Sustainable and ESG investing with BBVA in Europe: Invest with purpose and profitability! The definitive guide 2025

Investing is no longer just about seeking returns; it's about generating impact! ESG (Environmental, Social, and Governance) investments are the megatrend in Europe. This definitive guide explains what they are, their growing importance, and how, through BBVA, you can align your finances with your values ​​and access sustainable investment opportunities.

The investment world is undergoing a profound transformation. More and more investors, especially in Europe, are looking for more than just a financial return: they want their money to contribute to a more sustainable and fair future. This is where ESG (Environmental, Social, and Governance) investments come into play, a trend that BBVA has actively integrated into its product offering, especially in the European market.

ESG is a set of criteria used to evaluate the sustainability and ethical responsibility of a company or investment. They are divided into three fundamental pillars:

* Environmental: Refers to a company's impact on the environment. * Examples: Carbon emissions management, energy efficiency, renewable energy use, water conservation, waste management, biodiversity protection.

* Why does it matter? Companies that manage their environmental risks well tend to be more resilient and better prepared for the future. * Social: Evaluates how a company manages its relationships with employees, suppliers, customers, and the communities where it operates.

* Examples: Fair working conditions, diversity and inclusion, health and safety, customer data protection, community investment, human rights in the supply chain.

* Why does it matter? Strong social performance can improve brand reputation, employee loyalty, and customer satisfaction.

* Governance: Focuses on how a company is run and managed.

* Examples: Transparency in executive remuneration, board structure, shareholder rights, business ethics, corruption prevention, internal and external audits. * Why does it matter? Strong governance is crucial for sound decision-making, risk management, and long-term value creation.

"ESG investing isn't a passing fad; it's a natural evolution toward a more conscious and responsible capitalism."

Europe has positioned itself as a world leader in the adoption of ESG criteria. Several factors are driving this trend:

* Favorable Regulation: The European Union has implemented regulations such as the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy, which seek to promote transparency and direct capital toward sustainable activities.

* Investor Demand: There is a growing awareness among institutional and retail investors about global challenges (climate change, inequality) and a desire for their investments to reflect their values.

* Risk and Opportunity Management: Companies with strong ESG profiles are often better positioned to mitigate long-term risks (regulatory, reputational, climate) and capitalize on new opportunities in the green and social economy.

* Potential Returns: Contrary to the old myth that sustainable investing involves sacrificing returns, numerous studies and practical experience show that companies and funds with high ESG ratings can offer competitive, or even superior, returns over the long term.

BBVA, as a global financial institution with a strong presence in Europe, is committed to sustainability and offers its clients various ESG investment options.

* BBVA Sustainable Investment Funds: The bank has developed and selected a range of investment funds that apply rigorous ESG filters. These funds invest in companies that demonstrate a strong commitment to sustainability in their operations and strategies. * How do they work? The managers of these funds analyze companies not only for their financial potential but also for their performance across the three ESG pillars. They can exclude controversial sectors (e.g., weapons, tobacco) or invest in sustainability leaders ("best-in-class").

* Variety of Options: BBVA typically offers ESG funds with different risk profiles and thematic approaches (e.g., climate change, renewable energy, gender equality).

* Expert Advice: BBVA's financial advisors in Europe are increasingly skilled at guiding clients in selecting sustainable investment products that align with their financial goals and personal values.

* Sustainable Banking Products: Beyond investment, BBVA also promotes products such as green loans (for energy efficiency projects) or sustainable mortgages, encouraging the transition toward a low-carbon economy.

* Define your goals and values: Which aspects of sustainability matter most to you? What is your risk profile and investment horizon?

* Get informed: Research the different types of ESG products BBVA offers. Read the funds' information leaflets (KIID/DDF) to understand their investment policies and sustainability objectives.

*Consult a BBVA Advisor: A professional can help you build a diversified portfolio that includes ESG investments that are right for you.

* Monitor Your Investments: As with any investment, it is important to regularly monitor its financial performance and sustainable impact.

The evidence suggests yes. Companies that manage ESG risks and opportunities well tend to be more innovative, efficient, and have a better reputation. In the long term, this can translate into:

* Lower Volatility: They tend to be more stable investments.

* Better Financial Performance: Many leading ESG companies outperform their peers.

* Attracting Talent and Clients: New generations value sustainability

While past performance does not guarantee future returns, the structural trend toward sustainability suggests that ESG investments will continue to gain relevance and growth potential.

Sustainable and ESG investing is no longer a niche, but an integral part of a smart investment strategy in Europe. With BBVA, you have access to tools and products so your capital not only grows but also contributes to building a better world. It's an opportunity to align your finances with a vision for a prosperous and responsible future.

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