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Responsible banking 21 May 2018

How sustainable finance can help fight climate change

The role the financial sector must currently play in the fight against climate change, the challenges posed of sustainable financing and the proposed series of objectives to facilitate green financing were some of the issues discussed by the Sustainable Financing Solutions panel. This debate closed the first edition of BBVA Sustainable Finance Forum, which was held on May 9 and brought together investors, entrepreneurs and public and private sector institutions with the aim of promoting sustainable development and the fight against climate change.

Ricardo Laiseca, Head of Global Finance at BBVA, moderated a panel discussion which included Gerassimos Thomas, the European Commission’s Deputy Director-General for Energy; Philippe Zaouati, Chief Executive Officer of Mirova; and Muriel Canton, Enterprise Director of Vigeo Eiris.

In recent years, climate change has become an imminent social threat and a challenge for the business world. In a world of constant change and evolution, the financial sector has adapted to the new circumstances. This issue was the cornerstone of the debate. The three representatives pointed to the efforts being made to promote sustainable finance, while acknowledging there is still a long way to go.

Philippe Zaouati, CEO of Mirova, praised BBVA’s work in sustainable financing. He gave the example of the Goya Project, the first green loan in Spain under the ‘Green Loan Principles’, an operation coordinated by BBVA.

From left to right: Ricardo Laiseca, Head of Global Finance; Gerassismos Thomes, Deputy Director-General for Energy of the European Commission; Philippe Zaouat, CEO of Mirova; and Muriel Canton, Enterprise Director of Vigeo Eiris.

Development in financial markets

Ricardo Laiseca, Head of Global Finance at BBVA, spoke of the beginnings of sustainable financing. Its origins date back to 2007, with the first green bond issued by the European Investment Bank, and later in 2014, the world’s first green loan for British supermarket chain Sainsbury’s.

Since then, we have witnessed these new instruments spread, amounting to over $100 billion. Gerassimos Thomas, the European Commission’s Deputy Director-General for Energy defined the role of the financial sector as essential in the fight against climate change. This opinion was shared by Philippe Zaouati, CEO of Mirova, who said that finance is not just a tool since the way we invest has a direct impact on how the actual economy develops.

Some 120 operations have been validated and classified as “sustainable” by the environmental consulting firm Vigeo Eiris in the last 4 years, according to its Enterprise Director, Muriel Canton. A significant figure, but she acknowledges the sustainable financing market still has a long way to go.

Common objectives

The three representatives agreed on the importance of defining a common taxonomy, to avoid the confusion that the absence of clear standards generates. The Enterprise Director of Vigeo Eiris stressed the importance of sharing a “common language”. However, she insisted that these parameters should be pending revision “as innovation ceases as soon as they are set”.

In addition, the European Commission’s Deputy Director-General for Energy placed particular emphasis on the need for greater involvement of state institutions, which he considers to be key to the development of sustainable finance. In the face of risks and changing monetary conditions, he insisted on improving regulations and establishing policies that encourage green financing.

Finally, for Philippe Zaouati better interaction with citizens is essential. “Voices must be diversified and different points of view in Europe must be expressed,” he said. “Society itself must be involved and committed to the fight against climate change”.

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