BBVA will invest in promising innovative companies involved in decarbonization
BBVA's CEO, Onur Genç, expressed BBVA's intention to go beyond financing and advising its customers in the transition to a sustainable future. At the IIF Sustainable Finance Summit, he announced that “BBVA will invest in promising innovative companies involved in decarbonization”.
Onur Genç has defended the importance of developing carbon-free technologies in all emission-intensive sectors, many of which do not exist today. In many cases, these technologies are being developed by companies that are at a very embryonic stage and are financed through venture capital and the large companies concerned (energy, industry, automobile, etc.), he noted.
The BBVA CEO stressed the role of these innovative green companies and also that of BBVA. “We have to support our customers not only in terms of financing, but also by investing in companies that are revolutionizing this transition and driving innovation,” he explained.
He also stated that decarbonization “represents an immense opportunity”. This transition requires innovation and an “incredible” amount of capital investment. Specifically, he pointed out how, “in the next 30 years, an investment of between 250 and 300 trillion dollars will be needed - between 7% and 8% of the world's GDP”. According to the executive, this enormous challenge not only involves financing purely green activities and projects, but also helping the economy as a whole in this transition.
Onur Genç has called for regulation to recognize the environmental efforts of companies along this path, especially those that are emissions-intensive. "What matters is the performance," he explained. In his opinion, banks should not only be evaluated by how sustainable they and their clients are, but also for being successful and "helping their clients to become sustainable". As a result, he said that “taxonomy is a priority”.
He also mentioned the role of particular countries in this transition. “Emerging countries are more exposed to the impact of climate change; they have a lot to lose,” but “they also have other priorities to solve,” he acknowledged. Lack of conviction and resources are their main obstacles along the journey, he acknowledged. In spite of this, Genç expressed confidence in their progress, because “without them we cannot decarbonize the planet”.
He concluded by addressing incentives to attract capital to clean technologies. He believes that a well-functioning global carbon market would be a very powerful initiative to manage the negative effects of CO2 emissions, thus changing the behavior of investors and consumers. Moreover, he also expressed the need to eliminate fossil fuel subsidies.
In addition to BBVA's CEO, the event was also attended by Anne Richards, CEO of Fidelity, and Sonja Gibbs, Managing Director and Head of Sustainable Finance at the IIF, who moderated the panel.