Truist Financial Corp. issued more than $4 billion in bonds aimed at environmentally and socially focused investments in 2021, and also financed more than $856 million in renewable energy projects, according to a report released Thursday.
The Charlotte-based company also notes that its most significant climate-related risks are related to the energy, utility and automobile sectors, which combined account for about 15% of Truist’s $120 billion loan portfolio.
The updates are part of the company’s newest report on its strategies and progress related to climate change and community investment.
“Our latest ESG (environment, social and governance) and CSR (corporate social responsibility) Report reflects Truist’s purpose to inspire and build better lives and communities and our commitment to caring for our stakeholders and our planet at a time when purpose and care are needed more than ever,” Chairman and CEO Bill Rogers said in a statement. “We welcome the high expectations for Truist and the financial services industry to lead in ESG matters.”
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The 132-page document follows the December 2021 release of Truist’s first report detailing the potential impact of climate change on the company, and the announcement this year of its goal to reach “net-zero” greenhouse gas emissions by 2050.
According to Thursday’s report, the vulnerability of the energy, utility and auto sectors is tied both to environmental impacts of climate change and uncertainty over the nation’s shift to clean energy and zero-emission transportation, company spokeswoman Suzanne Vincent explained in an email response to questions from the Journal.
“Extreme weather events can damage assets and disrupt operations and supply chains, posing significant physical risks to Truist and our clients,” she said. “Simultaneously, new policies, technologies and consumer demand shifts related to climate change represent transition risks that can potentially alter the size and nature of global, regional and local economies and the financial markets that support them.”
The report also notes that as the company continued to update investors about progress in the 2019 merger of BB&T and SunTrust into what is now Truist, climate change emerged as one of the biggest concerns, along with cybersecurity and diversity.
”Investors have a keen interest in understanding how Truist is evaluating both the risks and opportunities that climate change presents,” Vincent explained. “Investors are also interested in understanding how Truist will make progress in advancing its net-zero goal.”
The report mentions multiple times that Truist already is working closely with companies that are at different stages in the shift to a “low-carbon” economy.
“For clients who have established transition plans, we want to finance the investments necessary to achieve their goals,” Vincent explained. “For clients who do not have an established transition plan, we want to work with them to develop one.”
Truist, one of the 10 largest commercial banks in the U.S., reported $544 billion in assets as of March 31. While the company is based in Charlotte, it still has a significant employee presence in Winston-Salem, which was home to BB&T before the merger.
In its report, Truist notes that it isn’t following the lead of some financial firms in refusing to deal with organizations that haven’t made significant progress toward environmental sustainability, a stance that is increasingly leading to political backlash.
“We embrace the philosophy of inclusion as we work with diverse clients to yield greater net benefit to the environment and our communities, rather than excluding companies and industries that may be in a different place on their own sustainability journey,” the company explains.
However, projects involving fossil fuels and nuclear energy are among those prohibited from funding through a $1.25 billion bond fund created by the bank in 2021 and aimed at environmental and social investment. It was the first bond of its kind issued by a regional U.S. bank.
More than 120 investors participated.
The company also issued $2.5 billion in loans for sustainability-related projects in 2021 including:
- Heating and air conditioning: $975 million
- Window/door improvements: $412 million
- Roofing: $330 million
- Remodeling: $289 million
- Solar: $113 million
John Deem covers climate change and the environment in the Triad and Northwest North Carolina. His work is funded by a grant from the 1Earth Fund and the Z. Smith Reynolds Foundation.
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