Katerina Swanson
ING Groep NV, a Dutch financial services firm, has been a significant financier of fossil fuels, with outstanding loans to upstream oil and gas companies totaling €2.5 billion at the end of 2023. However, in recent years, ING has taken steps to reduce its funding for the fossil fuel industry and transition towards renewable energy sources. In March 2022, ING announced it would no longer finance new oil and gas projects, becoming the biggest bank to make such a commitment in the fight against climate change. Following COP28, ING further committed to phasing out the financing of upstream oil and gas activities by 2040 and tripling its financing of renewable power generation to €7.5 billion annually by 2025. While ING's outstanding exposure to oil and gas decreased between 2022 and 2023, climate campaigners have had mixed reactions, noting that the decline was partly due to companies drawing less on existing facilities rather than a rapid exclusion of companies opening new oil and gas fields.
| Characteristics | Values |
|---|---|
| Total outstanding loans to upstream oil and gas companies | €2.5 billion |
| Ended financing for new oil and gas projects | 31st December 2021 |
| Phasing out financing of upstream oil and gas activities by | 2040 |
| Financing of renewable power generation by 2025 | €7.5 billion |
| Financing of renewable power generation in 2022 | €2.5 billion |
| Financing of renewable power generation in 2021 | €1.5 billion |
| Increase in lending for renewable energy by 2025 | 50% |
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What You'll Learn
ING's outstanding exposure to oil and gas decreased between 2022 and 2023
Despite being a significant financier of fossil fuels, ING's outstanding exposure to oil and gas decreased between 2022 and 2023. This decline was largely due to companies drawing less on existing facilities, driven by the prevailing high prices of the commodities. According to a spokesperson for the bank, ING's total outstanding loans to upstream oil and gas companies were €2.5 billion at the end of 2023. This is a decrease from the bank's current lending to the sector, which is 4 billion euros, according to another ING spokesperson.
ING's latest climate progress update is expected to impact around €1 billion of those loans, according to the bank's chief executive. The bank had already ended dedicated finance for the development of new oil and gas fields in 2022. This latest move to halt general financing means affected fossil fuel companies will need to seek alternative financing partners once their existing loan tenors expire.
ING has also committed to stopping financing new LNG export terminals after 2025, despite LNG funding increasing among banks. According to an NGO report, ING was one of 27 banks that increased its fossil financing commitments between 2022 and 2023, primarily through LNG-related loans.
In line with the COP28 climate talks in Dubai, ING plans to reduce loans to upstream oil and gas by 35% by 2030 and completely phase out its exposure to this sector by 2040. This decision is also influenced by an updated report from the International Energy Agency, which states that advanced economies need to phase out oil and gas by 2040 to limit global warming to 1.5 degrees Celsius. ING's renewables financing is set to increase significantly, reaching 7.5 billion euros by 2025.
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ING ends financing for new oil and gas projects
ING Groep NV (INGA.AS), a Dutch financial services firm, has announced that it will no longer finance new oil and gas projects, becoming the biggest bank to commit to such a step in the fight against climate change. The move is in response to a call by the International Energy Agency (IEA) to halt funding for new fossil fuel projects to help limit global warming to 1.5 degrees Celsius.
ING's energy chief, Michiel de Haan, stated that the bank would not finance projects approved after December 31, 2021, but would continue to fund energy firms. The bank is already phasing down its financing to the oil and gas industry and scaling up lending for renewables. De Haan added that ING aims for a 50% increase in lending for renewable energy by 2025, building on the strong growth in 2021, when financing in this sector grew by 26% to 7.3 billion euros ($8.05 billion).
ING's decision is part of its "Terra approach," which aims to steer the most carbon-intensive parts of its portfolio towards reaching net-zero emissions by 2050. The bank has also expanded its Terra approach to the aluminum and dairy sectors, now covering twelve sectors in its strategy to align with global climate goals. ING has worked hard to build a power generation lending book that is 60% renewables, outperforming the goals set by the Paris Agreement.
While ING's move has been praised as a great signal to the market, some critics argue that it does not go far enough. Lucie Pinson, executive director at NGO Reclaim Finance, stated that banks need to quickly rein in all other finance to the fossil fuel sector and be prepared to drop companies planning to expand production. Pinson added that ING's commitment to reducing funding to the sector without committing to excluding companies opening new oil and gas fields is not sufficient to address climate concerns.
ING's decision to end financing for new oil and gas projects is a significant step in the right direction, demonstrating its commitment to accelerating the global transition to a low-carbon economy. However, as pressure mounts on banks to act faster on climate change, it remains to be seen whether ING and its peers will take more aggressive measures to align with the urgent need to mitigate the climate crisis.
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ING's commitment to renewable energy
ING has taken significant steps to demonstrate its commitment to renewable energy and reduce its investment in fossil fuels. While the bank has been a significant financier of fossil fuels, with outstanding loans to upstream oil and gas companies, it has recently made moves to cut its support for the fossil fuel industry.
In 2022, ING ended dedicated finance for new oil and gas field developments. The bank also stated that it would no longer finance new oil and gas projects, becoming the biggest bank to make such a commitment in the fight against climate change. This was a crucial step in answering calls by the International Energy Agency (IEA) to halt funding for new fossil fuel projects to cap global warming at 1.5 degrees Celsius.
ING has also committed to phasing out the financing of upstream oil and gas activities by 2040. This gradual approach allows the bank's clients, such as integrated oil and gas companies, to transition to more sustainable operations. ING continues to provide lending and bond issuance services to these companies, supporting their diversification into renewable energy solutions, hydrogen, other green molecules, and carbon capture and storage.
Furthermore, ING has set ambitious targets to increase its financing of renewable power generation. The bank aims to triple its financing of renewable energy to €7.5 billion annually by 2025, up from €2.5 billion in 2022. This target is ahead of the COP28 guidance and reflects ING's recognition of the urgent need to transition to a low-carbon economy.
While ING's actions have received a mixed reaction from climate campaigners, the bank's latest announcements indicate a significant shift towards renewable energy and a clear path to phasing out oil and gas extraction from its financing portfolio.
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ING's financing of LNG export terminals
ING, the Dutch banking giant, has been one of the largest global backers of the expansion of liquefied natural gas (LNG). According to a report from Reclaim Finance, ING provided over $5 billion to LNG expansion from 2021 to 2023, making it the second-largest European financier and the fourteenth-largest global financier of LNG expansion.
In September 2024, ING announced that it would stop providing new financing for new LNG export terminals starting in 2026. This makes ING the first major international bank to stop project financing for new LNG export terminals. However, this commitment only applies to 'new financing', allowing ING to continue refinancing existing terminals. Additionally, the commitment will be implemented "after 2025", giving ING the leeway to finance new LNG export terminals until the end of 2025. Furthermore, ING's commitment only applies to project finance, and the bank can still provide general-purpose finance to companies developing new LNG export terminal projects.
While ING's decision is a step in the right direction, recognizing the devastating consequences of LNG expansion, critics argue that the bank's commitment falls short of what is expected from a climate leader. ING's largest client in the LNG sector, Venture Global, will likely remain unaffected by the new policy, as the company has been allocated $3 billion by ING for its LNG expansion plans from 2021 to 2023.
ING's climate commitments also include stopping new financing for pure-play upstream oil and gas companies that develop new fields and strengthening oversight of clients' climate transition plans. However, ING's previous announcement from December 2023 regarding the 2040 phase-out of its upstream oil and gas lending portfolio was criticized for its loopholes. ING has also been exposed for financing the expansion of LNG terminals in the US Gulf.
Overall, while ING's decision to stop financing new LNG export terminals is a positive development, the bank's continued indirect support for the LNG industry and its slow phase-out of upstream oil and gas financing have been met with scrutiny and calls for more urgent and comprehensive action.
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ING's lending to upstream oil and gas companies
ING has been taking steps to phase out financing for upstream oil and gas activities. In March 2022, the bank announced it would no longer provide new dedicated upstream finance for oil and gas fields. In September 2024, ING stopped all new general financing, including corporate financing and bonds, for pure-play upstream oil and gas companies that continue to open new fields. The bank's CEO, Steven van Rijswijk, stated that if an upstream oil and gas company is "developing fields and extracting oil and gas, and if you continue to open new fields, we will stop financing you altogether." This change is expected to affect around 1 billion euros of lending to about 25 clients.
ING's decision to tighten restrictions on oil and gas lending is part of its commitment to tackling climate change. The bank recognises the need to decarbonise while ensuring that energy remains affordable and secure. By setting strict policies on what it will finance and facilitating change from within, ING aims to support its clients in transitioning towards their climate goals.
ING's energy strategy balances three key interests: decarbonisation to address climate change, affordable energy for people and companies, and energy supply security. The bank has set absolute targets for its upstream portfolio, understanding that this will have a knock-on effect on the rest of the oil and gas value chain. ING also plans to triple its financing of renewable power generation to €7.5 billion annually by 2025, up from €2.5 billion in 2022. This aligns with the agreement made by governments at COP28 to triple renewable power generation capacity by 2030 to meet net-zero targets.
ING's new financing restrictions build upon its previous commitments. In 2023, the bank announced its intention to phase out upstream oil and gas financing by 2040. Additionally, ING has expanded its Terra approach, a strategy to steer its portfolio towards global climate goals, to include sectors like aluminium and dairy. As of 2023, the bank has outstanding loans of 17.1 billion euros in the oil and gas sector, making it the Netherlands' biggest financier in this industry.
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Frequently asked questions
Yes, ING is a significant financier of fossil fuels, with total outstanding loans to upstream oil and gas companies of €2.5 billion at the end of 2023.
ING's energy strategy balances three key interests: the need to decarbonize to fight climate change, the need for energy to remain affordable, and the need to ensure energy supply security. ING recognizes that society is still dependent on fossil fuels and sees its role as financing what the world needs today while supporting the transition to a low-carbon economy.
Yes, ING has committed to phasing out the financing of upstream oil and gas activities by 2040. The bank is also targeting a 50% increase in financing for renewable energy by 2025 and aims to triple this financing to €7.5 billion annually by 2025.
ING has restricted dedicated upstream finance for oil and gas fields approved for development after December 31, 2021, and has ended general financing for pure-play upstream oil and gas companies exploring and developing new fields.
ING was identified as one of 27 banks increasing its fossil fuel financing commitments between 2022 and 2023, largely through loans for LNG-related projects. However, ING's outstanding exposure to oil and gas decreased during this period due to companies drawing less on existing facilities.
