Spanish bank BBVA announced a new environmental initiative, with plans to eliminate its exposure to coal-related activities. The bank stated that it will exit the financing of coal companies and projects by 2030 in developed countries, and by 2040 globally. The new policy was announced as part of BBVA’s updated Environmental and Social Framework.

BBVA Chairman Carlos Torres Vila said:

“Today we are taking another important step forward, committing to reduce to zero our exposure to activities related to coal. We will actively help our clients in this journey, supporting them with financing and advice in their transition to models based on sustainable energy sources.”

According to the new framework, BBVA will not provide financing services to clients with more than 25% of activity consisting of extraction of coal for energy generation, and where they do not have a diversification strategy, with the longer term targets extending to companies with more than 5% of revenue from coal. According to the bank, the long term threshold is in line with the criteria of the Science-Based Targets initiative (SBTi), which proposes a methodological approach to set science-based decarbonization targets.

BBVA’s new policies follow similar moves by other investors and companies to distance themselves from coal and other fossil fuel sectors with poor sustainability profiles. Recently, industrial giant GE announced that it will exit the new build coal power market, and several prominent investorspension funds and investment banks have announced similar policies.

According to BBVA, it will extend its policies and initiatives to help the decarbonization of its clients in all sectors with intensive CO2 emissions, including coal, as well as oil, gas, automotive, steel, cement, and transport, which account for two thirds of global emissions, in order to contribute to the goal of net zero emissions by 2050.

Other aspects of BBVA’s Environmental and Social Framework include criteria for financing client activity in areas with a high impact on the environment and society, including sectors such as mining, agribusiness, energy, infrastructure and defense.

Vila said:

“At BBVA, sustainability is an essential part of our strategy, including the fight against climate change, which is one of the greatest disruptions humanity has faced.”