Company: BBVXF
Filing Date: 2025-03-21
Form Type: 6-K
Source: 0000842180-25-000016
Chunk: 304

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-03-21
Form: 6-K
Chunk 304
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 and waste, biodiversity and land use or water resource management. This exercise is included in the “Sector Guide for the integration of sustainability factors in credit analysis,” which defines the most common metrics and reference thresholds in relation to environmental aspects and is used as a support tool in the underwriting process.

In the Wholesale Portfolio, the adaptation of policies and procedures is particularly focused on the integration of transition risk and physical risk in the Sector Frameworks (a basic tool used to define risk appetite in wholesale credit portfolios). During 2024, the sectoral analyses of the risks derived from decarbonization were updated and complemented according to the reference scenarios. BBVA also continued to define:

– For all sectors, good practices and weaknesses in the management of environmental and social aspects at the client level using sectoral metrics and indicators. These serve as admission guidelines in the annual client review process. In sectors with greater exposure to physical risk, specific admission guidelines are now being defined based on the location of the client's activities.

– For sectors flagged as HTR in the internal transition risk taxonomy, transition risk mitigation policies have been defined at the client level that can adjust the risk appetite (growth) accordingly. These policies are based on the results of the Transition Risk indicator.

Compliance with the definition of appetite established in the Sector Frameworks is a condition that must also be met by the alignment plans drawn up for each sector with emissions reduction objectives.

Within the Retail portfolio, further progress has been made in the integration of sustainability aspects, particularly those related to decarbonization and physical risk, in the Mortgage, Small Business and Loans for Vehicles Action Frameworks. In the case of Mortgages, origination limits have been defined for the first time in Spain and Turkey, combining the letter of the Energy Performance Certificate and the LTV ratio (loan-to-value ratio). Therefore, transition risk is now beginning to be integrated into the definition of the risk appetite for this portfolio. Another of the main aspects affecting the transition risk of these portfolios is the financed carbon emissions associated with each one of them. Therefore, the calculation of financed emissions serves as a lever to identify the portfolios that are most sensitive to changes in regulation, technology or energy prices or CO 2 . In turn,

in the same manner as a risk mitigation lever, BBVA acts as a facilitator for financing investments needed to mitigate and adapt to climate change with more sustainable lifestyles and products.

BBVA has also applied differentiated pricing to loans with sustainability content, such as in the "Hipoteca Casa Eficiente", for homes with consumption