Around two and a half years ago, BBVA made an eco pledge that was based on a three-pronged strategy. Titled Pledge 2025, it included the "financing to contain climate change and assist with the fulfillment of the SDGs," "the management of environmental and social risks associated with the bank’s business activity," and the fostering of stakeholder engagement.
BBVA seeks to use its power in the industry to provide customers with sustainable loans and "superior advice on sustainable financing solutions." For example, the bank closed its first sustainable loan in Spain's steel industry in 2020. In addition, in May 2020, the bank became "the first private financial institution in Europe to issue a COVID-19 social bond."
Back in 2007, BBVA also set up a not-for-profit organization—the BBVA Microfinance Foundation—which "uses its financing instruments in Latin America to promote social and economic development that is also sustainable and inclusive of at-risk communities."
Sustainability-Focused Financing Solutions
BBVA Secures More Than €40 Billion for Its Eco Pledge
Trend Themes
1. Sustainable Financing Solutions - BBVA's Pledge 2025 drives its strategy to provide customers with sustainable loans and advice on sustainable financing solutions, presenting opportunities for banks to increase the offering of sustainable financial instruments.
2. Social Bonds - BBVA's issuance of a COVID-19 social bond presents an opportunity for banks to issue social bonds to finance projects that have a positive social impact, while at the same time provide attractive investments, and evidence of their corporate social responsibility.
3. Microfinance - BBVA's not-for-profit the BBVA Microfinance Foundation presents an opportunity for other financial institutions to provide financing to promote social and economic development in at-risk communities, presenting the potential for positive social impact and financial returns.
Industry Implications
1. Banking - BBVA's eco pledge and sustainable financing solutions present opportunities for banking to provide financing for sustainable development and reduce environmental and social risks associated with their business activity.
2. Steel Industry - BBVA's closure of its first sustainable loan in Spain's steel industry presents an opportunity for other financial institutions to provide financing for sustainable investment in this sector, benefiting from competitive returns and contributing to a more sustainable economic future.
3. Latin America Microfinance - BBVA's not-for-profit, the BBVA Microfinance Foundation, presents opportunities for financial institutions to provide funding for sustainable economic development in Latin America's at-risk communities, leading to increased social impact and potentially attractive returns.