Climate action

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Climate change is one of the biggest challenges of our time

Its consequences, like the growing scarcity of water, food, energy and other material resources, pose daunting social and environmental challenges. If we don’t tackle climate change, it could result in devastating and lasting impacts on the economy and society as we know it.

A transition is needed

Scientists and governments alike agree that to mitigate the worst impacts, we must transition to a low-carbon and climate-resilient future, remaining well-below a 2-degree rise (ideally 1.5 degrees) in global temperatures. Governments committed to this in what’s known as the Paris Agreement.

A global transition to meet this goal will require more than €30 trillion to be invested in clean energy and efficient infrastructure by 2035, according to the International Energy Agency. Bank lending makes up the most significant source of external capital.

This means that banks have a major role to play in financing the transition to a low-carbon economy. What about ING? What are we doing to play our part?

Our role

As a financial institution, we can play a role by financing change, sharing knowledge and using our influence. Being sustainable is not just about reducing our own impact, it’s in all the choices we make—as a lender, as an investor and through the services we offer our customers. That’s why sustainability is inherent to our purpose of empowering people to stay a step ahead in life and in business.

Business value is at stake: if ING is to thrive in the future, we don’t only need to manage our own direct and indirect impact—we also need to help our clients address the risks and opportunities that environmental challenges create. This way, we will not only strengthen the resilience of our own company but also societal resilience to climate change.

Our commitment and leadership start with our own operations

ING has been climate neutral since 2007 and we have ambitious goals. We will:

  • We will reduce our scope 1 and 2 CO2e emissions from our buildings and data centres by 80% by year-end 2022, and 90% by year-end 2030 (base year 2014).
  • We will reduce our scope 3 CO2e emissions from business travel by airplane and car by 25% by year-end 2022 (base year 2014).
  • We will reduce energy consumption by 65% by year-end 2030 (new target, base year 2014).
  • We will continue to procure 100% renewable electricity for all ING buildings where we have management control worldwide.

1. What we do finance

We’ve financed billions of euros in energy projects, from wind farms, solar energy, and geothermal power production; to energy efficiency in buildings and production lines; to electric vehicles and bio-based plastics; to (waste) water treatment and supply and circular economy solutions. We do this through green loans, green bonds, and other innovative products and financing constructions.

One such innovation is our sustainability improvement loan, which offers corporate clients a lower interest rate for improved sustainability performance. This has been very well-received since we introduced it in 2017, and we’ve supported more than 65 of these types of deals as at 30 September 2019. These loans cover more than just climate, but it’s an important motivator for companies looking to improve their climate performance.

We also do a lot to financing a circular economy – one where people and companies ‘reduce, reuse and recycle’ instead of ‘take, make and waste’. It’s about making the transition from ownership to access.

2. What we don’t finance

We apply strict social, ethical and environmental criteria in our financing and investment policies and practices.

Every client and transaction is assessed, monitored and evaluated against the requirements of our Environmental and Social Risk (ESR) framework to ensure compliance and limit negative impact on the environment and communities. This way, climate and environmental impact are taken into account every time we make financing or investment decisions.

We also say ‘no’ to certain companies and sectors, like with our aim to reduce our exposure to coal power generation to close to zero by 2025. ING was the first bank to commit to exiting coal.

3. “Yes, but…”

We screen every transaction and also respond to financing requests with “yes, but…”, outlining sustainability improvements the client must make first. As we assess potential clients and deals, our approach is to have a dialogue and support them in improving their environmental and social impact where possible. We believe this is more effective than excluding clients altogether. Of course if they don’t meet our standards and aren’t willing to change, we don’t do the deal.

Making money matter

We’re committed to making our money matter and understanding the impact of our financing. We have ambitious goals to guide us.

We are working to measure and steer our lending portfolio towards the Paris Agreement’s well-below two-degree goal, a strategy we call the Terra approach. Still, we recognise that individual banks can only do so much. That’s why we also looked beyond ING in building partnerships and coalitions. In December 2018, four peers signed on via the Katowice Commitment, which then became the groundwork for the UN-backed Collective Commitment to Climate Action signed by 31 banks in September 2019.

Transparency is an important aspect of combatting climate change, which is why we’ve also published a detailed breakdown of our portfolio by sector. We are also committed to transparently communicating the impact of our business through endorsing the Taskforce for Climate-related Financial Disclosure (TCFD) recommendations.

Can’t do it alone

Accelerating change cannot be done alone. As mentioned above, we’ve been working on coalition-building for portfolio measurement. We believe all banks would benefit from having an industry-wide standard, increasing transparency and therefore our collective effectiveness in fighting climate change.

We also engage with clients, business partners and other stakeholders, and collaborate in supply chains and at industry level. We share knowledge based on research and commit to or are part of many international initiatives.

We call upon governments to create incentives for long-term investments, for instance by setting science-based targets to mitigate climate change and to develop alternative energy sources. We also urge governments to work towards an effective price on carbon emissions and to stimulate and enable enterprises and institutions to publicly disclose their carbon emissions and forward-looking transition strategy, so banks are better capable to take climate impact into account in financing and investment decisions.

Furthermore we engage with clients who are frontrunners in addressing water stress, clients who are impacted by water risk and those who are in sectors that are using significant amounts of water to find solutions that can make them more resilient to water stress and further strengthen their water ambitions.

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