Anne Finucane: Accelerating the transition to a low-carbon economy
by Anne Finucane, Vice Chairman Bank of America, @AnneFinucane
As COP21 draws to a close, I’m encouraged by the willingness of world leaders to take bold action on climate change, one of the most important challenges of our time. Businesses are ready to do our part, as evidenced by the pledges President Obama assembled earlier this year from 154 American companies, most with global footprints.
The financial services sector in particular is in a unique position to help the world reach this goal. By providing the necessary financial and intellectual capital, we can accelerate the transition to a low-carbon economy. Bank of America recognizes this responsibility and has begun taking action.
There are many reasons for this, but I’ll highlight two in particular. Customers are well-informed participants in a changing world, and they 1) require business to be conducted in a manner that is responsible and sustainable, in every sense of that term, and 2) they need us to both reduce risk while providing financing to help to develop sustainable energy and other technologies. That kind of lending and investing requires financial services firms with scale and influence to make a real difference.
This past July, we announced an increase of our global environmental business initiative from US$50 billion to US$125 billion in low-carbon activity by 2025. We also continue to lead in developing the green bond market, issuing the first benchmark-sized corporate green bond – US$500 million – in 2013, followed by a second green bond for US$600 million this past spring.
Yet climate change is a challenge far bigger than one company or one country. Steering the world onto a path of 2°C emissions reduction will require upwards of US$50 trillion in cumulative investment in energy over the next 20 years. Without the global business community’s active participation, it can’t happen.
When Bank of America announced the Catalytic Finance Initiative last year with an initial US$1 billion commitment, the goal was US$10 billion in capital to reduce barriers to greater clean energy investments. As we move forward, we will work with partner organizations to join us in making additional pledges that work toward our goal and are focused on developing and advancing innovative financing structures that help incentivize investments in clean energy.
These kinds of commitments represent both an understanding of the challenges we face and a willingness to help society address the issue of climate change. As financial services institutions, we can and will continue looking for ways to overcome obstacles in catalyzing capital investments toward a low-carbon economy and providing the necessary financing to realize the promise of global climate commitments.
Achieving the goals of COP21 will mean transforming the global economy to ensure that business success and environmental protection are not mutually exclusive. This world belongs to all of us, and it’s only through bold, innovative collaboration that we can ensure a better future for everyone.