JPMorgan says it's still committed to climate transition financing
JPMorgan says it's still committed to climate transition financing

JPMorgan says it’s still committed to climate transition financing

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JPMorgan says it’s still committed to climate transition financing

Despite a tricky political environment, the Wall Street bank still has a goal. JPMorgan, BofA, Citigroup and Goldman all pulled out of the Net-Zero Banking Alliance after Trump’s election win. Asset owners in Scandinavia, the UK and the Netherlands have all signaled displeasure with how American money managers seem to be handling basic stewardship and climate commitments. But JPMorgan, the largest US bank, isn’t about to abandon commercial goals like transition finance in response to sudden shifts in the political debate, Taylor Wright, head of operational sustainability at JPMorgan, said in an interview. She says that getting a foot in the door as a buyer, while the market is still in its early stages, will make it easier to secure trade and financing deals when carbon credits take off. The bank “stands to profit,” Wright said.

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Despite a tricky political environment, the Wall Street bank still has a goal.

by Natasha White

Since Donald Trump’s re-election, Wall Street has abandoned public climate alliances and toned down diversity initiatives. But US bankers want Europeans to know that’s not the whole story.

At recent climate summits in London, representatives from JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp. and Citigroup Inc. were mingling with their European counterparts to discuss investment themes that have been vilified by the Trump administration.

It’s part of a balancing act that financial firms are trying to pull off against a backdrop of intense political pressure.

“We are an American bank, but especially being a highly regulated industry, we have to assess and evaluate what’s coming at us from all parts of the world,” Taylor Wright, head of operational sustainability at JPMorgan, said in an interview. “We see pressures on both sides.”

The comments feed into a difficult moment for relations between the finance industries of Europe and the US. Asset owners in Scandinavia, the UK and the Netherlands have all signaled displeasure with how American money managers seem to be handling basic stewardship and climate commitments. In some cases, European institutional investors have even pulled mandates, with others currently under review.

The list of issues angering European clients includes the withdrawal by US financial firms from global climate coalitions. JPMorgan, BofA, Citigroup and Goldman all pulled out of the Net-Zero Banking Alliance after Trump’s election win. But JPMorgan, the largest US bank, isn’t about to abandon commercial goals like transition finance in response to sudden shifts in the political debate, Wright said.

“We do a pretty good job of staying true to” those goals, “rather than letting volatility in the political landscape influence our decision-making,” she said.

Speaking at the City Week Net Zero Finance Innovation Summit, Cathy Shepherd, Citigroup’s global head of clean energy transition and the UK head of natural resources, said the current atmosphere in the US means clients concerned with transition finance are “really taking a pause on those investments.” That means that “money that’s sitting on the sidelines is starting to look elsewhere,” with Europe a “natural home” for those flows, she said.

Sandra Boss, UK chair of BlackRock Inc., noted that “in Europe, 100% of our largest clients have net zero commitments,” in comments delivered at the same event. “That’s not the same globally.”

JPMorgan’s Wright, who recently took on her current role after her predecessor Brian DiMarino left JPMorgan, leads the bank’s efforts to cut its operational emissions. The bulk of those are taken up by the company’s vast real estate portfolio spanning more than 60 countries, and by business travel, including a fleet of private jets. The bank’s operational emissions were 374,417 metric tons of CO2 in 2023, according to its latest data, down more than 60% from 2017.

Wright is also in charge of JPMorgan’s plan to expand its footprint in the market for carbon credits. It’s a business area that relies on companies, regulators and governments caring about emissions, and around which there’s “much more consensus” in Europe than in the US, Wright said. She says that getting a foot in the door as a buyer, while the market is still in its early stages, will make it easier to secure trade and financing deals when carbon credits take off.

The bank “stands to profit,” Wright said.

Carbon credits are traded via the voluntary carbon market, which has been beset by a string of greenwashing allegations in recent years. The market now faces new hurdles in the US, as Republicans seek to cut Biden-era subsidies for carbon removal projects.

Source: Investmentnews.com | View original article

Source: https://www.investmentnews.com/wirehouses/jpmorgan-says-its-still-committed-to-climate-transition-financing/261131

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