We interviewed Luís Javier Herrero, President of the Barcelona European Financial Center (BCFE), to undertand the objectives of the institution he represents, as well as the main challenges for consolidating Barcelona as a city of reference for financial services companies.
For people who don’t know what the BCFE is, could you give us a brief summary of its mission and main goals?
The BCFE’s main goal ever since it was set up in 1991 has been to play a key role in helping to cement Barcelona and its area of economic influence as a leading financial centre.
The BCFE has supported the ongoing development and innovation of financial services and their professionals through technical forums and by providing ready access to world-class experts, academics, researchers and regulators both in Spain and abroad.
The BCFE also seeks to promote Barcelona as a key hub for sustainable finance, investment and funding anchored in ESG principles while contributing to the European and United Nations goals for a green transition and in the fight against climate change. This is why the BCFE joined the Financial Centres for Sustainability (FC4S) international network in late 2018 as the Barcelona Centre Financer Europeu for Sustainability (BCFE4S).
What initiatives does it take to achieve these goals and could you pick out some of the most important ones?
The BCFE hosts all kinds of meetings, talks and conferences to further its goals and connect the city’s financial operations to the international community.
One of our most significant initiatives is promoting Sustainable Finance in line with the 2030 Agenda and the principles of the SDGs. This is now a key objective for the Barcelona area’s financial ecosystem. We applied to join the FC4S network in 2018 and by the end of the year we were a full member. In 2019 we started to flesh out these goals by setting up a high-level Advisory Committee in a new dedicated initiative in the association, Barcelona Centre Financer Europeu for Sustainability (BCFE4S), by running events on significant Sustainable Finance topics and backing initiatives in this area.
Barcelona is one of the entrepreneurial ecosystem’s hubs. Is it also one for financial services companies?
Barcelona is indeed home to a significant number of companies engaged in deploying new financial services. The ICF is a prime example of this because it is actively involved in development and financing.
The BCFE helps to provide ongoing training and information for the city’s banking and financial professionals. At the moment there is a lot of buzz in the Fintech sector in Barcelona, and the BCFE is keen to partner companies leveraging technology to enhance and automate financial services and processes based in Barcelona and also publicise and encourage new practices and regulatory changes.
What are the main challenges in this area?
Moving forward on new needs and including everyone in services which make it easier and more convenient to access financial products. Additionally, and no less important, we have the challenge of safeguarding customer security with the need for clearer regulation and more financial education in this area.
How does Barcelona compare with other European countries as a financial services centre?
Barcelona boasts a wide range of public and private financial services on a par with other European countries and financial centres.
Barcelona’s financial institutions, trainers, insurers, consultants and enterprises, the Catalan Government’s institutional system, the city’s international reach and its economic and business community mean it has always been a trailblazer in developing and delivering financial services for businesses.
Sustainable finance is here to stay; where do financial institutions stand and what are the next steps?
Since 2017, FC4S has been surveying its members to assess how sustainable finance is doing. We’ve taken part in this for three years in a row, and so the Assessment Programme 2021 run by the FC4S network has enabled the BCFE to compare its position with other financial centres.
In the analysis for 2021, most of the banks surveyed (67%) said they were committed to increasing the volume of sustainable lending (in the following 12 months), unlike the average European response where the majority of commitments (56%) were short term. Similarly, 76% of the finance companies surveyed in Barcelona partially or fully adhere to the TCFD recommendations, which is higher than the average European score coming to 67%.
As for not financing companies involved in coal mining, power generation and fossil fuel extraction or development, 48% of the companies surveyed in Barcelona do not yet have any of these kinds of measures in place, which is similar to the European figure standing at 52%. Finally, 58% of companies in the banking and asset management sectors in the Barcelona financial centre reported using a climate scenario analysis method in their corporate loan portfolios while the European average surveyed is lower at 46%.
The main next steps we need to address include corporate rollout of the SDG framework to ensure greater transparency and accountability under the 2030 Agenda coupled with bringing in sustainability labels whether private or public in line with other European financial centres.