ING launches ESG tool to assess clients' climate progress

Amsterdam-based global bank ING has introduced a new tool, ESG.X, to enhance the evaluation of its clients’ climate transition efforts. The bank revealed the tool’s development as part of its “Climate Progress 2024” update, which highlights ING’s ongoing efforts to assist its clients in transitioning to a low-carbon economy. This move aligns with the bank’s “Terra approach,” its strategy to push the most carbon-intensive sectors of its portfolio towards achieving net-zero emissions by 2050. The ESG.X tool gathers publicly available climate-related data from companies, including their current emissions, climate targets, and action plans, as well as governance and strategic frameworks. The tool generates a “client plan transition score,” which ING uses in its risk assessments and decision-making processes for transactions. In the first implementation phase, ING has assessed the climate information of nearly 2,000 of its largest customers, focusing on companies in the carbon-intensive sectors. Over the next two years, ING will continue to evaluate these customers and engage with them as their transition progresses. By 2026, the bank hopes to better understand what customers are doing. For companies that show little progress or are unwilling to comply, the bank can impose tough business conditions, including ending financial support, ING said. According to ING, the goal is to work with customers on climate change. Instead, ING intends to end its relationship with companies that do not make meaningful changes, said CEO Steven van Ryswijk. The bank also plans to expand the range of data contained in ESG.X and plans to make the tool available externally, to help clients and partners navigate climate change initiatives. . Van Rijswijk added that the development of ESG.X is an important part of ING's work with its clients. Using the data insights from this tool, the bank aims to have more conversations with customers and support them in reducing greenhouse gas emissions and moving to zero levels.