Bank of America Environmental Footprint: Strategies for energy reduction in a major U.S. business

Principal Investigator: Al Segars
Kenan-Flagler Business School

The University of North Carolina at Chapel Hill's Center for Sustainable Enterprise (CSE) and Institute for the Environment worked together to develop a case study with Bank of America (BAC) analyzing the environmental footprint of this financial services firm resulting from their use of material and energy, and providing a business analysis to explore a group of potential initiatives to facilitate reduction of its footprint. The purpose of this project was to provide a meaningful case study that will be made available to the entire financial services industry in order to help BAC and its corporate peers integrate environmental stewardship into their business operations. The goal is to promote sustainable, environmentally-sound economic growth in all our communities.

This environmental footprint project provided the BAC Environmental Team with a rigorous framework for tracking consumption and waste of material and energy, and assessing the costs, cost-effectiveness, and benefits of alternatives. Considering the reality that today's corporations have limited internal resources, this study prioritizes those areas where the most significant impact may be achieved within a business, realizing that some identified opportunities may be more advantageous to adopt than others. In this model, the study codifies existing practices and identifies new areas which may yield significant results with minimal additional allocation of internal resources. This analysis considers the internal operating and business model specific to BAC. Yet it provides valuable information that can benefit the entire financial services industry.

The assessment and decision-making model used for locating areas of material and energy use in a corporation, and proposing innovations in practice that will reduce the environmental footprint.

Throughout this project, a team of MBA students collaborated with the CEP researchers, giving each a chance to put classroom theory into practice, and push beyond broad recommendations into operational solutions capable of implementation. The UNC team executed this project using a combination of two approaches: 1) based in the Environmental Sciences and Engineering realm (a bottom up granular approach), and 2) based on standard full cost accounting practice (a top-down identification and analysis of the highest impacts on business operations approach).

The scope was BAC's domestic internal operations, including all commodities, products and services consumed or used by the bank's internal business processes, its associates (employees) within the U.S., produced and managed in-house by the bank and sourced from third party suppliers. The team researched the life cycle of materials that flow through BAC's operations: inflow, outflow (disposal, recycling), and current materials (including calculation of embodied carbon). Quantitative and qualitative inputs feed into the environmental footprint assessment model developed by the team (and available for use in assessing the performance of other corporations). The results of this assessment will help the financial services industry and BAC better share best practices across the global business community to promote environmentally preferable business practices, particularly within service industries.