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JP MorganChase joins efforts to curb global warming

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By Friends of the Earth US | San Fransisco, Apr 24 2005

Rainforest Action Network today commended JPMorgan Chase on its adoption of a comprehensive environmental policy to address the challenges of global warming and deforestation and recognize the rights of indigenous nations.

The policy sets new best practices on the environment in several critical areas including carbon mitigation and reduction, endangered forest protection, independently certified sustainable forestry as well as land and consultation rights of native communities everywhere. It is the first policy of its kind in the financial sector to create a special heading acknowledging “No Go Zones,” a major step forward in the effort to protect ecosystems that are most valuable intact and untouched by industry.

Developed in cooperation with groups including Rainforest Action Network, the new policy marks another environmental milestone in the private financial sector and follows the adoption of similar policies by Citigroup and Bank of America last year. Major advances include:

o Global Warming: JPMorgan Chase will encourage clients to develop carbon mitigation plans that include measurement and disclosure of greenhouse gas emissions as well as plans to reduce or offset them. In a financial industry first, the bank will internalize carbon pollution for power sector projects by integrating the financial cost of greenhouse gas emissions into its analysis.

o Sustainable Forestry Certification: The policy makes JPMorgan Chase the first private bank to state a preference for Forest Stewardship Council (FSC) certification.

o Illegal Logging: The policy will require JPMorgan Chase clients that “process, purchase or trade” forest products from high-risk countries to have certifiable chain of custody systems in place to ensure that the wood comes from legal sources.

o Human Rights: The bank recognizes the right of indigenous individuals and communities to “self determination over issues affecting their lands and territories, traditionally owned or otherwise occupied and used.”

o Project Finance: JPMorgan Chase joins the Equator Principles, lowers the application threshold to $10 million, and broadens the scope to include “all loans, debt and equity underwriting, financial advisories and project-linked derivative transactions,” specifically naming the mining, forestry, and oil and gas industries.

o Private Equity Risk Management: The policy marks the first time that any financial institution has integrated environmental risk management into the due diligence process for its private equity divisions.

o Leadership on Public Policy: In another industry first, JPMorgan Chase has agreed to arrange cooperative meetings with other financial institutions to advocate for reductions of greenhouse gas emissions and “focus on specific projects to alter the emissions trajectory of the US economy.”

Supporting statements:

“Today, JPMorgan Chase joins a growing community of business leaders who are taking their first steps to address global climate change, forest destruction, and human rights violations,” said Ilyse Hogue, director of the Global Finance Campaign at Rainforest Action Network. “This move represents a tipping point in the private financial sector, where the three largest banks have now publicly recognized that a sound long-term economic strategy relies on embracing environmental sustainability. The rest of the commercial and investment banks need to taker larger strides to confront their role in the environmental crisis facing us.”

"One of Wall Street's most trusted names is taking action to reduce its greenhouse-gas emissions,” said Jon Sohn, Sr., an associate at the World Resources Institute. “We hope JPMorgan's stance will drive other financial institutions to curb their pollution and protect themselves from the very real business risks of global warming. WRI applauds JPMorgan's leadership demonstrated today with the release of their Sustainability Commitment. JPMorgan's commitments are a tremendous step towards harnessing financial markets to expand economic opportunity and protect the environment. The commitments made by JPMorgan reflect an exciting trend by financial institutions to develop and adopt a new generation of rules to assess the risks posed by climate, biodiversity and social impacts on their portfolios and on individual investments in companies or projects.""

"We want to congratulate RAN and JPMorgan Chase on reaching this agreement which will have a significant impact on the relationship between the financial service sector and the responsible management of the world's forests,” said Roger Dower, president of the Forest Stewardship Council in the United States. “We set high standards that ensure forestry is practiced in an environmentally responsible, socially beneficial, and economically viable way, and we appreciate the recognition of FSC in this agreement as a vital tool for forest certification and conservation."

"Over the past several years, a coalition of some institutional shareholders of J.P. Morgan Chase have asked the bank to consider the environmental risks of projects it finances,” said Steve Lippman, vice president of social research at Trillium Asset Management. “We welcome the new leadership policies the bank announced today. J.P. Morgan joins a growing number of large banks in the U.S. and around the world that recognize that avoiding unnecessary environmental risks often means avoiding business risks and that there's ways to protect shareholders and the planet at the same time. We'll stay in touch with the bank to ensure the strong and effective implementation of these new risk management policies."

contact

Rainforest Action Network: +1 415 398 4404

Friends of the Earth US Website

JPMorgan Chase
JPMorgan Chase is one of the Big Four Banks of the United States (along with Bank of America, Citigroup and Wells Fargo). The firm was formed in…
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