Bank of America CEO says capitalism needs cleaning up with new global ESG rules

Bank of America Chief Executive Brian Moynihan said Wednesday that existent efforts to nutrient a acceptable of authoritative planetary standards connected ESG issues were captious to "align capitalism with what nine wants from it."

Asked by CNBC's Karen Tso astatine the World Economic Forum successful Davos whether stakeholder capitalism needed a reboot done the instauration of communal standards for firm disclosures, Moynihan said helium was converted to the thought aft seeing hundreds of companies motion up to the U.N.'s Sustainable Development Goals successful 2017, followed by ongoing statement implicit what concepts similar sustainability really mean, and accusations of greenwashing.

"Without that definition, without that convergence, what you had is everybody defined it their ain way. Somebody would deliberation this issue's important oregon this mode to speech astir it is important," helium said.

Environmental, social, and firm governance (ESG) initiatives are progressively discussed successful firm results and by elder concern figures, though they person besides proven controversial. Critics person included some those who assertion they are a PR workout and, recently, those who argue ESG concern funds volition supply weaker returns.

In 2020, Moynihan — who is besides seat of WEF's International Business Council — and WEF laminitis and seat Klaus Schwab worked with the large 4 accountants to make a acceptable of common stakeholder metrics for companies to follow.

He said it was present important to "go to the authoritative side" and was supporting the caller International Sustainability Standards Board acceptable up by non-profit the IFRS.

On Wednesday's panel, IFRS Chair Erkki Liikanen said that since mounting up the committee they had consolidated their enactment with that of different groups with niche expertise, and were moving connected a last standards work to beryllium released successful the mediate of 2023.

This is owed to comprise a acceptable of wide non-financial sustainability disclosure requirements for companies, and a acceptable specifically connected climate. Liikanen said it would past request adoption and endorsement astir the world.

Moynihan besides said it was important that sustainability and ethical standards became authoritative and global.

He said informal standards-setting meant companies could fell mediocre sustainability practices "further down the stream" of their proviso chains oregon divest definite assets, oregon other assertion they are excessively tiny to transportation retired checks.

But with standardized, cross-jurisdiction rules that are portion of companies' yearly reports and audited, helium continued, "then frankly, an concern manager, a consumer, society, others tin beryllium determination and say, here's a enactment that is acceptable and you're either supra it oregon beneath it."

"If you're beneath it we shouldn't bash concern with you, and if you're supra it, archer america however you're making advancement on these important things."

"Which, astatine the extremity of the day, volition align capitalism with what nine wants from it and get america going faster."