You probably don't often see Bank of America's (NYSE:BAC) name linked with the term "socially responsible," but the concept isn't as far out as you might think.
For the past few years, the bank has been involved in an initiative to make loans available to businesses that want to reduce their carbon footprint. The first multi-year program, to which B of A had committed $20 billion, completed its goal by the end of 2012. The current plan involves lending $50 billion over the next 10 years, and is also dedicating $100 million in grant money to further the green cause.
Investors want to invest more responsibly
Similarly, the trend toward socially responsible investing has not gone unnoticed at Bank of America. Between its Merrill Lynch Wealth Management and U.S. Trust units, B of A offers over 180 investment products with environmental, social, and governance themes. For some clients, Merrill Lynch Wealth Management also makes available, at no charge, a proxy voting service that assists shareholders in making their voices heard regarding socially responsible investing values.
Bank of America's Merrill Edge online brokerage now features these choices on a new Socially Responsible Investing page, allowing clients to filter and screen SRI funds according to their personal value system.
Not the first
Although Bank of America is now publicizing its SRI efforts, the concept is not new, and other banks have also been cultivating similar products. Wells Fargo (NYSE:WFC), for instance, launched its Wells Fargo Advantage Social Sustainability Fund in 2008 and, in its Environmental Finance Report, published in May, stated its own involvement in a green lending program similar to B of A's. Wells also noted that it had invested over $500 million in wind and solar ventures, in addition to other projects, during 2012.
JPMorgan Chase (NYSE:JPM) beefed up its SRI services in 2008 by incorporating screening capabilities into their investment platform, allowing clients to sort companies by various filters, based upon their personal investing code. Also, First Republic Bank's (NYSE:FRC) Private Wealth Management unit provides SRI services for its clients, noting individual preferences during the advisement process. Interestingly, First Republic was a former unit of Merrill Lynch, but it was sold to a group of investors by Bank of America in 2009.
Good public relations
Giving the investor what he wants is always a smart move, and SRI is a trend that is gaining momentum. Merrill Lynch Wealth Management's CIO notes that investing with an eye toward social responsibility is making up a larger part of the managed investment picture these days -- and that the returns are competitive, too.
Announcements like this one can't hurt the bank's standing with the general public, either. With big banks -- particularly Bank of America -- still suffering from reputational damage from the financial crisis, publicizing investment products that place them in a positive light is savvy advertising, as well.