Banking gets greener: not that long ago, banks were minor actors on the climate-change stage. Now, they are stepping up with major commitments and far-reaching goals.

• Author: Marshall, Jeffrey
• Position: SOCIAL RESPONSIBILITY - Bank of America Corp.

Early in March, when there was merely a suggestion of spring greenery around its Charlotte, N.C., headquarters, Bank of America Corp. made a surprising announcement: it was making a $20 billion, 10-year commitment to "support the growth of environmentally sustainable business activity to address global climate change."

Even for the nation's biggest domestic bank, with well over $1 trillion in U.S. assets, $20 billion is hardly chump change. But as impressive as the dollar commitment was, the details of the bank's initiative were truly arresting. It addresses a huge sweep of environmental issues, from financing companies involved in energy-efficient technologies, to carbon emissions trading to a host of commitments to improving its own house through investments in promoting hybrid vehicles, environmentally progressive construction and reducing greenhouse gas emissions. And the list goes on.

"We see an opportunity for the growth of environmentally sustainable products and services, and we want to encourage those through financing and investment," says Bank of America spokesperson Eloise Hale. "We believe that healthy communities create good business opportunities."

Environmental advocates were understandably pleased. "Bank of America is getting out on the front end of this issue--developing innovative products and services that will flourish in a developing green economy while helping households, investors and businesses cut greenhouse gases," says Eileen Claussen, president of the Pew Center on Global Climate Change.

"I salute big and bold," says Eric Olson, vice president of client services at Business for Social Responsibility, a nonprofit that works with corporate interests to develop and promote socially responsible initiatives. While Bank of America has a substantial legacy in this area, he says, large organizations "have to have a material impact" when they commit to high-profile programs.

While its initiative is noteworthy in many ways, Bank of America's green program has been echoed widely in the financial services industry recently. That's striking, because it sends a loud signal to others in Corporate America that, even as an industry not directly linked to industrial pollution or raw material extraction, banks are choosing to take a progressive stand on climate change--and intend to lead through lending decisions and a form of moral suasion.

That's taking climate-change activism up a notch from that practiced by the major manufacturing and natural resources companies--General Electric Co., Ford Motor Co., Duke Energy Co., BP plc--that have been out front in recent years. For these companies, the fundamental message is about taking measures to do better. For banks, it's more about working to make better...