Bank of America is pushing its global corporate clients to reduce carbon emissions as a way to gain an edge over rivals, a race that will drive ethical debt markets even as it prepares first ever drop.
Bankers at the Charlotte, N.C.-based lender make as many as 3,000 calls a day to potentially engage companies in reducing carbon emissions, said Bank of America vice chairman Paul Donofrio. risks and opportunities posed by emissions. As big companies increasingly put environmental pressure on suppliers, the banker believes suppliers without net-zero plans will end up losing business to rivals.
“It comes down to net zero and the company’s ability to compete,” Donofrio said in an interview. “It’s an opportunity for companies to gain or lose market share.”
Companies and governments are turning to global debt markets to raise capital trillion The dollars needed to finance the transition to low-carbon emissions.Meanwhile, top banks from North America and Europe increase income They pledged to cut funding for the transition by up to 10% by 2030, according to consultancy Alvarez & Marsal Inc.
“This presents a significant opportunity for banks to finance this activity, be it lending, raising capital or advising on mergers and acquisitions,” Donofrio said. “But it is also a significant opportunity for our clients because Most of the largest companies in the world have made a commitment and are in another company’s supply chain.”
Since it began selling bonds in 2013, Bank of America has so far sold about $14 billion under various ESG bond labels, making it the largest bond issuer among U.S. corporate and financial issuers, according to data compiled by Bloomberg. The lender is also the top underwriter for global bonds.
Global sales of sustainable bonds — which include green, social, sustainability and sustainability-linked bonds — fell 30 percent this year through Monday, according to data compiled by Bloomberg, which would be the largest on record. First full-year decline. While sales have plummeted as borrowers around the world reduce issuance of all kinds of debt, Bank of America sees ethical debt taking a larger share of the market than ever. Global ESG-themed issuance accounted for about 12% of all bond sales this year, compared with 10.8% for all of 2021, according to the bank.
Donofrio expects the market to continue to grow as companies capitalize on investor demand for ESG-related investments to fund their sustainability efforts. Fitch Group For example, Barclays Plc expects the largest fiscal commitment to combat climate change in U.S. history, the Inflation Reduction Act, to boost sales of U.S. green bonds.
“I don’t think we’ll see a decline in ESG bond issuance,” Donofrio said. “It can fluctuate, but the trend is pointing in one direction.”