‘Remuneration of ING employees’ is captured within the remuneration chapter of this Annual Report, GRI content index and Capital Requirements Regulation (CRR) 2017 Remuneration Disclosure ING Bank N.V disclosure. Disclosures are similar to previous years. Lastly, we have clustered the topics of ‘Fair communication of products and services’ and ‘Transparency’ as their definitions overlapped. The boundaries of the material topics remain unchanged.
2 Refer to note 25 of the ING Group Consolidated Annual Accounts 2017. 3 Refer to the P&L of the ING Group Consolidated Annual Accounts 2017 in the Annual Report 2017. 4 Refer to note 26 and 36 of the ING Group Consolidated Annual Accounts 2017.
ING’s power generation lending portfolio to Single Energy Sources (SES) clients, transactions supporting a particular energy source or utility companies operating one single energy source, is EUR 6.9 billion at YE 2017. Within this category, coal-fired power EUR 452 million represents some 6.6 percent of total.
Overall, ING’s power generation lending portfolio (DUCs and SES) is EUR 9.0 billion at YE 2017, an overview of the distribution in sources being reflected in the chart below.
Applying the Equator Principles (EP) As an Equator Principles (EP) Financial Institution, we have embedded the EP in our environmental and social policies, procedures and standards. We do not provide project finance or project-related corporate loans to clients that are unable, or choose not, to comply with the principles. All transactions in scope of EP are reviewed at least annually, at which time covenant compliance is typically affirmed. Project names of project finance transactions which reached financial close in the reporting period are published annually on the Equator Principles website. All project names are disclosed only if ING has received the related client’s consent. See The EP are embedded in ING’s ESR Framework, and require involvement of the following three banking areas: Front Office: departments that originate transactions and have direct contact with the client or project sponsors.
Our climate change strategy ING is committed continuously to review and monitor its policies and strategies as new risks and opportunities emerge, for example related to energy transition. For this reason, our ESR policies are updated regularly and our ESR framework is reviewed every three years. As a result of transition risk and our commitment to combat climate change, ING further sharpened its coal policy in 2017, pledging to a strategy for reducing thermal coal exposure to close to zero by 2025. (Read more on p. 47)
The table below outlines how ING has addressed climate-related risk and opportunity disclosures in its 2017 Annual Report and where you can read more about this.
Non-financial appendix, Climate change governance, p. 343 > Executive Board Charter, www.ing.com/17ar11
The world around us, Societal challenges, p. 10 The world around us, What matters most to our stakeholders, p. 11
C Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
Go ve rn an ce St ra te gy Ri sk M
Responsible Finance Responsible Finance is a set of strengthened ambitions replacing our Sustainable Transitions Financed (STF) portfolio ambition. We aim to double our funding to companies and sectors that are making a significant contribution to the low-carbon and self-reliant society of the future. We will do this by increasing our Climate Finance portfolio twofold by 2022 compared to 2017. We will also double our Social Impact finance by lending to projects that lead to, for example, basic infrastructure or essential services. And we will double lending to environmental, social and governance (ESG) Industry Leaders by 2022 compared to 2017. The tables below provide a breakdown of our Environmental and Social Impact Finance as of December 2017.
Sustainable Investments ING has provided customers with sustainable investment (SI) solutions since 1999. These can be dedicated portfolios, structured products or investment funds, and cover all asset classes. SI is available to customers in Belgium, Luxembourg, Germany and the Netherlands.
Total Investments ING Groenbank In EUR million as of Dec 2017 2017 2016 2015
Climate Finance1 in EUR million as of Dec 2017 2017 Energy transition 4,071 Low-carbon buildings 9,283 Energy efficiency 161 Transport 745 Waste management 50 Information Technology and Communications 89 Water (including climate adaptation) 62 Other climate finance 154 Total 14,619 1 Circular Economy is also one of the sub-categories under Climate Finance, however, as of year-end 2017, our exposure to Circular Economy was nominal. For a complete overview of our definitions and methodology for our Climate Finance indicator and sub-categories, please see our Non-Financial Data Reporting Protocol available on ING.com.
Social Impact Finance1 in EUR million as of Dec 2017 2017 Basic Infrastructure 239 Essential Services 228 Total 468 1 Affordable Housing, Food Security, Community Development and Financial Access and Microfinance are additional sub-categories under Social Impact Finance, however, as of year-end 2017, our exposure to these sub-categories was nominal or zero. For a complete overview of our definitions and methodology for our Social Impact Finance indicator and sub-categories, please see our Non-Financial Data Reporting Protocol available on ING.com.
Our objectives and targets concerning our operational environmental impact are managed through the ING Environmental Programme, which has established a robust Environmental Management System (EMS) that ensures effective processes and continual improvement of our performance. In 2017, ING maintained its ISO14001 EMS certification for head-office operations in the Netherlands. Our EMS, which applies globally, has helped us to make progress against our 2020 targets. Relative to our base year, our carbon footprint was reduced by 37% in 2017 as a result of increasing our renewable electricity consumption to 95% of total electricity consumption and by reducing global energy consumption by 23% compared to 2014. Our residual waste was reduced by 45% in 2017 relative to our base year meaning we achieved our 2020 residual waste reduction target. This was achieved through a 25% increase in recycling activities and a 37% reduction in paper consumption since 2014.
Total travel carbon per FTE in tonne - 0.6 – 0.5 – 0.5 1 Business travel comprises travel by air and by road for business purposes only.
Total carbon per FTE in tonne 1.0 1.2 1.5 Total extrapolated carbon 64 74 94 1 The total carbon amount is the sum of scope 1, 2 and 3 emissions. The total can vary slightly from sum of the figures displayed here and in other tables due to the fact that we only display figures rounded to the nearest kilotonne.
3 The total carbon figure for Scope 2 displayed here is calculated using the GHG Protocol Market-based calculation method outlined within the Scope 2 Guidance. This method takes into account the use of renewable electricity with an emissions factor of 0 g CO2e/MWh. This significant decrease since 2015 results from a decrease in electricity consumption and an increase of renewable electricity purchased. Using the Location-based method outlined within the Scope 2 Guidance, our scope 2 CO2e emissions for our base-year (2014) were 123 kilotonnes and for 2017 were 100 kilotonnes. This means that we have reduced our location-based scope 2 emissions by 19% since 2014. For more information on our calculation methodology and scope, please see our reporting protocol on www.ing.com/ar2017.
2 In 2017 we recorded a dramatic decrease in waste compared to 2016 in the absence of the one-off office relocation and archive dumps and due to a 25% increase in our recycling efforts and a 37% decrease in our paper consumption compared to 2014. 3 In 2016 we saw an increase in residual waste due to a slight uptick in coverage (we do not extrapolate waste values), the relocation of our UK office, and archive dumps in Belgium and Turkey.
Dakota Access Pipeline Being part of a syndicate of 17 banks, ING financed the DAPL pipeline project. Controversy arose as native American Standing Rock Sioux Tribe disagreed with the processes utilised in the granting of licences/permits.
ING has entered into a dialogue with several concerned NGOs and the clients where the barn fires occurred. ING is in general keen to help create safer living conditions for animals by supporting our clients in this endeavour.
Tax transparency Since 2015, all banks based in the European Union have been obliged to report on their operations on a country-by-country basis. The ‘Opening the vaults’ report tried to illustrate in what way banks are involved in tax havens.
Palm oil Greenpeace zoomed in on the palm oil portfolios of international banks and compared policies of banks to one another in their report called ‘Dirty Bankers’.
We provided input for the questionnaire used in the Greenpeace report about, among others, our RSPO membership, having policies in place for no-deforestation (natural forests/HCV), no forced/child labour, no burning of forests etc. Out of the 18 banks whose policies were compared and have decent policies in place we ranked 3rd.
The attribution of carbon emissions to a global warming scenario is important. We currently lack an international standard for reliable and comparable data. For this reason, ING is unable to deliver or disclose the requested data.
On 14 November 2017, the National Contact Point (NCP) ruled the notification made by the NGOs admissible. In accordance with its procedures, the Dutch NCP has therefore offered to facilitate a dialogue between ING and the NGOs. ING has accepted the NCP’s offer and will take part in that dialogue.