$600m ‘green bond’ announcedEthical News News & Features
Yesterday, Bank of America Corporation announced it has issued a $600 million ‘green bond’ to help accelerate the transition to a low-carbon economy by advancing renewable energy and promoting energy efficiency.
This is bank of America’s second green bond; the first – announced in conjunction with the Rio+20 United Nations Conference on Sustainable Development in June 2012 – launched in 2013.
At the time, the company said the ‘first ever corporate green bond’ would be used specifically to finance or invest in equipment and systems that ‘facilitate the use of energy from renewable sources, such as solar, wind and geothermal energy’.
These energy efficiency projects include lighting retrofits, co-generation and building insulation in residential, commercial and public properties. Each project must help reduce energy consumption per unit of output.
Proceeds from Bank of America’s previous green bond were used to finance projects such as the retrofitting of streetlights from traditional high pressure sodium to new LED technology in Los Angeles and the installation of commercial photovoltaic systems that generate clean, renewable solar power for thousands of customers in the US.
The $70bn commitment
The bond will help fund projects under the company’s $70 billion environmental business commitment to help address climate change, reduce demands on natural resources and advance lower-carbon economic solutions.
The 10-year $50 billion commitment, announced in 2013, builds on the company’s initial $20 billion multiyear commitment, which was announced in 2007 and achieved four years ahead of schedule.
‘We believe green bonds will play an important role in closing the financing gap for renewable energy, energy efficiency and other lower-carbon projects.
‘The market for green bonds is expanding rapidly and issuing our own green bonds is one way we are helping to meet that growing demand.’
Thomas Montag, Bank of America’s chief operating officer
Transparency and disclosure
As well as offering the first benchmark-sized corporate green bond, Bank of America co-authored the original version of the Green Bonds Principles (GBP), a voluntary set of guidelines to recommend ‘transparency and disclosure, and promote integrity in the development of this fast growing market by clarifying the approach for issuance of a Green Bond’.
According to Bloomberg New Energy Finance, last year Bank of America Merrill Lynch was the number one underwriter of green bonds.
As one of the world’s largest financial institutions, Bank of America serves roughly 48 million consumers and small businesses. It’s among the world’s leading wealth management companies and is at the forefront of corporate and investment banking and trading, serving corporations, governments, institutions and individuals all over the world.
Click here to find out more about Bank of America’s environmental commitments.