JP Morgan commits to $200 Billion to finance clean energy
Multinational banking giant JPMorgan Chase has announced it is committing to sourcing 100% of its energy needs from renewable energy by 2020 and a promise to facilitate $200 billion in clean financing through 2025.
For those of us who have been covering global warming science and clean technology for a while now — for me, it’s been over a decade — the role that big business and big banking has stepped into in taking a leading role in advocating for sustainable business and banking, and a transition to a low-carbon economy, has been incredibly heartening. It would be naive to imagine that these moves have been made entirely on altruistic terms — they most certainly haven’t, but more so, they don’t need to be, considering the economic value in such moves — but it has been rewarding regardless, to see big money so actively engage in sustainable business.
JPMorgan Chase, one of the oldest financial institutions in the United States with assets of $2.6 trillion, and working in over 60 countries with more than 240,000 employees, announced this week that they “have gradually and thoughtfully been increasing our commitment to sustainability for over a decade.”
Over a year ago, JPMorgan Chase announced that it was backing away from investing in new coal mining projects, adding such investments to a list of “Prohibited Transactions” alongside Forced or Child Labor and Illegal Logging. Further, and vitally important when we look to see beyond the altruistic motivations for such decisions, JPMorgan Chase explained that,
“When one of the world’s largest banks thinks about sustainability – it’s not just as an employer with a global real estate portfolio of 75 million square feet of space, which is approximately 27 times the square footage of the office space at the Empire State Building – but also as a financial services company helping its clients better manage sustainability challenges and capitalize on new opportunities.”
As such, JPMorgan Chase announced that it has “put a stake in the ground,” committing to sourcing renewable energy for 100% of its energy needs by 2020, and facilitating climate financing worth $200 billion through 2025. This impressive commitment is the largest made by a financial institution, and will likely spur many other institutions to match and exceed JPMorgan’s commitments.
“Business must play a leadership role in creating solutions that protect the environment and grow the economy,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “This global investment leverages the firm’s resources and our people’s expertise to make our operations more energy efficient and provide clients with the resources they need to develop more sustainable products and services.”
JPMorgan Chase hasn’t just gone in for impressive-sounding-but-vague promises, either. In its announcement, the company explicitly laid out what its commitments look like.
Specifically, JPMorgan Chase will seek to develop on-site solar power generation for up to 1,400 bank-owned retail and 40 commercial buildings across the globe. The company will also begin seeking Power Purchase Agreements (PPAs) for renewable energy — such as the recently signed 20-year PPA with a subsidiary of NRG Energy for approximately 75% of the electricity produced from the in-production 100 MW Buckthorn wind farm in Texas.
Further, JPMorgan Chase will seek to reduce its energy consumption through energy efficiency measures, such as the construction of the world’s largest LED lighting installation. Further, approximately 4,500 Chase branches will install new lighting technologies, and the company has already retrofitted 2,500 branches to date, for a total of 1.4 million light bulbs, cutting Chase’s lighting energy consumption by 50%.
On the clean financing side of things, the company — which has already facilitated and advised on some of the world’s largest clean financings — will begin advising its clients on “leading strategic transactions and capital raises in the renewable energy sector.” The company will also seek to finance and provide risk management solutions for clients’ renewable energy projects, as well as for companies facilitating new energy, technology, transportation, waste management, and water treatment.
JPMorgan Chase also underwrites debt with a sustainable use of proceeds for municipal, corporate, and multilateral clients, totaling nearly $15 billion in 2016, and already in 2017 Chase has served as active bookrunner on Apple’s $1 billion green bond offering in June. Finally, JPMorgan Chase will seek to support its clients’ sustainability measures.