Bank of America signs up to Carbon Principles

US banking giant joins JP Morgan Chase, Citi and Morgan Stanley in support of guidelines requiring them to consider climate risks when taking investment decisions

Carbon intensive energy projects in the US could find it a degree harder to secure funding after Bank of America announced yesterday that it is to join JP Morgan Chase, Citigroup and Morgan Stanley in adopting strict environmental guidelines governing how investors assess the carbon risks associated with financing energy projects.

The so-called Carbon Principles were launched earlier this year by JP Morgan Chase, Citigroup and Morgan Stanley and require lenders to encourage power companies to invest in energy efficiency and demand reduction measures and promote renewable and low carbon energy generation.

They also require signatories to ensure that where they do invest in conventional fossil fuel and nuclear power plants the risks associated with changing climate policy are fully considered.

Bank of America chairman and chief executive Kenneth D. Lewis said the principles had a "critical" role to play in developing a more sustainable energy mix, adding that he hoped they would allow the bank "to better evaluate the business models of utility sector companies and, ultimately, help them move to cleaner technologies in the future".

The announcement came on the same day as Lewis achieved a bizarre double, securing two conflicting awards from environmental groups both praising and criticising his green policies.

The National Resources Defense Council honoured Lewis at its annual awards, praising Bank of America's environmental initiatives, including its commitment to invest $20bn in green technologies and business models over the next 10 years.

However, in a move highlighting the thin line business leaders are treading between praise and condemnation over their environmental efforts Lewis was also voted 2008's Fossil Fool of the year in an online contests organised by the Rainforest Action Network, Energy Action Coalition and Co-op America over bank of America's support for coal mining and power projects.

Green protestors also reportedly chained themselves to the doors of Bank of America's headquarters in Boston to further highlight the bank's financial support for fossil fuel industries.