Climate change is emerging as one of the biggest challenges for the financial sector, which faces growing risks in assets and investments. Adapting to the ecological transition will be key to mitigating losses and taking advantage of opportunities in an increasingly uncertain global environment.
In this context, Openbank assures ABC that it is betting on products and services that incorporate environmental, social and governance (ESG) criteria. Within its catalog, the funds managed through its ‘roboadvisor’ stand out, which prioritize sustainable strategies. These funds already represent 70% of their portfolios, reaching 78% in the most conservative options. In addition, the entity highlights its commitment to sustainability in the use of recycled materials in its cards, of which 90% are manufactured with recycled PVC since 2022.
For its part, BBVA details that it has diversified its offer of sustainable products with initiatives such as green bonds and loans linked to climate objectives. From the entity, pioneering projects stand out such as first biodiversity bonus in Colombiain collaboration with IFC, to finance reforestation and ecosystem conservation. They also highlight the issuance of blue bonds in Colombia and Mexico, aimed at protecting the oceans and promoting the Blue Economy.
Since 2018, BBVA has mobilized 276 billion euros in climate action and inclusive growth, and plans to exceed 300 billion euros in 2025. On the other hand, the role of fintech is being consolidated as an essential complement to promote sustainability in the financial sector . According to José Luis Oros, member of the InsurTech vertical of the Spanish Association of Fintech and Insurtech (AEFI), these companies provide innovative technologies, such as blockchain-based traceability, that simplify processes and offer digital and flexible solutions. The collaboration between fintech and traditional banking, through joint projects, integration of APIs or the use of regulatory sandboxes – such as the one promoted by the Ministry of Ecological Transition – is opening new market niches and improving the capacity of the financial system to face climatic and social challenges.
José Luis Oros explains that technologies such as big data, artificial intelligence and blockchain are transforming climate risk management in the financial sector, while opening new opportunities. In this framework, blockchain stands out as a key tool to guarantee transparent and unalterable records, essential to verify climate commitments and combat ‘greenwashing’. Innovative platforms already make it possible to track the CO2 footprint, both in production processes and investments. Oros points out that the rise of sustainable models based on IoT and real-time data analysis facilitates more agile decisions thanks to open platforms. However, it warns about the risk of these tools being absorbed by traditional entities, underlining the importance of collaboration between fintech and banking to move towards a more sustainable sector.
Regulatory pressure
This drive towards sustainability is also being reinforced by emerging climate regulations, such as the EU green taxonomy and ESG disclosure standards, which are redefining financial sector business models and strategies. According to Javier Ybarra Sánchez, head of sustainability for financial services at NTTDATA, the sector continues to demand clear rules to determine what is green, sustainable or socially responsible. Furthermore, it highlights the importance of having homogeneous and comparable information on client sustainability, essential for decision-making in financing and investment. These regulations are paving the way for a more structured transformation of the sector.
Ybarra adds that regulations are facilitating the orientation of savings and investment towards companies with better sustainability performance, offering them more favorable financial conditions. Likewise, these regulations are integrating climate factors into the risk analysis and decision processes of the financial sector. In Spain, initiatives such as the Green Paper on Sustainable Finance, led by the Ministry of Economy, establish a clear roadmap, including measures such as the creation of the regulatory sandbox, support for SMEs and coordination through the Sustainable Finance Council , setting a new standard in the ecological transition of the financial system.
Despite the regulatory push and collaborative initiatives, the financial sector still faces significant challenges in integrating climate risk into its operations, explains AEFI’s Oros. One of the biggest challenges is quantifying the effects of climate change, especially extreme weather events, since traditional tools are not sufficient to measure these impacts in financial terms. This uncertainty not only makes strategic planning difficult, but also increases costs for consumers, as is the case with home insurance in rural areas exposed to higher risks.
Oros also points out that excess regulation, while encouraging responsibility, can slow down the adoption of innovative solutions and make it difficult to finance sustainable projects. This represents a barrier to disruptive business models that seek to transform the sector. Fintechs, through technological innovation, have the capacity to overcome these challenges, offering more efficient and accessible tools that help reduce the gap between regulation, innovation and adoption in the financial market.
Despite these regulatory and collaborative advances, the financial sector is not the only one under pressure from climate change. The insurance sector, according to the Spanish Union of Insurance and Reinsurance Entities (Unespa), also faces significant challenges due to the increase in extreme weather phenomena. This phenomenon has multiplied insured damages, as demonstrated by the recent DANA in Valencia, which generated losses of 3.5 billion euros, the largest natural catastrophe recorded in Spain. In 2023, insurers disbursed 847 million euros in 2023 to address the damage caused by more than 993,000 weather incidents.
More pressure
These figures reflect how the increase in the frequency and intensity of climate phenomena is forcing insurers to adapt your coverage models and rates. The increasing severity of accidents also impacts the countryside, where compensation from Agroseguro, the pool that protects crops and livestock, has doubled in five years, exceeding 1.2 billion euros in 2023. This panorama shows the urgent need to develop models more innovative and efficient to manage the risks associated with climate change.
Climate pressure not only forces the financial sector and insurers in general to adapt, but also demands concrete responses from the main companies in the sector. Mapfre points out that climate risk coverage is an essential component of its activity, but climate change has intensified the frequency and severity of these events, generating new demands and challenges. To confront them, Mapfre uses advanced analytics and prediction models that integrate the effects of climate change, allowing us to anticipate extreme weather events and optimize resources in critical areas.
The insurer highlights that companies, increasingly vulnerable to storms, floods and forest fires, demand products that cover not only physical damage, but also operational interruptions. This reflects the evolution of the sector towards more robust and adapted solutions. Furthermore, Mapfre emphasizes that the increase in the cost of natural catastrophes is not only due to more severe events, but also to factors such as demographic growth in risk areas, inflation and the greater complexity of the insured assets.
In this context, Mapfre emphasizes the importance of adjusting premiums to reflect real risks and collaborating with governments and other key actors to reduce the protection gap.
BBVA tells ABC that climate risk not only poses challenges, but also opportunities to develop financial products that promote the transition towards a sustainable economy. The entity mentions initiatives such as the “water footprint” loan, linked to water consumption metrics, and the water bonus in Colombia, designed to combat water stress in vulnerable sectors. In addition, they highlight their commitment to strengthening the resilience of the agricultural sector through sustainable certifications based on regenerative agriculture.
BBVA also highlights that they advise companies to manage physical risks derived from climate change and reduce their impacts. According to data provided by the entity, 80% of its portfolio in high-emission sectors is made up of clients who are already actively managing their transition towards more sustainable models. With a focus on clean technologies, circular economy and recycling, BBVA believes that the financial sector has an essential role in leading innovative solutions to climate challenges, combining long-term sustainability and resilience.
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