Ribera now points to the big banks: "The financial sector must reflect so as not to be trapped in investments full of CO2"
Banco Santander, BBVA, CaixaBank…. The greatest leaders of the Spanish financial world are now in the crosshairs of Teresa Ribera. The Minister for the Ecological Transition has singled out big banks for their significant role in financing a fully sustainable energy system: “The financial sector needs to reflect on what decarbonization means for them.”
The third vice president’s clear message was materialized in an initiative that the Ministry is currently finalizing. “We are working on a book on sustainable finance that will guide us in allocating our financial resources,” Ribera announced during his opening speech at the XII Business Symposium of the Foundation for Energy and Environmental Sustainability (Funseam) held in Barcelona on Monday.
Ribera clarified that this document, being prepared by the Ministry, aims to encourage the banking sector to avoid investing in high carbon emissions projects that could lead to difficulties in returns and may not align with the initial expectations. The ultimate goal is to facilitate the transformation of the entire energy and industrial system.
This is not the first time that the top national energy policy official has collaborated on a document related to sustainable finance. One year ago, Ribera participated in the preparation of the book “Sustainable Finance: An Environmental, Social, and Good Governance Commitment,” promoted by Funseam. The XII Business Symposium, held in Barcelona on Monday, also marked the opening of this event, where Ribera used the opportunity to announce the new ministerial initiative.
The book, which opens with reflections from Teresa Ribera, is expected to have an online version available in the first quarter of this year. The book is divided into three sections. The first section highlights the new approach to ESG (Environmental, Social, and Governance) factors being adopted by companies in the banking and telecommunications sectors.
Alongside Ribera, other voices appearing in the book include Margarita Delgado, the deputy governor of the Bank of Spain and president of the European supervisory authority, as well as José Carlos García de Quevedo, the president of the Official Credit Institute (ICO).
A year ago, Europe engaged in a contentious debate that determined which businesses were eligible for green financing. The controversy centered around whether to include gas and nuclear activities in the so-called green ‘taxonomy’, which would determine whether these activities could attract sustainable financing. After a close vote, gas and nuclear were included on the list alongside solar and wind energy, meaning they were considered equally green in the eyes of capital.
Ribera’s call to action comes as the latest annual report from the Spanish Observatory of Sustainable Financing reveals that the green credit market reached €60,788 million in 2023.
“Money is not the problem, but we need technological certainty and a regulatory framework,” said Paula Pinho from the European Commission.
While public-private initiatives offer attractive returns for companies, they need to carefully consider investments to avoid getting stuck in high carbon emissions projects.
Conflict in the US
Since its inception in 2021, the Net Zero Financial Services Providers Alliance (NZFSPA) has attracted some of the world’s largest financial services firms. Supported by the United Nations (UN), this group of companies has committed to aligning all their products and services with net zero greenhouse gas emissions by 2050. This commitment aims to encourage investment funds, banks, and other entities in the financial market to follow suit.
On September 13, 2023, 22 Republican attorneys general sent a letter to the signatories of the NZFSPA expressing concerns that their commitments may conflict with state and federal laws.