World’s Best Bank for Corporate Responsibility 2020: Bank of America
Using its balance sheet to help the transition to net zero emissions, racial equality and economic mobility, while supporting employees through Covid-19 and assisting communities in all markets it operates in, Bank of America has put corporate responsibility at its core.
In a year that has tested banks’ commitment to their corporate responsibility efforts, one bank in particular stands out for the ways in which it has met the multitude of challenges in 2020. Bank of America wins the award for world’s best bank for corporate responsibility this year.
Corporate responsibility is embedded in BofA’s culture. Chairman and chief executive Brian Moynihan introduced a responsible growth strategy shortly after he took the helm in the wake of the global financial crisis. Within that strategy there is a focus on diversity and inclusion, economic mobility and community development, in addition to responsible and sustainable finance.
When it comes to the environment, the bank – with vice-chairman Anne Finucane at the helm of the company’s ESG, sustainable finance, capital deployment and public policy efforts – puts its balance sheet to work. It has been a leader in green bonds and has issued five of its own.
Last year BofA announced an additional $300 billion commitment over the next decade to finance environmental business efforts globally. “Our focus is to make it more efficient to scale and innovate,” says Karen Fang, head of global sustainable finance at the bank.
Among many innovative deals last year was the tax equity financing for Engie Renewables, the largest renewable energy transaction in the sector at the time, which opened up a new structure for other deals to follow.
The bank itself achieved carbon neutrality this year and installed on-site solar and wind turbines at many of its facilities. Across Asia it has reduced its waste by 50% since 2012 and has eliminated much of its plastic usage. More than 24,400 employees are part of the bank’s environmental engagement programme, logging more than 75,000 volunteer hours last year.
The bank also works with environmental organizations to tackle issues such as access to clean water and sanitation, water security in metropolitan areas, the conservation of the Pantanal basin in Brazil and the development of ecotourism. In India, BofA has installed 60 solar micro grids in 41 villages that have not only brought clean energy but also helped increase farmer incomes.
Aside from environmental initiatives, BofA is also supporting its communities. In the UK it recently partnered with West London Zone (WLZ), providing $1 million to fund the outcomes-based payment initiative. The scheme is the first of its kind in the UK creating a programme of evidence-led intervention for children growing up in one of the most economically unequal communities in the UK.
The bank made $250 million in philanthropic donations to communities and organizations around the world last year. In 2020 it went further, adding another $100 million to tackle health and humanitarian issues arising from Covid-19, such as food insecurity, medical response and access to education, as well as an extra $10 million in philanthropic grants to help fund the operations of community development financial institutions (CDFIs). BofA had already announced $250 million in capital to CDFIs to support small businesses across the US.
Our focus is to make it more efficient to scale and innovate
While its philanthropic efforts are award-winning in their own right, it is through existing business lines that the bank is ensuring economic mobility at scale. In May it issued a $1 billion corporate social bond to support the fight against the coronavirus pandemic, the first such offering by a US commercial bank. The net proceeds from the offering will be allocated to the healthcare industry for the life of the bond, and as the short-term loans are repaid, capital will be redeployed to healthcare companies responding to the impacts of the virus.
Last year in the US, BofA also announced the $5 billion Community Homeownership Commitment to benefit low and middle-income (LMI) homebuyers and communities across the country over the next five years. Through a combination of specially designed products, resources and expertise, the programme will help more than 20,000 individuals and families from LMI communities to buy their own homes.
This year, BofA also announced that it would use its financing capabilities to advance racial equality and economic opportunity following the killing of George Floyd and the global protests for racial equity and justice that followed. In June, it made a $1 billion commitment over the next four years to create opportunities for people and communities of colour in the areas of health, job development, support to small businesses and housing.
To ensure the momentum around racial equality continues the bank also made a $25 million commitment to help launch a new Smithsonian Institution initiative that will examine how Americans understand, experience and confront race; its impact on communities; and how that impact is shaping the nation’s future.
This commitment to diversity and inclusion is reflected among the bank’s employees. As of 2019, 46% of its global management team were women; more than 50% of its global workforce were women; and 47% of its US-based workforce were people of colour.