The world is at a crossroads in terms of ecological and financial sustainability. Across the globe, structural reform is required to finance a transition to sustainable economies—a need accelerated by a coronavirus (COVID-19)-shaped backdrop of geopolitical and economic shifts.
To help steer a path toward a more sustainable world, a raft of initiatives have been launched, among them the recent $1 trillion pledge by Bank of America (BofA) to achieve a low-carbon, sustainable economy by 2030. This is the largest climate-related commitment to date in the financial services sector.
BofA’s commitment anchors a broader $1.5 trillion sustainable finance goal that will focus on environmental transition, social inclusive development, scaling capital to advance community development, affordable housing, healthcare and education, as well as racial and gender equality.
“We recognise the important role BofA has to play in helping create a sustainable, low-carbon economy,” says Andrea Sullivan, head of international environmental, social and governance (ESG) at BofA. “To really solve the world’s most pressing problems, as our broader commitments demonstrate, we also recognise that the private sector will be the catalyst that will help to mobilise the trillions of pounds needed.”
Furthermore, Ms. Sullivan believes three key dynamics are driving the ESG agenda and defining the role it has to play in the transition to a more sustainable economy. First, widespread understanding and agreement that there are large, systemic global issues that must be addressed urgently. Second, a growing belief that corporations have a role and responsibility to address these issues. And third, increasing understanding that companies that manage ESG will perform better.