Climate and Environmental Risk Management
At CaixaBank we actively manage environmental risks and those associated with climate. Based on the evaluation of the materiality of ESG risks in their interrelation with traditional risks, in the phased deployment of ESG risk management we have prioritized climate risks.
In accordance with the best sectorial practices, the recommendations of the TCFD and the European Commission guidelines on non-financial reporting, at CaixaBank we are progressing in our management and analysis of environmental risks and risks derived from climate change, which are classified as physical risks and transitional risks. The former emerge as a result of climatic and geological events and changes in the balance of ecosystems, and can be gradual or abrupt. They can entail physical damage to assets (infrastructures, properties), disruptions in production or supply and/or changes in the productivity of economic activities (agriculture, energy production).
Meanwhile, transitional risks are associated with the fight against climate change and the transition towards a low-carbon economy. They include factors such as regulatory changes, the development of alternative energy-efficient technologies, changes in market preferences or reputational factors associated to activities with a high impact.
ESG Risk (sustainability) is considered at CaixaBank as a transversal factor affecting various risks in the Catalog (credit, reputational and other operational risks), adding mentions of climate change and other environmental risks in the definitions of the legal and regulatory risk area. There is no explicit mention of liquidity and market risks given the low level of materiality applied to them, but in any case it has been assessed that the stress tests carried out are of sufficient magnitude to reflect impacts in these areas of climatic origin.
Management of the credit portfolio seeks to align the indirect impact on climate change with risk appetite and with the commitment to its sustainability objectives. To do this, since 2018 it has measured lending exposure to economic activities considered carbon-intensive. The main metric is based on the definition suggested by the TCFD to facilitate their comparison and includes exposure to assets linked to the sectors of energy and utilities, excluding water and renewable energies (carbon-related assets, as defined in Implementing the Recommendations of the TCFD). Additionally, at CaixaBank we have developed qualitative and quantitative analyzes for physical and transition risk.
Furthermore, exposure to the green portfolio is monitored. The EU Taxonomy being developed is the European standard for determining whether an economic activity significantly contributes to mitigating climate change without damaging the other environmental objectives of the EU. For the time being, Delegated Act 2021/2139 of the EU sustainability regulation is limited to the goals of mitigating greenhouse gas emissions and adapting to the vulnerability to the effects of climate change. The rest of the environmental goals envisaged by the Taxonomy have not yet been developed. As the regulations are developed, our commitment as a Group is to make them public with the best practices observed at any time.
In that regard, since 2019 we have been part of the UNEP FI task force to define guidelines for adapting banking to EU taxonomy (High-Level Recommendations for Banks on the application of the EU Taxonomy). Furthermore, in line with the technical criteria, operational and documentary criteria have been laid down for the classification of operations of the most relevant sectors in CaixaBank's portfolio and a project has been set up to implement the requirements in the processes and information systems.
During 2022, CaixaBank issued 2 green bonds, in addition to the 4 green bonds issued in 2021 and 2020. The €2,000m raised between these two bonds are in addition to the €3,582m previously issued.
The total amount acquired through these funds have been allocated to funding projects that promote four of the Sustainable Development Goals (SDG): number 6, Clean Water and Sanitation; number 7, Affordable and Clean Energy; number 9, Industry Innovation and Infrastructure; and number 11, Sustainable Transport Systems.
The portfolio of eligible green assets is made up of loans mainly destined to solar and wind renewable energy projects.
Furthermore, we have been signatories to the Green Bond Principles since 2015, established by the International Capital Markets Association (ICMA). Since then, we have participated in the placement of green bonds for projects with a positive climate impact.
Access to the SDG Framework