ING’s response to the admissibility of a complaint to the National Contact Point

14 November 2017

The climate is of course a hugely important subject in which banks also have a role to play and on which we naturally want to enter into dialogue. And we are already doing so. Like the parties which submitted the complaint to the NCP, ING would also like to be able to identify and then publish its indirect greenhouse gas emissions. Unfortunately, this is not so easy in practice; there is currently no international standard on reliable and comparable data for calculating CO₂ emissions. The absence of information on emissions by our global customers and the lack of international methodology to attribute financed emissions to a climate scenario mean it is impossible for ING to meet the wishes of the complainants. No international bank can. We are involved in numerous initiatives to change this. Our response to the initial complaint, which explains this, is shown below and it was also published by NCP today.

Summary of ING’s initial response

ING agrees completely that climate change is a tremendous challenge for the world and it is one in which banks, including ING, have a role to play. ING and the complainants have held several extensive discussions on the subject of the complaint and the related challenges and continue to discuss them. The complainants claim that ING is “not doing enough” and “falls seriously short” in its climate policy compared with other financial service providers. They point mainly to the environmental policies of investment institutions (which face different challenges from banks) that they say go further in some areas than ING’s policy. Investment institutions such as pension funds invest in companies listed on the stock exchange. Information on CO₂ data of listed companies is available through the CDP and research bureaus such as TruCost. Such data is often not available to banks as they have many non-listed companies in their portfolios.

That ING subscribes to the importance of measuring financed CO₂ and the development of a methodology is also shown by the fact that as early as May 2015 ING committed to the methodology to be developed by the Science-based Target Initiative (an initiative of the WWF, World Resources Institute, Ecofys and others).

ING offsets all of its own CO₂ emissions and so has been a climate-neutral organisation since 2007.

ING also takes climate reporting seriously and has been included once again with the highest possible score in the CDP’s Climate A list, comprising 193 businesses which are climate-change leaders. ING also received a Euronext/CDP Leadership Award for its excellent environmental reporting.

In other areas, ING’s policy and actions in fact go far further than those of its peers. For example, BankTrack, which it should be noted is one of the complainants, says ING is the only bank in the world that publishes its financing of mining of thermal coal, thus clarifying the reduction of this in its portfolio (down 26% in 2016). See BankTrack et al: “The effectiveness of existing coal mining policies at major banks remains clouded in uncertainty due to a dearth of reporting. To date, the only bank to have provided detailed reporting is ING”.

In addition, the universally respected 2ºC scenario of the International Energy Agency (IEA 450 Scenario) assumes that some 60% of all energy will still come from fossil fuels in 2040. See Global trends, p. 206 World Energy Outlook 2016 (OECD/IEA 2016). Consequently, no conclusions can be drawn from the mere fact that ING finances fossil fuels.

The complainants are asking ING to identify and publish its indirect greenhouse gas emissions. ING is keen to announce that it would like to do this. As explained in its annual report, ING is running pilots to measure its indirect climate footprint. ING also supports the Science-based Target Initiative referred to above that is developing a clear methodology to translate banks’ climate footprint into targets. There is no lack of willingness on ING’s part but what the complainants are asking for is currently not technically possible. There is currently no international standard on reliable and comparable data for calculating CO2 emissions. The absence of information on emissions by our global customers and the lack of international methodology to attribute financed emissions to a climate scenario mean it is impossible for ING to meet the wishes of the complainants. No international bank can.

The complainants are also asking ING to set targets and to work towards bringing its indirect greenhouse gas emissions in line with a 1.5ºC scenario. This demand is out of line with the international community’s 2ºC scenario. At the request of UNFCCC/parties to the Paris Accord, the United Nations’ climate agency (IPCC) is currently examining the feasibility of a 1.5ºC scenario. The outcome of that research is expected at the end of 2018. Governments may take the results of the IPCC report into account when assessing their plans to remain within the 2ºC standard. Since the IPCC report on the feasibility of a 1.5ºC scenario will not be ready before the end of 2018, it is impractical to demand that ING commits to a 1.5ºC scenario on 1 September 2017. This is completely separate from the fact that ING is actually working to make its portfolio greener and has already taken several steps on this (see https://www.ing.com/Newsroom/All-news/Reaction-to-National-Contact-Point-complaint-about-ING-by-Greenpeace-BankTrack-Milieudefensie-and-Oxfam.htm for several examples) but it is currently impossible to relate this to a 1.5ºC or 2ºC scenario.

In view of all this, ING believes that the complaint is i) impractical, ii) unnecessary and iii) groundless.

In accordance with the NCP procedure, parties will treat the dialogue process and detailed review as confidential. The NCP has stated that the procedure will conclude with a final statement on the results of the procedure that will be published on its website.