As more Americans seek to match their investments with their core values and beliefs, Bank of America (BAC) said Tuesday that it was rolling out more products and services to let its clients do just that.
Over the next 10 years, BofA says it “will drive no less than $50 billion of business that consists primarily of lending, equipment finance, capital markets and advisory activity, carbon finance, and advice and investment solutions [into] areas including energy efficiency, renewable energy, transportation, water and waste, as well as $100 million in grants and program-related investments to nonprofit organizations, community development financial institutions and other NGOs promoting low-carbon and resource conservation solutions.”
This works follows the company’s original $20 billion commitment, which it notes was completed four years ahead of schedule at the end of 2012.
“One of the most pronounced trends we’ve seen in recent years is the call for wealth to have a productive impact on our environment, our communities, and our society broadly, in addition to earning an investment return,” said Andrew Sieg, managing director and head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch, in a press release. “This program offers opportunities for a wide range of investors with diverse interests and beliefs to help meet this need.”
Merrill Lynch, U.S. Trust
Merrill Lynch Wealth Management and U.S. Trust currently offer more than 180 investments to individual and institutional investors, including mutual funds, ETFs, separately managed accounts and alternative investments that emphasize environmental, social and governance (ESG) issues, BofA says.
And it’s no wonder, given investor demand.
Values-based investing accounted for $3.74 trillion, or roughly one in every eight to nine dollars under professional management, says Chris Wolfe, chief investment officer of Merrill Lynch Wealth Management’s Private Banking and Investment Group, citing a 2012 study from the Forum for Sustainable and Responsible Investment.
This represents a 22% jump for the $3.1 trillion of values-based investments the group noted in its 2010 report. “There is compelling evidence that investing according to one’s principles can generate competitive returns,” he explained in a statement.
In early 2013, U.S. Trust launched a new set of investment screens, called Environmental Stewardship and Sustainability (E2S), led by portfolio manager Jason Baron.
E2S came on the heels of U.S. Trust’s Socially Innovative Investing (S2I) program, also managed by Baron. S2I investment screens have been used by clients to direct some $600 million in assets.
“In creating this strategy, we responded directly to client demand,” said Chris Hyzy, U.S. Trust’s chief investment officer, in a press release. “We believe that corporations dealing effectively with environmental issues are poised to do well relative to their industry peers.”