A Review of Bank of America’s Sustainable and Impact Investing

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The nation’s second-largest bank has expanded its sustainable investing efforts in recent years.

Bank of America is one of the largest and most influential banks in the world. It’s also a company that takes sustainability seriously, as evidenced by its recently announced sustainable investing efforts. The bank has decided to allocate $1 Trillion by 2030 to sustainable initiatives and companies with significant environmental or social benefits. 

They are also one of the most innovative and progressive financial institutions when it comes to sustainable investing. For decades, they have supported socially responsible investments and companies who try to do business in an environmentally friendly way. 

Recently, Bank of America announced their new Sustainable & Impact Investing Platform, which will offer more opportunities for customers interested in this type of investment strategy. 

In this post, we’ll review their recent efforts with sustainable investments, what they have done so far, and how you can get involved by opening a Sustainable Investment Account with Bank of America.

What’s the difference between Sustainable and Impact Investments?

Sustainable investments are companies that try to minimize their environmental impact while improving their social impact. They may reduce pollution, increase recycling efforts, or create products/services which support a better way of life for people in need (e.g., medical research).

Impact investments are similar to sustainable investments, but they also aim to generate a measurable social impact. This usually means that companies invest in projects/products which will improve life for people or communities who need it most (e.g., funding education initiatives).

This is just one way Bank of America continues to show its commitment to impacting the world.

Bank of America’s A-B-C framework 

Bank of America has also outlined an A-B-C framework for sustainable and impact investments, called “Invest to Support.” This means that their investment strategy is centered on generating financial returns while simultaneously supporting the Sustainable Development Goals (SDGs). These are 17 global targets designed to end poverty, protect our planet, and ensure prosperity for all. 

Avoid: Reduce negative environmental and social effects. 

Bank of America’s A-B-C approach means that they will avoid investing in companies/sectors known for the negative impacts on the environment or society. They also strive to be a leader in sustainable investments, so they have decided not to invest money into projects/companies that don’t support the SDGs.

The “Avoid” category is where they will invest money which directly aligns with their Sustainable & Impact Investment Platform, such as clean energy and agriculture/forestry companies that focus on sustainable practices or improving life for people in need. 

Benefit: Support positive environmental and social practices

The “Support” category includes investments that support the Sustainable Development Goals by improving social conditions, environmental practices and promoting sustainable growth. This is where they will allocate funds for companies trying to do good in the world through their products/services or mission. 

These include projects that help improve educational opportunities for children living in low-income communities, sustainable agriculture companies that focus on developing countries (e.g., providing seeds or training farmers), and clean energy companies that reduce carbon emissions in an environmentally friendly way.

Contribute: Advance positive, social, and environmental outcomes 

Finally, they have a “Contribute” category where Bank of America will use their knowledge and resources to support the Sustainable Development Goals in these three ways: 

  • Investing in companies trying to improve social conditions (e.g., improving education outcomes) 
  • Inviting clients/customers who share the same values as them to invest in sustainable and impact investments 
  • Sharing their learnings with other companies/investors who are looking to make a difference as well.

They have also been recognized for leading efforts within this space, including being ranked #265 out of the top 500 global companies on Newsweek’s Green Rankings and #15 on Barron’s list of sustainable banks.

Additionally, Bank of America was recently recognized by Forbes as one of America’s Best Large Employers for Employee Well-Being – ranking #223 out of 500 major employers across 25 industries nationwide. This survey examined how workplace programs such as wellness and health promotion and the company’s culture and leadership helped contribute to employees’ wellness.

They also recently earned a top score of 100 on the Human Rights Campaign Foundation’s 2021 Corporate Equality Index (CEI), which rates businesses based on how inclusive they are for LGBTQ+ individuals. This is their seventh year in a row receiving this recognition for workplace equality.

Bank of America has long been committed to diversity and inclusion and supporting the LGBTQ+ community through many initiatives, such as partnering with GLSEN’s National Day of Silence (a day where individuals take a vow of silence to bring attention to anti-LGBTQ bullying). 

Do sustainable banks outperform? ~ Global Alliance For Banking on Values

Bank of America’s Sustainable & Impact Investment Platform 

As part of its recent efforts to support investments with positive environmental and social impacts, Bank of America launched its Sustainable & Impact Investment Platform. 

This platform is designed to provide an integrated approach to working with customers, investors, and companies seeking sustainable growth while also driving positive social impact.

Here’s how it works: 

  • Bank of America will work closely with customers who have expressed interest in directly aligning their investments towards these types of projects.
  • Then, they will work with their clients to reach new investors who have a passion for doing good in the world through investments.
  • Lastly, Bank of America has an opportunity to share its learnings and successes within this space so that other companies/investors can join them as well.

Bank of America’s Sustainable and Impact Investing Initiatives: A closer look

Investment Strategy #A – Drive Performance through Innovation, Technology, and Risk Management    

As the world becomes increasingly interconnected, financial institutions need to remain competitive to stay relevant. One way Bank of America is doing this is by investing in technology. The company is dedicated to managing risk while driving performance through innovative approaches. This includes using data analytics, artificial intelligence, machine learning, and other technologies that help it manage its capital more efficiently.

Investment Strategy #B – Investing into the Future of Work    

As humans are expected to continue working well into their golden years, the workforce has to adapt. Bank of America is investing in this future by giving its millennial-aged staff members more opportunities through training, development, and mentorship programs. This includes getting millennials on board as employees and encouraging them to stay with a company for a long time.

Investment Strategy #C – Advancing Inclusion and Diversity    

White men still dominate the financial world, but this isn’t the case at Bank of America. The company has been on a mission to promote inclusion and diversity in its workforce through initiatives that encourage hiring women, minorities, veterans, members of the LGBTQ community. It also offers mentorship opportunities for these groups so they can advance their careers.

Investment Strategy #D – Building a Low-Carbon Economy    

As the world becomes increasingly aware of its impact on climate change, Bank of America is looking for ways to reduce carbon emissions. By taking steps like reducing energy consumption in its buildings, investing in clean energy technologies, and installing solar panels, it aims to reduce its contribution to global warming.

Millennials and Generation X are interested in sustainable investing 

With its recent efforts, Bank of America is positioning itself as a leader in the investment community by promoting responsible investing and sustainable practices that can help individuals find financial freedom or achieve their personal goals. These are the types of investments millennials and Generation X are interested in.

Bank of America is aware that millennials and Generation X are the largest groups interested in sustainable investing. This has led it to focus on providing products, services, information, and tools for these demographics so they can make more informed decisions when choosing an investment account or planning for retirement.

How can you get involved? 

To get involved in sustainable investing, Bank of America recommends you take several steps. The first is learning what sustainable and impact investing entails by reading its blog posts or visiting its website. Next, investors can open an account with the company, so they have access to responsible investment options that align with their values.

Doing these things will allow you to take your first steps towards sustainable and impact investing. If you are not already with the bank, this may be an opportunity for you to consider opening up a new account and investing your money responsibly into companies that are making a positive impact on the world. 

Sign up for their Sustainable & Impact Investing newsletter to receive news and updates from them, as well as information about upcoming events they have around sustainable investing. You can also visit their website here. Here you will find additional resources about social finance, sustainable investing, and impact investing.

Aspiration Zero: The beginning of a new era

As we continue to live in an era of environmental and social turmoil, it is more important than ever to make sustainable investments. Sustainable companies are looking for ways to minimize their impact on the environment while improving their social impact. 

Impact investments take this a step further by also aiming to generate a measurable social impact and reduce pollution. If you’re already working towards going carbon neutral but have been struggling with how best to do so, you may want to consider using your credit card responsibly instead! 

Meet Aspiration Zero – the eco-friendly credit card that rewards you for making sustainability part of your everyday life. Interested? Apply today! 

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