By Virginia Furness and Simon Jessop
LONDON (Reuters) – ING has become the first systemically important global bank to have its climate goals validated as being in line with efforts to limit global warming to 1.5 degrees Celsius, the body responsible for awarding the standard said on Wednesday.
The bank said in a statement it had met the threshold for targets across its lending to fossil fuels, power generation, cement, steel, automotive, aviation and the commercial real estate sector.
The Dutch lender had said in 2022 it would phase out upstream oil and gas financing by 2040 and last year further restricted access to general lending and bond issuance for some oil and gas companies.
“As the first global systemically important bank with a validated science-based target, ING is showing how large financial institutions can support climate stabilisation in the real economy,” Nate Aden, head of Financial Standards at the Science-Based Targets initiative (SBTi), said.
Validation of ING’s decarbonisation efforts comes as bankers and policymakers debate whether 1.5C, seen for a decade as key warming threshold, should remain a feasible target for banks as many country climate plans and sector policies point to a considerable overshoot.
This month the world’s leading climate group for banks proposed abandoning 1.5C as its north star for members’ climate plans after several large lenders exited the group or scaled-back their net-zero ambitions.
However the validation still brings prestige in the industry and also feeds into lending choices and the supply of finance. For companies, some banks say they will only support companies from certain sectors that have SBTi targets.
SBTi, a voluntary group which includes consultants, technical experts and NGOs and has a scientific advisory board, has emerged as the authority on corporate climate targets.
It says sector targets should be aligned to 1.5C, unless a 1.5C pathway is not available, in which case a well-below-2C pathway can be used instead.
Countries agreed in the 2015 Paris Agreement to strive to limit temperature increases to within 1.5C above the 1850-1900 average to help limit the impact of climate change.
(Reporting by Virginia Furness; Editing by Alison Williams)
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