We invited Catalyst member and partner Bank of America to share reflections on our four-part impact investing series and the need and opportunity they are seeing to deepen impact investing in our region and beyond. The following reflections are written by Rick Bregman, Bank of America Market President for San Diego
Bank of America sponsored and participated in Catalyst of San Diego & Imperial Counties’ recent four-part Impact Investing webinar series. At these events, we explored the importance of impact investing amid the COVID-19 pandemic, California’s housing crisis and racial equality and economic opportunity. Alongside local Community Development Financial Institutions (CDFIs), nonprofits and San Diego business leaders, the dialogue raised awareness of key issues we face across the globe and in our communities. Our commitment to advancing equitable communities and economies has only deepened as we reflect on and address current events and inequalities.
As one of the world’s largest financial institutions, we play a key role in building a more resilient future. As part of our responsible growth strategy, we deploy capital towards a more sustainable economy — helping to support jobs, develop communities, foster economic opportunity, and address society’s biggest challenges around the world.
In 2013, Bank of America officially launched an impact investing program to meet rapidly growing client demand for investments that have a positive impact on society or the environment without sacrificing performance. Since that time, client balances with a clearly defined ESG approach have continued to grow, reaching $26 billion as of June 2020.
Clients are increasingly articulating impact-oriented goals alongside their overall financial priorities. Today, 33 percent of Merrill Lynch advisors use five or more sustainable and impact investing solutions to help meet their clients’ needs – 40 percent more advisors as compared to just three years ago. In response to these trends and growing client demand, we are enhancing process, platform, investment guidance and resources dedicated to impact investing.
On the community investment side, Bank of America is also the nation’s largest investor of capital into CDFIs, with more than $1.6 billion to CDFIs in all 50 U.S. states and the District of Columbia. CDFIs provide microloans, technical support and guidance to small businesses and new start-ups, as well as to affordable housing nonprofits operating in lower income communities. Through these partnerships, we’re making capital and resources accessible to more entrepreneurs and communities.
Most recently, to help address the underlying issues facing people and communities of color who have been disproportionately impacted by the current health crisis, Bank of America made a $1 billion, four-year commitment to advance racial equality and economic opportunity. An early component of this is $50 million is dedicated to support minority depository institutions (MDIs) and CDFI Banks. We recently completed 10 equity investments in these institutions, acquiring approximately 4.9% of common equity in each organization. By providing equity capital to minority depository institutions, local housing, neighborhood revitalization, and other banking services and critical projects can be scaled. These equity investments are in addition to approximately $100 million in deposits from Bank of America in MDIs.
The current environment is, now more than ever, reflected in the financial trends and topics that our clients and community partners discuss with us, from ESG to racial equality. They’re more conscious about social impact investing and making sure that each investment they make stands up to the company’s social responsibility initiatives. This increased focus on social and community impact can bring a sea change to where capital and wealth gets distributed and invested. Bank of America is proud to be a contributor towards this end.