By Anne M. Finucane, Vice Chairman, Bank of America
Over the last year there has been enormous progress on climate change. The COP21 Summit in Paris produced a global framework that was the result of unprecedented collaboration and compromise between nearly every country. The momentum from those efforts has only accelerated in 2016, with leaders gathering at the United Nations in New York City this April to officially sign the climate accord, and again in Washington, DC, earlier this month to discuss implementation.
Governmental leadership has been critical in helping to define goals and set a vision for the future, but real change is going to require a focused effort by the private sector.
At Bank of America, we recognize the opportunity and responsibility to help finance the transition to a low-carbon economy. Increasingly, we find that prospective employees and clients look at what kind of company we are when making decisions on working for us or awarding us their business, and our existing clients require business to be conducted in a manner that is responsible and sustainable, in every sense.
Clean energy is also a great business opportunity, as one of the fastest growing industries in the world – our analysts estimate the sector will grow by $13 trillion by 2030. We see a clear market opportunity here, and investing in clean energy enables us to grow responsibly, using our unique position as a global financial institution to help bring the private sector together to create solutions.
Simply put, we view this issue as a global and economic imperative. There is no better example of responsible growth than when we can help address significant global issues by investing in jobs and infrastructure across the globe, while also seeing a business return.
As part of our effort to be a leader in clean energy investment, we’ve committed to $125 billion in financing for low-carbon and sustainable business by 2025 to address climate change and other demands on natural resources for clients around the world. To date, we have already directed $53 billion in projects connected to clean energy, energy efficiency, and sustainable transportation.
We are also working hard to continue robust expansion of the market for green bonds, which are designed to increase investments in projects with environmental benefits like incorporating solar energy into a company’s operations or making buildings more energy efficient. Bank of America issued the first corporate green bond in 2013 for $500 million and followed that up with a second in 2015 for $600 million. In addition, we have been the number one underwriter of green bonds for the past two years according to Bloomberg New Energy Finance. These kinds of financial products make sense for business and the environment, which is why it is great to see green bonds being widely embraced as more companies leverage them to achieve their own sustainability goals.
While we’re proud of what we’ve accomplished, we also recognize no single company can tackle this challenge on their own, which is why we were one of the founding signatories to the White House’s American Business Act on Climate Pledge. This initiative asked companies to demonstrate their commitment to climate action and voice support for supporting a strong outcome at COP21. Partnerships like these pave the way for greater innovation, and are a critical part of our efforts to continue exploring opportunities with our peers to see how we can work together on common objectives.
It was with this in mind we launched the Catalytic Finance Initiative (CFI) in 2014, focused on creating at least $10 billion of new investment in high-impact clean energy projects. The CFI started with a $1 billion commitment from Bank of America as an effort to bring other financial institutions to the table, and has grown to $8 billion with the recent addition of eight new partners earlier this year.
The goal is to create an environment in which clean energy innovations and infrastructure projects are easier to finance, particularly where the projects can have the greatest impact—creating opportunities to address other large-scale issues like health, education and job creation.
Today, many pundits discuss whether or not countries will meet the ambitious goals set in Paris. We believe the more relevant question is how to make progress through the collective efforts of those of us striving for these goals. This is where the private sector can make the biggest impact – mobilizing its resources and finding solutions that help reduce risk while leveraging opportunity. At Bank of America, this means embracing these efforts throughout our business as we strive toward a more sustainable world.