How we measure
We make our biggest contribution to a sustainable future through our financing. We are committed to better understanding the impact of our lending activities and working with our clients to drive progress on climate action and financial health. We have ambitious targets to guide us.
The Terra approach
We have a loan book of over €600 billion euros across many sectors, which we have now begun steering towards meeting the Paris Agreement’s two-degree goal. We call our strategy to get there the Terra approach .
Responsible Finance
We will continue to fund companies and sectors that are helping to keep global warming below two degrees Celsius. This includes funding projects that advance renewable energy, the circular economy and help combat climate change. We support these clients though our climate finance portfolio, which we aim to double by 2022 compared to 2017.
We also aim to double our lending in support of projects that lead to, for example, affordable housing or basic infrastructure improvements. We call this part of our business social impact finance. And we will double lending to clients considered to be environmental, social and governance (ESG) leaders in their respective industries.
In 2019, our climate finance portfolio rose 13% to €18.7 billion, while lending to industry ESG leaders rose 0.1% year-on-year. Our social impact finance portfolio decreased by 3% to €750 million as more clients repaid their loans. The tables below provide a breakdown of our responsible finance portfolio as of December 2019.
| Responsible Finance category 1,3,5 | |
| EUR billion | |
| Industry ESG leaders | 7.1 |
| Climate Finance | 18.7 |
| Social Impact Finance | 0.8 |
2 If criteria are strengthened, the new criteria are applied from the moment they are implemented. Outcomes of transactions finalised prior to such changes remain "as is" at the time they were completed.
3 The amounts reported under the three categories may overlap with one another. For example, a transaction may be both environmentally and socially impactful. The category Outstandings should not be added up.
4 A list of sub-categories that are in scope of the methodology/definition but that have zero-to-low exposure can be found in the non-financial appendix.
5 All figures listed in Outstandings are as of December 2019.
| Climate Finance 1 | ||
| in EUR million | 2019 | 2018 |
| Energy transition | 6,639 | 5,271 |
| Low carbon buildings | 10,593 | 9,229 |
| Energy efficiency | 133 | 133 |
| Transport | 917 | 1,214 |
| Waste management | 41 | 28 |
| Information technology and communications | 30 | 211 |
| Water (including climate adaptation) | 251 | 276 |
| Other climate finance | 76 | 147 |
| Total | 18,680 | 16,510 |
| Social Impact Finance1 | ||
| in EUR million | 2019 | 2018 |
| Basic infrastructure | 447 | 516 |
| Community development | 20 | - |
| Essential services | 283 | 258 |
| Total | 750 | 775 |
Sustainable investment services
ING offers Sustainable investment (SI) services to our retail banking customers in the Netherlands, Belgium, Luxembourg and Germany.
The services include brokerage, advisory and discretionary management. We provide dedicated portfolios, structured products and investments funds, and cover all asset classes.
ING has developed a methodology to assess all asset classes including fixed income, equity and investment funds based on a diverse set of environmental, social and governance (ESG) criteria.
Our company-level analysis integrates a positive and a negative ESG screening. The positive screening covers over 100 ESG criteria assessing the risk, reputation and opportunities profile of each company. We choose to invest in the companies with the best ESG profile in each sector. The negative screen excludes companies with a track record of negative corporate conduct or whose products & services have negative impacts.
In our investment funds selection we also apply a two-step process: a quantitative and qualitative screen. The quantitative screen is conducted to understand the ESG profile of the asset and the fund manager. It covers nine ESG categories across the areas of products, selection methodology and governance. The qualitative screen consists of an interview with the fund manager focused on their conviction and ESG approach. In a final step we validate the fund’s investments against our sustainable investing portfolio. More information on our methodology is available here.
In 2019, our retail customers in Belgium, Germany, Luxembourg, and the Netherlands invested a combined € 9.3 billion using ING’s SI services, up from € 6.3 billion in 2018. SI services represented 7% of ING’s total retail banking customer investments in 2019, marking a continued annual growth. We have the ambition to maintain this growth.
ING is a service provider signatory to the UN-backed Principles for Responsible Investment and has committed to incorporating ESG issues into the investment decisions, policies and processes that underpin our investment services.