Bank of America CEO says ‘we’re capitalists’ as anti-ESG critics gain steam

NEW YORK, March 7 (Reuters) – Bank of America Corp ( BAC.N ) Chief Executive Brian Moynihan had a clear message for shareholders on Tuesday: “We are capitalists.”

The proclamation from the boss of the second-largest US lender may seem obvious, but comes at a time when Wall Street titans are facing more criticism for embracing environmental, social and governance (ESG) concerns.

“I have sometimes been surprised to be asked — including at congressional hearings — ‘Are you a capitalist?'” Moynihan wrote in the bank’s annual report released Tuesday. “You may also find the question unusual. Of course I answered ‘Yes’.”

Some US Republican politicians have attacked banks and asset managers for their treatment of energy companies and consideration of issues such as climate change and workforce diversity, claiming they have put ESG considerations ahead of shareholder and saver returns.

Investors have also pulled back from ESG funds as high oil prices have hurt returns, but top asset managers have largely stood by many efforts with a social or environmental focus.

Latest updates

See 2 more stories

In January, Moynihan told Reuters that “capitalism is the system that will drive the best performance, and so we believe in profit and purpose,” he said, pointing to the bank’s record earnings in 2021, along with its rising wages and a range of employee benefits. across childcare, health and education.

While BofA is one of the largest US corporate issuers of ESG-themed bonds, it also had $36 billion in lending commitments to energy companies by 2022.

Investors and many companies say it’s good business to be concerned about environmental and social factors that can affect profits, such as rising sea levels or marketing that doesn’t reach certain audiences.

Moynihan is a proponent of stakeholder capitalism, a model in which private companies take into account interests beyond those of shareholders, including workers and local communities. The word “capitalism” is mentioned 22 times in BofA’s latest 222-page annual report, up from 16 a year earlier. The number of references to “ESG” fell to 36 this year from 59 last year.

“Capitalism provides the money, creativity, and expertise to solve society’s needs,” Moynihan wrote. “We enable our customers to drive capitalism.”

Still, the chief executive acknowledged there are concerns about whether companies are sharing profits or paying people fairly and equitably.

The lender outlined its ESG goals in the report, including a pledge to achieve net zero greenhouse gas emissions by 2050 and deploy $1.5 trillion in sustainable finance by 2030.

Reporting by Lananh Nguyen and Nupur Anand in New York; Additional reporting by Isla Binnie in New York and Ross Kerber in Boston; Editing by Josie Kao

Our standards: Thomson Reuters Trust Principles.

Leave a Reply

Scroll to Top
%d bloggers like this: