Bank of America mobilised $250bn in sustainable finance last year

Last year, the banking giant pledged to reach net-zero emissions across the projects it finances and its supply chain by 2050

Bank of America announced that the $250bn financed for sustainable projects and initiatives in 2021 is a “significant increase” compared to 2020.

Last year, the organisation increased an existing $300bn sustainable business initiatives fund to attempt to mobilise $1trn by 2030 for initiatives that will support the net-zero transition. The commitment will support a broader $1.5trn sustainable finance goal that is aligned with the UN Sustainable Development Goals (SDGs) that covers both environmental stewardship and social inclusiveness.

Highlights in 2021 include underwriting more than $47bn for ESG-themed bonds on behalf of more than 182 clients, creating a $12bn portfolio for renewable energy tax equity and issuing a second $2bn Equality Progress Sustainability Bond focusing on women and Asian American, Pacific Islander and Indigenous peoples.

Since launching the Environmental Business Initiative in 2007, Bank of America has deployed more than $200 billion to low-carbon, sustainable business activities

“Our sustainable finance strategy permeates every aspect of how we deliver for our clients, employees and communities, and we are committed to a more inclusive, net zero society for all. Our sustainable finance focus is long-standing and continues to play a catalytic role in scaling our environmental transition and inclusive social development goals across the globe,” The Bank’s vice chair Paul Donofrio said.

“As a financial institution, we are leveraging the power of our size, expertise and the capital markets to mobilize more investments and financings to address these global challenges and opportunities.”

Net-zero

Last year, the banking giant pledged to reach net-zero emissions across the projects it finances and its supply chain by 2050. It has also set a commitment to reach net-zero operational emissions by 2023. It achieved carbon neutral operations in 2019 and will now work on further internal emissions reductions, to reduce the amount of offsetting needed.

A first step in the Bank of America’s plans for reaching net-zero financed emissions is to begin disclosing financed emissions on an annual basis, beginning in 2023 at the latest. The firm will use this data to inform the development of “interim science-based emissions targets for high-emitting portfolios” including holdings in the energy sector.

At the same time, the bank will increase its capital allocation to low-carbon sectors including bioenergy, renewable energy, clean hydrogen, nature-based solutions, waste-to-energy, green agri-tech and carbon capture, usage and storage (CCUS). It will also scale up finance for improving water infrastructure.

Bank of America claims that it has been supporting the Paris Climate Agreement since it was ratified in 2015. But the ‘Banking on Climate Change’ report from last year claimed that the firm has provided billions of dollars to the fossil fuel sector, without environmental conditions attached, over the past five years.