JPMorgan nixes financing for certain coal, oil-and-gas projects

JPMorgan Chase & Co. will no longer provide financing for companies focused on coal extraction, the bank said Monday, as part of a broader initiative focused on environmental issues.

The bank plans to announce the initiatives as part of its investor day on Feb. 25. It detailed three types of financing restrictions related to fossil fuels, two tied to coal and one focused on oil and gas.

JPMorgan said it would provide no lending, capital markets or advisory services for companies that derive a majority of their revenues from coal extraction. It would phase out existing exposure to such companies by 2024. Second, the bank would not provide project financing or asset-specific financing to develop or refinance coal-fired power plants — unless the plant uses carbon capture and sequestration technology. The U.S. coal sector has entered a secular decline as export demand has dissipated.

Finally, the bank pledged to not provide project financing or other asset-specific financing for oil-and-gas development in the Arctic. On Feb. 20, U.S. Rep. Jared Huffman, D-Calif., wrote a letter, cosigned by 32 colleagues, urging the five largest U.S. banks to refuse financing for oil drilling in the Arctic National Wildlife Refuge.

Along with the financing restrictions, JPMorgan renewed its commitment to facilitate $200 billion of transactions that support climate action, stating that the bank would meet the goal by 2020 after setting a goal to hit the target by 2025. The bank also expects to meet its goal of sourcing renewable energy for 100% of its global power needs by year-end.

Additionally, the bank announced the launch of the J.P. Morgan Development Finance Institution, which will focus on scaling up finance for developing countries. JPMorgan also established a group focused on environmental, social and governance issues, which will advise clients on how to reduce carbon emissions and meet ESG investing goals.

• Print
• Email
• Tweet