JP Morgan Chase is to end fossil fuel loans for Arctic oil drilling and phase out loans for coal mining under new climate initiatives.
The world’s largest financier of fossil fuels set out its plans at an investor event on Tuesday, days after the bank’s economists warned that the climate crisis threatened the survival of humanity.
JP Morgan will aim to offer $200bn (£153bn) in environmental and economic development deals to help support clean energy and other sustainable projects instead.
JP Morgan’s green pledges put the bank on a par with Goldman Sachs which became the first large US bank to rule out future financing of oil drilling or exploration in the Arctic and in new mines for thermal coal.
But environmental groups said the bank’s green pledges were dwarfed by its huge financial support for fossil fuels. JP Morgan has provided $75bn in financial support to expand shale fracking, and Arctic oil and gas exploration since the Paris climate agreement.
Eli Kasargod-Staub, of ethical shareholder group Majority Action, said: “These steps pale in comparison to JP Morgan Chase’s responsibility to confront the climate crisis and the systemic risks it poses to investors and global financial stability.”
The group called on JP Morgan to disclose its climate impact and realign its lending with the global goal of limiting heating to 1.5C.
JP Morgan’s climate strategy is expected to fall short of the green pledges announced by BlackRock, the world’s largest hedge fund, which will cut companies that rely on thermal coal for more than a quarter of their revenues from its actively managed portfolios.
JP Morgan’s coal finance restrictions will apply to companies whose primary business is coal mining, but could allow a loophole to continue financing conglomerates that earn less than half of their revenue from coal.
Jeanne Martin, a campaigner at the investment charity ShareAction, said JP Morgan’s climate pledges were an “anticlimax” but proved that “even the world’s largest fossil fuel financier has no choice but to listen to its shareholders and civil society on climate change”.
The leaked document from JP Morgan’s economists, dated 14 January, warns that the bank “cannot rule out catastrophic outcomes where human life as we know it is threatened” by rising global temperatures.
“Although precise predictions are not possible, it is clear that the Earth is on an unsustainable trajectory. Something will have to change at some point if the human race is going to survive,” the report says.
ShareAction, which promotes responsible investing, said JP Morgan’s new policy “is at best an anticlimax and at worst dangerously omissive of a huge part of the coal market”.
Martin said: “If the world was waiting for JP Morgan to move meaningfully on its funding of the climate crisis after warning that human life ‘as we know it’ could be threatened by climate change, it will be sorely disappointed.”
