ING Statement on Climate Action
3 March 2016
Climate change is real and needs to be addressed.
Its consequences, like the growing scarcity of water, food, energy and other material resources, pose daunting social and environmental challenges. Banks have a role to play in addressing these challenges. The causes and the solutions are complex, but we already know that they will change traditional business models.
We believe in taking the long view and in going beyond just mitigating harm—we want to drive sustainable progress and help lead the global transition to a low-carbon, climate-resilient economy.
As a financial institution, we can play a role in enabling this transition 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 activities impact the environment we operate in—both directly, through our operations, but also indirectly, through our financing portfolio.
Our indirect impact
We believe in helping our clients transition and supporting them as they develop (new) sustainable business models and solutions.
ING has provided financing support for renewable energy projects with a total value of more than EUR 29 billion and maintained EUR 4 billion direct loan exposure to renewable energy projects at the end of November 2017. This amounts to 60% of our total project financing in the utilities sector.
We’ve facilitated the issuance of 18 sustainability bonds with a total value of over EUR 15 billion to fund our clients’ social, green and water projects. In addition, we developed a financing structure that led to around 10 transactions in 2017 linking the interest rate to a company’s sustainability performance and rating.
Our circular economy programme helps our clients make the transition from ownership to access.
Strict criteria
We also apply strict social, ethical and environmental criteria in our financing and investment policies and practices. We have accelerated the reduction of our financing to coal power generation, reducing our exposure to close to zero by 2025 and supporting the transition to a low-carbon economy. Read more on our energy page.
Every client and transaction is assessed, monitored and evaluated against the requirements of the 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.
Transparency and measurement
Transparency is an important aspect of combatting climate change, which is why we’ve published a detailed breakdown of our portfolio by sector.
We’re also committed to understanding the impact our lending has on the climate in order to steer our business in the right direction. After intensive internal research to determine the right metrics, we see that the gap in data required and the complexity of the financial supply chain means we cannot do this difficult task alone.
ING has therefore partnered in the past with, for example, Ecofys, in order to develop tools and methodologies for measuring impact, and we continue working on climate impact measurement. We are also committed to transparently communicating the impact of our business through endorsing the Taskforce for Climate-related Financial Disclosure (TCFD) recommendations.
Reducing our own environmental impact
ING reduces our own environmental impact through our operations and suppliers. Our Environmental Programme helps us closely monitor and manage this, transitioning to become a more resource-efficient and climate-resilient company.
We are transparent about the climate impact of our operations. We invest in operational efficiency solutions, are committed to sourcing 100% renewable energy by 2020, integrate sustainability in our procurement process and have been offsetting our carbon emissions since 2007. We aim to improve our environmental impact through our operations by setting science-based targets, and reducing the impact of our buildings, our IT systems and our business travel. We have already reduced our carbon footprint by 27% since 2014 and have set an ambitious target to cut our operational footprint by 50% by 2020.
Partnering for climate action
Accelerating change cannot be done alone. That’s why we engage with clients, business partners and other stakeholders, and collaborate in supply chains and at industry level. That’s also why we share knowledge based on research and why we commit to or are part of international initiatives such as the UN Global Compact, the OECD Guidelines for Responsible Business Conduct, the Equator Principles and endorse the Financial Stability Board’s Taskforce for Climate-related Financial Disclosures (TCFD) recommendations.
We welcome transparency and disclosure regarding financial investments and policies in relation to all energy-related activities — including fossil-based and alternatives. We support assessments of resilience to climate risks and call for new financial instruments to stimulate alternative energy and efficiency projects as well as green bonds. This will enable climate action to be integrated with financial reporting and instruments.
We also call upon governments to create incentives for long-term investments and to enable sustainable transitions, 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.