Demand for financing to fund sustainability-focused projects increased in 2022, despite market and geopolitical headwinds, according to Bank of America Chairman and CEO Brian Moynihan.
Speaking on a panel on “Stewarding Responsible Capitalism” at the WEF Forum in Davos, Moynihan indicated that companies’ sustainability commitments and the momentum of ongoing initiatives are driving a “level of activity that is growing very fast – that’s not going to stop.”
“2020, 2021, 2022 were three interesting years, right? I think in 2021 we did $200 billion of financing around the SDGs, around three-quarters of that was environmental.
“In 2022, we haven’t totaled it up yet – but it’s going to be bigger.”
Bank of America set a goal in 2021 to achieve $1.5 trillion in sustainable finance mobilization and deployment by 2030, including a new goal of $1 trillion in its Environmental Business Initiative aimed at accelerating the transition to a low-carbon, sustainable economy.
Last year, the company reported that its 2021 sustainable finance activity reached an all-time high of $250 billion in capital mobilized for financing UN SDG-aligned green and social projects, compared to approximately $105 billion in 2020.
According to Moynihan, demand for sustainable finance continues to grow, despite growing macro headwinds:
“Our client demand is driving this, and you see it keep going up. Obviously it hasn’t been stopped in very tough times in the world in the last couple of years: a war, a pandemic, shutting down the economy, interest rates up and down… and yet the financing going towards these things has gone up each year.”
The bank CEO also suggested that increased sustainability reporting requirements will likely contribute to the momentum of companies pursuing their sustainability initiatives, with companies compelled to demonstrate year-over-year progress to stakeholders. Moynihan said:
“Scope 1, Scope 2, Scope 3… you pick the topic. By having to disclose on a periodic basis, you make it part of the official record – you can’t walk away from it.”