Bank of America’s Investment Businesses Launch New Program to Help Clients Link Their Investments With Their Values

Tue Aug 20, 2013 8:00am EDT

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Bank of America’s Investment Businesses Launch New Program to Help Clients Link Their Investments With Their Values

More Americans are seeking to ensure that the companies they invest in match their values and beliefs, without having to forsake growth. Today, Bank of America’s investment businesses announced the launch of a new program that supports clients’ needs to align investments with the environmental, social and governance (ESG) issues they care about.

"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, managing director and 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."

New offerings for investors on a mission

Together, Merrill Lynch Wealth Management and U.S. Trust now offer more than 180 ESG-themed investments to individual and institutional investors, including mutual funds, exchange traded funds, separately managed accounts, and alternative investments. These offerings are organized around three key themes:

  • Environmental Stewardship – examining use of water, alternative energy, climate change and clean tech.
  • Human Capital Practices – including “gender lens” investing (investments focused on improving the lives of women and girls) and faith-based investing.
  • Corporate Governance – focusing on corporate transparency, disclosure, reporting and incentives.

Chris Wolfe, chief investment officer of Merrill Lynch Wealth Management’s Private Banking and Investment Group, notes that investors are rapidly adopting the values-based approach. He notes that values-based investing accounted for $3.74 trillion, or roughly one in every eight to nine dollars under professional management, citing a study from the Forum for Sustainable and Responsible Investment (US SIF) done in 2012. That is 22 percent higher than the $3.1 trillion noted in SIF’s 2010 report. Moreover, values and financial interests are no longer mutually exclusive, Wolfe says. “There is compelling evidence that investing according to one's principles can generate competitive returns,” he notes.

Proprietary strategies from U.S. Trust

In early 2013, U.S. Trust launched a new, proprietary strategy called Environmental Stewardship and Sustainability (E2S) with Jason Baron, portfolio manager. This strategy identifies thoughtful stewards of the environment by assessing energy practices, carbon footprint reduction, and process efficiency.

“In creating this strategy, we responded directly to client demand,” said Chris Hyzy, U.S. Trust’s chief investment officer. “We believe that corporations dealing effectively with environmental issues are poised to do well relative to their industry peers.”

That followed the launch of “Socially Innovative Investing” (S2I), also managed by Baron. S2I is a proprietary, customizable strategy that allows U.S. Trust and Merrill Lynch Wealth Management clients to deploy a proprietary set of positive investing screens. As of March 2013, the strategy had grown to approximately $600 million in assets.

A new focus at Merrill Edge

Investing according to your values is an approach that can work across a variety of asset levels. For Merrill Edge clients, a new landing page now houses all ESG-related products and services. For self-directed clients who like making their own investment decisions, Merrill Edge identifies socially responsible investing options in its mutual fund and ETF screens.

Proxy voting following Socially Responsible Investing (SRI) Guidelines

In addition to their growing interest in values-based investing, some investors are combining the power of their dollars with the power of their voices, using shareholder advocacy to express their views and vote their shares.

To make this process easier, Merrill Lynch Wealth Management now offers an SRI proxy voting service, at no additional charge, for clients with certain types of accounts. By completing a simple form, these clients can delegate proxy voting authority to a service provider who will vote proxies on their behalf, following SRI Guidelines1. SRI Guidelines reflect a broad consensus of the socially conscious investing community and help to assess environmental, social and governance risks.

Thought leadership from Bank of America

To build these and other ESG solutions, Bank of America taps into the extensive thought leadership of its ESG Council, created in 2012 and comprised of a broad range of experts and leaders throughout the organization, including Wolfe and Hyzy.

The council also includes Sarbjit Nahal, BofA Merrill Lynch Global Research’s director of Thematic Investing, who has led the industry’s No. 1 ESG team for the third year in a row, as ranked by Institutional Investor magazine. His team recently published papers on a wide range of related megatrends, including water, obesity, safety, extreme weather, and energy efficiency, and has also developed ESG screening tools on CO2, geographic risk and the ESG Consensus.

An environmental business commitment from Bank of America

In 2013, Bank of America Corporation launched a new $50 billion environmental business commitment to address climate change and demands on natural resources and to help advance lower-carbon economic solutions.

Over the next 10 years, the company will drive no less than $50 billion of business that consists primarily of lending, equipment finance, capital markets and advisory activity, carbon finance, and advice and investment solutions in areas including energy efficiency, renewable energy, transportation, water and waste, as well as $100 million in grants and program-related investments to nonprofit organizations, community development financial institutions and other NGOs promoting low-carbon and resource conservation solutions.

This follows the company’s original $20 billion commitment which was completed four years ahead of schedule at the end of 2012.

1 Service executed by Institutional Shareholder Services, a leading third-party service provider which votes proxies on behalf of investors

Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. We serve approximately 51 million consumer and small business relationships with approximately 5,300 retail banking offices and approximately 16,350 ATMs and award-winning online banking with 30 million active users and more than 13 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services.

The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

Global Wealth and Investment Management is a division of Bank of America Corporation (BAC). Merrill Lynch Wealth Management, Merrill Edge™, and U.S. Trust, are affiliated sub-divisions within Global Wealth and Investment Management.

Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of BAC. Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.

U.S. Trust, Bank of America Private Wealth Management operates through Bank of America, N.A., and other subsidiaries of BAC.

Investment products are not FDIC insured, are not bank guaranteed and may lose value.

MLPF&S is a registered broker-dealer, member SIPC and a wholly owned subsidiary of BAC.

This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation, offer or solicitation for the purchase or sale of any security, financial instrument, or strategy. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice.

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