EXCLUSIVE Dutch bank ING ends funding for new oil and gas projects

The ING bank logo is pictured at the entrance to the group’s main office in Brussels, Belgium September 5, 2017. REUTERS/Francois Lenoir

LONDON, March 23 (Reuters) – ING Groep NV (INGA.AS) will no longer finance new oil and gas projects, its energy chief said, becoming the largest bank yet to engage in such a approach in the fight against climate change.

The Dutch financial services company’s move increases pressure on its peers to respond to the International Energy Agency’s (IEA) call for a halt to funding new fossil fuel projects in order to limit global warming to a maximum of 1.5 degrees Celsius. Read more

Michiel de Haan told Reuters that ING would not finance projects approved after December 31, 2021, but would still finance energy companies, although ING is already phasing out financing for the oil and gas industry and increasing loans for renewable energies.

De Haan said the bank would aim for a 50% increase in lending for renewables by 2025, building on strong growth in 2021, when funding rose 26% to $7.3 billion. euros ($8.05 billion).

ING’s plan to reduce funding for existing oil and gas customers and projects is more gradual, with a target of reducing it by 12% to around 3.5 billion euros by 2025.

“Decarbonizing the energy system…is of almost existential importance, but so is affordable energy and a reliable supply of energy,” de Haan said.

“We can make the decision to end our involvement in new fields, but we (will continue) our current involvement in oil and gas across the world because we need to achieve those other two goals.”

Lucie Pinson, executive director of the NGO Reclaim Finance, said ING was the biggest bank after Crédit Mutuel to introduce such a project finance policy, but that while it was a “big signal “For the market, it didn’t go far enough.

Specifically, banks needed to curb all other sector financing more quickly and be prepared to drop companies planning to ramp up production, something only French public lender Banque Postale has committed to so far. Read more

“ING’s commitment to cut its funding to the whole sector without committing to quickly exclude companies opening up new oil and gas fields does not bode well for our climate,” he said. she stated.

Investor pressure on banks to act faster on climate change has grown in the year since the IEA released its report on the end of fossil fuel financing.

But many banks have only promised to stop lending under narrow circumstances, such as for Arctic drilling. The Ukraine crisis could further hamper change, as Europe seeks alternatives to Russian oil and gas. Read more

“It is important to recognize that the IEA also indicates that in the future oil and gas will be needed,” de Haan said, adding that the bank was looking to help customers decarbonize their businesses.

ShareAction, an organization that campaigns for responsible investing, said in a February report that 25 of Europe’s leading banks had provided $55 billion in funding in 2021 to energy companies planning to expand oil and gas production.

He said HSBC (HSBA.L), Barclays and BNP Paribas (BNPP.PA) were among the biggest financiers of oil and gas projects in 2021. read more

($1 = 0.9069 euros)

Editing by Edmund Blair and Jason Neely

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