Our approach to ESG priorities

Our approach to environmental, social and governance (ESG) priorities is guided by our commitment to Responsible Growth and doing so in a sustainable manner, which helps us deliver for our clients and stakeholders and address societal issues.

We listen to and engage with a diverse set of stakeholders who are interested in or directly affected by our company’s operations and incorporate the feedback of numerous constituent groups to tailor our disclosures. We drive engagement through various avenues, including our National Community Advisory Council (NCAC), a forum made up of senior leaders from civil rights, consumer advocacy, community development, environmental, research, and other organizations who provide external perspectives and feedback on our business policies and products.

We also utilize industry frameworks and ratings to help guide our sustainability disclosures, including but not limited to: Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), the Task Force on Climate-Related Financial Disclosures (TCFD), CDP, the World Economic Forum's International Business Council stakeholder capitalism metrics, MSCi, and Sustainalytics. As regulators and stakeholders increasingly focus on ESG topics, we also incorporate applicable guidance into our approach.

We then apply an internal lens through risk management principles, with our Responsible Growth Committee overseeing ESG priorities and strategy for the company. The result is a dynamic, ongoing process to assess ESG information and produce a view on how various ESG priorities are ranked in terms of importance to core businesses and to external stakeholders. 

The following “ESG Materialityfootnote1” matrix depicts the ESG priorities according to their assessed relative degrees of importance; all priorities on the “ESG Materiality” matrix — regardless of where they fall —are relevant to the company. These priorities were drawn from a broader set of potential areas.

We use the results of this “ESG Materiality” matrix to help guide our ESG reporting and disclosures and to advance transparency.

materiality chart

 

Figure 1. 2023 Refreshed “ESG Materiality” Matrix

ESG Materiality Matrix - Top Right Quadrant Detail

Chart shows the top right quadrant of the ESG Materiality Matrix -
Overview, which is also a quadrant chart with an x axis representing the increasing importance to business success and a y axis representing the increasing importance to stakeholders.

 

The bottom left, with a relative lower priority to both business success and stakeholder, contains one topic, "Land rights/use"

 

The bottom right, important to business success, contains three topics, "Financial health & education", "Sustainable finance", "Technology & innovation – Artificial intelligence"

 

The top left, important to stakeholders, contains seven topics, "Access to banking", "Community impact & development", "Sustainable/responsible operations and supply chain", "Human rights", "Nature & biodiversity", “Sustainable/responsible operations and supply chain”, "Transparency, accountability, & reporting".

 

The top right, with significance to both business success and stakeholders, contains six topics "Advocacy, lobbying & public policy engagement", “Business ethics, corporate governance & risk management”, “Client satisfaction & financial protection”, “Cybersecurity & data privacy”, “Human capital – Diversity & inclusion, Employee wellness, health & safety, Fair wage & page equity, Talent acquisition & retention”, "Net Zero strategy – Low-carbon transition, Climate risk," "Supporting economic opportunities for diverse people and communities",  and “Sustainable Finance”

*These topics in the “ESG Materiality” Matrix are part of Bank of America’s three-pronged climate strategy. The overall focus is to help minimize our impact on the environment, support and enable our clients to achieve Net Zero Greenhouse Gas (GHG) emissions and assess and manage climate-related risks. For additional information, please review our TCFD report.

Notes:

  • Topics are listed in alphabetical order, not in order of importance

  • Matrix was developed using BofA commitments and documentation (X-axis), and the BSR (Business for Social Responsibility) stakeholder report (Y-axis).

Topic Definitions

Upper Right Quadrant

  • Advocacy, Lobbying & public policy engagement:
    • Investing in programs and initiatives to address societal issues
    • Engaging with public policy makers to help empower diverse groups
    • Lobbying efforts and political contributions to government and influential institutions
    • Building relationships with public authorities
    • Leveraging public policy and market influence, all as part of efforts towards promoting equality and inclusion in our communities
  • Business ethics, corporate governance & risk management:
    • Highest standards of corporate governance, ethical conduct, risk assessment and management that apply globally.
    • Business ethics includes organizational standards, principles, and values that govern individual actions and prevention of corruption, extortion, and bribery in all markets where the company operates or does business.
  • Client satisfaction & financial protection:
    • Honest, transparent, and fair marketing and communications.
    • Safety of financial products.
    • Gauging customer satisfaction with products and whether products meet or exceed customer expectations.
  • Cybersecurity & data privacy:
    • Vulnerabilities and threats to customer and employee data security.
    • Fraudulent transactions and breach of privacy or data security.
    • Use of big data, including social and ethical considerations related to the use of artificial intelligence (AI).
  • Human capital
    • Diversity & inclusion: diverse representation throughout the company (i.e., attraction, hiring, development and retention) and building a culture where employees feel comfortable being who they are and bringing their whole selves to work with equal access to opportunities regardless of their differences.
    • Employee wellness, health & safety: providing a healthy and safe work environment for employees, including supporting their physical, financial, emotional, and mental well-being through programs such as paid medical and parental leave, flexible work arrangements, wellness programs and incentives.
    • Fair wage & pay equity: providing employees fair and reasonable compensation for their labor, free from discrimination based on factors such as gender, race, or age.
    • Talent acquisition & retention: Attracting and retaining top talent, efforts to promote professional growth, and actions to measure and improve employee satisfaction.
  • Net Zero strategy: reducing the impact on the environment, supporting and helping to enable our clients to achieve Net Zero GHG emissions, and assessing and managing climate-related risks, and addressing emissions resulting from financing activities.
    • Low-carbon transition: reduction of client GHG emissions through the use of cleaner technology, renewable energy, and efficient resource management.
    • Climate risk: includes the coordinated management, governance, and processes to help identify, monitor and control climate-related physical and transition risks.
  • Supporting economic opportunity for diverse people and communities:
    • Addressing issues critical to our stakeholders and meeting diverse needs, prioritizing supplier diversity and increasing economic opportunity for communities of color.
  • Sustainable finance:
    • Mobilizing and scaling capital deployment to help drive social and environmental change, including inclusive development and the transition to a low-carbon economy.
    • Reduction of investment in products and services with financial exposure to high GHG emitting sectors.

Lower Right Quadrant

  • Financial health & education: offering education (e.g., Better Money Habits), advice, and personalized support to help empower people to make confident financial decisions to build their preferred future.
  • Technology & innovation:
    • Digitalization and technology to help optimize efficiencies in business practices, improve and diversify product and service offerings for customers, and promote public interest.
    • Includes our focus on Operational Excellence and increasing efficiency.
    • Artificial Intelligence (AI): assessing the significance of AI in operations while helping to analyze and address potential ethical and societal concerns related to its use. 

Lower Left Quadrant

  • Land rights/use: business impacts of the company’s activities or business relationships on land rights, including rights of Indigenous Peoples, and the range of human rights linked to land, such as economic livelihood, property, adequate standard of living, housing, equality, food security, cultural rights, freedom from violence, self-determination, and life.

Upper Left Quadrant

  • Access to banking:
    • Access to customized financial products, services, and technology solutions to underbanked communities and different customer demographics.
    • Prioritizing our customers and the environment by reducing our physical footprint while widening our digital reach and increasing customer satisfaction.
  • Community impact & development:
    • Strategic lending, investing (for example through Community Development Financial Institutions and Minority Depository Institutions) and philanthropy for community economic development.
    • Assistance for underserved and disproportionately impacted communities through the transition.
  • Human rights:
    • Respecting human rights and demonstrating leadership in responsible business practices in the regions we operate and across our business relationships.
    • Basic entitlements for every individual, prevention of human trafficking and modern slavery, and a fair labor environment in operations and supply chain.
  • Nature and biodiversity:
    • Impact on local ecosystems by monitoring raw material consumption, deforestation, and land/water use, as well as human rights of local communities, especially in biologically sensitive areas.
    • Water conservation and responsible wastewater management, considering proximity to bodies of water.
  • Sustainable/responsible operations and supply chain:
    • Management of energy, water, and waste in our operations and supply chain.
    • Support for our Net Zero strategy.
    • Supply chain efforts, including international standards related to fair wages and benefits, forced labor, child labor, discrimination and harassment, and safe workplace conditions.
    • Assistance for underserved and disproportionately impacted communities through the transition.
  • Transparency, accountability & reporting: clear, accountable and comparable business and sustainability information to the public in an accessible manner.

This publication uses the term “materiality” from an ESG perspective and contains references to a number of priorities, which may consider disclosure recommendations and broader definitions of materiality, including those used by certain voluntary external frameworks and reporting guidelines, that differ from mandatory regulatory reporting, including the U.S. Securities and Exchange Commission (SEC). Accordingly, such priorities may be considered from a different perspective, and “materiality” in the context of this publication may be distinct from such term as defined for SEC reporting purposes. Any inclusion of such priorities in this publication is not an indication that the priorities are material to Bank of America Corporation for SEC reporting purposes or otherwise.

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Forward-Looking Statements

Certain statements contained in this publication may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. We use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could” to identify forward-looking statements. Forward-looking statements are not based on historical facts but reflect management’s current expectations, plans or forecasts, are not guarantees of future results or performance, involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and often beyond Bank of America Corporation’s control and are inherently uncertain. You should not place undue reliance on any forward-looking statement. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements due to a variety of factors, including global socio-demographic and economic trends, energy prices, technological innovations and advances, climate-related conditions and weather events, legislative and regulatory changes, public policies, engagement with clients, suppliers, investors, government officials and other stakeholders, our ability to successfully implement sustainability-related initiatives under expected time frames, third-party compliance with our expectations, policies and procedures and other unforeseen events or conditions. Discussion of additional factors, including uncertainties and risks, can be found in Bank of America Corporation’s 2022 Annual Report on Form 10-K and subsequent SEC filings. Forward-looking statements speak only as of the date they are made, and Bank of America Corporation undertakes no obligation to update or revise any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.