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. So what is ING doing?

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, in our financing 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.

ING takes a holistic approach to climate action. On the one hand, we’re taking action on how our business impacts climate change, which includes using our Terra approach to steer our portfolio towards global climate goals. And on the other hand, we’re considering how climate change impacts our business, as we work to assess climate risks and take action to mitigate them.

Our biggest impact on climate is through our financing

We’ve financed billions of euros in energy projects, through green loans, green bonds and other innovative products and financing constructions. Our sustainability-linked products, for example, offer corporate clients a lower interest rate for improved sustainability performance. We’ve supported hundreds of these types of deals since we introduced them in 2017.

We 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. We also respond to financing requests with “yes, but…”, outlining sustainability improvements the client must make first. We believe helping clients improve 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.

We also support our clients by financing circular economy solutions – where people and companies ‘reduce, reuse and recycle’ instead of ‘take, make and waste’, including making the transition from ownership to access.

Steering our portfolio towards net zero by 2050

We’ve been using our Terra approach to steer our portfolio towards global climate goals since 2018. As it became clearer that the world needs to move faster to reach climate goals, we increased our ambition in 2021. We joined the Net-Zero Banking Alliance and aim to steer our portfolio in line with keeping the rise in global temperatures to 1.5 degrees Celsius rather than well-below two degrees, to achieve net zero by 2050 rather than 2070.

Our Terra approach is about steering our portfolio towards the new low-carbon technology needed to reach these net-zero goals – like hydrogen, carbon capture and energy storage – and away from high-carbon technology. Per sector, we use the most appropriate methodology available, acknowledging that there are many roads to net zero and in the end it’s the impact that counts.

We manage climate and environmental risks

Of course, while we try to make a positive impact on climate change, we also have to limit the impact of climate change on our business. There’s physical risks, like floods and wildfires. And there’s transition risks, associated with policy interventions or technology developments. Like what happens to carmakers who haven’t started making any electric cars once those are the only ones legally allowed to be sold?

To be resilient to these risks, we have to identify them, understand them, figure out how likely they are and what their potential impact could be. Those insights shape our business strategy. Our approach continues to develop as methodologies advance and regulatory guidance and requirements evolve.

We also 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 can’t do it alone

We 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.

Transparency is an important aspect of combatting climate change. We’re committed to transparently communicating the impact of climate change on our business and our impact via our financing on climate change, following the Taskforce for Climate-related Financial Disclosure (TCFD) recommendations. We report more extensively on climate risk and our progress on alignment of our portfolio with global climate goals in our integrated climate report.

We also recognise that other areas benefit from and contribute to tackling climate change, such as human rights, biodiversity and the circular economy. We have an approach for these areas and continue to strengthen their connection with our climate action agenda.

Our integrated approach to climate action covers four priorities:

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