Company: BBVXF
Filing Date: 2025-03-21
Form Type: 6-K
Source: 0000842180-25-000016
Chunk: 323

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-03-21
Form: 6-K
Chunk 323
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 this standard also include negative perception due to association with third party companies.

BBVA considers the corporate governance performance of its corporate clients, analyzing their compliance with management practices. In other words, disputes affecting customers are analyzed and taken into account, together with the other internal risk management indicators that feed the risk appetite with each customer.

| PILLAR 3 2024 |     | 7. PRUDENTIAL DISCLOSURES ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS |     | P.319 |

The management and governance analysis serves as an input when calculating the credit rating and addresses the following factors: strategic positioning; financial and risk management; operational efficiency; and governance practices, including the management of environmental and social factors.

In this case, it is a rating modifier that should be considered negative if the company does not provide basic information related to governance. The following specific factors and subfactors are considered:

• Strategic positioning and consistency of strategy with organizational capabilities and market trends, strategic planning process, ability to monitor, adjust and control strategy execution.

• Financial and risk management in terms of risk management and risk tolerance standards.

• Financial and risk management as it relates to operational performance standards and enterprise-wide risk management standards and tolerances.

• Management’s operational effectiveness, knowledge and experience, and depth and breadth.

• Governance and reporting practices, including financial and non-financial reporting assurance practices.

These factors are in line with the definitions of the EBA governance factors set out in the Draft guidelines on the management of ESG risks.

In addition, another of the aspects looked at when reviewing customers is the integration of climate change into customers governance and decision-making processes, in line with TCFD recommendations.

BBVA analyzes the customers’ ESG disputes as an indicator of the quality of their governance and internal controls. In the area of governance risk, disputes related to (i) ethics, (ii) transparency: participation in lobbying activities and standards and practices; and iii) management of conflicts of interest are all reviewed.

During the annual client review process, the existence of an internal committee to review and monitor sustainability and climate management as well as the integration of sustainability objectives in the remuneration of the management team and the management committee.

BBVA analyzes, with the support of an independent advisor, that wholesale clients covered by its Framework do not engage in the prohibited activities outlined for the sectors it covers. It also assesses whether they engage in any activity of special attention, in which case BBVA evaluates the environmental and social impacts derived from the