Bank of America commits $1trn to global sustainability initiatives
The Bank of America has 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 $1trn commitment has been outlined by the Bank’s Environment Business Initiative and is an increase on a 2019 commitment of $300bn to low-carbon projects. Bank of America will invest $1trn in climate-related solutions by 2030.
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.
“The private sector is well-positioned to ensure that the capital needed – at the scale it is needed – can drive the transition to a low-carbon, sustainable economy,” Bank of America’s vice chairman Anne Finucane said.
“We will meet our commitment by working with clients to provide lending, capital raising, advisory and investment services, and to develop financial solutions and drive innovation to ensure the transition to a sustainable economy.”
The new funding commitment will support business initiatives across the sustainability spectrum, including renewables, transport, resource efficiency, water stewardship and improvements to agriculture and forestry.
Since launching the Environmental Business Initiative in 2007, Bank of America has deployed more than $200 billion to low-carbon, sustainable business activities.
Bank of America claims that it has been supporting the Paris Climate Agreement since it was ratified in 2015. But the recent ‘Banking on Climate Change’ report claimed that the firm has provided billions of dollars to the fossil fuel sector, without environmental conditions attached, over the past five years. As well as high emitters, the bank, like many of its peers in the US market, is facing increasing pressure to reduce exposure to corporates with high deforestation risks and those implicated in plastic pollution scandals.
Earlier this year, Bank of America pledged to reach net-zero emissions across the projects it finances and its supply chain by 2050.
The banking giant 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 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.
Its updated climate strategy includes commitments to shift to 100% zero-carbon electricity across the supply chain and to help all suppliers reduce Scope 1 (direct) and 2 (power-related) emissions by 75% by 2030. Energy efficiency will play a major role, with a new target to reduce energy consumption by 55%.
Suppliers will also be required to align with Bank of America’s operational targets on water, waste and resources for 2030. These include reducing potable water use by 55%, diverting 75% of construction and demolition waste and disposing of all electronics and electricals via certified solutions providers.