Bank of America last week more than tripled its environmental financing goal, saying it wants to deploy more than $1 trillion by 2030 to accelerate the transition toward a low-carbon, sustainable future, according to a Thursday press release.
Since launching its environmental business initiative in 2007, the bank said, it has financed $200 billion in sustainable activities, including asset-based lending, tax equity investments and capital raising in the energy and transportation sectors, among others. It pledged to back $300 billion in low-carbon activities between 2019 and 2030.
The $1 trillion pledge is in addition to $500 billion the bank aims to put toward socially inclusive development, including affordable housing, community development, healthcare, education, and racial and gender equality.
Banks have markedly ramped up their sustainability goals over the past two years. Between September and March, each of the six largest U.S.-based banks has pledged to achieve net-zero greenhouse-gas emissions in financing activities by 2050.
And although Bank of America laid out its $300 billion sustainable-financing pledge in April 2019, Goldman Sachs pushed a strategy several months later that more than doubled that commitment, saying it would target $750 billion over 10 years for "climate transition and inclusive growth finance." That encompasses loans, underwriting, advisory services and investments toward companies and projects focused on renewable energy, sustainable transportation, affordable education and other areas, Goldman said. Further, the investment bank published a blog post last month indicating it had put $156 billion toward its goal, including $93 billion focused on climate transition.
Bank of America’s $1 trillion pledge, plus its half-trillion-dollar commitment to socially inclusive finance, doubles Goldman’s goal.
The commitment "demonstrates our belief that there is opportunity for exponential market growth in [environmental, social and governance]-themed products and services as well as market share growth," Karen Fang, Bank of America’s head of global sustainable finance, told American Banker.
It also aligns with the 17 sustainable development goals the United Nations laid out in 2015, the bank said.
Bank of America has helped more than 225 clients support their sustainable business needs by raising upward of $300 billion through more than 400 ESG-themed bond offerings, the bank said Thursday.