ING introduces sustainable business loans with EcoVadis rating
ING introduces sustainable business loans for the broad group of non-listed companies. With these loans, the interest rate level increases or decreases with the achievement or not of sustainability criteria, which is assessed by the external rating agency EcoVadis.
In providing the loan, ING and the company agree on sustainable performance, the progress of which is assessed by EcoVadis, an independent rating agency specialised in assessing sustainability performance by companies. If the performance improves, the customer pays a lower interest rate to the bank, if it deteriorates, the interest rate will go up.
The interest rate of the sustainable business loan rises and falls based on sustainability performance
"These loans go a step further than the traditional green loan, which funds green projects. Social and ethical considerations are just as important with this loan as environmental aspects. Another difference with green loans is that this loan is intended for general business operations rather than just specific green projects," says Annemein Kolk, head of mid-corporate clients at ING.
"Much remains to be done to achieve the goals of the Paris Agreement. With the agreement with EcoVadis we want to help, motivate and reward our business customers to continue with their sustainability agenda. We are convinced that companies that deliver ambitious sustainability performance are the winners in the economy of tomorrow. That is why sustainability is an important issue in every conversation we have with clients."
In 2017, ING introduced for the first time a loan in which the interest margin is linked to the sustainability performance of the company. The first transactions were with Philips and DSM, listed companies on which a lot of information is publicly available.
The partnership with EcoVadis is another step in helping business customers, companies that are non-listed. The first transaction that ING has arranged is a syndicated financing for Dura Vermeer Group. Dura Vermeer itself has opted to have its sustainability performance assessed by EcoVadis. ING then arranged the financing together with ABN Amro and Rabobank in this case.