Bank of America has become the latest U.S.-based bank to commit to new environmental investments, reported Reuters on Monday, after the company announced a 10-year, $50 billion Environmental Business Initiative, which will provide loans and other financing for environmentally friendly energy projects.
The new initiative will follow in the wake of a similar pledge made in 2007, where the second-largest bank in the U.S. promised to provide $20 billion for green investments. Fellow Wall-Streeters, including Wells Fargo and Goldman Sachs, also announced green initiatives earlier this year, with Wells Fargo pledging $30 billion in April while Goldman announced a $40 billion initiative earlier this month. Citigroup too had pledged a 10-year, $50 billion environmental investment program back in 2007.
"Environmental business delivers value to our clients, return for our shareholders, and helps strengthen the economy," said Bank of America Chief Executive Officer Brian Moynihan in a press release cited by MarketWatch.
"We met our prior goal in about half the time we set for ourselves, so more than doubling our target is ambitious but achievable."
“For a company in a sector that is challenged for revenue growth, this is a real opportunity to create top-line revenue and to continue to develop the financial markets for" renewable energy, added Bank of America's technology and operations executive Cathy Bessant.
Nevertheless, some environmental advocates though have questioned whether the company’s latest initiative can make up for its previous record on coal.
“I am not knocking any bank that chooses to fund renewable energy and it’s great to be reducing your own emissions,” told Amanda Starbuck, energy and finance program director of the Rainforest Action Network, to the New York Times.
“But they’re setting the wrong target,” she said. “Until Bank of America addresses coal and other carbon-intensive fuels they’re financing, this is like green-washing.”
Neither Wells Fargo nor Bank of America have announced any decision to reduce their coal investments as part of its green initiatives. Kyung-Ah Park, who heads the environmental markets group at Goldman Sachs, on the other hand says that her bank was beginning to turn down coal-related projects.
“We haven’t financed new coal-generation projects in the United States in a few years,” she said.
Bank of America’s announcement comes nine days before a United Nations meeting in Rio de Janeiro on the environment and sustainable development. Bank of America’s chairman, Charles O. Holliday Jr., will attend the conference as the co-chairman of a United Nations panel on sustainable energy.
“We’re glad to be able to share it in Rio, but we timed this to when we were ready,” said Bessant.
“The market is really vibrant, with lots of transaction potential… If no one ever wrote about it, we’d be doing it anyway. It is absolutely core to the success of the company.”