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ING faces threat of legal action from climate group behind Shell case

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ING, the Netherlands’ largest bank, faces the threat of legal action over its financing of fossil fuel companies and its “contribution” to climate change from the campaign group that won a landmark case against Shell in a Dutch court.

In what could become a test case for the banking industry, Friends of the Earth Netherlands sent a liability notice to ING boss Steven van Rijswijk on Friday, alleging that the bank had breached its legal obligations “by contributing to dangerous climate change.”

Banks around the world have come under increasing scrutiny for their role in financing fossil fuel companies. The burning of fossil fuels is by far the largest contributor to climate change.

The lawsuit against ING maintains that the bank has a “duty of care” under Dutch law not to create any danger that could lead to avoidable property damage or personal injury.

This follows an ongoing lawsuit against French bank BNP Paribas that was filed last year in Paris in a sign of growing litigation risk for financial institutions, focused on its ties to major energy clients. The BNP case has not yet been admitted by the French courts.

Friends of the Earth Netherlands, also known as Milieudefensie, wants ING to halve its own emissions by 2030 compared to 2019 levels, require all its corporate clients to have a climate transition plan and stop financing Fossil fuel companies continue to expand and develop new fossil fuel projects or lack a comprehensive plan to phase out oil, gas and coal.

If ING does not agree to comply within a two-month response period, Milieudefensie said it would send a summons to start legal proceedings in Amsterdam.

The Dutch NGO said it believed Shell’s precedent set in 2021 suggested the Dutch judicial system would accept its action against ING.

The proposed action covers all of ING’s greenhouse gas emissions, including so-called indirect emissions from companies with which the bank does business and emissions generated through its lending and underwriting activities.

“We are in regular dialogue with a variety of stakeholders, including Friends of the Earth Netherlands,” ING said. “We are confident that we will take impactful action to fight climate change and sustainability is part of our overall strategic direction. Of course, we will respond in court if necessary.”

Milieudefensie won its case against Shell in 2021 when the Hague District Court ordered the oil and gas group to reduce its emissions by 45 percent by 2030, relative to 2019, across all activities, including both its own emissions and those for final use.

The judge said the company had an obligation to take additional human rights measures. Shell appealed the ruling and the parties are due back in court in April.

Roger Cox, the Milieudefensie lawyer who led the Shell case, said he was confident of a case against ING. He argued that companies like Shell and ING had influence at “such a systemic level” that they had legal responsibility for contributing to climate change.

ING’s Van Rijswijk spoke at the World Economic Forum in Davos on Thursday about the bank’s approach to encouraging customers to improve their sustainability, in a roundtable discussion on future-proofing the financial system.

Last month, the lender unveiled a new policy on oil and gas financing that it said was heavily influenced by the UN’s COP28 climate summit in Dubai, where countries agreed to transition away from fossil fuels.

Under the new approach, ING said it would phase out direct project financing for upstream oil and gas deals by 2040 and triple its renewable energy financing by 2025. This does not prevent it from providing loans or underwriting services to energy groups that are expanding fossil energies. fuel production.

“We are significantly increasing our commitment to renewable energy while offering a clear and accelerated path to the complete elimination of oil and gas extraction from our financing portfolio,” van Rijswijk said at the time.

Milieudefensie said the bank’s new policy did not go far enough and the deadline for phasing out oil and gas financing was too far in the future.

ING is the eighth largest financier of fossil fuels in Europe, campaign group Rainforest Action Network calculated in a report for 2023. Since the Paris agreement, it has provided $61.7 billion to fossil fuel companies and projects, according to the report.

In its latest annual report, ING reveals 56 million tonnes of CO₂ emissions from its lending activity in 2022, but not the indirect emissions of the clients to whom it lends, nor the emissions linked to the underwriting. This excludes most of the carbon footprint of oil and gas sold by its energy customers.

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