Sustainability, the bet of the financial sector for the future of the planet
The sustainability it is already clearly a priority. Not only has it been incorporated into our day-to-day life to make changes in lifestyle and consumption habits, but it has also become key for more and more companies, institutions and governments. The growth model of our society needed to be reviewed, and the incorporation of long-term sustainable measures is the most appropriate response according to the current needs of the planet, which is in the midst of the fight against climate change.
In each sector, company or entity the plans based on sustainability are different. In the financial sector and, specifically, As asset managers, we are focused on directing financing and investment towards solutions that integrate ESG criteria (Environmental, Social and Good Governance), whose objective is to offer a long-term sustainable profitability that, in turn, helps with the well-being of society.
BBVA Asset Management Sustainability has become one of the strategic priorities, which is reflected in our recent international incorporations to the Principles of Responsible Investment promoted by the United Nations and the Net Zero Asset Managers commitment. These initiatives are the result of two years of intense work in the design and execution of our sustainability strategy.
First of all, and following our investment conviction and fiduciary duty, We develop a plan to integrate extra-financial criteria (ESG) in the investment decision process and risk control of all our solutions and portfolios. There is no doubt that these criteria, in turn, improve the profitability and risk profile of these vehicles.
This has led us to preparation of an internal ESG rating of the instruments in which we invest. The rating we currently have covers more than 4,200 instruments, around 93% of which are part of our portfolios. According to the ASG rating, vehicles with a worse sustainable profile are not suitable for investment in our portfolios. In addition, the managers also have sustainability metrics and scores for all the instruments in which they invest. This novelty is already working in Europe, although the objective, for which we are already working, is for it to reach Mexico and the rest of the countries where our business is present in the coming months.
On the other hand, our commitment also focuses on influence the strategic decisions of companies so that they have a profitable and sustainable business model in the long term. At the same time, it is worth highlighting the expansion of the scope of our voting activity, both in the European and American companies in which we vote and in the vehicles that vote, located in Spain, Portugal, Luxembourg and Mexico.
Although exclusions are not the basis of our policy, they are maintained for activities considered very harmful to society, such as those that are related to controversial weapons or those that violate the principles of the UN Global Compact.
The next step has been the creation of solutions with a sustainable investment policy. At BBVA Asset Management we have a wide range of investment funds and pension plans, with a heritage of almost 3,000 million euros. This fact allows us to continue fulfilling our objective of offering sustainable solutions for clients of different profiles regarding investment preferences (traditional, sustainable…).
Following this idea we have developed our new range of sustainable equity products, designed with the advice of Robeco, which selects companies with a contribution to the SDGs and meets carbon footprint reduction targets.
Apart from continuing to work to incorporate more sustainable solutions to our offer, we have proposed integrate climate risks into the management of our portfolios. This commitment arises from the need to reduce and combat the consequences of climate change. Looking ahead, companies that have been able to adjust their business model to a carbon-free planet will remain.
It is a long process during which our work consists of guiding companies in this transition and financing those projects that follow a sustainable line. With our adherence to the iniciativa Net Zero, we will focus on the gradual process of aligning our portfolios, in which we will add intermediate and active objectives little by little. In addition, we will create vehicles that meet the net zero emissions commitment by 2050 and will guide our institutional clients to include decarbonization targets for their portfolios within their mandates.
There is no doubt that sustainability has been positioned as a key point both when investing and in the design of portfolios and other products, completely modifying our sector. For this reason, at BBVA Asset Management we will continue to work intensively, as we have during these two years, to add more advances that will guide us towards a better planet.