JPMorgan Chase has announced it is adopting a financing commitment that is aligned to the goals of the Paris Agreement. As part of its strategy, the firm intends to help clients navigate the challenges and capitalize on the long-term economic and environmental benefits of transitioning to a low-carbon world.
A Commitment to Paris
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 its commitment, JPMorgan Chase will establish intermediate emission targets for 2030 for its financing portfolio and begin communicating about its efforts in 2021. The firm will focus on the oil and gas, electric power, and automotive manufacturing sectors and set targets on a sector-by-sector basis.
Over time, JPMorgan Chase will aim to support companies to advance the goals of Paris, including reducing GHG emissions and expanding investment in low- and zero-carbon energy sources and technologies. The firm recognizes that significant changes in policy and the creation of new technologies will ultimately be required to reach net-zero emissions by 2050, particularly in those industrialized sectors that today lack alternatives. 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.
JPMorgan Chase plans to share more details in its next climate report, which will be informed by the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) and will be published in spring 2021. The company will also provide ongoing updates on its progress over time.
Center for Carbon Transition
The company 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. The CCT will also engage clients on their long-term business strategies and related carbon disclosures. The group will be led by Rama Variankaval, a Managing Director and 18-year veteran of the Firm who also continues to lead J.P. Morgan’s Corporate Finance Advisory team.
Industry Engagement and Carbon Neutrality
To help advance the transition to a low-carbon economy and track progress towards Paris, the company 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 and performance. The firm is also 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.
Additionally, the company will continue to engage with other stakeholders and clients on how to strengthen the comprehensiveness and quality of data reported, which remains a challenge, as well as advance policy solutions.
For example, earlier this year, the firm became 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 recently published a new set of principles to guide the development of effective climate policy.
JPMorgan Chase is also expanding upon its 100% 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.