As 2015 came to a close, a cohort of heads of state and the world’s leading scientists, environmentalists and economists gathered inside a remodelled airport hangar on the outskirts of Paris to adopt the final text of the 21st annual United Nations Climate Change Conference (COP21). The agreement was hailed for achieving unanimity around a substantive and comprehensive text and was celebrated as a game changer for how the world will address climate change.
Conference panelists spoke of climate finance, carbon asset risk and portfolio decarbonisation while heralding the growing strength of renewables. No matter the current stage of global energy consumption, the agreement could help transition the global economy to a low carbon economy.
Many companies are currently working to plan for a future that may not be too far off the horizon as the global economy begins a transition to meet the aspirations of COP21. At Bank of America Merrill Lynch, we recognise that we have an important role to play in financing that transition and have been busy making the investments necessary to see it through.
Earlier this year we increased our global environmental business initiative from US$50 billion to US$125 billion in low-carbon activity by 2025 through lending, investing, capital raising, advisory services and developing financing solutions for clients around the world. Furthermore, in addition to being the number one underwriter of green bonds, Bank of America Merrill Lynch issued the first benchmark-sized corporate green bond – US$500 million – in 2013, followed by a second green bond for US$600 million this past spring.
CFI wants to mobilise US$10 billion in capital into high-impact clean energy
We are also keenly aware there remain challenges to the kind of large-scale investments in clean energy that would enable the world to meet its carbon reduction commitments and keep below the internationally recognised threshold of a 2 degree Celsius rise in global temperatures. That is one of the reasons why we launched in 2014 the Catalytic Finance Initiative (CFI), with a goal to mobilise US$10 billion in capital into high-impact clean energy projects that reduce investment risk, thereby attracting a broader range of institutional investors. .
Financial institutions like Bank of America Merrill Lynch recognise the responsibility and opportunity in providing the necessary capital to support a low carbon economy and we will continue to deploy our resources so that today’s investments can pay dividends in a better tomorrow.
By John Lynch,
Managing Director, Head of Power, Utilities and Renewables for EMEA
Bank of America Merrill Lynch