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JPMorgan Chase, the US's largest bank and one of the largest
fossil-fuel investors in the world, announced on 6 October 2020
that it is enacting corporate policies to support the goals of the
Paris Climate Treaty.
The bank had announced in March 2020 that it was joining other
major US banks in halting future investments in oil and gas
drilling in the Arctic. In the last year, Morgan Stanley, Goldman
Sachs, Wells Fargo and Citigroup have made similar pledges.
Canada's largest bank, RBC, also made a no-Arctic oil and gas
pledge in October 2020.
In the new announcement, JPMorgan Chase said it will set
emissions targets for its investment clients for 2030 on a
sector-by-sector basis, starting next year with oil and gas, power
generation and auto manufacturing. Its goal is shifting all of its
investments by 2050 to companies that have achieved or pledged to
be net zero. JPMorgan said its lending to fossil fuel companies
from 2016 through 2019 was $268 billion.
The company itself will be operating on a net-zero emissions
basis by the end of 2020, including the purchase of emissions
credits to offset travel and building heating, cooling and
power.
"Climate change is a critical issue of our time. The goals set
in the Paris Agreement are commendable and ambitious, but the world
is not on track to meet them," said Daniel Pinto, co-president of
JPMorgan Chase and CEO of its Corporate & Investment Bank.
"While the world has a long way to go, we at JPMorgan Chase want to
do more. That means working with clients, policymakers and
advocates to transition our economy and turn the goals of Paris
into a reality."
To complement its investment actions, JPMorgan will open by the
end of 2020 the Center for Carbon Transition "to provide clients in
the Corporate & Investment Bank and Commercial Banking with
centralized access to sustainability-focused financing, research
and advisory solutions," the bank said. The Center will share
information on emerging technologies, promote a carbon tax and
develop carbon disclosure standards.
HSBC, the largest bank in Europe and sixth-largest in the world,
made a similar statement in October, saying that it will direct $1
trillion of lending towards reducing carbon emissions to reach the
Paris Treaty target. The largest share of HSBC's lending is in
Asia, where faster-growing economies are expected to increase
energy demand at rates well above the US and Europe.
Banks' announcements about their climate commitments continue to
receive guarded support from conservation groups. For example, the
Sierra Club on 6 October expressed concern about JPMorgan Chase's
past activities and ongoing fossil fuel investments, such as buying
a share of Permian shale producer Sable Energy this fall. "The fact
that the world's biggest funder of fossil fuels feels compelled to
make a pledge like this is a testament to the power of the movement
pushing financial institutions to clean up their act on climate,"
said Sierra Club Senior Campaign Representative Ben Cushing.
"Chase's climate pledge is an important step forward, but it's
severely insufficient to meet the scale of the climate crisis and
Chase's outsized role in driving the destruction that's already
underway."
Posted 11 November 2020 by Kevin Adler, Editor, Climate & Sustainability Group, IHS Markit
