Financial giant sets green example to other banks

Private bank JPMorgan Chase has been commended by environmentalists for its recent adoption of a comprehensive environmental policy, primarily to address global warming and deforestation.

The policy sets new best environmental practices in several critical areas: such as carbon mitigation and reduction; endangered forest protection; independently certified sustainable forestry; and the consultation rights of native communities everywhere.

Moreover, it is the first policy of its kind to be formed in the financial sector that recognises "No Go Zones" - a major step forward in the effort to protect ecosystems that can be damaged or even destroyed if not left intact and untouched by industry.

"Over past years, a coalition of institutional shareholders of JPMorgan Chase have asked the bank to consider the environmental risks of the projects it finances, and we welcome the bank's new leadership policies," spokesman for Trillium Asset Management Steve Lippman stated.

"JPMorgan joins a growing number of large banks that realise avoiding unnecessary environmental risks often means avoiding business risks, and that there are ways to protect shareholders and the planet at the same time."

Conservationists have described the bank's policy as an "environmental milestone in the private financial sector", with major advances including:

  • Global warming - carbon mitigation plans, and strategies to offset of reduce greenhouse gas emissions
  • Sustainable forestry - the bank now states a preference only for timber with the Forest Stewardship Council (FSC) certification
  • Illegal logging - the process, trade or purchase of forest products from high-risk countries will now only be possible for clients through a certifiable chain of custody sources to ensure legality
  • Human rights - recognition of the rights of native or indigenous individuals or communities over the land or territory on which they use or occupy
  • Project finance - JPMorgan has joined the Equator Principles, lowering the application threshold to US $10 million and broadening the scope to include "all loans, debt and equity underwriting, financial advisories and project-linked derivative transactions", specifically naming the mining, forestry, oil and gas industries
  • Risk Management - the first time that any financial institution has integrated environmental risk management into the due diligence process for private equity divisions
  • Public Policy - the bank has agreed to meet with other financial institutions to advocate for the reduction of carbon and greenhouse gas emissions, focusing on altering the US economy's emissions trajectory

    Associate of the World Resources Institute, Jon Sohn Sr applauded the bank's leadership and sustainability commitment, calling it a "tremendous" step towards harnessing financial markets to expand economic opportunities while protecting the environment.

    "One of Wall Street's most trusted names is taking action to reduce its greenhouse gas emissions," he commented.

    "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."

    By Jane Kettle

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