Since the European Commission adopted the first action plan on sustainable finance in 2018, progress has been made with speed and depth, and European banks have set out to be part of the initiative to mitigate the effects of climate change. In parallel with this ambitious action plan promoted by Brussels, one must consider the momentum that the ECB is giving to sustainable finance with the publication of supervisory expectations linked to risks derived from climate change at the end of last year. Similarly, the European Banking Authority expects to publish the results of the consultation it launched in 2020 on environmental, social, and governance (ESG) criteria and the impact on risk management, supervision, and disclosure, while it must begin laying the foundations for stress tests for European banking. <\/p>\n
In this context, the role that banks have traditionally played as financiers of the real economy places them on the front line for the allocation of private funds to the investment essential for the transition of the current economic model toward a more sustainable one that respects environmental, social, and governance needs.<\/p>\n
With the aim of assuming this role and leading the change, Spanish banking has made a fundamental commitment to climate action by signing the Principles for Responsible Banking, which have moved from being a mere proposal to becoming a key initiative that places as much importance on profitability as on the way it is achieved. Under this framework, the main Spanish banks took an additional step and joined the signing of the Collective Commitment to Climate Action, through which they commit to aligning their portfolios with the goal of limiting global warming to below 2o<\/sup>C, and making efforts to reduce this benchmark to less than 1.5o<\/sup>C. In parallel, three European countries (the Netherlands, Spain, and Germany) have joined this initiative by signing sectoral agreements in which their banks publicly endorse their commitments to climate action. The Spanish case is paradigmatic, as 95% of the banking sector joined this initiative within the framework of the United Nations Climate Change Conference COP25 held in Madrid in December 2019. <\/p>\n The creation of the Center for Sustainable and Responsible Finance (FinRESP), established by the Spanish financial system as a whole and linked to the Financial Centres for Sustainability (FC4S) global network endorsed by UNEP-FI, has provided a new boost to the development of sustainable finance in Spain, becoming a meeting point for all agents committed to promoting private capital and responsible investment for the necessary transformation of the productive fabric and, in particular, of Spanish SMEs.<\/p>\n However, the level of ambition of Spanish banks does not stop there. By endorsing its commitment to establishing pathways that mark the road toward achieving long-term goals, BBVA has declared its intention to reduce its exposure to coal-related activities to zero, for which it will stop financing companies in this business by 2030 in developed countries, and by 2040 in the rest of the countries where it operates. Santander’s ambition, for its part, is to reach net-zero emissions by 2050, which involves ceasing to provide financial services to electric power generation clients whose income depends on more than 10% on thermal coal, and it will eliminate all exposure to thermal coal mining worldwide starting in 2030. <\/p>\n As Spanish banks have already demonstrated, achieving these goals requires the full involvement of the board of directors. Only in this way will it be possible to advance and integrate sustainability into risk management and the strategic agenda of the entities. Furthermore, it is essential to work alongside clients, supporting them in their transition to reduce carbon emissions through advisory services and the offering of a wide range of sustainable products and services. <\/p>\n