In a strong week for the Financials sector, Bank of America tops our ESG Impact tracker as they work to promote racial equality and economic opportunity. Meawhile CitiGroup stands out with their recent headlines in Diversity and Inclusion.
Where we invest our money today will determine the future we inhabit tomorrow. In contrast to the AMP news from earlier this month, this week we highlight select positive developments in the financial industry.
At this time last year Bank of America’s ESG sentiment was negative as the firm weathered a slew of lawsuits and investigations over phony accounts. Since then, ESG sentiment at the company has become positive and they now rank in the upper echelon of banking peers for both sentiment and mentions. Positive events over the last year include the issuance of a $2 billion Green Bond in October 2019 and the achievement of carbon neutrality in the beginning of 2020. Bank of America recently added to their momentum, by pledging to allocate $300 million of their $1 billion fund towards dismantling racial inequality and promoting economic opportunity. The bulk of the initial allocation is $200 million in direct equity investments towards Black and Hispanic owned businesses as well as programs to increase the pipeline of entrepreneurs in these communities.
Notably, Bank of America’s plan directs $50 million towards Minority Depository Institutions, aimed to help level the playing field in financial lending and access for traditionally underserved communities. An additional $50 million will go to job training in partnership with historically black colleges and universities and towards revitalizing communities that have been hit hardest by the pandemic.
While Bank of America’s upward trend is particularly pronounced, this past week’s ESG headlines in the sector were dominated by CitiGroup. They announced that Jane Fraser will be heading the company following the upcoming retirement of Michael Corbat in February. This will make her the first female CEO of a major Wall Street bank. As of now only 37 Fortune 500 Companies are headed by women, but based on the recent increased focus on Diversity and Inclusion in the sector we hope that this is just the beginning of an industry trend.
As financial institutions become more reflective of the communities they serve at an employee and leadership level, the more they will understand the needs and challenges facing their communities. Financial institutions that better understand the obstacles facing their consumers will be better equipped to solve and meet those challenges head on.
Amenity’s Safeguard ESG product is designed to highlight both the positive and negative stories as well as pinpoint the companies, like Bank of America, that are trending up. If you’d like to conduct a similar analysis on your watchlist don’t hesitate to reach out and schedule a demo.
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This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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