In a surprising move, Bank of America has quietly removed environmental promises from its policy regarding coal mines and Arctic drilling.
This change came to light after a comparison was made between the bank's 2021 and 2023 "Environmental and Social Risk Policy Frameworks." The 2021 version explicitly stated that the bank "will not directly finance new thermal coal mines or the expansion of existing mines," and also mentioned not financing petroleum exploration or production activities in the Arctic. However, these statements were removed from the 2023 version, raising concerns about the bank's commitment to environmental responsibility.
This change in policy has sparked criticism from environmental advocates, who see it as a step back for the bank in terms of sustainability. In 2020, Bank of America pledged to stop financing new coal mines and plants and Arctic oil drilling, and the removal of the promises from their policy has raised doubts about their commitment to this pledge.
The bank, on the other hand, has stated that they have a "risk-based process" for client transactions and that certain high-risk relationships will go through an "enhanced due diligence" process.
This change in policy also comes at a time when some states in the US are passing laws to prevent banks from refusing to finance coal projects. These states, including New Hampshire, Texas, and West Virginia, are also trying to criminalize the consideration of environmental, social, and governance (ESG) principles in business decisions. This pushback against ESG principles has also led other companies to pull back from eco-friendly initiatives.
Last week, a coalition of 12 Republican state agriculture commissioners sent a letter to six large US banks, including Bank of America. The letter expressed concerns about the banks' involvement in the Net-Zero Banking Alliance (NZBA), a global alliance promoting sustainability in the banking sector. The state officials warned that the banks' actions may have negative economic consequences, including impacting food availability, leading to price increases, and limiting credit access for farmers, among others.
Georgia Agriculture Commissioner Tyler Harper, one of the signatories of the letter, stated that American agriculture is sending a clear message that they will not support the "failed, left-wing climate agenda of the United Nations."
He also emphasized the importance of American industries and the need for banks to support them. Harper believes that the NZBA is a threat to national security and must be stopped.
This new development has brought into question the role of banks in promoting sustainability and the extent to which they are willing to prioritize it in their business decisions. Many believe that actions like these undermine the progress toward achieving global sustainability goals and send a negative message to other industries and businesses. As the issue of climate change and environmental responsibility becomes increasingly urgent, the actions of major financial institutions like Bank of America will continue to face scrutiny.
Environmental advocates are now calling on Bank of America to clarify their position on sustainability, and some are even calling for customers to voice their concerns and reconsider their banking choices. With the UN Climate Change Conference approaching in November, the banking industry's role in promoting sustainability will undoubtedly remain a topic of discussion and potential controversy. As for Bank of America, they will have to respond to the criticism and concerns raised by the recent change in their environmental policy.