ING Groep NV, one of the first big global banks to pledge to such a move in the battle against climate change, has announced that it will no longer fund new projects in oil and gas sector.
The decision by the Dutch financial services business puts pressure on its colleagues to heed the International Energy Agency’s (IEA) demand to suspend funding for new fossil fuel projects in order to keep global warming below 1.5 degrees Celsius. find out more
Although ING is already phasing down funding to the oil and gas industry and expanding up lending for renewables, Michiel de Haan told Reuters that ING would not finance projects approved after December 31, 2021.
“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.”
De Haan stated that the bank aims to boost renewable energy loans by 50 per cent by 2025, following strong growth in 2021, when funding increased by 26% to 7.3 billion euros ($8.05 billion).
ING’s strategy to slash funding for existing oil and gas clients and projects is more gradual, with a goal of reducing it by 12 per cent by 2025, to around 3.5 billion euros.
“It’s important to recognise that the IEA also indicates that in the future, oil and gas will be needed,” de Haan said, adding that the bank was seeking to help customers decarbonise their businesses.
Since the IEA’s report on eliminating fossil fuel funding was published a year ago, investor pressure on banks to act faster on climate change has intensified.
However, many banks have only agreed to suspend lending in specific instances, such as for Arctic drilling. As Europe explores alternatives to Russian oil and gas, the Ukraine crisis may stymie the transition. find out more
In a February report, ShareAction, a responsible investment advocacy group, stated that 25 of Europe’s top banks have contributed $55 billion in finance for energy businesses expecting to expand oil and gas output in 2021.
HSBC, Barclays, and BNP Paribas were among the largest backers of oil and gas projects in 2021, according to the report.
(Adapted from Reuters.com)