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In pursuit of a healthier world, all aspects of society must come together to help reach net-zero carbon emissions.
Compared with the age of the planet, three decades won't register as even a blink of an eye. Yet the next 30 years could determine whether humans are able to set a course for long-term environmental sustainability and a more prosperous world.
According to the United Nations, society must achieve "net-zero" by 2050 — meaning that man-made carbon emissions are reduced to as close to zero as possible, to the point that what remains can be absorbed naturally or balanced by carbon removals. That's what it will take to limit global warming to 1.5 degrees Celsius above preindustrial levels in order to avoid the worst effects of climate change.1 But can we do it? Using history as a guide, the answer is yes — humans have a proven ability to effectively mobilize to counter global-scale threats such as polio and smallpox, as well as collaborate to realize critical opportunities such as global health and telecommunications networks.
Achieving net-zero will take the combined and cooperative action of governments, nonprofits and the private sector, says Brian Moynihan, chief executive officer of Bank of America. Collectively, the private sector can have a major impact on what path the world travels over the next 30 years, but it will require driving significant changes across all aspects of how companies and businesses run their day-to-day operations for that path to lead to a healthier environment. That's why, Moynihan says, "We're supporting the transition to a low-carbon, sustainable economy, through our operations, our business activities and our partnerships."
Bank of America's journey toward environmental sustainability dates to 2003, when it began disclosing environmental risks, opportunities and impacts through CDP (formerly the Carbon Disclosure Project). In 2007, it became the first bank to launch an Environmental Business Initiative (EBI) and has since deployed more than $200 billion to low-carbon, sustainable business activities, with an expanded goal to deploy and mobilize $1 trillion by 2030.
In the past decade, the bank has reduced emissions from its operations (Scope 1 and 2 emissions) by 60% and transitioned to using 100% renewable electricity. In 2019, a year ahead of schedule, the bank achieved carbon neutrality in its operations.
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While reaching net-zero before 2050 is the ultimate goal, actions taken (or not taken) during the current decade will say much about whether it's attainable. By 2030, according to the United Nations, humans must reduce overall emissions by 50%.2 For its part, Bank of America has committed to reducing its operational emissions by 75% by 2030 from its 2010 baseline. Additionally, the bank is committing to reduce both energy and potable water use by 55%, divert 75% of construction and demolition waste from landfills, and dispose of 100% of electronic waste using certified responsible vendors, among other goals.
The U.N. has also set 2030 as the target for achieving 17 sustainable development goals (SDGs), ranging from climate action, clean water and greater access to clean energy, to poverty, hunger and access to a quality education and economic opportunity for all. In addition to its $1 trillion EBI noted earlier, Bank of America will deploy $500 billion to address social issues, for a total commitment of $1.5 trillion by 2030 in sustainable finance to support the SDGs.
The efforts can't stop at a company's front door. "It is critical that we leverage all parts of our business — beyond our direct operations — in order to accelerate the transition to a net-zero global economy," says Anne Finucane, former vice chairman of Bank of America.
Brigitte Lancombe
To that end, Bank of America is working closely with its clients to connect financing to progress toward net-zero. "Every business has a unique value chain," says Alex Liftman, global environmental executive at Bank of America."Helping a power generation company drive to net-zero may include financing infrastructure and battery storage solutions, while an oil and gas company will need help with better ways to capture carbon and to deliver alternative energies to their customers," Liftman says.
The bank is making similar commitments across its supply chain, ensuring that the companies that sell the goods and services the bank uses are driving toward net-zero in their own operations. Among the bank's current 2030 targets is a goal to have 70% of global vendors by spend set greenhouse gas emission or renewable energy targets, and to assess 90% of vendors by spend for environmental, social and governance (ESG) risks.
Considering its extensive operations and networks, a single financial services company can contribute to a net-zero world, but when an entire industry comes together around that goal, capitalism has the power to effect global change.
In 2020, Bank of America became the largest U.S. financial institution to sign on to the Partnership for Carbon Accounting Financials (PCAF), a global coalition of banks that seeks consistent accounting and disclosure of greenhouse gas emissions tied to loans and investments made by the financial sector. It has traditionally been challenging to account for emissions beyond direct operations. Through PCAF's work, financial institutions will be able to use a defined methodology to measure and better understand the full impact of their business activities.
Bank of America is also part of the World Economic Forum's International Business Council, chaired by Bank of America's Moynihan, which in late 2020 introduced Stakeholder Capitalism Metrics, the first standardized measurements for companies' progress on ESG goals.
To help move the global economy toward net-zero by 2050, Bank of America was one of the original banks to form the Net-Zero Banking Alliance in April 2021. The alliance is part of the Glasgow Financial Alliance for Net-Zero, chaired by Mark Carney, U.N. special envoy on climate action and finance, which is bringing the financial sector together to coordinate action to unlock the trillions of dollars needed to achieve a net-zero future.
The stakes could hardly be higher. By curtailing emissions and temperature increases, society could help usher in not just a cleaner and healthier environment, but also a more vibrant and sustainable economy, with trillions of dollars of economic gain and tens of millions of low-carbon jobs, according to the United Nations.3 Yet should global warming reach 2 degrees above preindustrial levels by 2050, a world already challenged environmentally could face a devastating combination of rising sea levels, heat waves, flooding and other challenges.4
To meet the twin objectives of environmental sustainability AND prosperity, net-zero can't resort to restricting economic growth or returning to a preindustrial age. Rather, it's about rethinking the relationship between capitalism, climate and nature, moving from the extract-and-exploit models of the past to a sense of interdependence and caretaking — and finding science-based ways to counter climate change and other environmental threats.
"We recognize that this will be no easy task," Finucane says. "But we believe our commitment will help spur the growth of zero-carbon energy and power solutions, sustainable transportation and agriculture, and other sector transformations, while generating more climate-resilient and equitable opportunities for our future."
Whether marshalling global cooperation on reducing carbon emissions or innovating ways that capital can address social issues, Bank of America is working to create a healthier environment and a more equitable society.
Learn more about the bank's efforts to drive progress on critical issues such as environmental sustainability, racial equality and economic opportunity, and to increase the amount of capital available to fund innovations focused on creating a healthier, more equitable future for all.
This post was created by Bank of America, N.A. Member FDIC
© 2022 Bank of America Corporation
1 United Nations Climate Change, "The Paris Agreement," December 2015.
2 United Nations news release, "No Excuse Not to Meet Net-Zero Emission Target by 2050, Secretary-General Says in Global Lecture on Climate Change, Stressing Time for Small Steps Has Passed," July 2020.
3 United Nations, "Climate Action Fast Facts,"(undated).
4 Organisation for Economic Co-operation and Development, "OECD Environmental Outlook to 2050: The Consequences of Inaction," (undated).
