ING Group

ING Group N.V.
Quick Facts
Type	Public, shares listed on Brussels, Amsterdam and New York Stock Exchange
sector	Finance
Headquarters (Benelux Organization)	Amsterdam, Netherlands
Year of Origin	1991
Emissions (All Scopes)	42 megatonnes
Net Income	17,6 billion EUR (2020)
Key People	Steven van Rijswijk (CEO) Tanate Phutrakul (CFO)
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 2020 was 937,3 billion. In 2019 this was 891,7 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

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 has a two-tier board structure. The executive board and management Board Banking is resposible for day-to-day business and long term strategy and the Supervisory Board is responsible for controlling management performance and advises and challenges the Management Board.

Executive Board

Name	Function	Remuneration x1000 EUR
Ralph Hamers	Chief Executive Officer (first halfyear)	1679,6
Steven van Rijswijk	Chief Finanacial Officer (second halfyear)	1141,7
Tanate Phutrakul	Chief Financial Officer	1603,5
Steven van Rijswijk	Non-board role (first halfyear)	791,4

Together the current board made 3,52 million euro’s in 2020. This is due to the CEO handover in the middle of the year. The previous CEO amounted to 1,7 million in this first half year of 2020, totalling the remuneration of the executive board in 2020 to 4,42 million. As the first half year of 2020, Steven van Rijswijk’s function was not in the executive board, that's why his name is in the table twice.

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.

Operations

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

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.

Current Policies and Emissions

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

In ING’s 2021 integrated approach to climate action, ING explicitly commits to steering their loan book towards limiting the rise in global temperatures to a maximum of 1,5 degrees, instead of the previously stated ‘’well below two degrees’’.

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.

ING wants to steer 600 billion lending portfolio towards meeting below two degrees goal of Paris climate agreement. ING’s long-term vision is to have an energy-positive mortgage portfolio by 2050.

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 says 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 tot he 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.

Climate 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’s priorities are as follows:

• Reaching Net Zero in own operations

To achieve this, an environmental programme is set up, managing scope 1 and 2 emissions and scope 3 emissions from business travel. ING has set varying targets for different years and is well on track to reach these targets.

• Steering portfolio towards net zero by 2050 or sooner

To this end the Terra Approach is employed. The Terra Approach draws on different methodologies to measure the climate intensity of different sectors. Progress on these sectors is visible in the Climate Alignment Dashboard.

• Finance and advise clients in line with a net zero economy

ING wants to accelerate the green economy, finance the transition, pioneer for the future and build expertise in sustainable sectors.

• Manage climate and environmental risks

Building on different scenario’s and analysis, ING wants to identify risks and impact. Next to that, ING wants to develop a governance approach and a risk & business strategy that properly ensures management of climate risks. Both physical and economical.

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, their reports cover only 25 percent of all outstanding portfolio. Besides that the report show relative numbers instead of hard emissions data. This makes comparing performances difficult.

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. From a player with the size and influence of ING, an emission disclosure of more than 25 percent of the portfolio may be expected, as well as a more proactive stance in setting goals and working towards them.