Bank of America made its first-ever disclosures about financed emissions in a report based on guidelines from the Task Force on Climate-related Financial Disclosures.
In the report, released last week, the nation's second-largest bank by assets estimated that its financing activities in the auto manufacturing, energy and power generation sectors generated 47.3 million metric tons of carbon-dioxide equivalents in 2020, a 4.3% decrease from the previous year.
Energy-sector emissions fell by 6% from 2019 but still accounted for two-thirds of BofA's total reported financed emissions, according to the report.
The report marked the first time that BofA has disclosed any portion of its financed emissions, a process that the report described as "combining carbon accounting with financial accounting." Many large and midsize banks have been coming to grips with the complicated task for calculating financed emissions.
"The complexity of this process only served to highlight the critical need for consistent, verified public reporting of emissions and other climate-related data," BofA wrote in the report.
The Charlotte, North Carolina, bank also stated that the financing it provides to clients is the largest portion of its greenhouse gas emissions and "requires the most effort to transform."
The Task Force on Climate-related Financial Disclosures launched in 2015 as a global framework that provides corporate guidelines on disclosing climate-related financial risks.
BofA based its disclosures on guidelines from the Partnership for Carbon Accounting Financials, a global initiative seeking to standardize financed emissions disclosures. BofA joined the group in 2020.
In April, BofA set targets for reducing its financed emissions by 2030. Those targets include reducing all categories of emissions in the auto manufacturing sector by 44%. The bank is also targeting a 42% reduction for so-called Scope 1 and Scope 2 energy-sector emissions, a 29% reduction for Scope 3 emissions, and a 70% reduction for Scope 1 power generation emissions.
Reducing financed emissions has emerged as
In June, a study by the consulting firm Bain estimated that financed emissions represent at least 95% of overall emissions at large banks around the globe, but are largely underreported. Bain said that the majority of 45 large banks it surveyed in May made no disclosures about their current financed emissions.
But some large and regional banks have started to move on the issue. In August, Huntington Bancshares in Columbus, Ohio,
Meanwhile, the Securities and Exchange Commission has unveiled a proposal that could require emissions disclosures by publicly listed corporations.
Democrats and clean-energy advocates are seeking more disclosures about banks' contribution to climate change, while Republicans and lobbyists from the fossil-fuel industry are
