Checkpoint 2030: Markers on the road to net zero
While reaching net zero before 2050 is the ultimate goal, actions taken (or not taken) during the current decade will say much about whether it’s attainable. By 2030, according to the United Nations, humans must reduce overall emissions by 45%. For its part, Bank of America has committed to reducing its operational emissions by 75% by 2030 from its 2010 baseline. Additionally, the bank has committed to reducing both energy and potable water use by 55%, diverting 75% of construction and demolition waste from landfills and disposing of 100% of electronic waste using certified responsible vendors, among other goals.
The U.N. has also set 2030 as the target for achieving 17 sustainable development goals (SDGs), ranging from climate action, clean water and greater access to clean energy, to poverty, hunger and access to a quality education and economic opportunity for all. In addition to its $1 trillion EBI target noted earlier, Bank of America will deploy $500 billion to address social issues, for a total commitment of $1.5 trillion by 2030 in sustainable finance to support the SDGs.
Benchmarks for clients and suppliers
The efforts can’t stop at a company’s front door. In fact, it is critical that they leverage all parts of a business — beyond just direct operations — in order to accelerate the transition to a net zero global economy.
To that end, Bank of America is working closely with its clients to connect financing to progress toward net zero. “Every business has a unique value chain,” says Alex Liftman, global environmental executive at Bank of America. “Helping a power generation company drive to net zero may include financing infrastructure and battery storage solutions, while an oil and gas company will need help with better ways to capture carbon and to deliver alternative energies to their customers,” Liftman says. The bank is making similar commitments across its supply chain, ensuring that the companies that sell the goods and services the bank uses are driving toward net zero in their own operations. Among the bank’s current 2030 targets is a goal to ensure that 70% of global vendors, by spend, have set greenhouse gas emission or renewable energy targets, and to assess 90% of vendors, by spend, for environmental, social and governance (ESG) risks.
Scaling up for global net zero
Considering its extensive operations and networks, a single financial services company can contribute to a net zero world, but when an entire industry comes together around that goal, capitalism has the power to effect global change.
In 2020, Bank of America became the largest U.S. financial institution to sign on to the Partnership for Carbon Accounting Financials (PCAF), a global coalition of banks that seeks consistent accounting and disclosure of greenhouse gas emissions tied to loans and investments made by the financial sector. It has traditionally been challenging to account for emissions beyond direct operations. Through PCAF’s work, financial institutions will be able to use a defined methodology to measure and better understand the full impact of their business activities.
Bank of America is also part of the World Economic Forum’s International Business Council, chaired by Bank of America’s Moynihan, which in late 2020 introduced Stakeholder Capitalism Metrics, the first standardized measurements for companies’ progress on ESG goals.
To help move the global economy toward net zero by 2050, Bank of America was one of the original banks to form the Net-Zero Banking Alliance in April 2021. The alliance is part of the Glasgow Financial Alliance for Net Zero, chaired by Mark Carney, U.N. special envoy on climate action and finance, which is bringing the financial sector together to coordinate action to unlock the trillions of dollars needed to achieve a net zero future.
Lower emissions, greater prosperity
The stakes could hardly be higher. By curtailing emissions and temperature increases, society could help usher in not just a cleaner and healthier environment, but also a more vibrant and sustainable economy, with trillions of dollars of economic gain and tens of millions of low-carbon jobs, according to the United Nations. Yet should global warming reach 2 degrees above preindustrial levels by 2050, a world already challenged environmentally could face a devastating combination of rising sea levels, heat waves, flooding and other challenges.
To meet the twin objectives of environmental sustainability AND prosperity, net zero can’t resort to restricting economic growth or returning to a preindustrial age. Rather, it’s about rethinking the relationship between capitalism, climate and nature, moving from the extract-and-exploit models of the past to a sense of interdependence and caretaking — and finding science-based ways to counter climate change and other environmental threats.
Whether marshaling global cooperation on reducing carbon emissions or innovating ways that capital can address social issues, Bank of America is working to create a healthier environment and a more equitable society. Learn more about the bank’s efforts to drive progress on critical issues such as environmental sustainability, racial equality and economic opportunity, and to increase the amount of capital available to fund innovations focused on creating a healthier, more equitable future for all.