“Our goal is for all BBVA products to offer a sustainable option”

Carlos Torres Vila joined Bank of Spain Governor Pablo Hernández de Cos in opening the course ‘Sustainable finance and its importance in the future of the economy,’ organized by the Spanish Association of Financial Journalists (APIE) at the Menéndez Pelayo International University in Santander.

BBVA’s Group executive chairman began his presentation by sharing his vision of the biggest sustainability challenges facing society - both environmental, mainly climate change, and social, such as an inclusive economic growth, a reduction of inequality, education, and well-being. “It is imperative that society as a whole - companies, citizens and authorities - prepare ourselves to face these challenges and take resolute action in order to advance in a more socially sustainable and inclusive manner,” he indicated.

“The good news is that we are becoming more aware of the dimension of these challenges and we have been witnessing a mobilization that is increasing across all levels,” he said. In this regard, he stressed the importance of initiatives like the United Nations Sustainable Development Goals or the Paris Agreement, which in Spain takes the form of Agenda 2030.

The Group’s chairman stressed that the financial industry has a key role to play as catalysts in the transition. “Banks have the ability to mobilize and channel resources toward sustainable activities, creating incentives for companies and other economic actors to make their investment and production decisions based on criteria for social and environmental sustainability,” he added.

BBVA’s Group executive chairman recalled that the European Investment Bank issued the first green bond  in 2007, and BBVA participated in the operation.

He explained that the demand for alternative products has grown exponentially since then, leading to different financial structures for green bonds and sustainable loans. Regarding the latter, he underscored the loans tied to the company’s level of sustainability. These loans are designed for companies from traditional sectors that are committed to improving the sustainability of their business, and represent an opportunity to bring in new sectors to the sustainable finance market.

Carlos Torres Vila said that over a year ago, the bank announced its sustainable development and climate change strategy - Pledge 2025. This is based on three pillars: finance, manage and engage. BBVA plans to mobilize €100 billion before the end of 2025. In 2018 the bank secured nearly €12 billion and is a promoter of the Principles for Responsible Banking, a UN-lead initiative.

The chairman also recalled that BBVA was the first financial institution in Spain to issue a green bond, which was the largest amount in the eurozone at the time (€1 billion). Last week it placed its second green bond, also for €1 billion and with the same type of instrument (senior non-preferred debt). It was also the first private bank to issue a green bond in Mexico. To date, BBVA remains the most active Spanish bank in the issuing of green and social bonds and the global leader in sustainable loans.

The most active Spanish bank in green bonds

Just in terms of green bonds, BBVA is the most active Spanish bank in the world, holding fifth place, with a 4.8 percent market share, according to Dealogic, with data from the end of April 2019. Additionally, Climate Bonds Initiative recognized BBVA’s global leadership, best practices and innovation in sustainable finance at the ‘2019 Green Bond Pioneer Awards.’

“But we want to go even further,” he said. “Our goal is for all products for our customers to have  their corresponding sustainable option - not just for large corporations, also for SMEs and individuals.”

One example is the new Spanish ‘Préstamo Coche Verde’ (Green Car Loan’) for customers who wish to purchase electric or hybrid cars, thus contributing to a more responsible consumption; or the new line of loans to promote energy-efficient homes in Spain, which gives buyers of these homes a lower mortgage rate. Another is the investment fund Sustainable Future, which is the multi-assets fund with the most interest this year.

“Our goal is to not only offer financial solutions, but also advice. Ultimately, we want all those customers who want to get involved in this transition and common agenda to have BBVA as their leading partner,” he added.

He concluded by recalling that today’s decisions will determine the lives of next generations: “We want to contribute to a more sustainable and inclusive future for everyone because we believe that the future of banking is financing the Future, a future that is at the front and center of everything we do.”