Bank of America recently faced criticism for revising its environmental and social-risk policy, reneging on commitments it made two years ago to stop financing new coal mines, coal-burning power plants, and Arctic drilling projects due to environmental concerns. Instead, these projects will now undergo “enhanced due diligence.”
This change comes amid growing backlash from Republican lawmakers against corporations considering environmental and social factors in their operations, a movement dubbed “woke capitalism.” States like Texas, West Virginia, and New Hampshire have passed regulations aimed at protecting fossil-fuel companies’ access to banking services, further intensifying the debate.
The E.S.G. sector has felt the impact, with big investors pulling money out of sustainability-focused funds amid conservative criticism. Even Larry Fink, CEO of BlackRock and a former advocate for E.S.G., has distanced himself from the term, citing its politicization.
Bank of America emphasized that transactions carrying heightened risks will undergo senior-level risk review but declined to specify the criteria. The bank’s updated policy no longer includes language about financing thermal coal mines or Arctic petroleum activities.
Despite rolling back commitments, the bank acknowledges the challenges faced by coal and the unique considerations of the Arctic region. Meanwhile, JPMorgan Chase announced changes to its oil and gas emissions-reduction target, emphasizing financing for clean energy projects.
Source: NY Times
