JPMorgan Chase announced updates to its interim financed emissions reduction targets for three carbon-intensive sectors, including Oil & Gas, Electric Power and Auto Manufacturing, raising the ambition for each to align with pathways required to achieve net zero by 2050.
The updated targets were unveiled with the release of the firm’s 2023 Climate Report, which also included net zero 2050-aligned targets for 2 new sectors, a new Scope 3 “Energy Mix” target, and first-time disclosures on the firm’s financed emissions for sectors where targets have been set.
Financing activities typically make up the vast majority of financial institutions’ climate impact, with financed emissions often several times greater than operational emissions. 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.
JPMorgan established its first interim 2030 financed emissions reduction targets in 2021 for the Oil & Gas, Electric Power and Auto Manufacturing sectors, with the goals announced for each sector aligned with the International Energy Agency Sustainable Development Scenario, which is consistent with the Paris Agreement, and targets achieving net zero emissions by 2070.
In the new climate report, the firm revealed that it has revised those targets with new goals to align with the IEA’s Net Zero Emission by 2050 Scenario (IEA NZE), a more ambitious standard covering the necessary energy market transformation necessary to hit the global goal of achieving net zero emissions by 2050. JPMorgan’s Automotive Manufacturing goal, for example, has been revised to a 48% reduction in “tank-to-wheel” emissions intensity by 2030, from its prior 41% target.
JPMorgan also introduced two new IEA NZE-aligned 2030 sector targets in its report, including a goal to reduce emissions intensity for aluminum production by 25%, and “tank-to-wake” emissions for the Shipping sector by 33%. Last year, the bank introduced NZE-aligned goals for the Aviation, Iron and Steel, and Cement sectors.
In addition to the new and revised targets, JPMorgan also announced a change to its Oil & Gas target, expanding the focus of its prior “Oil & Gas End Use” goal to a new “Energy Mix” target, which now also includes zero carbon power generation activity from the firm’s Electric Power portfolio. The new target also aligns with the more ambitious IEA NZE scenario, and aims for a 36% reduction in emissions intensity by 2030 for the new category. In its report, JPMorgan explained the rationale behind the change, writing:
“We believe this updated target better captures the shift in fuel mix of the global energy complex, and balances the trade-offs between fossil-fuel based and zero- or low-carbon energy sources to achieve net zero emissions by 2050. Our approach allows further engagement with our Oil & Gas clients on their Scope 3 decarbonization plans, while also accelerating our financing of zero-carbon power generation, and enables us to balance energy transition needs and energy security concerns.
The report also includes disclosures for the first time of JPMorgan’s absolute financed emissions for the sectors for which the bank has set targets, and including emissions both for its lending as well as its capital markets activities. The disclosure reveals that the new “Energy Mix” category accounts by far for the bulk of JPMorgan’s Scope 3 footprint, with absolute financed emissions of 179.5 million tons CO2e, well ahead of the number 2 category of Electric Power at 34.2 million CO2e.
Source: JPMorgan
