JPMorgan Chase focuses finances on Paris Agreement goals

12 October 2020 by Acre
blog author

JPMorgan Chase is to adopt a financing commitment aligned to the goals of the Paris Agreement, the company has announced.

The global financial services firm will establish intermediate emission targets for 2030 for its financing portfolio, focusing on the oil and gas, electric power and automotive manufacturing sectors and setting targets on a sector-by-sector basis.

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.

However, it is not without its challenges due to a lack of high quality and comprehensive greenhouse gas (GHG) emissions data and the demand for new technologies.

JPMorgan Chase plans to help solve these issues by working with clients in key sectors to align its financing activities with the goals of Paris and help clients navigate the challenges and capitalize on the long-term economic and environmental benefits of transitioning to a low-carbon world. 

The firm will support companies to advance the goals of Paris, over time, including reducing GHG emissions and expanding investment in low- and zero-carbon energy sources and technologies. It recognises that significant policy changes and new technologies will be required to reach net-zero emissions by 2050 and will continue to advocate for policy solutions, including a price on carbon and the commercialization of new decarbonization technologies.

Daniel Pinto, co-president of JPMorgan Chase and CEO of its Corporate & Investment Bank, said: “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.

“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.”

Bob Perciasepe, president of the Center for Climate and Energy Solutions (C2ES), said: “With its ambitious new climate commitment, JPMorgan Chase & Co is positioning itself as a critical player in driving . clean energy technology development and deployment. By aligning its financing with the Paris climate goals, the bank is sending a powerful signal that will help steer utilities, automakers, and oil and gas companies further along the path to decarbonization.

“Executing this new strategy will be no easy task. But as more and more companies step up to the challenge, it’s now up to our political leaders to enact the policies needed to get the job done.”

JPMorgan Chase is 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.

Rama Variankaval, head of the Center for Carbon Transition, JPMorgan Chase, said: “The transition to Paris-alignment will require big ideas, technology innovation and financing.

“This group will enable us to leverage the best of our expertise and resources across the Firm to help all our clients thrive in a low-carbon future.”

The firm is exploring the most effective ways to 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. It is also expanding upon its 100 per cent renewable energy target by committing to become carbon neutral in its operations beginning in 2020.

This commitment will cover all of JPMorgan Chase’s direct carbon emissions from its corporate buildings and branches, indirect emissions from the generation of purchased electricity and emissions from employee travel.

JPMorgan Chase has already committed to facilitate $200bn in financing this year for companies and projects that support green, social and economic development objectives of the United Nations Sustainable Development Goals (SDGs).

It also announced a $1bn inaugural green bond issuance to fund eligible green projects.