The green transition is a great opportunity for banking

The green transition is a great opportunity for banking

The transition to a more sustainable model represents a great opportunity for banks, since 230,000 million euros of investment are still needed, as explained by the co-chair of Financial Initiatives of the Development Program of the United Nations (UNEPFI), Antoni Ballabriga.

Ballabriga, who is also the Global Director of Responsible Business at BBVA, highlighted in an interview with Efe that it is necessary to “green” the economy, but without vetoing any sector and establishing regulatory frameworks in each industry.

To facilitate the transition to a green model, a third of the banking sector signed last October the Principles of Responsible Banking, promoted by this UN financial initiative.

The signatory banks have thus pledged to align their business strategy to be consistent with the Sustainable Development Goals (SDGs) and the Paris Agreement and allow up to four years to implement the new plan.

Ballabriga has explained that, although the terms could be more demanding, the objective of the principles is to create a framework “ambitious enough” but also inclusive so that all banks that want to address sustainability can do so.

In fact, the principles do not require that all polluting activities be stopped immediately, but should be more gradual. “There are concrete activities that must be excluded, but the rest of the companies only need us to accompany them to get involved in ambitious goals,” he stressed.

In addition, the main Spanish banks pledged on Monday, December 9 to reduce the carbon footprint on their balance sheets, as well as to work together to develop the necessary methodologies for measuring climate impact.

All so that in 2030 there will be 40% less greenhouse gas emissions, a 32% share of energy from renewable sources and a 32.5% improvement in energy efficiency.

Buildings are responsible for 40% of energy consumption and 36% of CO2 emissions in the European Union, and it is difficult to reform them due to the Horizontal Property Law, which makes it impossible for neighboring communities to receive a loan.

Along the same lines as the president of the Spanish Banking Association (AEB), José María Roldán, Ballabriga is committed to a change in that legislation that allows communities to have the backing of a banking entity to make the necessary changes in infrastructure .

Regarding the role of banks in this transition, Ballabriga argues that entities must accompany companies and, for this, they must provide better information and more data and thus banks can integrate them into their models and better manage risks.

Specifically, BBVA has proposed to offer a sustainable alternative for each of its products, such as green pension plans, although the entity’s manager has warned about the lack of incentives that some of these sustainable options still have in some activities.

“It depends on what type of activity, the incentives are in themselves, in the change that means. Some solar panels or changing other elements of the house are paid in a short time and represent a great saving, but in other activities they do require more benefits for this to take another speed. “