The transitional (phased-in) common equity Tier 1 requirement that ING Group had to meet on a consolidated basis was set at 9.02% in 2017. This requirement is the sum of a 4.5% Pillar 1 requirement, a 1.75% Pillar 2 requirement, a 1.25% Capital Conservation Buffer (CCB), a 0.02% Countercyclical Buffer and the 1.50% Systemic Risk Buffer which has been set separately for Dutch systemic banks by the Dutch Central Bank (De Nederlandsche Bank). This requirement excludes Pillar 2 guidance, which is not disclosed. The CCB and the Systemic Risk Buffer (SRB) are scheduled to phase-in to 2.5% and 3.0% respectively by 1 January 2019 respectively.
Regulatory adjustments additional Tier 1 53 0 –374 –798 1 Including EUR 3,123 million which is CRR/CRD IV-compliant (4Q2016 EUR 3,542 million), and EUR 1,866 million to be replaced as capital recognition is subject to
Regulatory requirements Capital adequacy and the use of regulatory required capital are based on the guidelines developed by the Basel Committee on Banking Supervision (The Basel Committee) and the European Union Directives, as implemented by the Dutch Central Bank (Dutch Central Bank until 3 November 2014, the ECB thereafter) for supervisory purposes. In 2010, the Basel Committee on Banking Supervision issued new solvency and liquidity requirements, which superseded Basel II. The minimum requirements, excluding buffers, for the common equity Tier 1 ratio is 4.5%, the minimum Tier 1 requirement is 6% and the total capital ratio is 8% of all risk-weighted assets. Basel III requires Banks to hold a capital of at least 80% of the old Basel I requirements, which was 8% of the RWAs as calculated with the Basel I methodology. This Basel I floor has been extended until the end of 2017.
The Executive Board R.A.J.G. (Ralph) Hamers, CEO and chairman J.V. (Koos) Timmermans, CFO S.J.A. (Steven) van Rijswijk, CRO
Total amount recognised directly in equity –1,820 26 –1,794 Net result 153 4,752 4,905
Total amount recognised directly in equity 8 –255 –247 Net result 4,651 4,651
Parent company equity and related reserves The total amount of equity in the Parent company annual accounts equals Shareholders’ equity (parent) in the consolidated annual accounts. Certain components within equity are different as a result of the following presentation differences between the parent company accounts and consolidated accounts: • Unrealised revaluations within consolidated group companies, presented in Other reserves - Revaluation reserve in the consolidated accounts, are presented in the Share of participating interests reserve in the parent company accounts; • The reserve for cash flow hedges within consolidated group companies, presented in Other reserves – Revaluation reserve in the consolidated accounts is included in the Share of participating interests reserve, in the parent company accounts on a net basis. • Foreign currency translation on consolidated group companies, presented in Other reserves - Currency translation reserve in the consolidated accounts, is presented in the Share of participating interests reserve in the parent company accounts; and • Revaluations on investment property and certain participations recognised in income and consequently presented in Retained earnings in the consolidated accounts, is presented in the Share of participating interests reserve in the parent company accounts.
During the 2016 Annual General Meeting of Shareholders, it was decided to reduce the par value per ordinary share from EUR 0.24 to EUR 0.01. As a result of this, EUR 891 million is attributed to the Share premium. Reference is made to the ING Group Consolidated annual accounts, Note 18 ‘Equity’ - Depository receipts for ordinary shares.
Realised gains/losses transferred to the statement of profit or loss –90 –90
ING Group Annual Report 2017 307 13 Other Fees for audit and non-audit services Reference is made to the ING Group Consolidated annual accounts, Note 26 ‘Other operating expenses’ for disclosures related to fees for audit and non-audit services.
Guarantees ING Group has issued certain guarantees as participant in collective arrangements of national banking funds and as a participant in required collective guarantee schemes. For example, ING Groep N.V. provided a guarantee to the German Deposit Guarantee Fund (‘Einlagensicherungsfonds’ or ESF) under section 5 (10) of the by-laws of this fund, where ING Groep N.V. indemnifies the Association of German Banks Berlin against any losses it might incur as result of actions taken with respect to ING Germany. The ESF is a voluntary collective guarantee scheme for retail savings and deposits in excess of EUR 100,000.
Fiscal unity ING Groep N.V. forms a fiscal unity with several Dutch banking entities for corporation tax purposes. ING Groep N.V., ING Bank N.V. and its banking subsidiaries that form part of the fiscal unity are jointly and severally liable for taxation payable by the fiscal unity. Settlements of corporate income tax paid or received are executed by ING Bank N.V.
14 Proposed appropriation of results For 2017, the Executive Board, with the approval of the Supervisory Board, has proposed a cash dividend of EUR 0.67 per ordinary share of EUR 0.01. In August 2017, an interim dividend of EUR 0.24 per ordinary share was paid. Therefore, a final dividend of EUR 0.43 per ordinary share remains. The final dividend will be paid entirely in cash after ratification of the proposal by the General Meeting of Shareholders.
Addition to reserves pursuant to Article 37 (4) of the Articles of Association 2,302
Applying these scoping criteria led to a full or specific scope audit for 36 components, in total covering 13 countries. This resulted in a coverage performed by component auditors of 86% of profit before taxation from continuing operations and 87% of total assets. For the remaining 14% of profit before taxation from continuing operations and 13% of total assets procedures were performed at the group level including analytical procedures in order to corroborate our assessment that the risk of material misstatements in the residual population is remote.
KEY AUDIT MATTERS • Estimation uncertainty with respect to the loan impairment losses • Estimation uncertainty with respect to the provision of a legal matter • Risk of inappropriate access or changes to information technology and systems • Estimation of the impact of IFRS 9 accounting standard
By performing the procedures mentioned above at components, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the consolidated annual accounts.
Estimation of the impact of IFRS 9 accounting standard Description ING is adopting IFRS 9 ‘Financial Instruments’ from 1 January 2018 and included an estimate of the financial impact of the change in accounting standard in accordance with IAS 8 ‘Accounting Policies, Change in Accounting Estimates and Errors’ as set out in Note 1. This disclosure requires judgement and management estimates regarding the impact of IFRS 9 on the classification and measurement of financial assets and liabilities and the impairment of financial assets. Our response Our audit approach included testing both the effectiveness of internal controls around management’s process for disclosing the estimated impact of adopting IFRS 9 as well as substantive audit procedures regarding the disclosure required by IAS 8. We considered the appropriateness of key technical decisions and judgements made in determining the estimate. Our procedures over internal controls included testing controls around management’s classification and measurement processes. We also focused on internal controls around the expected credit loss methodology and tested ING’s process for reflecting multiple macroeconomic scenarios, including involvement of economic specialists. We considered the process around the implementation and internal validation of the models used to estimate the impact of the IFRS 9 expected credit losses, which was concentrated on the most significant models from an exposure perspective.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the annual accounts.
Services rendered For the period to which our statutory audit relates, in addition to this audit, we have provided agreed-upon procedures and assurance engagements to ING Groep N.V. or its controlled undertakings. These services were rendered for the benefit of external users, largely driven by regulatory compliance.
As part of the preparation of the annual accounts, the Executive Board is responsible for assessing the Company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the Executive Board should prepare the annual accounts using the going concern basis of accounting unless the Executive Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Any of the risks described below could have a material adverse effect on the business activities, financial condition, results of operations and prospects of ING. Additional risks of which the Company is not presently aware, or that are currently viewed as less material than the risks described below, could also affect the business operations of ING and have a material adverse effect on ING’s business activities, financial condition, results of operations and prospects. The market price of ING shares or other securities could decline due to any of those risks including the risks described below, and investors could lose all or part of their investments. The sequence in which the risk factors are presented below is not indicative of their likelihood of occurrence or the potential magnitude of their financial consequences.
Shareholders’ equity and our net result may be significantly impacted by turmoil and volatility in the worldwide financial markets. Negative developments in financial markets and/or economies and changes in the regulatory environment in which we operate have in the past had and may in the future have a material adverse impact on shareholders’ equity and net result, including as a result of the potential consequences listed above. See ‘— Continued risk of resurgence of turbulence and ongoing volatility in the financial markets and the economy generally have adversely affected, and may continue to adversely affect, our business, financial condition and results of operations’ and ‘— We operate in highly regulated industries. Changes in laws and/ or regulations governing financial services or financial institutions, the application of such laws and/or regulations on the consequences of any non-compliance with such laws and/or regulations may reduce our profitability’ below.
The aforementioned impacts have arisen primarily as a result of valuation and impairment issues arising in connection with our investments in real estate (both in and outside the US) and private equity, exposures to European sovereign debt and to US mortgagerelated structured investment products, including sub-prime and ‘Alt-A’ residential and commercial mortgage-backed securities, collateralised debt obligations and collateralised loan obligations, private equity and other investments. In many cases, the markets for investments and instruments have been and remain highly illiquid, and issues relating to counterparty credit ratings and other factors have exacerbated pricing and valuation uncertainties. Valuation of such investments and instruments is a complex process involving the consideration of market transactions, pricing models, management judgment and other factors, and is also impacted by external factors, such as underlying mortgage default rates, interest rates, rating agency actions and property valuations. Although we continue to monitor our exposures, there can be no assurance that we will not experience further negative impacts to our shareholders’ equity, solvency position, liquidity, financial condition or profit and loss accounts in future periods.
We are subject to the jurisdiction of a variety of banking regulatory bodies, some of which have proposed regulatory changes in recent years that, if implemented, would hinder our ability to manage our liquidity in a centralised manner. As a holding company, ING Groep N.V. is dependent for liquidity on payments from its subsidiaries, which are subject to restrictions, as described in ‘—As a holding company, ING Groep N.V. is dependent for liquidity on payments from its subsidiaries, many of which are subject to regulatory and other restrictions.’. Furthermore, regulatory liquidity requirements in certain jurisdictions in which we operate are generally becoming more stringent, including those forming part of the ‘Basel III’ requirements discussed further below under ‘—We operate in highly regulated industries. Changes in laws and/or regulations governing financial services or financial institutions or the application of such laws and/or regulations governing our business may reduce our profitability’, undermining our efforts to maintain this centralised management of our liquidity. These developments may cause trapped pools of liquidity and capital, resulting in inefficiencies in the cost of managing our liquidity and solvency, and hinder our efforts to integrate our balance sheet.
• (depending on the position) a significant collateral posting requirement associated with our interest rate hedge programs, which could materially and adversely affect liquidity and our profitability.
A significant and sustained increase in inflation has historically also been associated with decreased prices for equity securities and sluggish performance of equity markets generally. A sustained decline in equity markets may: • result in impairment charges to equity securities that we hold in our investment portfolios and reduced levels of unrealised capital gains available to us which would reduce our net income, and • lower the value of our equity investments impacting our capital position.
Regulators around the world have increased their focus on the regulation of the financial services industry. Most of the principal markets where we conduct our business have adopted, or are currently in the implementation phase of, major legislative and/or regulatory initiatives in response to the financial crisis. Governmental and regulatory authorities in the Netherlands, Germany, Belgium, the United Kingdom, the EU, the US and elsewhere have implemented, or are in the process of implementing measures to increase regulatory control in their respective financial markets and financial services sectors, including, among others, in the areas of prudential rules, liquidity and capital requirements, executive compensation, crisis and contingency management, bank taxes and financial reporting. Additionally, governmental and regulatory authorities in the Netherlands, in the EU and the US as well as in a multitude of jurisdictions where we conduct our business continue to consider new mechanisms to limit the occurrence and/or severity of future economic crises (including proposals to restrict the size of financial institutions operating in their jurisdictions and/or the scope of operations of such institutions). Furthermore, we are subject to different tax regulations in each of the jurisdictions where we conduct business. Changes in tax laws (including case law) could increase our taxes and our effective tax rates and could materially impact our tax receivables and liabilities as well as deferred tax assets and deferred tax liabilities, which could have a material adverse effect on our business, results of operations and financial condition. Changes in tax laws could also make certain ING products less attractive, which could have adverse consequences for our businesses and results.
In 2017, the US Secretary of Treasury issued several reports, after consultation with other financial regulatory agencies, evaluating the current financial regulatory framework against core principles set out by the new US administration. The reports have recommended some revisions to Dodd-Frank and related rules and regulations. There can be no assurance that these or any other future reforms will not significantly impact our business, financial condition and results of operations.
There are certain differences between the provisions of the Intervention Act, the BRRD and the SRM Regulation, which may further bring future changes to the law. We are unable to predict what specific effects the Intervention Act and the implementation of the BRRD and the entry into force of the SRM Regulation may have on the financial system generally, our counterparties, holders of securities issued by or to be issued by us, or on us, our operations or our financial position.
Additional Governmental Measures Governments in The Netherlands and abroad have also intervened over the past few years on an unprecedented scale, responding to stresses experienced in the global financial markets. Some of the measures adopted subject us and other institutions for which they were designed to additional restrictions, oversight or costs. Restrictions related to the Restructuring Plan are further described in Note 50 ‘ING’s Restructuring’ to the consolidated financial statements.
With respect to secured transactions, our credit risk may be exacerbated when the collateral held by us cannot be or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure due to us. We also have exposure to a number of financial institutions in the form of unsecured debt instruments, derivative transactions and equity investments. For example, we hold certain hybrid regulatory capital instruments issued by financial institutions which permit the issuer to cancel coupon payments on the occurrence of certain events or at their option. The EC has indicated that, in certain circumstances, it may require these financial institutions to cancel payment. If this were to happen, we expect that such instruments may experience ratings downgrades and/or a drop in value and we may have to treat them as impaired, which could result in significant losses. There is no assurance that losses on, or impairments to the carrying value of, these assets would not materially and adversely affect our business, results of operations or financial condition.
Market conditions, including those observed over the past few years, may increase the risk of loans being impaired. We are exposed to the risk that our borrowers (including sovereigns) may not repay their loans according to their contractual terms and that the collateral securing the payment of these loans may be insufficient. We may see adverse changes in the credit quality of our borrowers and counterparties, for example, as a result of their inability to refinance their indebtedness, with increasing delinquencies, defaults and insolvencies across a range of sectors. This may lead to impairment charges on loans and other assets, higher costs and additions to loan loss provisions. A significant increase in the size of our provision for loan losses could have a material adverse effect on our financial position and results of operations.
Ratings are important to our business for a number of reasons. A downgrade or a potential downgrade in our credit ratings could have an adverse impact on our operations and net results. Credit ratings represent the opinions of rating agencies regarding an entity’s ability to repay its indebtedness. Our credit ratings are important to our ability to raise capital and funding through the issuance of debt and to the cost of such financing. In the event of a downgrade, the cost of issuing debt will increase, having an adverse effect on its net results. Certain institutional investors may also be obliged to withdraw their deposits from ING following a downgrade, which could have an adverse effect on our liquidity. We have credit ratings from S&P, Moody’s Investor Service and Fitch Ratings. Each of the rating agencies reviews its ratings and rating methodologies on a recurring basis and may decide on a downgrade at any time.
We may be unable to manage our risks successfully through derivatives. We employ various economic hedging strategies with the objective of mitigating the market risks that are inherent in our business and operations. These risks include currency fluctuations, changes in the fair value of our investments, the impact of interest rates, equity markets and credit spread changes, the occurrence of credit defaults and changes in client behaviour. We seek to control these risks by, among other things, entering into a number of derivative instruments, such as swaps, options, futures and forward contracts, including, from time to time, macro hedges for parts of our business, either directly as a counterparty or as a credit support provider to affiliate counterparties. Developing an effective strategy for dealing with these risks is complex, and no strategy can completely insulate us from risks associated with those fluctuations. Our hedging strategies also rely on assumptions and projections regarding our assets, liabilities, general market factors and the creditworthiness of our counterparties that may prove to be incorrect or prove to be inadequate. Accordingly, our hedging activities may not have the desired beneficial impact on our results of operations or financial condition. Poorly designed strategies or improperly executed transactions could actually increase our risks and losses. Hedging strategies involve transaction costs and other costs, and if we terminate a hedging arrangement, we may also be required to pay additional costs, such as transaction fees or breakage costs. There have been periods in the past, and it is likely that there will be periods in the future, during which we have incurred or may incur losses on transactions, possibly significant, after taking into account our hedging strategies. Further, the nature and timing of our hedging transactions could actually increase our risk and losses. Hedging instruments we use to manage product and other risks might not perform as intended or expected, which could result in higher (un)realised losses, such as credit value adjustment risks or unexpected P&L effects, and unanticipated cash needs to collateralise or settle such transactions. Adverse market conditions can limit the availability and increase the costs of hedging instruments, and such costs may not be recovered in the pricing of the underlying products being hedged. In addition, hedging counterparties may fail to perform their obligations, resulting in unhedged exposures and losses on positions that are not collateralised. As such, our hedging strategies and the derivatives that we use or may use may not adequately mitigate or offset the risks they intend to cover, and our hedging transactions may result in losses.
Widespread outbreaks of communicable diseases may impact the health of our employees, increasing absenteeism, or may cause a significant increase in the utilisation of health benefits offered to our employees, either or both of which could adversely impact our business. In addition, other events including unforeseeable and/or catastrophic events can lead to an abrupt interruption of activities, and our operations may be subject to losses resulting from such disruptions. Losses can result from destruction or impairment of property, financial assets, trading positions, and the loss of key personnel. If our business continuity plans are not able to be implemented, are not effective or do not sufficiently take such events into account, losses may increase further.
Adverse publicity, claims and allegations, litigation and regulatory investigations and sanctions may have a material adverse effect on our business, revenues, results of operations, financial condition and/or prospects. We are involved in governmental, regulatory, arbitration and legal proceedings and investigations involving claims by and against us which arise in the ordinary course of our businesses, including in connection with our activities as financial services provider, employer, investor and taxpayer. Financial reporting irregularities involving other large and well-known companies, possible findings of government authorities in various jurisdictions which are investigating several rate-setting processes, notifications made by whistleblowers, increasing regulatory and law enforcement scrutiny of ‘know your customer’ anti-money laundering, tax evasion, prohibited transactions with countries or persons subject to sanctions, and bribery or other anti-corruption measures and antiterrorist -financing procedures and their effectiveness, regulatory investigations of the banking industry, and litigation that arises from the failure or perceived failure by us to comply with legal, regulatory, tax and compliance requirements could result in adverse publicity and reputational harm, lead to increased regulatory supervision, affect our ability to attract and retain customers and maintain access to the capital markets, result in cease and desist orders, claims, enforcement actions, fines and civil and criminal penalties, other disciplinary action or have other material adverse effects on us in ways that are not predictable. Some claims and allegations may be brought by or on behalf of a class and claimants may seek large or indeterminate amounts of damages, including compensatory, liquidated, treble and punitive damages. See ‘—ING is exposed to the risk of claims from customers who feel misled or treated unfairly because of advice or information received’. Our reserves for litigation liabilities may prove to be inadequate. Claims and allegations, should they become public, need not be well founded, true or successful to have a negative impact on our reputation. In addition, press reports and other public statements that assert some form of wrongdoing could result in inquiries or investigations by regulators, legislators and law enforcement officials, and responding to these inquiries and investigations, regardless of their ultimate outcome, is time consuming and expensive. Adverse publicity, claims and allegations, litigation and regulatory investigations and sanctions may have a material adverse effect on our business, revenues, results of operations, financial condition and/or prospects in any given period. For additional information, see the ‘Financial Economic Crime’ paragraphs in the ‘Risk categories’ part within the Compliance Risk in the Risk Management section in the annual report of ING Group. With respect to specific proceedings, see Note 45 ‘Legal proceedings’ to the consolidated financial statements.
Progress report Following is a summary of non-financial performance highlights for 2017.
• We achieved number one Net Promoter Scores (NPS) in seven of our 13 major retail markets. a
• We achieved our 2020 target to reach 25 million people and our new ambition is to reach 34 million people by 2022.
In 2017, ING chose to update its materiality outcomes by external stakeholder dialogue in Belgium and Germany and internal stakeholder validation. ING reached out to senior management and seven stakeholder groups: business and retail customers, NGOs, academics, shareholders, employees and regulators. All were asked to rank the importance of material topics and to find consensus on one or two action points for ING. They were also asked to comment on emerging topics suggested by ING and to propose new topics.
Our work this year builds on analysis of a long list of issues that either can impact or can be impacted by our business and strategy, as well as an external stakeholder dialogue conducted in the Netherlands a year earlier. The long list of issues and our engagement approach align with ING’s risk assessment framework as well as guidelines from the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
Our materiality work in 2017 helped us achieve focus by reducing the number of material topics. In a ‘hygiene’ first step, we removed the topics ‘regulatory development and compliance’ and ‘anti-competitive behavior prevention’, both relating to regulatory compliance. Furthermore, the topic ‘trust’ was removed, as we believe we gain trust through our performance on other topics. We then increased the materiality threshold to create more focused and balance in our reporting. As a result, ‘responsible lending and debt prevention’ and ‘remuneration of ING employees’ were removed. The former still forms a prominent part of our reporting under the key performance indicator Responsible Finance of our reporting under the material topic ‘Enhancing customer financial capabilities’.
Economic value generated and distributed from continuing operations in EUR million Economic value Stakeholder group Indicator 2017 2016 2015 Suppliers Operating cost1 2,382 2,280 2,274 Employees Staff expenses2 5,202 5,039 4,972 Shareholders Net result from continuing operations3 4,905 4,210 4,466 Governments Corporate income tax and bank taxes4 2,661 1,970 1,881 Community Total donations 14.9 13.6 12.7 1 Refer to note 26 of the ING Group Consolidated Annual Accounts 2017. Includes: IT-related expenses, office expenses, travel and accommodation expenses, advertising and public relations, external advisory fees, audit and non-audit services, and postal charges.
1 Category totals may deviate from the sum of sub-categories by margins of 0.1 due to rounding-up. 2 Other segments such as securitisations. 3 Rest of the world. 4 Other financial instruments such as term loans and derivatives.
In response to what stakeholders and society ask of us with regard to transparency, the table below provides insight into the different sectors we finance and the applicability of our Environmental and Social Risk Framework.
Consumer lending 39.8 • Financial institutions 14.2 • Governments 9.1 • Other 1.3 • Corporates 35.7 • • • - Real estate 5.7 • • • • • - Natural resources 6.7 • • • • • • •
Thermal coal category Lending O/S in EUR million Dec 2017 Dec 2016 % change Mining (including coal terminals) 316 455 -31% Power generation, coal-fired power plants 452 551 -18%
Environmental and Social Risk: department within risk management fully dedicated to assessing environmental and social impacts associated with ’High Risk’ transactions, which in the context of EP generally refer to Category A and B projects in non-designated countries.
The Board provides approval of new ING policies and/or targets based on the advice from ESR and Group Sustainability. Further, the board mandates action on external developments, including the TCFD recommendations, and engages external stakeholders on climate-related risks and opportunities.
As such, ING will be a user of the data that will come online as our clients start implementing the recommendations. However ING is also committed to aligning its own disclosures with the final TCFD recommendations as a ‘preparer’. It is estimated that it will take several years for companies like ING and its clients to be able to align fully with the recommendations. In fact, it is only as our clients start to disclose more completely that we can use that data for our own analyses and disclosures. However, we are not waiting for a perfect world before we take action.
In the coming year, we will work to strengthen the governance, processes, and ambitions and disclosures surrounding climate-related risk and opportunity management, but are well-positioned to take this forward given our past and current efforts to integrate the ESR framework and Climate Finance approaches within the business.
FSB TCFD Recommendations TCFD Recommended Disclosures ING 2017 Annual report and other Public Disclosure
B Describe management’s role in assessing and managing climate-related risks and opportunities.
Non-financial appendix, Environmental and Social Risk framework and Equator Principles, p. 346 > www.ing.com/17ar18
Our business, Responsible finance, p. 35 Risk and capital management, Environmental and Social Risk management, (Thermal Coal Policy) p. 47 > Non-financial appendix, Environment, p. 349 www.ing.com/17ar19
Our people In the past three years we have been making progress in our Human Capital return on investment (HC ROI), which shows ING’s profitability in relation to total employee costs. This ratio helps ING to identify the influence of HR contributions, such as performance management, training and development, automation and organisational structures, on the bank’s profitability. In 2017, our HC ROI indicator totalled EUR 2.51, compared to EUR 2.59 in 2016, EUR 2.48 in 2015 and EUR 2.30 in 2014.
Rest of Europe 22,891 21,996 21,323 South- and Mid-America 101 88 64
Rest of Europe 22,006 885 22,891 South- and Mid-America 101 0 101
Total donations (incl. business, customer and employee) and volunteering hours Total donations incl. business, customer and employees (in EUR thousands)
2 In 2015, this category was reported as ‘Financial Education and Entrepreneurship’.
Environmental Performance Our activities impact the environment we operate in - both directly, through the operations of our buildings, IT systems and business travel, but also indirectly, through our lending portfolio and through our procurement supply chains. We are committed to reducing this impact and work closely with customers and suppliers to take advantage of opportunities within the low-carbon and resourceefficient economy of the future. Our Environmental Approach describes how we are managing our direct and indirect environmental impacts as well as how we mitigate risks and create and seize opportunities. Our approach also outlines our 2020 targets for improving our operational eco-efficiency, namely: • We will reduce our CO2e emissions by 50% by 2020 (base year 2014). • We will reduce global residual waste by 20% by 2020 (base year 2014): achieved in 2017. • We will reduce our water footprint by 20% by 2020 (base year 2014). • We will remain carbon neutral by off-setting operational carbon emissions.
Business Travel Fully Electric Vehicles # Vehicles 105 82 75 Hybrid Vehicles # Vehicles 302 301 485 Sustainable Procurement Renewable Electricity % of total electricity consumption 95 91 86 Supplier Sustainability Performance Assessments # of Suppliers Engaged 877 647 596
Stakeholder engagement On a day-to-day basis we actively engage with our customers and other stakeholders, including investors, government officials and NGOs, on relevant topics, issues and challenges, both at an expert level and at a (senior) management and Board level. Our Global Head of Sustainability is actively engaged in dialogue with stakeholders both internally and externally. In revising our ESR policies, we follow a structured consultation process and proactively seek input from relevant stakeholders. In line with our Sustainability Direction we contribute to multiple international initiatives and cooperate as a member in platforms such as the Equator Principles Association and the Ellen MacArthur Foundation for circular economy. We seek external direction and validation of our sustainability priorities by endorsing international standards such as the UN Global Compact, the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative. In 2017, ING in Turkey, along with six other banks who are signatories of the UN Global Compact signed the Declaration on Sustainable Finance. The Declaration, prepared under the leadership of Global Compact Network Turkey, aims at amending the credit processes with the evaluation of the environmental and social risks and integrating these assessments to relevant policies. An up-to-date overview of partnerships, memberships and endorsements can be found on www.ing.com/17ar28.
In December 2017, we announced the ambition to stop our lending (project finance) to individual coal-fired power plants by the end of 2025. In 2015 we said that we wouldn’t finance any new coal-fired power plants, excluding standing commitments. As a result, lending to individual coal-fired power plants has already decreased by 9% in 2016. Both Cirebon II and Punta Catalina are projects we commited to before publication of the previous coal policy publication in 2015.
ING saw its scores increase from 41% to 52% and received again the highest score of the so-called big five retail banks on the Belgian market.
Banking fee A number of banks started charging for services which used to be free of charge. These included services like basic bank accounts, withdrawals, transfers and printed bank statements.
Net result attributable to ING Group’s shareholders from continuing operations 4,905 4,210 4,466 -/- Net result from divestments 367 -/- Net result from special items –799 –58 -/- Net result insurance other and eliminations ING Bank/NN Group –52 33 –63
Underlying cost/income ratio (g/e) 55.5% 54.2% 55.9% * average shareholders’ equity calculated based on quarter-end figures after excluding 'interim profit not included in CET1 capital' as from 31 March 2017