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ING has ended general financing to pure-play upstream oil and gas companies that continue to explore and develop new fields, the first major global bank to do so.

ING is a significant financier of fossil fuels, with total outstanding loans to upstream oil and gas companies of €2.5bn at the end of 2023, according to a spokesperson for the bank. This policy, announced as part of its latest climate progress update, is expected to impact around €1bn of those loans, according to ING’s chief executive.

While the bank had already ended dedicated finance for the development of new oil and gas fields in 2022, this latest move to halt general financing means affected fossil fuel companies will need to seek alternative financing partners once existing loan tenors run out.

ING will also stop financing new LNG export terminals after 2025, bucking the trend of banks increasing LNG funding despite reducing oil and gas support, according to NGO report Banking on Climate Chaos.

ING was one of 27 banks identified in the report as increasing its fossil financing commitments between 2022 and 2023, largely through loans for LNG-related projects, and is currently the fifth-largest financier of US LNG terminals.

Climate campaigners’ responses to the policy have been mixed, however.

The Rainforest Action Network welcomes the decision, climate and energy director Aditi Sen tells GTR.

“ING’s policy changes prove that banks can do something right,” she says. “They can move their clients towards credible transition plans, and they understand the science that states there is no need for expansion, especially of LNG/methane.”

ING said in its progress update it will “consider ending” its relationship with clients that fail to disclose progress towards green transition, beginning in 2026.

Quentin Aubineau, policy analyst on banks and climate at NGO BankTrack, is more sceptical.

“Our assumption is that the impact of ING’s new commitment will be very limited as it only applies to ‘pure-play oil and gas companies that develop new fields’. Nevertheless, ING could still provide these companies with dedicated finance for renewables or carbon capture and storage projects,” he tells GTR.

“Therefore, ING could have already excluded corporate financing and bonds for any company developing new fields, not only pure-play, with a possibility to finance renewables projects.”

In response to BankTrack’s statement, ING tells GTR: “We want to support our clients in their transition.

“Different from most pure-play upstream companies, integrated oil and gas companies are also investing in the diversification of their operations into sustainable energy solutions such as renewables, hydrogen and other green molecules, or carbon capture and storage.

“We do not exclude general lending or bond issuance services for integrated oil & gas companies. We continue to refrain from providing dedicated finance to new oil and gas fields to these companies.”

Banks have struggled to distance themselves from fossil fuels, despite campaigners warning that the industry is heavily exposed to climate risk and growing competition from renewable energy.

While ING’s outstanding exposure to oil and gas decreased between 2022 and 2023, this decline was largely due to companies drawing less on existing facilities, driven by the prevailing high prices of the commodities.