Bank of America CEO Proclaims ‘We Are Capitalists’ After Critics Blast ESG Stance

Brian Moynihan, CEO of Bank of America, told shareholders this week “we are capitalists,” After a huge backlash by critics about his bank’s position on the environment, governance, and governance agenda (ESG), he was finally allowed to resign.

Wall Street bosses are facing increasing criticism for their progressive ESG goals.

“I’ve sometimes been surprised to be asked, including at congressional hearings, ‘Are you a capitalist?'” Moynihan spoke in the bank’s annual report Published on March. 7.

“You might also find the question unusual. Of course I answered, ‘Yes,'” He declared.

The word “capitalism” BofA’s most recent annual report contains 22 mentions of the company, which spans 222 page, an increase from 16 in the first quarter 2022., reported Reuters.

Reuters reported that ESG was less frequently mentioned in 2023 than it was last year (59 vs 36).

“Capitalism provides the money, the creativity, and the expertise to solve the needs of society,” wrote Moynihan, adding, “we enable our customers to drive capitalism.”

The Financial Sector is Under Threat to Promote ESG Agenda

BofA rose as the US’s industry leader for ESG bonds last year, after it created a new ESG advisory/financial solutions board in late 2020.

The bank is also North America’s top player in green and sustainability-linked loans and in U.S. municipal “green” bonds.

BofA is expanding its participation in ESG capital markets. However, dozens of countries are opposing this equity goal.

In the interim,everal financial giants, including BlackRock, KKR, Carlyle Group, and Blackstone Group have reportedly noted in their annual reports that the backlash against ESG investing could present a “material risk” Their businesses, particularly when it comes to fundraising reported the Financial Times.

Several Republican lawmakers and state governors have warned the CEOs of banks and asset managers to avoid imposing what they call “woke capitalism” Their American clients.

Senator Joe Manchin (D-W.Va.), in a bipartisan move, voted this week to block a Department of Labor rule allowing retirement fund managers to use ESG standards in their investment decisions, but the resolution is likely to be vetoed by President Joe Biden, and there are not enough votes to overturn it.

For the 2024 Presidential Election Season, it is likely that anti-ESG sentiments will be a key political issue.

‘Woke Capitalist’ Agenda Accused of Endangering Investment Earnings

Many of the top investment and financial firms and institutions have been accused in defunding organizations and cancelling certain people and organisations who don’t agree with ESG talk points such as abortion, climate change, worker diversity quotas, gun controls, and guns.

Political activists as well as Conservative politicians accuse executives and financiers of pushing this agenda and putting ESG considerations before shareholders and company earnings.

However, many investors have already started to pull back from ESG funds, after recently defunding U.S. energy companies, as skyrocketing oil prices hurt returns.

Still, some of the largest asset managers like Blackrock, which lost $4 billion in a state-led backlash, have largely stood by their social justice and environmental goals, despite mounting pressure from conservatives.

Legislators in Republican-controlled states have considered or have passed laws requiring state pension funds to divest from money managers who use climate or racial equity goals as a litmus test in their investments.

Texas, Florida and Louisiana have all pledged to withdraw investments from their state pension funds. They cited concerns about Blackrock’s pro-ESG activities impacting investor returns.

State officials across the country have launched an investigation into BlackRock, State Street and their voting on shareholder proposals.

BofA may be the largest ESG-themed bond issuer in America but it maintained $36 Billion in loans to companies in the energy sector at the end last year.

BofA CEO Still Supports ESG Agenda Despite Claims

Moynihan said to Reuters that he had told Reuters earlier in January “capitalism is the system that will drive the best outcome, and so we believe in profits and purpose,” He pointed out the bank’s record earnings for 2021, rising wages, and an array of benefits that include childcare, education, and health.

However, BofA’s CEO is still a strong proponent of stakeholder capitalism. This ideology was promoted by World Economic Forum Davos. It states that the socially acceptable opinions of private companies overrides those of investors and shareholders.

Moynihan’s concern over whether profits should be shared or paid fairly to employees was reflected in his writing.

Further details were provided in the report by BofA, which included an ESG pledge to zero greenhouse gas emissions by 2050 as well as a commitment to issue sustainable finance of $1.5 trillion by 2030.

The personal interests of employees, shareholders and communities in stakeholder capitalism are not taken into consideration. They are instead guided by a business elite that is both socially aware and environmentally conscious.

ESG is a concept that advocates of in investment companies and business believe should be considered. ESG advocates believe that failure to tackle rising sea levels and market effectively to the marginalized would lead to a decline in future profits.

This report was compiled by Reuters