The success or failure of meeting the United Nations’ Sustainable Development Goals will ultimately fall on the financial industry, though the increasingly mainstream nature of sustainable investing has pushed the industry in the right direction, Bank of America CEO Brian Moynihan said Monday.
Moynihan said at the bank’s Securities Future of Financials 2020 Virtual Conference that meeting the SDGs costs about $6 trillion annually, and as charitable efforts to reach those goals only hits about $1.5 trillion, it’s up to the industry to make up the difference.
Bank of America has already issued billions of dollars in green bonds, Moynihan said, and has also “rounded out” those bonds to include broader social and sustainability bonds in order to meet the wider definition of green investing. He noted that the bonds are an “expression of investor demand” and that it is the bank’s responsibility to help drive capital in order to meet the demand.
Sustainable investing, from Bank of America’s perspective, is a “continuous expression of, on one hand, the demand from society of wanting to help support the change, and on the other, the operating side saying they’re going to drive the change faster,” Moynihan said.
The recent development of more clear metrics to measure environmental, social and governance standards has also allowed Bank of America, as well as other big banks, to hold themselves accountable and show that they have done so to clients, Moynihan said.
Such metrics will help create transparency to show progress to investors that may be on the fence about sustainability, though Moynihan stressed that investors should care about ESG goals simply because companies with higher ESG scores perform better.
“If you look at the research … companies that don’t do well at ESG are not going to do well,” Moynihan said. “If you can avoid the losers [in the market,] that’s success almost by definition.”
In other social responsibility goals, Moynihan referred to the bank’s second annual Human Capital Report, which revealed that only one-third of its board members were women and one-sixth were Black or Hispanic. Moynihan said that he wanted Bank of America to be “the employer of choice for everybody, no matter what your background is.”
“We need to represent society … with all that we can,” Moynihan added. “You can’t just choose people from one subsector. If you choose just men or just women, you’re not going to represent everyone.”
Moynihan noted that in discussions with other executives about diversity, many have tried to “make a business case for it,” but that Bank of America isn’t interested in engaging in “both sides” arguments when it comes to inclusion in its workforce.
“The reality is, this is the right thing to do,” Moynihan said. “Our clients are everybody out there, so we have to do a great job with people who can service everybody well.”