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Project finance 28 Sep 2017

BBVA, a respected voice in sustainable finance within the EU banking sector

The transition to a more sustainable economic and financial system is key to boost the union of capital markets in Europe and ensure competitiveness, job creation and stable economic growth maintained Antoni Ballabriga at the European Banking Summit 2017 organized today in Brussels by the European Banking Federation (EBF).

A transition with two imperatives: the first to improve the financial sector’s contribution to sustainable development, the second to strengthen financial stability through a longer-term vision of the risks and opportunities arising from the new environmental and social challenges.

Banks play a key role in the transformation toward a more sustainable economy, particularly in Europe where the economy is largely financed by banks. BBVA is one of the most active European institutions in sustainable finance and, as such, has been invited to this summit by the EBF to convey on behalf of the industry the opportunities and challenges facing the banking sector.

Antoni Ballabriga, Global Head of Responsible Business at BBVA, said today, on behalf of the European banking industry, that this transition to a sustainable economic and financial system is urgent, but it has to be smooth to ensure financial stability. Any action in this direction must be based on the long term and must respond to a single, clear and strong European strategy involving both public institutions and private stakeholders. Ballabriga sees a need for a stable and common regulatory framework that gives investors security and encourages the mobilization of resources towards sustainable projects.

Picture of: European Banking Summit 2017; Antoni Ballabriga

Simone Dettling, UNEP Finance Initiative; Esko Kivisaari, Deputy Managing Director of Finance Finland; Sirpa Pietikäinen, Member of the European Parliament and Antoni Ballabriga, Global Head of Responsible Business at BBVA, during his speech.

In this vein, the EBF is publishing a report on green & sustainable finance today that provides a perspective on how banks see their role and responsibility in supporting sustainable economic growth. It also addresses the main obstacles to increase involvement in sustainable financing and offers recommendations to overcome them.

Greater public/private cooperation; common taxonomy and principles; taking sustainability into account in the decision-making process, as well as in risk management policies; and greater integration of ECC (Environmental and Climate Change) risks in the regulatory and supervisory framework are the main keys that the EBF offers to face the identified difficulties.

At BBVA we are working to promote the business opportunities offered by sustinable financing”

Some European financial institutions are already working individually to integrate social and environmental considerations into their strategies and business models. “At BBVA we are defining a new Social and Environmental Framework to integrate these new emerging threats into our overall risk assessment framework, but also to promote the development of the extensive business opportunities offered by sustainable financing“, explained Antoni Ballabriga.

BBVA has been working for some time on including the environmental factor in the decision-making process and has a sound project finance policy based on the Equator Principles. In addition, the institution is part of the group of 14 banks that have committed themselves to the United Nations environmental program (UNEP-FI) to implement recommendations on financing and climate change published in July by the Financial Stability Board under the G20.

As a leading player in green finance, BBVA has the ability and the knowledge to provide its clients with superior advisory on sustainable financing solutions, both in loan and bond format, and is playing a key role in the development of this market. The Bank has been the most active Spanish bookrunner in the green bond market in 2016 and is already a leading player in the booming green loan market, having closed different landmark transactions in 2017.

Among other relevant operations, this year BBVA financed the first green loan to a utility company for Iberdrola and the first green loan with a project finance structure – both on a global scale.

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