Banks Move to Curb Their Carbon Footprints

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By Andrea Vittorio

Sept. 19 — Bank of America is going carbon neutral as JP Morgan Chase and Morgan Stanley get ready to price carbon internally.

They’ll join Goldman Sachs, which is among a few dozen companies that reported to the nonprofit CDP a tangible impact on their business from internalizing a cost on carbon.

More than 200 companies in the U.S. are now using or plan to use internal carbon pricing, a 43 percent uptick from last year, according to the latest tally from CDP.

Paula DiPerna, a special adviser to CDP North America, said carbon pricing at banks is “complicated.”

Banks typically use carbon pricing to cut emissions from operations such as buildings and data centers.

As part of its carbon neutrality goal, Bank of America pledged Sept. 19 to purchase 100 percent renewable electricity. That shift has been “investor-driven, employee-driven and customer-driven,” Bank of America’s environmental, social and governance executive Andrew Plepler said in New York at a Climate Week event.

Lending Exposure

But the main financial risk from carbon exposure is concentrated in banks’ commercial lending.

Amalgamated Bank, the largest union-owned bank in the U.S., just adopted new policies to reduce carbon risk across its own assets and lending portfolio.

“The announcements today are a step in the right direction but it will require everyone to make the changes necessary to stabilize our climate and create sustainable environment,” Keith Mestrich, the bank’s president and chief executive officer, said in a statement Sept. 19.

Canada’s TD Bank told CDP its internal carbon price has helped drive “an increased commitment to developing a range of low-carbon financial products,” including financing for residential renewables and energy efficiency projects, insurance for hybrid and electric vehicles and the issuance of a $500-million green bond.

“Banks are a good indicator of confidence that low-carbon is the horizon line of the future,” DiPerna said.

-- John Herzfeld in New York contributed to this report.

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editor responsible for this story: Larry Pearl at

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