JPMorgan Chase to Restrict Fossil Fuel Project Funding
- Feb 27, 2020
JPMorgan Chase had committed to two initiatives in 2017 that were tailored to support sustainability. The company had pledged to facilitate $200 billion in clean financing by 2025 and use 100 percent renewable energy sources to power its global operations by 2020. Now, the firm announced that both goals are expected to be reached by the end of this year and pledged to further promote sustainable development.
To reach these targets, the company has launched the J.P. Morgan Development Finance Institution. The entity will be led by Faheen Allibhoy and will focus on growing the firm’s development finance activities and spur private investment into emerging markets.
In addition, an Environmental Social and Government Solutions group will be established to assist clients in reducing their carbon emissions, along with investing in ESG expertise such as publishing ESG research and creating EDG fixed income indices. JPMorgan Chase will reduce its funding of coal and Arctic oil and gas, and by 2024, it will phase out remaining credit exposure to companies deriving the majority of their revenues from such activities.
The bank is the largest funder of fossil fuels, and according to the Banking of Climate Change 2019 report—which ranked U.S. banks as the largest lenders to fossil fuel projects—it provided nearly $196 billion between 2016 and 2019 to such developments. JPMorgan Chase’s commitment to low-carbon economy and clean energy transition to advance sustainable development goals follows similar pledges made by several European banks and by Goldman Sachs, which was also the first U.S. bank to announce such limits on fossil fuel funding.