bnef
defaultPlayer
true
black
/assets/images/bnef-video-still.jpg|Anne Finucane interview on stage|“How we deploy capital for clean energy” at Bloomberg New Energy Finance Summit
00:00:01.00 00:00:10.04
♪♪
00:00:10.08 00:00:14.07
-Sustainability is a huge issue
for us at Bloomberg,
00:00:14.12 00:00:16.17
being responsible
corporate citizens.
00:00:17.05 00:00:21.19
We expect, by 2025, that,
basically, all of our energy
00:00:21.22 00:00:23.03
that we consume
around the world
00:00:23.06 00:00:25.21
will be from renewable
power sources.
00:00:26.10 00:00:29.01
We've just opened
our new corporate headquarters
00:00:29.04 00:00:31.11
in London,
which is the number-one ranked
00:00:31.14 00:00:33.08
sustainable building
in the world.
00:00:33.11 00:00:34.19
We're incredibly proud of it.
00:00:35.04 00:00:38.10
But you've done a lot of things
at Bank of America.
00:00:38.16 00:00:41.07
Would you take us through some
of the things that you've done?
00:00:41.21 00:00:43.23
-Sure.
Well, thank you for having me.
00:00:44.08 00:00:46.12
I guess I'd begin
by saying we have a --
00:00:46.20 00:00:53.03
years ago, we put
a spade in the ground
00:00:53.05 00:00:55.20
with Mayor Bloomberg
for a building
00:00:55.23 00:00:57.04
we built at 1 Bryant Park,
00:00:57.07 00:00:59.21
which was the first
LEED-Platinum skyscraper
00:01:00.01 00:01:00.20
in the world.
00:01:01.08 00:01:04.14
And I think it was an aspiration
rather than knowing
00:01:04.17 00:01:06.08
exactly where we were going.
00:01:07.02 00:01:10.08
The financial crisis followed,
and, actually,
00:01:10.11 00:01:12.20
it was an opportunity
for us to regroup
00:01:13.00 00:01:15.00
and think through
what was our purpose.
00:01:15.03 00:01:18.11
How would we go about our
business on a go-forward basis?
00:01:18.14 00:01:22.11
And we talked about doing it
with responsible growth.
00:01:22.14 00:01:25.20
In other words, thinking about
the world as it will be --
00:01:26.04 00:01:27.20
as it is today
and as it will be.
00:01:28.02 00:01:29.13
And what part we would
play in that.
00:01:29.16 00:01:31.07
Now, we're
a financial services firm,
00:01:31.09 00:01:33.05
so it's about lending
and investing,
00:01:33.16 00:01:37.09
but, in that regard,
how could we participate
00:01:37.19 00:01:40.04
in a more productive
and progressive way?
00:01:40.10 00:01:45.14
We made a commitment in 2007
for $20 billion of financing
00:01:45.17 00:01:48.20
of environmental efforts,
00:01:48.23 00:01:51.03
and, honestly,
I thought, at the time,
00:01:51.06 00:01:52.21
"I'm not sure
we'll get that done.
00:01:53.01 00:01:54.07
How will we do it?"
00:01:54.20 00:01:56.08
It was a ten-year commitment.
00:01:56.11 00:01:58.22
In about five years,
we were through the 20.
00:01:59.04 00:02:03.07
By 2013, we made
a $125 billion commitment
00:02:03.17 00:02:06.12
in coordination
with COP 21 in Paris,
00:02:06.15 00:02:09.18
and we are at a very good clip.
00:02:09.21 00:02:12.14
We're five years in
and at $66 billion.
00:02:13.04 00:02:15.04
-Wow.
Very impressive.
00:02:15.17 00:02:18.16
So, this has been a journey
for all of us
00:02:18.19 00:02:20.03
and everybody in the room.
00:02:20.11 00:02:23.05
What are some of
the key takeaways that you have
00:02:23.08 00:02:25.10
and that you talk
with your colleagues about
00:02:25.15 00:02:28.08
in the senior-leadership ranks
at BofA?
00:02:29.00 00:02:30.12
-Well, from
an environmental space,
00:02:30.16 00:02:32.07
you have to make it
good business.
00:02:32.10 00:02:35.15
I mean, this is great
as a philanthropic effort
00:02:35.18 00:02:37.02
or as an aspiration,
00:02:37.05 00:02:40.23
and we, too, want to be
carbon neutral by 2020,
00:02:41.02 00:02:43.08
but we are --
in order for it
00:02:43.12 00:02:45.08
to be sustainable
within our own company,
00:02:45.12 00:02:49.01
it has to be in keeping with
what we do for a living.
00:02:49.06 00:02:50.18
So, getting the bankers
involved --
00:02:50.21 00:02:53.11
We have a committee,
an ESG committee.
00:02:53.14 00:02:56.05
It's made up of the heads
of the lines of business
00:02:56.08 00:02:57.23
and the heads of the staff area.
00:02:58.06 00:03:01.05
And we review
all our policies --
00:03:01.13 00:03:04.05
the environmental policies,
our social policies,
00:03:04.08 00:03:06.07
and what we're doing from
a governance perspective.
00:03:06.11 00:03:08.12
But from the "E" perspective,
00:03:08.20 00:03:11.03
it is taking what we knew
how to do well
00:03:11.06 00:03:13.00
and applying it
to the green space,
00:03:13.03 00:03:16.17
so we're the number-one
underwriter of green bonds.
00:03:17.03 00:03:20.23
We have applied what we know
in tax equity
00:03:21.02 00:03:22.21
to be sort of
first amongst equals
00:03:23.00 00:03:25.15
in terms of tax equities.
00:03:25.23 00:03:29.20
We have found that the business
around energy efficiency --
00:03:30.09 00:03:34.00
wind before solar,
that was a surprise to me --
00:03:34.13 00:03:36.20
energy efficiency --
wind, solar,
00:03:38.11 00:03:40.02
and then water storage
00:03:40.04 00:03:42.01
and some other sort
of ancillary things --
00:03:42.04 00:03:44.12
have been where we've gotten
our bread and butter.
00:03:44.15 00:03:48.15
And honestly, the demand
is greater than the supply
00:03:48.18 00:03:50.00
on the green bonds.
00:03:50.07 00:03:52.08
Green bonds, for those of you
who are familiar with them,
00:03:52.11 00:03:56.04
I mean the return is sort of
tantamount to a municipal.
00:03:57.01 00:03:58.21
But that's a business we're in,
00:03:59.06 00:04:04.00
and the only hardship,
if you will,
00:04:04.04 00:04:06.06
is that you really
have to be able to calibrate,
00:04:06.09 00:04:08.17
at the end of that,
what was the result.
00:04:08.21 00:04:10.22
Did you reduce
whatever it was --
00:04:11.01 00:04:12.19
the greenhouse gas emissions --
00:04:12.22 00:04:14.17
did you create
energy efficiency?
00:04:14.22 00:04:16.09
And it has to be definable.
00:04:17.12 00:04:19.09
-You've got a huge workforce,
00:04:19.12 00:04:21.08
lots of locations
around the world.
00:04:21.19 00:04:24.06
What are you doing with regard
to the workforce
00:04:24.08 00:04:27.08
and training them
to be more responsible
00:04:27.12 00:04:29.10
about issues
around sustainability
00:04:29.12 00:04:31.13
from a personal consumption
point of view
00:04:31.22 00:04:35.10
and how has that affected
the culture at BofA?
00:04:35.23 00:04:37.13
-Well, we have
a very young culture.
00:04:37.16 00:04:40.21
I think the average age is
in sort of the late 30s,
00:04:41.00 00:04:42.19
so there's not
too much push there.
00:04:42.22 00:04:44.04
-You call that young.
-Yeah.
00:04:45.19 00:04:48.10
So, it is --
we have more millennials
00:04:48.13 00:04:50.16
than we have boomers,
and we have --
00:04:52.10 00:04:53.20
so there's not much pushing.
00:04:53.23 00:04:56.12
In other words, that's
the demand of our own people,
00:04:56.20 00:04:59.18
that we -- yes, we make money,
00:04:59.20 00:05:02.16
and, you know, we've been
a very profitable
00:05:02.19 00:05:04.22
and well-run company
for the last several years,
00:05:05.00 00:05:07.13
but they expect to work
at a good company.
00:05:07.16 00:05:09.17
And it's not just about
the environment,
00:05:09.20 00:05:13.12
it's they want
a good social contract,
00:05:13.15 00:05:16.12
meaning very good
maternity/paternity,
00:05:16.19 00:05:22.15
good female/male diversity,
and people of color.
00:05:22.18 00:05:25.03
They want to have a place
00:05:25.06 00:05:27.04
that they can come to
and be proud of,
00:05:27.08 00:05:29.04
and I think that we have,
00:05:29.07 00:05:33.02
on a relative basis to the other
financial services industry --
00:05:33.14 00:05:36.01
we're first amongst those
00:05:36.04 00:05:39.03
in terms of
our environmental scores.
00:05:39.20 00:05:44.18
We're often lauded
for our workplace policies.
00:05:44.20 00:05:47.10
So, I think we'll just
continue to grow.
00:05:47.12 00:05:51.12
Our attrition has lowered,
both from an employee
00:05:51.15 00:05:54.01
and from a customer perspective,
00:05:54.11 00:05:55.20
and our revenues have grown.
00:05:55.23 00:05:57.22
So, I'd say that
it's a winning formula.
00:05:58.10 00:06:01.15
-So, we are lucky enough,
like you,
00:06:01.18 00:06:05.06
to operate to a higher purpose
every day at Bloomberg.
00:06:05.20 00:06:08.21
And the real underlining
fundamentals
00:06:09.00 00:06:11.23
of that higher purpose
is Mike's philanthropy
00:06:12.12 00:06:15.14
and the implication of that
philanthropy on our workforce,
00:06:15.17 00:06:18.02
knowing full well
that every dollar that we create
00:06:18.05 00:06:19.20
is going to fund
one of the large
00:06:20.04 00:06:21.15
philanthropic organizations,
00:06:21.17 00:06:25.02
and, through that,
lots of organizations
00:06:25.05 00:06:26.17
and lots of people,
geographically,
00:06:26.20 00:06:28.09
are going to be affected by it.
00:06:28.16 00:06:32.13
So, I think we share
that heritage with you,
00:06:32.16 00:06:35.06
which is, obviously,
very important for all of us.
00:06:35.16 00:06:38.09
So, as you look on
the corporate side
00:06:38.18 00:06:42.08
and particularly the role that
you play as a source of capital,
00:06:42.21 00:06:47.00
how do you track how well
your clients are doing
00:06:47.04 00:06:49.02
with regard to the use
of that capital,
00:06:49.07 00:06:51.23
specifically as it relates
to sustainability,
00:06:52.04 00:06:54.08
any ESG-related activities?
00:06:55.04 00:06:56.16
-Well, let me just
take a step back.
00:06:56.20 00:07:00.16
So, I meet with maybe 50
institutional investors a year.
00:07:01.01 00:07:03.12
Three years ago,
nobody asked about ESG,
00:07:03.15 00:07:06.14
and today, there's someone
at the table on the other side
00:07:06.23 00:07:08.08
in every conversation.
00:07:08.13 00:07:10.08
So, that's a sea change.
00:07:10.19 00:07:14.20
And what they're interested in
is, in each case --
00:07:14.23 00:07:16.21
I mean, we're there
to make money,
00:07:17.04 00:07:19.23
so what are we doing
on the environmental space
00:07:20.02 00:07:21.05
or the social or governance
00:07:21.08 00:07:25.20
that is accruing to
the benefit of our company?
00:07:27.04 00:07:30.11
Third parties score us, so I
think whether it's the Street
00:07:30.14 00:07:36.00
or whether it's Bloomberg
or GRI or Dow Jones,
00:07:36.03 00:07:38.00
so we do well in that regard.
00:07:38.09 00:07:44.13
But we're also looking at
where are we going.
00:07:44.16 00:07:50.07
So, we very purposely
00:07:50.12 00:07:52.17
sought to lead
in green bonds,
00:07:52.20 00:07:54.17
sought to lead in tax equity.
00:07:55.00 00:07:59.01
We recognize, however,
that there are conditions --
00:07:59.04 00:08:01.13
and you speak about
Bloomberg's philanthropy --
00:08:01.16 00:08:05.10
where we have to put in
philanthropic dollars first,
00:08:05.20 00:08:09.00
sort of first-loss money,
to get something up and running,
00:08:10.00 00:08:11.12
and we did that with an effort
00:08:11.15 00:08:14.09
we call Catalytic Finance Initiative,
00:08:14.12 00:08:16.00
which is kind of a mouthful,
00:08:16.04 00:08:18.04
and maybe we need to come up
with a different word,
00:08:18.08 00:08:19.23
but -- three words.
00:08:20.05 00:08:24.02
It is our company and seven
other financial institutions
00:08:24.09 00:08:27.14
that are working together
to stand up projects
00:08:27.17 00:08:31.00
that, on our own, none of us
could do for risk reasons,
00:08:31.19 00:08:35.07
but we can do on a collective
basis and make a return.
00:08:35.10 00:08:38.00
So, I'm talking about
a wind farm in the North Sea,
00:08:39.04 00:08:41.12
an installation
of tens of thousands
00:08:41.15 00:08:45.09
of residential solar in Spain,
00:08:45.12 00:08:47.15
conservation land in Africa,
00:08:47.23 00:08:49.07
and that would be something
00:08:49.10 00:08:51.11 we couldn't have done
just a few years ago,
00:08:51.14 00:08:54.11
but that many other
financial institutions
00:08:54.14 00:08:57.00
joining with us in a consortium
00:08:57.03 00:08:59.21
and then also bringing in
the development banks
00:09:00.05 00:09:03.01
and the non-profits, who --
00:09:03.08 00:09:05.02
I'll use Rockefeller
as an example --
00:09:05.05 00:09:08.00
where they're willing
to give the money.
00:09:08.04 00:09:09.12
They'd like to see a return,
00:09:09.15 00:09:10.22
and what they're looking for
is an outcome.
00:09:11.00 00:09:12.04
What is the outcome,
00:09:12.08 00:09:14.04
rather than a return
of their money.
00:09:15.08 00:09:20.19
We also have seen an increase
in the private-equity space,
00:09:21.03 00:09:24.11
where private capitalization
of certain projects
00:09:24.14 00:09:26.07
that are looking for a higher return.
00:09:27.00 00:09:30.10
I think they have a broader view
of what fits in here,
00:09:30.19 00:09:34.01
but that kind of momentum
really makes a difference.
00:09:34.09 00:09:36.15
The last thing I'll say
is that we've done now
00:09:36.18 00:09:40.10
three studies completely
independent of this work
00:09:40.13 00:09:43.10
from our equity research group.
00:09:44.12 00:09:46.19
Does ESG matter in a company?
00:09:46.22 00:09:47.22
And it does matter.
00:09:48.01 00:09:51.13
First of all, it matters
from a de-risking perspective.
00:09:51.16 00:09:54.07
Those companies that are
committed to ESG
00:09:55.04 00:09:56.16
have less vulnerability
00:09:56.19 00:10:02.16
to sort of a chaotic
financial scheme.
00:10:02.19 00:10:05.06
They are less apt
to go bankrupt.
00:10:05.16 00:10:07.10
They are less risky.
00:10:08.05 00:10:10.03
And now we're seeing
real benefit,
00:10:10.06 00:10:13.07
particularly like an industry
00:10:13.10 00:10:15.07
you wouldn't think of,
real estate,
00:10:15.12 00:10:18.16
where to think about energy
efficiency right up-front,
00:10:19.14 00:10:22.17
you're literally going to reduce
your electricity costs,
00:10:22.20 00:10:24.13
your energy costs,
in the building of,
00:10:24.16 00:10:27.05
whether it's residence
or skyscrapers.
00:10:27.09 00:10:29.09
And if that's built in
from the beginning,
00:10:29.20 00:10:32.08
you're going to have lower costs
and it's going to be a benefit.
00:10:33.05 00:10:35.20
-So, we are just --
to kind of add
00:10:36.00 00:10:38.09
to some of your comments,
we are seeing --
00:10:38.12 00:10:40.18
I started, in 2007,
00:10:40.21 00:10:42.20
our sustainability effort
at Bloomberg
00:10:42.23 00:10:45.08
and had an individual
report to me --
00:10:45.12 00:10:47.17
I was the chief executive
officer at the time --
00:10:47.20 00:10:49.22
to make sure that
all of our colleagues
00:10:50.01 00:10:52.11
understood that there is
a strong validation,
00:10:52.14 00:10:54.11
that this is important
for us going forward.
00:10:55.01 00:11:00.10
I will say the journey to get
more and more ESG data collected
00:11:00.13 00:11:03.20
and on the terminal,
our core product,
00:11:03.23 00:11:06.19
and the fundamental analytics
that go into that
00:11:06.22 00:11:10.01
has been a long
and somewhat perilous journey,
00:11:10.09 00:11:13.00
but I would share
the same view that you have --
00:11:13.04 00:11:14.19
that the institutional
investment community
00:11:14.21 00:11:17.18
has become so much more
keenly involved
00:11:17.21 00:11:20.19
in ensuring that
that information is available
00:11:21.04 00:11:23.05
as part of their
investment review process,
00:11:23.08 00:11:26.03
that I think the tide
has turned dramatically,
00:11:26.12 00:11:28.16
and it's going to
keep moving forward
00:11:28.19 00:11:30.22
such that
more of that information
00:11:31.01 00:11:32.14
plays a more important role
00:11:32.17 00:11:34.23
in the investment decision
making process.
00:11:35.11 00:11:36.14
-Well and also
what you're doing --
00:11:36.17 00:11:40.05
SASB and the work
around the task force
00:11:40.08 00:11:42.12
with Mike and Mark Carney --
00:11:42.16 00:11:43.20
all of that is going to help.
00:11:44.00 00:11:45.12
I mean, it would good,
ultimately,
00:11:45.15 00:11:49.20
if we could have
one objective third party
00:11:49.23 00:11:51.03
evaluating all of this,
00:11:51.06 00:11:55.20
but even as that's going on,
very prosaic things
00:11:55.23 00:12:01.04
that would seem unlikely to be
00:12:01.07 00:12:03.10
the beneficiary
of the environmental space --
00:12:03.12 00:12:04.16
Let's just use one.
00:12:04.23 00:12:06.20
City of Los Angeles
with all the lights --
00:12:06.23 00:12:08.06
the street lighting.
00:12:08.08 00:12:14.06
They had very energy-hungry
street lighting
00:12:14.09 00:12:18.10
and all sorts of
street lighting.
00:12:18.23 00:12:21.22
We worked with them
to change out
00:12:22.01 00:12:25.04
all of their lighting
to LED lighting,
00:12:25.18 00:12:29.20
and it has reduced
the cost of the energy.
00:12:30.00 00:12:32.04
And it actually is --
In terms of a bond,
00:12:32.10 00:12:35.08
they can easily pay
the coupon on the bond
00:12:35.13 00:12:37.04
and still save money.
00:12:37.12 00:12:42.22
Now, that isn't something
you feature in a commercial,
00:12:43.00 00:12:45.19
but it is the kind of stuff
we're doing every day
00:12:45.22 00:12:46.18
that's making a difference.
00:12:46.21 00:12:47.21
-Yeah.
00:12:48.16 00:12:52.16
You've set the bar high
for many of us to follow.
00:12:52.19 00:12:54.16
I'd like to spend
the last few minutes
00:12:54.19 00:12:57.06
that we have together
talking about our --
00:12:57.09 00:12:59.00
yours and my favorite subject,
00:12:59.04 00:13:00.18
which is diversity
and inclusion.
00:13:00.21 00:13:01.22
-Yes.
00:13:02.01 00:13:05.20
-I have kind of
put a stake in the ground
00:13:05.23 00:13:08.14
for our senior leadership
team at Bloomberg
00:13:09.01 00:13:13.21
and really drive
those initiatives internally.
00:13:14.01 00:13:16.19
You and Brian have been
really great supporters
00:13:17.04 00:13:19.08
and I think, in many ways,
kind of paved the way
00:13:19.11 00:13:21.08
for other organizations
to follow.
00:13:22.00 00:13:24.21
Spend a minute talking about
some of the things
00:13:25.00 00:13:27.10
that you've learned, some of
the successes that you've had,
00:13:27.13 00:13:29.15
but some of the things
that haven't gone quite as well
00:13:29.18 00:13:32.04
that maybe we can benefit from.
00:13:33.04 00:13:35.13
-Well, first of all,
just to go back,
00:13:35.20 00:13:38.03
Brian Moynihan,
the C.E.O. of our company,
00:13:38.12 00:13:41.03
set in motion this concept
of responsible growth,
00:13:41.06 00:13:42.21
that we were there
to help our people --
00:13:43.00 00:13:45.11
our clients, our customers,
and our own people --
00:13:46.20 00:13:48.07
to improve
their financial lives.
00:13:48.10 00:13:49.18
And if we were going to do that,
00:13:50.15 00:13:53.06
I would submit that,
during the financial crisis,
00:13:53.09 00:13:55.13
we could have had more diversity
around the table,
00:13:55.16 00:13:57.03
that a question might be asked,
00:13:57.07 00:13:59.01
because everyone
isn't just like you.
00:13:59.08 00:14:02.13
And that was Brian's thought
from the beginning.
00:14:02.16 00:14:05.16
So he took over
in January of 2010,
00:14:05.19 00:14:10.10
and, since then,
30% of our board are women,
00:14:10.19 00:14:12.20
about the same
are people of color,
00:14:13.04 00:14:16.05
40% of our executive
management team are women,
00:14:16.14 00:14:18.01
half the company are women,
00:14:18.04 00:14:19.14
half the management team
are women,
00:14:19.17 00:14:22.17
and 43% of the company
is diverse.
00:14:22.23 00:14:24.07
And the value of that is,
00:14:24.10 00:14:27.04
given all the businesses
that Bank of America is in,
00:14:27.07 00:14:31.03
because, of course,
we go from low-moderate income
00:14:31.06 00:14:34.08
through investment banking
and capital markets,
00:14:34.14 00:14:35.20
but to be able to reflect
00:14:36.00 00:14:37.20
the customers
that you're dealing with,
00:14:38.00 00:14:40.01
you have to have
that level of diversity.
00:14:40.08 00:14:42.15
And we actually are always
striving to do better,
00:14:42.18 00:14:44.16
and we still need to do better.
00:14:45.05 00:14:48.01
But in the U.S.,
we feel that we've done well.
00:14:48.04 00:14:51.08
We had a recent review --
a third-party review
00:14:51.11 00:14:56.22
of our pay equity
between men and women,
00:14:57.00 00:14:58.16
and it's at 99%.
00:14:58.20 00:15:00.17
So, we still have
a percent to go.
00:15:01.00 00:15:02.20
I think there
are greater challenges
00:15:02.23 00:15:06.00
in the U.K. and Europe.
00:15:06.14 00:15:10.05
And that has more to do with --
it is a little less --
00:15:10.08 00:15:13.13
although it's probably
true of pay disparity,
00:15:13.16 00:15:15.17
but it has to do
with more women
00:15:15.20 00:15:20.15
in positions
of executive management.
00:15:20.18 00:15:23.17
So, we have to get more women
into executive management.
00:15:23.20 00:15:26.14
Then we need to look to make sure
that there's parity.
00:15:27.16 00:15:30.15
-As you think about
these accomplishments,
00:15:31.04 00:15:33.20
what would be an example
of what didn't work?
00:15:35.00 00:15:37.13
-I think it doesn't work
when you try to force something.
00:15:37.16 00:15:40.04
So, early on, particularly
in the environmental space,
00:15:40.07 00:15:41.12
I think I pushed too hard
00:15:41.15 00:15:45.08
without recognizing
that philanthropic effort
00:15:45.11 00:15:48.23
wasn't going to light the fire
00:15:49.02 00:15:51.13
of every investment banker
in the company,
00:15:51.21 00:15:55.16
but when we could start to
generate some business cases
00:15:56.11 00:15:58.02
and we brought in some clients
00:15:58.05 00:16:01.00
who would otherwise
not do business with us
00:16:01.05 00:16:03.12
but for our ESG profile,
00:16:03.20 00:16:05.07
that, of course,
sets in momentum.
00:16:05.10 00:16:08.17
So, a little too much
proselytizing
00:16:08.20 00:16:12.08
and not enough proof
in the early days.
00:16:12.11 00:16:18.03
So, I curtailed the talking and
tried to do more of the doing.
00:16:18.12 00:16:19.20
That certainly made
a difference.
00:16:19.23 00:16:23.11
The other thing is
00:16:24.16 00:16:27.19
making sure
that we are bringing in,
00:16:27.22 00:16:30.12
in training and entry level,
00:16:30.19 00:16:32.18
a very diverse group of people,
00:16:32.21 00:16:36.09
because you need to pull them
all the way through to the top.
00:16:36.12 00:16:45.13
♪♪
“How we deploy capital for clean energy” at Bloomberg New Energy Finance Summit
bankofamerica
1359940|enter782|cr-en402
_self
1359940|enter782|2014_859||
1359940|enter782|2014_581||
we'll get that done.
00:01:53.01 00:01:54.07
How will we do it?"
00:01:54.20 00:01:56.08
It was a ten-year commitment.
00:01:56.11 00:01:58.22
In about five years,
we were through the 20.
00:01:59.04 00:02:03.07
By 2013, we made
a $125 billion commitment
00:02:03.17 00:02:06.12
in coordination
with COP 21 in Paris,
00:02:06.15 00:02:09.18
and we are at a very good clip.
00:02:09.21 00:02:12.14
We're five years in
and at $66 billion.
00:02:13.04 00:02:15.04
-Wow.
Very impressive.
00:02:15.17 00:02:18.16
So, this has been a journey
for all of us
00:02:18.19 00:02:20.03
and everybody in the room.
00:02:20.11 00:02:23.05
What are some of
the key takeaways that you have
00:02:23.08 00:02:25.10
and that you talk
with your colleagues about
00:02:25.15 00:02:28.08
in the senior-leadership ranks
at BofA?
00:02:29.00 00:02:30.12
-Well, from
an environmental space,
00:02:30.16 00:02:32.07
you have to make it
good business.
00:02:32.10 00:02:35.15
I mean, this is great
as a philanthropic effort
00:02:35.18 00:02:37.02
or as an aspiration,
00:02:37.05 00:02:40.23
and we, too, want to be
carbon neutral by 2020,
00:02:41.02 00:02:43.08
but we are --
in order for it
00:02:43.12 00:02:45.08
to be sustainable
within our own company,
00:02:45.12 00:02:49.01
it has to be in keeping with
what we do for a living.
00:02:49.06 00:02:50.18
So, getting the bankers
involved --
00:02:50.21 00:02:53.11
We have a committee,
an ESG committee.
00:02:53.14 00:02:56.05
It's made up of the heads
of the lines of business
00:02:56.08 00:02:57.23
and the heads of the staff area.
00:02:58.06 00:03:01.05
And we review
all our policies --
00:03:01.13 00:03:04.05
the environmental policies,
our social policies,
00:03:04.08 00:03:06.07
and what we're doing from
a governance perspective.
00:03:06.11 00:03:08.12
But from the "E" perspective,
00:03:08.20 00:03:11.03
it is taking what we knew
how to do well
00:03:11.06 00:03:13.00
and applying it
to the green space,
00:03:13.03 00:03:16.17
so we're the number-one
underwriter of green bonds.
00:03:17.03 00:03:20.23
We have applied what we know
in tax equity
00:03:21.02 00:03:22.21
to be sort of
first amongst equals
00:03:23.00 00:03:25.15
in terms of tax equities.
00:03:25.23 00:03:29.20
We have found that the business
around energy efficiency --
00:03:30.09 00:03:34.00
wind before solar,
that was a surprise to me --
00:03:34.13 00:03:36.20
energy efficiency --
wind, solar,
00:03:38.11 00:03:40.02
and then water storage
00:03:40.04 00:03:42.01
and some other sort
of ancillary things --
00:03:42.04 00:03:44.12
have been where we've gotten
our bread and butter.
00:03:44.15 00:03:48.15
And honestly, the demand
is greater than the supply
00:03:48.18 00:03:50.00
on the green bonds.
00:03:50.07 00:03:52.08
Green bonds, for those of you
who are familiar with them,
00:03:52.11 00:03:56.04
I mean the return is sort of
tantamount to a municipal.
00:03:57.01 00:03:58.21
But that's a business we're in,
00:03:59.06 00:04:04.00
and the only hardship,
if you will,
00:04:04.04 00:04:06.06
is that you really
have to be able to calibrate,
00:04:06.09 00:04:08.17
at the end of that,
what was the result.
00:04:08.21 00:04:10.22
Did you reduce
whatever it was --
00:04:11.01 00:04:12.19
the greenhouse gas emissions --
00:04:12.22 00:04:14.17
did you create
energy efficiency?
00:04:14.22 00:04:16.09
And it has to be definable.
00:04:17.12 00:04:19.09
-You've got a huge workforce,
00:04:19.12 00:04:21.08
lots of locations
around the world.
00:04:21.19 00:04:24.06
What are you doing with regard
to the workforce
00:04:24.08 00:04:27.08
and training them
to be more responsible
00:04:27.12 00:04:29.10
about issues
around sustainability
00:04:29.12 00:04:31.13
from a personal consumption
point of view
00:04:31.22 00:04:35.10
and how has that affected
the culture at BofA?
00:04:35.23 00:04:37.13
-Well, we have
a very young culture.
00:04:37.16 00:04:40.21
I think the average age is
in sort of the late 30s,
00:04:41.00 00:04:42.19
so there's not
too much push there.
00:04:42.22 00:04:44.04
-You call that young.
-Yeah.
00:04:45.19 00:04:48.10
So, it is --
we have more millennials
00:04:48.13 00:04:50.16
than we have boomers,
and we have --
00:04:52.10 00:04:53.20
so there's not much pushing.
00:04:53.23 00:04:56.12
In other words, that's
the demand of our own people,
00:04:56.20 00:04:59.18
that we -- yes, we make money,
00:04:59.20 00:05:02.16
and, you know, we've been
a very profitable
00:05:02.19 00:05:04.22
and well-run company
for the last several years,
00:05:05.00 00:05:07.13
but they expect to work
at a good company.
00:05:07.16 00:05:09.17
And it's not just about
the environment,
00:05:09.20 00:05:13.12
it's they want
a good social contract,
00:05:13.15 00:05:16.12
meaning very good
maternity/paternity,
00:05:16.19 00:05:22.15
good female/male diversity,
and people of color.
00:05:22.18 00:05:25.03
They want to have a place
00:05:25.06 00:05:27.04
that they can come to
and be proud of,
00:05:27.08 00:05:29.04
and I think that we have,
00:05:29.07 00:05:33.02
on a relative basis to the other
financial services industry --
00:05:33.14 00:05:36.01
we're first amongst those
00:05:36.04 00:05:39.03
in terms of
our environmental scores.
00:05:39.20 00:05:44.18
We're often lauded
for our workplace policies.
00:05:44.20 00:05:47.10
So, I think we'll just
continue to grow.
00:05:47.12 00:05:51.12
Our attrition has lowered,
both from an employee
00:05:51.15 00:05:54.01
and from a customer perspective,
00:05:54.11 00:05:55.20
and our revenues have grown.
00:05:55.23 00:05:57.22
So, I'd say that
it's a winning formula.
00:05:58.10 00:06:01.15
-So, we are lucky enough,
like you,
00:06:01.18 00:06:05.06
to operate to a higher purpose
every day at Bloomberg.
00:06:05.20 00:06:08.21
And the real underlining
fundamentals
00:06:09.00 00:06:11.23
of that higher purpose
is Mike's philanthropy
00:06:12.12 00:06:15.14
and the implication of that
philanthropy on our workforce,
00:06:15.17 00:06:18.02
knowing full well
that every dollar that we create
00:06:18.05 00:06:19.20
is going to fund
one of the large
00:06:20.04 00:06:21.15
philanthropic organizations,
00:06:21.17 00:06:25.02
and, through that,
lots of organizations
00:06:25.05 00:06:26.17
and lots of people,
geographically,
00:06:26.20 00:06:28.09
are going to be affected by it.
00:06:28.16 00:06:32.13
So, I think we share
that heritage with you,
00:06:32.16 00:06:35.06
which is, obviously,
very important for all of us.
00:06:35.16 00:06:38.09
So, as you look on
the corporate side
00:06:38.18 00:06:42.08
and particularly the role that
you play as a source of capital,
00:06:42.21 00:06:47.00
how do you track how well
your clients are doing
00:06:47.04 00:06:49.02
with regard to the use
of that capital,
00:06:49.07 00:06:51.23
specifically as it relates
to sustainability,
00:06:52.04 00:06:54.08
any ESG-related activities?
00:06:55.04 00:06:56.16
-Well, let me just
take a step back.
00:06:56.20 00:07:00.16
So, I meet with maybe 50
institutional investors a year.
00:07:01.01 00:07:03.12
Three years ago,
nobody asked about ESG,
00:07:03.15 00:07:06.14
and today, there's someone
at the table on the other side
00:07:06.23 00:07:08.08
in every conversation.
00:07:08.13 00:07:10.08
So, that's a sea change.
00:07:10.19 00:07:14.20
And what they're interested in
is, in each case --
00:07:14.23 00:07:16.21
I mean, we're there
to make money,
00:07:17.04 00:07:19.23
so what are we doing
on the environmental space
00:07:20.02 00:07:21.05
or the social or governance
00:07:21.08 00:07:25.20
that is accruing to
the benefit of our company?
00:07:27.04 00:07:30.11
Third parties score us, so I
think whether it's the Street
00:07:30.14 00:07:36.00
or whether it's Bloomberg
or GRI or Dow Jones,
00:07:36.03 00:07:38.00
so we do well in that regard.
00:07:38.09 00:07:44.13
But we're also looking at
where are we going.
00:07:44.16 00:07:50.07
So, we very purposely
00:07:50.12 00:07:52.17
sought to lead
in green bonds,
00:07:52.20 00:07:54.17
sought to lead in tax equity.
00:07:55.00 00:07:59.01
We recognize, however,
that there are conditions --
00:07:59.04 00:08:01.13
and you speak about
Bloomberg's philanthropy --
00:08:01.16 00:08:05.10
where we have to put in
philanthropic dollars first,
00:08:05.20 00:08:09.00
sort of first-loss money,
to get something up and running,
00:08:10.00 00:08:11.12
and we did that with an effort
00:08:11.15 00:08:14.09
we call Catalytic Finance Initiative,
00:08:14.12 00:08:16.00
which is kind of a mouthful,
00:08:16.04 00:08:18.04
and maybe we need to come up
with a different word,
00:08:18.08 00:08:19.23
but -- three words.
00:08:20.05 00:08:24.02
It is our company and seven
other financial institutions
00:08:24.09 00:08:27.14
that are working together
to stand up projects
00:08:27.17 00:08:31.00
that, on our own, none of us
could do for risk reasons,
00:08:31.19 00:08:35.07
but we can do on a collective
basis and make a return.
00:08:35.10 00:08:38.00
So, I'm talking about
a wind farm in the North Sea,
00:08:39.04 00:08:41.12
an installation
of tens of thousands
00:08:41.15 00:08:45.09
of residential solar in Spain,
00:08:45.12 00:08:47.15
conservation land in Africa,
00:08:47.23 00:08:49.07
and that would be something
00:08:49.10 00:08:51.11 we couldn't have done
just a few years ago,
00:08:51.14 00:08:54.11
but that many other
financial institutions
00:08:54.14 00:08:57.00
joining with us in a consortium
00:08:57.03 00:08:59.21
and then also bringing in
the development banks
00:09:00.05 00:09:03.01
and the non-profits, who --
00:09:03.08 00:09:05.02
I'll use Rockefeller
as an example --
00:09:05.05 00:09:08.00
where they're willing
to give the money.
00:09:08.04 00:09:09.12
They'd like to see a return,
00:09:09.15 00:09:10.22
and what they're looking for
is an outcome.
00:09:11.00 00:09:12.04
What is the outcome,
00:09:12.08 00:09:14.04
rather than a return
of their money.
00:09:15.08 00:09:20.19
We also have seen an increase
in the private-equity space,
00:09:21.03 00:09:24.11
where private capitalization
of certain projects
00:09:24.14 00:09:26.07
that are looking for a higher return.
00:09:27.00 00:09:30.10
I think they have a broader view
of what fits in here,
00:09:30.19 00:09:34.01
but that kind of momentum
really makes a difference.
00:09:34.09 00:09:36.15
The last thing I'll say
is that we've done now
00:09:36.18 00:09:40.10
three studies completely
independent of this work
00:09:40.13 00:09:43.10
from our equity research group.
00:09:44.12 00:09:46.19
Does ESG matter in a company?
00:09:46.22 00:09:47.22
And it does matter.
00:09:48.01 00:09:51.13
First of all, it matters
from a de-risking perspective.
00:09:51.16 00:09:54.07
Those companies that are
committed to ESG
00:09:55.04 00:09:56.16
have less vulnerability
00:09:56.19 00:10:02.16
to sort of a chaotic
financial scheme.
00:10:02.19 00:10:05.06
They are less apt
to go bankrupt.
00:10:05.16 00:10:07.10
They are less risky.
00:10:08.05 00:10:10.03
And now we're seeing
real benefit,
00:10:10.06 00:10:13.07
particularly like an industry
00:10:13.10 00:10:15.07
you wouldn't think of,
real estate,
00:10:15.12 00:10:18.16
where to think about energy
efficiency right up-front,
00:10:19.14 00:10:22.17
you're literally going to reduce
your electricity costs,
00:10:22.20 00:10:24.13
your energy costs,
in the building of,
00:10:24.16 00:10:27.05
whether it's residence
or skyscrapers.
00:10:27.09 00:10:29.09
And if that's built in
from the beginning,
00:10:29.20 00:10:32.08
you're going to have lower costs
and it's going to be a benefit.
00:10:33.05 00:10:35.20
-So, we are just --
to kind of add
00:10:36.00 00:10:38.09
to some of your comments,
we are seeing --
00:10:38.12 00:10:40.18
I started, in 2007,
00:10:40.21 00:10:42.20
our sustainability effort
at Bloomberg
00:10:42.23 00:10:45.08
and had an individual
report to me --
00:10:45.12 00:10:47.17
I was the chief executive
officer at the time --
00:10:47.20 00:10:49.22
to make sure that
all of our colleagues
00:10:50.01 00:10:52.11
understood that there is
a strong validation,
00:10:52.14 00:10:54.11
that this is important
for us going forward.
00:10:55.01 00:11:00.10
I will say the journey to get
more and more ESG data collected
00:11:00.13 00:11:03.20
and on the terminal,
our core product,
00:11:03.23 00:11:06.19
and the fundamental analytics
that go into that
00:11:06.22 00:11:10.01
has been a long
and somewhat perilous journey,
00:11:10.09 00:11:13.00
but I would share
the same view that you have --
00:11:13.04 00:11:14.19
that the institutional
investment community
00:11:14.21 00:11:17.18
has become so much more
keenly involved
00:11:17.21 00:11:20.19
in ensuring that
that information is available
00:11:21.04 00:11:23.05
as part of their
investment review process,
00:11:23.08 00:11:26.03
that I think the tide
has turned dramatically,
00:11:26.12 00:11:28.16
and it's going to
keep moving forward
00:11:28.19 00:11:30.22
such that
more of that information
00:11:31.01 00:11:32.14
plays a more important role
00:11:32.17 00:11:34.23
in the investment decision
making process.
00:11:35.11 00:11:36.14
-Well and also
what you're doing --
00:11:36.17 00:11:40.05
SASB and the work
around the task force
00:11:40.08 00:11:42.12
with Mike and Mark Carney --
00:11:42.16 00:11:43.20
all of that is going to help.
00:11:44.00 00:11:45.12
I mean, it would good,
ultimately,
00:11:45.15 00:11:49.20
if we could have
one objective third party
00:11:49.23 00:11:51.03
evaluating all of this,
00:11:51.06 00:11:55.20
but even as that's going on,
very prosaic things
00:11:55.23 00:12:01.04
that would seem unlikely to be
00:12:01.07 00:12:03.10
the beneficiary
of the environmental space --
00:12:03.12 00:12:04.16
Let's just use one.
00:12:04.23 00:12:06.20
City of Los Angeles
with all the lights --
00:12:06.23 00:12:08.06
the street lighting.
00:12:08.08 00:12:14.06
They had very energy-hungry
street lighting
00:12:14.09 00:12:18.10
and all sorts of
street lighting.
00:12:18.23 00:12:21.22
We worked with them
to change out
00:12:22.01 00:12:25.04
all of their lighting
to LED lighting,
00:12:25.18 00:12:29.20
and it has reduced
the cost of the energy.
00:12:30.00 00:12:32.04
And it actually is --
In terms of a bond,
00:12:32.10 00:12:35.08
they can easily pay
the coupon on the bond
00:12:35.13 00:12:37.04
and still save money.
00:12:37.12 00:12:42.22
Now, that isn't something
you feature in a commercial,
00:12:43.00 00:12:45.19
but it is the kind of stuff
we're doing every day
00:12:45.22 00:12:46.18
that's making a difference.
00:12:46.21 00:12:47.21
-Yeah.
00:12:48.16 00:12:52.16
You've set the bar high
for many of us to follow.
00:12:52.19 00:12:54.16
I'd like to spend
the last few minutes
00:12:54.19 00:12:57.06
that we have together
talking about our --
00:12:57.09 00:12:59.00
yours and my favorite subject,
00:12:59.04 00:13:00.18
which is diversity
and inclusion.
00:13:00.21 00:13:01.22
-Yes.
00:13:02.01 00:13:05.20
-I have kind of
put a stake in the ground
00:13:05.23 00:13:08.14
for our senior leadership
team at Bloomberg
00:13:09.01 00:13:13.21
and really drive
those initiatives internally.
00:13:14.01 00:13:16.19
You and Brian have been
really great supporters
00:13:17.04 00:13:19.08
and I think, in many ways,
kind of paved the way
00:13:19.11 00:13:21.08
for other organizations
to follow.
00:13:22.00 00:13:24.21
Spend a minute talking about
some of the things
00:13:25.00 00:13:27.10
that you've learned, some of
the successes that you've had,
00:13:27.13 00:13:29.15
but some of the things
that haven't gone quite as well
00:13:29.18 00:13:32.04
that maybe we can benefit from.
00:13:33.04 00:13:35.13
-Well, first of all,
just to go back,
00:13:35.20 00:13:38.03
Brian Moynihan,
the C.E.O. of our company,
00:13:38.12 00:13:41.03
set in motion this concept
of responsible growth,
00:13:41.06 00:13:42.21
that we were there
to help our people --
00:13:43.00 00:13:45.11
our clients, our customers,
and our own people --
00:13:46.20 00:13:48.07
to improve
their financial lives.
00:13:48.10 00:13:49.18
And if we were going to do that,
00:13:50.15 00:13:53.06
I would submit that,
during the financial crisis,
00:13:53.09 00:13:55.13
we could have had more diversity
around the table,
00:13:55.16 00:13:57.03
that a question might be asked,
00:13:57.07 00:13:59.01
because everyone
isn't just like you.
00:13:59.08 00:14:02.13
And that was Brian's thought
from the beginning.
00:14:02.16 00:14:05.16
So he took over
in January of 2010,
00:14:05.19 00:14:10.10
and, since then,
30% of our board are women,
00:14:10.19 00:14:12.20
about the same
are people of color,
00:14:13.04 00:14:16.05
40% of our executive
management team are women,
00:14:16.14 00:14:18.01
half the company are women,
00:14:18.04 00:14:19.14
half the management team
are women,
00:14:19.17 00:14:22.17
and 43% of the company
is diverse.
00:14:22.23 00:14:24.07
And the value of that is,
00:14:24.10 00:14:27.04
given all the businesses
that Bank of America is in,
00:14:27.07 00:14:31.03
because, of course,
we go from low-moderate income
00:14:31.06 00:14:34.08
through investment banking
and capital markets,
00:14:34.14 00:14:35.20
but to be able to reflect
00:14:36.00 00:14:37.20
the customers
that you're dealing with,
00:14:38.00 00:14:40.01
you have to have
that level of diversity.
00:14:40.08 00:14:42.15
And we actually are always
striving to do better,
00:14:42.18 00:14:44.16
and we still need to do better.
00:14:45.05 00:14:48.01
But in the U.S.,
we feel that we've done well.
00:14:48.04 00:14:51.08
We had a recent review --
a third-party review
00:14:51.11 00:14:56.22
of our pay equity
between men and women,
00:14:57.00 00:14:58.16
and it's at 99%.
00:14:58.20 00:15:00.17
So, we still have
a percent to go.
00:15:01.00 00:15:02.20
I think there
are greater challenges
00:15:02.23 00:15:06.00
in the U.K. and Europe.
00:15:06.14 00:15:10.05
And that has more to do with --
it is a little less --
00:15:10.08 00:15:13.13
although it's probably
true of pay disparity,
00:15:13.16 00:15:15.17
but it has to do
with more women
00:15:15.20 00:15:20.15
in positions
of executive management.
00:15:20.18 00:15:23.17
So, we have to get more women
into executive management.
00:15:23.20 00:15:26.14
Then we need to look to make sure
that there's parity.
00:15:27.16 00:15:30.15
-As you think about
these accomplishments,
00:15:31.04 00:15:33.20
what would be an example
of what didn't work?
00:15:35.00 00:15:37.13
-I think it doesn't work
when you try to force something.
00:15:37.16 00:15:40.04
So, early on, particularly
in the environmental space,
00:15:40.07 00:15:41.12
I think I pushed too hard
00:15:41.15 00:15:45.08
without recognizing
that philanthropic effort
00:15:45.11 00:15:48.23
wasn't going to light the fire
00:15:49.02 00:15:51.13
of every investment banker
in the company,
00:15:51.21 00:15:55.16
but when we could start to
generate some business cases
00:15:56.11 00:15:58.02
and we brought in some clients
00:15:58.05 00:16:01.00
who would otherwise
not do business with us
00:16:01.05 00:16:03.12
but for our ESG profile,
00:16:03.20 00:16:05.07
that, of course,
sets in momentum.
00:16:05.10 00:16:08.17
So, a little too much
proselytizing
00:16:08.20 00:16:12.08
and not enough proof
in the early days.
00:16:12.11 00:16:18.03
So, I curtailed the talking and
tried to do more of the doing.
00:16:18.12 00:16:19.20
That certainly made
a difference.
00:16:19.23 00:16:23.11
The other thing is
00:16:24.16 00:16:27.19
making sure
that we are bringing in,
00:16:27.22 00:16:30.12
in training and entry level,
00:16:30.19 00:16:32.18
a very diverse group of people,
00:16:32.21 00:16:36.09
because you need to pull them
all the way through to the top.
00:16:36.12 00:16:45.13
♪♪" />
, link opens in a new window
, link opens in a new window
, link opens in a new window
