Banks progress in setting climate alignment standard

21 September 2020 ... min read Listen

ING isn’t only measuring and steering our own portfolio in line with the well-below two-degree goal of the Paris Agreement. We’ve also been collaborating with other banks and experts to define a standard way to do this across the financial sector.

ING has a long-standing commitment to climate action.

ING has a long-standing commitment to climate action.

That standard, called PACTA for Banks, was released last week by our partner 2dii. It’s open source and available for all banks to use. How does it work? Basically, PACTA looks at the technology shift that’s needed across certain sectors to slow global warming and then measures the needed technology against the actual technology clients are using – or plan on using in the future.

Today, ING and four other banks release our blueprint for how we’re going to put this tool into practice.

But what steps have we taken to get here? Here’s a timeline of our journey.

2005 – 2015: ING starts disclosing our carbon footprint; offsetting carbon emissions; integrating sustainability into our business; launches renewed sustainability direction with a major focus on climate action.

Early 2015: ING recognises the importance of measuring the climate impact of our lending portfolio and begins working on finding a way to do that accurately.

2017: ING partners with the 2˚Investing Initiative (2dii), the leading global think tank on developing climate metrics in financial markets. Behind the scenes, we together take the first steps in co-developing a climate methodology, now called PACTA for Banks. (PACTA stands for Paris Agreement Capital Transition Assessment).

September 2018: ING publicly announces the Terra approach, our intention to steer our €600 billion loan portfolio towards meeting the Paris Agreement’s well-below two-degree goal. We announce that we’ve been working with 2dii to co-create the innovative, accurate way to measure our portfolio. With this, we become the first global bank to commit to using science-based scenarios to steer our business strategy.

Also, ING begins working behind the scenes to get other banks to join a pilot for the measurement methodology with 2dii, while encouraging the banks to also publicly commit to steering their portfolios in line with the Paris Agreement.

December 2018: ING and BBVA, BNP Paribas, Société Générale and Standard Chartered sign the Katowice Commitment. These four other banks join us in our pledge to steer our portfolio toward the well-below two degree goal of the Paris Agreement and work together to further refine the metrics and tools needed to do this.

February 2019: 2dii officially starts pilot with ING and 16 other global banks to road-test the methodology.

September 2019: the Katowice Commitment forms the groundwork for the UN-backed Collective Commitment to Climate Action, signed by ING and 35 other banks that together represent $13 trillion in loans. It’s the banking sector’s farthest-reaching commitment to align with the Paris Agreement goals. It was launched on the side of the signing of the United Nations Principles for Responsible Banking, as a first example of how those principles can be made actionable.

September 2019: ING releases our first Terra progress report (PDF 7.4 MB). We disclose our Climate Alignment Dashboard, which shows ING’s pathway towards climate alignment in each sector. This is a first in the banking sector.

September 2019—September 2020: Experts from ING’s Terra team and Wholesale Banking client-facing colleagues are involved in many in-person workshops with specialists from the Katowice banks on methodology development for certain sectors. Internally, we focus on following up our own commitment, to be released in the Terra Progress Report 2020.

September 2020: Signatories of the UN Principles for Responsible Banking, which includes alignment with the Paris Agreement, share their progress and commitment one year later.

September 2020: 2dii releases the open-source climate alignment methodology called PACTA for Banks.

September 2020: ING and the Katowice Commitment banks release a report on how we will apply PACTA for Banks to our own lending portfolios. We hope to help and inspire other banks to use PACTA and contribute further to its development.

October 2020: ING will release our second Terra progress report, stay tuned!

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