Ladies and gentlemen, shareholders. As Chairman of the Supervisory Board, I would like to welcome you, whether you're attending the meeting remotely or physically here in this room. I'd like to welcome you at the general meeting of ING. I'd also like to welcome the representatives of the Central Works Council and all those others attending the meeting. Today, we are going to have a hybrid annual general meeting at ING's office, Cedar, which means that we've connected people outside this meeting room as well. Supervisory Board and Executive Board members are present here today, and the same applies to a number of shareholders who are attending the meeting in person today. Other shareholders can follow today's meeting remotely via the live webcast and the online eVote platform. To start with, two announcements. Points of order.
For the people attending the meeting in person, I would request you and insist to put your mobile phones or other devices on silent mode or switch them off. I would also like to point out that during this meeting, you're not allowed to make any video recordings or audio recordings. Obviously, this meeting is broadcast as a webcast, so for the rest, it's simply not allowed to take any photos, make any videos, or make any audio recordings. I would introduce you to the people here on the podium. On behalf of the Supervisory Board, next to me, you will see Herna Verhagen, she's Chair of the Remuneration Committee, Margarete Haase, Chair of the Audit Committee, Mike Rees, Chair of the Risk Committee, and myself, and I'm the Chairman.
On that side, you'll find Steven van Rijswijk, CEO, Ljiljana Čortan, Chief Risk Officer, Tanate Phutrakul. I should have reversed the order, but that's how my speaking written notes read. Our CFO, and then on the other end, sorry, Vroukje van Oosten Slingeland , our General Counsel. Furthermore, present here at the meeting in person or remotely elsewhere in the building are the other members of Supervisory Board. They're all over there. Juan Colombás , Mariana Gheorghe , Lodewijk Hijmans van den Bergh , Herman Hulst , and Harold Naus .
Other members of the Management Board of ING Bank is listening in remotely. Pinar Abay, Andrew Bester, Aris Bogdaneris, Ron van Kemenade, and Marnix van Stiphout . Cindy van Eldert-Klep , Company Secretary, is also present in person in the room. On behalf of the external auditor for the 2021 financial year, KPMG, we have Mr. Waldo Bakker and Peti de Wit .
Finally, the independent civil law notary, Joyce Leemrijse and Lisanne Bosman , both work for Allen & Overy. This meeting is in Dutch, as you will have noticed. Just as the presentation given by the CEO, we'll only be speaking English if the speaker doesn't have Dutch as a mother tongue. Here in the room, there is simultaneous interpretation available. We intend, as per the next AGM, to have the agenda and the explanatory notes of the agenda published only in English. For some years now, the Annual Report has been published only in English. That means that the annual meeting itself will be held in English, but should you have any questions in Dutch, they'll be translated, of course, that will be possible.
The shareholders, ladies and gentlemen, have been notified of the meeting in accordance with the law and the Articles of Association, taking into account the quorum present. The meeting can therefore pass legally valid resolution. Shareholders have not submitted any motions for discussion at this meeting. Now, I still have a number of formal announcements to make. Issued capital or issued shares per record date on 28 March 2022 consisted of 3,905,726,525 shares. ING Group and its subsidiaries jointly held at that date 140,591,639 shares, and the number of shares on which a vote could be cast is 3,765,134,886 shares.
One vote can be cast on each ordinary share. Statement of the represented capital and the proxy votes cast will be displayed on the screen prior to the vote on agenda item 2D. The notarial record of the meeting of 26 April 2021, so that's last year's meeting, has been available on the company's website since October 28, 2021, and the draft minutes have also been available for inspection since 26 July 2021. The Corporate Secretary will ensure that the notarial record that is discussed at this meeting will be prepared by Allen & Overy. A draft version will be published three months after this meeting on the company's website and the final version six months after the meeting. A couple of remarks with respect to the order of the meeting.
Shareholders who have registered had up to 72 hours prior to the start of this meeting to submit questions about the agenda items, and could do so by email. These questions will be read out during the meeting and will be answered, and the questions will be clustered as much as possible. Also, linked to the agenda items that we discuss here. Of course, as a registered shareholder, you can also ask questions during the meeting. You can use the microphone in this room to ask any questions you may have. As chairman of the meeting, I will decide whose turn it is to ask questions and who will be answering the questions. Should you be attending the meeting remotely, you can ask questions via the chat function or via email.
However, in whichever way you ask your questions, I would request you to keep your questions brief and concise. Please don't come up with extensive statements or philosophy. Shareholders prior to this meeting invited me to be very strict about this, so my natural attitude will be quite strict should you expand on your questions. Questions obviously need to be related to the agenda item in question, so there'll be no any other business. Please ask your questions under the relative, relevant items of the agenda. Shareholders have issued voting instructions in advance to the civil law notary or via eVote, the online platform on all motions that have been tabled for a vote.
Shareholders present in this room or in neighboring rooms can vote during the meeting and therefore, I'd like to give the floor to Vroukje van Oosten Slingeland to explain how the voting works and how to ask questions. Vroukje.
Yes. Shareholders attending the meeting remotely and who wish to vote have already given their voting instructions. If you're present here in the room, you'll have been given a voting device with a chip card. If you want to leave the room and at the end of the meeting, please return your voting pad, your chip card. But you don't need to return these items if you're just leaving the room temporarily. The voting results will be announced after each voting item after it's been dealt with. Now about the questions.
If you don't have access to eVote, you can mail your question should you have any, to an email address shown in the agenda. These questions, along with the answers, will be published on ing.com, our website. They'll also be included in the minutes of this meeting. These questions will be grouped per agenda item and per topic. When the relevant agenda item is raised, they'll be answered together where possible in the meeting. Questions will not be answered via chat option or email. Thank you for listening. Now, Chairman, I return the floor to you.
Thank you, Vroukje. Ladies and gentlemen, we're now proceeding to agenda items 2A and 2D. There will be separate presentations. After those presentations, you'll have the opportunity to ask questions about agenda items 2A to 2D. We're doing this in order to structure the debate in three rounds. The first round are questions about ING's strategy, financial performance and sustainability. Second round is for questions about other topics, covered by item 2A to 2C that will not be raised under other agenda item. The third round is meant for questions about agenda item 2D being the remuneration report 2021. Agenda item 2E and the audits carried out by KPMG with respect to the financial year 2021 will be explained by Mr. De Wit of KPMG. Afterwards, there'll be an opportunity to raise any questions on agenda item 2E.
Ladies and gentlemen, just a couple of explanations on the substance of matters. As the Chairman and Supervisory Board of ING, this meeting is characterized by what transpired in and around your bank in 2021. I do think it is appropriate to take a moment to dwell on a shocking event that took place this year, and that is Russia invading Ukraine. There are simply not enough words to express our anger and our shock with respect to this, infringement of peace, violation of peace in Europe that is so difficult to understand. ING condemns the invasion, and our thoughts are first and foremost with the very courageous people of the Ukraine that is experiencing terrible times, and particularly our colleagues, their families and our customers there. Steven van Rijswijk will be talking about that later on, our CEO.
What we also need to realize is that, this invasion will have far-reaching consequences for all of us over the next few years, particularly for the geopolitical constellation that we live in and in which your bank will have to operate. We started 2021 with the hope that the post-COVID period would be a period of stability and growth in which we would be able to focus entirely on the major challenges of ESG, and particularly climate change and further digitization. Reality, however, is that over and above these challenges, because they continue to exist and we're going to face those challenges. We're faced with challenges of a different world order, higher inflation and many uncertainties for people and for companies, and we'll have to operate in that new reality.
The good news, however, is, as you can read in the Annual Report , that your bank, as is shown and reflected in the performance in 2021, is top fit and is ready to face those challenges. 2021, it seems a long time ago, is a year in which the COVID virus continued to have a major impact on our customers, our staff, and our business and brought great uncertainty. Large number of our employees worked from home, and others who, given the nature of their work, were not able to work from home, continued to go to the office and continued to provide services to our customers. All of us, our employees, but also the members of the Supervisory Board and the Executive Board adapted and adjusted to this new situation. Meetings were, as much as possible, held virtually, remotely.
Continuing low interest rate, rising inflation, energy prices, sustained pressure in the supply chain, and the constantly increasing geopolitical tensions have led to uncertainty and volatility in the market. In many respects, it was once again a very challenging year. Despite that, it was also a year in which ING, in our opinion, showed excellent performance, delivered solid results in a very rapidly changing environment. We would like to thank all our employees once again, all our employees worldwide. In the Annual Report , you can read more about our operations and our performance. Our CEO, Steven van Rijswijk, will be talking about this in more detail later on. For me, as Chairman of the Supervisory Board, I must say that there's so many things that we look back on that we're so pleased with.
For instance, the improvement of our mobile and digital experience for customers and how we've been able to support our customers in sustainability transition in the form of transactions with a positive social impact and positive impact on climate. On the financial side, an increase of ING's commission income, fee income. I'm not going to mention all these things that we're so proud of, but I will highlight what ING is doing in the field of sustainability in the broadest sense. Not only in the area of environment are we making headway, but also with respect to other ESG targets, we're making a contribution. We're committed to financial health. We're helping people get, reduce their debts. We want a society in which everybody is financially healthy and everybody can participate.
We also want our employees to have a safe working environment and respectful working environment. In order to increase the efficacy of our Supervisory Board and in order to integrate ESG strategy across the organization, the Supervisory Board has set up an ESG committee in order to realize our strategy compliance, with regards to ESG. That can be monitored on a regular basis. With that, we can strengthen governance in ING. We want to make sure that ESG becomes integral part of our decision-making processes, and that ties in with what serious shareholders, regulators, governments, international organizations, and the society at large expect from us. Finally, another item. Keeping the bank safe and compliance is something we concentrate on constantly.
Just as in previous years, we continue to focus on improving our KYC processes, Know Your Customer, and also fighting financial crime and protecting customers against theft online and offline. That concludes my introduction, ladies and gentlemen. With that, we move to item 2 A and 2 B, which is the report of the Executive Board for 2021 and also sustainability. Both topics are being dealt with jointly for some years at the annual meeting. Sustainability, as I just explained, are one of the most important parts of our strategy, and so it's an integral part thereof. For that reason, as from next year, the next AGM, we will no longer address this as a separate item of the agenda. It'll be part and parcel of the report of the Executive Board .
I'd like to refer to the report of the Executive Board as included in the Annual Report , pages 5 through 88, the explanatory notes to the agenda and agenda item 2B. For the sake of completeness, I also refer to the chapter on risk management in the Annual Report , pages 90 to 197. Now I give the floor to Steven.
Can everybody hear me? Thank you, Hans. I'm delighted that when we started at about ESG, you had the floor, not me. First I'd like to say a bit about Ukraine and that we condemn this invasion. It's horrible what's happening there, all that violence. We empathize with the people and with our coworkers. As well as with their loved ones and families and customers. Their safety matters to us. We're doing everything we can to help them. We've donated EUR 12 million to children and families in Ukraine, as well as to those who have fled. We're also donating to organizations outside Ukraine, and we're waiving fees for transactions to Ukraine so that we can support individuals and their loved ones. We're helping the people who have fled to find shelter, and also we're helping them open accounts.
I'd like to thank all ING coworkers in many countries who have personally offered to help Ukrainians. That's excellent work, and we remain active there. As for Russia, we issued an announcement in March that regarding our operations with foreign customers, we're complying with all sanctions, and we're ready to implement any additional sanctions. We're supporting our foreign customers in Russia, but we're not doing new business with Russian customers, and we're remaining in touch with our own staff. Their safety matters to us. That's a top priority, and I'm pleased about the results. I'd like to highlight three points. First, we had a commercially and financially successful year despite the COVID-19 pandemic.
Our digital first business model proved its strength as more customers chose ING as their primary bank, and we supported a growing number of businesses and customers with their green transition efforts. This slide conveys the major challenges that we face. They've been with us for a while, but what matters is how we respond to those challenges concerning the negative interest environment and the ongoing digitalization and its acceleration. There's also the climate crisis. That's one of the biggest challenges that the world faces, as well as the COVID-19 pandemic. All these matters have placed us in a different context, which we need to cope with. We need to focus on that, and we need to adapt.
We need to focus on areas where we can make a difference, so impact for our customers, impact for our customers and impact for our staff and impact on the climate. We're good at working with our customers. We have a strong sustainability foundation. We have powerful technology. We have excellent people, and we generally achieve good results. Based on those five elements, I'm going to walk you through this presentation. First, customers increased again by nearly 500,000 in a year in which the COVID-19 pandemic endured. In NPS, which is the Net Promoter Score to measure customer satisfaction, we ranked 1 in 5 of our 11 retail markets, and digitalization increased significantly due to COVID-19. So of the 6.9 billion customer interactions, 91% were via a mobile device.
Now over 50% of our customers bank via mobile only, and the mobile product sales surged. This includes our investment products. In Germany, the number of investment product accounts grew to 2 million, an increase of 21% compared to last year. Now, sustainability, that's a major ambition. In the past, we were one of the first banks to commit to the Paris Agreement's climate goals. We were the first to develop a science-based approach which helps us measure the impact. We were among the first banks to develop sustainable loans, which we issued to help our customers.
We guided 2.5 times as many green transactions last year, and we produced a climate report and joined the Net-Zero Banking Alliance, representing over 40% of global banking assets and having committed to align their portfolios with net zero emissions by 2050. That means global warming should not exceed 1.5% by 2050, and that's good, but 2050 is a long way off. We need to translate that to short-term goals. If you look at that goal of 1.5 degrees or the net zero emissions line, it means reducing carbon dioxide emissions by 45% per 2030. That's what we're focusing our lending portfolio on. They call that Scope 3. That's how we can make the biggest difference in our own lending portfolio.
In each sector, we've charted a roadmap of climate pathways to ensure that the global carbon dioxide emissions are decreased by 45% by 2030. We've done that in oil and gas. We've cleared that pathway already, and that also means that we won't be funding any more new oil and gas fields as we recently announced. As for the other eight sectors, because there are nine Terra sectors, I mentioned oil and gas, and for the other eight Terra sectors, we'll have those climate roadmaps ready by the end of 2022 and for our entire lending book by 2023. We also aim to increase new financing of renewable energy by 50% by year-end 2025 with respect to the level in 2021.
We certainly take the climate transition seriously. We absolutely want to do our bit, and we want to be at the vanguard here. As Hans Wijers just said, ESG is not only about climate, and global warming, it's also about social and governance. We want to ensure that we combat financial and economic crime. The best way to do this is to team up. That way you can achieve the best results. In the Netherlands, we've teamed up with the Fintell Alliance. That's an alliance of ING and three other banks, as well as the Financial Intelligence Unit. This is because we're firmly convinced that if you jointly use external data, you can trace the criminal networks far more effectively. Another important robust element is fighting fraud, theft, and cybercrime.
The way we do this is by simplifying and standardizing our network by using the cloud. We're also investing in access security to better protect our systems. Next, our third pillar of strength, that's about technology. As I said, we want to offer excellent customer experience, and we leverage our technology to that end and provide our channels 24/7. We're also digitalizing our processes end-to-end for a seamless customer experience. We're using scalable technology, which enables us to develop new products and services faster and at a lower cost for our customers. Now, people, of course, our people are important for us. We invest in our people. We aim to teach them future-proof skills. We also believe that hybrid teams are important. They tend to be more creative and more adaptable.
They change the context and deliver a better performance and offer better solutions. That's why at ING, we have what's known as the 70% principle, which means that not more than 70% of a team should comprise a single nationality, one gender or age group. Of course, that 70% principle carries over to diversity. We're pleased that our Supervisory Board, which you see the members here, one-third of the Supervisory Board members is female. That aligns. One-third is male. For the top 300 at ING, we've set the target as of 2025 of having at least 30% women throughout that group. I'm repeating at least 30% here. We also think it's important to give equal pay for equal work.
At the end of 2021, we launched the global job architecture, which is basically a tool, and this enables us to compare jobs like for like at every level of the organization to determine whether women and men at the same job level are receiving equal pay for equal work in 2022. If there is a gap, we can also reduce that gap. The same holds true for the global pay gap. What the average man and the average woman get paid within ING reflects the global wage gap, and we'll report on that at the end of 2022, and we'll do our best to reduce that gap as well. My coworker is nodding vigorously, so she agrees. Sridjan agrees, and I hope you do as well. Next, our results.
I'm proud of those results, and I'd like to highlight them on this slide because I mentioned low or negative interest environment. Nonetheless, ING remains a bank that is highly sensitive to interest income. Over 80% of our income consists of interest, and at the end of the day, we want to diversify that so that we are not dependent only on interest rates and their fluctuations. We've decided to grow our fee incomes significantly in 2021, and you see 17% growth in fee income for 2021. Some of these graphs are multiyear charts, so four, five- year charts. Altogether, that contributed to 19% of our total full income. That's important because you see a decline in interest income on these bar charts.
That's the gray bar is low interest rates, so we try to maintain our revenue through other areas in our business model. In 2021, the net result was nearly EUR 4.8 billion net, which is 92% higher than the year before. We managed to grow our business through more transactions, more customers, more sustainable deals. In the meantime, we also managed to curtail our costs. Our risk costs were EUR 516 million or 8 basis points over average customer lending, well below our through-the-cycle average of approximately 25 basis points. Our loans increased to EUR 30.6 billion in 2021, up from EUR 2.5 billion decline in 2020.
This compares more to the level from before COVID-19 and net customer deposit growth was EUR 10.3 billion compared with 2021 when it was EUR 41.4 billion. That's because customers have resumed normal spending patterns. I'm sure this rings a bell. In addition, we took several actions, including introducing the negative interest rate in Germany in November 2021. We also successfully concluded a share buyback program, and today we intend to cancel those shares if you approve. We achieved return on equity of 9.2%. That's a strong improvement with respect to the first COVID-19 year, and our capital position was strong and culminated at 15.9% CET1 ratio. That takes us to the dividend. We'd like to pay you as shareholders an active dividend.
According to our policy, we distribute 50% of our net earnings. We already paid EUR 0.21 in dividend, and we propose paying EUR 0.41 following the vote. We're also very concerned about the future. We condemn the Russian invasion in Ukraine. We're concerned about the safety of people, and what also matters is how this will impact the economy. We see rising inflation, rising cost of energy, and we see that supply chains are under pressure. We're worried about that as well. As ING, however, we're well prepared. We have strong capital buffers. We have a robust risk policy, and we have a strong focus on implementing our strategy. In addition, we're focusing on two pillars.
One is continuous improvement of service to our customers, and the second is our strong sustainability pillar. On this note, I'd like to convey huge thanks to our ING staff for their wonderful dedication in 2021, and I'd also like to thank you for your support to ING. I'll be happy to answer questions at this meeting, and I'm handing you back to the Chairman, Hans Wijers.
Thank you, Steven. We'll hear the questions in a moment, but first I'm going to cover 2C. That's the report from the Supervisory Board . I referred to the report as in the Annual Report on pages 202 to 231. You'll have read in that report that the Supervisory Board in 2021 met 14 times at regular meetings. You'll also find the topics we discussed. These include strategy, the impact of COVID-19, ESG, KYC, AML, and more recently, since the beginning of 2022, obviously the Russian invasion. I've just mentioned these topics in my explanation. I'll leave it at that and refer to the report included in the Annual Report , and we will move on to item 2D. That's the remuneration report for 2021, as included in the Annual Report on pages 236 to 262. I'm pleased to give the floor to Herna Verhagen, the Chairwoman of the Remuneration Committee.
Thank you, Mr. Chairman. I'm pleased to address the remuneration report for 2021. Of course, you'll find that on pages 236 through 262 of the Annual Report . The Remuneration Committee addressed various aspects that came into play in 2021. Of course, COVID-19 is among one of many, as Steven just mentioned in his presentation. We also thought about how this impacted ING staff and how it impacted the company. At the meeting, obviously, we also discussed the performance goals we set, and during the course of the year, we discussed realizing these performance goals. At the beginning of this year, we determined the performance goals and thereby also the payment of variable remuneration. We also discussed the performance goals for 2020 as included in the Annual Report for 2021. The remuneration principles for the Executive Board are the same as those that apply for other staff at ING.
The purpose of our remuneration policy is to attract, motivate, and retain staff and obviously to help them acquire the right skills, capacities, and conduct necessary to implement and realize the ING strategy. In addition, we aim to offer balanced remuneration focused not only on realizing short-term goals and achieving short-term results, but also on realizing the long-term result of ING. Achieving non-financial goals, for example, in customer orientation risks and assessment, sustainability and staff carry at least as much weight as achieving the financial goals. To ensure that our remuneration policy matches what stakeholders expect from us. We are in continuous dialogue with regulators, customers, shareholders, works councils, and other stakeholder groups. In 2021, we spoke with our stakeholders about our remuneration policy and what they thought of it.
They indicated that they would like greater insight and transparency concerning the impact of ING's performance on variable remuneration. We took this into consideration in the remuneration report for 2021 and disclosed the targets for the new year as also included in the remuneration report for 2021. I'll briefly address the remuneration report as well as the policy applicable to the Executive Board. In this respect, 2021 was a successful year for ING, as Steven explained in his presentation. The variable remuneration for the members of the Executive Board was calculated and adopted by carefully considering the ING results as a whole, based on general targets as well as individual targets. Scores on financial and non-financial targets result in a variable remuneration of 17% for the CEO and CRO, and 18% for the CFO.
The way that this variable remuneration was awarded and the considerations that led to it are explained in more detail in the remuneration report. As indicated, we took into account the input and feedback of our stakeholders and shareholders in drafting the remuneration report for 2021. In this remuneration report, we also describe the remuneration policy for all ING employees, including the principles applied, how the performance management process crystallizes, and how it relates to remuneration. In 2022, we will remain in consultation with our stakeholders about remuneration policy and how we report on this. I'd also like to say a bit about equal pay and the gender pay gap, and Steven has already said a bit about that. We believe that it's important for all people performing the same work in the same situation to be paid equally.
The gender pay gap is a common social problem in which women generally earn less than men. There's a wide range of underlying reasons, for example, that often fewer women work in higher positions. In addition, women may not stay in the same jobs for as long. In our Annual Report about 2022, we will publish for the first time the worldwide gender pay gap, and we'll monitor this annually and report back to you on that. As for the remuneration report on 2021, it has been submitted to you for an advisory vote and of course, we will consider the results in the remuneration report that we will be drafting for 2022. Of course, I'm happy to answer any questions. I'll hand you back to the chairman now.
Thank you, Herna. Ladies and gentlemen, it's your turn now. We're going to structure this exchange. As indicated previously, we're going to address the themes mentioned previously in three rounds. The first theme is about strategy, financial performance, and sustainability. The second themed round about all topics mentioned in two A through 2 C and 2D in the remuneration report from 2021. We'll start with a themed round here in this room, and you may ask your questions. After that, I'll read out the questions asked about the same topic via the chat or email, and I'll indicate who is going to answer that question. Once again, please state your questions concisely and ensure that they relate to the agenda item being addressed at that point.
First themed round, strategy, financial performance, and sustainability. Who would like the floor? Please approach the microphone where I will give you the floor. I'll start at microphone one. Please state your name when you take the floor so that we can record it correctly for the minutes. Microphone one.
Good afternoon, ladies and gentlemen. I'm Robert Vreeken from We Connect You, Public Affairs & Investor Relations. Two years ago, there were about 10 of us as shareholders because of the COVID-19 crisis. This was Ralph Hamers' final meeting, and I replaced it. Ralph Hamers be replaced by one of our own, such as Steven van Rijswijk. I'm glad to see that has come about and Steven van Rijswijk has continued Ralph Hamers' excellent improvements. My compliments. What continues to surprise me is that communication outside ING is considered to be an extremely expensive, polluting bank in terms of fossil fuels, and I think that needs to change.
One of my coworkers told me that EUR 16 billion in fossil fuels and EUR 7 billion in clean energy. It would be a good idea to accelerate this transition because given the Russia crisis. We're all being taken by surprise even though we had the most brilliant data analysts here in 2014. We saw the Crimean crisis. Now all of a sudden we discovered that we're getting 80% of our gas from Russia.
Mr. Vreeken, you need to answer questions.
"That's my question," says Mr. Vreken. The question is, in the future, could you look to see how we can avert these risks because you could have seen this coming a mile away. Another question is that EUR 17 billion is being spent on fossil fuels and EUR 7 billion is spent on clean energy. What about funding the largest polluters, the big customers such as Shell, BP, Tata Steel, Schiphol, and KLM? How does ING feel about this? As a partner in the chain, how can the ING promote making those polluting companies cleaner? Now, a specific case, PostNL has 50,000 employees, among whom many would like to make EUR 14 an hour. They're being tormented by rising inflation and the rising cost of energy.
I suggest giving these people solar panels, generators, and a circular system that reduces the use of water and gas, and then have ING cover financing because then you won't have to provide major pay raises, but you can improve their disposable income dramatically through a reduction in the cost of energy.
Thank you for your clear question. Does the ING want to play a part here? I'd like to give other shareholders the opportunity to ask questions. Now, microphone two, please.
Good afternoon. I'm Romuald Abma. I'm a concerned dad and a concerned shareholder. These concerns arise from the fact that climate change is becoming worse and worse and is deeply impacting the life and well-being of my daughters and the economic consequences of the ING. Despite the wonderful words used here, the measures by the ING for the climate are too slow and too few. The recent ruling against Shell reveals that the court determined that every company has an extensive requirement to make an effort to reduce emissions by customers as well. This means for the ING that they share responsibility for financing with respect to fossil fuels. I share the previous speaker who asked questions concerns. Okay.
Can we accelerate, asks Hans Wijers. Is that your question?
Why does the ING continue to fund so many billions in coal, oil, and gas?
Okay. That's a clear question, mentions Hans Wijers.
I have another important question for you. The ING manifests as one of the front runners in sustainability, although the Eerlijke Bankwijzer conveys an entirely different impression. On that Eerlijke Bankwijzer , ASN and Triodos are doing well. The Rabo has good performance. Even the ABN AMRO bank's performance is improvement with respect to the ING. The ING is performing among the stragglers here. My question is, why is the ING so far behind in this respect?
Okay. Clear question. Back to microphone one.
Good afternoon. I'm Gillian Gailliaert, and I represent PGGM, a few medium participants, including APG, Ahold and MN. At 2A and 2B, I have four questions. May I ask them all at once?
Yes, please go ahead.
ING has decided to stay in Russia for the time being. Please explain why ING is remaining active in Russia and under which circumstances the operations would be scaled back more quickly. Second, about climate. ING has mentioned that it will not submit its climate strategy for an advisory vote during the general meeting of shareholders. There are three reasons. Climate figures integrally in the strategy. There are no standards at this time, nor is there any opportunity for assurance. Implementing the CSRD will enable uniform reporting standards. In addition, the auditors will need to provide a reasonable degree of assurance. Would ING consider at that point to submit the entire climate report for an advisory vote by the AGM?
My third question concerns implementation of diversity and inclusion policy. Which steps has ING taking to improve the positions of underrepresented groups such as women in lower management levels as well as people of migrant extraction within the bank? My final question is about reports from whistleblowers. During the annual dialogue between Eumedion and ING, there was mention of reporting announcements by whistleblowers. Now the ING report to the Pillar 3 report, which does not reflect or convey these reports from whistleblowers or describe the course of events to follow up on it. Given the recent cases of inappropriate conduct, did the ING intend to report more extensively on this than it has thus far?
Thank you very much for asking your question so concisely. Now back to microphone.
I am Sara Heinsbroek from the VBDO. I have three questions that I would like to ask all together.
Yes, please go ahead.
They are in English. First I'd like to thank ING for their constructive dialogue with us in recent years. When will ING start reporting on its escalation strategy per sector, including clear goals and milestones for engagement and potential divestment thresholds? [Foreign language] . When can VBDO expect ING's first reporting regarding the ENCORE biodiversity module? Can ING explain how the results and learning will be integrated into its policies, engagement and strategy? [Foreign language] Finally, r ecently announced EU due diligence law. When can VBDO expect ING to report more extensively on improvements of labor conditions in the supply chain?
[Foreign language] . Compliments to you as well. Microphone number one. Please state your name.
Thank you, Mr. Chairman. I'm Mr. Jorna, and I am representing the Association of Stockholders, the VEB. I have some brief questions, Mr. Chairman. If you receive a request to facilitate gas or oil extraction in the North Sea, in what measure would you pursue your current policy or say, because of the war and trying to divest Russian gas, we will finance this. This may go to your conscience. My second question is, do you accept rubles for repayments and interest payments in Russia? The ESG question is that from 1 January 2023, every office needs to have an energy performance label C. You have undoubtedly financed many office premises.
Does ING know how many offices do not meet energy level C so that the municipality needs to enforce, and I will figure as standard assets in ING. Will buy up standard assets in ING. You're divesting online retail customers in France and China. Why is it that in Germany, the online retail clients are functioning, but in these other countries, they're not getting off the ground? My final question, I'm not sure which round it needs to be asked. Perhaps, I'll have some other questions in the second and third round. IT is indispensable for ING, but we've often read that in Belgium and in other countries through other platforms. In what measure is ING on a single platform globally to what extent?
Thank you. I'm not going to keep mentioning compliments, but you do deserve them. Microphone two, please. Thank you.
Good afternoon. I'm Michael Benis, and I represent the BankTrack organization. BankTrack is investigating commercial banks globally and their impact on human rights, climate, and biodiversity, among other things. We've heard several questions about ING's financing of fossil fuels. My questions address that too. First, I'd like to say that we're very happy that ING is making such good progress in this respect. As we heard in March of this year, ING mentioned that they would not issue new financing to new upstream oil and gas projects, and the bank referred explicitly to the conclusion of the International Energy Agency, and that if we want to curtail global warming to one and a half degrees, there may not be any new investments in oil and gas fields.
We're very happy that the ING is embracing these conclusions and has adopted new policies accordingly so quickly. At the same time, ING in general and the banking sector as a whole funds a lot to general companies in general and not so much to project financing. Based on what we've investigated, we find that it's 90% versus 10% in terms of bank investments to fossil fuels. At least 80% of the companies in these industries have considerable expansion plans. We've noticed that the ING still provides financing to companies that are expanding their fossil operations. My three questions are. First, how many projects has the ING actually financed during the year under review that can be excluded from upstream oil and gas extraction?
How many projects do you intend to stop financing in the coming year? My second question is, does the ING know how many customers are expanding their fossil upstream oil and gas projects? My third question is whether the ING plans to continue financing the companies that are expanding upstream oil and gas, and to ask them to stop, and that if the company doesn't come up with a plan to discontinue that, then exclude them from financing.
Mr. Stevense, you have the floor.
I'm from the Foundation of Legal Protection for Investors, the SRB. My first question is about your staff who had to work from home. Do I understand correctly that these staff have returned to their offices? Or do they work from home three days a week and at the office twice a week, two days a week? How are you arranging this? There's a question about France and Austria in that respect, and we're amazed that the wholesale customers are doing well. You're also retaining mortgage and consumer loans, but you're divesting the rest, and we don't really understand that. You also just mentioned Russia. You are required to deposit your money at the Russian Central Bank. In what measure can we expect you to ensure that these monies won't be used towards the war?
The government is imposing very stringent requirements on banks, including checking for money laundering, and you're going to pass on those charges to the customers. We think this is odd, and we think that this is more of a government task. Next, the endless bond loans, the debenture bonds of 6. 7%, and 8.5%. Do you expect those to continue? How do you expect them to be?
Excuse me, I don't understand your question, says Mr. Wijers. Could you please repeat it?
I'm talking about repaying the eternal debenture bonds of 6.7%-8.5%. What is the background to that? And what also intrigues us in relation to the interest swaps that we had. You didn't increase them with revolving credit. You'll be subject to penalties on those. I'll leave it at that, Mr. Chairman. Thank you very much.
The last person to receive the floor to ask questions is the gentleman behind you, and then we'll start answering questions.
My question will be in English because I don't really speak Dutch. My name is Igor Marianen, and my question concerns the recent sanctions connected to Russian-Ukrainian crisis. The clients of retail banking holding Russian passports got their accounts blocked recently in, like, in many of them, even though their accounts were under EUR 100,000, and they were asked to provide the evidence of residence in EU. First, their accounts were blocked. Only then the evidence was asked for. This is a little bit questionable practice, and there are messages of such cases in retail banking also within ING. Though these messages are not unconfirmed yet. Though there are confirmed cases in Raiffeisen Bank and Deutsche Bank in Austria and Germany.
I would like to ask to put attention from the side of the bank of ING, so to avoid discrimination and discrimination based on the passports to check how the rules concerning the Russian individuals will be implemented, and this way, maybe to save further litigation costs. Thank you.
Thank you. Steven.
Yes.
Please start answering the questions of Mr. Vreeken.
Yes. So I mean, clearly, I mean, you said that climate change is a very big risk and didn't we see this coming and well, I think everybody sees this coming. I'm very sorry, in Nederlands.
In Nederlands, yeah, sorry.
Sorry. Yeah. Okay. In Nederlands. Meneer Vreeken. Yes, I'll continue in Dutch. Obviously, climate change is an enormous challenge, and I think you more or less said that we should have seen this coming. Well, perhaps we should have seen things coming, some things coming. What I'm very pleased with, and that is due to COVID-19, is that everybody, governments, people, are taking action. That is, I think, the upside of COVID, that people are really saying, "We've really got to roll up our sleeves and get to work." COVID has helped in that respect. You also referred to the funding of EUR 16 billion. That is correct. Our total upstream and downstream portfolio amounts to EUR 16 billion in total. In our financing, we have about EUR 7 billion in clean financing. 60% of our annual financing annually in energy generation is sustainable energy. That's a majority.
Now then, percentage-wise, we are financing more than twice the sustainable energy generation than other generation. The question is to Ms. Verhagen. Well, of course, that's not my remit, but we have a sustainable innovation corporate investments. The tricky thing about sustainability is that there are many, many good ideas, but sometimes technology is not entirely proven, there are not enough clients, or there are not enough contracts. Now, the difficult thing for a bank is that, of course, you have stakeholder principles, and you try to keep the money of your customers safe. When you invest that in financing, sometimes you have these projects that you say, "You know, they're pretty interesting," but are these projects really ready for the market? Can we, as a bank, finance that in a safe way?
That's not always evident, and sometimes we look at it, but sometimes it's difficult. Mr. Vreeken, yes, yes, we'll be dealing with your question in a couple of moments. What we do sometimes, if we look at investments in shares or financing shares, Ebusco is a company making electrical buses. There we have invested in share capital. You've always got to be careful with that. Sometimes, well, we have to look at solutions, see whether as a bank we can do something and play a role, Scope 1, Scope 2, or as one of the gentlemen on my right-hand side just said, "you should also take a look at the supply chains of your customers." Yes, we are prepared to do so. Why don't you send us an email? No, sir, the chairman.
First of all, we're going to answer all the questions. I think it was Mr. Abma. It was about emissions. No. There was still funding oil, carbon, and gas. Well, in 2017, we decided that we are not going to finance any coal power generation. It's about 1.6%. We also said that in 2025, we're going to withdraw entirely from coal-fueled power generation. This tiny bit of financing that we had was still withdrawn since 2017. We contacted our customers that were still very much engaged in energy generation. We said, "We're going to reduce this from a higher percentage to lower percentage, and if you can't go along with us, we will withdraw from your business," which is precisely what we did.
We're almost carbon-free in terms of project financing. The Eerlijke Bankwijzer. Well, we have excellent contacts with several bodies, including this one, in order to get feedback on their views of our business and where we can improve. Note, I don't want to sound defensive, but you've got to keep in mind that we have a global business with operations in more than 40 countries with our wholesale banks. We don't only do business in 40 countries. We do business in more than 100 countries. If you support the general economy, the setting is quite different from only supporting sustainable energy. This is something that we need to adjust.
Constantly, we said, "Okay, we want to lead the way in line with the strictest scenarios." There's 2050 net zero, and also with the energy path, we want to make sure that our portfolio is in line with that. Now, the PGGM question. Remaining in Russia, we said, "Okay, our international customers, non-Russian customers, will continue to be supported there should they need working capital." For those customers, it's not very simple to all of a sudden pull the plug, which would also jeopardize those companies. We have a responsibility there. We said, "We're not gonna do any business anymore with Russian customers," but we have EUR 6.7 billion outstanding to customers in Russia and Russian customers outside Russia. To put it bluntly, I want to get my money back.
That does mean that we need to continue our operations, and when fundings come to an end, we will ask customers to repay us. Of course, there are also limits to that. We have Western sanctions from Russia, so we'll have to see how we deal with that. Now, climate, you're quite right about the three reasons why we're not putting this to the general meeting of shareholders. The main reason being that we consider this to be part of our strategy. Or that climate is integrated part of our strategy. In general, we account for that. CSRD reporting will go along with that. We will look at that. With respect to diversity and inclusion, that's also a good point.
We can now, with the Global Job Architecture, we are able to measure the degree of diversity at the different job levels in our bank and how we pay with respect to men and women working in the same job positions, but also the average pay of men and women, global difference in pay. That's just one aspect of diversity and inclusion. At the end of the day, we said, "Okay, we have this for the top 300, and then we're also going to roll it out for lower echelons." Gender diversity is only one dimension thereof. It's also about making sure that the entire population can learn how to deal with the different stakeholder groups, how you make sure that you actually roll out inclusion.
We organized an inclusion week in which we all discussed our own personal experience, and background is only one dimension of inclusion, so we really try to make headway here. We have about 30 inclusion groups that represent certain ideas and backgrounds at ING, and also speak to senior management and voice their ideas. We also have to develop a way of measuring all this properly, and we haven't gotten that far. That's why I'm saying, boys and girls, let's measure inclusion properly and the 70% that we have, let us roll it out properly until we can really measure it properly and then move on from there. Now Pillar 3, and I think you submitted the question prior to the meeting. That's Pillar 3. This is about sexual harassment and how to report that.
Possibly this year we will look at how to do that, including rationale argumentation. Good point. VBDO now, the Association for Sustainable Development. You asked your questions in English. Unfortunately, my English is reasonably good, or that's what I hope. In any case, depending on how we answer your question. You started by asking a question as to when we will be reporting on our strategy per sector, including clear targets, milestones, and potential divestments and thresholds. Is that more or less the gist of your question? Yes. Okay. More or less. Well, that's a I would say a C. A C for my English.
It all starts with doing this inclusively. Why am I saying this? Because actually the, a s a bank, the easy thing to do is to say, "Okay, we'll just divest everything." But that's why I completely disagree with Extinction Rebellion. To say we're gonna divest everything, okay, well, we can divest it, someone else will buy it, and that way we will have zero impact on the climate. Zilch. Nothing at all. We want to do this as inclusively as possible, meaning that we want to engage with companies in order to make sure that their policies with which they can adjust their production process. Technically speaking, this is Scope 3. These are not our emissions, but the emissions of our customers.
We want to do this in such a way that we can actually make sure, as a society at large, that we reduce carbon emissions by 50% so that we can move to zero emissions or 1.5 degrees Celsius, if you will. Then that means, and, for our target in terms of oil and gas, first of all, 2014 -19%, that's off the top of my head that I'm saying that. For 2030 in the IEA scenarios, we say -12% for 2025, -19% 2030, and about 15% in terms of upstream oil and gas, 2050. We're on that line, we're on track, and that is what we will be strategically focusing on. We've got that roadmap. We've got the plan.
Now, the million-dollar question at the end of the day will be what happens if you deviate from this path and if your customers don't achieve these plans? I think that with you and other organizations, we will have to see what we do. Are you really going to stand by your demands, your requirements, or are you going to adjust accordingly? Then the ENCORE-based biodiversity reporting. ENCORE, let me explain this. ENCORE means Exploring Natural Capital Opportunities, Risks and Exposure. The issue is whether you can measure now how biodiversity affects your own portfolio. Based on those ENCORE data, we mapped out which sectors have the biggest impact on our credit portfolio, because ENCORE can do that. We published that, I believe, a couple of weeks ago, and we published it on our website.
The sectors where our portfolio has the largest impact is food and agriculture, building, mining, and energy. These results have been incorporated in our ESR policy, environment, social responsibility, and that sort of reflects what our perspective is on lending. Ljiljana here knows about this. If it's not in line with our ESR policy, we will issue a negative advice, and that will concern, for instance, the wetlands in certain regions in the world, where there are activities that have an impact on biodiversity, and we will say, "No, we're not gonna fund that." If there's a negative advice, then it has to go up to the highest credit body in order to get an exception to that. I've checked that this past year. You see this in Annual Report s 16% of ESG advices were negative.
I asked what were the exceptions, and there were 1 and 2. We have a very strict policy. If Anchor, and this applies to more ESG elements, is more capable of measuring this properly, and that's the gist of the matter, we'll take another look at it. But for the moment, measurements are too limited. That also touches on your third question of VBDO, which is about improving conditions, labor conditions in the bank supply chains. Once again, we don't really generate the biggest impact because of our own operations, but it's our customers, what do they do. The farther away you get in the supply chain, the more difficult it is to track what's going on. We have all these UNCP guidelines that we abide by, and we also address labor issues.
Based on all these international guidelines and et cetera, we have high-risk customers and transactions that in our view require a detailed analysis to see whether our customers comply with the frameworks. We look at sectors, products, et cetera, et cetera. Quality of data of these recommendations can be found on pages 175, 176 of our Annual Report. Once again, also in terms of human rights, it is very difficult, and you'll agree with me, I'm sure, because this is something very difficult to put into this quantitative mold. What we do is publish case studies. It's about dilemmas. How do you address them? How do you deal with them? Which is why we want to engage with stakeholders in order to constantly improve.
The better we can measure, the better we can adjust our organization and focus on it. That, as far as VBDO is concerned. Not in English, but there you go. Now, VEB, Mr. Jorna, gas and oil. Yes. That is a dilemma indeed. The answer, I think, is, and we decided to say if we really want to do something about climate, and I understand, of course, this invasion in Russia is going to have an enormous energy impact as well. But let me be a bit outspoken here. I mean, there's always something going on. I don't wanna downplay things, absolutely not. But at the end of the day, if we're going to go for climate, if climate's gonna be a strategic pillar in our strategy, then we will have to take decisions.
We have said we will decide—we decide to make sure that the climate scenarios in the IEA standards, that we'll follow them. In our case, that means if we want to have a roadmap for oil and gas, that means that we cannot finance new oil and gas fields. I also believe, and perhaps the Russian situation is a good warning for us, that we really have to make sure that we are less reliant on fossil fuels, and we have to do so really, really quickly. It's a very difficult dilemma, and we will indeed continue to keep an eye on these developments. What else? Ruble. Yes. Well, of course, there are particular restrictions in exchanging euros and dollars, and those sanctions are different in Europe or U.K., U.S., and also Russia.
Russia has sanctions. There are limitations in the currencies in which you can be paid and the accounts you can be paid into. Loans in rubles in Russia, we are repaid on our Russian accounts in rubles. Retail. That's a good question. I think Mr. Stevense also commented on that question. I have said this before also in analyst presentations. At the end of the day, in retail, it's all about achieving local scale. Retail products, Mr. Stevense referred to that, mortgages, consumer loans. I mean, there's so many local requirements, models, data, IT infrastructure. There are all these regulatory requirements and customer requirements tied to that for banks, particularly for banks. Even if you try to structure this globally in the same way, for wholesale customers, that does work.
One payment system, one type of loans. Well, we're not entirely there, but we have a couple. For retail customers, I must say that the requirements that we have for mortgages here, I mean, they're thick books. They are very different from Germany, France, Italy. In short, local scale and local impact in retail is key. That means that we will then see whether in the medium term, we are capable of achieving sufficient scale or have a local impact, something that's produced in one country that we can use it somewhere else or that we can achieve sufficient return on equity. If the answer to all those questions are no, then you will see you may, might want to consider whether you need to take other strategic decisions.
In some cases, we decided to stop retail operations and to use the capital in other markets where it does work, Benelux, Poland, Romania, Spain, other markets. Because local scale allows us to have an impact. Related to that, interestingly enough is, can you have one IT platform for all your global operations? Now, the answer is no. An IT platform is a short word for everything it entails. It's very complicated. What you try to do is integrate elements or components that are less dependent upon regulations. You can do that at the front end. You may have the same kind of app that you can roll out in the same countries. If there's an upgrade, then you can also upgrade another country as well.
You can do it also by saying, "Okay, we're gonna use the same codes." Because if you develop something, and this is what I was referring to when I referred to modular technology, you develop something, tiny pieces of code in a certain way. Once you've done that and developed that, you put it in the IT platform. In that connection, we do have one IT platform. It's a TouchPoint Platform. If somewhere in the world develops something, an open app or a make the payment, then that is put into the platform so that everybody elsewhere in the world that wants to use that can then use that command, that instruction. That way, you only have to develop something one time, and then you can roll it out across the world in the same way. It's a more extensive answer. Sometimes this does work, sometimes it doesn't work.
On to BankTrack. Thank you for your observations. Yes. If you want to follow the energy paths of IEA, you've got to get to work and constantly talk to your customers and make sure that they can achieve all this. We do not disclose how many projects where we said we're not going to finance new oil and gas fields, which is precisely what we communicated to our customers. We won't be invited to do so. Expansion. The world, at the end of the day, is still dependent on fossil fuels. That's not what I want per se, but that is simply the situation we're facing, which is why it's so important to engage with customers about their transition. Particularly those sectors that are very difficult to change.
Sometimes there are simply insufficient technologies available for those company for them to transition very rapidly. The International Energy Agency has in fact said for different sectors, there are different speeds, because for some sectors it's much, much easier than for other sectors. Which is why for us it's so important to engage with the fossil companies, the fossil businesses, to help them finance renewable energy so that they can move away from oil and gas more quickly. Stevense.
Now, regarding the hybrid workstyle by Mr. Stevense, we've indicated 50% at the office, 50% from home as a guideline, and we do that for each team, not based on each office, because the team is best able to assess what good methods of working together are. For example, horizontal communication, because if half the meeting is at home and half is in one room, then you'll only consider the people in the room, and you won't really pay attention to the people on screen. You've all noticed that. You try to agree with the team, when is it important to come to the office and when do we work from home? For the company overall, for each building in each country, it should average out to 50%, but it may vary depending on the team.
Now, I've discussed retail, I've talked about Russia. You asked what money are they using to fund the war. Well, they've still got our money. I'm not sure what's happening with the money, because the money is in the companies, but that's not my call. We've lent some money to companies that belongs to you as shareholders. We have agreements as to when we try to get repaid. As for money laundering, we've heard your appeal. Keep restating it is my view. As for Kifid, that concerns revolving credit or revolving loans. Together with Kifid, that's a mediation consumer organization, and they look into complaints that parties may have.
Based on that, they said that in the past, banks had provided unclear information, and we set aside a provision to compensate customers for damages that they said they suffered, and we did that, as we always try to do. Tanate, debenture bonds.
A question about repayment of bonds, hybrid securities. Just to give you some background, ING with our balance sheet, we issue a lot of bonds and we redeem a lot of bonds every year. I think the criteria we use for when we redeem bonds is duration of that bond, how long a life it has left, whether it can be used as capital, which in the case that we redeem that you refer to, it no longer or partially doesn't count as capital anymore. We don't want to pay the 6%. Then the third is we can finance it at a cheaper price than what that 6% is. That's why we decided based on this criteria to redeem the bond. Okay, thanks.
Thank you, Tanate. Yeah. Regarding the EUR 100,000. That's clear. We'll keep an eye on that. We comply rigidly with those sanctions, and we'll continue to do so. I'm sure that we do make mistakes, and we're notified about that. I'm not in charge of what the other banks do. We'll pay attention, and we'll comply rigidly with those sanctions. If anything is unclear, and sometimes it is, then we'll ask the central bank or the Ministry of Finance. Thank you.
I don't see anybody else at the microphone for the first round. Mr. Jorna and Mr. Vreeken. Okay, Mr. Jorna, I'll give you the floor first.
Thank you. I'm Mr. Jorna from the VEB. I had asked a question about the C energy performance label that customers in offices are required to have by January 1st, and what is the exposure to the ING, and which measures has the ING taken to be clear about that? Or is it simply a system of issuing alerts?
Yes, you did ask that question. I apologize. Mr. Vreeken, I'll take yours as well.
I'm delighted that the ING has achieved such fantastic results. Perhaps you could do something for society. ING was a major sponsor of the Artis Zoo, especially the lions. But ING is now invisible there and the zoo in Amsterdam suffered a loss of EUR 50 million last year. Perhaps you could help some other outfits such as art. You've got the Amsterdam Art Fair, and there's also the TEFAF. The TEFAF Art Fair was canceled, but parties that you used to sponsor might appreciate your help anyway because Artis had a difficult time last year. That's just for your consideration. Now, what's important is China. We didn't see Russia coming, but China's there and Taiwan. The question is how you can use your wonderful network in the Orient to ensure a good ambiance there.
Finally, even GroenLinks would like to expand the defense, and that's a good sign because you don't want Russians or Chinese here in the Netherlands telling us what to do. How will the ING invest in defense? Because it's more important for us to be free. How will we invest in what's sustainable and green? Because most things are not sustainable. If you develop things properly, then you can make it more sustainable.
I see a second person at the microphone who has not yet asked any questions.
Yes, I worked for this excellent company for 30 years.
Could you please state your name?
I'm Jan Bouwer. I apologize. Based on my own experience, I know what a fine company this is. Last year, the Chairman of the Executive Board said that I had made a huge contribution toward the development of ING, the Netherlands. That indicates my commitment. I do hear you saying, Mr. van Rijswijk, I’d like my money back. I bought 9,000 shares at EUR 15.5, and now the share price is at about EUR 9.5. I would say keep up the good work.
I also see Mr. Jorna again, and I don't want to ignore him. Apparently, he has another question.
Yes, I'm just checking. Okay. Remuneration. This round or the next one? Okay, the next round. Okay. Following up on the first round, I have a comment in advance. If those people blowing the whistles had read your Annual Report , they wouldn't have needed to manifest this performance. I think it's a lack of awareness about how ING deals with ESG, and if they had done their homework better, then they would certainly see that ING is one of the trailblazers here. I've read many annual reviews, and ING scores very well. So keep up that good work as well. As for ESG, we'll see this in the remuneration. ESG is now increasingly important, and non-financial targets are now 50%. How do you quantify your progress, measure it, and assess it?
Are you considering assigning the auditor to include that in the review and audit it? We'd like them to audit those non-financial targets as well. That's one question. Digitalization is a spearhead as well, and that means that you want to transition as many customers as possible to entirely mobile. Doesn't that make you particularly vulnerable for the large tech companies with lots of cash, such as Amazon, which also has a banking license, and by now you're hardly distinct. Now the growth of primary customers, I was a bit disappointed. Could you focus more on that? Because if you're a primary customer and use more than one service, then you're far more profitable to the bank. Perhaps you could attune your policy to pursue that as well. Next, the Supervisory Board report. Can I ask a question about that now?
Yes, no. Ask that one in the next round.
Well, perhaps you can think about it in the meantime, if I ask it now. Your position, Mr. Chairman, Mr. Wijers, you serve on all committees. Don't you trust the others, or is it impossible for you to manage, if you're not there? Delegation is a precious skill for a leader.
No, it's the custom within ING that the Chairman of the Supervisory Board serves on all committees. It fascinates me, and sometimes it yields some good things.
Steven. Yes, I agree with that. Well, I can't comment on our own share price, but I'll do my best, and I'll try to keep up the good work. I'll take that one on board. As for the lions in the zoo. Yes, we supported those as part of a program where companies adopted animals. We need to be selective in our support, and we've opted for sports and music. In fact, last year, the zoo did mention that two philanthropists of the zoo in Amsterdam offered to fund the lions. We're delighted to hear that at the ING as well. Next, about Taiwan. Okay, I'm not going to elaborate on all geopolitical tensions specifically, but if you look at the stress scenario, that does take geopolitical tensions into consideration. I'm not going to share my opinion about China's in Taiwan with you.
In our stress scenario, we do consider geopolitical tensions and how that might impact a bank such as ING. Now, about defense, I have two comments about that. One is that we have a very restrictive defense policy, as you'll read in our ESG report and in our ASR framework, which reveals what we do and don't finance. As a bank, I do not intend to fund substantial defense spending. We focus on other sectors. Now, about the C energy performance label. Now, let me think. The C label for ING. We provide real estate financing in one of the nine Terra sectors, so that's in the integrated climate report. You see there that the energy line, which is based, and it's not very advanced in all countries. I venture a bit, but in the Netherlands, if you ask three questions, you would already have an A label, but that's no longer the case.
They specify more rigidly what an A label is and what a B label is and even what a G label is. What matters is to measure the emission impact of a home. The same holds true for financing broader projects. We have a five-step plan with customers to have a business plan transformed to a lower energy label. For several years, ING has not been funding coal anymore. We're ahead of the City of Amsterdam in that respect. We're ahead of other banks, too, in that respect. Excuse me. What matters is that you have financed certain offices. As of 1 January, municipalities need to enforce no more label C. The city can intervene even by closing those offices. I don't expect that to happen.
Does the ING know how many buildings and office buildings they have funded that don't meet this requirement? We don't have an answer to that here, but I'm sure the ING knows, and I'll ensure that you get the answer to that question outside of this meeting. The question was also asked to the Rabo, and the Rabo doesn't have that info, so I question whether you have it. Mr. Jorna, that's not how we treat each other at this meeting. Ask and you shall receive. I would be very unhappy if I couldn't get that information. Now, about digitalization. Yes. Digitalization is not an intrinsic objective. It's a way to improve customer experience. Many customers want digitalization. It's not just I'd like a digital channel now. Now they want seamless experience, and they want a certain measure of quality because they want the banking to be fast and personal.
It's not just that we're digitalizing for the sake of digitalizing. Customers expect that from us. You'll inevitably wind up in a competition with some of the big tech companies. What matters at the end of the day is customer experience. I'm sure you remember ING Direct 20 or 25 years ago. Last Friday, we celebrated the 25th anniversary of ING Direct. Back then, we did not have the best technology, and we didn't invent digital banking, but we were able to carry that over to an excellent customer experience. We use it as an objective, as a tool to see whether we can check whether it's fast and useful and personal. How useful is the banking system? Because other regular banks are trying to digitalize, but so far, we've been quite successful here. I'm talking about KPMG.
Well, KPMG was beaming. They say, "Okay, we've got some extra work here. Stay in your seats, gentlemen. We're going to start experimenting with data to see how you can measure your ESG framework, including the risk appetite properly." Next, the question will be, can we get that measurement right? Can we measure accurately? This will be in a subsequent stage, certainly not in 2022. The next question is whether you're headed for assurance, and that will be a question for the years ahead. Once we have achieved stable data, we can get some assurance there, and we're going to think about that. Thank you.
I'd like to wrap up round one now. I'm going to wrap up round one, but Mr. Stevense has one more question, and given his long-standing commitment to the bank, he will be the final person asking questions in this round. Stevense is a lovely name.
Thank you very much, Mr. Chairman. My question is about Germany. There's a German regulator in banking who reprimanded ING in Germany. Can you tell me the course of events? Next, your capital buffers. Because of cryptocurrencies, banks need to have a stronger capital buffer. We also need to check the return here. I expect that this will pressure return. Please let me know the details on that. Those were my two questions. Those were our two questions. Thank you.
Usually, there are three questions at a time, but these were only two. Okay. How were we reprimanded by this German regulator? Transactions that were reported to customers too late. You're referring to a newspaper article. First, we don't ordinarily discuss direct contacts we have with the regulators. I'd also like to emphasize that this was a newspaper article.
There's no lawsuit pending?
Well, as I said, we never make such statements because next time you'll want to know whether it's true or not. That's why I'm emphasizing that this was a newspaper article.
Well, you can say it was a newspaper article, but you're not just saying that for no reason.
Well, I'll leave that with the newspaper article. On to your question about cryptocurrency. At the end of the day, we maintain capital to ensure that we can run the bank safely. Of course, we check which risks are relevant for our bank, lending risks or money laundering risks or fraud risks, all kinds of non-financial risks or financial market risks. Geopolitics is included there because, of course, that all impacts portfolios. That's how we determine within the guidelines of the central bank, how much capital we need to maintain. As far as cryptocurrency, we have an extremely cautious policy there. We don't directly offer cryptocurrency or cryptocurrency services to our customers. We believe that cryptocurrency needs to be regulated because we believe that otherwise it will become an excessive risk to society. You do have cryptocurrency is the question.
No, we don't have cryptocurrency. You said you want to ensure that it doesn't get out of control. Well, I mean, yes, it shouldn't get out of control in society, but we do not offer cryptocurrency to our customers.
The way you said it, the bank has a small involvement in cryptocurrency.
Let me rephrase that. We don't offer direct cryptocurrency to our customers. Not at this time.
Okay. We're talking about 2021 and the remuneration aspect of the Annual Report . Who would like the floor about this? Mr. Jorna announced this. Please approach the microphone.
I'm Mr. Jorna from the VEB. Mr. Chairman. We noticed that aside from the there are four financial targets, two of them are operational expenditures and cost control divided by the number of FTEs. Those are two new elements that were added after the approved report in 2020, so for 2020. Can ING explain exactly how they calculated this assessment? The main reason I'm asking this is because page 8 indicates that there are about 57,000 employees, and the sum that appears there on page 250 of the Annual Report is 62,032. How did you get to those numbers? Why were these two items added to the remuneration for the board of management? The most important aspect for us is that the changes in remuneration policy were not explained in the remuneration report for 2021.
You should provide that explanation because you amended policy, you added elements, and you're not explaining this in the remuneration report for 2021. Another point is that the Management Board is being held accountable for nine ESG targets, and there's no insight into the targets applied or what was measured or how this award was assessed. That makes this an essential point. These two items mean that we're going to abstain from the vote. The statement we would like to make in our abstention is the lack of an explanation concerning new objectives, and the remuneration policy does not align with and is not commensurate with the expectations that ING engendered with its remuneration policy, the lack of.
For example, we want the non-financial targets of a CEO such as Steven van Rijswijk, as well as how the Supervisory Board assessed these. As a result, it's impossible for shareholders to determine whether these sustainability goals are carefully thought through. My final remark is that it's ridiculous to see when we see the variable remuneration of your CEO compared with many other AEX-listed funds, and it might be a good idea to see whether legislation can be amended on that topic.
Mr. Jorna, you disappointed me in one respect because I had hoped that you would wait for Ms. Verhagen's reply before reaching that conclusion, because perhaps her insights would be cause for you to change your view.
I'm looking forward to a surprise, says Mr. Jorna.
Ms. Verhagen. I think I'll start with the question about the amended remuneration policy. We did not amend such policy because if we had, we certainly would have submitted this to the stakeholders and to the AGM for approval. What we agreed in the 2020 remuneration policy was that we have some financial and non-financial fields for setting the targets, and these financial and non-financial fields concern profit before tax, return on equity, and the non-financial ones relate to customer strategy, including risk and regulation, sustainability, and people. Regarding the remuneration policy that was approved in 2020, we agreed that within those fields we can determine exactly which targets we will assign or add. If you consider targets, operational expenses and control FTEs, then those are two important targets substantiating profit before tax, and these targets are based on ING's multi-year plan.
We did not add anything with respect to FTEs, full-time equivalents. Now, if you look at the ESG goals and in what measure we disclose which goal we set concerning exact targets and realization in the Annual Report for 2021, we tried to provide far more transparency than we did in the Annual Report for 2020. That's why in the Annual Report for each Executive Board Member, you'll find a list of the non-financial targets. You'll also see how the Supervisory Board assessed them based on those non-financial targets. We've tried to describe that, as you'll see, concerning customers, risk and regulatory sustainability into people. On the next page, we have then expressed that in percentage terms. You see that the financial targets may have been achieved to the tune of 100% in the non-financial targets.
If you consider customers, Steven achieved 60% of that, and we tried to explain it. We also understand that you want more transparency. It's not new in that sense. Year after year, we keep trying to improve the remuneration report. As for FTE, so full-time equivalent employees, I have an answer on my screen, and Steven will correct me if the answer is not correct. That concerns the 57,000 that you mentioned, and then the other number you mentioned, 62,132. That's the difference between internal employees and internal plus external employees. That's the nature of the difference. Mr. Chairman.
Thank you, Ms. Verhagen, for your reply. That's clear. I think that the difference in insight should not become semantics, but I think it relates to the word target. I think that the government in The Hague has explained this in the sense of the target being 1% or 10%. You explain targets in terms of elements that may or may not receive consideration in remuneration, so that's clear. That section of the statement can be omitted, and the other section is transparency. We see in disclosure that the CEO receives remuneration, but the CEO says it's not clear to us. You provide a lot more information. That's perfect. I would like, as a very brief statement, to continue along that track. By all means, continue.
Herna, we will continue. I would almost sing, but I'm not going to do that. Okay. I think that after Mr. Vreeken has asked another question, we can proceed to the vote. Mr. Vreeken, please go ahead.
I think what we're forgetting here a bit is that as shareholders, we invested more than EUR 1 billion in money laundering. The first victim was Ralph Hamers. ING had to pay EUR 100 million, and there was a lot of press attention to that. Then ABN AMRO and Rabobank were also in the limelight. This is what we've invested, EUR 1 billion in money laundering. We'd like to know what happened with that money because we didn't see any big legal cases. A lot of money was invested. ABN AMRO, Robert said that 5,000 people there have dedicated to money laundering, but the prosecution is not prosecuting. At ING, I'd like to know how many people are dedicated to laundering and how many complaints or reports have been prosecuted.
Shareholders like the fact that something is being done against money laundering, but we'd like to see a return. 5,000-man staff members would cost a certain amount of money. It's important that the prosecution service prosecute. It would be nice if something would be done about Mr. van Rijswijk's remuneration.
The Chairman, this is about remuneration, right?
Yes, I know, says Mr. Vreeken. I know that. It's about making money, and Mr. van Rijswijk is good at that, and that is indeed the idea here. Another point. First point is laundering, money laundering. Point number two, cybercrime. The longer ING is safeguarded from cybercrime, the higher his incentive should be, Mr. van Rijswijk's incentive should be. It's important, Mr. van Rijswijk. It's important that we remunerate him properly. I said this before, that Mr. Hamers' salary was not in accordance with the market. He made about EUR 1 million or EUR 2 million. And that, if you relate that to the profit, I mean, it's not enough.
Now he's making much more money, so I think he should make about EUR 6 million. Mr. Hamers, that is. Mr. van Rijswijk, in international terms, is receiving rather low remuneration. This is something I think you should bear in mind.
The chairman, Herna, you are going to answer these questions, I hope.
Indeed, says Ms. Verhagen. KYC, Know Your Customer . Money has been invested in that and at ING, lots of people are working on Know Your Customer , and we've included that in the targets on risk and regulatory. We have an explicit element about regulatory commitments, which includes Know Your Customer . That is, as far as I'm concerned, the answer to the first question. In terms of cybercrime, less cybercrime, the higher the incentive should be. Cybercrime is part of risk and regulatory. It's in the non-financial risk framework, and this is something that ING, just as all the other banks, is working very hard at. In that sense, it has an indirect impact on non-financial targets and hence on variable remuneration. Your last question, remuneration in line with the market. I think this debate has taken place many, many times at AGMs.
We have tried. To have the remuneration in line with the market. This is Remuneration Policy 2020. I think, Steven, I mean, I'd be happy for Steven to make more money, but I think that the remuneration policy that we have right now is quite appropriate.
We're closing this round of questions. We're going to proceed to the vote on 2D., which is the remuneration policy. Before we do so, on the screen, if everything goes well, we're going to show you the capital represented, shares represented at the meeting. Fortunately, that is the case I say with a certain degree of relief. I'd like to give the floor to Vroukje, so that she can take us through the vote and the voting instructions.
Thank you, Chairman. Most of you are familiar with the procedure, but I'm going to go over it again very briefly. You have received a voting card and a voting pad when you entered the room. You must insert the voting card into the voting pad with the gold-colored chip facing you, and you'll see a welcome message with your name on it, so you know everything has proceeded correctly. Then you have three possibilities. If you want to vote in favor, press one. If you want to vote against, press two. If you wish to abstain from voting, press three. You will then get a confirmation of your choice on the screen, and it's important that you know as long as the vote is still open, you can also change your decision, change your mind.
You can press another button, and the last button you press is the vote that will be counted. Having said that, I think that we can proceed. Someone raised his hand. Apparently, there's a problem. The interpreter cannot hear what is being said.
Chairman, perhaps, someone can assist this gentleman. Apparently, there's a broader problem. I'm just asking the technical assistant whether that's okay and whether this makes a difference for the vote. Instead of your name, you get the town you live in. Well, I'm being assured here at the table that that makes no difference. We're not gonna look for you just because you voted against, so we're gonna proceed with the vote. No, that's fine if the town you live in appears.
Okay, we can proceed to vote on 2D, Remuneration Policy 2021, and I hereby declare the vote to be open. At Heineken some time ago, you would see a draft beer, a glass being filled, and then when the vote was over, you stopped hearing that, the noise of the draft beer. Perhaps we could do something with coins. Well, I suggest that we close the vote because we received most of the votes, even though we don't have a glass of beer. The outcome, 98.26% of the votes have been cast in favor of the proposal. Well, thank you very much. This is a positive advice, and now we can proceed to 2E, which is Financial Statements 2021.
I'd like to refer to the financial statements as included in the Annual Report, pages 265-388. The financial statements were prepared on 7 March 2022 in the English language and were made available on the website of ING on 10 March, was available for perusal at the head office, and was available free of charge for shareholders. The auditor issued an unqualified opinion for those statements. You'll find that in the Annual Report , pages 402-408. The Supervisory Board proposes to adopt the financial statements. I'd like to give the floor to Peti De Wit . He is the external auditor of KPMG, and he will briefly explain the audit.
Thank you, Chairman. Ladies and gentlemen, my name is Peti D e Wit, and on behalf of KPMG, as per 2021, I am responsible for the 2021 audit of ING Group. 2021 was the first year I was involved in the audit of ING Group. For KPMG, this was the sixth year as your external auditor. I'd like to take the opportunity to explain our involvement as an external accountant or external auditor. As you know, external auditors are bound by confidentiality, but in accordance with good practice, ING has relieved us of our confidentiality, which means that I can provide you with an explanation of our audit work and our auditor's opinion. Let's start with what we audited. We audited the company and the consolidated financial statements for ING Group for the year 2021.
We issued an unqualified audit opinion on these financial statements, and we also issued an assurance report on selected non-financial information as included by ING in its Annual Report . This assurance opinion is unqualified. You'll find it on page 87 and 88 of the Annual Report . ING Group also has a listing at the stock exchange in the U.S., which is why we also issued an opinion on the financial statements as filed with the SEC, the so-called Form 20-F. We issued a statement on the effectiveness of internal control measures with respect to financial reporting by ING Group. Both opinions are unqualified by nature. As a structure for my explanation, I would like to use our auditor's report as included on pages 402 and 408 of the Annual Report . I will summarize the key elements.
First of all, the scope of our opinion. Based on our work, we have come to the conclusion that the financial statements give a true and fair value of the financial position as per 31st December 2021, and of the result in cash flows for 2021, based on IFRS in the EU and Dutch law. Financial statements have been prepared using a going concern basis of accounting. Based on our work, we've concluded that this assessment by management is appropriate. Now a few words about our impartiality and independence. We are independent of ING Group and its subsidiaries worldwide. We report on our independence to the Audit Committee and Supervisory Board of ING at least twice a year. Now a few words about something important, which is materiality.
We have used a materiality in the audit of ING Group of EUR 250 million. This materiality is determined on the basis of profit before tax. Materiality actually determines the level of detail of how we conduct the audit of the financial statements. Materiality in 2021 was consistent with materiality that we used in 2020. All audit misstatements in excess of EUR 12.5 million that we identified are communicated in writing to the Audit Committee and Supervisory Board. The number of reported audit misstatements is very limited given the size and complexity of ING's financial reporting. The reported audit misstatements were both individually and in aggregate not material for the 2021 financial statements. Now the scope of the audit.
KPMG is not only the external auditor of ING in the Netherlands, but in almost all other countries where ING has operations. As auditors of ING Group, we determine for the group purposes, where and with what scope the audit for group purposes need to be executed. Around 81% of profit before tax and 93% of total assets have been subject to audit work performed by our local auditors. The remaining part was covered by work performed by us at ING Group level. This coverage is also in line with 2020. We assess the results of local audits and discuss these with our local teams, primarily in digital meetings. We collect findings at a central level, and on this basis, we arrive at our final opinion.
Due to travel restrictions, we were only able to a very limited extent to visit foreign auditors to conduct file reviews. That is why we assessed our audit work for the local auditors in a different way. We asked auditors of selected locations to give us digital access to their local audit files so that we could evaluate their work. Now I'd like to discuss rules and regulations. ING has to comply with many rules and regulations in those countries where ING has operations. There are rules and regulations that have a direct impact on financial statements, such as the reporting standards under Title 9 of the Civil Code, Civil Code number 2 and IFRS. We've established compliance with these laws and regulations as part of the audit procedures with regard to the financial statements.
In addition, there are many laws and regulations where non-compliance may indirectly affect items in the financial statements and/or disclosures. For instance, as a result of receiving fines or claims. You might think, the law to prevent money laundering and terrorist financing in the Netherlands, but also sanction legislation. We commented on this earlier on. The audit standards on identifying non-compliance with these indirect laws and regulations result in limited activities, among others, questioning management, inspection of correspondence with regulatory bodies and legal correspondents. In case of signals or signs of non-compliance with indirect laws and regulations, we assess whether this has an impact on financial statements. For instance, whether a provision or explanatory disclosure would be necessary.
We also report, if at all relevant, we report on our findings on signals or signs of non-compliance with indirect laws and regulations to the Executive Board and Supervisory Board. In the Annual Report , the Executive Board explained how ING is implementing its bank-wide Know Your Customer enhancement program. Program aims to improve governance systems and tools around client due diligence and transaction monitoring. Based on auditing standard 250, our activities in this context include instructing local auditor, asking questions to management, head of legal affairs, the compliance officer, the head of the internal audit department of ING Group, and inspecting communication with regulators, internal progress reports, and reports of the internal auditor.
Given the size, duration, and complexity of the enhancement project, we expect that in the coming period, this will continue to require the necessary time and attention from the Executive Board, the Audit Committee, and Supervisory Board. The next topic is fraud risk. In the planning and execution of the audit, we consider the risk of fraud. This includes consideration of presumed fraud risk on revenue recognition and management override controls. Additionally, we consider the risk of management overriding controls related to the determination of collective loan loss provisioning. In our response to fraud risk, we involved forensic specialists in the audit. Our procedures did not result in a so-called key audit matter. I'll be commenting on the key audit matters in a couple of moments. Next topic is climate risk. What became clear today, we also appreciate the importance of information related to climate risk and ING.
For you as shareholders and for ING as well as for other stakeholders, which is why this year in our audit opinion, we addressed for the first time how we considered climate risk in our financial statements audit of ING. Our audit procedures are directed towards potential effect of climate risk on the financial reporting of account balances, such as valuation of loan portfolio, adequate disclosure of climate risk in the financial statements. We performed audit procedures, and we see no material misstatements. We obtained an understanding on the current governance structure and integration of climate related risks and credit risk policies and procedures. We assessed the minutes of the Climate Change Committee. We obtained understanding of the process to identify climate related risks and the heat map developed by ING to assess financial materiality of climate related risks on ING.
We held inquiries with staff involved in the integration of climate-related risk into credit risk policies and development of climate-related heat maps. These procedures did not result in a key audit matter. We confirmed that ING continues to work very hard at further target setting and on how to best report on progress going forward. We continued the dialogue on this topic with the Executive Board, the Audit Committee and Supervisory Board. Now, key audit matters in the audit. Key audit matters are those matters that have been the most significant in the audit on the financial statements 2021. We included two key audit matters in our statement, in our opinion, namely the provision for expected credit losses and information technology.
Key audit matter, impairment of goodwill that was included in our 2021 audit opinion was no longer necessary for 2021 because this year there's no significant impairment of goodwill. Allow me to comment on the impairment losses on loans and advances. We consider this to be a key matter. The estimation uncertainty remained at elevated levels in 2021 due to economic conditions caused by COVID-19. As per 31 December 2021, ING has approximately EUR 628 billion in loans to customers and EUR 24 billion in loans to banks. These portfolios have been valued at amortized cost price. The provision in the event that these loans are irrecoverable is approximately EUR 5.3 billion. The provision consists of collective and specific provisions.
Determining the provision requires estimates, including assumptions about the probability of default, for example, or future cash flows, macroeconomic scenarios, and identifying significant increases in credit risk. Corrections are also applied so-called management overlays. These management overlays have been recognized due to uncertainties in the estimation of future economic developments that have not or not fully been captured in the regular process. This concerns for example, consideration of loans in economic sectors that have been more severely impacted by COVID-19. We work together with our specialists in order to assess the provisions. This in view of the complexity of the models and the estimates that are the basis of these provisions, and jointly, we looked at the assumptions, methodology, cash flows, and collateral values in the audit. As part of our work, we tested internal controls to determine expected credit losses.
This includes, for example, controls around assumptions, monitoring expected credit losses, determining risk categories, and estimating future cash flows for collateral enforcement. In addition, we also looked at the application of management overlays. In addition, we independently assess individual credit files worldwide to check specific loan loss provisions. Based on this work, we can agree with the valuation of the loan portfolio and the related disclosure in the financial statements. Second key audit matter is IT, information technology. For ING Group, the IT infrastructure is of great importance for reliability and continuity of its business operations and its financial reporting, and particularly whether the access to IT systems to ensure segregation of duties is sufficiently guaranteed. Given this importance, we consider this to be a key audit matter. Among other things, we tested the design, implementation, operating effectiveness of user access management to change management.
Our audit findings in this respect have been followed up by management adequately. Based on the mix of internal control testing on substantive audit activities, we concluded that there is sufficient basis to rely on the operation of the IT systems for the audit of the financial statements. In conclusion, some topical matters. We started with that today. In our audit, we also look into the potential effect of subsequent events on the financial statements 2021. I'm talking about 7 March 2022 and the date of publication of the financial statements, which is 10 March 2022. Auditing standards require us to consider if and if so, to what extent subsequent events warrant adjustment of the 2021 financial statements or additional disclosures. Russia and Ukraine merit mentioning.
This tragedy is an event post-balance sheet, but is one that does not require an adjustment of the financial statements. Management already explained that in the financial statements. Based on our work, we concur with the conclusion drawn by management on this matter. This completes my explanation of our 2021 audit. With that, I'd like to give the floor back to the chairman.
Thank you. Who can I give the floor, ladies and gentlemen? I see someone approaching microphone one.
Gaia of PGGM and Eumedion. I have a question about the selection procedure for the new auditor. We understand that ING Group in 2021 started a procedure in order to select a new auditor. The Annual Report does not refer to that at all. Can the Supervisory Board confirm that the selection process has started? If so, indicate how many accountant firms have been invited to submit a quotation, and what the important, most important selection criteria were. When does ING expect to wrap up its selection procedure?
Margarete, question for you.
These KPMG auditors are already approved in 2019 for the accounts of 2020, 2021, 2022 and 2023. This is a current process. If we select a new one, we have our internal processes in the Audit Committee, according to our policy and selection criteria, as usual, independence, quality, team, and fee, of course. Any further detailed information is not available now. It's of course highly sensitive, so we are not able to disclose more than I've already said. For 2023, we have KPMG already approved by the AGM. This is information we can give today for you.
Thank you, Margarete. No further questions? Jorna.
Thank you, Chairman. Mr. Jorna. Yes, a question for the auditor, really. Events post balance sheet. Exposure to Russia. Just a couple of sentences, 2, 3 lines. Management really says, "This is not material to adjust our balance sheet as an event post balance sheet," and you concur with that. If I see that the exposure is about EUR 7 billion, part of which has been hedged, what is your standard? When would it be material? That's my first question. Second question to you is Luxembourg is starting criminal investigation into possible money laundering on the part of ING. I don't know how far this investigation extends, whether it's only the Luxembourg operations or whether it extends beyond that. You do not include anything about this in your opinion, but in both cases, I would say that you should have done so.
A second or rather third question to you is we just heard that ING has a participating interest, a share interest in Ebusco. As KPMG, you may also audit Ebusco. If that's not the case, well, that's the end of the matter. Otherwise, you would be facing problems such as at ASML that you wouldn't really be competent to do that. Last question to you is the added value of the fraud paragraph. NBA, your industrial organization, refers to that, and VEB agrees with that. You are the image. Actually, you interact with society, and this shouldn't happen. If we look at your comment in your opinion, we see that very often you say, well, you've engaged with people, you have studied reports, you've looked at processes in place, and you take cognizance, or rather you review what the company itself already does.
The fraud paragraph should include the activities of the auditor independently focused specifically on the company, on the business at hand. I mean, you are mixing up a lot of fraud with legislation and complying with legislation, but the specific fraud element only appears in management overrides and doesn't appear anywhere else. Your independent view on, or assessment of management override isn't visible. The predictable nature of your audits, well, of course, nobody says that he or she is defrauding, but since you are so predictable, I mean, you say that you have. You more or less say that you've focused on South Korea. Big question mark, why South Korea, and how predictable is this for ING? Those are my questions to the auditor. I don't know whether I have the possibility to ask questions about the rest of the Annual Report .
Well, please go ahead.
The Annual Report . Cost-to-income ratio has declined. Good thing. It's not at the level of 52, but it's somewhere in the 60s. Which measures is ING going to take in order to comply with this target? You indicate that EUR 124 million is earmarked for those. For households that cannot pay their energy bills anymore or that cannot repay bills anymore. But w e know from experience that the last thing people do is not repay their mortgages, so there are hardly any losses there. Why is ING then so fearful that we should face a problem with consumers and their mortgage funding? Thank you. That's those are my questions.
Can we take Mr. Vreeken's question as well? Mr. Vreeken?
I have a general remark first. I was working at ING. That's ING International Corporate Investments. We had quite a strong working relationship in over 30 countries, and there was no discrimination or racism and so on and so forth. I think that's important to note here. Next, I'm particularly happy that ING is not involved in cryptocurrency, because if you're talking about laundering cryptocurrency, it's the most profitable crime globally. I'm curious how the auditor feels about that. Next, cybercrime and the blockchain. We all pay taxes, but they have a fossil system that is basically strung together with sticky tape and staples. In municipalities, it's not done very safely. ING may be doing the right thing, but it's important that everybody does the right thing. How has that been arranged and guaranteed?
Let's see. Where did the gentleman take a seat? Thank you very much for your questions. I appreciate them. Let's start with the one about Russia. Because I'd like to qualify some of your remarks. We also greatly value EUR 7 billion. Our materiality is EUR 250 million, so we really value EUR 7 billion. It's not, t here's another factor. The question is whether information is revealed after balance sheet date that sheds a different light on the information. The KPMG and the ING management have noted that the invasion took place at the end of February, and that was when everything was triggered. That means that we did not adjust the figures but did explain that element. I'm referring to future financial information that's been disclosed. I think that's incorrect because your statement is dated 7 March .
If we look at the date of the ING Annual Report , that's early February. In my view, 24 February is later than this. Okay. The Annual Report is dated 7 March, and the auditor's opinion is also dated 7 March, but we consider the balance sheet on 31 December, and we see what information became available between 31 December and 7 March to see what is available. Because the invasion was on 24 February, the figures were not adjusted. We agreed on the financial statements for 2021. Now, your comment about Luxembourg, thank you very much for that because that shows you that you read the Annual Report very carefully, and that's our primary responsibility. We aim to ensure that if there are any legally relevant developments we need to ensure that they were explained in the Annual Report .
In assessing this, o f course, we examine how important something is in financial terms, and I can tell you that we did consider this point. We considered whether it was sufficiently important to require an indication in our auditor's opinion, but the information is present in the Annual Report , so we were satisfied about that. Now, your question about Ebusco. As far as I know, KPMG is not the auditor there. I'm not sure what your question is, but we're not the auditors there. Next, about fraud. I'd like to thank the VEB for considering the fraud risk and for their encouragement to our group association NBA.
You said that you have to prevent fraud from happening, and you're assigning me a responsibility that's a bit more extensive than the guidelines, because it's said that fraud prevention and detection are an interplay between the Executive Board, which supervises that, and the auditor. What our auditor's opinion reads is that ISA 240, which is about the auditor and risk of fraud, says that upon auditing all financial statements, you need to consider two fraud risks. One is about revenue recognition, and the other is management override of controls. Can the management override internal audit measures by telling somebody you need to tinker with the figures this way?
We examined that, and there's an additional risk that we mentioned, and that concerns the management override and specifically concerns the collective credit facility, because that's something where there's a lot of leeway for the management to influence the figures. We then examine journal entries, not only centrally, but also in all the countries we instructed to ensure that everybody in a senior position behaved appropriately and did not tinker with the figures. That's what our opinion reads. Standard 240 urges an element of unpredictability, and that can take many forms, because if you see fraud coming, then you would have many opportunities to conceal it. One element of unpredictability is me. I said that I started this year, so nobody from the ING knew what I would consider and or how.
In the implementation, we said we're going to address one country that is not ordinarily in our scope by taking a local look at coverage based on the argument that the further away it is, there's less likely to be careful supervision. That was our reason for considering South Korea, but we did not make any special findings in South Korea. There was a question about cryptocurrency.
Well, with all due respect, you said no special findings. The conclusions of your audit are not in the fraud paragraph. The only thing you did, which addresses the review activities of the internal audit and everything that happened, but I don't see any independent actions.
Well, I think our conclusion is there that as far as fraud risk is concerned, we have no key audit matter to report. That was our conclusion, and I just explained what we did. Okay, now crypto. I was trying to figure out what the question was that also related to fraud. Well, you've heard from the Management that ING does not offer cryptocurrency and is not engaged in that. It is a topic that we asked about, and we were present at a discussion between Supervisory Board members, and we have nothing else to say about that. Thank you. Yeah.
Yeah. You had a question about mortgages, and if we're talking about payment discipline, including in the previous mortgage crisis, you said that the Dutch are very disciplined, and they pay their mortgages throughout stressful times as well. The only possible limitation is that those models consider only past conduct. Every crisis is different. If you're talking about, we had a financial crisis from 2008 to 2010. In this crisis, the models do not consider inflation or the higher cost of energy or disruption in supply chains. Then your models are too limited in scope because at this point, there's a shortage of labor and surging inflation all of a sudden. The models don't reveal that because the models go back only 10 years.
That's why I said if you want to be prudent in changing economic circumstances, basically you need to model or simulate when it would take place. We did that simulation, and that led to the additional statement there. You had a question about the 50%-52%. Our cost targets and our cost ambition remains. That endures. There are three aspects that you need to find. You need to allow this to grow, you need to curtail costs, and you need to restrict capital. As you'll understand, the increased revenue, including because of the diversification that I mentioned, as well as our digital channels and strong technology, can help bring about that operational leverage, and those are the elements that we use.
Thank you very much. Ladies and gentlemen, we're going to vote on agenda item 2E, and I'm going to give Vroukje the floor.
Okay, the vote is open. Please cast your vote. The vote is closed. Poll is now closed, and we see that 99.92% has voted in favor of adopting the financial statements for 2021. I note that this proposal has been carried. That takes us to item 3 on the agenda, which is the profit retention and distribution policy. For the explanation of that policy, please see the Annual Report pages 83 through 87, where you'll see the principles of our dividend policy.
Are there any questions about that? Mr. Jorna.
Thank you, Mr. Chairman. I'm Mr. Jorna from the VEB. Mr. Chairman, the dividend proposal has not been taken well by the market because we see a steep drop in share price as a consequence, and given what Mr. van Rijswijk already said, that the capital buffer of 15.9 is so strong, it's required to be somewhere around 12. Failure to enhance a share buyback program has disappointed many of us. Can you state that you consider this to be an omission and that you will be announcing it nonetheless, and then we'll have news in the papers tomorrow morning?
Well, I understand that this was a very disappointing answer, but no, we're not going to make that statement. Our dividend policy distributes a certain percentage, and we're examining our capital position to see whether we need to start additional distribution programs. We started that last year after the first section that we announced in October. When we announced the annual figures for Q4 in February, we said that we'd like to complete that program first, and then upon publishing the Q1 figures, we would make any additional announcements about other steps. Ordinarily, we make such statements of the quarterly figures, and that has not changed. Stay tuned.
On to 3B of the agenda, which is the dividend for 2021. Please see pages 66 and 85 in the Annual Report . The proposal is for the total dividend for 2021 to be set to EUR 0.62 per ordinary share. Considering the 21 cent interim dividend distributed in October, thus the final dividend is EUR 0.41 per ordinary share to be paid in cash. Are there any questions about that? It all looks very clear to me. That takes us to the vote on agenda item 3B. I am opening the poll. Please cast your vote. The voting is closed. The poll is closed. 99.77% of the votes have been cast in favor of this item.
I can determine with some certainty that this proposal has been adopted. That takes us to agenda items 4A and 4B on the agenda, which we'll address jointly. These concern discharge of the members of the Executive and Supervisory Board s. Discharge is the term used to release a board member from liability concerning his or her duties for the year concerned in the discharge, as is clear from the accounts and the financial statements, and in ways about which shareholders were notified other than the financial statements. Are there any questions? If not, I propose that we now vote on whether to discharge the members of the Executive Board. Please cast your vote. The poll is closed. 97.49% of the votes have been cast in favor.
I note that this proposal has been adopted and that takes us to agenda item 4B, and we'll vote about that as well. Vroukje.
You may now cast your vote. The poll is open. The poll is now closed. 97.49% of the votes has been cast in favor.
I determine that this proposal has been adopted. There was a minor slip of the tongue. Fortunately, we're on the ground floor. On to item 5 on the agenda, which is the amendment of the Supervisory Board profile. This is merely incorporating a proposed law concerning the diversity objective for the Supervisory Board. As you know, already compliant before that law was introduced. This just formalizes it. If you have questions, now is your opportunity. If not, I propose that we open the poll, Vroukje .
There's no vote because that was a discussion item.
Okay, we won't vote on it. Now on to Item 6 on the agenda. Item 6A is the authorization of the Executive Board to issue ordinary shares. That's an agenda item that figures on the agenda every year, and the authorization replaces the authorization granted by the previous meeting and by the meeting before that. I refer to the literal text of the proposal in the explanatory notes to the agenda and the convening notice at item 6A, and on page 27 of the Annual Report . Agenda items 6A and 6B concern the authorization of the Executive Board to issue ordinary shares based on with or without preemptive rights of existing shareholders and up to a maximum of 10% without preemptive right for existing shareholders.
The Executive Board requires authorization by the meeting of shareholders, and these proposals correspond with proposals adopted in previous years, and these enable us to manage capital properly and respond properly to trends on the financial market if circumstances are required. At the Supervisory Board, we have approved the proposal. Does anybody have any questions? I don't see any hands raised. Then we can vote on 6A.
Please cast your vote. Hereby sluit de stemming [Foreign language]. The poll is now closed. 94.42% of the votes have been cast in favor.
I determine that this proposal has also been adopted, and that takes us to 6 B, as I just explained. Does anybody have any questions or would anybody like the floor on this one? If not, I propose that we vote.
The poll is now open. Please cast your vote. De stemming is gesloten. The poll is now closed. 96.63% has voted in favor.
I determine that this proposal has been adopted. Item seven is the authorization of the Executive Board to acquire ordinary shares in ING Group's capital. You may cast your vote unless somebody would like the floor about this. I apologize. I don't see anybody interested in the floor. Vroukje.
Please cast your vote. Yeah. [Foreign language] Nu echt. Het is nu geopend. [/Foreign language] You may now cast your vote. Bij deze gesloten. 99.64- It's closed. 99.64% voted in favor.
This proposal has also been adopted. 8 A is reduction of the issued share capital by canceling ordinary shares held by ING Group in its own capital as a result of the share buyback program. Are there any questions about this? No. We will now vote. I don't see the correct information on my screen.
The vote is now open. Please cast your vote. [Foreign language: Bij deze geslo-] The poll is now closed. We see that 99.97% of the votes has been cast in favor.
This proposal has been adopted. That takes us to amendment of the articles of association. That's item 8B. We're going to vote about this unless somebody would like the floor. If not, we're going to vote.
The vote is open. Please cast your vote. [Foreign language: ik sluit de stemming.] The poll is now closed. 99.97% of the votes was cast in favor.
This proposal has also been adopted. That takes us to agenda item 9, reduction of the issued share capital by canceling ordinary shares. Would anybody like the floor about that? If not, we're going to vote about this.
The vote is open. Please cast your vote. The poll is now closed. 99.97% of the votes has been cast in favor.
I determine that this item has also been adopted. That takes us to closing this meeting. The definitive results of the votes will be posted on the ING website in a few days on our website, www.ing.com/agm. Three months after this meeting, the draft minutes will be posted, and after six months we'll have the official report for the meeting. I'd like to thank all of you for your presence and for your involvement in our organization and for the support that you have expressed for what we are trying to do. Please stay healthy and stay involved. We need you. There is a remark off mic. Inaudible to interpreter. Interpreter apologizes. Ik zal mijn best doen.
I'll do my very best. You'll get. We'll give you a wonderful whistle. Thank you very much for listening. The meeting is now closed. Have a safe trip home.