Bank of America Stiffens Environmental Loan Rules
Date: 19-May-04
Country: USA
Author: Jonathan Stempel
The move by Bank of America, the No. 2 U.S. bank, was announced in a joint statement with the Rainforest Action Network, a San Francisco-based advocacy group that is pushing several big banks to stiffen lending standards. The group's demands may affect billions of dollars of loans a year.
Citigroup, the largest U.S. bank, in January agreed to tighten its own standards.
"The health of our environment has a very real effect on the health of our local and regional economies, and therefore on the health of our company," said Kenneth Lewis, Bank of America's 57-year-old chief executive, in a statement. "We have an opportunity and responsibility as leaders to promote sustainable, environmentally sound economic growth."
Bank of America agreed not to fund projects involving oil and gas exploration, mining or logging activity in old-growth tropical rainforests. It also agreed not to fund logging operations in "intact" forests - which support many species - as defined by the World Resource Institute.
The Charlotte, North Carolina-based company also pledged not to finance "companies or projects that collude with, or knowingly purchase timber from, illegal logging operations," or projects in "sensitive" forests where indigenous peoples have unresolved land claims.
The policies cover new business as of May 15, and old contracts as they come up for renewal.
"They went significantly further than Citigroup in that they set specific goals and a timetable to reduce (greenhouse) gas emissions resulting both indirectly and directly from their financing activities," said Ilyse Hogue, Rainforest's global finance campaign director, in an interview.
The other companies targeted in Rainforest's campaign are Bank One Corp., Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Manulife Financial Corp.'s John Hancock Financial Services; SunTrust Banks Inc., U.S. Bancorp, Wachovia Corp. and Wells Fargo & Co. . J.P. Morgan expects to buy Bank One by mid-year.
Rainforest wants banks to adopt standards tighter than the "Equator Principles" drafted by the World Bank's private sector arm. Hogue said the group is continuing or pursuing talks with the other companies.
