ING to be investigated under OECD grievance mechanism in climate finance test case

Dutch bank ING is to be investigated for allegedly breaching the Organisation for Economic Co-operation and Development’s corporate human rights guidelines in what could become a test case for climate finance.

A case brought against it by a group of NGOs has been accepted by the Dutch OECD ‘National Contact Point’, which is housed within the Ministry of Foreign Affairs. The NCP is the mechanism through which grievances under the OECD’s ‘soft law’ Guidelines for Multinational Enterprises guidelines are mediated.

The alleged breach refers to the absence of reporting and target setting on indirect greenhouse gas emissions arising from the bank’s global financing activities – which the complainant NGOs argue is prescribed by the OECD’s guidelines.

It is important because this is the first time that an NCP – the OECD’s country specific ‘outpost’ – has ruled that a climate related complaint warrants investigation.

In a statement on its website, the Dutch NCP states that this case serves as an opportunity to “clarify” due diligence issues on climate change in relation to the financial sector.

Whilst acknowledging the “complexity” of the issue, it believes that its investigation and mediation can positively contribute to the “objectives and activity” of the OECD guidelines.

ING – which has accepted the NCP’s offer to take part in the dialogue – says the complaint against it is “impractical, unnecessary, and groundless”.

It states that its failure to publish indirect greenhouse gas emissions does not stem from a lack of will but from the fact that such disclosure “is currently not technically possible”.

The complaint against ING was brought before the NCP in May by a group of Dutch climate and finance NGOs – including BankTrack, Oxfam Novib and Greenpeace Nederland.

At issue is ING’s failure to disclose – or commit to disclose in the future – its indirect greenhouse emissions in relation to its financing activities. This, along with the absence of goals to reduce its greenhouse gas emissions, place it outside the OECD guidelines, according to the NGOs.

The OCED guidelines, which are quoted extensively in the complaint document, stress the importance of “direct and indirect” greenhouse gas emissions as an “evolving” reporting standard.They also state that the “basic premise of the Guidelines is that enterprises should act as soon as possible, and in a proactive way, to avoid…serious or irreversible environmental damages resulting from their activities”.

In its complaint, the group had called upon ING to commit to publish:

1) Its total carbon footprint: i.e. direct and indirect emissions.
2) “Ambitious, concrete and measurable targets” to lower its indirect GHG emissions

It also urges ING — which currently has an item on its website called A polar warning — to commit to the “final outcome” of the Platform for Carbon Accounting Financials (PCAF) initiative. PCAF is an initiative of 12 Dutch financial institutions that “have agreed to work together to jointly develop open source methodologies to measure the carbon footprint of their investments and loans”.

The members of the platform are ABN AMRO, Achmea Investment Management, Actiam, APG, ASN Bank, FMO, MN Services, PGGM, Stichting Pensioenfonds Metaal en Techniek (PMT), Stichting Pensioenfonds van de Metalektro (PME), Triodos Bank and de Volksbank. The initiative’s final report is due next month.

Speaking to RI, Peter Ras, Senior Policy Adviser, Sustainable Financial Sector, at Oxfam – and lead filer of the complaint – expressed his hope that this initial success with the Dutch NCP would set a “precedent” and that “other NGOs will also take notice of this positive development and take the initiative in their own country too”.

Elsewhere, the Swiss NCP has also published its assessment of a complaint filed against Credit Suisse by the Society for Threatened People concerning links with companies involved in building the Dakota Access Pipeline in the US. It will engage with both parties on a mediation process. Credit Suisse had requested that the US NCP take up the case, as the complaint refers to activities there. The Swiss NCP decided that the case will be treated in Switzerland, and if there is a specific issue on the US context, the US NCP might be involved.

The OECD holds a workshop in Paris on December 7 on responsible business conduct.

Additional reporting by Vibeka Mair.