J.P. Morgan said it spent $1.29 on green solutions for every dollar spent on high-carbon activities in a disclosure prompted by a proposal submitted by NYC Comptroller Brad Lander, writes ESG Dive. The proposal was also submitted to four other major US banks and the Royal Bank of Canada and J.P. Morgan was the first to agree to publish the ratio.
The calculation includes its lending, facilitation and tax oriented financing for zero- and low carbon power generation, low-carbon fuels and other solutions, compared to its financing for things including oil and gas refining and coal, oil and natural gas power, according to a methodology released the same day as its annual climate report.
The climate report also revealed that there was a year-over-year decrease in the revenue-based carbon intensity for the bank’s real estate portfolio — J.P. Morgan’s third largest sector by wholesale credit exposure.
The bank classified any project financing as either 100% low carbon or 100% high-carbon, and also included any tax-oriented investments, green bonds or green loans as low-carbon financing, according to its methodology. Dimon called the energy transition “an enormous commercial opportunity.”
In a research analysis published by J.P. Morgan earlier this year, the bank warned that a “reality check” was needed on the timeline for a global energy transition, noting that the shift from fossil fuels to renewable energy takes time. The bank called the energy transition a “highly complex process,” noting it “should be measured in decades or generations, not years.” In line with this report, the International Monetary Fund has estimated that reaching net-zero will require $5 trillion in annual investments in low carbon solutions by 2030.