Company: INGVF
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001628280-25-010764
Chunk: 72

Company: ING GROEP NV
Filing Date: 2025-03-06
Form: 20-F
Item: Item 4
Chunk 72
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Actions to implement the ESG Risk Policy
As part of the risk management cycle (refer to ESG Risk section), ING takes a proactive approach to mitigating identified risks in line with its risk appetite. This is achieved through various risk mitigation strategies, such as reducing, avoiding, accepting, or transferring the risk. These measures are embedded in updates to existing policies and procedures across different risk categories. In the following paragraphs we elaborate on the key initiatives for each of the business lines where climate change has been identified as a material risk.
Retail Banking: Residential mortgages 
ING regularly analyses different transmission channels and takes actions to manage associated risks. Transition and physical risks for the mortgage portfolio have been incorporated into ING’s business strategy, data controls, risk appetite, lending criteria and collateral valuation processes for local retail entities. Each local entity implements the ESG Risk Policy via the global guidance on material identified topics. Local adaptations are made in line with local regulations and market practices (reference: Organisational bodies,
ESG Risk Section).
•Some local entities have already implemented policies to increase financing amounts and reduce pricing for properties with high-quality Energy Performance Certificates (EPCs). Additionally, customer-engagement procedures, supported by advisory services and duty of care, aim at shifting customer interest towards low-emitting buildings. 
•One of the most crucial actions ING took to achieve more accurate emissions-based target setting and to better understand the effectiveness of its business strategy was implementing a set of mandatory data controls. For new originations, ING local entities implemented controls to ensure the mandatory collection of EPC data. Additionally, for the existing portfolio, controls on the development of energy performance proxy models facilitated high-quality data remediation.
•Risk appetite is aligned with the business strategy and includes specific metrics for managing low-quality EPCs at new origination. Breaches in risk appetite are managed within the Risk Appetite Framework, with timely escalation to the ESG Risk Committee and top management. 
•The incorporation of climate-related risks into lending criteria is aligned with our risk appetite and business strategy. 

•Transition and physical risks are incorporated into collateral valuation through external valuers or by internally managing collateral haircuts and loan-to-value limitations for high-emitting properties.
Retail Banking: Business Banking lending
ING regularly reviews its business strategy and sets decarbonisation goals for sectors identified as major drivers of negative impact. Decarbonisation efforts are supported by defining relevant processes and actions, such as data collection and controls (e.g. EPC data for income-producing real estate), specifying