NEW YORK , March 7 (Reuters) – Financial institution of America Corp's (BAC.N) Chief Govt Officer Brian Moynihan had a transparent message for shareholders on Tuesday: “We're capitalists.”
The proclamation from the top of the second-largest U.S. lender might sound apparent, however comes at a time when Wall Avenue titans face extra criticism for embracing environmental, social and governance (ESG) concerns.
“I've generally been shocked to be requested – together with at Congressional hearings – ‘Are you a capitalist?'” Moynihan wrote within the financial institution's annual report revealed on Tuesday. “You may also discover the query uncommon. After all, I answered, ‘Sure.'”
Some U.S. Republican politicians have attacked banks and asset managers for his or her therapy of vitality firms and consideration for points resembling local weather change and workforce variety, claiming they've put ESG concerns forward of shareholder and saver returns.
Traders have additionally pulled again from ESG funds as excessive oil costs have harm returns, however high asset managers have largely stood by many efforts with a social or environmental focus.
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In January, Moynihan instructed Reuters that “capitalism is the system that can drive the perfect final result, and so we imagine in earnings and objective,” he mentioned, pointing to the financial institution's report earnings in 2021 alongside its rising wages and a raft of worker advantages throughout childcare, well being and training.
Whereas BofA is likely one of the largest U.S. company issuers of ESG-themed bonds, it additionally had $36 billion in lending commitments to vitality firms in 2022.
Traders and lots of firms say it's good enterprise to be involved with environmental and social elements that may have an effect on earnings, resembling rising sea ranges or advertising and marketing that doesn't attain sure audiences.
Moynihan is a proponent of stakeholder capitalism, a mannequin during which personal companies take into consideration pursuits past these of shareholders, together with staff and communities. The phrase “capitalism” is talked about 22 instances in BofA's newest annual report spanning 222 pages, rising from 16 instances a 12 months earlier. The variety of references to “ESG” fell to 36 this 12 months from 59 final 12 months.
“Capitalism gives the cash, the creativity, and the experience to unravel the wants of society,” Moynihan wrote. “We allow our prospects to drive capitalism.”
Nonetheless, the CEO acknowledged there are issues about whether or not firms share earnings or pay individuals pretty and equitably.
The lender outlined its ESG objectives within the report, together with a pledge to attain internet zero greenhouse fuel emissions by 2050 and deploy $1.5 trillion in sustainable finance by 2030.
Reporting by Lananh Nguyen and Nupur Anand in New York; Further reporting by Isla Binnie in New York and Ross Kerber in Boston; Enhancing by Josie Kao
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