NEW YORK, Nov 15 (Reuters) – JPMorgan (JPM.N) is including low-carbon power in how it calculates the eventual environmental impact of its energy funding, as regulators and shareholders worldwide push lenders to measure how businesses contribute to climate change.
“We have an important role to play: providing our clients with the advice and capital they need to advance their decarbonization strategies,” CEO Jamie Dimon said in a report published on Wednesday.
Companies and banks use different ways to calculate their greenhouse gas emissions and those of their suppliers and customers, and set reduction targets. JPMorgan, the biggest U.S. bank by assets, uses a benchmark established by the International Energy Agency.
JPMorgan’s new approach to emissions from the use of its clients’ energy products, known as Scope 3, combines money for lower-carbon projects with financing to fossil fuels to arrive at what it calls an energy mix.
A spokesperson said the formula would be used to measure combined progress in reducing financing to oil and gas, increasing financing to low carbon power generation, and reducing one measure of emissions from end-users of oil and gas products.
Including low-carbon financing could mean this indicator falls without any change to oil and gas financing. This captures a broad shift from oil and natural gas to low carbon fuels and electricity generation, JPMorgan said in the report.
Using this framework, it aims to reduce Scope 3 emissions the companies in its portfolio produce from each megajoule of energy they deliver by 36% from 2019 levels by 2030.
The bank said it was now basing its targets on IEA projections for a way to achieve “net zero” greenhouse gas emissions by 2050, instead of 2070.
Source: Reuters, Reporting by Isla Binnie; Editing by Richard Chang
