(19 September 2024 – Europe) Dutch bank ING will cut ties with large clients that fail to make adequate progress in reducing their climate impact, a move that contrasts sharply with the stance of many US banks.
CEO Steven van Rijswijk announced that ING will restrict or stop financing companies that do not adequately address their carbon footprint, based on individual assessments. This approach diverges from US institutions like Bank of America, which have softened climate targets amid backlash against so-called “woke capitalism.”
ING has reviewed 2,000 of its largest clients based on their publicly available climate transition plans and will evaluate their progress by 2026.
“Our goal is to make sure we fight climate change. It is not to say goodbye to clients,” he said. “But if it is about them not being willing [to address their carbon footprint], then that will mean we will say goodbye.”
Van Rijswijk expressed concern over the polarising nature of climate discussions, noting that while US banks may avoid addressing these issues, ING aims for transparency with the bank wanting to be “as open and honest as we can be”.
US banks are facing scrutiny from political figures over incorporating environmental, social, and governance (ESG) factors into business decisions, which has led to a phenomenon known as “greenhushing,” where companies avoid discussing climate risks. In contrast, Dutch companies, like Shell, are under pressure to adopt more aggressive climate targets.
ING is also taking concrete steps to limit its involvement in fossil fuel projects. The bank will halt financing for LNG export terminals starting in 2025, following recommendations from the International Energy Agency. Additionally, ING will stop new financing for upstream oil and gas companies involved in developing new fields.
“There is also a financial risk involved. There are companies who have more imminent financial risks because their assets might be stranded.”
Mr Van Rijswijk pointed to shipping or airlines as examples where, in future, “cleaner ships or aeroplanes will be required”, making lending for traditional fossil fuel-intensive vessels risky.
ING’s analysis found that shipping and commercial real estate were among the laggards when it came to disclosing climate plans.