The signatory entities of this collective commitment will develop the necessary methodologies to measure the climate impact of their clients’ activities
On the occasion of the United Nations Climate Change Conference (COP25), held in Madrid, the main Spanish banks, representing more than 95% of the sector, have today presented a joint commitment to reduce the carbon footprint in their credit portfolios within a specified timeframe, in a manner that can be measured using internationally recognized criteria and in line with the objectives of the Paris Agreement. In this way, these entities align themselves with the “Collective Commitment to Climate Action” promoted by UNEP FI.
The agreement, which brings together more than twenty leading banking institutions, was presented today at an event held at the Spain Pavilion at IFEMA, the COP25 venue, by the President of the Spanish Banking Association (AEB), José María Roldán, the Director General of the Spanish Confederation of Savings Banks, José María Méndez, and the President of the Official Credit Institute (ICO), José Carlos García de Quevedo.
The event was also attended by delegates from the signatory banking institutions: Banco Santander, BBVA, CaixaBank, Bankia, Banco Sabadell, Bankinter, Kutxabank, Unicaja Banco, Abanca, Ibercaja Banco, Liberbank, ING Bank, BNP Paribas, Banca March, BCC-Grupo Cajamar, Cecabank, Société Générale, Bankoa-Grupo Credit Agricole, Banco Mediolanum, Triodos Bank, Caja de Ahorros y Monte de Piedad de Ontinyent, and Colonya-Caixa D’Estalvis de Pollença.
Under this agreement, the signatory banks commit to developing the necessary methodologies to assess the impact that their clients’ activities may have on their balance sheets from an environmental preservation and climate change mitigation perspective, thereby ensuring that their balance sheets are aligned with the Paris Agreement and the Spanish climate agreement. The main objective of both agreements is to keep the global average temperature increase below 2 degrees Celsius above pre-industrial levels, and to continue efforts to limit the increase to 1.5 degrees Celsius.
The institutions also intend to work together and support each other in developing the necessary methodologies to measure climate impact. The signatories to the agreement are free to choose their own methodologies, although they are willing to share experiences with each other in order to enable comparison of results and improve measurements. Furthermore, they will make every effort to adapt to international best practices and standards in this area.
The agreement states that within a maximum period of three years, the institutions will have established and published sector-specific targets, based on scenarios for aligning portfolios with the objectives of the Paris Agreement. Following the signing of the Agreement, the first results of this commitment could begin to be seen within one year, as the banks intend to publish and implement within that timeframe a set of measures, which they will take in ongoing dialogue with their clients, to promote the shift toward low-carbon and climate-resilient technologies, business models, and societies. Each institution will also report annually on its individual progress and every two years on the collective progress achieved in implementing this commitment.
Initially, the signatory banks will focus their efforts on the most carbon-intensive and climate-vulnerable sectors within their portfolios, which are key to the transition toward a low-carbon economy and to building resilience in those communities most exposed to the effects of climate change. They also intend to involve their clients in this transition process.
In the words of José María Roldán, President of the AEB, this agreement demonstrates that “banks are aware that they have the means to address the challenges and also to seize the opportunities offered by the fight against climate change, which is why they want to contribute to making the necessary changes to achieve a low-carbon and climate-resilient economy.”
For his part, the President of the Official Credit Institute, José Carlos García de Quevedo, stated that ICO’s adherence to this agreement “reinforces the public bank’s commitment to contribute, through the public-private partnership model, to the banking system’s initiative to promote a more sustainable growth model. Therefore, it adopts the Paris objectives as its own and participates in all sectoral debates regarding the best way to address banking challenges related to climate change.”
The Director General of CECA, José María Méndez, stated “the decarbonization of the economy is an enormous challenge. The only way to find the right path is through building consensus among regulators, supervisory authorities, and the private sector. Through signing these commitments, we are demonstrating that banking institutions are aware of our responsibilities regarding climate change.”
