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Sectoral Decarbonization Targets

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Sectoral Decarbonization Targets

Garanti BBVA aims to align its credit portfolio with net zero scenarios by 2050, as part of its commitments to the Net Zero Banking Alliance (NZBA) and sciencebased target setting. The Bank’s 2030 decarbonization targets for carbonintensive sectors, including energy, automotive, iron & steel, and cement, have been developed using the internationally recognized PACTA (Paris Agreement Capital Transition Assessment) methodology and were publicly disclosed in 2023. Garanti BBVA Garanti BBVA's portfolio decarbonization targets for companies in the energy, automotive, iron & steel, cement, and coal sectors, for which it has set decarbonization goals, and their progress as of 2024 are as follows:

Garanti BBVA Decarbonization Targets

 Scenario Sector Metric Emission Scope Garanti BBVA Baseline* Garanti BBVA Progress (2023) Garanti BBVA Progress (2024) Reduction Target by 2030 Difference
  Energy kgCO2e/MWh 1+2 371* 339 371 (-71%) +0%
  Automotive gCO2e/km 3 182 179 171 (-40%) +15%
IEA Net Zero 2050  Iron & Steel kg  CO2e/Tiron&steel 1+2 1131*** 1.306*** 1.414 (-13%) 0%
  Cement kg CO2e/Tcement 1+2 726 726 726 (-20%) 0%
  Coal      

Phase-out plan was announcedin March 2021.
The Bank will reduce the coal exposure of our portfolio to zero by 2040 or sooner.

Note: Garanti BBVA has negligible Oil&Gas exposure.
*The starting point for Energy, Automotive, Iron & Steel, and Cement is 2022.
**Starting data for Energy has been updated.
***The emission factor per ton of production in the iron and steel sector has been updated, taking into account grid electricity emissions.

The objectives of Garanti BBVA’s sectoral decarbonization targets are:

  • Measuring customers' progress in their decarbonization processes and providing them with the necessary financial support for investments in new technologies and production methods.
  • Increasing risk weighting for customers aligned with decarbonization targets to reduce transition risks in the loan portfolio.
  • Fulfilling the transparency commitment regarding environmental and social performance disclosures, which have become increasingly important for the financial sector.
 
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