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Our Paris-Aligned Financing Commitment
In October 2020, JPMorgan Chase announced we are adopting a financing commitment that is aligned to the goals of the Paris Agreement. As part of our strategy, we intend to help clients navigate the challenges and capitalize on the long-term economic and environmental benefits of transitioning to a low-carbon world.
As part of this commitment, we are launching the Center for Carbon Transition (“CCT”) to provide clients in the Corporate & Investment Bank and Commercial Banking with centralized access to sustainability-focused financing, research and advisory solutions. The CCT will also engage clients on their long-term business strategies and related carbon disclosures.
We are also expanding upon our 100 percent renewable energy target by committing to become carbon neutral in our operations beginning in 2020.
For more information read our full press release, as well as this article from Daniel Pinto, co-President and COO of JPMorgan Chase and CEO of its Corporate & Investment Bank, and Ashley Bacon, Chief Risk Officer of JPMorgan Chase & Co.
At JPMorgan Chase, we believe that climate change is a critical issue of our time and have long supported the goals of the Paris Agreement. However, the world is not currently on track to meet these goals, and we recognize we do not have time to lose when it comes to climate action.
Our business strives to do its part in collaboration with our clients, as well as policymakers, who have a critical role to play in creating the frameworks needed to advance significant reductions in greenhouse gas (GHG) emissions globally.
As part of this commitment, our goal is to help clients navigate the challenges, and capitalize on the long-term economic and environmental benefits of transitioning to a low-carbon world.
We recognize that significant changes in policy and the creation of new technologies will ultimately be required to reach net-zero GHG emissions by 2050. To that end, JPMorgan Chase will continue to advocate for market-based policy solutions, including a price on carbon, and the commercialization of new technologies that can help advance deep decarbonization.
For example, the firm is a Founding Partner of Rocky Mountain Institute’s Center for Climate-Aligned Finance, which is developing practical solutions for financial institutions seeking to pursue the goals of the Paris Agreement in relation to relevant business activities. In addition, JPMorgan Chase is a member of the Climate Leadership Council and Business Roundtable, the latter of which published a new set of principles in 2020 to guide the development of effective climate policy.
The Paris Agreement aims to hold the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels, and ideally, to 1.5 degrees Celsius – which would require the world to achieve net-zero emissions by 2050.
As part of our commitment, JPMorgan Chase will establish intermediate emission targets for 2030 for its financing portfolio. We will focus on the oil and gas, electric power and automotive manufacturing sectors and set targets on a sector-by-sector basis.
To help advance the transition to a low-carbon economy and track progress towards Paris, the firm will aim to evaluate its clients’ carbon intensity, which tracks emissions relative to unit of output. When measured over time, carbon intensity provides insight into changes in efficiency, performance and business strategy.
While a growing number of companies have been working to align their business strategies with the goals of the Paris Agreement, significant challenges exist, such as the lack of comprehensive and high-quality GHG emissions data and the complexities of mapping transition pathways that align with Paris targets. We are evaluating a variety of tools and approaches available and will focus on incorporating the best available information to guide our strategy.
We are focusing on these three sectors because they are responsible for a significant share of GHG emissions from the global energy value chain. JPMorgan Chase aims to work with clients in these sectors to advance the goals of Paris, including by reducing GHG emissions and expanding investment in low- and zero-carbon energy sources.
We are exploring ways to most effectively address all emissions, including Scope 3 emissions, which are relevant for sectors where the majority of GHGs are generated at other points in the supply chain.
We have seen a steady increase in the number of companies who have expressed support for achieving net zero emissions by 2050 and announcing goals to align their GHG emissions trajectories with the Paris Agreement.
While we anticipate seeing more such commitments from companies over time, transition pathways will be industry-specific, and strategies for individual companies will likely look different. We recognize that, for most companies, there will be opportunities to reduce GHG emissions and improve efficiency, yet it may not be feasible for every company to significantly transition their business models or strategies.
To support Corporate & Investment Bank and Commercial Banking clients with their sustainability and energy-transition goals, we are launching the Center for Carbon Transition (CCT). This new global group will work in close partnership with industry coverage, capital markets, and other teams across the firm to provide clients with centralized access to sustainability-focused financing, research and advisory solutions. The CCT will also engage with clients on their long-term business strategies and related carbon disclosures.
While net zero emissions by 2050 is an important goal, there remains a significant gap between the path the world is on today and the changes to our global energy system that will be needed to get there.
Successfully reaching the goals of the Paris Agreement is contingent upon a significant amount of technology creation and policy action. To close the gap, significant investment and policy solutions will be needed to expand deployment of existing low- and zero-carbon technologies, and support the commercialization of other new technologies that can advance deep decarbonization.
Carbon neutrality is defined as reducing direct emissions as much as possible and then turning to solutions “outside the fence line” for the remainder.
We’ve already made substantial commitments towards our operational footprint to date, including sourcing renewable energy for 100 percent of the firm’s power needs starting in 2020 and offsetting 100 percent of our Scope 3 emissions from employee travel every year since 2008.
We will meet our 100 percent renewable energy commitment by generating and purchasing energy and corresponding renewable energy certificates in an amount equivalent to the total megawatt hours of electricity that the firm consumes globally over the year. Over time, our goal is to meet our commitment on an annual basis in a way that maximizes our impact by bringing more renewable energy onto the grid.
To achieve operational carbon neutrality, we will explore additional opportunities to invest in new building efficiency measures and, for the remainder, we will purchase verified carbon offsets equivalent to the emissions we haven’t been able to eliminate.
We are planning to share more details about our commitments in our next climate report, which will be informed by the recommendations of the Task Force on Climate-related Financial Disclosures and will be published in Spring 2021. The firm will also provide ongoing updates on its progress over time.
Our Commitment to Sustainable Development
JPMorgan Chase is leveraging our expertise in the financial markets to promote sustainable business practices and help our clients raise the capital they need to invest in projects and initiatives intended to achieve positive environmental and social outcomes. Our firm aims to facilitate $200 billion in financing in 2020 to drive action on climate change and advance the objectives of the United Nations Sustainable Development Goals (SDGs). This target—which we announced in early 2020 and builds on our previous clean financing goal—represents a significant expansion of our commitment to creating a more sustainable future for clients, customers, employees and communities we serve.
In 2020, the firm commits to facilitate $200 billion for efforts focused on the following objectives:
Supporting climate action, clean water and waste management
Increasing access to housing, education and health care
Advancing infrastructure, innovation and growth
Our Operational Impact
Minimizing the environmental impact of our physical operations continues to be an important part of the global sustainability strategy at JPMorgan Chase. We will meet our 100 percent renewable energy commitment in 2020 by generating and purchasing energy and corresponding RECs in an amount equivalent to the total megawatt hours of electricity that JPMorgan Chase consumes globally over the year.
Expanding upon our 100 percent renewable energy target, we commit to become carbon neutral in our operations beginning in 2020. This commitment will cover all of JPMorgan Chase’s direct carbon emissions from our corporate buildings and branches, indirect emissions from the generation of purchased electricity, and emissions from employee travel.
Environmental, Social & Governance Report
JPMorgan Chase manages a broad range of ESG matters. This report provides information about our approach to and performance on ESG matters that we and our stakeholders view as among the most important to our business.
TCFD Climate Report
Climate change is an important global challenge. This report discusses JPMorgan Chase’s approach to managing climate-related risks and opportunities.
Environmental and Social Policy Framework
Environmental and social issues are an important component of our risk management process. The Environmental and Social Policy Framework provides an overview of how the firm approaches these issues across its business.
Memberships and Commitments
These relationships enable us to deepen our expertise, drive improved sustainability performance and create new sustainability opportunities for our clients.
NatureVest is an initiative of The Nature Conservancy, focused on developing a pipeline of investable deals that deliver both meaningful conversations results and financial returns for investors.