Banks Seek to Apply a Green Polish to Their Reputations
Criticized for having lent to the coal industry, Bank of America is now supporting green projects and companies with a new $50 billion initiative that includes "underwriting initial public offerings for so-called green companies, making loans to consumers who buy hybrid vehicles and helping developers to retrofit old factories as well as investing in renewable energy."
Another part of the plan is to knock down Bank of America's own energy use by 25% from 2004 numbers and its paper and water use by 20% from 2010 numbers, all by 2015. The initiative follows similar strategies employed by other banks, such as Goldman Sachs, Wells Fargo, and Citigroup, who have devoted money for environmental purposes, which, as Nelson D. Schwartz points out, "they would probably undertake otherwise as part of their ordinary lending and capital-raising business."
Schwartz reports that the announcement came at a useful time--just days before Bank of America's chairman, Charles O. Holliday, Jr., attends the United Nations' meeting in Rio de Janeiro on the environment and sustainability.
Schwartz further notes, "There is a new hunger for capital among green companies, as well as new interest on the part of investors. At the same time, new regulations are requiring companies to raise money and invest in new technologies that reduce greenhouse-gas emissions. In addition, the banks are capitalizing on federal tax credits being offered to encourage investment in renewable energy."
"Environmental advocates who have been critical of Bank of America in the past praised the company's latest initiative but said it should not obscure the bank's record on coal."
Thanks to Akemi Leung