BofA’s new sustainable financing goal: $1 trillion by 2030

Bank of America is boosting its environmental financing goal, aiming to provide $1 trillion in financing for sustainable and low-carbon activities by 2030.

The new target represents a more than threefold increase from a $300 billion goal the North Carolina company set two years ago. Bank of America first established an environmental business initiative in 2007 and has financed $200 billion in sustainable activities since then, including asset-based lending, capital raising, bond underwriting and tax equity investments.

Additionally, BofA pledged another $500 billion to financing socially inclusive development, including affordable housing, community development, healthcare and education. The company said the overall $1.5 trillion commitment is in line with the United Nations’ Sustainable Development Goals, a set of 17 development priorities that include clean water, gender equality and alleviating poverty.

“Sustainability is a clear focus across our eight lines of business globally,” Karen Fang, head of global sustainable finance, said in an email to American Banker. “This new 10-year sustainable finance commitment of $1.5 trillion in capital demonstrates our belief that there is opportunity for exponential market growth in ESG-themed products and services as well as market share growth.

Also called transition finance, the basic idea is to fight climate change and damage to the environment by funding cleaner business activities. For example, that could mean lending to a transportation company so it can upgrade its fleet to low-emissions vehicles, or financing energy-efficient housing, or underwriting a municipal bond intended for waste management.

Bank of America also named sustainable agriculture, forestry and pollution control as some of the other areas where it’s provided financing as part of its environmental initiative.

In February, the company said that it plans to cut greenhouse gas emissions from its financing activities to net zero by 2050.

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