Wells Fargo (NYSE: WFC) is upping the ante for environmental investment. On Monday, the bank announced it will plunk down $30 billion in loans and investments aimed at building a greener economy. The goal, which it hopes to achieve by 2020, represents a significant jump from its former target of $1 billion by 2010, which the company blasted past with investments of more than $3 billion by the end of 2008.
Wells Fargo has been steadily growing its bets in environmental projects, investing a record $2.8 billion in 2011 for a then total of $11.7 billion. The news Monday indicates the bank intends to more than double down. That could have a huge impact as the money opens the gate for more wind and solar energy projects, energy efficient buildings, environmental innovation and environmentally responsible public financing.
“Our commitment to the environment reflects our belief that Wells Fargo’s responsibility as a corporation goes beyond its mission of helping customers succeed financially. We also have a major role to play in promoting the long-term economic prosperity and quality of life of the communities we serve,” CEO John Stumpf said in a statement.
The announcement also underlines the growing investment in green projects from large, traditional financiers. After all, only a few years ago, $1 billion seemed like big money. Now, the numbers have grown much larger. It's not just Wells Fargo: Last year, Bank of America announced it had invested $11.6 billion in environmental initiatives since 2007 and planned to raise that to $20 billion by 2017.
By comparison, global venture-capital investments in cleantech reached almost $9 billion in 2011, according to the Cleantech Group. Of course, VCs are putting money into new technologies, while banks are betting on projects using more proven technologies. But the growth in investments from big banks shows that some of these technologies are successfully becoming more mainstream.
Several factors have enabled the bank to boost its commitment, Patricia Callahan, chief administrative officer and senior executive vice president at Wells Fargo, said during an interview with GreenBiz Executive Editor Joel Makower.
In addition to the increased availability of projects and companies that it expects would qualify for investment, "some of it is increased expertise on our side about how to find relationships that have been built, better understanding across these various sectors of the kinds of business that we can do that is actually important from an environmental point of view, both in the alternative energy, in our community lending," she said. "And trying to not just build low-income housing, but build low-income housing that is well insulated, has solar on it and so forth. And so I think there’s an expertise shift, as well as a demand shift."
Aside from its plans to make more green loans and investments, Wells Fargo said Monday that it will spend $100 million on community grants for grassroots environmental initiatives by 2020, including tree planting and maintenance, as well as nonprofit- and university-led innovation to promote cleantech and advance a greener economy; and $1 billion on investments with environmental benefits for low- to moderate-income communities.
At the same time, it aims to increase own energy efficiency 40 percent while diverting 65 percent of its waste, reducing its total greenhouse-gas emissions by 35 percent from 2008 levels, getting 35 percent of its buildings LEED certified and helping to reduce its suppliers' environmental impact via more accountability and transparency.
The news comes as Well Fargo gears up for its annual shareholder meeting in San Francisco on Tuesday. It's likely to be contentious, as an Occupy group plans to protest at the event.
For more information about Wells Fargo's sustainability initiatives, check out GreenBiz Executive Editor Joel Makower's post discussing the motivation behind the bank's new commitments.