Dive Brief:
- JPMorgan Chase signed a pledge to join the United Nations' Net-Zero Banking Alliance climate initiative, the bank announced Friday, according to Reuters and Bloomberg.
- The Net-Zero Banking Alliance is composed of 61 banks across the globe that have committed to realigning their lending and investment portfolios to reduce attributable greenhouse-gas emissions, including a promise to reach net-zero carbon dioxide emissions by 2050.
- "Climate change is a critical issue of our time, and we are committed to doing our part to address it," Marisa Buchanan, the bank's global head of sustainability, said in a statement Friday.
Dive Insight:
In signing the pledge, JPMorgan joins a group that already counts fellow Wall Street titans Citi and Morgan Stanley as members.
However, JPMorgan, the U.S.'s largest bank, held out on joining the initiative for several months. The program launched in April with 43 member banks and has grown to encompass 61 institutions across 30 countries, counting $39 trillion in assets. Together, the signatories account for one-quarter of all global banking assets.
JPMorgan is the top arranger of bonds for fossil-fuel companies, but also is the foremost underwriter of green bonds, according to Bloomberg.
The bank’s announcement comes weeks ahead of the Oct. 31 kickoff of U.N.'s climate-focused COP26 conference in Glasgow.
The Net-Zero Banking alliance is a component of the Glasgow Financial Alliance for Net Zero (GFANZ), chaired by Mark Carney, the Bank of England's former governor.
Member banks must publish science-based plans to reduce several types of greenhouse-gas emissions, and establish 2030 targets. Signatories have committed to transparency, and must share data with the U.N. annually to monitor adherence to U.N. Race to Zero criteria.
JPMorgan Chase pledged in May to reduce operational carbon intensity by 35% by 2030, and to reduce end-use carbon intensity by 15%.
"We are joining the Net-Zero Banking Alliance because we support the ambition for greater climate action, the sharing of best practices and a collaborative approach between the public and private sectors to reach this goal," Buchanan said. "Thoughtful policy, technology and behavioral advancements are all prerequisites in realizing our common goals around net-zero emissions by 2050."
But some advocates say the deal doesn’t go far enough. Leaked emails sent by advisers to GFANZ reveal disagreements over which climate regulations to adopt, according to a Monday report from the Financial Times. Some members favor the more restrictive and prescriptive approach aligned with research by the International Energy Agency.
"The [International Panel on Climate Change's research] scenario allows banks to continue to finance exploration plans," a source told the Financial Times. "That’s the scientific fraud — the idea that you can continue to grow fossil fuel production and use, but tell the world that you are net zero."
