The urgency to address climate challenges is growing by the day. Despite ongoing challenges, including geopolitical tensions, key sectors such as agriculture, transport and logistics, and energy are making significant strides in cutting greenhouse gas emissions and reduce reliance on fossil fuels. In the Asia Pacific region, the transition to a sustainable future remains a monumental task for all, including developed markets like Australia, Singapore, and South Korea, as well as emerging economies.
"Today, corporations in APAC not only recognise the urgency for climate transitions but are also strengthening their action plans and governance to drive real change. Net-zero commitments are increasingly embedded in corporate strategies and capex planning. The growing corporate willingness, understanding, and ability to embrace transition pathways reflect a powerful regional shift towards a more responsible and forward-thinking approach to economic growth and environmental stewardship,” said Martijn Hoogerwerf, ING’s head of Sustainable Solutions Group for APAC.
“We see that companies are seeking like-minded partners for guidance and consultation. Partners who possess deep industry expertise on a global level, and who are capable of deploying capital strategically to drive a successful and impactful transition,” Martijn added.
Using Science-Based Benchmarks to Drive Transition Plans
Since setting the benchmark with the first sustainability-linked loan for Royal Philips in 2017, ING has been driving innovation in sustainable finance, partnering with businesses to create credible transition pathways through understanding their progress and real-world needs. Recently, ING rolled out a new accountability framework – the Client Transition Plan (CTP) Score, assessing the governance, strategy, and sustainability action plans of approximately 2,000 of its clients.
The CTP is a key component of ING’s commitment to taking a leadership role in financing the net-zero transition. It involves systematically assessing and evaluating publicly available data on climate disclosures and transition planning across a broad spectrum of its clients.
This data-rich and fact-based approach enables ING to understand where clients stand in their transition journey, provide targeted advisory support, and direct financing toward clients who are committed and capable of transitioning. This aligns with ING’s net-zero goals contributing to global progress. It also serves as a tool and framework for ING to communicate its expectations for clients’ transition over time.
Regulatory frameworks such as the Corporate Sustainability Reporting Directive (CSRD), ISSB (International Sustainability Standards Board), and initiatives such as Carbon Disclosure Project (CDP), Science Based Target Initiative (SBTi) have been instrumental in establishing and shaping the criteria for a credible CTP.
The first criterion, emissions reporting, is essential for identifying emission sources and levels, forming the foundation for setting targets and developing actionable strategies. This is complemented by commitment and target setting, which are crucial for aligning the business with the industry’s transition pathway.
Connecting Planning with Credible Action
The credibility of any transition plan is underpinned by the robustness of its action plan; and targets are meaningless without a concrete action plan. Integrating sustainability and the journey to net zero into the core business strategy is equally important. Strong governance is vital for achieving long-term success.
“The CTP scores serve as an initial step in guiding and informing decisions, but its true value lies in providing the basis for meaningful and insightful discussions about transition progress. These engagements are essential for designing practical and impactful KPIs when structuring sustainable finance solutions. We recognise that each company, regardless of sector, location or size, faces unique challenges in reaching their sustainability goals. Our approach is to engage with clients as partners, using the CTP score as a starting point to foster improvement and support their transition journey over time”, said Martijn.
Engagement is critical for defining KPIs and establishing specific targets, whether they are environmental, social, governance-related. Whether its reducing greenhouse gas emissions in energy production, securing energy efficiency certifications in real estate, or transitioning to electric fleets in the logistics sector; well-defined, financially material KPIs can drive significant progress toward environmental and social objectives while generating financial benefits. The key outcome of engagement is to set realistic expectations and targets that foster continuous improvement over time.
Recently, ING acted as the Sole ESG Structuring Advisor for Stoneweg EREIT Management, providing expertise in updating Stoneweg European Real Estate Investment Trust’s (“SERT”) Green Finance Framework. The use of proceeds categories defined in the framework – such as green buildings, renewable energy, and energy efficiency - were evaluated based on their positive contribution to the United Nations Sustainable Development Goals, resulting in lower financing costs.
“As a pioneer in sustainable finance, we have the responsibility and opportunity to support our clients in any given sector on their transition journey, regardless of their current carbon intensity,” Hoogerwerf said. ING is increasingly providing sustainable finance solutions to clients and has increased its target for sustainable volume mobilised to €150 billion per year by 2027. Meanwhile, the bank aims to triple financing for renewable energy by 2025 to €7.5 billion annually, up from €2.5 billion in 2022.
ING remains committed to transparency and continuous improvement in its climate assessment practices, and supporting our clients in transitioning to a low-carbon economy. Whether it is sustainable financing for data centres in Korea, financing solar power installations in Australia, or integrating sustainability into Hong Kong’s infrastructure securitisation market, we recognise that this is just the beginning. We aim to evolve the methodology to assess real progress at the client level and to broaden and deepen the data we can draw on.
Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance many sustainable activities, but we still finance more that’s not. See how we’re progressing on ing.com/climate/