Banking Giant JP Morgan Exits Climate Action Group - OilPrice.com
Banking Giant JP Morgan Exits Climate Action Group | OilPrice.com
JP Morgan Asset Management has left the Climate Action 100+ group that was set up to pressure companies into becoming greener.
The reason for the move, per the Financial Times, is that the bank’s asset management arm believes it has accumulated the expertise to push companies into climate action on its own.
“The firm has built a team of 40 dedicated sustainable investing professionals,” a spokeswoman for JP Morgan Asset Management told the FT. “Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements.”
Climate Action 100+ was set up in 2017 with the purpose of forcing heavy emitter companies into cutting their carbon footprint. The group’s targets included oil and gas, the air travel industry and other energy-intensive industries.
In response to JPMAM’s exit, Climate Action 100+ said only 13 members have ended their membership in the group since its establishment while new members since mid-2023 stood at 60.
JP Morgan Asset Management is not the first member to leave the group. Last year saw the exit of several smaller investment firms such as Boston-based, Natixis-owned Loomis Sayles and BNY Mellon-owned Walter Scott.
Current members include BlackRock, Goldman Sachs, and Invesco, while Vanguard and Fidelity never joined the group, the FT recalls.
The past couple of years also saw several high-profile exits from anther net-zero formation in the financial services world. Vanguard surprised the industry when it abruptly left the Net Zero Asset Managers group saying it wanted more independence and clarity for its investors.
There have been lower-profile exits from climate pressure groups in the industry, too. One reason that analysts cite for this is conservative state governments’ push against so-called ESG investing, which many have argued is discriminatory. Some states, notably Texas, threatened to pull out their investments from asset managers that supported the ESG investing movement.
By Irina Slav for Oilprice.com
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”