STAKEHOLDER ENGAGEMENT
Corporate Responsibility Report 2008
18
present report. However, new risks and changes
affecting the issues relevant to CR at BBVA were
also identified. The accompanying tables provide
details of these results.
CR principles
and policies
BBVA’s responses to each of the detected
variations are covered throughout the chapters of
this report, as well as in the 2008 progress and
2009 objectives scorecard.
Implications of the current crisis
The economic crisis has had a significant social as well as economic (falling share prices)
impact. The social effects can be seen in a generalised dissatisfaction with the lack of control
over banks and the financial system, leading to greater demands for transparency and good
practices. The crisis has also lead to widespread criticism of government support for the
financial sector.
One specific example of this sentiment is the growing interest in linking senior management
compensation to long-term objectives.
This situation heightens the relevance of the code of conduct, the specific functional area
codes, as well as the pertinent complementary policies.
RELEVANT
ISSUES Implications of the current crisis
Customer focus
Financial inclusion
Responsible finance
Offering responsible
products and
services offer
The crisis has altered the focus on financial services access. Whereas before we focused on
the variety and efficiency of the bank channels offered, that focus is now directed at a more
fundamental business issue – access to loans and credit.
At the same time, a change has occurred in the customer requirement profile. For this reason,
and due also to the jump in the NPA ratio, there has been an increase in demand for
counselling and for customised solutions. Moreover, the difficulties caused by the downturn will
lead to a drop in customer satisfaction, with the subsequent negative effect on their perception.
Similarly, we may expect a strengthening of financial laws and regulations, along with greater
demand for transparency and clarity in the products offered by financial organisations.
We can also look forward to a growing need for microfinance products as a way to increase
credit access. Conversely, this need could be difficult to meet, as the result of reduced
resources in the microfinance market due to global liquidity problems.
Latin America has also seen an increase in the NPL ratio. This will have an effect on BBVA’s
work to extend banking usage in the region, while leading to a demand for solutions to new
customers’ financial difficulties.
Current socioeconomic and demographic changes also call for a review of the bank’s activity
with the migrant population.
The financial sector is currently running the risk of being lax in incorporating social and
environmental issues into its project finance decisions. Current circumstances, however, make
the financing of high social impact projects still more important.
Lack of liquidity in the market increases the risks associated with capital origin, thus highlighting
the importance of money laundering prevention.
The severity of the financial crisis is having a significant effect on some of the financial products
most closely associated with sustainable management. Consequently, the future of the Socially
Responsible Investment market has become quite uncertain. There has been a substantial drop
in pension fund values, sparking the risk of nationalisation of those funds in certain Latin
American countries.
Another change arising from the economic difficulties can be seen in the tendency of
citizens to give more priority to social, as opposed to environmental issues. We also foresee
cuts in the private financing of the third sector, forcing NGOs to search for alternative
financing sources.
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.