The bank had won the favor of climate activists about two years ago, a report from the NY Times this weekend wrote, for saying it wouldn't finance new coal mines or coal burning power plants.

Now, the bank has backtracked and said such projects would simply be subjected to "enhanced due diligence".

The bank said clients or transactions "that carry heightened risks will continue to go through an enhanced due diligence process involving senior level risk review."

Prior to that, in 2021, it had said it "will not directly finance new thermal coal mines or the expansion of existing mines" or "petroleum exploration or production activities in the Arctic" and that it would not  "directly finance the construction or expansion of new coal-fired power plants, including refinancing recently constructed plants".

Bank of America's recent decision is a response to growing opposition from Republican lawmakers against companies incorporating environmental and social considerations into their operations, the report says. This backlash, often termed "woke capitalism," has ensnared Wall Street in the broader cultural and political debates.

As the NY Times notes, several states, including Texas and West Virginia, have implemented financial regulations to protect fossil-fuel companies' access to banking services.

These actions have unsettled the ESG landscape, leading to a significant outflow of funds from sustainability-focused investments as investors distanced themselves from the sector due to conservative criticism. 

Bank of America had previously acknowledged the challenges faced by coal as a major contributor to global warming and expressed awareness of the unique considerations related to the Arctic region, including environmental fragility and Indigenous Peoples' rights. However, these statements are no longer present in its updated policy, and the bank has not disclosed the specifics of its risk assessment process, the report says.