The Journey to Net Zero

How you can help drive change

 

7 minute read

 

Companies and governments worldwide are taking vital steps to address global warming and climate change. Recently, Bank of America convened a panel discussion featuring Chief Executive Officer Brian Moynihan and Vice Chairman and Head of ESG, Sustainable Finance and Public Policy Anne Finucane, who have spearheaded climate initiatives within the bank and the broader business community over the past several years. Hosted by Alastair Borthwick, President of Global Commercial Banking, the discussion covered the global transformation toward a low-carbon economy and outlined tangible ways companies can take action. Following is a summary of this conversation.

 

What are carbon neutrality and net zero?

Driving down carbon emissions to the lowest possible level should be a goal for everyone. For companies that can’t completely eliminate emissions, it’s possible to offset them by investing in environmentally friendly projects, such as refurbishing forests and buying excess solar power capacity from producers.

 

Once a company has balanced its own emissions with offsets, it has achieved carbon neutrality. The next step —net zero— happens when the company becomes carbon-neutral across its entire supply chain, including its employees, vendors and customers.

 

Many countries have committed to net-zero emissions over the next few decades. Bank of America has already achieved carbon neutrality and is accelerating progress toward reaching net zero. According to Finucane, the primary architect behind BofA’s net-zero strategy, “The goal is to limit global warming to below 2 degrees Celsius —and preferably 1.5 degrees— by 2050.”

 

What are companies and countries doing today?

Moynihan, who has played a central role in discussions with leaders of G7 countries and other global CEOs, notes that significant activity is already underway. “This is happening now. It’s not coming someday. The urgency to get to net zero across the board is felt.”

 

 

Moynihan also pointed out that many of these efforts are led by the private sector across every industry. “Private-sector companies are committing to net zero because it’s the right thing to do. Their clients, customers and shareholders are demanding it.” While much of today’s action stems from globally known businesses cutting their own emissions, the effects will cascade throughout global supply chains as these large companies require their suppliers to step up their own net-zero commitments. “If you are a retail company, you will face more demand from your customers. All companies will start to see that suppliers and vendors, clients, and others you do business with are committed to net zero.”

 

 

All of your stakeholders engaged 

These groups are monitoring your commitment to net zero

  • Governments and regulators
  • Investors and capital providers
  • Employees and communities
  • Customers

 

 

Finucane discussed some of the legal and regulatory strategies to curb emissions. In the U.S., President Biden has recommitted to the 2015 Paris Agreement on climate change and has vowed to do more via executive orders. The Securities and Exchange Commission is considering proposals to require that public companies add new climate disclosures to investors. Along with tax credits for things like solar power and electric vehicles, the U.S. is developing an incentive-driven, market-based approach to creating change.

 

The European Union has been the catalyst for governmental action in the last few years, but Finucane noted that it’s focused on stricter regulations and taxes. The European Green Deal is one such regulation, and it requires that every company with more than 500 employees show a concrete plan to reach net zero.

 

“The U.S. will seek to be the world’s clean-energy superpower. Republicans and Democrats are working together in this effort because it’s both a business opportunity and a risk. We are unapologetically capitalist, and as a result we see a market opportunity that is less clear in other regions,” Finucane summarized.

 

What are the opportunities for businesses today?

Bank of America’s commitment to net zero is already having a positive effect on business clients. “We will seek to work toward net zero with all of you. We’re seeing many companies taking advantage of that,” Finucane noted. Some companies, including several large retailers, have benefited from installing clean-energy technology to power their facilities and taking a market-based approach by selling the excess capacity to other companies who wish to purchase offsets for their own emissions. Agribusinesses are committing to sustainable farming practices and becoming additional outlets for companies that wish to purchase offsets.

 

While making some consumer goods more sustainably can sometimes cost more, it’s sometimes possible to charge higher prices because many customers are seeking premium products that are responsibly made and sourced. Additionally, many emissions-reduction strategies can actually drive costs down. For example, municipalities can save millions of dollars and cut carbon by upgrading traditional lighting to LED bulbs.

 

“Whether it’s the factory floor or windmills and solar, we’re seeing quite a bit of activity from our own client base,” Finucane stated.

 

 

How Bank of America reduced carbon emissions

  • Switched operations to solar and wind power
  • Made facilities LEED-certified
  • Purchased renewable electricity and installed onsite solar across facilities
  • Implemented energy efficiency projects across facilities 

 

 

How can businesses get started?

“This is happening now,” Borthwick stated. “And in many cases, it’s happening because business leaders want to do it themselves, because they’re part of someone else’s supply chain, or because it’s important to their customers and employees. They may want to make net-zero commitments, even though they don’t have the resources of a global company or may not know where to get started.”

 

Finucane advised these companies to begin with an audit, which Bank of America can facilitate. “Even if you’re a smaller operation, there are ways to get renewable energy by buying extra capacity from wind and solar creators. There’s so much that can be done, and there are people who know how to do it. We have a good team here that can assess what steps you can take on your own, and steps where you can use financing. It’s not as overwhelming as you might imagine.”

 

Contact us to learn more

To discuss these topics, or ways we can help your business, contact your Bank of America representative.

 

 Watch the full panel discussion.

 

Moderator

Alastair Borthwick | Chief Financial Officer | Bank of America

 

Speakers

Brian Moynihan | Chairman of the Board and Chief Executive Officer | Bank of America

Anne M. Finucane | Vice Chairman, Head of ESG, Sustainable Finance and Public Policy | Bank of America

Photo © Brigitte Lacombe