Orange blog - Sustainability
Dealing with ESG risks is improving credit ratings
Sustainable financing instruments are here to stay. ING's Head of Wholesale Banking Germany Eddy Henning describes how banks can support companies in the sustainable transformation.
Dealing with ESG risks is improving credit ratings
Becoming more sustainable is not easy. Sometimes you need to take one step back to go two steps forward. Moving towards sustainability is not about achieving perfection. It is about achieving improvement.
Many companies have already reaped the benefits of sustainable improvement through our sustainable finance solutions. Our Sustainability Improvement Loan, for example, provides financial incentives for those whose sustainability rating goes up. But we also team up with experts who assess and track our own sustainability performance, next to that of our clients.
Our sector specialists understand the complexities that come with the transition to a more sustainable business, but also the opportunities brought by smart technology.
Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance a lot of sustainable activities, but we still finance more that’s not. See how we’re progressing on Opens in a new tabing.com/climate.
Climate change is here to stay. The effects of global warming are becoming ever more apparent, for example shown by record heat in July, snow and ice streams in the streets in August or winters that are far too warm. Climate change also increases the risks for companies. In order to make its impact on business models more visible and drive the transformation of the economy, the EU introduced the European Green Deal in 2020, which comprises various individual regulatory initiatives and is intended to put the EU economy on the path to climate neutrality. The Green Deal includes the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy Regulation and the Corporate Due Diligence Directive for Sustainable Supply Chains (CSDDD).
New EU ‘Omnibus’-regulation - simplification of ESG reporting directives does not mean deregulation
New EU ‘Omnibus’-regulation - simplification of ESG reporting directives does not mean deregulation
The advancing digitalisation requires more and more computing power.
Data centres: the big energy consumers
Data centres: the big energy consumers
Sustainable Aviation Fuels (SAF) are considered an important means of reducing aviation emissions in the medium run. Despite bold 2030 goals, blending quotas remain low. European airlines are global leaders in SAF use but need to accelerate further to meet the EU's ambitious targets.
Sustainable Aviation Fuels - a means for more sustainable flying?
Sustainable Aviation Fuels - a means for more sustainable flying?
Major investments in real estate, infrastructure, vehicles, or equipment are usually funded on a loan or lease basis. The financing itself is provided by manufacturer-related or non-manufacturer banks as well as leasing companies. But there is also a huge need for capital to invest in the transition to a sustainable economy and society, which can only be met if banks or leasing companies offer appropriate financing instruments.
Securitisation - a financing instrument for transformation
Securitisation - a financing instrument for transformation
The geopolitical and macroeconomic environment remains volatile. Surveys on lending in Germany show that banks are currently still cautious about lending rather than optimistic. Factors contributing to this include not only the economic environment but also regulatory frameworks and equity requirements — and the ESG risks associated with corporate activity are playing an increasing role too. That said, ESG criteria afford banks and companies great opportunities to deepen their business relationship and set themselves apart from their competitors. Treasurers and banks should therefore address ESG risks proactively. But what's at the core of these risks?
The way banks look at ESG risks
The way banks look at ESG risks
"Life in plastic, it's fantastic", as Barbie already knew. And indeed, hardly any other raw material is as omnipresent in our everyday lives as plastic. Whether packaging, children's toys or medical devices - plastic is a lightweight yet robust and comparatively inexpensive material that we simply cannot imagine life without.
Less plastic waste - but how?
Less plastic waste - but how?
Steel production is known to cause high CO2 emissions. A lot of process and energy-related emissions are generated during this production - around 28 percent of total German industrial emissions are attributable to the sector. What approaches has the industry developed to reduce this proportion? What role does green steel play and how can the financial sector support the transition to sustainable production methods?
Rethinking steel
Rethinking steel
More than half of Germany's energy requirements are used for heating or industrial purposes. Around 85 percent of this heat has so far been generated using fossil fuels such as oil, gas and coal . This is set to change. In addition to familiar forms of renewable energy generation such as wind power, solar energy and biomass, geothermal energy is increasingly coming into focus.
Geothermal energy in Geretsried - sustainable heat supply powered by ING
Geothermal energy in Geretsried - sustainable heat supply powered by ING
The federal, state and local authorities provide an essential part of public services for millions of citizens. Whether infrastructure, hospitals or energy supply - the areas that are financed by the public sector are diverse and vital. However, public budgets have recently also come under pressure due to rising interest rates and high investment requirements. The demands on banks as reliable financing partners are also becoming more complex as a result.
(Green) financing for the public sector
(Green) financing for the public sector
Conventional export financing is undergoing change. The sustainable transformation of the economy and society is also becoming visible in this sector. The decarbonization of the energy industry is one of the biggest challenges of this century, as it is responsible for around 38% of CO2 emissions worldwide.
Export financing in transition
Export financing in transition
The European transport system connects people, goods and markets across the continent. However, as demand has grown over recent years, so has the sector's carbon footprint.It is clear to all market participants that Land Transport has a key role to play in the decarbonization of the European transport sector.
Land Transport sets the course for the future
Land Transport sets the course for the future
The upheaval in the automotive industry is obvious and is affecting more and more companies. The industry will not be able to manage this change without external capital. As financiers, banks can play an important role in this transformation. But what does this mean for banks' sustainability strategies?
Climate targets in the financing of the automotive industry
Climate targets in the financing of the automotive industry
Climate change is one of the greatest challenges of our time. The economy must transform its business models into more sustainable and low-emission ones; the financial sector can play an important role in this. As a bank, we want to help align economic growth with environmental and social action.
Climate action at ING
Climate action at ING
Hydrogen is considered a versatile energy source and is set to play a key role in the energy transition. At the UN Climate Change Conference in Dubai in 2023, it was decided to continue phasing out fossil fuels. However, renewable energies are often not yet sufficient, especially for energy-intensive industries. In addition, they cannot replace fossil fuels as raw materials for products such as plastic or steel. Hydrogen has therefore been seen as a promising option for some years now, as it can both supply enough energy for high production temperatures and, in combination with hydrocarbons, serve as the basis to produce plastics and steel. After a rather disappointing performance in 2023, the question now is how the market for hydrogen will develop in 2024.
What will happen on the hydrogen market in 2024?
What will happen on the hydrogen market in 2024?
These are challenging times for companies: Alongside the ongoing risk of recession, far-reaching structural changes are afoot. The increasing geopolitical tensions worldwide and the growing rivalry with China in particular are prompting global supply chains to be restructured. And above everything else, there is the impact of climate change and the energy transition.
New role for the Treasury in the transport and logistics sector
New role for the Treasury in the transport and logistics sector
The automotive industry is in a state of upheaval: climate change and digitalization are leading to a fundamental shift in the requirements for and provision of mobility.
Climate change and digitalization - the revolution in the automotive industry
Climate change and digitalization - the revolution in the automotive industry
Very few sectors were as directly and as profoundly impacted by the global Corona pandemic than the aviation sector. The impact was not limited to airlines only, airports, travel agencies, aircraft leasing companies, tour operators and many other players in the wide eco-system of the aviation sector suffered as well. But fortunately, we are now witnessing an unprecedented recovery as travel restrictions were lifted and demand for air travel did not fade.
How the aviation sector is returning to its former strength
How the aviation sector is returning to its former strength
There are many reasons for companies to become more sustainable. But regardless of whether it is a question of transforming energy supply, reducing pollutant emissions, or responsibly designing production processes - in the end, a sustainable approach must always be economically feasible. To offer companies an additional incentive, banks like ING have developed a broad toolbox of sustainable financing solutions in recent years.
Sustainable Syndicated Loans: Need for Expertise
Sustainable Syndicated Loans: Need for Expertise
Ships are going green. The EU Commission recently approved a new set of EU Taxonomy (“EUT”) rules to expand the eligibility of the ships in scope.
Sailing towards a sustainable future – the Shipping sector
Sailing towards a sustainable future – the Shipping sector
The Transport and Logistics sector is a sector with demonstrated resilience and an ability to adapt to change.
When challenges and opportunities meet: The transport and logistics sector
When challenges and opportunities meet: The transport and logistics sectorWith its Terra approach, ING has set itself the goal of making companies from industries with high CO2 emissions in their loan book climate-neutral by 2050.
How sustainability is finding its way into the cement industry
How sustainability is finding its way into the cement industry
Companies and banks are facing high societal expectations to prioritise the protection of biodiversity. Their interests are complementary. They should therefore jointly explore ways and means of driving the transformation forward.
Biodiversity: Why it should also be the driving force in funding
Biodiversity: Why it should also be the driving force in funding