CaixaBank has introduced an environmental, social and governance (ESG) advisory service to assist its corporate and institutional customers with analyzing and establishing a sustainable strategy and positioning.
With this advisory service, CaixaBank aims to promote its customers’ transition towards neutrality in carbon emissions and “guide them through their processes of adapting, understanding and defining sustainable goals in the short and long term,” according to a release.
Since the 2015 Paris Agreement, a series of regulatory milestones and a push for sustainability have “emerged that focus on the need to decarbonize globally to guarantee sustainability at every level.” This transition to a carbon-free economy “poses an ambitious and complex challenge,” the update noted.
CaixaBank, as a financial institution, accepts its role “as a conduit of financing and promotes investment to help its customers transition to carbon neutrality.”
Through its Corporate and Institutional Banking (CIB) Structured Finance – Sustainable Finance Department, it makes available an ESG advisory process to its customers “to help them develop a comprehensive sustainability plan and adapt their finances to the specific needs of their decarbonization strategy.”
This is “a unique service designed using an in-house methodology based on the guidelines of the Cambridge Institute for Sustainability Leadership and UNEP-FI.” It offers an added value to customers, who can “ascertain their level of ESG maturity, while providing guidance and also offering a consulting partnership agreement to help them improve their sustainability performance.” This service analyzes three areas of customer performance, “offering them a customised diagnosis, comparing their positioning and outlook in their sector, and suggesting an action plan with specific proposals.”
In the first area, they offer a personalized analysis of each client’s sustainability strategy, commitments, and “the degree of alignment with the goals of the Paris Agreement.” Also defined are medium and long-term goals, which “must be measurable and consistent with the company’s corporate strategy.”
In the second area, the team relies on ESG agencies and ratings to “analyze the customer’s visibility in those markets in which it is present or in which it could achieve visibility.” They propose different structures, metrics, and tracking and impact tools. CaixaBank offers active management “with ESG agencies, ratings and indices through active dialogue with market leaders in order to improve the sustainable positioning and recognition of each customer.”
In the last phase, they “evaluate if the company has incorporated ESG criteria into its financing decisions, and we assess the option of defining a sustainable financing framework that integrates these ESG criteria into the financing policy and streamlines decision-making and access to capital.” They also “validate potential financing products that can be incorporated into said financing framework,” the update explained.
Sustainable financing can be “classified as Green if it has a direct and positive environmental impact;” Social “if the use of the funds affects social variables, such as health or education; or ESG-Linked if the financing incentivizes the company to achieve sustainable objectives.”
This process “lasts somewhere between nine and twelve months.” The bank has already “signed several agreements with leading companies in their sectors, marking the beginning of the consulting process under strict confidentiality rules, with a designated team assigned to each customer,” the announcement noted.
Recently, the University of Cambridge’s Institute for Sustainability Leadership, in cooperation with the United Nations, released a report on “Leadership Strategies for Client Engagement”, in which it “selected CaixaBank and three other international banks to illustrate the success of this method for advising and assisting customers in the field of ESG.”
CaixaBank views this service as a “strategic partnership” with its corporate and institutional customers that “elevates the strategic dialogue and enhances long-term relationships and commitments.”
It represents one more step in its commitment to “provide added value to customers at a time of constant global change, when sustainability is playing a central role in the strategy of companies and institutions as a key factor in investment decisions, and as a core focus of development at both the regulatory and market forecasting level.”