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Bank of America CEO: We should lend to oil companies, not divest from them

Erin Fuchs
Deputy Managing Editor

At the World Economic Forum in Davos, Switzerland this week, climate change emerged as a major theme among speakers including business and world leaders, as well as the 17-year-old Swedish activist, Greta Thunberg.

The forum came the week after BlackRock CEO Larry Fink told investors it was focusing its investing strategies to address climate change and exiting certain investments like thermal coal producers that he said “present a high sustainability risk.”

In a new interview from Davos, Bank of America (BAC) CEO Brian Moynihan told Yahoo Finance’s editor-in-chief, Andy Serwer, that oil and gas companies need funding so they can be part of the solution to climate change.

“We should lend to those companies to help them make progress faster, rather than divest from them,” he said, “which won't help them at all.”

Bank of America CEO Brian Moynihan attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland, January 22, 2019. REUTERS/Arnd Wiegmann

Moynihan made the comments during a conversation that aired in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

In his interview, Moynihan contradicted Thunberg’s suggestion at Davos that zero progress has been made on reducing carbon emissions. He said progress has, in fact, been made, though he acknowledged that we could be progressing more quickly. For its part, Bank of America said this week that the bank had met its own carbon neutrality goal, a year ahead of schedule, pending verification from a third party.

“For us to say we're carbon neutral and for an oil and gas company to say it's carbon-neutral are two different questions, because that's their business, and we have other businesses,” he said. “But the bridge between it is, if we're going to provide funds to them, lending to them and stuff, we need them to be making progress.”

Moynihan noted that he was on a panel at the World Economic Forum with Lynn Good, CEO of Duke Energy (DUK), which has pledged to reduce its carbon emissions by at least 50% by 2030.

“Think about that. That's a power company. If they're moving with that kind of pace, and we are saying we need more alternative energy to meet our goals, that business system will get more progress,” Moynihan said. “And so yes, we've got to make more progress. We've got to make it faster. But we've got to do it in an aligned way.”

These comments mirrored those made by Zambian economist Dambisa Moyo in a separate interview, during which she told Yahoo Finance that energy companies play a key role in solving problems posed by climate change.

“I think it's very shortsighted and actually, dare I say it, naive for people to be campaigning for defunding these institutions that actually are really very knowledgeable around where we can potentially find solutions to the climate change crisis,” said Moyo, a board member of Chevron Corporation (CVX).

The search for a solution to that crisis is one commitment that Bank of America has made as part of its effort to improve society as a whole, according to Moynihan. “Because at the end of the day, we're only going to be as good as society,” he said. “You know, how does a bank make its money? When societies prosper and economies grow. And if we believe that the ... climate is going to be such that it's going to slow down growth, or hurt growth, or cause risk, you know, we need to help get through it.”

This CEO is not the only business leader concerned with climate change. The World Economic Forum’s latest Global Risks Report — which surveys more than 750 business leaders, academics, and politicians — listed climate change as the top risk of the 2020s.

Erin Fuchs is deputy managing editor at Yahoo Finance.

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