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Amalgamated Bank's investment underline growing commitment to sustainable business from big finance.

Posted on Aug 29, 2018 7:30:00 PM

Untitled design (80)The largest trade union-owned bank in the USA, Amalgamated Bank, has furthered its commitment to socially responsible business with a promise to double the assets of New Resource Bank which it acquired in May 2018. The San Francisco based bank New Resource Bank offers support to businesses and organisations who are driven by visions of a more sustainable future. New investment will see New Resource Bank’s current investment double to $700 million by 2020. Recent investment into the firms “2X Impact” programme focuses on investment in environmental protection, health and wellness, education & community empowerment, and sustainable commerce. Through significant investment, Amalgamated Bank has broadened its services and support of clients throughout the United States and earnt itself the reputable B-Corp certification, awarded to businesses that strive to use their resources to solve social and environmental problems.

Keith Mestrich, President and CEO of Amalgamated Bank, commented: “Amalgamated is proud to be able to help sustainable and socially responsible businesses by providing funding to fuel their growth and impact. We believe that if our clients are achieving their missions, then we are achieving ours: making the world a more just, compassionate and sustainable place. We look forward to working with existing and new customers to provide them with the financing they need to grow and expand their businesses, while building a more socially and environmentally just world.”

Amalgamated Bank is also a member of The Global Alliance for Banking on Values (GABV), a consortium of banks striving towards positive change in the banking sector through the support of environmental intiatives and the provision of services for the real economy. Investment into progressive businesses making a positive impact through the prioritisation of Environmental, Social and Corporate Governance (ESG) is one example of a financial house moving large-sum capital investment in the right direction.

Growing influence of sustainable practise and environmental trends has seen other financial houses follow suite, reaching out to more and more companies that consider themselves socially responsible. Of these, here are a few making a difference.

System IQ London based with offices in Germany and Indonesia

London-based advisory and investment firm, System IQ targets disruptors that look at solving current inefficiencies in flows of food, energy, industry and transport. Systems IQ offer incubation and investment to companies that build business strategy around a more sustainable and socially responsible approach. Through values of collaboration, care, creativity and change the company was awarded a B-Corp certification in 2018. The firm regards the B-Corp certification suggesting it is to business what Fair Trade certification is to coffee or USDA Organic certification is to milk’.

New Call-to-actionRecent projects at Systems IQ have included consultancy support of the Green Finance Institute (GFI), funded by the City of London Corporation and UK Government. GFI hopes to promote sustainable finance in the UK and overseas.

“The transition to a low-carbon economy is a massive opportunity for the UK, which has the potential to lead the world in cutting emissions and strengthening climate resilience, while driving growth,” said Jeremy Oppenheim, founder and senior partner at SYSTEMIQ. "It is an honour to be working with the City of London and its partners at the Green Finance Initiative to help unlock this opportunity and enhance the role of London as the world’s preeminent green finance hub."

London continues to boast an exemplary position in green finance markets with nearly 80 green bonds worth over $24 billion across seven currencies. The Global Commission on the Economy and Climate Change estimates around US$93 trillion of global infrastructure investment between 2015 and 2030 will need to be Green in order to fulfil climate change commitments.

Beyond Bank Adelaide Australia

Beyond Bank is Australia's largest Customer Owned financial institutions offering a range of personal and business banking solutions. Awarded B-Corp status for its support of fundraising, charity and volunteering programmes. Bank profits are reinvested bank into local communities and strives to deliver positive social and environmental outcomes for staff, customers, their communities and the environment.

Voted ‘Best bank in corporate social responsibility; at the Australian retail banking awards (2018), the bank recently contributed to the social impact festival, held at the University of Western Australia Business School (CSI UWA). The event brings together various initiative aimed at bringing about positive social change.

Beyond bank prioritises the contribution of its financial resources to sustainable projects, with a primary focus in developing communities to become better places for people to live and work. This includes the reduction of the company’s environmental footprint and to redistribute resource more efficiently through reducing consumption which in turn influences their customers to do the same.

 

 

Bank of America Merrill Lynch

One may assume that sustainable, green businesses tend to be the prey of financial management firms that specialise in those markets. Merrill Lynch, Bank of America (BofA) is a contradiction of this assumption. Many know that BofA is world’s largest wealth-management corporation and a leader in banking technology but who would have known that Green Bonds are in fact a product of BofA monetary innovation. In the US, G was established through the formation of a consortium of investment banks supporting Green Bond principles. Created to fund projects that have environmental and/or climate benefits, green bonds have seen the progression of socially responsible business and technologies since their introduction in 2007.

"The development of a robust and liquid market for green bonds is an important progression for debt markets," said Suzanne Buchta, Global Co-head of Green Debt Capital Markets at BofA Merrill. "In co-authoring these principles, we attempt to help standardize the product and we hope to catalyse investment into environmentally sustainable projects, something to which our firm is very committed."

As of May 2018, the bank introduced a green bond of $2.25 billion invested in boosting renewable energy generation. This is the largest single green bond issued to date. Part of a total $4.35 billion investment in renewable energy projects since 2013, the bond has provided electricity for over 42,000 homes in Grady county, Oklahoma. As part of Pioneer Plains wind-power project, the money is invested in a bid to scale-up renewable power in the U.S. as a cost-effective replacement for fuels blamed for climate change.

Since 2007 the bank has provided more than $87 billion in finances towards low-carbon, sustainable business activities and continues to support its Environmental business initiative into which a total of $125 billion has been invested.

"We are engaging every part of our company to address today's biggest global challenges — including solutions to help transition to lower-carbon energy sources and address unsustainable demands on our natural resources," said BofA vice chair Anne Finucane. "Green bonds are an important tool for the private sector to finance clean and alternative energy sources, as well as other environmentally minded activities, at competitive market rates.”

It was agreed under the Green Bond Principles in 2013 that a bond could only be considered ‘Green’ if proceeds paid for projects that had a positive environmental impact. Since 2007, BofA has invested $96 billion of its assets into low-carbon and green business showing its commitment to a more sustainable future.


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Read: New EIB funding aims to unlock nearly €1bn in private investment for the bio-economy and agriculture. 

Read: A new kind of business? Investors offer renewed focus on ethical investments. 

Read: Bipartisan senate bill aims to promote innovation in American sustainable chemistry.

Download: Bio-Based World Quarterly issue #10. 

Visit: World Bio Markets, 1st-3rd April 2019, Amsterdam


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Luke Upton
Luke Upton
Luke is the editor and co-founder of Bio-Based World has edited this site since its launch and previously worked for b2b media companies across industries including energy, advertising and sport. His ...read more