As a global provider of financial advisory, underwriting and lending services for clients in a range of sectors and geographies around the world, we recognize that our business decisions have the potential to impact surrounding communities and the environment. We believe that balancing non-financial factors such as environmental and social issues with financial priorities is a fundamental aspect of sound risk management and a core part of corporate responsibility.
In 2005, we adopted our first Environmental and Social Risk Policy, which provides a framework for integrating considerations of potential environmental and social impacts into our decision-making involving corporate lending, advisory and capital markets transactions. We are currently revising our internal policy and plan to release publicly, in early 2014, a new comprehensive Environmental and Human Rights Strategy, which will articulate the key aspects of our approach to managing risk and developing business opportunities with respect to key issues such as climate change, forests and biodiversity, and human rights. The summary of our current Environmental and Social Risk Policy is available here (PDF).
In addition, JPMorgan Chase employs a range of best practices and adheres to internationally-recognized principles to assess environmental and social impacts and promote responsible performance. Our commitments and memberships include:
JPMorgan Chase is a Member of the Equator Principles, a framework for assessing and managing environmental and social risks in certain financial transactions. The most recent version of the Equator Principles (known as EP III), which became effective in June 2013, applies to certain transactions involving Project Finance, Project-Related Corporate Loans and Bridge Loans. JPMorgan Chase reports information about its involvement in EP eligible transactions in its annual Corporate Responsibility Report.
JPMorgan Chase adopted the Carbon Principles in 2008 in partnership with seven electric utilities, three environmental organizations, and four other financial institutions. The Carbon Principles outline a process for analyzing the risks associated with greenhouse gas emissions in the U.S. power sector, and integrating that analysis into lending and underwriting decisions. The Principles require adopting institutions to apply an Enhanced Diligence Process to transactions involving financing for coal-fired power plants owned by investor-owned utilities, and public power and electric cooperatives. JPMorgan Chase reports information about its involvement in Carbon Principles eligible transactions in its annual Corporate Responsibility Report.
Green Bond Principles
The Green Bond Principles (PDF) are voluntary guidance for the development and issuance of Green Bonds. The Principles encourage transparency and disclosure by making recommendations, principally for bond issuers, on the information that should be publicly disclosed regarding the use of proceeds, proceeds management, and associated reporting. The Principles will also be useful for investors by ensuring availability of information necessary to evaluate the environmental impact of Green Bond investments and will help underwriters by moving the market towards standard disclosures which facilitate transactions. JPMorgan Chase was a lead author of the Green Bond Principles together with a group of peer banks.
Principles for Responsible Investment (PRI)
The U.N.-supported Principles for Responsible Investment (PRI) initiative is an international network of investors working on a voluntary basis to incorporate environmental, social and governance (ESG) issues into investment practices across asset classes. J.P. Morgan Asset Management became a signatory to the PRI initiative in 2007.
Extractive Industries Transparency Initiative
J.P. Morgan Asset Management supports the Extractive Industries Transparency Initiative (EITI), a global standard that promotes revenue transparency and accountability in the extractive sector.
JPMorgan Chase supports CDP in its efforts to promote standardized disclosure from companies on greenhouse gas emissions and climate change risk management. JPMorgan Chase is also a respondent to CDP's annual climate change information request.
In 2013, JPMorgan Chase became a member of the Ceres Company Network to help advance the firm's sustainability objectives. Ceres is a leading nonprofit organization that works with a network of companies, investors, and public interest groups to accelerate and expand the adoption of sustainable business practices and build a healthy global economy.