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Green Technology Interview:
Janet W. Lamkin


by Racquel Palmese

In February 2007, Bank of America became a pillar of the new green economy in California when it announced a 10-year, $20 billion environmental initiative to help address climate change. Since then, it has funded a wide range of philanthropic, commercial and public sector green projects. From working in partnership with Chevron to installing solar panels on a school at no upfront charge to the school district, to providing grants to community groups for building green coalitions, to financing new technology companies, to greening its own buildings and practices, B of A has become a lynchpin in the greening of California.

At the helm is Janet W. Lamkin, president of Bank of America California. Named one of the 100 most influential businesswomen in the Bay Area two years in a row, she is responsible for the integration of the company’s entire operation through the state. Thirty-five thousand B of A associates call her boss. In this special interview with Green Technology Magazine, Ms. Lamkin explores the factors that impel the company to push ever further into financing the new green economy and her own personal motivations for making sure it has a solid foundation from which to grow.
 



What are some highlights of B of A's green initiatives?

The bank has quite a legacy in this state. For about two decades we've been a leader around environmental practices, first focusing on our own practices, like reducing the paper we use by associates. We've actually been able to do that by 40 percent. We've been able to set some very aggressive voluntary goals to reduce greenhouse gas emissions across the company by nine percent through the reduction of our energy consumption.

One of the more recent components of what we've done internally is we have created a program where we reimburse our associates $3,000 to buy a hybrid. Nearly 2,000 have taken us up on it so far.

We have a long legacy of managing our own environmental house and providing some incentives internally. But a year ago February we started to take a look at the world and felt that as a company, we needed to become a leader externally, to encourage our various lines of businesses to develop green strategies and green opportunities for their customer bases. As a result, such strategies are now in place in our credit card business, our mortgage business, our leasing business, etc.

We've had some really interesting results. In the leasing space, a variety of really exciting deals have come up. One of them is in Rialto, which is in the Inland Empire. We financed an energy project that is the largest use of fuel cell technology to convert waste water sludge into energy.

We did a project with the San Jose School District, taking them all solar—with no up-front cost to the district—in a deal with Chevron. We’ve done projects with wineries in Napa Valley, helping them turn solar. So we've had a lot of success, both in finding green technologies and financing those technologies and creating products that green companies can use.

We are making huge investments in California in our own banking centers. We are refurbishing them, and the green component has been a strong part of that. So in our banking center upgrades we're using new HVAC (heating and air conditioning) technologies in 3,200 banking centers and new lighting technology in 1,300 of our banking centers on the West Coast. The lighting project alone will produce the same GHG (greenhouse gas) reductions as 15 football fields of solar panels for 25 percent of the cost. It’s also expected to save $2.5 million in energy costs. These technologies include recently developed fluorescent lamps and ballasts and LED exit signs.

B of A’s $20 billion green initiative is a little over a year old now. How did it come about - an epiphany, or a gradual expansion?

This going to sound odd, but it was a little bit of both. We actually have had it in our culture and in our DNA that we are a company that cares about these issues. What's interesting is that most people don't think of a bank as needing to be green. I remember we actually got a great deal of attention when we announced the initiative. People said, “Why, what's in it for you?” It seemed to them like an odd priority for a financial institution. Not only was it in our DNA, in our approach to the way we conduct our own business, but the epiphany was that this is a great business move. With the economy changing and new green technologies emerging, this is where the future is for our customers, and therefore we need to be there for them.

When you say the economy's changing, what do you mean exactly?

I think there's a shift. Famed venture capitalist John Doerr puts the energy market at $6 trillion, calling it the “mother of all markets,” dwarfing the internet market. I think it's an evolution of technology that is creating real business opportunities.

Why do you think that clean or green tech companies need to know about your $20 billion initiative?

Mainly because we are very actively looking to invest in them and to finance them. A lot of the companies that are creating these new technologies think that banks are very traditional in their lending and risk profiling. In fact, they are, but what this initiative does is allows us to take a fresh look at what that risk profile might be and what the financing of something might need look like. What's interesting is that it's not unlike what happened when the ag (agricultural) industry first emerged at the turn of the century or the entertainment industry first emerged in the 1930s. They both required high capital initially with long term return. They required a different way to look at how the financing could be applied to be successful. We kind of started the first financing in both of those industries with that approach. It's ironic that in many ways green technology is analogous to that. In the ag industry you need capital to plant crops, and you don't harvest the crops for a certain amount of time. Their cash process is on a different timetable than banks were accustomed to at that time.

(Note: In 1904, A.P. Giannini founded Bank of America and made its first agricultural loan. Having been raised on a farm, he knew the needs of the industry and continued to maintain a close relationship with growers, input suppliers and processors.)

We had a very interesting conversation with the Environmental Defense Fund here in San Francisco. Right now one of the things we’re doing, in addition to looking for investment and finance opportunities, is talking with leaders in this field who can help us continuously improve this effort and this initiative. The EDF people were sharing with us that often existing industries are interested in doing their business in a green way, but are faced with a huge financial hurdle to get there initially. So there's a real opportunity for companies like ours to come in and figure out the financing to get through that initial hurdle. The San Jose school district deal is a good example of that. We lease solar panels to them. They were able to install those panels without a capital outlay. It will save the district $20 million in energy costs over the life of the solar power system. It also will give the district budget stability and predictability through known energy costs; a 25 percent reduction in the district’s demand for utility power, a reduction of 37,500 tons of carbon dioxide emissions, the equivalent of planting 400 acres of trees.

Is the public responding to offerings such as “green” credit cards, where the bank donates a percentage of credit card use to environmental causes?

Yes, we have found a level of interest. I would say, though, we have more to learn about how we can bring this to the consumer. We know that they're interested, and we do have a credit card affinity program. We offer a half dozen different credit cards highlighting leading conservation organizations, with reward points converting to money donated to those organizations, and our Brighter Planet Visa card with points going to investments into new renewable energy projects in the U.S.

Because our initiative also includes philanthropy, we have made a number of foundation grants around environmental efforts. On the foundation side there's a lot of opportunity for helping us to either fund various environmental organizations or to help a non-profit figure out an environmental strategy. We did a particularly interesting package in San Diego, where we made grants to several non-profits. These grants played a leadership role in bringing together the rest of the economic development community to work out how they could approach the issue of sustainability on a regional basis. We also provided support to a non-profit health center to help them build a new building to LEED standards.

The other piece that we're also exploring is the green workplace - workplace development is a very critical priority for our efforts to rebuild neighborhoods. This, again, is a smart thing to do. With all these green technologies coming online, marrying workforce development with the green economy through curriculum development is also a really wonderful opportunity.

The green economy is growing in the midst of dramatic shifts in the mortgage and banking industries. Worries about the economy have surpassed all other issues in recent polls. How does a company like Bank of America manage to stay focused on the future when there is so much pushback on all these different levels?

We do that across the line with business in general. That is the challenge of running a large company, setting your goals and keeping your eye on that long term goal while managing the short term challenges that you face. Whether it has to do with the green initiative or any other component of our business, that's our challenge. On the green piece, again, we think this is a strategic move. We are doing this to make money, and we think it's a smart business move to make. Notwithstanding all the benefits to the environment, we are doing this because it makes good business sense.

What do you expect to see ten years into the future as a result of your efforts, and how do you see B of A positioned in that future?

I think there will be a number of technologies that have emerged that will very much change the way buildings are built, the way people live their lives If you look back a few years to where the internet was to now, and all the numerous companies and products that have emerged from it and been leveraged by it, I think we're going to see something very similarly happen with the green economy in California.

I think that we will be seen as leaders, as having brought this to the forefront, not only our thought leadership around promoting the notion that this is an emerging part of the economy, but by virtue of our lending practices. The other wonderful component about implementing green initiatives, in economic sense, is that not only do they save on the emissions side, but there is also evidence and data that shows that costs are actually substantially reduced.

What would happen if everybody got so caught up in economic and other problems today that green efforts stalled?

I think that would be a real mistake. There's so much understanding now that we have to move quickly and that the very smart, creative people who are out there creating this technology are moving at light speed. So I think that if we don’t build up an infrastructure to sustain that and propel it, it would be, not a lost opportunity, but a real mistake.

Maybe it's our proximity here to Silicon Valley, but I don't see a slowing down. I think there are enough brilliant, committed, smart, creative people who are fast on this track, creating the technologies. And I think the technologies will be compelling in and of themselves, even the person who may not have this in their everyday frame of mind. As green technologies develop, and the benefits of them become clear, it will be transformational for that person.

One of the most interesting demonstrations of our commitment to green, and our belief in it, is the new Environmental Strategic Investment Group that we've established as part of our environmental initiative. For us to have set aside capital to invest in these companies, which is usually something that venture capitalists do, I think speaks of a very strong demonstration of the commitment on our part, and the fact that we think it's a smart business move.

What do you think is the role of government?

I think, first of all, leadership. I think that we have wonderful leadership in this state, and that's part of how and why green technology has had so much attention and why so many of the green industries in California have flourished. What we're finding when we talk to municipalities is that there are a lot of best practices that they can learn from each other. It's easier to scale a solution when governments work together. For example, the city of Berkeley working with Bay Area government to collectively assess their efforts so that what the private sector might bring to work with them can be scalable.

Leadership in developing coalitions to scale the solutions is one thing. The second is continuing to create and maintain financial incentives. The tax incentives that are so prevalent in this state strongly encourage green projects. This is true particularly now, when the industry is kind of at its cusp of liftoff. Incentives are incredibly important in making the decision to do something or not.

As a woman in leadership here in California, you have a lot of people watching you. You're a leader in business, and with this initiative, you're also an environmental leader. What are some qualities someone would need to fill your shoes?

I think a personal commitment to community is really critical, and in this case a personal commitment to community is expressing itself in understanding the value and the benefit of this green initiative. Community matters to me; quality of life for our communities matters to me. So whether it's our green initiatives, or some of our community development programs, the fact that this institution has a platform, and very deliberately directs a lot of our resources to improving the quality of life in our communities, matters to me. I think having it matter to me is important, because I spend a good portion of my day managing that process. My personal commitment makes the work more effective. If I didn't care about that, if our 35,000 California associates didn't care about that ultimately, I'm not sure how good the work would end up being.

What are some personal attributes that you feel serve you well?

One of my skill sets that I fall back on continuously is being able to assess people's strengths and playing to them in order to develop a good team environment. There's a book that I read early on in my career that is now very well-known called GOOD TO GREAT: WHY SOME COMPANIES MAKE THE LEAP... AND OTHERS DON'T by Jim Collins (HarperCollins 2001). It talks about leadership qualities, and it's all about choosing the right people. That is fundamentally the most important role, assessing skills and matching the right skills to the right role, and then building a team that functions well is.

What motivated you to become part of the Green California Summit?

What compelled us to be part of it was the fact that we are wanting to play a key role in driving this agenda. So that said, we felt we should support this and help bring this to fruition. Our experience was very positive. I thought it had a great, diverse set of perspectives and companies. We were there, Cisco was there, WalMart was there. You had high-tech, you had retail, you had financial services. I thought there was a diversity of experiences that we shared that was really interesting. And we just had a terrific experience. We learned a lot. It was nice to connect with other companies and government officials who have green objectives.

I've been to conferences that have been just business, and that's interesting, but there always seems to be this hidden, this missing element of the other important partner, which is government. From my perspective, bringing business and government together makes all the difference.

Thank you.

You’re welcome


 

   


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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