Carlos Torres, president of BBVA /
Finance Forum
“Sustainability is a business opportunity.” This is how forceful the
President of BBVA, Carlos Torres Vilawhen talking about a
sustainable financing that has more and more weight in the bank. Proof of this is that the bank has increased its sustainable financing objective by 50% for 2025, reaching 300,000 million euros. When BBVA began this path back in 2018, the challenge was to reach 100,000 million euros, but in 2021 that goal was doubled to 200,000 million euros. Now, and with a consolidated figure as of June 30, 2022 of 112,000 million euros, the bank triples its initial commitment.
This commitment places BBVA as
one of the most ambitious European banks in its goal of mobilizing sustainable financing, but it also shows its unequivocal defense of sustainability, one of the strategic priorities of the bank. It should be noted that this decision comes in a more than complex context in energy and climate matters. Precisely for this reason, BBVA defends the need to
redouble efforts in favor of clean energy and against climate change and inequality.
In this line are framed
three strategic pillars of BBVA:
nurture new business through sustainability, reach net zero emissions by 2050 and make a positive impact. As Carlos Torres Vila points out, “the world changes fast and we must embrace those changes.” And this new scenario is already confirming its good health because sustainable financing is being channeled into BBVA “at a really fast pace.”
Forecasts more than exceeded
The data is validating that the path taken by the bank is being the correct one. In just four years (period 2018-2022) more than 100,000 million euros of sustainable financing have been mobilized, a goal that was expected to be reached in 2025. But the most significant thing is the progression that is taking place. To show two data that are very illustrative. On the one hand,
this financing of sustainable operations by BBVA in the first half of 2022 grew by 50% compared to the same period of the previous year. The fact that quarter after quarter, BBVA has exceeded its forecasts in mobilizing this type of financing is also encouraging.
And how is this financing broken down? As of June 2022, 77% of sustainable finance mobilization has been related to climate action while 23% to inclusive growth. By segments, it comes mainly (65%) from investment and corporate banking operations for large clients (Corporate and Investment Banking); followed by companies, with 18%; and retail financing, with 17%. All the work carried out by BBVA around sustainability has led the bank to be, according to the Dow Jones Sustainability Index,
the most sustainable bank in the world.
Decarbonization process
Another of BBVA’s challenges is
reduce your customers’ emissions, with special emphasis on the oil and gas sector. Specifically, the entity has set the goal of reducing the emissions of customers in this sector by 30% before 2030. In this sense, BBVA has committed in its Environmental and Social Framework not to finance new exploration, drilling, and extraction in these sectors. In parallel, it will continue to promote renewable and sustainable energy projects for these companies in order to help in their energy transition.
This is not something new for BBVA, which already in November 2021 set intermediate objectives to decarbonise its portfolio in four industries that are intensive in CO2 emissions. These are the cases of electricity generation (52%), automobile manufacturing (46%), steel production (23%) and cement production (17%). As if this were not enough, BBVA committed to stop financing coal customers in developed economies in 2030 and in emerging ones in 2040. It must be taken into account that these sectors are the most intensive in emissions, and in their together account for 80% of CO2 emissions in the world.
Don’t forget that
BBVA is part of the net zero emissions banking alliance (Net-Zero Banking Alliance, NZBA), which has committed to making all of its credit and investment portfolios net neutral in greenhouse gas emissions by 2050.