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 statement from the head 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 published 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 concerns 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 bets with a social or environmental focus.
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In January, Moynihan told Reuters that “capitalism is the system that will drive the best result, 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, they also had $36 billion in lending commitments to energy companies in 2022.
Investors and many companies say it is good business to be concerned about environmental and social factors that can affect profits, such as rising sea levels or marketing that does not reach certain target groups.
Moynihan is a proponent of stakeholder capitalism, a model in which private companies take into account interests beyond shareholders, including workers and local communities. The word “capitalism” is mentioned 22 times in BofA’s latest annual report, which spans 222 pages, an increase from 16 times 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 run capitalism.”
The CEO, however, acknowledged that there are concerns about whether companies share profits or pay 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
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