BBVA UR - Subordinated Sustainable Bond 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$500thousand and US$750thousand. 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 IDBInvest 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. 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$500thousand and US$750thousand. 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 IDBInvest 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.