Amalgamated Bank in New York sets plan for net-zero emissions by 2045

Amalgamated Bank in New York said it established formal targets to dramatically reduce greenhouse gas emissions across its own operations and in its financing.

It targets a 49% reduction this decade and aims to reach net zero emissions by 2045.

The bank said it is the first in the country to make formal such targets under the guidelines of the Intergovernmental Panel on Climate Change. That panel set a 2050 global deadline for net zero emissions, known as the Paris Climate Agreement.

Net zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere. While reducing carbon discharges is key, technologies enable companies to capture pollutants and store them underground, a process that contributes to the net-zero ambition.

The bank is a unit of $6.9 billion-asset Amalgamated Financial, which emphasizes an environmental, social and governance mission.

“We are committed to be a bold leader of policy and public affairs” to combat climate change, Priscilla Sims Brown, president and CEO of Amalgamated Financial, said during the company’s third-quarter earnings call Thursday.

Brown said Amalgamated submitted its targets to the Science Based Targets initiative, or SBTi, an organization that promotes, measures and certifies emission-reducing actions among private-sector companies.

Banks play “a critical role in decarbonizing the economy and we need the financial sector to step up and commit to ambitious action,” said Cynthia Cummis, a spokeswoman for SBTi. She said Amalgamated’s climate targets could prove a “quality blueprint for other banks to follow.”

To be sure, more banks are ramping up initiatives as institutional investors such as BlackRock make it known they expect their holdings to be on board with ESG efforts.

Large banks such as JPMorgan Chase and Bank of America report climate-related risks on a voluntary basis and have established ESG targets of their own across both lending and investing. Regional and community lenders are trying to follow suit.

Berkshire Hills Bancorp in Boston, for one, said last month it would lend and invest a total of$5 billion over the next three years, in large part to bolster the credit needs of underserved communities. The bank also committed to using only renewable sources of electricity to power its own offices and branches, and it ceased lending to carbon-intensive businesses such as oil and gas producers.

Amalgamated Bank said it wants to stake a leadership position both in action and with aggressive, measurable targets.

Additionally, the bank's recent M&A ambitions should help it expand its ESG visibility from the East and West coasts to the Midwest. The company said in September it would buy unaffiliated Amalgamated Investments Co., the parent of Amalgamated Bank of Chicago, for $98.1 million in cash.

Amalgamated Financial currently operates in New York, San Francisco, Boston and Washington, D.C. The acquisition would give it a footprint in Chicago, the nation’s third-largest city by population, and a platform from which to grow in the Midwest, Brown said.

Amalgamated Financial reported third-quarter net income of $14.4 million, or 46 cents per share, up 15% from a year earlier.