Move to restrict financing to companies that fail to address carbon footprint widens gulf with US lenders
Summary
ING has announced it will restrict financing to companies that fail to reduce their carbon footprint, aligning with the growing legal and regulatory focus on climate action. The bank’s CEO, Steven van Rijswijk, emphasized that clients must show significant progress by 2026 or risk losing support, highlighting the legal and reputational risks financial institutions face.
ING will also stop financing new LNG export terminals by 2025 and end funding for upstream oil and gas projects, following International Energy Agency (IEA) guidelines. The move reflects the increasing legal responsibility of banks to assess environmental risks and could set a precedent for future climate-related cases.
Key points
Dutch bank ING plans to cut ties with large clients failing to reduce their carbon emissions, signaling a growing divide between European and U.S. banks on climate action. ING’s CEO, Steven van Rijswijk, announced that the bank will either limit or cease financing companies that do not make sufficient progress in addressing their climate impact, contrasting with U.S. banks like Bank of America, which have relaxed some climate commitments.
ING has assessed 2,000 of its largest clients based on their climate transition plans, giving them until 2026 to demonstrate progress. Van Rijswijk emphasized the goal is not to abandon clients but to help them align with the Paris Agreement. If companies show unwillingness to act, ING will end the relationship. The bank will evaluate factors such as the implementation and ambition of transition plans in each sector.
While some banks restrict lending in specific sectors like coal, ING’s approach applies across its portfolio. Van Rijswijk voiced concerns about the increasing polarization of climate discussions but insisted that ING remains committed to transparency, even as competitors avoid the issue amid political backlash, particularly in the U.S.
In the Netherlands, pressure on companies to adopt stricter climate goals is increasing. Shell, for example, is appealing a Dutch court ruling demanding deeper cuts to its greenhouse gas emissions.
Van Rijswijk argued that climate change presents both societal and financial risks, pointing to sectors like shipping and airlines, where cleaner technologies will be required in the future, making traditional fossil fuel-dependent assets risky investments.
ING will also stop financing new LNG export terminals by 2025 and halt funding for new upstream oil and gas projects, aligning with recommendations from the International Energy Agency.
Source; Financial Times
