Shareholders today sent a message of concern to JPMorgan Chase about its outsize support of fossil fuels in the face of catastrophic climate risk. The preliminary vote came in this morning showing just under 50% of voters supported a pioneering shareholder resolution asking the US banking giant to describe whether it will align its lending with the Paris goal of maintaining global warming well below 2 degrees Celsius and how it plans to do so.
JPMorgan is the largest global financier of fossil fuels, having funneled more than $268 billion from 2016 to 2019 into companies profiting from climate change , averaging approximately $67 billion per year.
Climate change presents material portfolio risks to investors. Globally, losses from climate change are estimated to be between $150 and $790 trillion by 2100. In the US, annual losses in some sectors are projected to reach hundreds of billions of dollars by the end of the century. A large range of shareholders are responding to the likelihood of portfolio-wide risk from climate impacts, including Climate Action 100+, a group of large asset owners and managers with a combined total of more than $40 trillion assets under management.
As You Sow withdrew similar climate-related proposals with large US peer banks — Wells Fargo, Morgan Stanley, Bank of America, and Goldman Sachs — after the banks made commitments recognizing the urgent need to find systems to measure the greenhouse gas emissions associated with their financing activities toward alignment with Paris goals. Significantly, major European peers BNP Paribas, Société Générale, BBVA, Standard Chartered, and ING, with a combined portfolio of $2.7 trillion, committed to decrease the climate impact of their loans in alignment with Paris climate goals. Most recently, Barclays, the largest financier of fossil fuels in Europe, stated an intention to align its financing with the Paris climate agreement and set a target of net zero emissions — a goal that promises progress.
Though JPMorgan Chase is heavily invested in fossil fuels, it has also embraced renewable energy. In February, news broke that the company expects to reach its goal of 100% renewable energy sourcing for global power needs across its buildings, branches, and data centers by the end of this year.
The global financial services firm with assets of $2.6 trillion initially set the 100% renewable energy target for 2020 in 2017. JPMorgan Chase’s strategy to get there included:
- Reducing energy consumption by implementing energy-efficient lighting and other technologies.
- Deploying onsite renewable energy at retail branches and commercial buildings globally.
- Executing power purchase agreements (PPAs) to support the development of new renewable energy projects on grids from which the company purchases energy.
- Purchasing renewable energy certificates (RECs) to cover their remaining electricity supply.