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Opinion 26 November 2018

The responsible banking that our society needs

Op-ed article by Carlos Torres Vila, published in Spanish business newspaper Expansión on November 26, 2018.

Today is a historic day for the global banking industry. Today, a coalition of 28 banks from the five continents – with a combined $17 trillion in assets under management – and the United Nations present today in Paris the Principles for Responsible Banking. A set of Principles that aim to define the new way of banking that our societies demand and need.

But, what is the purpose of these Principles? The world is currently facing tremendous environmental and social challenges, such as the fight against climate change or inequality. Challenges that are global by nature and which require everyone’s involvement, including banks as relevant economic players, through the funding of projects for a sustainable societal development and providing advice to help people achieve their life goals.

“We want to drive the shift our society needs”

Today more than ever banks need to be value-driven organizations, governed by a strong purpose. And this purpose needs to be transformational, massive in scope, aimed at making a difference in people’s lives. Our success depends, in short, on the prosperity of the societies we serve. We need an inclusive society that uses natural resources in a sustainable way.

That is why, from BBVA we want to promote these Principles and foster sustainable finance. We want to drive the shift our society needs and contribute to secure the well-being of present and future generations.

The initiative we’re presenting today is structured around six Principles that provide the reference framework for all the banks involved, which aim to align the financial system with our world’s needs, under the prism of sustainability:

  1. We will align our business strategy to ensure its consistency with the UN Sustainable Development Goals (SDG) and the Paris Agreement on Climate Change.
  2. We will promote the positive impacts, and reduce the negative impacts, arising from our activity.
  3. We will accompany and work with our customers to pursue sustainable practices and we will support activities thinking about the prosperity of present and future generations.
  4. We will work proactively with all stakeholders to achieve these goals.
  5. We will implement these Principles by means of an effective Governance, a responsible banking culture and specific long-term goals in high-impact areas.
  6. We will be transparent about our compliance with these Principles, and we will review these compliance from time to time, both individually and collectively.

With the launch of these six Principles, we open a consultation process and encourage all banks and institutions, public organizations, and entities that are already working in the promotion of sustainable finance to contribute. Our goal is to keep improving the definition and materialization of these Principles to create an even greater coalition in the months leading to its signing, on September 2019, at the UN Headquarters in New York City.

This is why I call upon all agents and stakeholders to take part in this initiative.

In first place, upon all banks that are not represented here today in Paris. Regardless of where they’re at in their journey to integrate sustainability into their business. What really matters is their commitment with this common agenda to finance prosperity within our societies. Thus, in the case of BBVA, we have committed to mobilize €100 billion to fund sustainable finance projects, to progressively align our activity to the Paris Agreement and to get all our stakeholders involved in this colossal collective duty.

“The burden of responsibility that rests on humanity’s shoulders is unprecedented”

In second place, upon regulators and supervisors. They need to be aware of the Principles and how we’re going to implement them. They are our collective response to align our business in the long term and better integrate the risks and opportunities arising from the big environmental and societal challenges I mentioned above.

And finally, upon civil society. Their involvement in the process is essential, and in this sense I want to thank the 12 organizations that, to date, have also contributed to draw up these principles, including Oxfam International, 2 Degrees Investment Initiative and WWF.

Our vision about the world we live in is marked by a sense of urgency, but also by a sense of opportunity. The burden of responsibility that rests on humanity’s shoulders is unprecedented. As Ban Ki Moon, former Secretary-General of the United Nations once said:  “We are the first generation that can end poverty, the last that can end climate change.”

These Principles represent an opportunity to reinvent the role of banks in society, placing people at the heart of our activity, bringing the age of opportunity to everyone. The future of banking is financing thinking about the future.

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