During its Investor Day today, JPMorgan Chase announced a slew of clean energy commitments while also placing restrictions on any further coal and Arctic oil and gas funding. This announcement follows similar commitments made by a number of European banks and by Goldman Sachs, the first U.S. bank to announce such limits on fossil fuel funding.
Investor concern for JPMorgan’s inaction on climate has been increasing. This year, JPMorgan is facing climate-related shareholder proposals, including a resolution from As You Sow, a nonprofit that promotes environmental corporate responsibility through shareholder advocacy, requesting that the company measure and reduce its carbon-intensive lending in line with the Paris 1.5 degree goal, as well as a campaign to remove a climate-skeptic from the company’s board.
To be continued on all of that, but here is what was decided today:
First came the commitment to facilitate $200 billion to advance the objectives of the United Nations Sustainable Development Goals (SDGs), including $50 billion toward green initiatives that also fulfill the 2017 clean financing target.
The firm aims to increase its sustainable development financing commitment each year. To support the $200 billion effort, the firm is expanding its capacity and capabilities by:
• Launching the J.P. Morgan Development Finance Institution, which focuses on scaling up finance for developing countries;
• Establishing an Environmental Social and Governance (ESG) Solutions group to advise clients on reducing their carbon emissions and respond to increased interest in ESG investing;
• Assembling a new Energy Transition Team to provide strategic and financial advice to corporate clients on M&A transactions that support their carbon optimization objectives; and
• Investing in ESG expertise, including publishing ESG research and creating ESG fixed income indices.
To support the market demand for and transition to cleaner sources of energy, the firm is expanding financing restrictions on certain activities to include:
• Not providing lending, capital markets or advisory services to companies deriving the majority of their revenues from the extraction of coal, and by 2024, phasing out remaining credit exposure to such companies;
• Not providing project financing or other forms of asset-specific financing where the proceeds will be used to develop a new, or refinance an existing, coal-fired power plant, unless it is utilizing carbon capture and sequestration technology; and
• Not providing project financing or other forms of asset-specific financing where the proceeds will be used for new oil and gas development in the Arctic.
— Solar Builder magazine