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No. 1 fossil fuel funder JPMorgan says it will align with Paris Accord

 JPMorgan Chase & Co. (NYSE: JPM) said today that it will adopt a financing commitment that is aligned to the goals of the Paris Agreement.

Where JPM wants to go

As the United Nations explains:

The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. 

JPMorgan Chase will establish intermediate emission targets for 2030 for its financing portfolio and begin communicating about its efforts in 2021. It will focus on the oil and gas, electric power, and automotive manufacturing sectors and set targets on a sector-by-sector basis.

It will aim to support companies to advance the Paris Agreement goals, including reducing greenhouse gas emissions and expanding investment in low- and zero-carbon energy sources and technologies. JPMorgan Chase will advocate for carbon pricing and the commercialization of new technologies that can help advance decarbonization.

It’s also launching the Center for Carbon Transition to provide clients in the Corporate & Investment Bank and Commercial Banking with centralized access to sustainability-focused financing, research, and advisory solutions. The center will also engage clients in their long-term business strategies and related carbon disclosures.

JPMorgan Chase will share more details in its next climate report in spring 2021.

Where JPM is now

JPMorgan Chase is the No. 1 fossil fuel bank in the world by a 36% margin, with $268 billion in lending and underwriting to fossil fuel companies in the four years after the Paris Climate Agreement was adopted (2016-2019), according to the Rainforest Action Network (RAN). Its No. 1 fossil fuel client is TC Energy, which is still trying to push through the controversial Keystone XL tar sands pipeline.

Further, as Electrek reported on September 24, JPMorgan Chase and Wells Fargo together provide almost 40% of financing for fracking companies, despite warnings that the sector is financially unsustainable.

And yesterday, Electrek reported that Exxon plans to actually increase its emissions, according to internal documents. Exxon is JPMorgan Chase’s No. 3 fossil fuel client.

The banking giant did launch the world’s largest commercial installation of bifacial solar modules in November in Columbus, Ohio. It was JPMorgan’s solar pilot.

What RAN thinks

Rainforest Action Network’s climate and energy program director, Paddy McCully, issued the following statement in response to JPMorgan Chase’s announcement:

JPMorgan Chase’s announcement is a welcome step forward and a sign that the bank is feeling the heat from all sides, from the climate movement to investors. It is a bad day for the long-term prospects of the fossil fuel industry when the world’s biggest bank sets itself on a course that logically means it must slash its exposure to, and eventually exit, the sector.

But vague hand waving in the direction of Paris alignment doesn’t make it so. Real Paris alignment requires common-sense steps that the bank simply has again refused to take. 

If JPMorgan Chase is serious about aligning with Paris, it must immediately stop financing expansion of fossil fuels and deforestation. If the bank’s clients, like ExxonMobil and Keystone XL pipeline developer TC Energy, won’t stop building new wells and pipelines, JPMorgan Chase must drop those clients. 

A promissory note for 2030 or 2050 isn’t worth the paper it’s printed on unless it is matched by action in 2020, and in the context of the worst wildfire and hurricane season in history, today’s news is a half-measure at best. JPMorgan Chase must make commitments that truly align with Paris by the UN’s climate negotiations in Glasgow in a year’s time, with its shareholder meeting next May a crucial midterm deadline.

Photo: Bryan Parras/Sierra Club

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2020-10-06 17:51:00

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