Terra approach

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As a bank, ING makes the most positive impact on climate action through our financing, via the money we loan to companies and customers. We’re steering hundreds of billions of euros in our loan book towards meeting net-zero climate goals. We call this the Terra approach.

ING is focusing on the sectors in our loan book that are responsible for most greenhouse gas emissions: power generation, fossil fuels, automotive, shipping, aviation, steel, cement, residential mortgages and commercial real estate.

We are measuring whether our lending in each sector is adding up to contribute to achieving net-zero greenhouse gas emissions by 2050. 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 steer towards net-zero by 2050 after joining the Net-Zero Banking Alliance in August 2021.

Our progress

We released our first integrated climate report (PDF 13.5 MB) in September 2021. It details our progress and targets on climate alignment in the nine sectors in our loan book most responsible for climate change.

Of the nine sectors in scope for Terra, five (power generation, automotive, residential real estate, shipping and fossil fuel) are on track with existing climate-alignment pathways. Another three sectors (steel, cement, commercial real estate) are within 5% of their scenario and we’re confident we can bring these into alignment in the years to come. Finally, aviation comes out well above the pathway due to the extraordinary impact that Covid-19 had on the sector in 2020.

Over the next period, we’ll work on the steps and intermediate targets that are needed to get us on the more ambitious net-zero pathway. We aim to do this for all sectors in scope for Terra by the end of 2022.


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. An IT tool compares the data from the sector roadmaps to 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.

Getting other banks involved

We believe all banks would benefit from having an industry-wide standard, increasing transparency and therefore our collective effectiveness in fighting climate change.

For this reason, ING was joined in December 2018 by the global banks BBVA, BNP Paribas, Société Générale and Standard Chartered in signing the Katowice Commitment – a pledge to steer our portfolios toward the well-below two degree goal of the Paris Climate Agreement and work together to further refine the metrics and tools needed to do this.

In September 2019, the Katowice Commitment formed the groundwork for the UN-backed Collective Commitment to Climate Action, signed by ING and more than 30 other banks that together represent $13 trillion in loans.

PACTA for Banks, the open-source methodology we co-created with 2DII, was released in September 2020. Then ING and the four other Katowice banks published our blueprint for how we will put the tool into practice.


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, building on our lead roles in climate alignment working groups for the aluminium and steel sectors, and our involvement as a founding signatory of the Poseidon Principles for the shipping sector.

Together with other leading financiers to those carbon-intensive sectors, we work to establish measurement methodology, emissions data and reporting frameworks, and governance structures, which are necessary for financial institutions to support the transition to net-zero emissions.

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