February 15, 2008
By: by The Business Review
Bank of America Corp. Chief Executive Kenneth Lewis says BofA will establish a team to identify and finance "the best new ideas in the green economy."
Richard Cohen of the bank's strategic interests group will lead the team.
Lewis announced the initiative Tuesday at an energy forum in Raleigh, N.C.
"This team will apply the broad capabilities of our company to the biggest environmental challenges," he told the 2008 Emerging Issues Forum at North Carolina State University's McKimmon Center. "We expect the group to be up and running within the coming months."
Lewis cited a recent study by the environmental investor group Ceres ranking the green projects at the world's 40 largest financial institutions. Two dozen of those companies have targets for reducing their own greenhouse emissions. Nearly as many offer climate-related products to consumers, investors or businesses, the report says.
Lewis said about $100 billion was invested worldwide in renewable-energy sources last year. That is out of a $600 billion invested worldwide in energy.
Pradeep Haldar, director of the Energy and Environmental Technology Applications Center (E2TAC) at the University at Albany, said Lewis' comments could be good news for New York. BofA, based in Charlotte, N.C.-based BofA (NYSE: BAC), is one of the largest banks in the Albany, N.Y., area.
"There's a lot of interest in clean energy," Haldar said. "Everyone is getting into it. Even folks like Google. And the banks are getting into it too."
He said as venture capitalists and banks increase their investments in clean energy, the companies that stand to gain the most are those located in states that have clean energy policies.
"The people who are getting the money are in places where the government, from a policy standpoint, are embracing the technology," Haldar said. "There's a huge opportunity for New York state and the local economy to play in this because of the companies and partnerships that exist here related to what the state government is starting to do."
Gov. Eliot Spitzer has announced a goal of reducing the demand for electricity by 15 percent by 2015.
"New York is a huge market opportunity, too," Haldar said. "The money could come to projects in the state if we position ourselves correctly."
Lewis said Bank of America has not yet found the right path into the market. But he says it would be an important step for the financial industry.
The bank has financed "everything from solar to wind to the expansion of hydro power ... and even experimental technologies, such as giant buoys that capture energy generated by ocean waves," for commercial customers.
Lewis cited efforts on several fronts. For instance, the bank is working with the Chicago Board of Trade to develop carbon-trading markets in the United States. The bank has a pilot to install green technology in 3,200 banking centers.
But gaps remain, he said. Commercial customers need more help to see the benefits of sustainable technologies that carry high upfront costs. Lewis also said standards are needed for green mortgages for homes.