Bank of America Commits to $50 Billion in Financing for Green Economy

After meeting its previous goal of providing $20 billion in financing for the green economy four years early, Bank of America (BOA) says it will finance $50 billion over the next decade.

The financing is intended to address climate change, reduce demands on natural resources and advance low-carbon economic solutions. It begins in 2013.

"Environmental business delivers value to our clients, return for our shareholders, and helps strengthen the economy," says CEO Brian Moynihan. "We met our prior goal in about half the time we set for ourselves, so more than doubling our target is ambitious but achievable."

As we said when Wells Fargo announced it would finance $30 billion in renewable energy projects through 2020, BOA’s financing is important and positive. Goldman Sachs also announced last month it would finance $40 billion over the next decade and reduce carbon emissions to zero by 2020.

Yet, like Wells Fargo and Goldman, BOA continues to finance coal plants and mountaintop removal and ranks #1 on the Filthy Five.   BOA is also a member of ALEC. 

In 2011, however, Bank of America was the fourth biggest asset-finance lender for renewable energy companies.

"Facing bad publicity on practically every front, the big banks are highlighting what has quietly become a hot growth area in recent years – backing projects and companies in sectors like renewable energy, emissions reduction and reduced-carbon transportation," says the NY Times.

Here are the areas BOA plans to focus on through lending, equipment finance, carbon finance, and advice and investment solutions for clients:

• Energy efficiency – in residential, commercial, and public properties, as well as supporting the full supply chain that drives energy efficiency.
• Renewable energy and energy infrastructure – including wind, solar, hydro, biomass and waste-to-energy solutions and their upstream and downstream supply chains, as well as smart grid, large-scale energy storage and other important infrastructures.
• Transportation – electric and hybrid vehicles, batteries/fuel cells and sustainable bio-fuels, and developing local and regional charging infrastructure to support the growth of new hybrid vehicle technologies. 
• Water and waste – innovative new technologies and infrastructure development in water purification and waste disposal and recycling.

BOA says it will give out $100 million in grants and program-related investments to nonprofits, community development financial institutions and other non-governmental organizations that promote low-carbon and resource conservation solutions. 

Since 2007, BOA has financed $17.9 billion in:

• $8.4 billion (47%) for energy efficiency activities ranging from its $55 million Energy Efficiency Finance Program to provide low-cost loans and grants to support energy efficiency retrofits in low-income neighborhoods, to financing lighting, heating and cooling equipment upgrades in public housing developments, commercial and government buildings.
• $5 billion (28%) for renewable energy projects that range from financing San Jose’s Unified School District in California, one of the largest solar systems in the world, to working with CleanStar Mozambique to replace thousands of charcoal-burning cook stoves with cleaner biofuel stoves.

  In 2011, the bank helped arrange and finance the world’s two largest rooftop solar projects – with clients Prologis and NRG Energy, and SolarCity – a combined 1000 MW of solar.

• Nearly $1 billion for consumer financing of hybrid vehicle purchases.

Internal Goals

In 2004, Bank of America was the first financial institution to publicly commit to greenhouse gas (GHG) reduction targets and in 2009, it exceeded them, cutting emissions 18% during those five years. 

The Bank of America skyscraper in New York City was the world’s first LEED-Platinum high-rise office building under the LEED Core and Shell rating system. 

Targets for 2015:

• Cut GHG 30% globally from 2004 levels.
• 20% LEED certification in its corporate workplace portfolio.

• Reduce energy consumption 25% from 2004 levels

• Reduce paper consumption 20% from 2010 levels. All paper will contain 20% post-consumer recycled content and will be sourced entirely from certified forests.

• Reduce global water use 20% from 2010 levels
• Divert 70% of global waste from landfills. Dispose of all electronic waste using certified, responsible vendors.

The bank’s CEO will attend the upcoming Rio+20 Conference and is co-chair of a United Nations panel on sustainable energy. .