BBVA Raises Its Sustainable Financing Target To €300 Billion
BBVA Chair Carlos Torres Vila announced that the bank will increase its sustainable finance target by 50 percent. “Sustainability is a business opportunity,” because the amount of investment required is huge ($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 channeling sustainable financing “at a really fast pace”, which prompted the bank to surpasse 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 the period 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 has pushed the bank to raise once again 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 a 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 at a time of 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 a total of €112 billion in sustainable financing. BBVA financing of sustainable operations rose 50 percent in the first half of 2022 compared to the same period the previous year. Quarter after quarter, BBVA has exceeded its forecasts for this type of financing.
From 2018 through June 2022, 77 percent of the amount channeled in sustainable financing was related to climate action, and 23 percent to inclusive growth. By segment, the majority (65 percent) comes from corporate and investment banking operations for large clients (Corporate and Investment Banking); followed by companies, with 18 percent; and retail financing with 17 percent.
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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 the emissions of clients in this sector by 30 percent before 2030. In this regard, in its Environmental and Social Framework, BBVA has committed to no longer finance 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 in order to help in their energy transition.
In November 2021, BBVA set intermediate targets to decarbonize its portfolio in four CO2 intensive industries. Specifically, between 2020 and 2030, the bank set the goal of reducing the carbon intensity of its credit portfolio by 52 percent in electricity generation; 46 percent in automobile manufacturing; 23 percent in steel production; and 17 percent in cement production.
And previously, in March 2021, BBVA committed to stop 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 percent of global CO2 emissions.
With all of this, BBVA aims to fulfill its commitment to be neutral in carbon emissions by 2050, not only in terms of its own 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 commited to ensure 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.