Amsterdam-based global bank ING announced today that it has joined the Net Zero banking Alliance, a coalition of banks dedicated to advancing global net zero goals through their financing activities.
As part of its membership in the alliance, ING stated that it will ramp the orientation of its loan book towards aligning with a maximum global temperature rise of 1.5°C, rather than its current objective of ‘well below 2°C.’ The bank said that it will determine over the next 12 months the appropriate steps and intermediate goals needed to pursue this goal.
The Net Zero Banking Alliance was launched in April 2021, with a group of banks committing to align operational and attributable emissions from their portfolios with pathways to net-zero by 2050 or sooner. The alliance has already grown to over 50 banks from 27 countries representing more than $37 trillion in assets, nearly a quarter of global banking assets. The coalition forms part of the Glasgow Financial Alliance for Net Zero (GFANZ), along with the Net Zero Asset Managers Initiative and the Net-Zero Asset Owner Alliance.
ING stated that it will use its “Terra approach” to steer its loan portfolio to align with 1.5°C. The approach, which the bank had been utilizing for its prior goal, assesses the technology shifts needed across various sectors in order to achieve the climate target, relative to the technology used by the bank’s clients currently, setting a direction to apply its financing activities. The approach focuses on several high-emitting sectors, including energy, automotive, shipping & aviation, steel, cement, residential mortgages and commercial real estate, and helps the bank determine if its lending is contributing to climate resilience in these areas.
In a statement announcing the bank’s joining of the Net Zero Banking Alliance, ING said:
“We see this as an excellent opportunity to use our experience and knowledge as we help clients with advice and financing to facilitate their transition to a net-zero world. We’ve always believed in an inclusive approach to fighting climate change – working with our clients to support their transition. We intend to continue this inclusive approach as much as possible.”