BBVA commits to reduce the emissions of its oil and gas customer portfolio by 30% before 2030

By Grupo BBVA

This is an automated translation of the original press release issued in Spanish

BBVA commits to reduce the emissions of its oil and gas customer portfolio by 30% before 2030

● The BBVA Group will align its balance sheet in the oil and gas sector according to the scenario of zero net emissions in 2050 following the metric of absolute emissions.

● Between December 2021 and December 2030, BBVA will reduce the issuance of its credit portfolio in exploration, drilling and extraction activities in this sector .

BBVA wants to accompany the energy sector in its transition and is committed to clean energy. For this reason, it has announced that it will reduce the emissions of its oil and gas portfolio by 30% before 2030. This commitment is added to the objectives set by the bank in 2021 in four other CO2-intensive sectors and to the decision to stop financing coal companies, in line with the 2050 Net Zero Emissions Banking Alliance (NZBA).

“The energy sector is fundamental in the economic and social development of the countries in which we operate. With this commitment we want to collaborate in the transition towards more sustainable business models”, explained Luisa Gómez Bravo, Global Head of Corporate & Investment Banking at BBVA.

BBVA will align its balance sheet in the oil and gas sector according to the scenario of zero net emissions in 2050 following the metric of absolute emissions. In other words, between December 2021 and December 2030, it will reduce the emissions of its credit portfolio in exploration, drilling and extraction activities in this sector by 30% according to the most demanding scenario at the moment (not to exceed 1.5ºC of temperature increase in 2050). Likewise, BBVA has undertaken not to allocate financing directly linked to exploration, drilling and extraction projects in said sector.

With this step in a key sector such as energy, BBVA advances in its commitment to be a carbon neutral entity in 2050, not only due to its own activity, where it has already been since 2020, but also due to the activity of customers whom it finances.

To get its customers to reduce emissions, BBVA will first help them define solid plans and clear emission reduction targets. And, secondly, it will accompany them in their transition towards other forms of low-carbon energy generation, supporting them in the necessary investments that will facilitate their diversification and decarbonisation.

This announcement is in line with the objective of accelerating the green transition in Europe in accordance with the REPowerEU plan and the indications of the International Energy Agency (IEA). According to the report Net-Zero Emissions by 2050 Roadmap, published by this organization, a "massive and immediate investment in clean and efficient energy" is needed. According to the report, “if renewable energies grow successfully soon enough, the result will be that the demand for oil and gas will be reduced, and it will not be necessary to develop new deposits”.

In 2019, BBVA incorporated sustainability as one of its strategic priorities and in 2021 announced the creation of the global Sustainability area. In that year, the entity announced its objective of eliminating its exposure to coal customers in 2030 in developed countries and in 2040 globally (in the terms indicated in BBVA's Environmental and Social Framework). It subsequently set intermediate targets to decarbonize its portfolio in four emissions-intensive sectors by 2030, sectors that, together with coal, accounted for 60% of global CO2 emissions.

BBVA is part of the Net Zero Banking Alliance (NZBA). The banks of this international alliance have committed to making all their credit and investment portfolios neutral in net greenhouse gas emissions by 2050 as the deadline, in line with science and the most ambitious objectives of the Paris Agreement.

In 2021, BBVA announced that it was doubling its goal of channeling sustainable financing from €100 billion to €200 billion in the 2018-2025 period. In 2022, BBVA has reached the top position in the Dow Jones Sustainability Index (DJSI), obtaining the highest score among banking entities along with a South Korean entity