklists

2006

2006

12/2007

06/2011

4

4

4

(4)

Expand commitment to

environmental technology

sector

Draft a renewable energy market strategy and obtain

Board of Management approval

Expand sector expertise for the whole environmental

technology sector

Join Environmental Cluster Bavaria

Intensify dialogue with customers on findings from study

on the impact of climate change on different industries

in Bavaria

07/2007

Ongoing

2009

Since 2010

4

(4)

4

(4)

Increase subsidised funding

for projects with a high

benefit for the community

Draft a subsidised funding market strategy 2008 4

4 done (4) partly done – to do


11 >›› Sustainability management

Objective Measures Deadline Status

Employees

Further raise awareness

among and step up training

of employees regarding

sustainability

Present the issue of sustainability to new employees

Integrate the issue of sustainability into the training

programme

Give employees product-specific training

Ongoing

12/2011

Ongoing

4

–

4

Keep sickness rate below

4 percent

Continue operational health management

Health discussion group and intranet health portal

Make health management part of the BayernLB

corporate identity

Ongoing

Since 2007

12/2011

4

4

–

Diversity management People in an age-friendly working culture pilot project

Continue cross-mentoring programme

2007 – 2009

Ongoing

4

4

Improve management culture Introduce 180 degree feedback for managers 07/2010 4

Raise staff skills Expand internal training courses/training budget 04/2010 4

Sustainable bank operations

Climate neutrality at the

Munich site

1. Prevention

Energy efficiency-focused renovation of three buildings

Increase use of grey water

Pilot project: reduce thermal load by using thermal

insulation film

Use cool summer evening air to reduce the thermal load

in buildings

Greater use of ceilings with integrated cooling systems

Use high-efficiency pumps in house facilities

2. Substitution

Buy electricity from certified hydropower

Examine use of more photovoltaic facilities

3. Offsetting

Climate-neutral paper consumption

Climate levy for air travel

2010

Since 2007

2008

Since 2008

12/2011

12/2011

Since 2007

12/2011

Since 2005

Since 2008

4

4

4

4

–

–

4

–

4

4

Sustainability in the

supply chain

Check transferability of LBS Bayern’s minimum

environmental and social standards to BayernLB’s

supplier management

Get all suppliers to voluntarily commit to minimum

social and environmental standards

Carry out regular supplier audits

12/2008

12/2010

Ongoing

4

(4)

(4)

4 done (4) partly done – to do


< 12

Integrity

Sustainable corporate activity requires integrity. For BayernLB,

combating money laundering, fraud and terrorism financing and

ensuring compliance, data protection, consumer protection and

corporate governance, are of prime importance.

Combating money laundering, economic crime and terrorism financing

For BayernLB, integrity and seriousness are not just key pillars of social responsibility but an

essential precondition for enduring business relations with customers. Combating money

laundering, fraud and the financing of terrorism is therefore of great importance.

BayernLB is subject to a whole range of national and international regulations and implements

new measures such as the 3rd EU Anti-Money Laundering Directive promptly and without restric-

tion. The strategic guidelines and operational implementation in the fight against money laun-

dering and fraud are set down in: the Group-wide risk strategy; the concept on preventing money

laundering, fraud and terrorism financing; the risk-based approach with constantly updated risk

analyses; and specific instructions. The overriding aim is to protect customers, staff and the Bank

from loss or abuse as a result of criminal activity.

To achieve this, the idea of PRIEM (the German acronym for prevention, research, information,

investigations, measures) has been implemented. The focus is on preventive measures. A new

customer approval process and constant monitoring of existing relationships and transactions

ensure that UN, EU and German rules on embargoes and sanctions are observed in full. To the

greatest extent possible, all audit processes are automated. Audits are based on information

from the Bank’s own IT systems and external sources. However, standardised and proven proc-

esses can only successfully combat money laundering, fraud and the financing of terrorism with

the support of all staff. Regular online and classroom-based training sessions are therefore held

for all employees. The content of the training courses is optimised to suit the specific needs of

staff so they are as effective as possible. Attendance is mandatory.

As well as auditing business relationships and transactions, applicants are checked before they

join the Bank and regular reliability audits conducted on decision makers, staff who come into

direct contact with customers and employees who are authorised to make payments. Staff repre-

sentatives fully support the measures this requires.


13 >›› Sustainability management · Integrity

Hans-Gerd Neuhauser (56), Risk Controller | Responsibilities handling risk and portfolio-related

queries raised by the rating agencies | Qualifications banking degree, degree in business administration,

degree in real estate economics (EBS) | Interests hunting, clocks, skiing, good cuisine and anything else

that’s fun – life is serious enough as it is…

Compliance

In order to protect customers, the Bank seeks to identify possible conflicts of interest between

itself (and staff) and customers so that customers are not potentially disadvantaged. The organi-

sational steps this involves have been put in place and appropriate measures taken. Securities

services customers receive an information brochure at the start of the business relationship

explaining how conflicts of interest are dealt with.

Clearly defined Chinese walls ensure that insider information is not passed on to unauthorised

persons. The flow of such information is monitored and managed with the help of a watch list

and a restricted list, produced by Capital Markets Compliance.

The employee transaction guidelines include all the regulations to be observed in employee

transactions. This is an internal code of conduct making it entirely clear that staff may not buy or

sell securities they are dealing with professionally, and that employee transactions must not harm

the interests of customers or the Bank. In addition, no employee may, in performing their duties,

demand or accept any financial or non-financial recompense or other benefit for themselves or

for third parties.

These preventive guidelines also protect staff against deliberate and accidental breaches of crimi-

nal law. Violations of the employee guidelines may involve steps being taken under employment

law. Staff can also be ordered to donate improper gains to charity.

Data protection

Handling sensitive data responsibly is an important principle at BayernLB when dealing with both

customers and staff. It is the task of the data protection officer to see that the German Data Pro-

tection Act and other regulations are observed and customers and staff protected from having

their data misused.

A standard data protection procedure has been put in place which specifies detailed, in-depth

and regular checks. For instance, it was decided at an early stage that HR, the Staff Council and

line managers should be involved in assessing employee data, as well as the data protection

officer. In this way, employee interests are protected at all times. BayernLB’s duty of care extends

beyond the internal use of sensitive data, though. It also considers external service providers

who process data under contract. Important breaches of data protection affecting customers,

such as those involving bank account or credit card details, are reported to the regulator immedi-

ately. In addition, as required by law, the customers affected are advised and necessary counter-

measures taken.

Revisions I to III of the German Data Protection Act, which took effect on 1 September 2009,

1 April 2010 and 11 June 2010, were implemented on schedule. BayernLB therefore now provides

the new enhanced right to information about the collection, processing and use of personal data.

All staff are regularly given needs-based training to ensure compliance and data protection

function efficiently. Employees are also given constant advice and support on how to meet each

requirement. The range of support varies from publishing guidelines to providing details of

specific examples to case-by-case individual discussions.


15 >›› Integrity

Consumer protection

Investor confidence suffered a heavy blow in the financial market crisis. Trust shown in the finan-

cial services industry by retail investors in particular plummeted. Although BayernLB does not

have any retail customers of its own, it develops products for savings banks to sell to their end-

customers. It is therefore of considerable importance to ensure that retail investors have trust in

the savings banks and in BayernLB’s products.

Product safety, transparency and simplicity are key principles when developing and selling securi-

ties investment products. In order to protect customers, products should be structured as simply

and transparently as possible to allow customers to act on their market view on the basis of the

information provided. Product development is not the only area where customer protection is

important; it is also key in investment consulting. Since it is the savings banks which advise cus-

tomers, BayernLB provides the advisors at the savings banks with a great deal of information.

For structured products in particular this includes product-specific guidelines with all the relevant

information for the customer as well as additional details for the advisor. For transactions in

simple securities a product information sheet is used which follows the recommendations of the

Federal Ministry of Consumer Protection. The magazine AdvisorCompass (BeraterKompass) is also

published. It has been specially tailored to meet the information requirements of investors and

customers and contains general background information.

If advice is to be transparent and full, customers must always be advised of the risk/return trade-

off as well. With this in mind, BayernLB offers the savings banks a modular training concept

developed specially for them with the European Derivatives Academy (EDA). Taking part in these

sessions means advisors are able to offer customers even more comprehensive advice.

All these measures support the requirement which came in on 1 January 2010 to keep a written

record of advisory meetings. They are intended to protect customers and win their trust. After all,

trust is the essential precondition to successful cooperation – for the good of the customers, the

savings banks and BayernLB.

Corporate governance

Confidence in business policy is determined to a large extent by responsible, transparent

management and controls designed to increase the value of the company over the long term.

BayernLB therefore places great emphasis on corporate governance that lives up to these

requirements.

As a corporation established under public law, BayernLB has a management and supervisory

structure laid down in the Bayerische Landesbank Foundation Act, with responsibilities split

between two bodies, which have different members. The Board of Management runs the busi-

ness, while the Supervisory Board appoints, monitors and advises it. The other corporate body is

the General Meeting of Shareholders, which has the power to decide matters of basic principle.


< 16

The corporate governance principles summarise the corporate management and control regula-

tions applicable to BayernLB, which are either legal requirements or which BayernLB has chosen to

impose on itself. These principles are largely based on the provisions of the German Corporate

Governance Code, so far as these can be sensibly applied to BayernLB as an unlisted public sector

company with only two indirect shareholders. BayernLB’s corporate governance principles go

beyond the requirements of the German Corporate Governance Code in a number of areas.

BayernLB has a major interest in making the corporate governance system it has voluntarily

adopted transparent and comprehensible so as to promote even greater trust among customers,

staff and the wider public. The corporate governance principles are regularly reviewed and

amended as appropriate to reflect new experiences and legal requirements and changes to

German and international standards.


17 >›› Integrity

Eva-Marie Baum (24), Investor Relations Manager | Responsibilities managing relationships and

communication with capital providers and the financial market | Qualifications Bachelor of Arts in inter-

national business | Interests golf, tennis, travelling, cooking

Dialogue with stakeholders

BayernLB believes in communicating with stakeholders in an open,

fair and transparent way, and tackles social and sustainability

issues in close dialogue with them.

In view of the strategic orientation of sustainability management, there is extremely close coop-

eration with business partners, investors, rating agencies, government agencies and sustainability

groups in the financial services industry. Communication with other stakeholder groups is mainly

through the relevant specialist units. Sustainability management also has an advisory function in

this. The results of all of these cooperations are constantly announced in press releases and web

postings.

Communications with staff

The Bank works on sustainability issues in many units and engages in dialogue on these. Staff in

different specialist areas are committed to driving such issues forward. Employees are regularly

updated on relevant topics using various internal communication media. By way of example, the

staff magazine has included detailed contributions on issues such as climate change – risks and

opportunities, Desertec and renewable energy. Employees can also consult position papers

to allow them to respond to direct approaches by stakeholder groups. These clearly set out the

line the Bank is taking on current issues. There is also a series of events entitled “Shaping Our

Future Together,” where staff can put questions and discuss the latest high-level strategic topics

with members of the Board of Management. Special groups of employees are given specific tech-

nical training on sustainability issues related to their area of activity. Staff can also make sugges-

tions for improvement and propose ideas through the Bank’s suggestion process or in personal

meetings or special programmes like the “Bureaucracy Out” campaign.

Dialogue with social groups and associations

In line with its far-reaching social and business activities, the Bank is a committed member of a

range of groups and associations. The main associations in which the Bank deals with sustainabil-

ity issues are:

• The German Network for Business Ethics (Deutsches Netzwerk Wirtschaftsethik)

• The Association of German Foundations (Bundesverband deutscher Stiftungen)

• Climate Change Finance Forum (Finanz-Forum: Klimawandel)

• The United Nations Environment Programme Finance Initiative (UNEP FI)

• The Association for Environmental Management in Banks, Savings Banks and Insurance Compa-

nies (Verein für Umweltmanagement in Banken, Sparkassen und Versicherungen e.V.)

• Environmental Pact of Bavaria (Umweltpakt Bayern)


19 >›› Dialogue with stakeholders

At the start of 2010 the Bank also joined “Energy Shift Oberland, Civil Foundation for Renewable

Energies and Energy Saving” (Energiewende Oberland, Bürgerstiftung für Erneuerbare Energien

und Energieeinsparung). This body promotes measures to make it possible for electricity in the

vicinity of Bad Tölz-Wolfratshausen and Miesbach to come entirely from regionally generated

renewable energies within 30 years. The aim is to keep the value added within these districts and

create new jobs. The Bank will contribute its expertise in financing renewable energies.

Over the period under review, the Bank chaired the Climate Change Finance Forum, which was

set up as part of the German government’s high tech strategy to exchange information between

researchers, technology drivers and the financial services industry. The Bank also provided a

member on the Managing Board of the Association for Environmental Management in Banks,

Savings Banks and Insurance Companies. Where relevant, details of the Bank’s activities in other

associations are provided in the section headed “Corporate citizenship”. BayernLB has a close

network of partners, demonstrating its solidarity with other groups in society to deal with press-

ing contemporary issues. Energy and climate change remain key focus points.

Activities in social groups: excerpt

General business:

• The German Association for Personnel Management (Deutsche Gesellschaft für Personalführung e.V.)

• The German Institute for Internal Audit (Deutsches Institut für interne Revision e.V.)

• The German Association for Data Protection and Data Security (Gesellschaft für Datenschutz und Daten-

sicherheit e.V.)

• Marketing Club Munich (Marketing-Club München e.V.)

• The Committee on Eastern European Economic Relations (Ost-Ausschuss der Deutschen Wirtschaft)

• The Schmalenbach Society for Business Administration (Schmalenbach Gesellschaft für

Betriebswirtschaft e.V.)

Banking and financial services:

• ACI Deutschland – The Financial Markets Association

• The Banking Law Association – Academic Association for Banking Law (Bankrechtliche Vereinigung –

wissenschaftliche Vereinigung für Bankrecht e.V.)

• The German Leasing Companies Association (Bundesverband Deutscher Leasing Unternehmen e.V.)

• The Association of German Public Sector Banks (Bundesverband Öffentlicher Banken Deutschlands)

• The Society of Investment Professionals in Germany (Deutsche Vereinigung für Finanzanalyse und Asset

Management e.V.)

• The German Savings Banks Association (Deutscher Sparkassen- und Giroverband)

• The European Association of Public Banks (EAPB)

• The Association of Chief Financial Officers Germany (Gesellschaft für Finanzwirtschaft in der

Unternehmensführung e.V.)

• The Association of German Pfandbrief Banks (Verband deutscher Pfandbriefbanken)

Public relations:

• The Bavarian Journalists Association (Bayerischer Journalisten Verband e.V.)

• The German Association of Press Spokespeople (Bundesverband deutscher Pressesprecher e.V.)

• The International Press Club of Munich (Presse Club München e.V.)


< 20

Assessments by rating agencies

Investor groups regularly commission specialised agencies to rate the sustainability performance

of BayernLB. The Bank achieved very good ratings once again in the latest round of assessments:

• In 2010, oekom Research AG rated the Bank C (above average) and classified it as Prime.

• In 2008, Scoris GmbH gave BayernLB 64.9 out of 100 points, well above the sector average.

These results mean that the Bank’s listed securities qualify as a sustainable investment, subject to

investors’ individual exclusion criteria.

Cooperation with NGOs

The exchange of information with non-government organisations (NGOs) in the period under

review mainly concerned individual projects. Forums have been set up where the Bank can dis-

cuss sensitive topics with a range of NGOs and financial service providers. This is particularly

helpful for identifying critical projects at an early stage.

Communication with customers

The needs and suggestions of customers are key inputs and provide impetus for the development

of sustainable financial solutions. The Bank hopes to leverage the associated market potential by

working closely with its customers. It therefore seeks intensive dialogue with customers as to

how it can best meet their needs. This happens both at events such as the “Protecting the climate

– creating values” (Klima schützen – Werte schaffen) series and at conferences on issues like

energy efficiency and recycling and waste disposal.

The negative impact of climate change in particular is already presenting companies with some

considerable problems. BayernLB supports customers in overcoming these so they remain com-

petitive and viable. The Bank therefore commissioned a large-scale report on the impact of cli-

mate change on different industries in Bavaria in 2008/09. The report was drawn up by two part-

ners, the Environmental Science Centre at the University of Augsburg (Wirtschaftszentrum

Umwelt der Universität Augsburg) and consultants Arqum GmbH. These researchers combine

proven expertise in advising companies on environmental issues with skills in climate research

and commodity geography. The project looked at both the direct effects of climate change and

the regulatory environment for companies in 19 sectors, from water utilities to the clean-tech

industry to real estate management. Possible strategies for adaptation were also considered. The

project revealed what action needs to be taken as a result of climate change in, for example, the

water supply and reprocessing industry. The annual increase in atmospheric temperature is not

just hurting the quality of water; increasing periods of drought mean changes need to be made

to how waste water is processed and facilities operated. Some regions are at increased risk of

flooding, which also brings new challenges. The results indicate that a constructive dialogue and

intensive exchange of views with representatives from a wide range of industries are needed if

successful change strategies are to be drawn up. Solutions are being produced with representa-

tives from these sectors.


21 >›› Dialogue with stakeholders

The customer magazine MittelPunkt also reports regularly on the latest issues concerning sustain-

ability management and finance.

The knowledge gained about customers’ needs and desires and the latest trends make it possible

to successfully implement the measures in the sustainability strategy, such as expanding the

renewable energies segment.

Cooperation with suppliers

Since 2009 the Bank has entered into sustainability agreements with all its major suppliers for

them to observe environmental and social standards. The first steps were taken in technical, stra-

tegic and IT consulting and office supplies and computer hardware procurement. This is due to

be rolled out to all suppliers in 2010. Staff in Procurement and Business Service have been trained

in the requirements under the sustainability agreement and how to conduct audits and make

corrections. One way BayernLB checks on the requirements is by using an online tool called

RepRisk. The sustainability agreements also provide for internal audits at service providers.

Suppliers are also selected using social and ecological criteria. Where value for money is the

same, preference is given to:

• Regional suppliers, to minimise external transport and freight costs and delivery times;

• Products with an official environmental certification;

• Services and products from institutions for the disabled or other charities.

Starting from the beginning of 2010, it is now also mandatory for outsourcing to observe the

sustainability agreement. As far as possible, such agreements will also be signed with existing

outsourcing partners.


< 22

Corporate citizenship

BayernLB’s public mandate is based on section 2 of the Bayerische

Landesbank Act, which defines the Bank’s tasks as including

strengthening competition and providing financing and credit for

business and the public sector.

The Bank’s corporate citizenship activities predominantly involve projects that directly or indi-

rectly serve to promote primarily the regional economy or support a socio-cultural environment

that creates the basis for innovative, lasting economic activity. No donations are made to political

parties.

Economic promotion

The Munich Financial Center Initiative

At regional level, the Bank has been an active contributor to the Munich Financial Center Initia-

tive (Finanzplatz München Initiative) for several years. The initiative was established in 2000 at

the behest of the Bavarian Ministry of Economic Affairs and seeks to further the interests of all

players within Bavaria’s financial sector. Its participants are companies from the banking and

insurance sectors, venture capital and leasing companies, Munich’s stock exchange, professional

bodies, business and trade associations and research institutions linked to universities. Its prime

objective is to boost Bavaria, and especially Munich, as a financial centre and to improve the

area’s standing outside the region. To achieve this, regular discussions are held with representa-

tives of the European Commission and the European Parliament.

Bavarian Center of Finance

The Bavarian Center of Finance (Bayerisches Finanz Zentrum e.V.) was founded in 2006 under the

Bavarian State Government’s cluster initiative for financial services. As a member of the Board of

Trustees, BayernLB promotes its activities at cross-regional level. These include in particular col-

laborative projects between Bavarian universities and financial service providers with a practical

focus, a careers centre for newly qualified talented individuals and the exchange of knowledge

and experience. The third Bavarian Finance Summit in Munich in 2009 brought together major

names from the worlds of academia, business and politics once again. A key contribution to the

summit’s success came from the “New direction for regulation – lessons from the financial crisis”

event.

Financial Center Germany Initiative

At national level BayernLB continued to actively support the Financial Center Germany Initiative

campaign (Initiative Finanzstandort Deutschland) in 2009. The Financial Center Germany Initiative

was set up by the German government in 2003 to help strengthen Germany as a financial centre.

The IFD’s members are banks, insurance companies, financial sector associations, German Stock


23 >›› Dialogue with stakeholders · Corporate citizenship

Exchange (Deutsche Börse), German Central Bank (Deutsche Bundesbank) and the Federal Ministry

of Finance, making it the most comprehensive programme in the German financial sector. More

than 200 experts from all IFD member bodies work together across competitive boundaries to

devise pragmatic, market-oriented solutions. To promote public-private partnerships, ÖPP Deutsch-

land Aktiengesellschaft was established on the initiative of the IFD and in cooperation with the

Federal Ministry of Finance and other interested parties. It commenced its advisory activities at

the start of 2009. The Bank is also a member and supports the IFD in its work.

German Centres

BayernLB provides specific infrastructure services to support the economy both in Bavaria and in

Germany as a whole. In growth markets, the German Centres provide German companies with

practical support for establishing their own business operations in those countries, as well as a

platform for exchanging experiences and gaining access to networks. The Bank operates German

Centres in Shanghai and Delhi-Gurgaon to provide support to Mittelstand firms breaking into new

markets. The German Centre in Delhi-Gurgaon, a joint venture with Landesbank Baden-Württem-

berg (LBBW), began its work in 2008 and extends the global network that also includes other

centres in Jakarta, Mexico City, Beijing and Singapore. The German Centre in Moscow will be

ready to move in to in 2011.

Financial education

The debate surrounding the complexity of financial products in the wake of the financial crisis

has shown that education is vitally important in this area. BayernLB feels it has an opportunity

and an obligation to promote financial education at all levels of society.

The Economics department, which has already received numerous national and international

awards for its work, analyses the macroeconomic situation in Germany and Europe on a regular

basis and makes its findings available to the public via the internet and in special publications.

Recent topics have included in particular the economic crisis, euro stability and stagflation.

Monetary systems – “Gold from the Isar” exhibition

In the 18th and 19th centuries gold was panned from the gravel and sand of the Isar river and

used to strike ducats – in other words legal tender – in Bavaria’s mints. BayernLB has designed a

touring exhibition to document how the money was created. The exhibition has been available

to interested members of the public at Bavarian savings banks since 2009. It has been extremely

well received due to the increasing popularity of gold as an investment.

International financial education

As a member of the Sparkassen-Finanzgruppe the Bank supports the Savings Bank Foundation

for International Cooperation. The foundation’s mission is to make the experiences of German

savings banks available to similar financial institutions in developing and transition countries.


< 24

Financial education at schools and universities

BayernLB also plays a very active role at a more local level in disseminating specialist banking

knowledge and promoting economic understanding. To this end it supports high schools in the

Munich area by providing practical sessions on economic topics.

The financial stars of the future receive practical training and financial support thanks to the

combined efforts of BayernInvest Kapitalanlagegesellschaft mbH and BayernLB, which sponsor

the elite Finance & Information Management (FIM) programme run by the University of Augsburg

and the Technical University of Munich.

Real estate and healthcare education

Housing construction

BayernLB helped to finance an endowment chair for housing construction and the housing sector

in conjunction with a partner from the real estate sector. Teaching began in the 2003 summer

semester and was supported until 2009.

“Energy-saving renovation” awareness campaign

In line with its focus, LBS Bayern also conducts major information campaigns on housing con-

struction, paying particular attention to environmental aspects. For example, it demonstrates

through its public relations activities that environmental protection, profitability, value creation

and comfortable living can be combined with the aid of energy-saving modernisation measures.

Working in conjunction with the Bavarian savings banks, in the period under review LBS Bayern

held press conferences in Bavaria to present the regional real estate portfolio – including the

corresponding renovation requirements and associated potential savings – to interested mem-

bers of the public. The campaign was accompanied by the “Modernise and halve your energy

costs” (Modernisieren – Energiekosten halbieren) exhibition, which provided information to cus-

tomers at Bavarian savings banks. Press and background information was also made available on

the internet. Potential savings can be calculated with a free energy check.

Clinic Sponsorship Prize

It is not only in finance that the Bank promotes the sharing of key knowledge and skills in our

society. It also supports the spread of best practice in the field of healthcare. Accordingly, the

Innovation Award for Healthcare, worth EUR 25,000, was awarded for the eleventh time in 2009.

The prize rewards outstanding healthcare projects that boost efficiency and transparency.

Science

In the field of education and science BayernLB gives young people a helping hand into the

working world. The support is aimed not only at gifted children and young people but also the

disadvantaged.


25 >›› Corporate citizenship

The following scientific establishments received financial support in 2009:

• Society of Friends of the Distance-Learning University in Hagen (Gesellschaft der Freunde der

Fernuniversität Hagen e.V.)

• Society of Friends of the University of Augsburg (Gesellschaft der Freunde der Universität

Augsburg e.V.)

• Max Planck Society

• Foundation of the Academy of Fine Arts Munich (Stiftung Kunstakademie München)

• Research promotion arm of the savings banks organisation (Wissenschaftsförderung der

Sparkassenorganisation)

Education promotion at LBS Bayern

LBS Bayern’s education promotion activities are primarily focused on topics affecting the whole of

society. It works closely with various Bavarian ministries and major aid organisations, contribut-

ing its expertise where it is most required.

“Crossmedia” media competition

Commissioned by the culture ministry, the state associa tion for new media (Landesarbeitsge-

meinschaft Neue Medien) and LBS Bayern have staged the “crossmedia” media competition for

schools annually since 1998. The competition is open to students from all schools in Bavaria –

as individuals, groups or entire classes. The young participants address school-related, social or

personal issues through the medium of video or graphic design and layout, presenting the results

on DVD or online. LBS Bayern provides an annual prize fund of almost EUR 13,000, with the prizes

awarded each November in a central ceremony held at its head office in Munich. The prize money

is used to buy media equipment for the winning schools.

Safety training for young drivers

LBS Bayern has supported the “campaign safety training for young drivers” (Könner durch Er-

fahrung) since 1984. The free safety training offered by the Bavarian road safety organisation is

also supported by the Bavarian savings banks and the Bavarian State Ministry of the Interior. The

campaign helps young new drivers, who are statistically much more likely to have an accident,

become safer drivers or motorcyclists. In recognition of their commitment to safety, the 10,000 or

so young people who enrol on the course each year are entered in a draw to win one of ten LBS

Bayern home loan savings account, each credited with EUR 600, or one of 16 savings books with

an initial deposit of EUR 550.

Without fists – Preventing violence in schools

LBS Bayern has been involved with this preventive social programme for children since 2004. In

conjunction with the “Alliance for children. Fighting violence” (Bündnis für Kinder: Gegen Gewalt)

foundation of the Bavarian Ministry of Social Affairs, between 2004 and 2008 it donated more than

EUR 600,000 to the Heidelberg Prevention Centre’s Faustlos project. Over the five years of the

campaign it sponsored some 1,300 primary and special needs schools and nurseries throughout


< 26

Bavaria, enabling more than 2,600 teachers to attend over 140 Faustlos training sessions. During

the training they were placed in situations where they, together with their classes and groups, had

to find non-violent solutions to problems by taking part in role plays with the children designed

to teach mechanisms relating to empathy, controlling impulses and coping with frustration and

anger. A study commissioned by the German Ministry of Education and Research into the poten-

tial for democratic and violence-prevention programmes in schools and youth work picked out

Faustlos as an example of best practice, on the strength of its effectiveness and exemplary quality.

United we are strong – Preventing violence in sports associations

LBS Bayern remains committed to preventing violence. As a result, between 2009 and 2011 it is

donating EUR 200,000 to the “United we are strong” (Gemeinsam sind wir stark) anti-violence

programme run by the Bavarian branch of the German national association for the protection of

children (DKSB) in partnership with the “Alliance for children. Fighting violence” project. The

practical programme is focused on volunteer trainers of teams of children and young people. LBS

Bayern’s support helps to establish the necessary infrastructure and lay the foundations for “United

we are strong” training sessions throughout Bavaria. Other beneficiaries of LBS’s help include

1,000 sports associations, which have been given sponsorships so that three youth trainers or

leaders can attend the training free of charge. Local savings banks can also get involved in the

campaign between now and 2011 and take on similar sponsorships. In 2010 LBS Bayern received

the “Alliance for children. Fighting violence” foundation’s inaugural commitment award for its

longstanding efforts in violence prevention. The foundation honoured individuals and organi-

sations in four categories who in their own way demonstrated conviction and commitment with

regard to protecting children and young people against violence.

Community work and donations

Sternstunden

For many years now BayernLB has supported the “We help children” campaign run by the charity

Sternstunden at various levels. Every cent of each donation reaches children in need as the spon-

sors pick up all the administration costs. The Bank contributes EUR 85,000 each year. BayernLB

also provides offices for the charity. A record EUR 4.58 million was raised in 2009 at the pre-

Christmas Sternstunden gala, which is broadcast every year on Bavarian television, with the Bank

donating an additional EUR 50,000. A large number of volunteers from BayernLB, BayernLabo

and LBS Bayern spent the day collecting donations on behalf of Sternstunden. LBS Bayern also

donated the second prize in the Sternstunden prize draw – a home loan savings account credited

with EUR 10,000.

On top of this, BayernLB takes advantages of other opportunities to promote Sternstunden and

encourage donations. For example, a special sale of out-of-date promotional material in 2009

brought in more than EUR 12,000. In addition, selected works of art by staff were auctioned off

in a sale entitled “Kunststerne”. Most of the money raised at this regular auction goes to Stern-

stunden. LBS Bayern organises high-profile charity events such as cards tournaments featuring

personalities from the media and politics, with the money raised also going to Sternstunden.


27 >›› Corporate citizenship

Bavarian state school for people with disabilities

BayernLB also uses other art auctions to raise money for Sternstunden. Works by students of the

Bavarian state school for people with disabilities (Bayerische Landesschule für Körperbehinderte)

are regularly exhibited at the Bank. The 2009 exhibition was entitled “Pictures Living Seeing –

Paintings and Things”. The auction, which attracted a lot of interest from the Munich public, staff

and business partners, raised a total of EUR 45,000 in donations. The money raised by the auction

was divided evenly between the Sternstunden project and the school.

Other donations

BayernLB also offers support in the event of natural disasters and other unexpected emergencies.

For example, it recently donated EUR 8,000 to the Chile earthquake appeal. Donations totalled

more than EUR 130,000 in 2009.

Voluntary work

Sternstunden is not the only cause for which Bank staff give up their time. They also perform a

valuable service in rescue teams, the Federal Agency for Technical Relief, the fire brigade and

crisis intervention teams. BayernLB supports these activities by giving volunteers paid leave. Such

activities are given prominent coverage in the staff magazine, the aim being to motivate other

staff to get involved in community work as well.

Art and culture

The final element in BayernLB’s corporate citizenship activities is its support for art and culture.

This ranges from exhibitions in the Bank’s own gallery to support for musical performances and

historical events. Its constant goal is to make cultural heritage accessible to a wide audience.

In the period under review the Bank staged free exhibitions of works by Bavaria-based artists in

its gallery. Staff also learned about the artistic context of the various exhibitions through exten-

sive articles in the staff magazine. Four exhibitions were held at the gallery in 2009 – including a

retrospective of Hans Langner, also known as Birdman. The works of the multi-media artist cover

a wide range of paintings, found art, installations and functional design patterns. The gallery con-

cept is in the process of being revised.

BayernLB also supported Munich’s Museum Night again in 2008 and 2009. The ongoing loan of

the Palais Dürckheim to the Pinakothek der Moderne art museum promotes access to art and

culture for children and young people. The Bank’s patronage of the arts also includes a host of

permanent loans to preserve cultural heritage.


< 28

Human resources

Even in a difficult environment BayernLB fulfils its obligation to

balance its interests with those of its staff.

The Bank developed a focused business model in the period under view through the Hercules

restructuring project, adapting its human resources tools in line with the socio-demographic

changes. All customer segments, portfolios, products and target countries were analysed, with

processes and services coming under scrutiny. This was accompanied by large-scale organisa-

tional changes and moderate staff reductions. Management structures were streamlined, and the

sales structure geared more strongly to the Bank’s target customers.

These changes will require staff to demonstrate even greater personal responsibility and drive

despite the tougher conditions. At the same time the Bank is offering more intensive support for

the personal development of dedicated staff, since the Bank’s opportunities in the future will

come from the move towards a corporate culture that sets even greater store by performance

and responsibility.

Staff communications

Changes in culture call for improved corporate communications and optimal access to appropri-

ate information channels. With this in mind, the staff magazine was relaunched in the period

under review. The intranet site was also reviewed to determine whether its content was reaching

staff and adapted accordingly. Direct communication between management and staff was

strengthened through various new info gatherings.

A structured change process was implemented to systematically and consistently manage the

change in culture and overcome the challenges posed by the restructuring project. Regular staff

surveys were conducted on communications and cooperation issues under the “Cultural barome-

ter” banner. To help managers and staff come to terms with the changes in corporate culture,

the most important core themes were summarised in ten concise principles and communicated

to all colleagues at workshops. Change coaches also supported staff throughout the change

process. Staff attended change workshops where they drew up specific measures for implement-

ing the focused business model, allowing them to play an active role in shaping the necessary

change in culture.

A question & answer function was set up on the intranet to address and correct any rumours

that might arise. An electronic change management manual (the Change Guide) was also made

available. The Change Guide is a practical compass designed to assist managers and project

leaders by providing specific recommendations for action, checklists and other tools and helping

share expertise on dealing with change projects.


29 >›› Corporate citizenship · Human resources

Integration workshops drawing on the advice and information in the Change Guide were held

whenever new organisational units were established. The Board of Management also held regu-

lar communication events with the second and third levels of management and with the entire

workforce.

Staff representation

Staff representatives offer vital support with the wide-ranging changes. All BayernLB staff in

Germany are represented by the Staff Council at the Munich and Nuremberg locations. Its activi-

ties are based on the Bavarian Staff Representation Act and the collective wage agreement for

the organisations represented by the Association of German Public Sector Banks (Bundesverband

Öffentlicher Banken Deutschlands). The Staff Council has proved to be an important point of

contact for staff with regard to more complex internal and external matters. BayernLB is bound

by all requirements and co-determination rights laid down in law and works with the Staff Coun-

cil constructively and in an atmosphere of trust for the benefit of its staff. Relevant issues are

addressed as early as possible. This also applies in part to issues that are outside the scope of

statutory co-determination rights.

Since the beginning of 2009, the Staff Council has been represented on the Board of Administra-

tion at the instigation of BayernLB’s main owner, the Free State of Bavaria. This has also been

enshrined in the new Landesbank Act, which came into force in August 2009. The Staff Council

representative has full voting rights to ensure that staff interests receive a proper hearing in the

supervisory body.

Major topics addressed by staff representatives in the period under review included health man-

agement, social and sporting events, holiday care for the children of employees and amicable

staff reductions.

Headcount reduction

A fair and socially responsible solution including various human resources measures was drawn

up for the staff reductions in conjunction with the Staff Council. Following on from this, the

majority of the cuts required as a result of the restructuring were achieved in 2009 through vol-

untary agreements, without the need for compulsory redundancies. Measures included voluntary

redundancies, retirements and outplacements. Particular attention was paid to the local situation

at foreign entities. Employment relationships will be terminated as activities, products and proc-

esses cease to exist, with some not ending until 2012. The set of measures was announced in

April 2010, with the remaining staff reductions since being achieved through natural attrition

and a hiring freeze, with certain exceptions. Overall almost 20 percent of the workforce was

affected by the staff reduction. The Bank still wishes to secure top-class staff for the long term,

however, and the 183 fixed-term contracts in place at the end of 2009 included 80 concluded with

trainees and 25 with graduate trainees.


< 30

Andreas Blank (46), HR Development Department Manager | Responsibilities management

development, change management, talent development, junior and specialist staff development |

Qualifications degree in psychology | Interests sailing, tennis and skiing

Staff turnover and protecting know-how

Further staff reductions were achieved by outsourcing the retail customer business, which was

transferred to Deutsche Kreditbank AG (DKB) as of 1 October 2008 as part of a partial handover

of operations designed to create additional centres of expertise within the BayernLB Group. The

HR department, working closely with colleagues at DKB, was able to agree fair and attractive

conditions for transferring the employment relationships of the affected employees. Most of the

employment relationships were ultimately transferred from BayernLB to DKB.

Staff turnover rate by region

Region 2009 2008 2007

Germany 2.02% 2.69% 1.93%

Europe (ex Germany) 5.27% 7.78% 13.80%

America 3.77% 3.62% 12.85%

Asia 12.97% 9.72% 8.11%

Total 2.42% 3.11% 3.06%

The staff turnover rate is calculated by dividing the number of resignations by the average number of employees

When staff leave the Bank, a vast amount of knowledge and experience leaves along with them.

The knowledge transfer process, whereby task areas and activities are restructured at an early

stage, was introduced in order to retain this expertise within the Bank. The process brings man-

agers, departing staff and their successors together, and is aided by special checklists, training

and advisory programmes.

Staff retention

As well as reducing staff costs, and the job cuts that this entails, the Bank must remain attractive

to its current and future workforce. With this in mind the Bank regularly participates in studies

that measure its attractiveness as an employer. In 2008, for example, it was ranked as one of the

100 best employers in Germany in a study of top employers. This feedback is complemented by

internal surveys such as the above-mentioned cultural barometer and various other feedback

through studies, and it helps the Bank implement appropriate measures.


< 32

Compensation policy and pensions

As a requirement of the changing business model, HR managers were faced with the task of

bringing the Bank’s remuneration and pensions systems into line with normal market conditions

in order to help establish an appropriate structure for staff costs. Converting these to perform-

ance and market-based systems involves balancing employee expectations with the Bank’s busi-

ness needs. This was achieved by working out new solutions in close cooperation with staff rep-

resentatives.

When drawing up the non-collective wage agreement remuneration system, particular attention

had to be paid to regulatory requirements in addition to the focus on performance and market

factors and the corresponding staff costs issues. This called for a rigorous focus on sustainability,

transparency and avoiding unreasonable risks with a view to preventing counterproductive, risky

behaviour that is detrimental to the market.

The new remuneration approach is based on the new job architecture; in other words it groups

functions into job families on the basis of the activities involved and determines their internal

value within defined, specific career ladders. Differentiated and market-oriented salary bands that

define the minimum and maximum annual fixed salary at three levels and within which individual

increases and bonuses are determined were assigned to the job families.

This produces a remuneration system where, within the job architecture, the annual fixed salary

corresponds to the specific task description for a function, the requirements for the function

holder and the qualifications that he/she should/does have. All employees receive variable remu-

neration, in the form of a discretionary voluntary benefit, that is geared consistently to individual

performance and that of the Bank. Performance is assessed as part of staff reviews. Business suc-

cess is measured on the basis of long-term, transparent and risk-adjusted management ratios.

Employees governed by the collective wage agreement also receive a special annual payment

from the Bank in line with the collective wage agreement.

The remuneration committee assesses the suitability of the remuneration system, particularly the

individual remuneration components. The committee then informs the Board of Management

and the Board of Administration of the findings of its assessment at least once a year.

BayernLB’s social commitment to its staff is not restricted to their working lives, but also includes

safeguarding their standard of living in old age or in the event of their incapacity. Staff are

offered different pension models depending on their start date and length of service. With one

exception, all employer-funded occupational pension systems are funded by BayernLB alone and

cover biometric risks such as old age and early incapacity to work. Employees also have the

option of contributing towards a tax-incentivised deferred compensation scheme. Various tools

are available depending on the type of tax incentives in question. The preparatory work for con-

verting the former retirement benefit programme for employees who joined the Bank up to and

including 2001 into a standard scheme was carried out in 2009, with the switch then imple-

mented in 2010.


33 >›› Human resources

Attracting the next generation

School-leavers and university graduates are currently experiencing deep uncertainty when choos-

ing their career and potential employer. Accordingly, a Bank that will consistently employ fewer

people in the future must also review its responsibility to the next generation. As a result, the

number of trainee places was reduced by around a third in the period under review, in line with

the reduction in headcount. This will ensure that suitable young people have a realistic chance

of ultimately being taken on by the Bank. BayernLB actively markets its training programmes

to graduate trainees at recruitment fairs and to school-leavers during tours of Munich high

schools, giving regular presentations to students on banking careers in general and BayernLB in

particular. The current application requirements are constantly updated on the BayernLB website.

Until further notice, 55 places will be available each year in four training programmes: banking

traineeship, studies alongside practical training at the Baden-Württemberg Cooperative State

University in Heidenheim or Ravensburg, studies at the Sparkassen-Finanzgruppe University and

the 15-month in-house trainee programme. Employment at the end of the training programme is

based on performance during the course. In addition, the Bank regularly gives more than

150 placement students and undergraduates each year an insight into the banking business,

thereby providing them with support for their studies.

Equality

BayernLB regards the diverse talents and skills of its employees as critical to its success. Discrimi-

nation against employees on grounds of race or ethnic origin, gender, religion, political opinion,

disability, age or sexual identity is against the Bank’s ethos. Indeed, the corporate mission states

“We condemn all forms of discrimination.” The Bank regards compliance with the German Anti-

Discrimination Act (Allgemeines Gleichstellungsgesetz) as a duty towards its employees and

is rigorous in implementing the measures required to achieve this. For example, all employees

receive mandatory training on the German Anti-Discrimination Act, and a complaints and

arbitration board has been set up as a first port of call for employees who feel they have been

mistreated. The board did not receive any complaints during the period under review.

To underline this duty externally as well, since 2010 BayernLB has been one of more than

600 companies that actively support the “Diversity as Opportunity – The Charter of Diversity of

German Companies“ (Diversity als Chance – Die Charta der Vielfalt der Unternehmen in Deutsch-

land) initiative. By signing the charter the Bank acknowledges its commitment to an open corpo-

rate culture that recognises, respects, encourages and uses the diverse talents of its employees.


< 34

Age structure and gender distribution (as at 31 December)

Age 2009 2008 2007

Proportion under 30

Number of men/women

10.0%

178/269

11.6%

221/365

13.5%

261/411

Proportion aged 30 to 50

Number of men/women

71.9%

1,669/1,548

69.8%

1,800/1,677

71.0%

1,891/1,725

Proportion over 50

Number of men/women

18.1%

440/368

18.6%

516/411

15.5%

495/387

Total number 4,472 4,980 5,170

To make it easier for women to reach positions of management responsibility, BayernLB partici-

pates in the innovative Munich Cross-Mentoring Programme under which up-and-coming young

employees (mentees) are supported in their professional and personal development through

one-to-one exchanges with experienced staff (mentors).

Work-life balance

Striking the right balance between work and personal life has become a key success factor for

companies. BayernLB has been alive to the issue for a number of years, and this is reflected

not only in the 30 days of annual holiday but also in working-time models that take account of

employees’ needs through a wide range of part-time working options and even telework stations.

BayernLB also offers reserved local nursery places for the children of employees. On top of this,

each year some 100 primary school children of employees are looked after during the summer

holidays by trained professionals and the General Staff Council’s women’s officers.

Management by objectives

The staff interview plays a central role in performance management and as such was reactivated

and extended in 2008 and 2009. Part of the interview involves discussing the achievement of

objectives in the previous period and setting new ones. This enables managers to measure and

reward performance, while employees receive fresh motivation by being set challenging objec-

tives. Employees also receive feedback on the extent to which they are fulfilling the functional and

personal requirements of their position, and the potential and areas for development that their

manager sees in them. This ensures that every employee is aware of his/her specific tasks and

knows how they contribute to the achievement of the Bank’s objectives. The working environ-

ment and style of leadership are also discussed during the interview. Managers at all levels have

received intensive training in this tool.



Training

The staff interview determines the improvements required to bring an employee’s qualifications

and skills into line with their job profile and potential. The training offered is therefore designed

to contribute to a culture of life-long learning. The Bank’s commitment in this area is demon-

strated by the extensive ongoing training on offer and the high take-up rate. Employees receive

support in maintaining their employability on both the internal and external job markets. They

should also learn to take responsibility for their own career path. With this in mind, needs-based

staff development and offers on career issues are both key elements. The focus in the period

under review was on specialist training (e.g. customer and credit analysis, finance modelling),

behavioural and communications training (e.g. boosting social skills, managing meetings and

negotiations) and language training. Several business areas also sought to improve sales skills.

The measures were complemented by one-to-one coaching. At the organisational level, too,

greater emphasis was placed on the principles of self-responsibility and a needs-driven approach,

with internal change champions increasingly being trained and used for large-scale change

projects.

Training activities

2009 2008 2007

Number of training courses 1,205 1,443 1,677

Number of participants 5,240 6,420 7,390

Days per employee 2.52 3.17 2.49

Total cost (EUR million) 2.4 3.1 3.0

As the advances in the Bank’s sustainability performance rely heavily on staff being aware of

issues and given the necessary support, sustainability will remain an integral part of the general

training programme in the future. At the same time, regular specialist training has been and will

continue to be provided on subjects such as complying with the World Bank’s environmental and

social standards.

Talent programmes

A number of talent programmes have been put in place since 2008 to encourage staff with

special potential. Participants in the programmes are helped to reflect on their own objectives,

compare their role within the Bank with their expectations and career goals and take personal

responsibility for filling any gaps in their knowledge and expertise. The programmes also create

better networking opportunities for participants and allow them to work with people from other

areas of the Bank. Participants work together on projects involving various topics including cus-

tomer issues. The “changing sides” project (Seitenwechsel) enables participants to spend a short

time working in a social or charity institution. In a similar vein, the Bank will in the future also be

taking part in the “Joblinge” project, a vocational scheme which helps motivated young people

from difficult social backgrounds find a job or course of study that suits their particular skill set.


< 36

Expansion of in-house training centres

The Bank provides a pleasant learning atmosphere in its own training rooms. A modern training

centre that conforms to the latest adult learning and technical requirements was established in

Dornach, near Munich, in 2008. It has eight training rooms and two computer learning rooms.

The Aiterbach am Chiemsee conference and recreation centre was also expanded, and now offers

almost double the previous number of beds and seminar rooms.

Health management

The objectives of health management are as follows:

• To provide the required health and safety services

• To boost the wellbeing, and hence the job satisfaction, of employees

• To increase awareness of health issues among employees and encourage them to take respon-

sibility for their own health

The Bank offers a diverse range of measures that go far beyond the legal requirements: preventa-

tive measures are at the heart of these activities, ranging from the organisation of health days in

conjunction with various hospitals to flu jabs and health education. Particular attention is paid to

dealing with stress and information on preventing work-related postural problems. Rapid medical

checks, which provide valuable and reliable indicators of any further diagnoses that may be

required, have been very popular among employees. Staff were also offered various preventive

measures in the recent flu scare (disinfection equipment, information on vaccination).

Ergonomic, adjustable chairs and height-adjustable desks are purchased as standard whenever

new office furniture is required. Staff also have access to information on fundamental and topical

health issues such as skin diseases, blood and organ donation and allergies via a dedicated

intranet health portal.

BayernLB supports employees who have been on long-term sick leave by helping them gradually

build up their working hours and return to full productivity. Staff with addiction problems can see

the two addiction advisors, who are familiar with the addiction support systems in the Munich

area.

Alongside a host of short-term health promotion campaigns and seminars on making sensible

use of one’s own resources, the Bank also offers sporting activities through the company sports

association, which has over 1,500 members.

Sickness rate and accidents

2009 2008 2007

Overall sickness rate (days of absence per year

divided by target days per year)

• of which accidents en route to/from work

• of which accidents at work

4.30

0.01

0.00

3.90

0.04

0.01

3.91

0.02

0.01



Working conditions for staff of all ages

Companies face the challenging task of maintaining and promoting the health, motivation and

productivity of workers right through to retirement. BayernLB was one of three pilot companies

participating in the “People in an age-friendly working environment” project (Menschen in alters-

gerechter Arbeitskultur) funded and supported by the German Ministry of Labour and Social

Affairs and Institute for Occupational Safety and Health. The project produced some valuable

results, with LBS Bayern in particular able to draw vital conclusions based on its current age and

task structure. For example, surveys showed that it is especially important for older employees to

see a point to their work and feel that they are treated with respect, so that they can deal more

easily with long-term pressures. Sales support and back office staff in particular work long hours

and are faced with higher levels of stress. The concept developed on the back of the project aims

to highlight the importance of personal responsibility for these employees and raise their aware-

ness of how to better manage their own stress levels. The responsible managers are trained to

spot signs that employees are overloaded, address the issue and offer support. LBS Bayern shares

its experiences of age management with industry experts at relevant events.

Looking after former staff

The Bank also keeps in touch with its former staff. Pensioners are regularly invited to various

events. The Bank works with the Eberle-Butschkau foundation (Eberle-Butschkau-Stiftung),

which has close links with the savings banks, to assist former trainees who go on to complete

further studies. The Bank provides mentors for these students, organises special training events

and helps them look for work placements.


< 38

While the effect of banking products on the natural environment

must ultimately be accorded greater weight than those of in-house

operations, BayernLB considers environmental protection “at

home” to be an important aspect of sustainability management.

Environmental protection measures help not only to minimise the

Bank’s ecological footprint but also to strengthen the customers’

perception of BayernLB as a credible partner that is serious about

climate protection and efficient use of resources.

History of environmental protection at BayernLB

The Bank has a long tradition of behaving responsibly in managing valuable resources. It has

since the early 1990s looked at ways of becoming greener; its efforts to avoid banking business

impacting directly or indirectly on the environment are encapsulated in a Group-wide environ-

mental policy forming the basis for all measures to improve environmental performance. These

measures have since as far back as 1999 been implemented in accordance with the EU Eco-

Management and Audit Scheme (EMAS) Regulation. BayernLB’s internal environmental protec-

tion measures have gained recognition through the external audits of the environmental

management system.

Climate protection strategy

BayernLB is aware that combating the effects of man-made climate change is already one of the

biggest challenges facing society in the 21st century, which is why it is especially committed to

climate protection. Reducing its direct and indirect carbon footprint is the centrepiece of efforts

to improve BayernLB’s internal environmental performance.

Defining specific targets and the commensurate measures requires operationalisation of the

target system. Annual emissions analyses are therefore conducted with the aim of determining

the CO2 emissions from business operations. These analyses cover the following aspects of busi-

ness operations:

• Energy consumption of buildings

• Water consumption

• Paper consumption

• Volume of waste

• Volume of business travel

Environmental protection at BayernLB


39 >›› Human resources · Environmental protection at BayernLB

Operationalisation of the target system created the basis for a climate protection strategy that

has been rigorously implemented since 2007. There are three stages to the climate protection

strategy, each building on one another:

Step I – Avoidance

The first and most important step in the climate protection strategy is to consistently avoid busi-

ness-related CO2 emissions through active energy and resource management. A wide range of

measures have therefore been launched and implemented in recent years:

Energy consumption of buildings

n Total energy consumption (GWh) -n- Per-capita energy consumption (MWh/employee)

Total energy consumption of buildings has been cut slightly versus 2007, with a sizeable reduc-

tion in electricity consumption more than making up for a rise in demand for district heating.

The gains in terms of electricity consumption were achieved partly through the adoption of

motion sensors and the increased use of energy-efficient equipment and modern lighting

technology. Cool summer evening air was also integrated into the system controls to transport

accumulated heat out of the buildings on cool evenings without the need for thermodynamic

treatment of the delivery air. To ensure continual improvement in the energy consumption of

buildings, three buildings in Munich were renovated in 2009 with view to increasing energy

efficiency.

50.0

40.0

30.0

20.0

10.0

02007 2008 2009

43.741.3 42.3

10.1 10.4 11.3


< 40

Water consumption

n Total water consumption (m3) -n- Per-capita water consumption (l/employee)

Water is a very valuable resource, and managing it is a core element of the environmental man-

agement system. Water consumption has been scaled back considerably in the last few years, for

example through the increased use of flow controllers. Grey water has been increasingly used to

flush toilets and urinals. The use of grey water alone saved more than 7,000 m3 of drinking water

in 2009.

Paper consumption

n Total paper consumption (tonnes) -n- Per-capita paper consumption (kg/employee)

Although BayernLB is still a long way off the dream of the paperless office, paper consumption

has been considerably reduced over the last few years. Targeted measures such as the use of

intelligent printers and the ongoing digitisation of forms played a decisive part in reducing paper

consumption by nearly 29 percent between 2007 and 2009.

120,000

100,000

80,000

60,000

40,000

20,000

02007 2008 2009

93,01598,628

86,085

21,486 24,830 22,999

350

300

250

200

150

100

50

02007 2008 2009

305.9

268.8

217.3

70.7 67.7 58.1


41 >›› Environmental protection at BayernLB

Volume of waste

n Total waste produced (tonnes) -n- Per-capita waste produced (kg/employee)

The volume of waste has generally been on the rise in recent years, which is attributable to more

relocations and increased renovation and refurbishment of the Bank’s buildings. Nevertheless, the

Bank is continuing to work actively to reduce its waste volume as far as possible. To ensure that

the waste generated is either disposed of in an environmentally friendly fashion or recycled, it

works exclusively with waste disposal companies that have a certified environmental manage-

ment system.

Volume of business travel

n Total business travel (millions of km) -n- Per-capita business travel (1,000 km/employee)

With a view to avoiding greenhouse gas emissions and travel costs associated with business

travel, employees are required to consider possible alternatives to travel before embarking on a

journey, especially where there is no need from a customer perspective. Staff are also provided

with the technical infrastructure to hold video conferences and conference calls.

2,000

1,500

1,000

500

02007 2008 2009

1,511.5

1,783.0 1,753.7

349.2468.5448.9

25

20

15

10

5

02007 2008 2009

19.117.4

12.5

4.4 4.4 3.3


< 42

BayernLB also strives to reduce the impact on the environment from commuting. It has therefore

joined forces with Deutsche Bahn and the Munich Transport and Tariff Association to offer staff

“JobTickets” – discounted corporate tickets for public transport to and from the workplace.

Step II – Substitution

As a second step, conventional sources of electricity have been and are being replaced wherever

possible. For instance, BayernLB has since 1998 used power from a photovoltaic facility installed

at one of its buildings in Munich. What is notable about this facility is that the elements, compris-

ing numerous photovoltaic modules measuring roughly 10 x 10 cm, are used not just for generat-

ing electricity but also to replace other building components. For example, photovoltaic elements

are positioned obliquely on the frontage and used as projecting roofs, glass roofs above corri-

dors and rear-ventilated frontage elements. The power generated in this way is not fed into the

public grid, but is used internally. However, the amount of power generated by BayernLB’s own

photovoltaic facility is small by comparison with its actual electricity consumption. The Bank

therefore satisfies its entire remaining electricity requirement at its Munich location exclusively

from certified hydroelectric power stations on the High Rhine.

Step III – Offsetting

The final stage is to offset the CO2 emissions caused by the unavoidable use of resources. Under

the offset mechanism, which originated under the Kyoto Protocol, emissions certificates from

various externally verified climate protection projects are purchased and cancelled. The projects

in question cover a broad range of themes and geographical areas. For instance, a fuel-saving

project in South Africa, a biomass project in India and – an area of particular emphasis – a hydro-

electric project in Guatemala were supported. These investments were partly funded by means of

a climate change levy charged on all flights since 2008.


43 >›› Environmental protection at BayernLB

Climate neutrality at the Munich site1

n Total greenhouse gas emissions (tonnes; gross) -n- Per-capita greenhouse gas emissions (kg/employee; gross)

Thanks to the success of its climate protection policy, BayernLB has been climate-neutral at its

Munich site since 2008. This objective, set in 2007, continues to apply to the coming years. The

reasons behind it are obvious: firstly, through its commitment to climate protection, BayernLB is

living up to its social responsibility as a public sector bank, and, secondly, credibility gained in

this area also has a positive effect on the sale of products linked to climate change.

1 “Climate neutrality” relates to net emissions from business activities – i.e. gross emissions less offset emissions. Deviations from earlier

representations are due to the change from net to gross emissions

8,000

6,000

4,000

2,000

02007 2008 2009

7,354 7,3636,534

1,699 1,854 1,746


< 44

Sustainable financial solutions

The products offered are a critical element to consider when

studying the social impact of financial service providers. Banks

are able to serve companies from the clean-tech sector, but even

more importantly they can make a major contri bution to the sustain-

ability of society by considering environ mental and social factors

in their lending decisions.

Involvement with the clean-tech sector

The exploitation of natural resources, the increase in environmental pollution and climate change

are threatening the natural basis for life. They are already having a negative effect on economic

output, and hence on the prosperity of society. It is therefore imperative with a view to promot-

ing a sustainable society to work in a way that saves resources and is climate-friendly. The clean-

tech industry plays an important part in this. It delivers solutions to combat the biggest chal-

lenges facing society and will also benefit from the global rise in demand for products and serv-

ices linked to the themes of resource efficiency and climate protection. German companies in par-

ticular are extremely well positioned in these markets by virtue of their ability to innovate and

their technology leadership, and they stand to participate significantly in the expected global

growth.

The clean-tech industry is consistently gaining in size, bringing with it not just environmental, but

also economic opportunities. This is one of the future-oriented sectors for the 21st century and is

creating jobs, caring for the environment and making a huge contribution to a sustainable soci-

ety.

In this light, BayernLB is to step up its involvement with the clean-tech sector. This includes the

following key markets:

• Environmentally friendly energy generation

• Energy efficiency

• Commodity and material efficiency

• Recycling

• Sustainable water management

• Sustainable mobility

These are dynamic markets: companies are growing very fast, projects are steadily increasing in

number and size, internationalisation is forging ahead and subsidy programmes are flourishing

nationally and internationally. These trends are already well in evidence and will intensify further

in the coming years. This is leading to direct real economic challenges, requiring financial solu-

tions, which is where BayernLB comes in.


45 >›› Environmental protection at BayernLB · Sustainable financial solutions

Ulrich Eckert (48), Department Manager and Head Relationship Manager for International Business |

Responsibilities overseeing payments, finance and risk-hedging instruments used in international trans-

actions, managing specialist publications, lecturing at the Deutsche Sparkassenakademie and the German

chamber of industry and commerce | Qualifications banking degree, degree in business administration,

professional training in international business | Interests table tennis, skiing, running, biking, golf

Customers of BayernLB are able to benefit from an extensive product offering – ranging from

growth financing and export and project financing to advisory services and the securing of subsi-

dised loans. BayernLB has proven its expertise in the clean-tech sector time and time again. It has,

for instance, successfully supported various companies and projects in the clean-tech sphere in

recent months as a recognised expert, namely:

• Financing the Soma wind farm in western Turkey; EUR 70m financing volume; turbine supplier:

Nordex Energy GmbH

• Arranging of a project financing for the Lynn, Inner Dowsing and Glens of Foudland wind farms

in the interest of the British energy utility Centrica plc; financing volume: GBP 340m; turbine

supplier: Siemens Power Generation

• Municipal lending consortium with Kreissparkasse München Starnberg for AFK-Geothermie

GmbH, the first shared geothermal project between the municipalities of Aschheim, Feldkirchen

and Kirchheim; EUR 40m financing volume for the first two phases of construction, with expan-

sion out to 2036 taking the total investment to EUR 170m

• Arranging of the Central States Wind project financing facilities for the 185 MW wind parks

Butler Ridge, Majestic and Wessington in the United States in a club deal with Unicredit, BBVA,

Credit Agricole, Nord/LB and Bank of Tokyo-Mitsubishi UFJ; total debt USD 225 m; sponsor:

NextEra Energy Resources

• Consortium financing under the lead management of BayernLB for Gehrlicher Solar AG;

EUR 95m financing volume; objective: to secure the funds for planned expansion

• Arranging project financing for the largest photovoltaic park in the Czech Republic through

a club deal with Landesbank Baden-Württemberg; CZK 1,284m financing volume; general

contractor: S.A.G. Solarstrom AG

Success in the clean-tech market requires close cooperation between the real economy and the

financial economy. Companies in this sector too need tailored financial solutions in order to be

able to compete on the global market. BayernLB will therefore continue to act as a capable and

reliable partner for the clean-tech industry in the future, so as to be able to capitalise on the

opportunities that exist in cooperation with its customers.

Sustainability in real estate management

BayernLB is able to live up to the claim of making a significant contribution to developing a

sustainable society in relation to real estate in particular. Firstly, investments aimed at boosting

energy efficiency and hence promoting the sustainability of real estate are essential if the fight

against climate change is to be effective. Sustainability in this area brings greater direct economic

benefits than almost any other area barring corporate social responsibility. Investments in energy

efficiency measures or in the use of renewable energy sources have a positive effect on the long-

term value of a property, for example in the form of lower running costs.

Various certification systems – such as the German Sustainable Building Certification awarded by

the German Sustainable Building Council (Deutsche Gesellschaft für Nachhaltiges Bauen e.V.) and

the Leadership in Energy and Environmental Design (LEED) awarded by the US Green Building

Council – have been established to measure and document the sustainability of properties.


47 >›› Sustainable financial solutions

Tenants and buyers alike will increasingly be seeking properties holding such certification in the

future in the interests of ensuring their competitiveness.

In this light, the Bank regards sustainable real estate as a key growth market and will continue to

step up its exposure to this growing market segment. Customers and business partners are able

to draw on the experiences of various projects.

• BayernLB provided a loan of EUR 40m to finance the construction of a new office building for

E.ON Bayern in Regensburg. It is working with a closed-end real estate fund launched by

Real I.S. AG. The property has around 28,000m2 of office space and was awarded gold-standard

pre-certification by the German Sustainable Building Council.

• BayernLB is lending around EUR 70m for the construction of the Pariser Höfe in Stuttgart. The

Bank is supporting Munich-based Reiss & Co. Real Estate, which is developing a mixed building

with around 20,000m2 of residential space and 7,300m2 of office space on a prime site as part

of the Stuttgart 21 project. Reiss & Co. Real Estate has registered the property with the DGNB

for certification. BayernLB is assisting with the certification process with the real estate valua-

tion company LBImmoWert, the aim being to gain detailed knowledge of the certification

process and the data employed.

BayernLB recognises the advantage in value terms brought by such certifications in competitive

markets and is increasingly supporting its customers in realising sustainability projects. The Bank

is extremely well-equipped to do so, thanks to its wide product range. Bayern Facility Manage-

ment GmbH, for example, draws on the experience of its many years in building management to

support customers through the DGNB certification process via a qualified auditor. LB Immobilien-

bewertungsgesellschaft mbH documents the relevance for value and risk purposes of sustainabil-

ity issues in its expert reports, in order to enable BayernLB to offer preferential terms for proper-

ties that are demonstrably planned and managed in a sustainable fashion, in the form of higher

collateral values and hence cheaper funding costs. BayernLB passes these lower funding costs for

the financing of properties that meet the required sustainability criteria on to customers. It also

offers particularly attractive terms from a special quota and is able to support customers along

the whole of the value chain – from realisation to letting and selling and also facility manage-

ment – thanks to its networks and the strength resulting from its partnerships.

By taking this broad approach, BayernLB is tackling the issue of sustainability with the necessary

rigour and substance and creating positive investment incentives for sustainability in real estate

management.


< 48

BayernLB’s subsidised lending business

The state’s readiness to act and the political will to support investments in sustainability are

reflected in a variety of subsidised lending programmes for various purposes. The funds under

these programmes are made available in the form of low-interest subsidy loans by state-owned

funding bodies, such as KfW, and can be utilised to fund a very wide range of projects. Invest-

ments to modernise residential property, to improve energy efficiency in businesses – for exam-

ple by modernising plant and equipment – or to expand the use of renewable energy can all be

subsidised by means of low-interest loans. These subsidised loans are open to retail, commercial

and municipal customers alike.

BayernLB supports these groups of customers in close cooperation with the Bavarian savings

banks to optimise financial planning to include subsidised loans. BayernLB has accomplished

this demanding task in the past working jointly with the Bavarian savings banks, and as such

has further expanded its subsidised business for investments in environmental protection.

Volume and number of subsidised loans for investments in environmental protection

n Number (left-hand scale)-n- Volume of subsidised loans (EUR m) (right-hand scale)

Thanks not least to its strategic focus on the clean-tech sector, BayernLB also is set to expand its

own-account business in this attractive and important market segment. There is great demand

from customers. As energy prices keep rising inexorably, investing in energy efficiency gains is

becoming increasingly important for all companies. BayernLB provides advice and helps its cus-

tomers to leverage savings potential by drawing on subsidised loans to finance the use of innova-

tive and efficient technologies, for example in the form of plants to use waste heat from cooling

cycles. By offering low-interest financing for investment projects linked to energy efficiency, Bay-

ernLB is seeking to contribute to the competitiveness of its customers.

Under the slogan “Fostering the future” (Zukunft fördern), sales activities are being stepped up in

2010, and the Bavarian savings banks are being supported by means of a marketing and sales

programme around the topic of sustainability and environmental protection. The support for the

Bavarian savings banks includes the following services:

17,500

15,000

12,500

10,000

7,500

5,000

2,500

0

1,750

1,500

1,250

1,000

750

500

250

02007 2008 2009

569.2713.7

1,350.2

8,616

11,595

16,417



• Thermo-imaging of residential and commercial property to identify weaknesses in energy

efficiency and potential for energy savings

• Series of seminars on “Fostering the future”

• Support in planning and conducting customer events on the topic of sustainability and environ-

mental protection

For BayernLB, taking these measures is a major step towards being able to maintain its high

standards in supporting customers in relation to subsidised loans, for customers, for the savings

banks and for the Bank.

Projects with a high benefit for the community

BayernLabo financial solutions

As a body charged with implementing government housing policy, BayernLabo – BayernLB’s

development bank – undertakes tasks in the area of sustainable residential and urban develop-

ment. In fulfilling this important role, BayernLabo not only has recourse to the Free State of

Bavaria’s Residential Construction Programme, but also offers its customers its own low-interest

programme to build homes with the support of KfW. These funds have a restricted purpose,

which ensures that they are used in a way that is environmentally and socially responsible.

For example, through the Bavarian Modernisation Programme, BayernLabo encourages energy-

saving building improvements to existing rented property and residential nursing homes. Cus-

tomers enjoy particularly favourable terms. The already-low interest rates in the KfW Energy-

Saving Renovation and Housing Modernisation subsidy programmes are cut further thanks to

funds from BayernLabo. BayernLabo is also supporting a trailblazing pilot project in experimental

housing construction, “e% energy-saving residential construction”, run by the principal planning

authorities at the Bavarian State Ministry of the Interior, under the auspices of which it is provid-

ing loans and subsidies of around EUR 10m. The aim of the initiative is to test measures to opti-

mise energy consumption in new-build and existing homes and highlight ways in which energy

can be used sparingly and efficiently in all aspects of construction. A total of 186 homes received

support from BayernLabo in 2009.

BayernLabo also respects social considerations in relation to sustainable housing. It provides sup-

port to residences for students and people with disabilities, along with other care institutions.

Even more emphasis will be placed on this assistance for care institutions in the future, as demo-

graphic trends mean that demand for these institutions is constantly rising. BayernLabo does

more than just support care institutions and residential homes; it also seeks to enable people

with disabilities to live in their familiar social environment. By granting non-repayable loans –

in other words subsidies – to finance housing alterations required to meet the needs of disabled

persons, BayernLabo is taking major strides towards meeting this socially beneficial goal.


< 50

Subsidies to finance housing alterations required to meet the needs of people with disabilities

n Homes

BayernLabo also provides financing for local authorities and public-sector special-purpose associ-

ations in Bavaria. In 2009, for example, it entered into a public-private partnership with the city of

Nuremberg to finance schools, thereby helping it to fulfil its educational responsibilities.

BayernLabo conducts its government-backed development mandates on a non-competitive basis,

and its entire business strategy adheres strictly to the regional principle: all business activities

are limited to the Free State of Bavaria. It acts as a reliable partner at each stage of a business

relationship, meaning that, for instance, the sale to third parties of receivables from customers

is categorically prohibited.

LBS Bayern financial solutions

LBS Bayern offers a wide range of advisory and financing services on energy efficiency and renew-

able energy matters. The placement on the market of LBS building savings products as a “state-

supported home protection policy”, for example, gave customers the opportunity to build up

assets to fund modernisation measures, and hence invest in securing the value of their property

long-term. The lucrative “Riester incentives” play a significant role in helping to build up these

assets. “LBS building savings – the state-supported home protection policy” is an optimised com-

bination of provision for modernisation with retirement provision. Customers are also guaran-

teed attractive interest rates across the entire term, as with all building-savings loans. LBS Bayern

also offers homeowners a simplified process for borrowing modernisation loans. It is able to lend

up to EUR 30,000 without carrying out a valuation or making an entry in the land register, subject

to the proviso that the loan must be used for modernisation, renovation or energy-efficiency

measures.

Energy efficiency and renewable energy will continue to gain in importance in the future, on

both economic and environmental grounds. The development and sale of financial products in

these areas is therefore a strategically important target for LBS Bayern. In the medium to long

term, LBS Bayern wants to continue to position itself in the market as “the building society for

1,200

1,000

800

600

400

200

02007 2008 2009

464

1,022

805



energy saving” and provide the best-possible service for its customers in this area too. It is very

well placed to achieve this: with its range of advisory and financial services, LBS Bayern already

occupies a leading position among German building societies.

LBS Bayern capitalises on its expertise and range of services to assist the savings banks in unlock-

ing the commercial potential linked to sustainability issues. LBS Bayern and other members of

the Sparkassen-Finanzgruppe have, for instance, worked intensively on the “Energy efficiency for

savings banks” (EnergieSparkasse) project of the Association of Bavarian Savings Banks (Sparkas-

senverband Bayern). The goal of the project is to support savings banks in developing and imple-

menting their own sustainability strategies, and as such to embed sustainable thinking more

deeply within the culture of the Sparkassen-Finanzgruppe.

Donation bonds are sustainable investments

Because they are backed by municipalities and have regional ties, savings banks have a social

mandate, which they fulfil by cooperating with foundations, by supporting non-profit organisa-

tions and through their corporate responsibility activities in the local area. BayernLB supports the

savings banks as its distribution partners and customers in their fulfilment of this public mandate.

BayernLB has therefore developed a concept for the savings banks that combines investments

with social engagement in the region – the donation bond. The basic principle underlying this

concept is that by investing in a security, a donation is made to a good cause. The idea was put

into practice in a 2009 pilot project: Sparkasse Fürth offered a BayernLB step-up bond, under

which EUR 3 was donated to social institutions in the Fürth region for every EUR 1,000 invested.

A total of EUR 20m was placed with investors, which meant that EUR 60,000 was donated to the

St Michael children’s home, the Kinderarche Fürth children’s centre and the Der Schülercoach

foundation offering careers coaching for disadvantaged school children.

This example shows that the donation bond concept can deliver social benefits, and that there is

demand for such a product. BayernLB is therefore looking to secure such projects from other

savings banks in the future.

Environmental and social standards in lending

BayernLB is a recognised and established provider of structured financing, particularly project

and export financing, thanks to its good expertise in this area, as borne out by its successful

involvement in numerous projects. Its performance is attributable to a clear sector focus in

project financing, in which BayernLB specialises in the energy and infrastructure industries. These

sectors are of central importance for the economy and as such form the basis for the prosperity

of society. BayernLB regards its engagement with these sectors as making a significant contribu-

tion to society, particularly in developing and emerging countries. BayernLB is also conscious that

the energy and infrastructure projects can sometimes give rise to considerable environmental

and social risks.


< 52

It has therefore produced an internal guideline on environmental and social risks. It requires the

World Bank’s environmental and social standards to be complied with. These standards define,

for example:

• how environmental and social management systems are to be structured in order to avoid or

minimise any potential negative impact

• how population groups affected by a project are to be brought into the project development

process

• how biotopes and habitats are to be protected

• how to ensure that dealings with indigenous peoples respect their human rights

They also set out the requirements for compliance with labour standards, such as the avoidance

of child or forced labour. These generally applicable qualitative requirements are supplemented

by sector-specific quantitative rules designed to guarantee the effective prevention of environ-

mental, health and safety risks. The aim of the standards is to ensure that all projects adhere to

environmental, social and economic principles and are therefore conducive to sustainable devel-

opment.

Although the Equator Principles are a voluntary set of guidelines for determining, assessing and

managing social and environmental risk in project financing for the financial services sector and

their content is based on the World Bank standards, BayernLB has, unlike other banks, chosen not

to sign up to the Equator Principles and continues to follow the tougher World Bank standards.

This decision was taken not only on the basis of the content, but also in light of the limited scope

of the Equator Principles. In their original 2003 version, they applied only to project financing

with a volume of upwards of USD 50m. The financing volume to which the principles apply has

since been reduced to USD 10m, but the restriction to project financing remains in place.

BayernLB firmly believes that environmental and social standards should be applied to all possible

project-based deals, irrespective of the bank product or financing volume. BayernLB also complies

with the World Bank’s environmental and social standards in export financing to the best of its

ability. To meet this difficult challenge the requirements of the standards have been broken down

into checklists and tailored to internal work processes with the aid of information flow modelling.

By complying with the World Bank standards, BayernLB is living up to its social responsibility in

relation to project and export financing, which are very important products for the development

of infrastructure and industry in developing countries, for example. Its actions also reduce liabil-

ity, credit and reputational risks, to the benefit of the Bank and its customers.



Sustainability performance at selected subsidiaries

Bayern Bankett Gastronomie GmbH

Company

Bayern Bankett Gastronomie GmbH

Arnulfstrasse 50

80335 Munich

www.BayernBankett.de

Managing Director: Dr Stefan Hartmann

Chairman of the Supervisory Board: Wolfgang Reinhart

Profile

Bayern Bankett Gastronomie GmbH (Bayern Bankett) is one of the largest providers of franchise

catering and other catering services in Munich and the surrounding area. It also offers customers

in the hotel trade tailored solutions. Bayern Bankett prides itself on very high standards of service

in all areas in which it operates. Customers are ensured the ultimate in flexibility at all times,

thanks to short decision-making paths, direct contact and central management. In this way, Bay-

ern Bankett turns culinary desires into an experience to savour. The broad service offering also

comprises comprehensive consultancy services in relation to the planning and operation of cater-

ing establishments.

Overview in brief

• Founded:

1 January 1997

• Shareholder(s):

BayernLB (100 percent)

• Headcount:

166 (2009), 168 (2008), 153 (2007)

• Sales:

EUR 14.6m (2009), EUR 13.8m (2008), EUR 12.0m (2007)

• Locations (16):

Munich (6), Aschheim (2), Bad Reichenhall, Feldkirchen-Westerham, Grünwald, Hallbergmoos,

Pleinfeld, Putzbrunn, Rimsting, and Schwaig


< 54

Sustainability performance of Bayern Bankett

Bayern Bankett has a forward-looking, sustainable management style. In addition to the obliga-

tory economic matters, environmental and social considerations are also central to business

decisions. Specifically, its commitment to sustainability consists of the following elements:

1. Internal activities

Internal environmental protection within Bayern Bankett is an integral part of BayernLB’s EMAS-

validated environmental management system. All data required for validation are recorded inde-

pendently. The resulting measures to reduce negative environmental effects and make more

efficient use of resources are, where possible, implemented immediately. For example, a control

system to optimise the use of detergents in the dishwashers was recently introduced, falling

under the “hygiene” heading. In addition, annual staff training covers the efficient and environ-

mentally friendly use of cleaning products. Suppliers are also involved: the standard policy is to

review all major business partners for sustainability.

2. Sustainable products

For Bayern Bankett as a company operating in the catering industry, sustainability issues at prod-

uct level are particularly important. For example, it places great emphasis on regionality when

sourcing ingredients, the menu is based around seasonal produce and information is given on

the ingredients of the various dishes. Reusable containers are of course used. A special organic

offering is currently under development for fresh herbs.

3. Social engagement

Bayern Bankett considers that it has a responsibility towards society as a Mittelstand company

with a regional focus. It fulfils this in particular by supporting the Münchner Tafel food donation

charity and making targeted donations to Sternstunden. Bayern Bankett also provides advice on

healthy eating at free events held at school parents’ evenings.


55 >›› Sustainability performance at selected subsidiaries

Bayern Facility Management GmbH

Company

Bayern Facility Management GmbH

Arnulfstrasse 50

80335 Munich

www.BayernFM.de

Managing Directors: Stefan Kohlhepp, Erik Rupprecht

Chairman of the Supervisory Board: Stefan Ermisch

Profile

Bayern Facility Management GmbH (BayernFM) is a Mittelstand service provider for the real estate

sector. Customers are offered intelligent, high-value solutions across the whole of a property’s

lifecycle. BayernFM has four divisions. The first, Management, takes a comprehensive approach

and is one of Bavaria’s leading providers of management services for administrative, hotel and

light industrial buildings. The Construction division has long experience of assessing and renovat-

ing challenging buildings, enabling them to best meet customer needs, however unusual. The

Consulting division also draws on extensive practical experience and excellent specialist knowl-

edge, with the emphasis on energy, operating responsibilities and the organisation of facility

management. Finally, BayernFM is Germany’s market leader in the benchmarking of real estate

portfolios for municipalities and financial institutions, with RealisBench® (Benchmarking division).

Its customers include BayernLB, big-name companies from the industrial, financial and service

sectors and more than 150 savings banks and 400 municipalities.

Overview in brief

• Founded:

July 2004 with locations in Bavaria (including Munich and Nuremberg), Berlin and Frankfurt am

Main

• Shareholder(s):

BayernLB (51 percent), Flughafen München GmbH (49 percent)

• Headcount/area managed

196/1.7 million m2 (2009), 186/1.3 million m2 (2008), 175/1.1 million m2 (2007)

• Sales:

EUR 42.5m (2009), EUR 36.2m (2008), EUR 24.6m (2007)


< 56

Stefan Kohlhepp (43), Head of Bayern Facility Management GmbH | Responsibilities facility management,

construction project management, consulting and benchmarking – specialisation in administrative buildings |

Qualifications degree in business administration | Interests my children and doing as much sport as possible

Sustainability performance of BayernFM

Sustainability is high on the agenda at present and a challenge for the future. BayernFM does not

simply support its customers; it is also prepared to take on responsibility itself. As a certified qual-

ity and environmental management company, BayernFM lives up to this responsibility daily in its

dealings with customers, employees and the environment.

1. Internal activities

BayernFM’s environmental management system embodies modern environmental protection of

the highest order. It has been EMAS-certified since 2005, which enables BayernFM to consciously

take a responsible approach to the environment, without neglecting economic considerations.

BayernFM is also proud to be the first climate-neutral facility management service provider in

Germany: since 2008, its CO2 emissions have been fully neutralised under the three-step process

of avoidance, substitution and offsetting. In 2009, the volume of CO2 to be offset by means of cli-

mate certificates was reduced to just 124 tonnes.

2. Sustainable products

BayernFM strives to support its customers as they work to achieve greater sustainability. Gradual

optimisation of energy use with property portfolios is particularly important on both economic

and environmental grounds. In the last few years, BayernFM has assisted many financial institu-

tions, municipalities and other companies in optimising energy use at their properties through

skilled analysis, planning and (project) management of renovation and optimisation measures.

For example, the Bad Tölz-Wolfratshausen administrative district received help in designing and

running the climate-neutral operation of its school, residential and administrative buildings as

part of “Energy Shift 2035” (Energiewende 2035). Generally speaking, confirmation of the sustain-

ability of buildings by means of certificates is coming to increasing prominence in the real estate

industry. The German Sustainable Building Council (DGNB), founded in 2007, has developed a sys-

tem that assesses and certifies the environmental, economic, sociocultural, technical and process-

related quality of properties. BayernFM has been a member of the DGNB since 2009, and since

2010 has supported its customers in the certification of their properties through its approved

DGNB auditors. In the ongoing “Energy efficiency for savings banks” (EnergieSparkasse) project,

it has assumed project leadership of the “operational ecology” package. The aim is to define the

key points for sustainable, energy-optimised operation of savings banks. These should, as well as

reducing costs, result in improved customer retention and acquisition of new customers. The

plans appear realistic, as a recent study (January 2010) by the “Climate Change Finance Forum”

(Finanz-Forum: Klimawandel) and the Sustainable Business Institute e.V. found that sustainability

was a significant contributory factor to decision-making on banking matters for up to 70 percent

of retail and business customers.


< 58

3. Social engagement

BayernLB is committed to the common good and supports numerous social projects. In one

example of its social engagement, the Bank has undertaken to act as a microlending sponsor

through the Kiva platform, fostering greater independence and responsibility in Third World

countries.


59 >›› Sustainability performance at selected subsidiaries

GRI content index*

1. Strategy and analysis

1.1 CEO statement p. 6f.

1.2 Key impacts, risks and opportunities p. 6f.; p. 9; pp. 45–53

2. Organisational profile

2.1 Name of the reporting organisation Bayerische Landesbank

2.2 Brands, products and services p. 4**

2.3 Operational structure See 2009 consolidated financial statements

2.4 Location of headquarters Munich, Germany

2.5 Countries of operation See 2009 consolidated financial statements, p. 225f.

2.6 Nature of ownership and legal form p. 4

2.7 Markets served p. 4**, see 2009 consolidated financial state-ments, p. 15ff.

2.8 Scale of the organisation See key figures/inside front cover

2.9 Significant changes during the reporting period regarding size, structure or ownership

See 2009 Annual Reports and Account 2009 – Individual Report, pp. 9 – 14 and pp. 8 – 11

2.10 Awards received in the reporting period p. 27

3. Report parameters

3.1 Reporting period 2008/2009

3.2 Date of most recent previous report 2008

3.3 Reporting cycle Biennial

3.4 Contact point for questions regarding the report or its content See publishing details/inside back cover

3.5 Process for defining report content p. 5

3.6 Boundary of the report p. 5

3.7 Specific limitations on the scope or boundary of the report p. 5

3.8 Basis for reporting on other entities p. 5

3.9 Data measurement techniques and bases of calculations p. 5

3.10 Effect of any restatements of information provided in earlier reports Tables on pp. 32, 35, 37 and 44

3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report

No change

3.12 GRI content index GRI content index

3.13 External assurance None

4. Governance, commitments and engagement

4.1 Governance structure See 2009 Annual Reports and Account 2009 – Individual Report, p. 86

4.2 Chairman of the Board of Administration/CEO See 2009 Annual Reports and Account 2009 – Individual Report, p. 6 and p. 85f.

4.3 Number of independent and/or non-executive members of the highest governance body

See 2009 Annual Reports and Account 2009 – Individual Report, p. 85f.

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the Board of Management/Board of Administration

p. 19**

4.5 Linkage between compensation for members of the Board of Management and the second level of management and the organisation’s social and environmental performance

None

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided

p. 13ff.

4.7 Process for determining the qualifications and expertise of the members of Board of Management for guiding the organisation’s strategy on economic, environmental and social topics

p. 6f.; pp. 9 – 12

4.8 Internally developed statements of mission or values, codes of conduct and principles

p. 10

4.9 Procedures of the Board of Management for overseeing the organisation’s identifi-cation and management of economic, environmental and social performance

pp. 9 – 12

4.10 Processes for evaluating the Board of Management’s own performance with respect to economic, environmental and social performance

p. 21f.

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation

p. 13; p. 15ff.; p. 52f.

4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or endorses

p. 19f.; pp. 23 – 27

4.13 Memberships of associations p. 19f.; pp. 23 – 26

4.14 List of stakeholder groups engaged by the organisation pp. 19 – 22

4.15 Basis for identification and selection of stakeholders with whom to engage p. 5; p. 19

4.16 Approaches to stakeholder engagement pp. 19 – 22

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns

pp. 19 – 22

5. Management approach and performance indicators

Sector-specific criteria

FS1 Policies with specific environmental and social components applied to business lines

p. 10; p. 22

FS2 Procedures for assessing and screening environmental and social risks in business lines

p. 52f.

FS3 Processes for monitoring customers’ implementation of and compliance with environmental and social requirements included in agreements or transactions

p. 52f.**

FS4 Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines

p. 19; p. 22; p. 36

FS5 Interactions with customers/investees/business partners regarding environmental and social risks and opportunities

p. 19ff.

FS6 Percentage of portfolio for business lines by region, size and sector See 2009 Annual Reports and Account 2009 – Individual Report, pp. 38 – 42; consolidated annual financial statements, pp. 70 – 74** and pp. 89 – 99**

FS7 Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose

p. 51**

FS8 Monetary value of products and services designed to deliver a specific environ-mental benefit for each business line broken down by purpose

p. 49f.**

FS9 Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures

p. 10**

FS10 Percentage and number of companies held in the institution’s portfolio with which the reporting organisation has interacted on environmental or social issues

Not applicable

FS11 Percentage of assets subject to positive and negative environmental or social screening

Not applicable

FS12 Voting policy/policies applied to environmental or social issues for shares over which the reporting organisation holds the right to voting shares or advises on voting

Not applicable

FS13 Access points in sparsely populated or economically disadvantaged areas p. 50ff.**;Basic access across Bavaria assured by the S-Finanzgruppe

FS14 Initiatives to provide access to financial services to disadvantaged people Not applicable

FS15 Policies for the fair design and sale of financial products and services p. 16**

FS16 Initiatives to enhance financial literacy, by target group p. 16**6; p. 24f.; p. 36f.

Economic

EC1 Direct economic value generated and distributed See key figures/inside front cover

EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change

p. 6f.; p. 21f.; pp. 45 – 52

EC3 Coverage of the organisation’s defined benefit plan obligations See key figures/inside front cover; p. 33ff.

EC4 Significant financial assistance received from government, e.g. subsidies See 2009 Annual Reports and Account 2009 – Individual Report, p. 18

EC6 Supplier management p. 22

EC7 Local employees in management positions Not applicable

EC8 Investments and services provided for public benefit p. 23ff.; p. 50ff.

Environmental

EN1 Materials used by weight or volume See key figures/inside front cover; p. 41

EN2 Percentage of materials used that are recycled input materials See key figures/inside front cover

EN3 Direct energy consumption See key figures/inside front cover

EN4 Indirect energy consumption See key figures/inside front cover

EN8 Total water withdrawal by source See key figures/inside front cover**

EN11 Land in protected areas None

EN12 Significant impacts of activities, products and services on biodiversity in protected areas

p. 52f.

EN16 Total direct and indirect greenhouse gas emissions See key figures/inside front cover**

EN17 Other indirect greenhouse gas emissions, for example produced by business travel See key figures/inside front cover**

EN19 Emissions of ozone-depleting substances n/a

EN20 NOx, SOx and other significant air emissions n/a

EN21 Total water discharge Only sanitary wastewater

EN22 Total weight of waste by type and disposal method See key figures/inside front cover; p. 42

EN23 Total number and volume of significant spills None

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

pp. 45 – 53

EN27 Products whose packaging materials are reclaimed n/a

EN28 Monetary value of significant fines for non-compliance with environmental laws and regulations

None

Labour practices and decent work

LA1 Total workforce by employment type, employment contract and region See key figures/inside front cover**

LA2 Total number and rate of employee turnover by age group, gender and region p. 32**

LA4 Percentage of employees covered by collective bargaining agreements Depends on type of collective bargaining agreement: working-time regulations, for example, apply to all employees

LA5 Minimum notice periods regarding significant operational changes Not applicable

LA7 Rates of injury and sickness p. 37

LA8 Prevention and risk-control programmes regarding serious diseases p. 37

LA10 Average training per year per employee by employee category p. 36

LA13 Composition of governance bodies and breakdown of employees See key figures/inside front cover**; p. 34f.

LA14 Ratio of basic salary of men to women Wage category depends entirely on func-tion and not on gender

Human rights

HR1 Investment agreements that include human rights clauses p. 52f.

HR2 Percentage of suppliers and contractors that have undergone screening on human rights

100%

HR4 Total number of incidents of discrimination and actions taken No incidents

HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights

p. 22; p. 52f.

HR6 Operations identified as potentially involving incidents of child labour, and meas-ures taken to contribute to the elimination of child labour

p. 22; p. 52f.

HR7 Operations identified as potentially involving incidents of forced or compul-sory labour, and measures taken to contribute to the elimination of forced or compulsory labour

p. 22; p. 52f.

Society

SO1 Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities

p. 13**

SO2 Percentage of business units analysed for risks related to corruption 100%

SO3 Percentage of employees trained in organisation’s anti-corruption policies and procedures

100%

SO4 Actions taken in response to incidents of corruption Not applicable

SO5 Participation in public policy development and lobbying p. 19f.; p. 23f.

SO8 Monetary value of significant fines for non-compliance with laws and regulations Not applicable

Product responsibility

PR1 Customer protection pp. 13 – 16

PR3 Type of product and service information required by law p. 15f.**:

PR6 Programme for adherence to laws, standards and voluntary codes related to mar-keting communications

Not applicable

PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Not applicable

Application level under GRI: B (self-declaration)

* Only mandatory indicators are included. Consequently, the numbering is not sequential.

** GRI indicator only partially met

BayernLB – Financial Data

Earnings*

EUR million 1.1. – 31.12.2009 1.1. – 31.12.2008 Change in %

Net interest income 1,410 1,394 1.2

Net commission income 146 292 – 50.1

Gross profit 1,556 1,686 – 7.7

Staff costs – 380 – 459 – 17.2

Operating expenses – 371 – 491 – 24.4

Administrative expenses – 751 – 950 – 20.9

Net income/losses from financial

transactions 612 – 1,066

Net balance of other operating

expenses and income 185 – 3

Risk provisions – 849 – 1,737 – 51.1

Gains or losses on measurement – 2,555 – 1,351 89.1

Operating profit/loss – 1,803 – 3,421 – 47.3

Extraordinary expenses – 347 – 80 > 100.0

Income taxes – 445 – 417 6.6

Partial profit transfer – –

Net profit/loss for the financial year – 2,595 – 3,919 – 33.8

Withdrawals from reserves 1,661 3,919 – 57.6

Withdrawals from profit participation

capital 187 –

Withdrawals from silent partner

contributions 747 –

Net retained profit – –

Figures in the tables may be rounded up or down to the next unit


Balance sheet figures under the German Commercial Code

EUR million 31.12.2009 31.12.2008 Change in %

Total assets 267,653 318,168 – 15.9

Credit volume 199,605 235,332 – 15.2

Total deposits 135,766 179,412 – 24.3

Securitised liabilities 98,388 103,288 – 4.7

Reported equity 20,655 18,145 13.8

[ BayErnLB | SUSTAINABILITY REPORT 2009 ]


Brienner Strasse 18

80333 Munich

Germany

www.bayernlb.de

Publisher


Brienner Strasse 18

80333 Munich

Reuters Dealing BLAM, BLAS, BLAX

BIC/SWIFT-Code: BYLA DE MM

[email protected]

www.bayernlb.de

Text/editorial staff/production

BayernLB

Corporate Center Central Area

Corporate Development & BoM Support

Marketing & Internal Communications Department

Contacts

Matthias Patzelt Jörg Widemann

Corporate Development & Corporate Development &

Sustainability Management Sustainability Management

Brienner Strasse 18 Brienner Strasse 18

80333 Munich 80333 Munich

Tel.: +49 89 2171-26955 Tel.: +49 89 2171-24892

mailto: [email protected] mailto: [email protected]

Concept and layout

dassel & schumacher werbeagentur gmbh, Munich

Printed by

Lipp GmbH, Graphische Betriebe, Munich

Picture credits

Images: Christoph Gramann, Studio Gramann

Board of Management photographs: Antje Meinen, Meinen Fotografie GmbH

We would like to thank our staff for their kind support.

Closing date for submissions: 30 July 2010

This sustainability report is printed on climate-neutral FSC paper. The CO2

emissions resulting from the production of the BayernLB sustainability report

have been offset by the purchase and invalidation of emission certificates from

a certified climate protection project.

A PDF version of the sustainability report is available online at www.bayernlb.de/

sustainabilitymanagement.

Publishing details

Responsibility Sustainability Future.

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