Bank of America Says It’s Ahead of Plans for Financing Sustainable Projects
(Bloomberg) -- Bank of America Corp. saw its busiest year on record for sustainable finance deals as demand for environmental, social and governance investments accelerates.
The lender backed $250 billion of projects aimed at combating climate change and promoting social inclusion in 2021, more than double the $105 billion it arranged a year earlier, according to company executives.
“The pace is way faster than we thought it would be and the market is still growing,” Karen Fang, global head of sustainable finance, said in an interview. “I suspect we will continue to be busy this year and beyond.”
Bank of America's activity is ahead of its overall $1.5 trillion goal of financing projects aimed at supporting climate change and social equality by 2030, a target the bank set a year ago. The bank has no immediate plans to revise its objectives amid headwinds such as Russia's war against Ukraine and overhanging concerns about inflation, Fang said.
Read More: BofA Boosts Environmental Business Target to $1 Trillion
Bank of America's focus on ESG-related activities aligns with the broader pressure on companies to combat climate change and social inequality. Last month, the U.S. Securities and Exchange Commission unveiled a proposal that would force businesses to provide detailed information about their greenhouse gas emissions.
Bank of America has pledged to achieve net-zero emissions in its financing activities, operations and supply chains by 2050, joining other banks that have made similar commitments.
“We need everyone to report so market participants can understand how an entire industry is reducing emissions,” said BofA Vice Chair Paul Donofrio. “This will allow capital to flow to its best and highest use.”
Projects that contributed to Bank of America's climate goal include advising on financing electric-vehicle purchases, wind farms and solar companies. The Charlotte, North Carolina-based lender said it arranged $47.1 billion of ESG-themed bonds for more than 182 clients last year.
Social inclusion and development represent a growing pillar for the bank, representing $500 billion of its $1.5 trillion target, Donofrio said. The company issued a second $2 billion equality progress sustainability bond in 2021, broadening the scope to include women and Asian Americans, as well as Black and Hispanic-Latino populations.
©2022 Bloomberg L.P.
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