How innovative capital deployment helps Bank of America drive progress

Bank of America and WP Brand Studio - Washington Post's in-house creative agency - are partnering on a series focused on responsible growth, what it means to be a responsible company today and how that leads to both long-term corporate success and sustainable economic growth. The content will feature commentary from Anne Finucane and other senior leaders and will address how and why responsible growth is emerging as a core business strategy for a broad array of companies.

By: Anne Finucane, Vice Chairman Bank of America

How do individuals and institutions harness the powers of the financial markets to do good? What’s the connection between social benefit and sound business performance?

Today, the strength of a business is inextricably linked to the communities it serves. That means their challenges are our challenges. When climate change results in a hurricane that devastates an entire region, or when a small business owner in an underserved neighborhood has trouble securing the funds to open her doors, the community is affected, regardless of its size.

In the past, some of the largest global companies failed to see that social and environmental progress could be compatible with economic profit, and approached the challenge of connecting with the communities they serve separately from their long-term business goals.

But if a company’s bottom line is affected by society’s environmental and social issues, doesn’t it stand to reason that those issues should be taken into account across all levels of planning and operations? As the public sector struggles to keep up with the pace and scale of some of our biggest concerns—devastating weather events due to climate change, crumbling roads and bridges, new entrepreneurs struggling to receive capital for their businesses—how can the private sector do more to not just fill in those gaps, but truly lead the charge in finding innovative solutions?

These are questions we’ve been exploring at Bank of America through our environmental, social and governance (ESG) work. Focusing on these efforts ensures that our day-to-day work reflects our values, opens tremendous business opportunities and allows us to create shared, lasting success with our clients and communities.

To generate the real momentum needed to solve today’s most pressing problems, we’re leading the way on innovative capital deployment, marrying financial incentives to social and economic progress. In 2016, we made more progress toward our goal of investing $125 billion in client projects connected to clean energy and environmental sustainability. Since becoming the first financial institution to issue a green bond, we’ve maintained our position as the lead green bond underwriter globally for three years, funding nearly twice as much as our closest competitor and issuing three bonds totaling $2.1 billion.

By extending capital to individuals and companies across the country, we’ve helped drive economic growth and job creation—and enabled businesses to find solutions that improve economic mobility. To achieve this, Bank of America has embraced the role of community development financial institutions (CDFIs) as another creative means to help bring capital to communities and individuals who might otherwise have a hard time getting credit. As America’s largest CDFI investor, we’ve lent more than $1 billion across the U.S. That’s the kind of innovation needed to transform communities by helping them address the challenges they face.

Through the bank’s Initiative for a Competitive Inner City, we find small businesses in areas needing revitalization, and come up with ways to provide them with the capital they need to get their projects off the ground. So far, the program has raised more than $1 billion and created nearly 11,000 jobs. We also launched a mortgage product in early 2016, in partnership with Self-Help Ventures Fund (Self-Help) and Freddie Mac, to offer low- and moderate-income homebuyers a way to purchase their first homes. Within the first year, we doubled our commitment to the program from $500 million to $1 billion.

All of these are business practices that drive our bottom line. They’re not charity or grant-giving—though we do that, too. When we pioneer new capital deployment methods like these, we’re helping to create large-scale economic and social progress, which in turn enables us to meet our ESG goals. This focus on good environmental, social and governance policies creates jobs, transforms communities and fosters economic mobility, all while helping us grow our business.

When we match our business and our values, we can use our business to tackle society’s biggest challenges in a way that positions us to lead, and to grow responsibly.

Read more from the responsible growth series by visiting the Washington Post Brand Studio.

7/14/2017


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