Bank of America CEO says ‘we are capitalists’ as anti-ESG critics gain momentum

NEW YORK (Reuters) – Bank of America Corp. CEO Brian Moynihan delivered a clear message to shareholders on Tuesday: “We are capitalists.”

The announcement from the head of the US’s second-largest bank may seem obvious, but it comes at a time when the Wall Street giants are facing more criticism for embracing environmental, social and governance (ESG) considerations.

Moynihan Books in Bank Annual Report Posted on Tuesday. You might 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 that they put ESG considerations ahead of returns to shareholders and savers.

Investors also pulled out of ESG funds as higher oil prices hurt returns, but top asset managers have largely sided with many efforts with a social or environmental focus.

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“Capitalism is the system that works best and so we believe in profits and purpose,” Moynihan told Reuters in January, pointing to the bank’s record profit in 2021 along with higher wages and a range of employee benefits. Through child care, health and education.

While Bank of America is one of the largest US corporate issuers of environmental and social (ESG) bonds, it also had $36 billion in lending commitments to energy companies in 2022.

Investors and many companies say it’s a good idea to pay attention to environmental and social factors that could affect profits, such as rising sea levels or marketing that doesn’t reach a certain audience.

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Moynihan is a proponent of stakeholder capitalism, a model in which private companies consider interests beyond those of shareholders, including workers and communities. The word “capitalism” was mentioned 22 times in Bank of America’s latest 222-page annual report, up from 16 times the previous year. The number of mentions of “ESG” is down to 36 this year from 59 last year.

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

However, the CEO acknowledged there were concerns about whether companies were sharing profits or paying people fairly and equitably.

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

Additional reporting by Lanh Nguyen and Nupur Anand in New York; Additional reporting by Isla Penny in New York and Ross Kerber in Boston. Editing by Josie Kao

Our standards: Thomson Reuters Trust Principles.

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