“Sustainable finance will continue to grow despite Trump's withdrawal from the Paris Agreement”

Global sustainable finance issuance reached $1.657 trillion (KRW2420 trillion) in 2024, reflecting an 11% increase from the previous year. Despite heightened uncertainty following Trump's decision, Jacomijn Vels expects that it will not diminish the demand from businesses and financial institutions for the energy transition. 

ING, the largest financial institution in the Netherlands, provides retail and corporate banking services in over 40 countries worldwide. The bank has operated in Korea since 1991. In 2017, ING introduced the world’s first sustainability-linked loan (SLL), solidifying its position as a leader in sustainable finance. With more than 30 years of experience at ING, Jacomijn Vels is a seasoned industry expert specializing in corporate banking and risk management. We met with Ms. Vels at ING’s Seoul office during her recent visit to Korea. Here’s what she had to say. 

Sustainable finance is still a relatively unfamiliar concept. 

“In simple terms, it means using finance to help companies reach their net-zero goals. There are two main ways we do this. First, we provide financing, such as loans, to corporate clients investing in renewable energy and transition technologies like wind and solar power. Second, we collaborate with our corporate clients to develop sustainable transition strategies and design tailored financing solutions. ING is actively supporting companies worldwide in their efforts to reduce carbon emissions through various initiatives.” 

Do you mean financial institutions can help companies reduce carbon emissions? 

“Through our Terra Approach, ING steers the most high-emitting sectors in our portfolio towards net-zero alignment by 2050. Next, we use the customer transition plan assessment to evaluate whether companies have set appropriate reduction targets and developed concrete implementation strategies. For companies with clear reduction targets and solid action plans, we may structure sustainability-linked products, which can include lower interest rates or provide additional financing. Conversely, for those with less robust transition strategies, we first enter into an open dialogue to understand. For those that remain unable or unwilling to progress, we will, on a case-by-case basis, apply stricter credit conditions on the type of business we want to do with these clients, or cease financing them altogether.” 

President Trump announced the withdrawal from the Paris Climate Agreement. I guess the industry is also expected to face significant impacts-isn't this bad news for sustainable finance? 

“First, I want to clarify that ING does not take a position on political decisions. However, we acknowledge the concerns about how such decisions might impact the sustainability agenda. That said, this is currently viewed as a short-term turbulence. The long-term trajectory toward a net-zero economy remains unchanged. In fact, the global sustainable finance market, including the U.S., performed well last year. Issuance of sustainable finance, including green bonds, reached $1.657 trillion in 2024—an increase of more than 11% year-over-year. This demonstrates that demand from companies and financial institutions for the energy transition remains strong, and we are confident that the sustainable finance market will continue to grow.” 

What's driving the sustainable finance market? 

“There are two key factors. First, companies need to invest in low-carbon technologies to support the energy transition. Implementing carbon-reducing solutions—such as renewable energy, green technologies, and IT innovations, requires substantial financing. Financing plays a crucial role in enabling these technology investments. Second, sustainability is becoming a core business priority, driving a growing demand for financing. More companies are setting clear carbon reduction targets, recognizing that going green is not just a choice but a crucial factor in maintaining competitiveness. In response, financial institutions are expanding their sustainable finance offerings to help businesses achieve their net-zero goals.” 

Why should we pay attention to corporate sustainability amid the volatile asset market? 

“Because it can offer investors a good investment opportunity. Companies that are more sustainable—those with clear transition plans—are better equipped to adapt to future changes. When evaluating companies, financial institutions assess carbon reduction targets, the feasibility of transition plans, and associated risks. These factors are crucial in determining a company’s long-term viability and competitiveness. Ultimately, companies actively pursuing carbon reduction and sustainability are more agile and better positioned to respond to market shifts. They are less vulnerable to regulatory changes and have greater potential for sustained growth.” 

There has also been criticism of “greenwashing” 

“On the contrary, criticism of greenwashing has led to stricter standards for sustainable finance products across the industry and has improved the quality of the market. The process of verifying that companies are genuinely meeting their carbon reduction targets has been strengthened, and awareness has grown. As a result, the sustainable finance market is now more transparent and credible. ING is also addressing this issue by tightening its internal standards.” 

What is the purpose of your visit to Korea? 

“The purpose of my trip is to meet with both existing and potential clients to explore partnerships in sustainable finance. As Korean companies are increasingly prioritizing sustainability, ING is keen to discuss opportunities for collaboration. In fact, we recently signed an MOU with BNK Financial Group to advance sustainable finance. Also, the Korean government has announced several projects and initiatives related to renewable energy. This area aligns closely with ING’s goals.” 

What is your first impression of Korea's sustainable finance market? 

“It’s very positive. There is a strong government commitment to renewable energy and green infrastructure, and Korean companies are actively pursuing the energy transition. There are numerous opportunities for financing in industries where sustainable finance can make a significant impact, such as offshore wind, eco-friendly ships, and data centers.” 

Which industry did you find most impressive? 

“Green vessels. Korea has a strong shipbuilding industry with many competitive shipbuilders and shipping lines. ING sees green vessels as an area where Korean companies can enhance their competitiveness in line with energy transition and technological advancements. Also, ING has deep expertise in ship financing and can provide companies with the financial support needed to introduce green vessels.” 

Do you believe that sustainable finance can really save the planet? 

“I wouldn’t be doing this if I weren’t convinced. With ING, companies are making real changes.” 

Originally published in Chosun Biz: Opens in a new tabhttps://economychosun.com/site/data/html_dir/2025/03/07/2025030700012.html