Company name
BBVA Uruguay S.A.
Project number
12665-01
FI-2 operations are those where the risk potential is considered medium: the FI’s current or future portfolio consists of or is expected to consist of, business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures; or includes a very limited number of business activities with potential adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented.
E&S category
FI-2
Country
Uruguay
Sector
Financial Institutions
Status
In implementation
Disclosed date
04/09/2019
Projected date at which a project will be put forward for the Board of Executive Directors’ approval.
Projected board date
09/30/2020
Approval date
09/30/2020
Signed date
02/12/2021
Sponsoring entity
N/A
Investment Operations Department Contact
N/A
Investment type
Syndicated amount
N/A
Financing amount
USD $ 15,000,000
Currency
USD
Project scope and objective
- Scope of Environmental and Social Review. The environmental and social review of the proposed transaction was carried out through desk research, several client interviews, and a portfolio review. BBVA is an existing client of the IDB Group and has an Environmental and Social Management System (“ESMS”) in place. Through this transaction, IDB Invest is supporting BBVA to strengthen its ESMS and segment its portfolio to improve monitoring of the proposed green bond.
- Environmental and Social Categorization and Rationale. The proposed transaction is classified as an FI-2 per IIC´s Sustainability Policy. The sustainable bond is expected to contribute to more than five SDGs, with some of the underlying loans that will support by the sustainable bond: energy efficiency, sustainable construction, clean transportation, social housing, SMEs and micro‑enterprises, among others. The sub-loans will average between US$500 thousand and US$750 thousand. Category A sub-projects, representing corporate or project finance transactions, will be excluded.
- Environmental and Social (E&S) Risks and Impacts. The main E&S risks of this projects are associated with BBVA’s capacity to identify and manage the E&S risks associated with its lending activities. BBVA is improving its capacities and an Action Plan (see below) to enhance environmental and social management has been defined. The Environmental Social Health and Safety (“ESHS”) impacts and risks associated with loans to corporates and SMEs are likely to be moderate in nature. A review of BBVA’s human resources policies demonstrates compliance with Performance Standard 2.
- Mitigation Measures. BBVA has a short-form ESMS, which was created and is operated by its Risk Department. The ESMS includes a basic bank-defined exclusion list and informal designation of E&S responsibility within the risk department. There is strong commitment on the part of BBVA’s senior management to further formalize its sustainability strategy, policy, and operation of its ESMS. The Action Plan defined places priority on improvement of BBVA’s overall ESMS, formalization of procedures, enhanced due diligence in higher risk sectors, and capacity building, among others. The activities defined align with the wider use of proceeds defined in supporting BBVA with the issuance of its first Sustainability Bond.
- Environmental and Social Action Plan
Activity
Description
Compliance Indicator
Sustainability / Environmental Policy
BBVA will formalize its commitment to E&S risk management and sustainability in the form of an environmental and social Policy.
Senior Management sign off on bank‑wide Policy
Enhanced ESMS
BBVA will be required to work with a designated technical advisor to enhance its corporate-wide ESMS consistent with IDB Invest Requirements and IFC Performance Standard 1.[1] As part of this requirement, BBVA will form an ESMS/Sustainability committee (including credit risk, portfolio, and product development, among others) and assign a dedicated staff member / ESMS Manager to oversee enhancement and implementation of the ESMS.
TOR for ESMS enhancement; updated ESMS
Assignment or hiring environmental and social Analyst
BBVA will hire (or assign) an environmental and social analysis, capable of (i) supporting the ESMS Manager; and (ii) providing technical analytical E&S support with regard to the review and due diligence of transactions with higher E&S risk.
TOR for analyst position, and hired individual
E&S capacity building
Senior management, loan officers and credit analysts will be trained by the hired technical advisor on E&S management, the ESMS updates (to be undertaken by consultant), E&S risk management, and the IFC Performance Standards generally.
Certificates of training completion
(annual reporting for new personnel)
Communication Plan / Mechanism
BBVA will enhance its internal and external communication plan to include dissemination on its approach to sustainability, E&S risk management, and grievance response.
Communication Plan
[1] For a summary of the components of an ESMS, please see the IFC Interpretation Note for Financial Intermediaries.
- Contact Information For project inquiries, including environmental and social questions related to an IDB Invest transaction please contact the client (see “Investment Summary” tab), or IDB Invest using the email divulgacionpublica@iadb.org. As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing to mecanismo@iadb.org or MICI@iadb.org, or calling +1(202) 623-3952.
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Contact information
For inquiries, comments and information requests about the project
Request informationAlternatively, you may also use the following contact information :
Client Contact
N/A
PHONE NUMBER
N/A
POST OFFICE ADDRESS
N/A
IDB Invest Contact
requestinformation@idbinvest.org
PHONE
+1(202)-566-4566
ADDRESS
1350 New York Ave NW, Washington, DC 20005
COUNTRY OFFICES
IDB Invest Country OfficesIndividuals or communities can submit complaints and concerns related to environmental, social, or corporate governance issues to the Management Grievance Mechanism by e-mailing mgm@iadb.org or by calling +1 202 312 4040.
As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing to mecanismo@iadb.org or MICI@iadb.org or calling +1(292) 623-3952.
For inquiries, comments and information requests about the project
Request informationLearn more about how we provide private-sector solutions in the region .