Governance of ESG (Environmental, Social and Governance) risk management
CaixaBank manages its business and its products and services within the framework of its commitment to respect people and the environment. It coherently supports the most environmentally-friendly initiatives and projects that contribute to prevent, mitigate and respond to climate change.
One of CaixaBank's objectives is that the procedures and tools for identifying, assessing and following up on the environmental risks derived from its activity with clients and transactions are applied and integrated in the standard risk, fulfillment and operations processes.
The company has a specialised environmental risk management team. Environmental risk management includes the following action points:
Environmental Risk Management Committee
It is the most senior specialised executive body at CaixaBank when it comes to environmental risk management and reports to the CaixaBank Management Board.
It is responsible for analysing and, where necessary, approving the proposals received from the different functional areas concerning the Bank's strategy and approach, while also identifying, managing and controlling the associated risks as a first line of defence.
Transaction Appraisal Unit
This group constitutes the operating unit specialised in environmental risk to support the company in the daily decision-making processes linked to the ordinary business of granting risks, and informs the Environmental Risk Management Committee.
The group is made up of environmental risk specialists representing the Business, Risks and Corporate Responsibility areas.
Its key role is to issue a diagnosis, report or explanation with respect to the potential environmental risk level provided that it is required to do so and, particularly, in granting new asset operations referring to activities and sectors included in the Environmental Risk Management Policy.
Reputational Risk Support Service
CaixaBank has a Reputational Risk Support Service that answers queries related to:
ESG (Environmental, Social and Governance) and climate-related procedures
Project financing: Equator Principles
What is project finance?
The Equator Principles are a set of ten guidelines under which the financial institutions that adopt them voluntarily undertake to assess and take into consideration the social and environmental risks associated with the investments they finance within the field of development, in order to ensure the sustainable nature of the operations being financed.
Who has signed up to them?
These Principles were established in 2003 with the support of the International Finance Corporation (IFC) attached to the World Bank. Up to the end of August 2016 they had been adopted by 84 institutions. All of them collaborate in promoting best practices, in order to ensure standards improve, and also prepare an annual report on its application.
What is the commitment?
In accordance with the Equator Principles, CaixaBank goes through different phases when assessing projects:
1. The potential social and environmental risks and impacts of the projects are assessed, which are subsequently classified into three categories: A, B or C, according to the standards of the International Finance Corporation, IFC, attached to the World Bank Group.
A: projects with potential significant adverse environmental and social impacts that are considered irreversible or unprecedented.
B: projects with potential limited adverse environmental and social impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures.
C: projects with minimum social or environmental impacts or that have no adverse impact, including certain projects carried out by financial intermediaries with minimum risks or without risks.
2. Once classified, an independent expert must confirm that the projects meet the requirements of the Principles. For those projects with a higher foreseeable impact, category A or B, these requirements include a social and environmental assessment and a specific action plan, related to the potential risks and impacts, which must be followed.
3. If the project is economically viable and these risks and impacts are considered acceptable and feasible, the loan is agreed. In the case of category A projects, or category B projects for non-designated countries, the loan conditions require the borrower to contract an independent consultant to monitor the project until start up and to review the project's environmental and social monitoring, control and follow-up reports, in order to guarantee all the Principles are fulfilled.
By adopting these guidelines, CaixaBank undertakes to apply them to all project finance in which it participates and that require an overall financing higher than ten million dollars, regardless of the sector and the place in the world in which they are situated. Similarly, since 1 January 2014 they have been applied to all corporate loans linked to projects with an overall amount that is higher than 100 million dollars in which CaixaBank has a stake of at least 50 million dollars.
In accordance with these Principles, to be approved, projects need to be assessed positively with social and environmental factors incorporated in the analysis, as per certain standards established by the International Finance Corporation (IFC).
What is project finance?
This is a system to fund projects requiring a very high investment with certain predictable and sustainable expectations of future revenue generation to allow the loan to be repaid. In addition, the assets that have been financed with the loan serve as a repayment guarantee. These characteristics allow the projects to receive a specific financing that is generally provided by several companies. Some examples of these kinds of projects are motorways, telephone networks, etc.
Management of social and environmental risk in financing projects under the Equator Principles
CaixaBank's activity must be coherent with its corporate values, its codes of conduct and general risk principles. Some of the sectors in which CaixaBank operates could have a significant environmental impact. For this reason, in accordance with a rigorous and responsible decision-making process, CaixaBank believes it is essential to identify, assess and manage the environmental risk associated with its activity.
Scope of the management framework
Project finance is carried out under the Equator Principles, which CaixaBank has adhered to since 2007. As a result, an analysis of the potential environmental and social risks and impacts of the projects is required, carried out according to the standards established by the International Finance Corporation (IFC), for:
Application by CaixaBank
Number of financed projects in 2018
|Financed operations (units)||Financed operations (€MM) 1|
|A Category (projects with potential impact ESG significant and hardly mitigables)||1||99|
|B Category (projects with potential impact ESG limited and easily mitigables)||7||504|
|C Category (projects with potential impact ESG minimum or without adverse impacts)||0||0|
1. The reflected amounts can vary because of the change of conditions in the loans granted in closed dates to the reporting.
In 2018, eight projects were assessed in accordance with the Equator Principles entailing total investment of € 10,626 million, of which CaixaBank contributed more than € 603 million. One project was classified under category A and seven were classified under category B.
|Region||Europe, Middle East & Africa||1||7|
|Country designation||Designated Country||1||7|
Global volume by sector and category (in euros)
Note: data updated as of May 2019
Previous years of Project financing: Equator Principles
In 2017, seven projects were assessed in accordance with the Equator Principles entailing total investment of € 2,793 million, of which CaixaBank contributed more than € 332 million. None was classified under category A, five were classified under category B and one under category C.
Projects evaluated according to Ecuador Principles classified as B:
Number of financed projects in 2017
|Region||Europe, Middle East & Africa||4||1|
|América del Sur|
|América del Norte||2|
|Country designation||Designated Country||6||1|
Global volume by sector and category ( in euros)
Note: as of December 2017. Figures for 2017 were updated down the line due to the delays in collecting the contractual documents relating to the transactions.
In 2016, twelve projects were assessed in accordance with the Equator Principles entailing total investment of € 4,800 million, of which CaixaBank contributed more than € 721 million. None was classified under category A, ten were classified under category B and the remaining two under category C.
Number of financed projects in 2016
|Europe, Middle East & Africa||2|
Global volume by sector and category
Note: as of April 2017
In 2015, fourteen projects were assessed in accordance with the Equator Principles entailing total investment of € 17,808 million, of which CaixaBank contributed more than € 636 million. None was classified under category A, twelve were classified under category B and the remaining two under category C.
Number of financed projects in 2015
|Europe, Middle East & Africa|
Global volume by sector and category
Note: as of March 2016.
In 2014, nine projects were assessed in accordance with the Equator Principles entailing total investment of € 2,506 million, of which CaixaBank contributed more than € 270 million. One was classified under category A, four under category B and the remaining four under category C.
Number of financed projects in 2014
|Real Estate & Tourism||2|
|Europe, Middle East & Africa|
Global volume by sector and category (in thousand euros)
Note: as of February 24th 2016.
Environmental Risk Management Policy
Some of the sectors in which CaixaBank operates could have a significant environmental impact. For this reason, in accordance with a rigorous and responsible decision-making process, CaixaBank believes it is essential to identify, assess and manage the environmental risk associated with its activity.
Managing the environmental risks integrating ESG (Environmental, Social and Governance) risks is one of the main lines of action of the Company's environmental strategy. CaixaBank therefore developed an Environmental Risk Management Policy in 2018 that regulates the financing of certain companies and projects representing a potential ESG risk. The main objective of this policy is to determine a framework of global principles forming the foundations of all actions that are related or that have an identified impact on potential ESG risks. The sectors that have been taken into account in this policy are:
Task Force on Climate-related Financial Disclosures (TCFD)
With the view to complying with the recommendations of the Task Force on Climate-related Financial Disclosures (TFCD), CaixaBank has identified its portfolio exposure to carbon-intensive sectors1, representing 0.94% of its total assets. In addition, CaixaBank is currently working to identify its portfolio exposure to green sectors.
 Data on CaixaBank Group's carbon-intensive equity, fixed income and credit exposure (including BPI). This includes exposure to
fossil-fuel-based power generation sectors (coal, oil and gas) and utilities, based on the recommendations of the FSB Task Force on Climate-related Financial Disclosures. Financial Disclosures of the FSB. Some exposures may contain a mix of power generation that includes renewable energies.
United Nations Principles for Responsible Investment
CaixaBank's pension plan management company (VidaCaixa) and collective investment institution management company (CaixaBank Asset Management) adhere to the United Nations Principles for Responsible Investing (UNPRI) and manage their portfolio in accordance with these principles. In addition, both entities adhere to the Climate Action 100+ initiative led by UNPRI, to drive the clean energy transition and help achieve the goals of the 2015 Paris Agreement (COP21).
VidaCaixa is the only Spanish insurance company to have received the maximum A+ rating in sustainability from the United Nations.