It’s time to talk to the actors of change. In this case, a scientist and someone from the financial sector will discuss, based on their expertise and field of work, how they’re working on the climate crisis and the inclusive growth that we’ll see throughout the training. What would you ask someone from the financial sector about the climate crisis and inclusive growth? >> Well, thanks for the opportunity, because we’ve always wanted to ask someone from the financial sector about the monitoring of all the money that’s loaned for a project, how the agreement is established between the person who receives the money and the one who gives it, to see that it’s really used for, let’s say, sustainable purposes, or, at least, that its environmental footprint is traceable, and, if this isn’t the case, what happens? >> Thanks, Fernando, that’s really important. Let me differentiate between two kinds of financing, ok? On the one hand, we have the financing of projects that we can regard as green, ok? Under the criteria, on the one hand, for example, of the EU taxonomy in Europe. Or, in the case of BBVA, we have our own sustainability standard. These are fully sustainable projects. For example, financing a photovoltaic plant. So, in that case, it’s clear that this is something in BBVA’s standard. In the case of Europe, in the EU taxonomy and, therefore, that financing 100% counts, doesn’t it, as green financing? Because its use will be a 100% sustainable asset. And then there’s another kind, a second kind of financing that we also label as sustainable, whereby what we do, although the financing doesn’t have an end use in a sustainability asset, as in the first case. What we do is commit with the customers to a series of KPIs associated with decarbonization. For example, reducing the customer’s carbon footprint, which are the ones we follow up throughout the product’s life cycle to ensure its compliance. And, in the event of non-compliance, the product’s conditions logically change for the worse, don’t they? >> What would you ask a scientist about the climate crisis and inclusive growth? >> Thanks very much, Leo. Well, I think the question is which of them are the keys from the scientific and technological standpoint to achieving the objectives we’ve set ourselves of net-zero by 2050 in global terms. >> Well, the question is really interesting and alludes to a long list of things. But, to sum up, I’d emphasize two goals. On the one hand, that we’re able to use the technology and make the most of all the recommendations, protocols, and strategies that science is putting on the table, which are under-used. By using 100% or, at least, 90% of what’s already developed, we’d remove the stumbling block of the 2 degrees of the Paris Agreement. The other matter, equally or more important, is making connections between issues that have traditionally been addressed separately. We have a great tendency to separate the transportation sector from the energy sector, the food sector, and so on, and we don’t realize that factors such as water are incredibly cross-cutting. They can’t be understood solely from the point of view of agriculture or livestock breeding, but also the water from domestic service or water as an energy supply. These connections, of technologies and the current state of things that are surprising us about climate change, which seem to be disconnected. This is one of the exercises we should all do. And science is pushing it as far as it can. >> Why is climate action urgent? And why is it necessary to take such rapid and urgent action? >> The basis for the urgency lies in a mathematical property that has many of the effects that humans have on the environment, including, especially, climate change. We’ve reached an exponential phase and it isn’t very intuitive for many of us, because we’re used to linear processes. An exponential process, what it means, is that we have less and less time to do the same things. Or, to put it another way, we have to do more and more things in less and less time. This is the basis of the urgency. What we used to be able to do, let’s say, in a decade, we can now do in a year. If we’re a few days late in doing something, we may not have to do it any longer and have to do something even more important. Countries, governments and sectors of activity have been doing things for 30 years, but they haven’t been doing enough. Just look at how the concentration of greenhouse gas emissions continues to rise. So, it’s not that we haven’t done things. But they’ve been done below that line of exponential growth of climate change, or the climate change driver, greenhouse gases. As long as we aren’t in parallel or above that exponential speed of climate change, we’ll always be behind. And we’ll have more and more work to be done in less time. >> What’s the role of a financial institution like BBVA in the climate crisis? And how can an entity such as BBVA contribute to mitigating the social and environmental crisis? >> Well, Fernando was telling us earlier about the importance of the different technologies that will be fundamental when it comes to decarbonizing lots of productive sectors, right? In that regard, we need a large amount of investment in order to develop these technologies and bring them to scale. And that’s where the role of a bank becomes very natural, isn't it? It’s very natural, channeling and financing, accompanying the customers from the different emitting industries in executing those investments in technology, which they have to carry out in order to decarbonize their production cycle. As for the second part of the question, in terms of inclusive growth, that too, right? I believe that the role of a financial institution, a bank, BBVA in particular, given the importance this has in the emerging markets, where we have a significant presence. It’s very important, through financial education, to ensure and guarantee that access to credit for our customers, comes with training and sufficient knowledge. And then, after that, to encourage the use of financial instruments for aspects that are currently really important in the daily life of every country, right? For example, online shopping. >> How important is knowledge and technology vis-à-vis the terrestrial and marine ecosystems with respect to the economy, society and politics? >> We have a complex game in climate change, particularly when it comes to mitigating it, reducing the problem of greenhouse gases. On the one hand, we have the knowledge of what natural systems are, how they work, both the marine and terrestrial ones, and we have a number of technologies to, at times, support nature, partner it. But that’s not the hardest part, because in terms of technology and knowledge we’re doing quite well. There’s considerable consensus within the scientific community as to identifying what the Gordian knot really is, socially and politically. Society and politics have certain inertias in following how things were going. And we’re proposing really significant changes in the socio-economic model, in the way we transport ourselves, in the way we generate wealth and change the concept of wealth, for example. Changing the concept of growth. Growing in things that no one will question, like growing in equality. And growing in rights, growing spiritually, growing in physical and mental health. That’s what we need to grow. However, we have to downsize in lots of monetary matters, which is hard for us, because it’s the tradition we’ve acquired. So, mainly, the second aspect, as the IPCC report recently revealed, is the one that’s proving the most difficult one. And it’s the one that can be jeopardized, put at risk, really arriving on time for the Paris Agreement and the proposals that we’ve set ourselves. >> What are the main actions that are being carried out by a financial institution like BBVA in the sustainability area? >> Well, we’re really focusing on, first of all, fully understanding, in line with what we were talking about earlier, the most important technologies with which we have to support our customers. To name just a few, we’re seeing how green hydrogen can have a significant impact on decarbonization, carbon sequestration, mega battery plants, recycling plants and so on. We’re looking for spaces in which we believe it will be really important to build projects to scale, ones that generate a positive impact in terms of reducing CO2 emissions. We’re also really focusing on being able to support our customers from all the banks: (corporate banks, but particularly companies, SMEs and retail) in understanding their carbon footprint. Based on that understanding, and this calculation of the carbon footprint, proposing financial solutions and financial products to help them to decarbonize. Or to reduce the impact that they’re having right now. And in also helping the customers of all of our banks, companies, SMEs and retail to take action too, right? In taking action through understanding of what their current carbon footprint is. And, from then onwards, proposing some financial solutions, like the electric vehicle, the installation of photovoltaic panels, energy efficiency, etc.
