12. RESPONSIBLE CONSUMPTION AND PRODUCTION

JPMorgan sets new standards in financed emissions reductions

Written by Amanda

JPMorgan Chase has recently updated its interim financed emissions reduction targets for several carbon-intensive sectors.

According to ESG Today, this bold move is part of the firm’s strategy to align with the net zero pathways by 2050, as detailed in their 2023 Climate Report. The focus is on sectors such as Oil & Gas, Electric Power, and Auto Manufacturing, showcasing a heightened ambition to meet environmental goals.

The 2023 Climate Report is a significant step forward, as it not only updates previous targets but also includes net zero-aligned targets for two new sectors and a novel Scope 3 “Energy Mix” target. Remarkably, the report also offers a first-time disclosure of the firm’s financed emissions for sectors with set targets.

It’s notable that financing activities have a more substantial climate impact compared to operational emissions for financial institutions, and JPMorgan’s new targets are a testament to their commitment to the Paris Agreement goals.

Originally, JPMorgan set its 2030 financed emissions reduction targets in 2021 for sectors like Oil & Gas, Electric Power, and Auto Manufacturing. These were in line with the International Energy Agency Sustainable Development Scenario, aiming for net zero emissions by 2070. However, the firm has now shifted its focus to a more ambitious target aligned with the IEA’s Net Zero Emission by 2050 Scenario (IEA NZE). For instance, the Automotive Manufacturing sector now aims for a 48% reduction in emissions intensity by 2030, an increase from the previous 41% target.

Moreover, JPMorgan has introduced new targets for other sectors, including a 25% reduction in emissions intensity for aluminum production and a 33% reduction for the Shipping sector’s “tank-to-wake” emissions. These goals align with the NZE scenario and follow last year’s introduction of similar targets for the Aviation, Iron and Steel, and Cement sectors.

A significant update in JPMorgan’s strategy is the modification of its Oil & Gas target. The focus has shifted from “Oil & Gas End Use” to a broader “Energy Mix” target, which now encompasses zero carbon power generation activities. This target aims for a 36% reduction in emissions intensity by 2030, balancing between fossil fuel-based and low-carbon energy sources.

JPMorgan’s report also includes, for the first time, details on the bank’s absolute financed emissions. The “Energy Mix” category is the most significant contributor to JPMorgan’s Scope 3 footprint, with absolute financed emissions of 179.5 million tons CO2e, highlighting the scale of their commitment to environmental sustainability.

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Source: fintech.global

About the author

Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai