Julian Mylchreest tells Net Zero Finance Summit that fossil gas still has a role in supporting energy security in wake of Russia’s war in Ukraine, however
Recent geopolitical events and soaring energy and commodity prices should be a clarion call for all players in the financial sector to accelerate the pace of the net zero transition, according to leading Bank of America executive Julian Mylchreest.
Speaking during BusinessGreen’s Net Zero Finance summit this afternoon, Mylchreest – who is executive vice chairman of global corporate and investment banking at the US financial giant – said the firm aimed to unleash $1tr financing for clean energy and other sustainable activities by 2030 as it works to decarbonise its extensive financial portfolio to meet its climate targets.
The bank has pledged to achieve net zero across its financing activities, operations and supply chain before 2050, and surging energy prices exacerbated by the war in Ukraine should offer further incentive for the wider financial industry to do the same, he said.
“Unquestionably we shouldn’t be slowing down,” he told BusinessGreen editor James Murray in a fireside chat. “If anything, [recent events and high prices] should accelerate the push to net zero in terms of building more alternative sources of energy, renewable sources of energy and local sources of energy.”
As part of its plan to deliver net zero, Mylchreest said the bank would be “massively increasing its commitment of capital” to activities included in the EU’s Green Taxonomy. “We’re going to be all in,” he said.
The sustainable investment rulebook unveiled by the EU earlier this year has courted major controversy in recent months over proposals to include of fossil fuel gas investment, with many climate and energy experts arguing will hinder financiers’ ability to deliver net zero portfolios and will result in reduced climate ambition around the world.
However, while conceding gas presented a “conundrum”, Mylchreest nevertheless argued that investment in the fossil fuel would be necessary over the coming years in the wake of increased concerns around energy security prompted by Russia’s invasion of Ukraine.
Still, he said new gas projects should utilise “as much existing infrastructure as possible” and operators should set out plans to scale low carbon hydrogen fuel that can decarbonise industry in the future. Any gas input terminals and storage facilities built in the near-term could also be repurposed in the future store hydrogen, he added.
“Gas needs being part of the energy mix in Europe to ensure that there are alternative options to Russian gas supply,” he said.
Mylchreest was also quizzed about how Bank of America would translate its headline net zero targets into real-life emissions reduction across its portfolio over the coming year. In response, he stressed the bank would be stepping back from coal, ramping up investments in clean activities, while taking careful stock of progress other companies were making on decarbonisation.
“The most interesting piece for us is how do we deal with those companies in what I call the ‘big brown middle’,” he reflected, noting that progress on climate looked different in different sectors. “We want to provide support if they’re moving at the right pace. And that pace is not just about them becoming necessarily greener, because some will remain ‘brown’ companies, with fossil fuels being part of the mix in most scenarios in 2040, even 2050.”
Mylchreest’s comments came during an action-packed day of expert discussion at the Net Zero Finance Summit. Other highlights included a keynote speech from Minister for Business, Energy and Corporate Responsibility Lord Callahan, an animated discussion about the need to rethink mainstream economic assumptions between Resilience Capital Ventures CEO Gillian Marcelle, AgFunder Asia director John Friedman, and impact investing consultant at Fidelity International, Emilie Goodall, as well as a look into the Science-Based Targets initiative ongoing plans to publish a net zero framework for the finance sector.
All sessions of today’s Net Zero Finance Summit will be available on demand for delegates after the event. Sign up now.