Banks join ING in aligning loan portfolios to fight climate change
BBVA, BNP Paribas, Standard Chartered and Société Générale today announced they have joined ING in committing to measure the climate alignment of their lending portfolios, with the aim of steering them towards the well-below two-degree goal of the Paris Agreement.
The banks have signed a commitment letter, pledging to finance change and put their balance sheets to work. The banks have a combined loan book of €2.4 trillion across a variety of sectors.
ING started steering its portfolio to help combat climate change in September this year when the bank announced the co-creation of the Terra approach with global think-tank for climate-related metrics in financial markets, the 2˚ Investing Initiative. The methodology works by looking at the technology shift required across certain sectors to keep the rise of global temperatures to well below two-degrees Celsius.
“I’m really proud that ING has led the way in starting this movement and that we found these other banks ready and willing to join us,” said ING's CEO Ralph Hamers, speaking at the start of the global climate summit, COP-24, in Katowice, Poland. “It shows that banks are becoming increasingly ready to take the bold steps needed to play our part in achieving a low-carbon economy.”
The banks have pledged to focus on the most carbon-intense sectors such as energy (including oil, gas, renewables and conventional power), automotive, shipping and aviation in the first instance. They will work together to analyse data on the assets that clients use for production, as well as future investments, to determine what technology changes are needed and by when to reduce their carbon assets.
“With a coordinated global effort to fight climate change our impact will only become stronger,” said Hamers. “We hope this is just the beginning.”