Saturday, April 21, 2012

Santander Proves Greenest as No. 2 Bank of America Becomes Solar

A $1 billion plan to put solar panels on 160,000 U.S. military-base homes was collapsing in September after a $344 million U.S. Department of Energy loan guarantee fell through. Bank of America Corp. stepped up to finance the effort headed by SolarCity Corp. of San Mateo, California. Now, the SolarStrong project is en route to becoming the country's largest residential solar-energy installation.

SolarStrong was Bank of America's second big bet on sun power in 2011. The Charlotte, North Carolina-based lender in June provided a $1.4 billion loan to San Francisco's Prologis Inc. for solar systems on warehouse roofs. The Energy Department guaranteed 80 percent of the loan.

"We'd found that rooftop solar was an area that had difficulty attracting capital," says Jonathan Plowe, head of the bank's New Energy and Infrastructure Solutions group.

Support for solar propelled Bank of America to No. 2 behind repeat winner Banco Santander SA in Bloomberg Markets' second annual lineup of the world's greenest banks. The ranking, published in the May issue, tallies how much banks are investing and lending to support clean energy and how they're managing their own power consumption and carbon footprints. The results, which cover 48 banks with market values of $10 billion or more each, are based on data compiled by Bloomberg from public documents, company filings and websites.

Santander Repeats


Madrid-based Santander held its top spot thanks to its equity investment in the $1 billion Crescent Dunes Solar Energy Plant near Tonopah, Nevada. It also helped arrange $210 million in loans for First Wind Holdings Inc.'s Whitman County, Washington, wind farm.

No. 3, Italy's Intesa Sanpaolo SpA, funded a 33 million euro ($44 million) acquisition of two solar parks in Italy by investors headed by Foresight Group LLP. It also cut total energy use by more than 6 percent in 2010, climbing 17 places. No. 4 Citigroup Inc. inched from fifth after investing $157 million in California's Alta Wind Energy Center and cutting its own greenhouse gases 6.4 percent from 2009 levels. London's Lloyds Banking Group Plc provided 413 million pounds ($656 million) to 13 projects, among them Scotland's Millour Hill wind farm, to complete the Top 5.

Banks are reducing their own power consumption, saving on printing and stemming long-distance travel. Lloyds says it has trimmed energy use 7 percent in the past two years by adjusting its thermostats. Bank of America gives any employee who buys a hybrid vehicle $3,000.

Clean-Energy Investments

Globally, clean-energy investments climbed 5 percent in 2011 to $260 billion, Bloomberg New Energy Finance says. Solar headed the list, after panel prices tumbled 51 percent to 88 cents per watt.

Goldman Sachs Group Inc. learned the risks of solar investing. Hired as an adviser in 2008, the New York-based bank helped raise almost $1 billion for Solyndra LLC. The solar energy company declared bankruptcy last year after failing to compete with low-cost panel makers in China. Goldman, which was second in the ranking published last May, tumbled to No. 18.

Environmentalists see a flip side to banks' green investing. Lenders have provided the coal industry with more than 232 billion euros since 2005, according to Bankrolling Climate Change, a 2011 report from nonprofits, including Germany's Urgewald. Coal-fired plants spew 40 percent of man- made CO2 emissions, the Environmental Protection Agency says.

Subsidies Dropping

Green projects may slow as government subsidies decline, BNEF says. A U.S. Treasury program that offered cash grants for as much as 30 percent of renewable-energy projects' capital costs ended last year. Europe's debt crisis has taken a toll as governments cut energy incentives.

Plowe says Bank of America's experience backing projects without incentives shows it can be done.

"We created a blueprint to roll out financing with or without government guarantees," he says.

How We Crunched the Numbers


To rank banks' environmental records, Bloomberg Rankings looked at their efforts to reduce their own waste and carbon footprints and at their investments in clean energy.

Bloomberg New Energy Finance and Bloomberg's ESG Data group, which collects information on environmental, social and governance issues, gathered material from annual and corporate responsibility reports, websites and other public documents. The teams conducted independent research and used surveys and telephone interviews to secure additional data and verify the accuracy of their findings.

$10 Billion

We started with banks covered by the ESG team that are members of predominant national benchmark indexes, such as the Standard & Poor's 500, FTSE 350 and Nikkei 225 Stock Average. We narrowed the universe to 48 banks in 19 countries by eliminating those with market capitalizations of less than $10 billion and insufficient environmental activities.

In the opportunity category, which tallies clean-energy investments and accounts for 70 percent of the score, we assessed banks' support for clean-energy projects in 2011. We considered wind, solar, geothermal, hydro, biomass/biofuels and related technologies. We divided the efforts into public- and private-equity investments, debt issuance and advisory services. We ranked the projects from highest to lowest based on the total installed electricity-generating capacity of the investments in megawatt-hours, total dollars invested and total deal count.

Reducing Impact

The second part, reducing environmental impact, accounts for 30 percent of the score. We looked at reductions in air emissions and water use and at gains in energy efficiency. We used a three-year momentum approach with the most-recent data receiving the greatest weight. Banks with more-aggressive and mature programs and with measurable, multiyear declines in greenhouse gas emissions and water and energy consumption earned the most points. Banks that disclosed more data got more credit.

Each data point is peer ranked on a scale of 0 to 100. For example, in underwriting activities, the banks reporting the highest-dollar-value deals received the highest scores. Those scores were then multiplied by the weight factor assigned to that category to determine the overall value in the section. This was done for every category to determine a total score for the opportunity and environmental-impact categories.

SOURCE: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/03/30/bloomberg_articlesM1K3W00D9L3801-M1NH6.DTL

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