Bank of America has announced a major push into environmental, social and governance (ESG) investment for its retail and wealthy clients – including an SRI proxy-voting arrangement with Institutional Shareholder Services (ISS).
Elements of the programme from investment subsidiaries Merrill Lynch Wealth Management and U.S. Trust, the private bank affiliate, include its ‘Environmental Stewardship and Sustainability’ and ‘Socially Innovative Investing’ strategies run by portfolio manager Jason Baron.
The former strategy, launched in response to client demand, identifies “thoughtful stewards” of the environment by assessing energy practices, carbon footprint reduction, and process efficiency. The latter, which lets clients deploy a proprietary set of positive screens, has already grown to $600m in assets.
A feature of the new push will be an SRI proxy voting service “at no additional charge” for clients with certain accounts. Users will be able to delegate proxy voting authority to service provider ISS who will vote proxies on their behalf.
“One of the most pronounced trends we’ve seen in recent years is the call for wealth to have a productive impact on our environment, our communities, and our society broadly, in addition to earning an investment return,” said Andrew Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “This program offers opportunities for a wide range of investors with diverse interests and beliefs to help meet this need.“Merrill Lynch Wealth Management and U.S. Trust now offer more than 180 ESG-themed investments to individual and institutional investors. They are organised around three key themes of environmental stewardship, human capital practices (including what’s termed “gender lens” investing) and corporate governance.
The firm cites figures from the Forum for Sustainable and Responsible Investment (US SIF) showing that values-based investing now accounts for $3.74trn, or roughly one in every eight to nine dollars under professional management – a 22% increase over the 2010 number.
The group’s Merrill Edge investment platform will now feature a new landing page for all ESG-related products and services. For those making their own investment decisions, it will identify socially responsible investing options in its mutual fund and exchange traded fund (ETF) screens.
The development follows the establishment of the bank’s ESG Council in 2012, whose members include Chris Wolfe, chief investment officer of Merrill Lynch Wealth Management’s Private Banking and Investment Group, Chris Hyzy, U.S. Trust’s chief investment officer, and Sarbjit Nahal, BofA Merrill Lynch Global Research’s director of Thematic Investing.
This year Bank of America launched a new 10-year $50bn environmental business commitment after its original $20bn commitment was completed four years ahead of schedule at the end of 2012. Link