ING steps up efforts to align oil and gas portfolio with its climate goals
Banking giant ING has updated its climate policies in a bid to further restrict financing to the oil and gas sector, as it continues its efforts to align with the International Energy Agency’s (IEA) ‘Net-Zero Emissions by 2050 Roadmap’.
Last year, ING became the first global bank to issue a declaration that it would stop providing dedicated finance to new oil and gas field exploration and extraction. The decision on this “upstream” financing was based on the net-zero pathway laid out by the IEA.
The bank has this week (14 March) expanded its approach to oil and gas financing to restrict support for “midstream” projects covering infrastructure developments that could unlock new oil and gas fields. ING is also aiming to reduce the volume of traded oil and gas that it finances.
Upstream oil and gas remain ING’s largest climate impact across its value chain and the company has included a “Trade and Commodity Finance business” under this new approach. As such, ING will aim to reduce the combined volume of traded oil and gas it finances by the same reduction targets that it has committed for upstream lending – a 19% reduction by 2030 in line with IEA pathway.
ING will publish public targets for Trade and Commodity Finance in 2024.
The organisation is currently aiming for a 53% reduction in its oil and gas portfolio by 2040 compared to a 2019 baseline. ING states that this is in alignment with the IEA’s Net-Zero Pathway.
The banking firm also wants to introduce a “net zero by 2050”-aligned methodology for its midstream oil and gas infrastructure by the end of the year. This would include projects such as pipelines, liquified natural gas terminals and storage facilities.
The announcement builds into ING’s wider approach to climate action. ING announced back in 2018 that it would steer its portfolio towards a 2C trajectory – the less ambitious of the two warming pathways outlined in the Paris Agreement. It launched a new set of metrics and processes, known as Terra, to track the decarbonisation of its financed activities.
The Terra approach received an update last year. The new strategy confirms new emissions goals for financed activities in the nine high-emitting sectors it regards as a priority under Terra. Eight of them are badged as aligned with net-zero on a 1.5C pathway, with shipping being the only exception at present. Across the eight sectors, ING has more than €330bn of activity.
ING’s activities in the residential real estate, cement, steel, automotive and aviation sectors are all given net-zero targets for 2050, up from their previous 2C-aligned goals. They are also given interim 2030 goals for the first time.
edie will be publishing an interview with ING’s global head of sustainability Anne-Sophie Castelnau in due course.
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