Company: INGVF
Filing Date: 2025-03-06
Form Type: 20-F
Source: 0001628280-25-010764
Chunk: 74

Company: ING GROEP NV
Filing Date: 2025-03-06
Form: 20-F
Item: Item 4
Chunk 74
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 and adaptation challenges, are crucial in defining these signals. Lending criteria are established per sector, aligned with the steering. The lending policies include ESG factors and transmission channels relevant to each sector, detailing acceptable mitigants to address potential financial risks from ESG factors.
•ESG risk assessment tool: For WB, ING has developed a new ESG risk-assessment approach, which considers the Environmental (including Climate), Social and Governance risk factors, negative impacts and dependencies of our WB customers, and fully integrates the previous ESR framework. Tooling was developed to support the implementation of the assessment approach in the credit granting process. The new approach (including addition of S&G factors) was gradually rolled out over 2024, and enhancements and refinements will continue during 2025. Depending on the ESG risk-assessment outcome, mitigation actions and escalation to the ESR team, for additional due diligence and (binding) advice, might be required. The process steps are as follows: 
•First, a materiality check is performed for all clients and transactions to determine if a company is likely to have a significant negative impact and/or dependency on an ESG factor, based on its business model. This check is data-driven and relies on the company’s primary sector and the typical negative impacts and dependencies of that sector.
•Second, for material ESG factors, an initial assessment for the entity/transaction is provided. Assessing the impact of the ESG factor and reputational risk. 
•Third, the front office conducts a qualitative assessment and identifies potential mitigants to either reduce the impact or the financial risk of a given transaction. Additionally, the transaction is checked against the minimum standards for the sector and the list of restricted activities and companies.
•Fourth, for (very) high risk outcomes, ESR desk performs a due diligence and provides an advice which may contain additional conditions or a go/no go decision. 
•Fifth, credit risk experts review the ESG factor assessment. Mitigants are reviewed if deemed material for credit risk. 
•Client-engagement strategy: A business-driven client-engagement strategy is aimed at enhancing clients’ performance and management in terms of climate change. 
•Data infrastructure: The ESG data infrastructure is being improved to integrate external and internal ESG data sources across the entire business line. This integration provides a foundation for ESG data-driven solutions, such as centralised corporate-client location data and EPC label data for commercial real estate, ensuring the highest possible level of granularity.
•Collateral