BBVA placed 1,040 million euros through two social bonds in 2020, the funds of which have been used mainly to help micro and small companies through loans with an ICO guarantee, in the case of Spain. In total, 15,175 companies with a total of 207,628 employees have benefited. This is clear from the ‘BBVA 2020 Green and Social Bonds Follow-up Report’. The report highlights that, since the publication in 2018 of the framework for the issuance of bonds linked to the Sustainable Development Goals (SDG), the emission into the atmosphere of 2.3 million tons of CO2 has been avoided through the projects financed with BBVA green bonds in 12 countries; a figure that is equivalent to the annual emissions of more than 912,000 cars.
At the end of December 2020, BBVA’s total eligible social portfolio amounted to 2,268 million euros. 60% of the loans identified were originated in 2020 and 21% in 2019, while the remaining 19% originated in 2017 and 2018. Last year, BBVA carried out the first issuance of a COVID-19 social bond of a financial institution in Europe, for an amount of 1,000 million euros, and carried out a social private placement of 40 million euros. Most of the social portfolio corresponds to financing for SMEs (55%), health (21%) and social inclusion (19%). The rest is shared between affordable housing, education, economic inclusion and other social projects.
The funds received from the issuance of social bonds for an amount of 1,040 million euros have been used mainly to finance micro and small companies through loans with ICO guarantee, from which up to 15,175 companies have benefited and a total of 207,628 employees. Those 1,040 million are part of the almost 20,000 million of financing with ICO guarantee that BBVA has granted until May 31. Due to social and territorial impact, 83% of the total amount has been allocated to companies that have suffered a strong or significant impact from COVID-19. Likewise, 69% has been assigned to companies located in areas with a high potential for social impact.
Strong growth of the eligible green finance portfolio
In relation to green bonds, as of December 2020, the total eligible green portfolio of the BBVA Group amounted to 4,009 million euros, which represents a growth of 44% compared to the end of 2019, and 268% more compared to the end of of 2018. 40% of the portfolio corresponds to financing renewable energy projects, 26% to sustainable transport, 21% to energy efficiency and the rest to waste management (11%) and water (2% ).
Of the total of this eligible portfolio, projects worth 3,063 million euros have been financed, with which since 2018 the emission into the atmosphere of 2,306,475 tons of CO2 has been avoided, which is equivalent to the annual emissions of 912,877 cars . Likewise, a volume of water of 19,105,070 cubic meters has been treated, equivalent to the annual water consumption of 393,554 Spaniards, and a volume of waste of 642,342 tons has been managed, which is equivalent to the annual waste generated by more than 1.3 millions of Spaniards.
77% of the identified green loans have originated in the last two years; 72% of the volume corresponds to financed operations and the rest to operations that have undergone some modification in their conditions. Geographically, the bulk of green financing has occurred in Spain (60%), France (10%), the United Kingdom and Ireland (8%), Australia (7%) and Italy (6%).
BBVA has become one of the most active banks in the issuance of green bonds, since the publication of its framework for the issuance of bonds linked to the SDGs in 2018. After its inaugural bond, in 2019 the bank issued a second green bond and the first green bond structured using blockchain technology. In May 2020, BBVA was the first private financial entity in Europe to issue a social bond related to COVID-19 and, two months later, it was the first financial entity in the world to issue contingently convertible perpetual bonds (CoCos) with the consideration of green bonds for 1 billion euros, destined to finance eligible green assets in BBVA’s portfolio.
In 2019 BBVA defined as a new strategic priority “helping clients in the transition towards a sustainable future”. In this context, the issuance of green and social bonds plays a fundamental role in achieving BBVA’s objectives. Sustainable origination enables the bank’s clients to be accompanied in their transition to a low-carbon economy, as well as progressively contributing to the alignment of the bank’s activity with the objectives of the Paris Agreement.
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