ING Group

ING Group N.V.
Quick Facts
Type	Public
sector	Finance
Headquarters (Benelux Organization)	Amsterdam, Netherlands
Year of Origin	1991
Emissions (All Scopes)	42 megatonnes
Total Revenue	17.6 billion EUR (2020)
Stock Exchange	Brussels, Amsterdam & New York
Key People	Steven van Rijswijk (CEO) Tanate Phutrakul (CFO)
Number of Employees	14754
Subsidiaries	ING Bank N.V. (Amsterdam) Bank Mendes Gans N.V. (Amsterdam) ING Belgium S.A./N.V. (Brussels) ING Luxembourg S.A. (Luxembourg City) ING DiBa AG (Frankfurt am Main) ING Bank Slaski S.A. (Katowice) ING Financial Holdings Corporation (Delaware) ING Bank A.S. (Istanbul) ING Bank (Australia) Ltd (Sydney) ING Commercial Finance B.V. (Amsterdam) ING Groenbank .N.V. (Amsterdam)

ING Group N.V., stylized as Internationale Nederlanden Group, was founded in 1991 by merger of the Dutch insurance company Nationale-Nederlanden and national postal bank NMB Postbank. ING Group is active in the financial sector with products like savings, payments, investments, loans and mortgages as well as wholesale banking. ING serves over 39.3 million individual customers as well as small and medium-sized businesses up to multinational corporations and financial institutions. ING is active in more than 40 countries. In the retail market, ING is market leader in the Netherlands, Belgium and Luxembourg and a challenger in the German market. ING total portfolio amounts to 887.5 billion euro’s outstandings. ING recorded a net income of 17.6 billion, and a net result of 2.5 billion euro’s in 2020, which was a 48% decline in comparison to 2019. ING is headquartered in Amsterdam, the Netherlands. According to the Financial Stability Board and the Nederlandse Bank, ING is both nationally as well as internationally a systembank and will therefore be backed by the State in case of problems. Systembanks are deemed essential for international monetary stability.

The balance value of ING Group in 2021 was 951.3 billion. In 2020 this was 937.3 billion. ING is a public company with shares listed at the Brussels, Amsterdam and New York Exchange. ING's loanbook in 2020 had an estimate of 42 megatonnes of emissions of CO2 eq.

Company Structure

ING Groep N.V. (ING Group) is a publicly listed company based in the Netherlands. ING Group is the parent of one main legal entity: ING Bank N.V. (ING Bank). ING Bank is the parent company of various Dutch and foreign banks, other subsidiaries, branches and representative offices globally.

Share capital of ING Group consists of ordinary shares and cumulative preference shares. Currently, only ordinary shared are issued. Each share gives right to one vote. Only investor group BlackRock Inc. holds more than 3 percent of shares in ING group. ING’s shares are listed at the Amsterdam, Brussels and New York stock exchange. Geographically, most outstanding shares are American-owned (40 percent) with the UK following (18 percent).

ING is headquartered in Amsterdam. ING is historically a Dutch company and therefore resides in the Netherlands.

ING knows 11 principal subisidiaries and one joint venture. In most countries ING is active, the local activities are carried out by a branch of the main subsidiary, ING Bank N.V.

Board of Directors

ING Group has a two-tier board structure consisting of the Executive Board and the Supervisory Board. The Supervisory Board has established four permanent committees to prepare its decision-making and to advise the Supervisory Board on specific matters, namely the Risk Committee, the Audit Committee, the Nomination and Corporate Governance committee and the Remuneration Committee.

ING Bank also has a two-tier board structure, consisting of the Management Board Banking and the Supervisory Board. The members of the Executive Board are also members of the Management Board Banking and are therefore double-hatting. In addition, the Supervisory Board and committees of the Supervisory Board are identical for both ING Group and ING Bank.

Executive Board

Name	Function	Remuneration EUR in 2021
Steven van Rijswijk	Chief Executive Officer	1,776,300
Tanate Phutrakul	Chief Financial Officer	1,221,700
Ljiljana Čortan	Chief Risk Officer (as of her appointment as CRO at the AGM on 26 April 2021)	837,600

Together the current board made 3,835,600 euro’s in 2021. Plus the variable remuneration of 663,471 euro's (percentage for the Executive Board members are as follows: CEO 17%, CFO 18% and CRO 17%). Plus benefits of 495,500 euro's for the CEO, 349,800 euro's for the CFO and 382,200 euro's for the CRO(as of her appointment on 26 April 2021).

Management Board Banking

Management Board Banking

Name	Function
Pinar Abay	Head of Market Leaders
Aris Bogdaneris	Head of Challengers and Growth Markets
Roel Louwhoff	COO and chief transformation officer
Isabel Fernandez	Head of Wholesale Banking

There is no information available on the individual remuneration of the management board banking.

Supervisory Board

Supervisory Board

Name	Function	Remuneration x1000 EUR
Hans Wijers	Chairman	173
Hermann-Josef Lamberti	Vice-chair	48
Mike Rees	Vice-chair	129
Jan-Peter Balkenende	Member	80
Juan Colombas	Member	23
Mariana Gheorghe	Member	108
Eric Boyer de la Giroday	Member	38
Margaretha Haase	Member	105
Herman Hulst	Member	68
Harold Naus	Member	68
Herma Verhagen	Member	100

These numbers exclude the stocks granted to the board and supervisory board.

Accountant

The auditor of ING Group is KPMG. KPMG has been the auditor of ING since the financial year of 2016.

Main Activities

ING Group is active in the financial sector with products like savings, payments, investments, loans and mortgages as well as wholesale banking. In wholesale banking ING provides specialised lending, tailored corporate finance, debt and equity market solutions, sustainable finance solutions, payments & cash management and trade and treasury services. ING serves over 39.3 million individual customers as well as small and medium-sized businesses up to multinational corporations and financial institutions.

Government

To what extent can the government influence company policy? (shareholder, licensing authority, client etc.) Has company received NOW support or royal status?

ING has not received NOW support from the Dutch government. ING does not have royal status.

Paris Agreement to Today

Since the Paris Agreement in 2015, ING has strived to set a pledge to get multiple banks to steer their portfolio towards the well-below two degree goal of the Paris Agreement. This resulted in the signing of the Katowice Agreement together with four global banks. This formed the groundwork for the UN-backed collective commitment to Climate Action in 2019, signed by over 30 banks. ING and the think-tank for the financial sector ‘’2° Investing Initiative’’ published PACTA for banks. An open-source methodology to measure and monitor climate goals. In August 2021, ING joined the Net-Zeo Banking Alliance, committing to steer its portfolio towards net-zero greenhouse gas emissions by 2050. ING has published their first ‘’Terra Report’’ in 2019 and its first integrated climate report in 2021.

ING has decreased its exposure to thermal coal mining by more than 90 percent from 317 million in 2017 to 30 million in 2020.

Financial Results since 2015

In this table, the financial situation of the company since 2015 is shown.

Financial situation

Year	Revenue	Profit	Dividend
2015	16.9 billion EUR	4 billion EUR	2.5 billion EUR
2016	17.5 billion EUR	4.6 billion EUR	2.6 billion EUR
2017	17.8 billion EUR	4.9 billion EUR	2.6 billion EUR
2018	18.2 billion EUR	4.8 billion EUR	2.7 billion EUR
2019	18.3 billion EUR	4.9 billion EUR	2.7 billion EUR
2020	17.6 billion EUR	2.6 billion EUR	468 million EUR
2021	18.5 billion EUR	4.9 billion EUR	2,37 billion EUR

Fossil and Agricultural investments

This table shows ING's fossil and agricultural investments causing high co₂ emissions. Numbers are in billions.

Investments, outstanding amounts	year-end 2020 (in billion EUR)	Percentage of total investments	year-end 2021 (in billion EUR)	Percentage of total investments
Production of electricity (fossil part)	4.15	0,47%	XXX EUR	XXX
Manufacture of refined petroleum products	2.92	0,33%	XXX EUR	XXX
Extraction of crude petroleum	4.78	0,54%	XXX EUR	xxx
Extraction of natural gas	1.85	0,21%	XXX EUR	XXX
Mining of hard coal	0,33	0,04%	XXX EUR	XXX
Support activities for petroleum and natural gas extraction	3.46	0,4%	XXX EUR	XXX
Wholesale of solid, liquid and gaseous fuels and related products	14.8	1,67%	XXX EUR	XXX
Raising of dairy cattle	1.03	0,12%	XXX	XXX
Raising of swine/pigs	0,19	0,02%	XXX	XXX
Raising of poultry	0,38	0,04%	XXX	XXX

Scandals and controversies

Any dirt on the companies can be added here.

Current Emissions

ING estimates emissions of 42 megatonnes of CO2 eq. in their loanbook.

ING’s Terra approach means to align ING’s lending portfolio with Paris Agreement goals in nine sectors most responsible for climate change . The report’s Climate Alignment Dashboard tracks the performance, showing the CO2 intensity per sector of ING’s portfolio compared to the market and the relevant climate scenario. The first Terra Report was published in 2019.

In 2020, ING published its second Terra Progress Report that provided an update on how it steers its lending portfolio in line with the goals of the Paris Agreement for all nine sectors in scope, including quantitative results. In the first integrated Climate Report (published in 2021), the latest update per sector is given on the alignment with the relevant climate scenario per sector.

In its Climate Alignment Dashboard, ING focusses on nine sectors. ING mainly contrasts itself to market developments and climate scenario’s like PACTA and Below two Degrees Scenario. For all sectors reported on, CO₂ intensity is given. For oil and gas, ING shows the absolute portfolio reduction trend in line with the relative climate scenario with their 2019 upstream portfolio as base year for reduction. For shipping, ING shows the average alignment delta: the difference between actual and required annual efficiency ratio per vessel. These different measures reduce comparability of emissions in hard numbers.

ING claims to align itself to either PACTA or B2DS Scenario. However, in three of the nine sectors, the convergence pathway of ING is until 2050 above the B2DS Scenario or the PACTA scenario.

1. For the sector of power generation, the convergence path of ING is in line with its Net Zero Emissions reference. ING currently outperforms both the market as well as the reference scenario. However, the 2030 goal is less than half of the current emissions, mainly due to the current strong performance.

2. In the upstream oil and gas sector, ING does not have reduction emission targets. For upstream oil and gas, there is a financing reduction goal of 69 percent in 2050. Thermal coal mining will be completely phased out in 2025. 3. ING is nearly on track to reach zero emissions in their commercial real estate portfolio by 2040. This is ten years earlier than the planned trajectory.

4. In the residential real estate portfolio, ING want to become energy-positive by 2050. However, their trajectory pathway until 2050 is (far) above the B2DS scenario.

5. In the cement portfolio, ING’s plans are in line with the B2DS scenario. However, the performance of the current portfolio is not in line with neither the convergence path nor the B2DS scenario. The 2050 target is not zero emissions nor close to it.

6. For the steel sector, ING has not yet decided their convergence path. In 2020, it was stated that as they expect that the decrease in average market (and ING’s steel portfolio) intensity will be slow and will not significantly change before 2030. As such, both the market and ING’s portfolio lines will likely deviate significantly from the B2DS scenario. The most recent numbers are in accordance with this statement.

7. For the automotive sector, ING’s convergence path is above the B2DS scenario until 2050. ING is however currently outperforming both the convergence path as well as the B2DS scenario. The ING reduction target for the automotive sector is only focused on zero tailpipe emissions. The emissions in the production process and supply chain are not reported and there are no targets relating to these emissions.

8. The climate scenario ING follows for the aviation sector has no zero targets for 2050. The B2DS scenario’s target is 20 gr. CO2/passenger KM. Until 2050, ING’s convergence pathway is above the target.

9. The international shipping sector is not part of the Paris Agreement. The International Maritime organization however has proposed the goal reducing total GHG emissions by at least 50% by 2050, compared to 2008. ING is committed to this ambition. . The reporting however lacks a clear target and emission numbers.

Total emissions since 2015 ( in megatonnes CO2-eq.)

Year	Scope 1	Scope 2	Scope 3	Total
2015	0.02	0.03	0.04 (incomplete)	Unknown
2016	0.02	0.01	0.03 (incomplete)	Unknown
2017	0.02	0.1	0.03 (incomplete)	Unknown
2018	0.01	0.007	0.03 (incomplete)	Unknown
2019	0.01	0.007	0.02 (incomplete)	Unknown
2020	0.01	0.004	42.008	42.024
2021	n/a	n/a	n/a	n/a

Until the first Terra Report in 2020, ING made the following statement in their annual report: 'While scope 3, category 15 (emissions through lending and investments) is material to ING’s indirect emissions footprint, due to measurement complexity and lack of quality data, ING is not able to completely measure and disclose this figure. ' This is why hardly any data is available in this period.

Since 2020, ING measures their scope 3 emissions through their Terra Progress Reports. The Terra Progress report encompasses 75% of ING’s outstanding loanbook. However, only emission intensity is given and outstanding investments are mentioned, but no totale mission number is given per sector. Based on the information given, it is also not possible to calculate an emission number for scope 3. ING makes an estimate, so the underlying data is there. ING chooses not to report this data. No information is available yet for 2021.

Climate Policies and Plans

ING has increased its ambition to align its lending portfolio with a net zero future by 2050 or sooner. ING will now evolve its Terra approach to steer our loan book towards keeping the rise in global temperatures to a maximum of 1.5 °C, rather than well below 2 °C. . ING plans to reduce emissions in scope 1 & 2 by 90 percent in 2030. As the emissions table shows, this hardly makes a difference as by far most of the emissions of ING are in scope 3.

ING’s priorities are as follows:

• Reaching Net Zero in own operations
• Steering portfolio towards net zero by 2050 or sooner
• Finance and advise clients in line with a net zero economy
• Manage climate and environmental risks

In 2019, ING Group signed the climate commitment for the financial sector. All 54 financial institutions that signed this commitment commit to taking their responsibility in the execution of the Paris Agreement as well as the Dutch Climate Agreement. This means that these institutions need to measure and reduce the emissions from their relevant investments, report about those from 2020 onwards and before 2022 publish a plan of action including reduction measures for 2030 for all relevant investments, shares and guarantees.

However, this commitment is not enough. This climate commitment is not binding. There are hardly any conditions to the plans that should be published in 2022. Only 19% of the signees had a climate plan in accordance with the Paris Agreement in 2020. Also, the commitment did not mention any definitions with regard to relevant investments. In 2020 only 9 of the 54 signees reported on all classes of activa. Next to that, the pace of execution is too slow. For example, in 2018 ING commited to the Spitsbergen amibtion where it promised to tackle climate change. Yet, in 2020, there was still no Paris Proof climate plan.

Due Diligence

Keep the broader context in mind. Is the company integer when it comes to deforestation, palm oil, biodiversity, human rights etc etc? Be critical in the sources used here.

Conclusion

ING is a major financial player, essential to the financial system. With the enormous revenu and profits ING makes, it is their moral responsibility to be a leader in fighting climate change. Leadership salaries at ING are very high, as is remuneration for the supervisory board.

The ambitions of ING are in line with the 2050 goals of the Paris Agreement. ING is committed to steering their portfolio in line with the well-below two degrees scenario. Through the different cooperations with banks and governments, ING shows its goodwill. However, ING's reports show relative numbers instead of hard emissions data. It is not possible to calculate emission numbers from this data. This makes comparing performances difficult. Until 2020, ING deemed reporting their scope 3 emissions too complex.

Throughout the report, ING downplays their own responsibility by referring to lacking regulatory guidelines and the possibility of ‘’portfolio leak’’ multiple times. Not setting targets on difficult to change markets is not very committed either. ING seems to be following market developments and is reactive instead of proactive in the energy transition. In a number of sectors, the goals of ING are above the threshold and will only be in line with the respective scenario by 2050. That is not enough. ING is on the right track with the disclosure of 75% of their outstanding portfolio, but should release the underlying data to be able to make an assesment of the total impact of the ING loanbook. A more transparant and proactive stance in setting goals and working towards them may be expected from a player like ING.