In a keynote at the Mackinac Policy Conference, Bank of America Corp.’s CEO defended capitalism supported with business-friendly policy as the “only hope” to accomplish the world’s sustainability and carbon-reduction goals.
The transition to a cleaner energy future is too expensive for charity, governments and individuals to foot the bill, Brian Moynihan said Wednesday during the event held on Mackinac Island in Michigan by the Detroit Regional Chamber. It’s incumbent on business and an economy that can quickly move money to bridge that gap to achieve carbon neutral and net-zero goals.
“If you take the talent innovation to the private sector can bring, you back in with a profit-making, sustainable business model that represents a lot of money, which eclipses $6 trillion a year easily,” Moynihan said, referring to a $6 trillion annual estimate needed for the world to invest to achieve sustainable development goals. “But capitalism isn’t the only system that can do this; it’s really the only hope to accomplish these things.”
Although Moynihan did in his speech celebrate the incentives presented by the Inflation Reduction Act, he said he’s told heads of governments: “We do not need your money. We have enough money.”
Instead, Moynihan emphasized the transition presents opportunities for a state like Michigan so long as it can push “the basics of what good business climate are like.”
He discussed the need to speed up permitting processes to help construction projects finish faster and to use government purchasing power to buy hydrogen-powered trucks and electric school buses because one single decision on those has a greater impact on conversion than decisions from many small companies. He expressed the need to put a “reasonable” price on carbon to develop a market for the transition away from its creation and to create standard sustainability disclosures.
“Capitalism is enhanced by strong public sector health,” Moynihan said, later urging conference attendees to use their voices to support passage of a debt ceiling bill in Congress. “We need to, as a business community, say we need this deal, because the alternative is not very pretty, and so they’ve spent a lot of time to negotiate something. We need to help push that through.”
In the face of recession concerns for the latter half of the year and in early 2024, Moynihan expressed confidence in stable unemployment figures and called recent bank failures like of Silicon Valley Bank in March anomalies.
“You had some failures because of the very unusual circumstances of how those companies operated and how the economy affected them,” Moynihan said. “Overall, you should all feel very good about the rest of the industry and what my colleagues have done and what we’ve done in the company.”
He noted Bank of America’s $26 billion net income in 2022 makes it one of four companies in the United States to have made $15 billion or more in the last eight years. He emphasized that the bank based in Charlotte, North Carolina, delivered a record operating profit in the first quarter along with “record purpose.”
He illustrated the bank’s $360 million in charitable giving as well as $22 million in giving in Michigan in the past five years. The bank also has committed $1 trillion for the energy transition over 10 years, $2 billion of annual spending on women- and minority-owned vendors and $5 billion of annual investment in affordable housing. The company that employs around 215,000 people worldwide also doubled its 10,000-employee hiring goals in low- and moderate-income neighborhoods.
“People on one side or the other will say we’re only here to produce profits and nothing else,” Moynihan said. “People on the other side will say we’re only here for purpose, nothing else. But we don’t believe companies need to make that false choice. They have to produce for the shareholders and for society.”
Bank of America recognizes that energy, electricity, cars, cement and other contributors of greenhouse gases remain necessary for the functioning of society today.
“We need to help the transition take place for our clients or customers,” Moynihan said. “Can we improve how it’s done? One hundred percent, but right now, we need it to survive. So, the idea is how do you have that but make progress? And that comes down to having plans and having commitments, and so, the net-zero commitment by countries, by businesses, by sectors, by states, cities and towns covers a large portion the economy in the world, 95%.”
That means businesses increasingly will experience pressure to move toward sustainable goals, whether they fear climate change or not.
“It’s not going to be a big deal from some right-wrong basis,” he said. “It could be a big deal them from just a business system, because at some point, they’re going to get a knock on a door and say, ‘Are you net-zero or not? And if not, I may have to rebid your contract.'”