JPMorgan Chase announced the expansion of its 2030 financed emissions targets to a series of new carbon-intensive sectors including Aviation, Iron and Steel, and Cement. The targets were unveiled with the release of the firm’s 2022 Climate Report, highlighting JPMorgan’s progress and approach to addressing climate risks and opportunities for the firm and its clients.
The new targets form part of the company’s commitment, announced in October 2020, to align its financing activities with the goals of Paris Agreement, and to help clients navigate the challenges and capitalize on the long-term economic and environmental benefits of transitioning to a low-carbon world.
The targets also mark an expansion of the sectors covered by the firm’s 2030 financed emissions goals. Last year, JPMorgan became the first large U.S. bank to set 2030 portfolio-level emissions intensity targets, which covered the Oil & Gas, Electric Power and Auto Manufacturing sectors.
Financing activities typically make up the vast majority of financial institutions’ climate impact, with financed emissions often several times greater than operational emissions.
In its Climate Report, JPMorgan noted that the six sectors now covered by its 2030 goals account for the majority of global emissions across the supply and demand side value chains of the global energy system. In addition to their contribution to global emissions, JPMorgan said that the sectors were chosen with consideration given to the technical and economic maturity of their available decarbonization pathways.
Each of the new targets were made with the intention to align with the International Energy Agency’s (IEA) Net Zero by 2050 scenario, according to the report, and each focuses on emissions intensity, or the emissions produced per unit of output. The targets include a 31% reduction in emissions per ton of crude steel, a 29% reduction in emissions per ton of cementious product, and a 36% reduction in “tank-to-wake” Scope 1 emissions per revenue tonne kilometers (RTK) for passengers and freight for the aviation sector.
The report also included an update on JPMorgan’s progress towards its existing 2030 sector goals, as of June 2022. While the firm reported significant progress in emissions intensity reductions in the Electric Power and Auto Manufacturing sectors, down 22% and 10% from a 2019 baseline, respectively, Oil & Gas sector intensity remained mostly flat.
In the Electric Power sector, progress was attributed to clients shifting their generation mix to lower emissions sources, and JPMorgan’s increasing financing to companies and projects with lower emissions intensity, while Auto Manufacturing reductions were driven by “banking new and emerging pure-play EV manufacturers.” In the Oil & Gas sector, the report notes that a shift by companies’ fuel production mix towards oil and away from natural gas drove higher emissions intensity, following a higher natural gas mix in 2019 due to the pandemic and commodity market volatility.
JPMorgan said that it aims to expand its targets to additional carbon-intensive sectors, and that it plans to re-evaluate its existing sector targets, and that the firm expects to publish its Scope 3 absolute financed emissions in 2023.
Click here to access JPMorgan Chase’s 2022 Climate Report.