Dutch banking group ING says it will stop lending to companies that aren’t decarbonising fast enough, and will immediately halt financing for those that continue to develop new oil and gas fields.
This comes after the International Energy Agency determined that new fossil fuel projects are no longer needed, and are inconsistent with efforts to prevent catastrophic climate change.
“The urgency of climate change is becoming more evident all the time and ING wants to play a leading role in accelerating the global transition to a low-carbon economy,” CEO Steven van Rijswijk said in a statement accompanying the bank’s annual “climate progress update” report.
Over the past year, the bank has assessed the sustainability disclosures of around 2,000 of its largest clients so that it can hold “more data-informed discussions” with them about the progress they’re making, Rijswijk said.
By 2026, it’ll determine which companies “are unable or unwilling to progress”, and then apply stricter financing conditions on them or cease financing them altogether, he added.
It will also impose an immediate ban on funding for upstream oil and gas companies that continue to develop new fields, and will stop providing financing for new liquefied natural gas (LNG) export terminals after 2025.
The bank stopped financing new coal-fired power plants ahead of the Paris climate conference in 2015, and says it will no longer fund utilities that are over 5% reliant on coal by the end of 2025.
In its update on September 19, ING said it was now also monitoring clients in the aluminium and dairy sectors, adding that “to successfully fight climate change, action is needed at all levels of society.”
In June, Denmark’s largest commercial pension fund, PFA, announced that it was stripping oil and gas stocks out of its portfolios.
But while European financial institutions turn their backs on polluters, their US peers are filling the void.
Bloomberg reported this week that just as protestors were demonstrating outside Citigroup’s headquarters over its role in the climate crisis, the bank was stepping up dealmaking in the underwriting of bonds for fossil fuel companies, to the tune of $4.2 billion.
