BBVA has issued its first sustainable financial contracts designed for individual customers. This structured investment product guarantees the return of 95 percent of the money invested and an 0.80 percent coupon for this amount.
The remaining five percent is not guaranteed at maturity – a three year period – with the possibility of a one percent annual coupon (on the five percent) if a certain condition is met. The return of five percent of the invested amount will depend on how the price evolves for a basket of three securities: Siemens, Axa and Inditex – companies that are part of the Dow Jones Sustainability Europe Index.
On an annual basis and at maturity, BBVA will provide the investor both a copy of the sustainability certificate, so that it is possible to demonstrate that the criteria determining the sustainability of the financial contract have been met, certified by the external auditor Vigeo Eiris; and the composition of the sustainable portfolio (in which the money from the contract is invested), including the number of bond or stock issuances, as well as their industrial sector and location.
The commercialization of this innovative product is now possible thanks to the sustainable transaction banking framework BBVA offers its clients with a wide range of sustainable financial solutions.
The methodology designed by BBVA allows financial products that are connected to sustainability to be certified as green, social or sustainable, even if the funding is not allocated to projects that are directly linked to the United Nations Sustainable Development Goals (SDGs).
As a sign of its firm commitment to the fight against climate change, BBVA approved its Pledge 2025 in 2018, through which it will mobilize €100 billion in green financing, sustainable infrastructure, social entrepreneurship and financial inclusion by 2025. At the end of June 2018, the bank had already mobilized €22 billion in sustainable finance.
Now, the bank aspires to have a sustainable alternative solution for all of its products – both for large corporations and institutions and for SMEs and individual customers.
With this in mind, BBVA has launched several solutions in the retail market in recent months, such as the line of loans to promote green housing, loans for hybrid and electric vehicles (for individuals) and sustainable vehicle loans (for SMEs and the self-employed).
In addition, as part of its goal to minimize potential negative environmental impacts – direct and indirect – from its activity, BBVA has committed to ensure that 70 percent of the energy consumed by the group in 2025 comes from renewable sources, and 100 percent by 2030.
It has also committed to reduce its CO2 emissions 68 percent from 2015 levels. In Spain, BBVA has cut CO2 emissions by 12,000 tons since 2015, the equivalent of the emissions from a neighborhood with around 10,000 homes.