Terra approach

... min read

As a bank, one of the ways ING can make a positive impact on climate action is through our financing. We’re aiming to steer the most carbon-intensive parts of our portfolio towards reaching net zero by 2050. We call this the Terra approach.

ING is focusing on parts of the sectors in our loan book that are responsible for most greenhouse gas emissions: power generation, oil & gas, automotive, shipping, aviation, steel, cement, residential mortgages and commercial real estate. We’re working to include additional carbon-intensive sectors, such as aluminium, and more parts of existing sectors in order to have more impact.

We are measuring whether our lending in scope in each sector is adding up to contribute to achieving net-zero greenhouse gas emissions by 2050. Per sector, we use what we consider to be the best-fit methodology to measure and steer our loan book, acknowledging that there are many roads to net zero and in the end it’s the impact that counts.

Our progress

Our climate report details our progress and targets on climate alignment in the nine sectors in our loan book most responsible for climate change.

We're on track to achieve our medium-term 2030 sector decarbonisation targets in four of our nine Terra sectors:

  • Power generation, upstream oil & gas and automotive have shown particularly strong performance and improvement and are on track. Shipping is also on track versus the identified pathway.
  • Aviation, while not yet on track, has also improved compared to the 2021 alignment score.

For the other sectors in scope, we face challenges with bringing our portfolios into alignment with the relevant science-based pathways. These challenges range from the long lead-time in scaling new technology solutions in sectors like cement and steel, to the lack of mainstream low-carbon fuel alternatives in aviation and shipping, to insufficient government guidance and incentives to influence customer behaviour in residential real estate. These challenges would be greatly reduced by concerted action by governments and regulators , see below.

We continue to broaden Terra to have more impact, working to include additional carbon-intensive sectors and more parts of existing sectors. For example:

  • We now have 2030 and 2050 targets in place for not only upstream, but also midstream and downstream parts of the oil & gas value chain. This includes extracting oil & gas, its transportation and storage, and converting oil & gas into various products.
  • We’re also working to expand our approach into trade and commodity finance. What this all means is that when it’s done, the full value chain of oil & gas will be covered.
  • In commercial real estate, we previously only measured our portfolio for small and medium-sized businesses in the Netherlands. In our 2023 climate report we also cover the commercial buildings and offices we finance around the world.
  • We’re also working to expand to Business Banking clients, who account for 18% of ING’s total financed emissions. We’re first focusing on small and medium-sized enterprises (SMEs) in the Netherlands active in agriculture (especially dairy farming) and transportation (especially inland shipping and road transportation).


While ING’s Terra approach makes use of various methodologies, there is one that applies to most of the sectors in scope. This is the methodology ING co-created with the 2˚ Investing Initiative (2DII), a global think tank developing climate metrics in financial markets.

It’s called PACTA for Banks. It looks at the technology shift that’s needed across certain sectors to slow global warming and then measures this against the actual technology clients are using – or plan on using in the future.

Detailed technology roadmaps for each sector are being developed by independent organisations like the International Energy Agency. These are used as benchmarks. We then compare the data from the sector roadmaps to the data on the technology our clients are using today and planning on using in the future.

This client data comes from global databases that track public and private companies of various sizes around the world. This makes it easy for clients, as they aren’t required to provide any data themselves.

In the automotive sector, for example, we measure the current mix of our clients’ production of internal combustion engine vehicles compared to zero-emission vehicles and how clients plan to shift this balance over time. We can then compare this with what science-based transition pathways prescribe for the automotive sector in order to reach the net-zero by 2050 goal. The analysis doesn’t only tell us what needs to shift, but also how much and by when. This is where financing comes in – and where ING can have an impact.


Collaboration is an essential part of our approach to climate action, as no sector or company can solve the world’s problems alone.

We joined the Center for Climate-Aligned Finance as a strategic partner in July 2022. Together with other financiers, we work to establish measurement methodologies, emissions data and reporting frameworks, and governance structures, which are necessary for financial institutions to support the transition to net-zero emissions.

Building on our involvement as a founding signatory of the Poseidon Principles for the shipping sector, we led a working group to design a climate-aligned finance agreement for steel, and we're proud to be one of six banks that have signed the Sustainable STEEL Principles. This will help banks measure and report the emissions associated with their steel loan portfolios compared to net-zero emissions pathways. We also have a lead role in the climate alignment working group for aluminium.


While we accept the important role we must play in financing and facilitating our clients’ transition to net zero, a massive joint effort is required for the world to actually reach net zero by 2050. We call on governments to direct and guide the changes needed to reach net zero by 2050, whether by regulation, policy or incentives. Some examples of focus areas for governments are:

  • accelerating the decarbonisation of the power grid
  • investing in sustainable alternatives (e.g. accessible and affordable rail travel and public transport)
  • incentivising changes in customer behaviour
  • phasing out subsidies to carbon-intensive sectors

Specifically for the real estate sector, governments could focus on ‘greening’ the power grid; the harmonisation and mandated use of Energy Performance Certificates for residential buildings; and incentivising homeowners to undertake renovations to improve the energy-efficiency of their homes.

We would like to see regulators working together with the financial industry in further supporting the international alignment and harmonisation of climate reporting requirements, particularly on climate impact measurement and target-setting. The availability and quality of climate risk and climate alignment data is critically important to the success of our climate approach.

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