CHARLOTTE, North Carolina (Reuters) - Bank of America Corp (BAC.N), which has faced criticism for dealings with coal companies in recent years, on Monday set a new 10-year, $50 billion goal to provide loans and other financing for environmentally friendly energy projects.
The second-largest U.S. bank announced the initiative as it nears the early completion of a 10-year, $20 billion goal set in 2007. The bank also pledged to reduce energy and paper consumption in its own operations by 2015 and to make $100 million in grants to nonprofit organizations and other groups promoting low-carbon use.
The initiatives underline the bank’s support for environmental sustainability, while also bringing in new business and reducing expenses for Bank of America, said Cathy Bessant, the bank’s technology and operations executive and chair of its environmental council.
“For a company in a sector that is challenged for revenue growth, this a real opportunity to create top-line revenue and to continue to develop the financial markets for” renewable energy, Bessant said in an interview.
Under the initiative announced in 2007, Bank of America has provided financing for solar power projects, loans for making low-income neighborhoods more energy efficient and loans for hybrid automobiles.
At the bank’s annual meeting in May, Bank of America Chief Executive Brian Moynihan said a new environmental commitment was in the works. At the same meeting, Moynihan also faced criticism from environmental activists about the banks’ underwriting of bonds for coal companies and utilities that burn coal.
Amanda Starbuck, director of the energy and finance program at Rainforest Action Network, on Monday said the group was disappointed with the bank’s announcement.
“This new commitment completely skirts that issue and makes no strong commitments around actually reducing the coal, the climate emissions, the fossil fuels the bank is financing,” she said.
Bank of America has faced particular criticism for providing financing to companies that use so-called mountaintop removal mining techniques, practices which critics say have polluted communities in the Appalachian mountains in the eastern United States.
Bessant said the bank has a policy of not banking companies primarily in the business of mountaintop removal, although she acknowledged that doesn’t go far enough for community and environmental activists.
Coal “still comprises such a huge percentage of overall energy that reducing reliance on carbon-based fuels will take a huge combination of global public policy, U.S. domestic policy and continuing to expand the markets for renewables, which is what this commitment is all about,” she said.
Other banks have also made environmental commitments in recent months. Wells Fargo & Co (WFC.N) has pledged $30 billion in loans and investments, while Goldman Sachs Group Inc (GS.N) is targeting $40 billion in investments.
Bank of America’s announcement comes ahead of next week’s United Nations Conference on Sustainable Development in Brazil. Bank of America Chairman Chad Holliday Jr. will be attending. He is also co-chairman of United Nations Secretary-General Ban Ki-moon’s High-level Group for the “Sustainable Energy for All” initiative.
Reporting By Rick Rothacker in Charlotte, North Carolina; Editing by Bernard Orr