JPMorgan Chase Releases Carbon Reduction Targets for Paris-Aligned Financing Commitment

Rhea-AI Summary

JPMorgan Chase has outlined its commitment to align financing with climate goals under the Paris Agreement, setting 2030 carbon intensity targets for the Oil & Gas, Electric Power, and Auto Manufacturing sectors. The firm introduced its Carbon Compass methodology to monitor progress and drive client emissions reduction. Key targets include a 41% reduction in auto manufacturing carbon intensity, a 69% reduction in electric power generation, and a dual 35% and 15% reduction in operational and end-use carbon intensity for oil and gas. Additionally, JPMorgan achieved carbon neutrality in operations as of 2020.

Positive

• 2030 targets set: 41% reduction in Auto Manufacturing carbon intensity.
• 69% reduction in Electric Power generation carbon intensity by 2030.
• Achieved carbon neutrality across operations in 2020.
• Launched the Carbon Compass methodology for effective carbon monitoring.
• $2.5 trillion financing target over 10 years, including $1 trillion for green activities.

Negative

• None.

JPMorgan Chase today released comprehensive 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 last fall, the firm has published 2030 carbon intensity targets for the Oil & Gas, Electric Power and Auto Manufacturing sectors. JPMorgan Chase also released its new Carbon Compass^SM methodology that describes how the firm set its targets and how it will monitor progress over time.

“There must be collective ambition and cooperation by business and government to tackle climate change,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase. “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.”

A Commitment to Paris

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 firm’s Commercial Banking business launched a Green Economy specialized industry team to support the development and growth of companies in Renewable Energy, Efficiency Technology, Sustainable Finance, and Agriculture and Food Technology. To help our clients access capital needed for innovation, JPMorgan Chase announced in April 2021 a target to finance and facilitate more than $2.5 trillion over 10 years - including $1 trillion for green activities - to advance long-term solutions that address climate change and contribute to sustainable development.

Carbon Compass^SM Methodology and Targets

JPMorgan Chase has built Carbon Compass^SM, 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 the firm’s efforts in creating Carbon Compass^SM, JPMorgan Chase enlisted the support of ERM, a global sustainability consultancy with deep sectoral, technical and business expertise in the low-carbon economy transition.

Key aspects of JPMorgan Chase’s approach and its portfolio targets, established against a 2019 baseline, include:

• Auto Manufacturing:
  • 2030 target: 41% reduction in the carbon intensity from manufacturing of new vehicles, and tailpipe emissions from such vehicles.
    • Covers global manufacturers of light duty vehicles, such as global passenger cars and U.S. light trucks. The firm will work with clients to help accelerate the transition to electric vehicles, and over time, quantify and address emissions from the automotive supply chain.

• Electric Power:
  • 2030 target: 69% reduction in carbon intensity from electric power generation, which accounts for the vast majority of the sector’s climate impact.
    • Covers companies engaged in power generation. The firm 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.
      
      
• Oil & Gas:
  • 2030 targets: 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 & natural gas downstream and increase in renewable energy generation.
    • Covers producers of oil & natural gas, as well as refiners and integrated companies. The firm 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.

“JPMorgan Chase is leading the way for the banking industry by developing and transparently sharing a practical methodology which tackles key challenges, such as the urgency of reducing methane emissions in the oil and gas sector, and the prominence of light duty trucks in the non-commercial U.S. fleet,” said Keryn James, CEO of ERM. “They have embraced the enormous opportunity for the banking industry to finance the transition to a low-carbon economy and provided clarity to their corporate clients on credible decarbonization trajectories.”

Over time, the firm intends to integrate additional sectors into its Paris-aligned financing commitment. As a next step, JPMorgan Chase is analyzing target setting for the Aviation and Pulp & Paper sectors by the end of 2022.

“We have carefully chosen our targets and put the resources in place to help our clients transition to a low-carbon world,” said Ashley Bacon, Chief Risk Officer, JPMorgan Chase. “Our Carbon Compass^SM methodology creates incentives to deliver capital and advice to our global clients for the purpose of improving carbon efficiency, to help put us on a path to net zero.”

Measurement and Reporting

The firm’s 2020 ESG report, which was released today, provides updates on how environmental, social and governance matters are considered in the way JPMorgan Chase manages its business, as well as how the firm is putting its business to work for its stakeholders. This includes information about the firm’s approach to managing climate-related risks and opportunities, which has been informed by the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Addressing Operational Impact

JPMorgan Chase also announced today it has achieved carbon neutrality across its operations in 2020 and will maintain this commitment each year going forward. Examples of how the firm reached its goal include:

• Improving Energy Efficiency:
  • Installed LED lighting systems at approximately 4,300 branches and 50 commercial offices, reducing lighting-related electricity consumption at each building by an estimated 50%.
  • Installed energy-efficient building management systems at over 3,400 branches to better control and monitor energy use at each location.
• Building On-site Renewable Energy Capacity:
  • Installed approximately 30 megawatts (MW) of solar capacity across 900 branches, which are expected to provide about 35% of each location’s power needs.
  • Planning to install 40 MW of solar capacity across the firm’s corporate office buildings in the U.S. and the U.K.
• Executing Long-term Renewable Energy Agreements:
  • Collaborated on the development of a 108 MW, 22-turbine wind farm, which will provide the equivalent of about 14% of our energy needs globally.

To continue advancing sustainability in its own operations, JPMorgan Chase is also establishing a series of new goals:

• Reduce greenhouse gas emissions from the operation of its buildings, branches and data centers by 40% by 2030, based on a 2017 baseline.
• Satisfy at least 70% of its renewable energy goal with on-site renewable energy and off-site long-term renewable energy contracts by 2025.
• Transition its entire owned fleet of vehicles to electric by 2025.
• Reduce global water consumption by 20% by 2030, based on a 2017 baseline.
• Reduce office paper use by 90% by 2025, based on a 2017 baseline, and purchase 100% of paper from certified sources by the end of 2021.
• Divert 100% of e-waste from landfill through responsible third-party vendors.

Last month, as part of its commitment to support technology and market innovation, JPMorgan Chase was among the founding members of the Sustainable Aviation Buyers Alliance (SABA), whose mission is to accelerate the path to net-zero aviation by driving investment in high quality sustainable aviation fuel (SAF), catalyzing new SAF production and technological innovation, and supporting member engagement in policy-making.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $3.7 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

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FAQ

What are JPM's 2030 carbon intensity targets?

JPMorgan Chase aims for a 41% reduction in auto manufacturing, 69% in electric power generation, and a 35% reduction in operational and 15% in end-use carbon intensity for oil and gas by 2030.

When did JPMorgan Chase achieve carbon neutrality?

JPMorgan Chase achieved carbon neutrality across its operations in 2020.

What is the Carbon Compass methodology introduced by JPM?

The Carbon Compass methodology guides JPMorgan Chase in setting Paris-aligned targets, measuring clients' carbon intensity, and integrating carbon performance into business decisions.

What financing commitment did JPM announce in 2021?

JPMorgan Chase announced a financing target of $2.5 trillion over ten years, with $1 trillion specifically for green activities.

How does JPMorgan Chase plan to support renewable energy?

JPMorgan Chase plans to transition its entire fleet to electric vehicles by 2025 and maintain significant investment in renewable energy projects.