Bank of America – Mountain Top Removal Mining (2010)
Outcome: Omitted by SEC
Bank of America (BAC) recognizes that its ability to attract and retain customers and employees could be adversely affected “to the extent our reputation is damaged” and that “failure to address, or to appear to fail to address various issues” could damage the Corporation and its business prospects (2005 Annual Report).
BAC also recognizes that:
- The company’s health is dependent on the health of communities and our society;
- Climate change and atmospheric pollution represent a risk to the ultimate stability and sustainability of our way of life; and
- Every part of our business has a potential impact on our environment.
As a leading financial institution, BAC implemented a goal of reducing direct greenhouse gas (GHG) emissions from its facilities by 9% and indirect GHGs within its energy and utility portfolio by 7%. However, BAC’s greatest impact on climate change and the environment arises from its financing of businesses and activities such as coal mining that emit substantial greenhouse gases (e.g., carbon dioxide and methane) and other pollutants.
Mountain top removal (MTR) coal mining, in particular, has serious adverse impacts on communities, the environment, and public health. MTR causes massive environmental devastation. Forests are clear-cut, the tops of mountains blasted away to reveal coal seams and the rubble dumped in the valleys below, filling streams and destroying water resources.
The U.S. Environmental Protection agency (EPA) found that approximately 1,200 miles of headwater streams in the Appalachian coal region (or 2% of the streams in the study area) were directly impacted by MTR. (http://www.epa.gov/region3/mtntop/index.htm)
Recently, EPA placed 79 MTR projects on hold to review of the permits due to concerns about water quality and environmental health. (http://www.bloomberg.com/apps/news?pid=email_en&sid=aJjhGdHTDUH4)
Between 1992 and 2012, EPA estimates MTR will have destroyed approximately 7% of Appalachian forests in coal mining regions studied. (http://www.epa.gov/Region3/mtntop/pdf/mtm-vf_fpeis_full-document.pdf)
Deforestation is the second leading source of GHG emissions worldwide. (http://www.gsfc.nasa.gov/gsfc/service/gallery/fact_sheets/earthsci/green.htm)
Old growth forests, like those found in Appalachia, are important carbon sinks that store atmospheric carbon dioxide. The carbon in forests destroyed by MTR each year roughly equals the annual emissions from two 800-megawatt coal-fired power plants.
Shareholders request that BAC’s Board publish a report, at reasonable cost and omitting proprietary information, by October 2010, describing (i) the implementation of its policy barring funding of companies engaged predominantly in MTR and an assessment of the efficacy of the policy in reducing GHG emissions and in protecting BAC’s reputation; and (ii) assessing the probable impact on GHG emissions and environmental harm to Appalachia of expanding the policy to bar project financing for all MTR projects.
Recognizing the particularly damaging impacts of MTR, BAC adopted a policy that bars it from financing companies “whose predominant method of extracting coal is through mountaintop removal.” However, BAC hasn’t reported on how this policy has impacted its lending. Furthermore, unless the policy is broadened by barring all “project financing” for MTR projects, we doubt that it will significantly impact on the environmental concerns caused by MTR.