What is BBVA doing to combat climate change and its impacts?
The United Nations warns about one of the most significant global issues facing humanity, as reflected in Sustainable Development Goal (SDG) 13: climate change and its impacts. “Without action, the world’s average surface temperature is likely to surpass 3ºC this century. The poorest and most vulnerable people are being affected the most.” BBVA’s approach to business is accompanied by a firm commitment to mitigating the effects caused by climate change and integrating them into its risk management model.
Climate change is an urgent problem that impacts everyone, without exception. Changes in weather patterns, rising sea levels, and record high greenhouse gas emissions are causing wide scale natural disasters, changes to ecosystems, and massive migrations. Now is the time to act in order to mitigate the impacts of global warming, using realistic solutions that stimulate more sustainable economic activity and guarantee the future for generations to come. In one of her speeches at the COP24 held at the end of 2018 in Katowice, the young environmental activist Greta Thunberg summarized the situation as follows: “Some people say that I should be in school instead. Some people say that I should study to become a climate scientist so that I can ‘solve the climate crisis.’ But the climate crisis has already been solved. We already have all the facts and solutions. And why should I be studying for a future that soon will be no more when no one is doing anything whatsoever to save that future?”
Moving toward a sustainable economy
BBVA is an environmentally aware organization and has firmly committed to the fight against climate change. In 2018 the bank unveiled its Pledge 2025, the Group’s climate change and sustainable development strategy defining the bank’s contribution to the fulfillment of the UN’s sustainable development goals, aligned with the Paris Agreement on Climate Change. This commitment, which will help the bank align its business activities to the goal of keeping global warming below a 2ºC rise and strike a balance between sustainable energy and fossil fuel investments, is based on three lines of attack: financing, management, and engagement.
As part of its pledge, BBVA has committed to allocating €100 billion euros in green financing, sustainable infrastructure projects, social entrepreneurship, and financial inclusion. Furthermore, the bank will work to mitigate any environmental and social risks associated with its business dealings and thus minimize any potentially negative, direct or indirect impacts. As part of this effort, the bank will engage its stakeholders in order to collectively encourage a greater contribution from the financial sector to sustainable development.
Alliances and agreements
The bank has used the recommendations gathered by the Task Force on Climate-related Financial Disclosures (TCFD) as a guide. TCFD was created by the Financial Stability Board and it addresses four recommendation areas: governance and decision making, strategy, risk management, and metrics and targets.
To implement the recommendations, in 2017 BBVA joined a pilot group of banks spearheaded by the UNEP FI (United Nations Environment Programme - Finance Initiative). Under the remit of this group, work was undertaken in the first half of 2018 to develop an innovative methodology based on the TCFD recommendations, with the goal of increasing the financial sector’s understanding about how climate change can impact its business and how the assessment of risks – and opportunities – can be improved. In a similar vein, BBVA has participated with other banks in the Katowice Commitment which formalizes the mission to align lending portfolios with the goals set out in the Paris Agreement against climate change.
The bank continues to participate in agreements and alliances that add further weight to their commitment. In 2018, the bank – along with 32 other multinational and medium-sized Spanish companies – signed a declaration, “Spanish Businesses for Energy Transition Opportunities and the Fight Against Climate Change.” This manifesto is a first of a kind initiative in Spain, coordinated by the Spanish “Green Growth Group” (GECV). It stresses the importance of ambitiously addressing the energy transition process in Spain.
Carlos Torres Vila, BBVA’s Group executive chairman announced that the bank’s goal is for all products to offer a sustainable option – both for large corporations and institutions, and SMEs and individual customers.
A champion of sustainable finance
BBVA has proved itself a European leader in sustainable finance, and as such it can provide its customers with specialized advice, about both bonds and lending; it thus plays a key role in the development of both markets. Today BBVA is the most active Spanish bank in the issuance of green and social bonds and one of the leading banks worldwide in sustainable lending. BBVA issued the first green bond by a financial entity in Spain and the largest in the eurozone at the time of its issuance (€1 billion). It was also the first private bank to issue a green bond in Mexico.
In addition, the bank plays an important role in increasing awareness. In 2018, BBVA held the first BBVA Sustainable Finance Forum. Investors, business people, public and private sector institutions, and members of the press gathered at the bank's headquarters to promote sustainable development and fight against climate change.
BBVA’s Pledge 2025 is an initiative that demonstrates BBVA's efforts to contribute to the UN’s Sustainable Development Goals (SDGs). Spearheaded by the United Nations, the 17 SDGs are a worldwide call for the adoption of measures to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity. Included among the priorities defined by the 17 goals are domains such as climate change, economic inequality, innovation, sustainable consumption, peace, and justice. On the whole, given its wide range of its business activity, BBVA contributes to all the SDGs, with both its global presence and its ever-active BBVA Microfinance Foundation.