JPMorgan AM Exits Climate Action 100+ - ESG Today
JPMorgan AM Exits Climate Action 100+ - ESG Today
JPMorgan AM Exits Climate Action 100+
JPMorgan Asset Management (JPMAM) has withdrawn from Climate Action 100+, a climate-focused investor network focused on engaging with companies to reduce their greenhouse gas emissions and implement climate transition plans.
According to a statement from a JPMAM spokesperson, the firm’s decision follows the development of its internal engagement capabilities, allowing the company to act on its own.
The spokesperson said:
“J.P. Morgan Asset Management (JPMAM) is not renewing its membership in Climate Action 100+in recognition of the significant investment it has made in its investment stewardship team and engagement capabilities, as well as the development of its own climate risk engagement framework over the past couple of years.”
Launched in 2017, Climate Action 100+ is an investor initiative that has targeted the world’s largest corporate greenhouse gas (GHG) emitters to promote taking necessary action on climate change, and align their business strategies with net zero in order to help limit average global temperature rise to 1.5 degrees Celsius. The network has grown to include more than 700 investors representing more than $68 trillion in assets.
The group, however, has also become a key target for anti-ESG politicians, and fueling claims that its members are “boycotting” energy companies. Last year, a group of U.S. Republican state attorneys general sent a letter to large asset managers warning that participation in groups such as CA100+ raised concerns about the investors’ adherence to fiduciary duties and compliance with anti-trust rules.
Similarly, Texas cited participation in Climate Action 100+ as part of the criteria used by the state to compile a list of “Financial Companies that Boycott Energy Companies,” which it cited in its placement of a series of asset managers for divestment.
JPMorgan Asset Management has listed Climate Change as one of its six main investment stewardship priorities, posing the most significant risks and opportunities for its investments, and the firm was involved in over 780 climate-focused engagements in 2022.
In the statement, the spokesperson said:
“The firm has built a team of 40 dedicated sustainable investing professionals, including investment stewardship specialists who also leverage one of the largest buy side research teams in the industry.
“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.”
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.”