BBVA Chair Carlos Torres Vila announced that the bank would increase its sustainable finance target by 50 per cent. “Sustainability is a business opportunity” because the amount of investment required is enormous ($275 trillion per year through 2025), he said at the Institute for International Finance (IIF) annual meeting in Washington, DC. In this sense, he added that the bank has been channelling sustainable financing “at a really fast pace”, which prompted the bank to surpass in June 2022 the initial goal set for 2025. For that reason, “today I can announce that we’re now upping the ante again to €300 billion for 2018-2025,” he said.
On February 28, 2018, BBVA announced its first sustainable financial target: €100 billion. In July 2021, the bank doubled this target to €200 billion. As of June 30, 2022, the bank had reached €112 billion at a pace that pushed it to raise the goal to €300 billion, three times its initial commitment.
This figure makes BBVA one of the most ambitious banks in Europe in terms of its sustainable finance goal. But above all, it is a tangible example of the bank’s commitment to sustainability – one of its strategic priorities.
This decision comes amid a critical context for energy and climate issues. While participating in discussion with IIF president and CEO Tim Adams, Carlos Torres Vila stressed that the current moment requires us all to increase our efforts to support clean energy and fight climate change and inequality.
The BBVA Chair also went over the main global challenges during unprecedented uncertainty. He also mentioned the three trends he feels are redefining the world: digitization, the emergence of new transformative technologies and decarbonization. “The world is changing rapidly, and we must embrace these changes,” he said.
Data on BBVA sustainable finance efforts
Between 2018 and June 2022, BBVA reached €112 billion in sustainable financing. BBVA financing of sustainable operations rose 50 per cent in the first half of 2022 compared to the previous year’s period. Quarter after quarter, BBVA exceeded its forecasts for this type of financing.
From 2018 through June 2022, 77 per cent of the amount channelled in sustainable financing was related to climate action, and 23 per cent to inclusive growth. By segment, the majority (65 per cent) comes from corporate and investment banking operations for large clients (Corporate and Investment Banking); followed by companies, with 18 per cent, and retail financing, with 17 per cent.
Commitment to the decarbonization of its customer financing
BBVA recently announced new decarbonization targets for its portfolio, specifically in the oil and gas sector. The bank has set the goal of reducing clients’ emissions in this sector by 30 per cent before 2030. In this regard, in its Environmental and Social Framework, BBVA has committed to no more extended financing of new exploration, perforation or extraction projects in the oil and gas sector. In parallel, it will continue to promote renewable energy and sustainable initiatives for these companies to help in their energy transition.
In November 2021, BBVA set intermediate targets to decarbonize its portfolio in four CO2-intensive industries. Expressly, between 2020 and 2030, the bank set the goal of reducing the carbon intensity of its credit portfolio by 52 per cent in electricity generation, 46 per cent in automobile manufacturing, 23 per cent in steel production, and 17 per cent in cement production.
And previously, in March 2021, BBVA committed to stopping financing coal-related clients in developed economies by 2030 and by 2040 in emerging economies. All these sectors have the heaviest emissions and add up to 80 per cent of global CO2 emissions.
With all of this, BBVA aims to fulfil its commitment to be neutral in carbon emissions by 2050, not only in terms of its emissions (for which it is already net zero), but also for those of its clients.
Furthermore, BBVA belongs to the Net-Zero Banking Alliance (NZBA). The banks in this international alliance have committed to ensuring that all of their credit and investment portfolios are neutral in greenhouse gas emissions by 2050, the deadline according to science and the most ambitious goals of the Paris Agreement.
According to the Dow Jones Sustainability Index, BBVA is the most sustainable bank in the world.
Source: BBVA