Company: BBVXF
Filing Date: 2025-09-05
Form Type: F-4/A
Source: 0001193125-25-196513
Chunk: 394

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-05
Form: F-4/A
Chunk 394
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 challenging situations that could have an impact on the Institution’s reputation to be detected early. A-155

4.4.1.4 Environmental risk

Banco Sabadell has adopted environmental commitments through a cross-cutting strategy (Sabadell’s Commitment to Sustainability) and is moving
closer to achieving them by rolling out various measures in the area of environmental risk laid down in the Bank’s Sustainable Finance Plan. Both the commitments and the measures are aimed at complying with the wide range of regulatory
requirements, supervisory expectations and voluntary initiatives adhered to by the Institution.

Banco Sabadell has mechanisms in place for
identifying, managing, controlling and governing environmental risk. The Institution views it as a risk of a cross-cutting nature, which could affect the Institution as an additional risk driver to traditional banking risks (e.g. credit risk, market
risk, liquidity risk, operational risk), where environmental risk is identified, managed and controlled.

It regularly carries out various
assessments related to this risk, including the following: (i) a qualitative analysis of the impact of environmental risk factors on the aforesaid risks, (ii) a quantitative estimate of the impacts stemming from environmental risk on
credit risk, market risk, liquidity risk and operational risk, (iii) a quantitative analysis of the exposure of its credit portfolios to the most carbon-intensive sectors, and (iv) a measurement of its sustainable exposure (green, social
and sustainability-linked transactions). During this year, environmental risk indicators have continued to be defined and developed and are gradually being converted to metrics that are included in the Risk Appetite Framework in order to manage and
monitor these risks.

It is worth mentioning that the Group has incurred no material losses relating to environmental risk in 2024 or before then,
except for the financial impact stemming from the DANA emergency that took place in October 2024, mainly on credit risk (for more information, see Notes 4.1 and 4.4.2.5 to these annual financial statements). Furthermore, it should be noted that
following a review of the qualitative assessment of the materiality of environmental risk factors on risks that could be significantly impacted, it was concluded that the potential impacts were concentrated in credit portfolios. Specifically,
transition risks were found to be the most material, from the point of view of regulatory factors and technological change. While the short-term impact was not very significant, the potential medium- and long-term impacts should continue to be
monitored and assessed on an