Response to Growing Client Demand for Social
Impact Investments
Bank of America’s Global Wealth and Investment Management (GWIM)
division today announced that it has signed the United
Nations-supported Principles for Responsible Investment (PRI) on
behalf of its discretionary asset management businesses. The unit
(GWIM) is comprised primarily of Merrill Lynch Wealth Management
and U.S. Trust.
The PRI initiative is recognized as the leading global network
for investors and financial industry participants who are committed
to integrating environmental, social and governance (ESG)
considerations into their investment practices and ownership
policies.
"We are seeing increasing demand from our clients to ensure that
their investments express their personal values and have a positive
impact on society,” said Andy Sieg, head of Global Wealth and
Retirement Solutions for Bank of America Merrill Lynch. “To meet
that demand, we are committed to offering broad access to
innovative financial solutions related to responsible investment.
The PRI initiative represents another important step in this
direction and in the evolution of our ESG and impact investment
platform.”
The PRI’s network of international signatories work together to
implement a set of voluntary and aspirational principles that
provide a framework for integrating ESG factors into investment
analysis and ownership practices. These factors are aligned with
investors’ goals and values and tailored to each organization’s
investment strategy, approach and resources.
“We are delighted to welcome Bank of America’s Global Wealth and
Investment Management division to the PRI,” said Fiona Reynolds,
managing director of the PRI. “Their commitment to using the PRI’s
framework is welcome news and clearly demonstrates how ESG has
moved into the minds of mainstream investors. More investors are
seeing the benefits of embracing responsible investment strategies,
and we believe that acceptance of the PRI is helping to underpin
this trend.”
Recent research by U.S. Trust found that one-half of high net
worth investors consider social and environmental impact an
important part of investment decision-making (up from 45 percent in
2013).1 Six in 10 of these investors feel that the way they invest
can have a strong influence on society.2 Two-thirds believe that
private capital from socially motivated investors is a way to help
hold public companies and governments accountable for their actions
and results.3
A component of the growing demand for social impact
investing is being driven by the interests of women and
millennials, or Generation Y. Specifically:
- Seventy-five percent of millennials and
63 percent of women surveyed feel that their investment decisions
are a way to express their social, political and/or environmental
values.4
- Values-based investing was one of the
top three criteria wealthy 20- and 30-year-olds use when selecting
an advisor.5
- Twenty-nine percent of millennials
surveyed say they feel that changing the world by finding solutions
to major problems is the most important use of their wealth.6
GWIM’s ESG program includes a broad array of investment
opportunities, including innovative social impact partnerships
designed to help drive social change, as well as substantial
thought leadership. As of September 2014, Bank of America
Corporation’s investment businesses had more than $8.6 billion in
assets with a clearly defined ESG approach. The GWIM platform
is part of a broader commitment from Bank of America totaling $70
billion in environmental lending, financing and other business, as
well as $100 million in grants over the next 10 years.
GWIM formed an ESG Council in 2012. Today, the council acts as a
collaborative team to bring the best of Bank of America’s ESG
capabilities to clients at all asset levels. The council reports
into the bank’s Global Corporate Social Responsibility Committee,
which, in turn, reports to the company’s chief executive officer
and makes recommendations regarding corporate social responsibility
and ESG issues.
Bank of America Merrill Lynch has been extremely active in both
developing and offering investment opportunities with social
purpose. In late October 2014, BofA Merrill Lynch Global Research
launched the BofAML Green Bond Index to track the performance of
debt issued by quasi-governments and corporations where the
proceeds of the issue are to be used solely for projects and
activities that promote climate or other environmental
sustainability purposes. The index was created because of the
growing interest in this market segment.
In August 2014, Merrill Lynch clients were offered fixed rate
bonds issued by the World Bank, an offering spurred by interest in
social purpose investments. Additionally, Bank of America Merrill
Lynch completed the offering of interests in an innovative social
impact partnership with New York State and Social Finance Inc. in
December 2013. The proceeds are being used to fund a 5½-year
program focused on comprehensive reentry employment services to
2,000 formerly incarcerated individuals in New York City and
Rochester, N.Y.
1 U.S. Trust 2014 Insights on Wealth & Worth, June 2014
2 U.S. Trust 2013 Insights on Wealth & Worth, May 2013
3 U.S. Trust 2014 Insights on Wealth & Worth, June 2014
4 U.S. Trust 2014 Insights on Wealth & Worth, June 2014
5 Young High Net Worth Survey, Merrill Lynch Private Banking and
Investment Group, April 2013
6 U.S. Trust 2014 Insights on Wealth & Worth, June 2014
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About the Principles for Responsible Investment (PRI)The United
Nations-supported Principles for Responsible Investment (PRI)
Initiative is an international network of investors working
together to put the six principles for responsible investment into
practice. Its goal is to understand the implications of
Environmental, Social and Governance issues (ESG) for investors and
support signatories to incorporate these issues into their
investment decision making and ownership practices. In implementing
the principles, signatories contribute to the development of a more
sustainable global financial system. Visit www.unpri.org.
Merrill Lynch is the marketing name for Merrill Lynch Wealth
Management, and Merrill Edge™, both of which are made available
through Merrill Lynch, Pierce, Fenner & Smith Incorporated
(“MLPF&S”). Merrill Lynch makes available products and services
offered by MLPF&S and other subsidiaries of Bank of America
Corporation (“BofA Corp.”). Banking products are provided by Bank
of America, N.A., and affiliated banks, members FDIC and wholly
owned subsidiaries of BofA Corp.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed
May Lose Value
U.S. Trust operates through Bank of America, N.A., member FDIC,
and other subsidiaries of BofA Corp.
Visit the Bank of America newsroom for more Bank of America
news.
www.bankofamerica.com
Reporters May Contact:Susan Atran, Bank of America,
1.646.743.0791susan.atran@bankofamerica.comJoy Frascinella, PRI, 44
(0) 203.714.3143joy.frascinella@unpri.org
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