ING announces €100m Sustainable Investments fund

The €100m fund will be gradually invested over the next three to four years and will target companies with proven concepts that can deliver positive environmental impacts. The fund will primarily target innovations in areas including the energy transition, the circular economy and water, but is open across all sectors.

“Sustainability has become a strategic priority and board room topic for many of our clients” ING’s corporate investor director Mark Weustink said. “Our commitment of risk-bearing capital, ranging from junior debt to ordinary equity, enables ING to fill a client need and add to our overall sustainable finance strategy.”

“This step enables ING to support our clients who are proactively making changes in their business models to adapt to a more sustainable and energy-friendly way for the future, and further support them throughout their journey. We are very keen to make this initiative a success for our clients and will thoroughly review every opportunity we receive.”

Initially, the Sustainable Developments fund will target purpose-driven projects in the Benelux, before extending to ING’s other core markets over the coming years. All sectors will be covered by the fund, but business projects focusing on energy, the circular economy and water align with ING’s wider sustainability aims.

Unlocking finance

Water, for example, is a key area of focus for ING. In a recent blog post, ING’s vice president for sustainable finance Ambika Jindal explained that many companies have improved water efficiency in their operations, but that most of the water footprint is located in the supply chain, where access to finance is limited.

ING has had a supply chain initiative in place since 2010. The bank told the Guardian that it enables companies to reward suppliers that place an emphasis on environmental, social and governance (ESG) issues, by reducing invoice costs on supply chain finance schemes.

The bank wants to work with businesses to gain insight into portfolio risks specifically associated with water, and Sustainable Investments will create new frameworks for ongoing conversations.

ING has been pioneering new approaches to green finance, including agreeing a €1bn loan with Philips that has an interest rate dependent on the year-to-year progress of the global lighting firm’s sustainability performance.

The ‘revolving credit facility’ agreed between the two Dutch firms will operate through a rating system assessed by independent researcher Sustainalytics. The score of Philips’ benchmarked sustainability performance will decide whether the interest rate goes up or down.

With some investors fearing that the next financial crash will be climate related, a stream of new green bond commitments have disrupted the markets over the past couple of years. ING revealed that it had funded more than €27bn to clients aiming to solve environmental challenges in the first two quarters of 2016.

Matt Mace