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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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