Responsible banking

BBVA Group has a differential banking model based on seeking out a return adjusted to principles, strict legal compliance, best practices and the creation of long-term value for all stakeholders.

In February 2018, BBVA announced its strategy around climate change and sustainable development. The strategy will help the bank meet the United Nations Sustainable Development Goals and is in line with the Paris Agreement on Climate Change. The key elements of the strategy are:

  • On the financing side, a commitment to mobilize €100 billion in green financing, sustainable infrastructures, social entrepreneurship and financial inclusion.
  • In management, BBVA will work to mitigate environmental and social risks and thus minimize potentially negative impacts, both direct and indirect. From the point of view of mitigating direct impacts, BBVA has pledged that by 2025, 70% of energy bought by the Group will be renewable, thus reducing its CO2 emissions by 68% compared to 2015. The Group will mitigate indirect impacts by applying new industry standards for energy, infrastructure, mining and agribusiness. As part of its commitment to transparency in this area, BBVA is the first bank that has reported its total exposure to fossil fuels, at 3.4% of total assets.
  • Lastly, BBVA will involve its stakeholders in pushing for a greater collective contribution from the financial sector to sustainable development.

To foster this contribution, in April, BBVA presented the SDG-linked bond framework, under which it may issue what are called green bonds, social bonds or sustainable bonds. The existence of this framework is one of the characteristic elements of sustainable issues. It consists of a document in which the issuer has defined in advance the type of projects that could be financed with this type of instrument and is verified by an independent external advisor, in this case the quality assurance company DNV GL.

In May, BBVA issued a green bond for €1 billion, the largest amount ever by a financial institution in the
 Eurozone, as well as being the first Spanish bank to carry out this type of issue. Also of note is that the
 magazine The Banker granted BBVA the award for best green financing deal of 2018 in the Americas for a
project to finance the construction of a power transmission line in Uruguay. In fact, it was the first green loan
 with a project finance structure in the world.

Other outstanding actions related to promotion of responsible and sustainable growth were:

  • BBVA's Annual General Meeting, held on March 16 in Bilbao was awarded with the Sustainable Event certificate for its clear commitment to environmental, social and economic stability under the UNE-ISO 20121:2013 standard. The certification has been verified by AENOR audit.
  • In April, BBVA and some 30 multinational and medium-sized Spanish companies signed the manifesto ‘’Spanish Companies in Favor of Opportunities for Energy Transition and the Fight Against Climate Change’’. This is a pioneering initiative in Spain that highlights the need to address the process of energy transition in the country, and a further example of BBVA’s strong commitment to sustainable financing.
  • In May the first BBVA Sustainable Finance Forum was held in the Entity’s headquarters in Madrid. Those attending included investors, businesspeople, institutions in the public and private sectors and the media, who came to promote sustainable development and fight against climate change. BBVA is committed to these goals and has worked for some time to include the environmental factor in the decision-making process, as enshrined in a climate change and sustainable development strategy for 2025.
  • In 2018 BBVA also participated in the second SDG Summit in Brussels, designed to foster the SDGs. BBVA believes that banks should help customers boost sustainable development and transition toward a low-carbon economy.
  • Finally, in response to a proposal by the United Nations Environment Program Financial Initiative (UNEP-FI), 16 leading global banks, among them BBVA, published the first joint methodology to make the banking system more transparent and promote understanding of the management of climate- related risks and opportunities.

Regarding the implementation of responsible business policies, a reputational risk model, and a people-centric culture throughout the Organization, it should be noted that at the start of this year, BBVA published its Human Rights Commitment, an action plan that covers all the areas of the Group and its ecosystem. For the Bank, respect for the dignity of people and their rights is an essential condition for action and is very closely linked to the challenge that it has assumed of fostering and preserving the well-being of the communities in which it operates. This commitment is based on the UN Guiding Principles on Business and Human Rights.

Additionally, BBVA has been chosen to form part of the 2018 Bloomberg Gender Equality Index. The index is composed of 104 companies from ten sectors headquartered in 24 countries. It recognizes the achievements of companies with respect to gender-equality policies, both in relation to their employees and their support for social initiatives and products and services that prioritize this commitment. The aim is to provide managers and investors with information on the commitment and performance of companies in the area of gender equality. Garanti Bank, BBVA's subsidiary in Turkey, was the first Turkish Bank included in the index.

Finally, in terms of investment in the community in 2017, BBVA Group's allocation to social programs amounted to €103m, accounting for 2.9% of the its net attributable profit for the year. Of this total, 70% supported initiatives that drive development and create opportunities for people, within the priority framework of knowledge, education and culture included in the Group's Community Investment Plan for the period 2016-2018.