One year ago, ING became the first major global bank to halt the provision of dedicated finance for new “upstream” (or exploration and extraction) oil and gas fields, which was in accordance with the International Energy Agency’s (IEA) net-zero pathway. Now, they’re expanding their approach to other parts of the oil and gas value-chain by restricting dedicated finance to ‘midstream’ (oil & gas infrastructure) activities that will unlock new oil and gas fields, aiming to reduce their traded oil and gas volumes.
In an article published today, ING revealed they are seeking to expand their approach to other aspects of the oil and gas value chain by limiting any specialised finance to “midstream” activities (such as oil and gas infrastructure) which enable new oil and gas fields. Additionally, they aim to reduce the quantities of traded oil and gas that they finance.
ING states that their energy strategy seeks to balance three interests, as ‘‘the need to decarbonise to fight climate change, the need for energy to remain affordable for people and companies, and the need to ensure the security of the energy supply’’.
In a society that remains reliant on fossil fuels, they perceive it as their responsibility to finance what the world requires presently while also supporting the transition to a low-carbon economy in the future.
In the website article, they affirmed, ‘‘As we continue to finance clients that are active in the oil and gas sector, we’re aligning our portfolio with the International Energy Agency’s (IEA) ‘Net-Zero Emissions by 2050 Roadmap’ and the climate science that underpins the IEA’s approach. We’re currently on track to reduce our upstream oil and gas portfolio by 19% by 2030 in line with the IEA’s pathway, aiming for a 53% reduction by 2040 compared to 2019. We’re committed to following the science, and plan to adapt our approach to mirror any future changes to the IEA’s pathway.
By the end of the year we also want to adopt a ‘net zero by 2050’-aligned methodology for midstream oil and gas infrastructure such as pipelines, liquified natural gas terminals and storage facilities’’.
Furthermore, ING also backs-up its the sentiment that a ‘just transition’ into a green and renewable future should occur.
Why doesn’t ING just stop financing fossil fuels?
- The world still needs them – for heating, transport, steelmaking and more. There simply isn’t enough green energy yet, and even in the future a net-zero world will not equal a completely fossil-free world.
- Cutting off clients or industries won’t solve the problem. We strongly believe that the biggest impact we can have in fighting climate change is by working with our clients to help them move away from fossil fuels.
- It’s a balancing act. Moving away from fossil fuels has a social impact – if the supply of fossil fuels decreases too fast, the price of energy could skyrocket and bring many people into financial problems. We want to balance our climate action with our societal role to ensure energy remains affordable and available for people and companies.
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