Environmental sustainability

Our commitment to environmental sustainability


$125 billion, committed by 2025 to low-carbon financing and sustainable business activities At Bank of America, we are committed to improving the environment in how we approach our global business strategy, work with partners, support our employees, make our operations more sustainable, manage issues and govern our activities Since 2007, we have provided more than $62 billion in financing for low-carbon and sustainable business activities. As part of our second commitment established in 2012, and increased in 2015, we will provide $125 billion in capital, along with significant intellectual capital, to develop solutions to climate change and other environmental challenges. We rigorously manage environmental and social risks across our enterprise and have established an Environmental and Social Risk Policy Framework to provide transparency into those policies and processes To learn more about our environmental commitment and how we are working across the globe to transition to a low-carbon, sustainable economy, read our Environmental, Social and Governance (ESG) addendum or recent press releases on our environmental initiatives.
 

Ensuring strong governance of environmental strategy, initiatives and issues management

We have very strong governance of our environmental activities. This includes everything from industry leading business and operational goals, to strong risk management of environmental issues related to our clients, to comprehensive reporting.

Bank of America has a dedicated senior leadership committee focused on environmental, social and governance topics and an internal environmental team partnering across lines of business and operational groups to identify and advance solutions to help transition to a sustainable, low-carbon economy.

Additionally, we have public positions and policies related to climate change, biodiversity and ecosystems, energy and extractives, as well as social associated areas such as human rights and indigenous peoples.

In 2016, we published our Business Standards Report, and report annually on our environmental, social and governance performance through the Global Reporting Initiative. Also, our Environmental and Social Risk Policy Framework articulates how we manage and govern environmental and social risks across our business, as well as outlining the environmental and social issues most relevant to us. We recognize the impact they can have on our communities, customers, clients, vendors, employees and company, and take our role in managing those risks very seriously. Our Environmental and Social Risk Policy Framework provides clarity and transparency on our approach to environmental and social risks, including how we identify, measure, monitor and control these risks as part of our company’s risk framework.


Our Strong Leadership Commitment – Global Environmental, Social and Governance Committee

We have established a Global Environmental, Social and Governance Committee responsible for ensuring responsible business practices; identifying and addressing environmental and social risks; promoting the adoption of environmental, social and governance best practices and determining key metrics for success. This committee is comprised of senior leaders from across our company. Led by our Vice-Chairman Anne Finucane, the committee is accountable to the Chief Executive Officer and reports to the Corporate Governance Committee of the company’s board of directors. For more information, visit the Governance section of our Environmental, Social and Governance addendum.


Global Environmental Group

We also have a dedicated team that works full-time on our environmental initiatives. The Global Environmental Group focuses on five strategic areas: transformational finance, operations, employee programs, partnerships, and governance and risk management. The Global Environmental Group’s primary goal is to help identify and pursue areas that present new opportunities for the company – revenue opportunities through new products and services, expense saving opportunities through operational efficiency, or opportunities to better engage our employees or improve our local communities.


About our policies and reporting

Environmental, Social and Governance (ESG)

Bank of America has reported about its environmental, social and governance efforts under the Global Reporting Initiative since 2004. To learn more about how we are creating long-term value through ESG today, and helping make financial lives better for customers, clients and communities around the world, please read our Business Standards Report, including the ESG Addendum. Together, this information details how we deliver responsible, sustainable growth by making our business more efficient, empowering employees and helping local communities around the world address their biggest challenges.


Environmental and Social Risk Policy Framework

The Environmental and Social Risk Policy Framework outlines how Bank of America manages and governs business risks related to environmental and social issues across all lines of business. It provides clarity and transparency and outlines the parameters for how we identify, measure, monitor and control business risks related to these environmental and social issues. We maintain strong processes for how we evaluate business risks and conduct reviews of policies outlined in the Environmental and Social Risk Policy Framework.

To learn more how we manage environmental and social risk, read our Environmental and Social Risk Policy Framework.


Here is a look at a few of our environmental policies:
  • Coal Policy

    Download Coal Policy PDF

    Bank of America recognizes that climate change poses a significant risk to our business, our clients, and the communities in which we operate. As one of the world’s largest financial institutions, the bank has a responsibility to help mitigate climate change by leveraging our scale and resources to accelerate the transition from a high-carbon to a low-carbon society, and from high-carbon to low-carbon sources of energy.

    The bank is committed to increasing our support of energy efficiency, renewable energy, and other low-carbon energy sources through our lending, investments, products and services, and operations. We also understand that at the present time, fossil fuels – including coal – will continue to supply a significant amount of the energy needed to power our society. There are environmental and other impacts associated with any energy source. For coal, these impacts result from extraction, processing and combustion. Bank of America continues to engage key stakeholders including those in the energy industry, leading universities, and environmental community on the environmental impacts of coal. From these engagements, we have developed a Coal Policy that will ensure that Bank of America plays a continued role in promoting the responsible use of coal and other energy sources, while balancing the risks and opportunities to our shareholders and the communities we serve.

    Our Coal Policy is focused on the following elements:

    Extraction

    With regulatory pressure related to both extraction and combustion, changes in economic conditions, and increased pricing pressure due to the proliferation of natural gas and new energy technologies, the dynamics around coal are shifting. Energy companies and their subsidiaries that are focused on coal are currently the most exposed to these changes. Over the past several years, Bank of America has significantly reduced our exposure to coal extraction companies. Going forward, Bank of America will continue to reduce our credit exposure to coal extraction companies. This commitment applies globally, to companies focused on coal extraction and to divisions of diversified mining companies that are focused on coal.

    Other ongoing transactions involving companies focused on coal mining are subject to due diligence that incorporates evolving market dynamics as well as specific risks and regulations related to coal mining.

    For coal mining companies operating in the U.S., our due diligence includes review of client compliance with laws, regulations, and permitting, with particular attention to disclosures made to the Securities and Exchange Commission (SEC). SEC disclosures for the mining sector address federal and state oversight by multiple regulators including the U.S. Office of Surface Mining Reclamation and Enforcement, the Environmental Protection Agency, and the Army Corp of Engineers. We review current material issues, as well as potential emerging issues, and the number and types of regulatory violations. In addition, we periodically conduct site visits and aerial surveys of both operating and reclaimed mine sites. We also evaluate the impacts of coal mining operations on the communities in which clients operate, as well as environmental and safety awards that our clients receive from various federal and local governmental agencies and communities.

    Utilizing this and other data, our due diligence and client engagement teams evaluate material environmental issues faced by our clients including: meeting air quality standards, discharges into ground or surface water, dredging and land filling, endangered species protection, wetland protection, hazardous materials, reclamation and remediation, as well as health and safety. The bank will not finance coal mining companies that are not working to address significant, ongoing or recurring material violations of these and other relevant environmental, health or safety standards.

    Mining companies who engage in mountain top removal mining (“MTR”) in the Appalachian region of the U.S. have been subject to both enhanced regulatory oversight and criticism related to MTR’s impacts. Bank of America’s clients in the region are substantially reducing their reliance on mountain top mining due to these and other challenges. In alignment with our commitment to reduce credit exposure to extraction companies focused on coal mining, Bank of America will continue to reduce our exposure to coal mining companies that utilize MTR practices in Appalachia.

    Our due diligence on coal mining companies operating outside of the U.S. also includes the core elements we evaluate for U.S. companies in addition to a consideration of potential gaps in existing regulatory frameworks that might typically best evaluate and address environmental as well as health and safety risks. As such, we expect clients to align with industry best practices in addition to local regulations in mitigating or avoiding damage to ecosystems, especially critical natural habitat or internationally protected areas. In considering the impacts of client operations on local communities, we support fundamental principles of human rights, and expect our clients to do the same. In transactions where uses of proceeds are linked to a specific project, we expect clients to integrate respect for and consideration of free, prior and informed consent for impacted indigenous peoples.

    Technology

    Advanced technologies, such as carbon capture and storage, that capture carbon from fossil fuel plants and then sequester that carbon in geologic reservoirs will be necessary to address global climate change while enabling economies to flourish. Through our partnerships we will promote the necessary conditions for implementing carbon capture and storage on a global scale. We will employ our resources as a financial institution to promote the development and deployment of these advanced technologies to reduce carbon emissions produced by the burning of fossil fuels.

    Financial Services Policy

    We will support, adopt, and adhere to leading practices for managing the environmental impacts associated with coal. Bank of America has taken a leadership position by committing to the Carbon Principles and reporting on emissions associated with our electric power utility portfolio–best practices for managing risks associated with the combustion of coal.

  • Forest Practices

    Download Forest Practices PDF

  • Paper Procurement Policy

    Download Paper Procurement Policy PDF

  • Position on Forest Certification

    Download Position on Forest Certification PDF


External Principles:

Bank of America adheres to and is a signatory to the following external principles, which guide our approach to lending, investing and other financing decisions that relate to important environmental and social areas.

  • Principles for Responsible Investment

    Our Global Wealth & Investment Management division was the first major wealth management firm to sign the United Nations-supported Principles for Responsible Investment (PRI). Since its launch in 2006, the Principles for Responsible Investment PRI initiative has been instrumental in raising awareness about among the global investment community and fostering collaboration among companies and policymakers on ESG issues.

  • The Green Bond Principles

    The Green Bond Principles (GBP) are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the fast-growing green bond market. As a co-creator of the GBP and one of its original conveners, Bank of America has been an active participant in a multi-stakeholder process that brings together issuers, investors and intermediaries, with the support of the International Capital Market Association, to maintain the GBP.

  • The Equator Principles

    The Equator Principles is a framework adopted by financial institutions for determining, assessing and managing environmental and social risk in large project finance transactions such as power plant, pipeline and dam construction. Although our business model does not generally reflect the types of transactions subject to the Equator Principles, Bank of America continues to support these principles as an industry best standard.

  • The Carbon Principles

    In 2008, financial institutions worked with utility clients and environmental groups to develop the Carbon Principles, a due diligence standard now considered to be a best practice for evaluating financing for new power plant construction, incorporating the long-term costs of carbon even in the absence of regulation.