ING reaction to Fair Finance Guide report
13 December 2018
In a report released today, ING's score in the Fair Finance Guide remains rather stable, despite the fact we have improved our policies.
The Fair Finance Guide (Eerlijke Bankwijzer) is a Dutch organisation that publishes a (bi)-annual policy update assessing the sustainability policies of several Dutch banks based on criteria drawn up by the Fair Finance Guide itself. In 2018, all Dutch banks decided to no longer actively cooperate with the Fair Finance Guide, partly because of this lack of objectivity.
The main reason for our average – and on certain topics low – score is that ING is making choices that differ from those that the Finance Guide would prefer. For example, the Fair Finance Guide basically requires that no funding goes to oil, gas, large-scale livestock farming, or water dams.
We understand that civil-society organisations are concerned about climate change, human rights, animal welfare, and environmental damage. ING shares these concerns. It’s a good thing that they ask us to develop extensive policies that take these concerns seriously.
However, requesting banks to exclude activities such as oil and gas at this moment would mean that major sectors in society could no longer be financed; sectors for which there are no viable alternatives yet: steel production (coal); the transport industry, including freight transport, shipping and aviation (oil); electricity production and heating (gas); world food production (livestock farming), and so on.
ING believes in giving shape to sustainability in a different way. As a bank, we believe our role is to finance and facilitate society’s shift to a low-carbon and self-reliant society. Read more in our sustainability direction.
Our biggest impact is in what we DO finance, what we DON’T finance, and how we interact with our clients to come to those decisions.
We screen every transaction and also respond to financing requests with “yes, but…”, outlining sustainability improvements the client must make first, and then helping them do it. But sometimes it’s not about doing more, but about doing less. We say ‘no’ to certain companies and sectors, like with our aim to reduce our exposure to thermal coal power generation to close to zero by 2025.
Strengthening our approach
Sustainability is a dynamic topic and so are our policies. Throughout the years a lot of changes have been made in our way of thinking as well as in our approach. Here are a few examples.
Human Rights: ING is committed to respecting human rights and critically reviewed our own practices, resulting in our first Human Rights report released in 2018. We seek to embed human rights due diligence in to the fabric of our business. This will be a major challenge in the years ahead, but we have actions in place for continued improvement:
- We are updating our ESR sector policies.
- We plan to take action to extend opportunities for client engagement on human rights, including for the most severe human rights risks identified.
Tobacco: In relation to human rights we also decided in 2018 to take the next step in our approach to tobacco: we will gradually reduce our exposure to the tobacco industry to zero by 2023. This includes our exposure to the growing, trading, processing and manufacturing of tobacco products.
Tax: We have been publishing a lot of information on how we do business and why. This resulted in being ranked 8th out of 76 companies in the VBDO/PwC Tax Transparency benchmark. Oxfam deemed ING to be a positive exception in their international research into the use of tax havens.
Climate: Our business supports the transition to a low-carbon economy, for example through our green bonds, our circular economy programme and a sustainable loan construction where clients are given better interest rates for better sustainability performance. We committed to begin steering our €600 billion loan book towards meeting global climate goals by using the Terra approach, and four other global banks subsequently committed to do the same. You can read more in ING's approach to climate action.
Eye for improvement
Despite being recognised for our sustainability policies, ING won’t be sitting back complacently. We will continue to work on further tightening our policies, while also supporting customers during their transition towards becoming more sustainable.