JPMorgan Chase has unveiled steps it is taking in its efforts to align its financing activities with the climate goals of the Paris Agreement.
As part of its Paris-aligned financing commitment announced in 2020, the bank has published 2030 carbon intensity targets for the oil and gas, electric power and auto manufacturing sectors.
JPMorgan Chase also released its new Carbon CompassSM methodology that describes how the firm set its targets and how it will monitor progress over time.
JPMorgan Chase chairman and CEO Jamie Dimon said: “Setting our Paris-aligned targets is an important step toward accelerating the transition to a low-carbon economy and meeting the goals of the Paris Agreement.
“JPMorgan Chase is committed to doing its part by working with clients around the world to reduce emissions and by ensuring our own operations remain carbon neutral.”
JPMorgan Chase first announced its Paris-aligned financing commitment in October 2020, aiming to work with clients to “drive near-term actions that help set a path for achieving net zero emissions by 2050”.
As part of this effort, JPMorgan Chase also created the Center for Carbon Transition to engage with clients on sustainability focused financing, research and advisory solutions.
More recently, the bank’s commercial banking business launched a green economy specialised industry team to support the development and growth of companies in renewable energy, efficiency technology, sustainable finance, and agriculture and food technology.
JPMorgan Chase announced in April 2021 a target to finance and facilitate more than $2.5tn over 10 years including $1tn for green activities to advance long-term solutions that address climate change and contribute to sustainable development.
JPMorgan Chase has built Carbon CompassSM, a methodology that guides its approach for Paris-aligned target setting, measuring clients’ carbon intensity, evaluating ongoing progress and integrating carbon performance considerations into business decision-making.
The targets are based on credible third-party energy and emissions scenarios, including the International Energy Agency’s Sustainable Development Scenario.
To challenge and enhance efforts in creating Carbon CompassSM, JPMorgan Chase enlisted the support of ERM, a global sustainability consultancy.
Key aspects of JPMorgan Chase’s approach and its portfolio targets, established against a 2019 baseline, include for electric power a 2030 target of a 69% reduction in carbon intensity from electric power generation, which accounts for the vast majority of the sector’s climate impact.
It covers companies engaged in power generation.
The bank said it will work to accelerate the power sector’s shift to low- and zero carbon sources, like solar and wind, to help reduce emissions from electricity grids globally.
In oil and gas the bank has set a 2030 target of a 35% reduction in operational carbon intensity, as well as a 15% reduction in end-use carbon intensity reflecting a decrease in emissions from the combustion of oil and natural gas downstream and increase in renewable energy generation.
It covers producers of oil and natural gas, as well as refiners and integrated companies. The bank intends to work with clients to address methane leakage and flaring activity, in addition to encouraging shifts to renewable electricity to reduce operational emissions.
JPMorgan Chase will also work with clients to address end-use emissions, including by shifting to lower-carbon fuels and exploring other business diversification strategies.
As a next step, JPMorgan Chase is analysing target setting for the aviation and pulp and paper sectors by the end of 2022.