In 2017, JPMorgan Chase made two sustainability commitments: facilitate US$200bn in clean financing by 2025 and source renewable energy for 100% of its global power needs by 2020. Both of these goals are expected to be reached by the end of 2020. The firm is now taking additional steps to address climate change and further promote sustainable development.
Financing clean energy and sustainable development
This year, JPMorgan Chase commits to facilitate US$200bn to advance the objectives of the United Nations Sustainable Development Goals (SDGs), including US$50bn toward green initiatives that also fulfil the 2017 clean financing target. This new commitment is intended to address a broader set of challenges in the developing world and developed countries where social and economic development gaps persist. These efforts will be focused on the following objectives:
- Green: Supporting climate action, clean water and waste management.
- Social: Increasing access to housing, education and healthcare.
- Economic development: Advancing infrastructure, innovation and growth.
The firm aims to increase its sustainable development financing commitment each year. To support the US$200bn 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 optimisation objectives.
- Investing in ESG expertise, including publishing ESG research and creating ESG fixed income indices.
Supporting climate policy solutions
JPMorgan Chase has joined the Climate Leadership Council, a group promoting a bipartisan roadmap for a revenue neutral carbon tax-and-dividend framework for the United States. The firm is also working with Business Roundtable and other trade organisations on market-based policy solutions to address climate change, drive clean energy innovation and protect underserved communities.
Facilitating the transition to a low-carbon economy
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 utilising carbon capture and sequestration technology.
- 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.
J.P. Morgan Asset Management is enhancing its investment stewardship process to increase its engagement with companies around five priorities, including climate change. It is also utilising data science to develop a proprietary ESG scoring framework and becoming a signatory to Climate Action 100+.
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