What’s the colour of money?

Bank of America’s Robert Kee explains that going green makes sense for the business as well as the environment.

“A couple of years ago we committed $20 billion to environmental pursuits”
-Robert Kee, Bank of America

Green IT has to be more than just green wash. Under our Electronification of Paper program, we look at paper in large concentrations along with other kinds of commodity spend as indicators of non-lean process. We then use that data to identify and prioritize processes that we want to digitize, and use best-in-class technologies and applications to try and replicate those and ultimately build a complete enterprise content management architecture.

Leaning process is enormously effective from a cost reduction standpoint but it also has all kinds of productivity gains that are really hard to predict in a business case prior to going in and actually doing it. The collapsing of cycle times, the efficiency and the effectiveness of the use of information, all those things are really hard to foresee in a model.  But pursuing this is very lucrative in the short run in terms of the elimination of commodity expends and it also has multipliers of productivity that are hard to visualize before you go into leaning the process.

Ever increasing volumes of data and stringent compliance rules all have big implications for my function. Having information indexed, classified and categorized for reasons of compliance retention, those are all things that help us build our cases to go in and digitize, making the information that much more agile. If you don't make the information accessible, then the abundance of it just makes it paralyzing. These are all opportunities for us, and we're actually excited about those environments.

These growing reserves of data also have an impact from an environmental perspective. When you take a look at being green, it always parallels just being economic in your consumption of any kind of commodity. The nice thing is that if you pursue a logical business path related to expense reduction and you understand all the externalities of that, it's going to be green. Also, if you properly classify and categorize data, then you're going to destroy it and eliminate it at the appropriate retention cycle, which is going to reduce your storage, your need for space, and consumption of energy and hardware.

There are literally hundreds of bottom-line benefits from more sustainable practices. Our online banking is a great example of this.  This is a scenario where you provide customers with very robust, agile information 24 hours a day, seven days a week, from any place in the world where they can get internet connectivity. Why is there a need to have a physical statement sent to those people? For some it might have value, but for a large population of online banking customers, it's almost an irritant. The elimination of all that paper has a huge environmental benefit. So that efficiency that we provided them also creates efficiency for us and an environmental benefit.

In any case, Bank of America's involvement in the environment goes way back. It’s one of the things that I've always admired about the corporation, that they've always really had an environmental principle that underlay all of their practices. A couple of years ago, our CEO Ken Lewis committed $20 billion to environmental pursuits. Monies were set aside so that over the next ten years, we would be sure that we made investments in green technologies, green industries, both from the small business standpoint and from a large business standpoint. We put caps on the amount of CO2 emissions that we would generate from our utilities portfolio. We’ve given ourselves percentages in terms of how we were going reduce our energy consumption across the whole portfolio. So those were all things that the bank had gone our and created well before kind of green became a popular sort of scenario. So the Carbon Principles we signed up to recently are just a rational way for us to continue that support of environmental sustainability.

To guarantee that the money we spend is used properly we have the Global Reporting Initiative, which we've been a member of for a number of years. We already have an ethic in our work to be able to assess the sustainability initiatives and roll them up into this one big picture. The criteria within our commitment on the $20 billion is tailored for each one of our business lines. So there is a methodology that's inherent in each one of those processes to be sure that we in fact do that.

We also created what we call our Environmental Council, which is made up of high-ranking executives within the bank and reports ultimately to Ken Lewis. It makes sure that our policy is consistent, that it's accurate across the whole global corporation. We've been involved in environmental initiatives for over two decades, so we make immense efforts to be absolutely sure that what we do is properly vetted. My particular group does a lot of reporting related to CO2 reduction and to the removal of paper from processes, so we use the EPA methodologies for calculating that. We have third-party entities that come in and vet our calculations and our statements so that we know that they're accurate and will be interpreted properly. and then ultimately we abide by all the rules and regulations and interpretations of the GRI report.

The other thing that is really fundamental here is that if a business goes in and makes their processes more sustainable, it's more efficient, which makes them a better risk to the bank. Quite frankly, we find businesses that are green generally tend to be more efficient and therefore less risky.

One of the he most important things to remember that there are so many opportunities to do things that are both green and rational from a business standpoint. It’s even true of our commitment to convert our builds to LEED certified buildings. It certainly creates a larger investment for us on the front end, but the payback on that in energy consumption, in the health of our employees, our associates and our customers pays that investment back with a healthy ROI in a very, very quick fashion. Green is just intelligent.

Another factor is to understand that through your lending portfolio, that there is some responsibility to direct that to investments that are more sustainable versus those that are not. Again, that's not just a green thing. That is an intelligent thing, because sustainable businesses will survive and thrive more than those that are not sustainable.

Robert Kee is SVP Process Change Executive within Global Operations at Bank of America.

A principled stand

BoA signed up to The Carbon Principles in April 2008. Providing a consistent approach to evaluate and address carbon risks in financing electric power projects, CEO Ken Lewis explained the principles are a new example of the organization’s continued investment in the environment.

Ken Lewis. The Carbon Principles are critical as we work to secure a more sustainable energy future. It is my hope that these principles, when combined with Bank of America's commitment to assess the cost of carbon in our risk and underwriting process, will enable us to better evaluate the business models of utility sector companies and, ultimately, help them move to cleaner technologies in the future. Helping our nation reduce greenhouse gas emissions, as well as encourage renewable energy and low carbon technologies, is not only the right thing for our planet, but it is also smart business. Bank of America is proud to be at the forefront.