BofA Banks $20 Billion to Grow Green Economy

BofA Banks $20 Billion to Grow Green Economy

Under an ambitious new initiative announced by Bank of America, the financial institution will direct $20 billion to help its corporate, individual and small-business customers take advantage of the business opportunities created by green economic growth.

The details of the ten-year initiative, which will encourage the development of environmentally sustainable business practices through lending, investing, philanthropy and the creation of new products and services.

"Over the last decade, Bank of America has implemented programs that have significantly reduced the environmental impact of our own operations," said Kenneth D. Lewis, Bank of America's chairman and CEO. "Today, we have a tremendous opportunity to support our customer's efforts to build an environmentally sustainable economy -- through innovative home and office construction, new manufacturing technology, changes in transportation, and new ways to supply our energy."

Under its environmental initiative, Bank of America will emphasize the business opportunities created by "green" economic growth by providing critical financing to encourage the development of environmentally sustainable products and technology; accelerate the deployment of existing technology; and increase energy efficiency.

For its corporate clients, Bank of America will commit $18 billion in lending, advice and market creation to help commercial clients finance the use and production of new products, services and technologies:
  • Commercial Real Estate Banking: The company will build upon its expertise in financing environmentally friendly development by creating customized solutions for clients who are developing and implementing environmentally sustainable designs. Areas of focus include financing real estate projects with LEED certification, improvements in energy efficiency, brownfield redevelopment, promotion of smart growth, and the use of energy-related tax credits.

  • Corporate & Investment Banking: The company will focus on financing and advisory services to clients participating in emissions offsets markets, developing energy-efficient or low-carbon technologies and helping private/public sector entities adopt green and low-emissions technology.

  • Carbon Emissions Trading: The bank will launch the capability to trade carbon emissions credits in order to enable clients to achieve carbon emission neutrality through existing and emerging market mechanisms.

  • Environmental Lending Consideration: The company will give favorable consideration, among other existing underwriting criteria, to lending opportunities with clients that are creating and implementing environmentally sustainable products, services and technologies.
Bank of America currently is developing a set of products for individuals who consider the environmental impact of their purchasing decisions and want to offset or minimize their carbon emissions. The bank will announce the launch several new products in the next year, including an eco-friendly credit card. For every dollar spent on this new card, Bank of America will make a contribution to an environmental organization to invest in greenhouse gas reduction projects. These cards, available later this year, will have environmentally friendly incentives and features.

In addition to the new card, Bank of America will create the following programs for its individual customers:
  • WorldPoints Rewards for the Environment: Existing cardholders may donate their WorldPoints rewards to organizations that invest in greenhouse gas reductions or redeem them for environmentally friendly merchandise.

  • The Green Mortgage Program: Homebuyers will receive a reduced interest rate or $1,000 back for each home-purchase mortgage meeting ENERGY STAR specifications.

  • Environmental Home Equity Program: For customers who use their home equity line of credit's Visa Access Card, Bank of America will make an annual donation to a non-profit organization that focuses on environmental conservation. At launch, donations will be directed to Conservation International for land conservation and carbon sequestration. Additional non-profit organizations may be added to the program over time.

  • Timberland Investment Solutions: Bank of America is evaluating proprietary investment management solutions that incorporate forest conservation principles consistent with those defined by the Forest Stewardship Council. Reforestation, wildlife management, responsible development and the support of carbon sequestration ecosystems are important attributes that will be considered. Bank of America intends to commit its own capital to promote "green" investment solutions for its clients.
In addition, Bank of America will further promote an existing product, the EPA SmartWay Transport Program. Under a partnership between the Environmental Protection Agency and the freight industry, the bank provides Small Business Administration SBA Express loans with no collateral and flexible terms to small and mid-sized trucking companies to finance fuel efficient technologies. The loan program helps trucking companies purchase SmartWay Upgrade Kits that include idle-reduction devices, low-rolling resistance tires, aerodynamic equipment and exhaust after-treatment devices. The kits can improve fuel efficiency by 15 percent.

Bank of America will also make a series of investments to offset the impact its own operations and associates have on the environment, including a planned commitment of $1.4 billion to achieve LEED certification in all new construction of office facilities and banking centers; donating $50 million from the Bank of America Charitable Foundation to support non-profit organizations focused on forest preservation, innovative energy conservation, developing green affordable housing and other environmentally Progressive activities; and investing $100 million in energy conservation measures for use in all company facilities.

"We have the opportunity to do more than address our own internal business practices," said Anne Finucane, chief marketing officer and chair of the company's environmental council. "As one of the world's leading financial institutions, we can and will work directly with individual and business customers to address the pressing issue of global climate change."

"Bank of America is getting out on the front end of this issue -- developing innovative products and services that will flourish in a developing green economy while helping households, investors, and businesses cut greenhouse gases," said Eileen Claussen, president of the Pew Center on Global Climate Change.