One good way for a bank to deflect and make people forget its role in the sub-prime financial fiasco that rocked the economy is to focus on its climate change and sustainability efforts and that’s what Bank of America Merrill Lynch is doing.
BoA’s “Environmental Progress Report” last week revealed the good things it is up to on the corporate sustainability front, and to give the bank its due, there are good things to report.
It’s ahead of the schedule it set in 2007 when it unveiled a 10-year, $20 billion “business initiative focused on addressing climate change. Through June of this year BoA says it has “directed” $8.4 billion through lending, investing, capital markets activity, philanthropy and its own operations. The bank committed about $5.4 billion of that in lending and investing activities; the rest went to facilitating nearly $3 billion in capital markets activity.
The bank touches all the bases in “aligning” financial products and services “to the burgeoning market for low-carbon energy, including wind, solar, biomass, nuclear and other emerging technologies.”
The $20 billion environmental business initiative is comprised of hundreds of transactions in 45 states, the District of Columbia, Canada and markets across Asia and Europe, it says. The 2010 report updates the company’s progress toward its environmental goals, commitments and activities including:
- $2.8 billion in commercial real estate banking, financing projects relating to LEED (Leadership in Energy and Environmental Design) certification, ENERGY STAR, brownfield redevelopment and the use of renewable energy tax credits.
- $2.8 billion in equity and debt capital raised to help facilitate clients’ climate change initiatives.
- $2.2 billion in equipment financing for energy efficiency projects and renewable energy projects in solar, wind, biomass and biofuel technologies for both utilities and end users.
- $265 million in private equity investments for innovative companies addressing climate change issues.
- $233 million invested in corporate workplace energy and resource efficiency initiatives for BoA facilities and LEED certification for all new construction office facilities and banking centers.
- $102 million in transactions that have financed emission reductions in the global carbon markets.
- $21 million in philanthropic support for nonprofit organizations focused on addressing climate change and other environmental opportunities.
In addition, BoA said it provided advice to clients on more than $2 billion in low-carbon energy and clean energy mergers, acquisitions and other financial transactions on behalf of both large and small renewable energy companies.
The company, a member of the EPA Climate Leaders program, reduced its absolute greenhouse gas emissions by 18 percent over its 2004 benchmark, doubling a goal set five years ago.
Last year BoA reported a net loss of $2.2 billion on net income of $6.3 billion, but those numbers were colored by the $45 billion it repaid to the government to exit the Troubled Asset Relief Program. After posting second quarter revenue that was below its already reduced estimates, the word is that company layoffs are likely, along with increases in fees.
Given that, some good news was needed. In the report BoA says it “understands the powerful role it can play in addressing private sector financing and economies of scale needed to build a low carbon economy.”
It has relationships with 98 percent of U.S. Fortune 1000 companies. But one interesting piece of news quietly buried in the report was the bank’s commitment “to phasing out our financing of companies whose predominant method of extracting coal is through mountain-top removal.”
No dollar amount was given on that, but it might be one of BoA’s most significant and progressive commitments.