Bank of America equals Morgan Stanley and JPMorgan Chase efforts with net zero funding target
Bank of America has joined some other major banks that have pledged to achieve zero net greenhouse gas emissions through its funding by 2050.
Some environmentally conscious and risk averse shareholders are increasingly concerned about the systemic impacts of climate change on the economy, especially as the big banks continue to fund the growth of fossil fuel projects.
Last summer, Bank of America BAC,
joined the Partnership for carbon accounting (PCAF). Together with 15 other financial institutions, Bank of America participated in the development of the Global GHG Accounting and Reporting Standard for the Financial Industry, which aims to provide a consistent methodology for measuring and reporting emissions associated with financing activities. Bank of America commits to disclose its funded issues no later than 2023.
“We recognize that it will not be an easy task, but we believe our commitment will help spur the growth of zero-carbon energy and energy solutions, sustainable transport and agriculture, and other sector transformations, while generating more climate resilient and equitable opportunities for our future, ”said Bank of America Vice President Anne Finucane. She leads the company’s efforts in the areas of the environment, society and governance, sustainable finance, capital deployment and public policies.
Bank of America joins Morgan stanley and JPMorgan Chase like the biggest US banks that say they are committed to achieving zero-financed issues.
Shareholder advocate As You Sow, joined by several investors including Mercy Investment Services, Arjuna Capital, Boston Trust Walden, Presbyterian Church USA and Boston Common Asset Management, among others, has tabled climate-focused resolutions with much of the US banking sector, including JPMorgan Chase JPM,
Wells Fargo WFC,
Bank of America, Goldman Sachs GS,
and Citigroup GS,
call on banks to take immediate concrete action to measure, disclose and, most importantly, reduce greenhouse gas emissions associated with their financing activities, including in particular their fossil fuel financing.
In 2020, As you sow and Arjuna Capital have deposited a shareholder proposal with Bank of America asking if and how it would align its funding with the 1.5 degree Paris Agreement target.
“After a constructive engagement, followed by the engagement of Bank of America, As you sow withdrew its proposal, ”the advocacy group said in a statement. “As the fourth largest financier in the world of fossil fuels, Bank of American leadership is important, signaling that it will transition its financing activities in line with global climate goals.
Bank of America’s research arm earlier this week released a report saying climate change was the most important theme of this decade, in the same way that technology has supported economic growth over the past decade. The great powers will fight to lead, according to the report. China has spent twice as much as the United States on climate action, said Haim Israel, the bank’s head of global thematic investment research.
“We believe that climate strategies offer a path to global supremacy,” he said. “Whether through regulations, export limits, tariffs or significant investments, we believe the United States and China will do everything in their power to take the lead in the climate action. “
The economic impact of climate change could reach $ 69 trillion this century, and investments in the energy transition must increase to $ 4 trillion per year, Israel said. This will lead to more than $ 100 billion a year in research and development.
Bank of America estimates that the potential market capitalization of companies tackling the problem of global warming is approximately $ 6 trillion across all sectors, including renewables, electric vehicles, environment, social and the governance. So far, China dominates electric vehicles and batteries, while Europe excels in renewables.