Sustainability Strategy

Sustainability strategy

 

Sustainability and the fight against climate change represent one of the greatest disruptions in history with great opportunities for banks, helping clients to move towards a more sustainable world, minimizing the risks while maximizing the opportunities that arise. For BBVA, sustainability includes two areas of action: climate change and sustainable and inclusive growth.

For this reason, BBVA incorporates sustainability at the heart of its strategy, being, as we have previously mentioned, one of the six established strategic priorities. This strategic priority has been divided into three objectives included in BBVA’s General Sustainability Policy, which are:

  • Foster new business through
    sustainability
  • Achieve Net Zero 2050
  • Make a positive impact

 

In 2018, BBVA presented its 2025 Commitment to channel €100 billion in sustainable finance by 2025 to contribute to the achievement of the SDGs and the challenges arising from the Paris Climate Agreement. Since then, the Group has advanced in the development of this priority, integrating sustainability transversally in internal management and processes and also in the relationship with customers and other stakeholders.

In 2021, the bank doubled this target to €200 billion and 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.

BBVA is also committed to being Net Zero by 2050, not only for its direct emissions, goal already achieved since 2020, but also for indirect emissions, that is, those of the customers it finances. To achieve this goal, BBVA has committed to stop financing coal by 2030, in developed countries, and by 2040 in the rest of the geographies where it operates. In addition, BBVA has set up intermediate objectives to decarbonize its credit portfolio in some of the most carbon-intensive sectors and participates as a founding member of the Net-Zero Banking Alliance (NZBA).

BBVA presents its Community Commitment, by which €550m will be allocated between 2021 and 2025 to social initiatives supporting inclusive growth in the countries where the Group operates. This commitment is a response to the most important social challenges and aims to contribute to a sustainable and inclusive recovery.

BBVA is also committed to transparency and therefore publishes the TCFD Report, following the recommendations of the Task Force on Climate-Related Financial Disclosure sponsored by the Financial Stability Board (hereinafter, FSB). In addition, since 2020 BBVA has published additional sustainability metrics following two of the most advanced standards in the market, such as those issued by the World Economic Forum-International Business Council (hereinafter, WEFIBC) or by the Sustainability Accounting Standards Board (hereinafter SASB).

TCFD

BBVA 2022 Report on TCFD

See report

WEF-IBC and SASB Metrics

Alignment of BBVA Group's non-financial information to WEF-IBC and SASB standards

More information

Sustainability General Policy

Sustainability General Policy of BBVA

See report

Contribution to society

 

In the area of contributing to the development of the companies in which the Group is present, BBVA has the Commitment to the Community 2025, through which it will allocate €550m between 2021 and 2025 to social initiatives to support the inclusive growth of these companies. The objective of this plan is that these initiatives reach 100 million people in 2025. Specifically, it will support five million entrepreneurs, it will contribute to the financial education training of two million people and it will help more than three million people to have access to a quality education.

This plan is structured around three main areas of action and seeks to contribute to the fulfillment of certain Sustainable Development Goals (SDGs): reducing inequalities and promoting entrepreneurship (SDG 8 and 10), creating opportunities for all through education (SDG 4) and supporting research and culture (SDG 9 and 11).

In 2022, the BBVA Group earmarked €131.0m for investment in the community (€106.3m in 2021). This figure represents 1.9% of adjusted net attributable profit. Through this contribution, we reached 77.8 million people. Among direct beneficiaries, 2.905.584 entrepreneurs were supported, 855.646 people were trained in financial literacy and 772,366 people participated in educational programs.

BBVA puts this community commitment into practice through its local banks and foundations, as well as supporting other foundations such as the BBVA Foundation, the BBVA Mexico Foundation and the BBVA Microfinance Foundation.

 

More information

 

community-commitment

Governance model

 

BBVA’s corporate bodies have defined and promoted that the Group has a strategy that incorporates sustainability as one of its priorities. Sustainability was embedded in the Group’s strategic plan in 2019.

For the Board of Directors, an essential element of this strategic approach is the integration of sustainability and the fight against climate change into the Group’s activities, managing the risks associated with these areas, and considering them a great opportunity for business in which to support its growth strategy. For monitoring and supervision, the Board is assisted by its committees on matters within their respective areas of concern:

  • Executive Committee
  • Risk and Compliance Committee
  • Audit Committee
  • Remuneration Committee

 

In 2021, BBVA gave fresh impetus to its strategy by elevating sustainability to the highest executive level of the organization by creating the Global Sustainability business area, with direct reporting to the CEO and the Chair.

 

More information

 

 

Management of climate risks

 

The risks associated with climate change (transition and physical) are considered an additional factor that impacts the risk categories already identified and in BBVA are managed through the Group’s risk management frameworks (credit, market, liquidity, operational and other non financial risks). Climate risk management in BBVA Group is based on the process of risk planning which is marked by the defined risk appetite and makes use of management frameworks which establish how these risks are to be treated in day-to-day business activity.

captura

Risks associated with climate change

Transition risks and physical risks

See table

Climate risk management model

Management of risks associated with climate change

See model

Management of direct and indirect impacts

 

As a financial institution, BBVA has an impact on the environment and society directly through the consumption of natural resources and its relationship with stakeholders; and indirectly, and most importantly, through its lending activity and the projects it finances.

The global strategy of the reduction of direct impacts is organized around four core elements: reduction in consumption through the energy efficiency initiatives:

  • reduction in consumption through the energy efficiency initiatives
  • use of renewable energy
  • awareness and involvement of employees and other stakeholders in the path toward a low-carbon economy
  • offsetting its carbon footprint through the purchase of credits of projects of the Voluntary Carbon Market to comply with the commitment acquired in 2020 to be a carbon-neutral company

 

Managing indirect impacts that customers generate on the environment is part of the Pledge 2025. To manage them, BBVA has implemented a number of initiatives and tools, within environmental and Social Framework or the Equator Principles.

 

More information

 

Materiality analysis

 Materiality analysis

 

BBVA seeks to have a positive impact on the lives of people, companies and the society as a whole through its activity. To generate value for its stakeholders, BBVA carries out a regular analysis called the “Materiality analysis” which helps prioritize the most relevant issues for both stakeholders and BBVA.

In 2022, this analysis has been carried out following the new GRI requirements (December 2021 version) and the proposal of the new European Corporate Sustainability Reporting Directive (CSRD), which has implied the incorporation of the double materiality approach, which analyzes, both, the impact that BBVA’s activity has on the environment and its stakeholders (impact materiality) and the impact that the environment and its stakeholders have on BBVA’s activity (financial materiality).

impact-materiality

The four material issues with greatest importance now and over a longer time horizon, for both stakeholders and BBVA’s business strategy, are as follows:

  • Climate change
  • Inclusive growth
  • Financial health and personalized advice to customers
  • Solvency and financial results

 

More information

 

 WEF-IBC and SASB Metrics 

 

BBVA has assumed the commitment to disclose in a consistent, reliable and standardized manner the essential aspects of ESG (environmental, social and governance matters) related to its business. Among the different existing standards, BBVA includes its non-financial information in the Non-Financial Information Statement (EINF) for the year 2021, in accordance with the Global Reporting Initiative (GRI) guide.

In addition and on a voluntary basis, BBVA publishes progress in ESG disclosures, according to two metrics with a high reputation in the market:

  • WEF-IBC core metrics. BBVA has been one of the first entities worldwide to support the Measuring Stakeholder Capitalism initiative of the International Business Council (IBC) of the World Economic Forum (WEF).
  • Sustainability Accounting Standards Board (SASB) – Commercial Banks standards. The Sustainability Accounting Standards Board establishes standards to guide companies on the disclosure of relevant and consistent financial information in terms of sustainability.

 

WEF-IBC and SASB metrics

Alignment of WEF-IBC and SASB standards

Participation in international initiatives

 

For over 20 years, BBVA has participated actively in various supranational initiatives. BBVA wants to continue to be the leader in the international agenda in favor of inclusion and the fight against climate change, expressing its commitment to various initiatives.

In addition to the UN Global Compact, BBVA co-chairs the UNEP FI steering committee, holds the chair of the sustainable finance working group at the European Banking Federation and is a member of the steering committee of the Equator Principles. BBVA is also a member of the Steering Group of the Net Zero Banking Alliance, the Sustainable Finance Working Group of the Institute for International Finance, the Task Force of Voluntary Carbon Markets and the Alliance of CEO Climate Leaders of the World Economic Forum.

international-initiatives

 Materiality analysis

 

BBVA seeks to have a positive impact on the lives of people, companies and the society as a whole through its activity. To generate value for its stakeholders, BBVA carries out a regular analysis called the “Materiality analysis” which helps prioritize the most relevant issues for both stakeholders and BBVA.

In 2022, this analysis has been carried out following the new GRI requirements (December 2021 version) and the proposal of the new European Corporate Sustainability Reporting Directive (CSRD), which has implied the incorporation of the double materiality approach, which analyzes, both, the impact that BBVA’s activity has on the environment and its stakeholders (impact materiality) and the impact that the environment and its stakeholders have on BBVA’s activity (financial materiality).

impact-materiality

The four material issues with greatest importance now and over a longer time horizon, for both stakeholders and BBVA’s business strategy, are as follows:

  • Climate change
  • Inclusive growth
  • Financial health and personalized advice to customers
  • Solvency and financial results

 

More information

 

Updated page 11 October 2023