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Dutch Bank ING Groep says it will no longer fund fossil fuel gas and oil projects in its bid to fight climate change, becoming the biggest lender to take such a position.
Fossil fuel extraction and use are driving climate change, and the Dutch lender says its shifting into a new direction that puts the planet at the forefront.
“ING has worked hard over the years to build a power generation lending book that’s 60 percent renewables, outperforming by far the most ambitious climate goal of the Paris Agreement. Today we go a step further and announce that we aim to grow new financing of renewable energy by 50 percent by year-end 2025 and will no longer provide dedicated finance to new oil and gas fields,” the company said on its website.
Funding a clean energy future
Global Head of Energy at ING Bank, Michiel de Haan told Reuters that no new projects as of the beginning of the year will be funded and existing financing would be phased out while it increases lending for renewable energy.
In addition to the targeted 50 percent increase in lending for renewable energy by 2025, it’s also aiming to decrease investments into fossil fuels by 12 percent over the same time period.
“Decarbonisation of the energy system … is of almost existential importance, but so is affordable energy and reliable supply of energy,” de Haan said.
“We can make the decision to discontinue our involvement in new greenfields, but we (will) continue our existing involvement in oil and gas across the world because we need to meet those other two targets.”
The announcement comes after a strong 2021 for renewables. ING says it grew by 26 percent to more than €7 billion.
Zero emissions roadmap
ING says the move is aligned with the ‘Net-Zero Emissions by 2050 Roadmap’ outlined by the International Energy Agency.
The roadmap says as clean energy and infrastructure increase, demand for fossil fuels will decline. “That reduced demand should be met by existing oil and gas fields, which means that in both the IEA’s and our view, no new fields should be needed,” ING says.
ING says it’s balancing three key interests: decarbonization to fight climate change, making energy affordable, and security for the energy supply.
The bank says the new path marks progress on a journey toward sustainability it started years ago.
“Looking at our power generation portfolio, we pledged in 2017 to exit coal-fired power plants by 2025 and have since then decreased our exposure by 80 percent,” the lender said. “At the same time, we more than doubled our financing of power generation from renewable energy sources such as solar and wind, which now makes up almost 60 percent of our power generation portfolio.”
The announcement comes on the heels of the SEC’s proposed rulings that would require companies to disclose their climate action items and impact to investors.
Lead image courtesy R/DV/RS | Flickr