JPMorgan Chase updates financed emissions targets for high-carbon sectors

JPMorgan Chase has set new 2030 targets to reduce financed emissions in aluminium and shipping. It has also updated the way it will calculate financed emissions from energy, as it scales up financing in renewables.

JPMorgan Chase updates financed emissions targets for high-carbon sectors

The business this week published its latest annual climate report, outlining progress to date in reducing the emissions intensity of the businesses and projects it finances. This report additionally includes updated climate targets and metrics.

A notable addition to the financier’s climate plan are new emissions targets for aluminium and shipping. The targets cover shipping clients’ Scope 1 (direct) emissions and both Scope 1 and Scope 2 (power-related) emissions from aluminium.

“We have chosen to prioritize these sectors given their contribution to total global emissions, and the technical and economic maturity of their available decarbonization pathways,” the report states.

JPMorgan Chase has pledged to engage with clients in the shipping industry to deliver a 33% cut in emissions intensity by 2030, against a 2021 baseline. Within the same timeline it is aiming or a 25% reduction in emissions intensity from aluminium investments.

These new targets are an addition to existing, sector-specific emissions intensity targets for oil and gas, electric power, automotive manufacturing, iron and steel, cement and aviation.

The report reveals that progress has been slow in cement and oil and gas, with just a 1% reduction in emissions intensity per sector against JPMorgan Chase’s baseline years. Additionally, an intensity reduction of just 3% has been recorded for aviation.

On oil and gas, the report explains that JPMorgan Chase has expanded its Scope 3 (indirect) emissions target for oil and gas to cover the entire energy generation sector. It has made this change to “prioritise a significant build-out of clean energy sources” and to reflect increased investments in renewables. The updated metric is called ‘Energy Mix’

JPMorgan Chase has stated that, since the end of December 2022, it has reduced emissions intensity by 15% using the new Energy Mix metrics. It attributes this to a decrease in exposure to oil and gas and an increased financing of zero-carbon

The business is targeting a 36% reduction in ‘Energy Mix’ emissions by 2030 against a 2019 baseline.

Methane statement

The business has not set out plans to end oil and gas financing, or time-bound, numerical targets to cut back. It has, however, acknowledged that some divestment will likely be necessary.

Climate campaigners have long been calling on the financier to boost its ambitions here and to provide more clarity. Activists including Greta Thunberg made headlines a few weeks ago with a demonstration outside the bank’s building in Canary Wharf, London.

JPMorgan Chase has stated that it will continue to “sustain efforts to engage with oil and gas clients to help them design pathways to reduce the carbon intensity of their product mix”. It expects clients to tilt away from oil, towards gas and alternative fuels in the longer term.

This year so far, there has been little to no reduction in the Scope 1 and 2 emissions intensity of JPMorgan Chase’s oil and gas client book.

The firm is, therefore, preparing to bolster its engagement work on topics that could present quick wins, including methane leaks and flaring. It has set out these plans in a new annual letter concluding that reducing methane requires “more financing, not less”, despite the assertions of energy majors.

More than 100 nations have backed a joint ‘Methane Pledge’ to reduce emissions by 30% this decade. The International Energy Agency (IEA) stated earlier this year that interventions from oil and gas companies have never been more affordable, estimating that 3% of the sector’s income during 2022 could deliver a 75% methane emissions reduction.

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