Portugal and the New Competitive Economy: Better Management for Meaningful Transformation

Maria Henriqueta Mauricio, Senior Transaction Banker, BBVA CIB Portugal

Better management is not an objective in itself; it is the prerequisite for creating lasting value.

The Greatest Economic Challenge of the 21st Century

For many years, sustainability was viewed by many organisations primarily as an environmental, regulatory, or reputational issue. Today, that perspective is no longer sufficient.

The energy transition, mounting pressure on natural resources, climate adaptation, and the transformation of global supply chains are reshaping corporate cost structures, risk profiles, and investment decisions. While sustainability alone does not guarantee greater competitiveness, overlooking these factors can significantly undermine it.

For this reason, the business debate should no longer focus solely on how much companies invest in sustainable initiatives. The critical question is how effectively they integrate environmental and social risks and opportunities into their strategy, operations, investment decisions, and corporate governance.

The organisations best positioned for success will be those capable of translating broad ambitions into measurable action plans, supported by clear accountability, robust performance indicators, and disciplined capital allocation.

BBVA: A Pioneer in Sustainable Finance in Portugal

Portugal possesses significant competitive advantages to support this transformation: abundant renewable energy resources, extensive expertise in clean power generation, strong industrial and technological capabilities, world-class scientific talent, and export-oriented sectors with a solid presence across European markets.

These strengths can attract new investment while reducing the economy's exposure to energy price volatility. They also create opportunities in areas such as electrification, sustainable mobility, building renovation, the circular economy, water management, and industrial modernisation.

However, a favourable starting position alone does not guarantee success. Portugal must also address several major challenges: strengthening and digitalising its electricity grids, expanding energy storage capacity, accelerating energy efficiency, mobilising private investment, and enabling small and medium-sized enterprises to manage both the costs and the complexity of the transition.

The opportunity is real, but capturing it will require effective execution, close coordination, and long-term policy consistency.

BBVA has played a pioneering role in the development of sustainable finance in Portugal. In 2019, it financed the country's first green commercial paper transaction alongside The Navigator Company, participated in the world's first green bond issued by a hospitality company with Grupo Pestana, and structured a sustainable commercial paper programme for BA Glass.

BBVA also arranged The Navigator Company's first sustainable financing transaction through the launch of Portugal's first Green Commercial Paper Programme, worth €65 million. In this landmark transaction, BBVA acted as sole lender, agent bank, and bookrunner.

That same year, BBVA served as arranger and bookrunner for Grupo Pestana's €60 million green bond issuance—the first green bond ever issued globally by a company in the hospitality sector.

In addition, the bank structured a €71 million sustainable commercial paper programme for BA Glass and launched a comprehensive model to support companies in their sustainability transition, with a particular focus on small and medium-sized enterprises. Even during the COVID-19 pandemic, this programme enabled the financing of dozens of projects across a wide range of industries.

In 2020, NOS completed a €100 million sustainable financing transaction with BBVA, marking the first sustainable financing deal for a telecommunications company in Portugal. During the same period, SONAE issued €20 million in sustainability-linked bonds tied to gender equality targets.

BBVA has also become one of EDP's leading financial partners in its green bond issuances. In October 2022, the bank acted as ESG Coordinator for EDP's €1 billion green bond issue.

In early 2021, BA Glass once again partnered with BBVA for a new €75 million sustainable commercial paper programme.

Beyond capital markets, BBVA has promoted Sustainable Supply Chain Finance solutions designed to accelerate the sustainability transition throughout corporate supply chains. As many Portuguese business groups rely on extensive domestic and international supplier networks, the bank offers sustainability-linked confirming solutions that encourage stronger environmental and social performance across the entire value chain.

Over the years, BBVA has developed a value proposition that extends well beyond financing. The bank supports companies throughout their transformation journey by combining specialised advisory services with tailored financial solutions aligned with each organisation's specific needs and strategic objectives.

A Different Transition for Every Sector

There is no single roadmap capable of meeting the needs of Portugal's entire economy.

In manufacturing, priorities may include improving energy efficiency, electrifying industrial processes, advancing material circularity, or reducing hard-to-abate emissions.

In tourism, building efficiency, sustainable mobility, water consumption, waste management, and adapting destinations to increasingly severe climate events will become ever more important.

In construction, renovating the existing building stock and improving its energy performance represent one of the country's largest economic challenges.

In agribusiness, water management, soil conservation, traceability, and resilient supply chains will become increasingly critical.

Meanwhile, the transport, technology services, and energy sectors each face their own infrastructure, investment, and innovation requirements.

What all sectors have in common is not the adoption of a sustainability label. It is the ability to identify material risks, establish realistic objectives, measure progress rigorously, and continuously adapt business decisions.

Competitiveness Begins with Better Management

True business ambition can only be sustainable. Otherwise, it ultimately fails to create long-term value.

A company that measures waste will also monitor its energy consumption. An organisation committed to operational excellence reduces emissions by eliminating inefficiencies. Sustainability is not a standalone department—it is the natural outcome of high-quality management.

Competitiveness Begins with Better Management

Portugal is exceptionally well positioned to lead this transformation across Europe.

Progress on the Sustainable Development Goals, as monitored by Portugal's National Statistics Institute (INE), demonstrates consistent advances in areas such as clean energy, energy efficiency, water resource management, and sustainable infrastructure.

These achievements are reinforced by abundant renewable resources, a strong scientific ecosystem, highly competitive export industries, and a supportive institutional framework capable of accelerating both the energy transition and the decarbonisation of the economy.

From Commitments to Results

Climate change, energy security, and biodiversity loss are likely to represent the greatest economic, technological, and societal challenges humanity will face during this century. Yet they also offer an extraordinary opportunity to rethink how we generate growth, create wealth, and build long-term prosperity.

Portugal has the natural resources, scientific expertise, entrepreneurial talent, and financial system needed to support this transformation.

Ultimately, however, the defining factor will not be technology or access to finance—it will be the quality of management.

Because, in the end, there will not be organisations that are merely competitive, nor organisations that are simply sustainable. There will only be organisations that are well managed. And those will inevitably be the most sustainable.