JPMorgan rejects calls to disclose lending’s impact on climate

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JPMorgan Chase is resisting proposals from activist investors that would require it to take stock of the impact its lending activities are having on climate change.

Several members of the Interfaith Center on Corporate Responsibility want to put several climate-related proposals to a shareholder vote that would, among other things, ask the bank disclose how it might mitigate greenhouse gas emissions resulting by its lending activities and how it will deal with the reputational risk that comes with financing certain types of drilling.

But the nation’s largest bank has asked the Securities and Exchange Commission to reject calls to include those shareholder resolutions in its proxy materials, arguing that they deal with day-to-day business operations that are not subject to shareholder oversight.

“Although environmental issues and risk factors are considered in the company’s business decisions, they must be considered contextually, not mechanically, and are one of many factors considered in a holistic review of what is best for both the company’s customers and its shareholders,” the bank wrote in its response to two of the resolutions.

The ICCR, a coalition of environmentally and socially conscious institutional investors, says it wants JPMorgan to live up to its public rhetoric on climate and sustainable financing.

In recent years, the bank has promised to end its financing of new coal mines around the world and stop financing coal-fired power plants in high-income countries, while pledging to finance more renewable energy projects, to the tune of $200 billion by 2025.

Chairman and CEO Jamie Dimon has also publicly criticized President Trump for withdrawing the United States from the 2016 Paris Agreement, and in a report issued last year, the bank’s first on climate risk and opportunity, Dimon alluded to a role the bank could play in mitigating the worst impacts of climate change.

“The private sector has the opportunity to play a role in creating solutions that grow the economy, thereby supporting governments in their efforts to minimize long-term impacts to the planet and enable a more sustainable future for all people,” he wrote.

Yet, JPMorgan also remains the world’s No. 1 financier of fossil fuel industries, according to the Rainforest Action Network. Between 2016 and 2018, it financed a little over $195 billion in fossil fuel exploration.

The shareholder resolutions in question were filed by three different nonprofit or institutional investor members of the ICCR. The nonprofit As You Sow Foundation, which focuses on environmental and social corporate responsibility, wants JPMorgan to compile a report detailing if and how it plans to reduce greenhouse gas emissions resulting from its lending activities.

Trillium Asset Management is requesting the company describe how it will respond to growing reputational risk associated with its financing of oil sands production and pipelines and oil and gas exploration in the Arctic.

And Boston Trust Walden wants the company’s board to share its proxy voting record and policies related to climate change. In that proposal, the investment management firm said that JPMorgan had voted against most climate-related shareholder proposals last year and that that record contradicts its public commitments to climate issues.

The ICCR and its members are some of the latest to turn up the heat on JPMorgan in particular for what they describe as the outsized impact it has via its financing decisions.

Recently, the nonprofit Majority Action zeroed in on Lee Raymond, former Exxon CEO, and the longest-serving director on the bank’s board. The nonprofit, also a member of the ICCR, says that Raymond’s tenure on the board poses a conflict of interest and compromises the bank’s ability to react to problems posed by a warming world.

And Boston Common Asset Management, an investment firm focused on environmental issues, said this year that it had divested entirely from Chase because its actions did not match its public statements on climate change.

JPMorgan would not comment on the proposals beyond what it wrote in its filings with the SEC. Its annual meeting is scheduled for May 20.

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Climate change Energy industry Commercial lending JPMorgan Chase Jamie Dimon ESG