Is the largest bank in the US doing enough to combat climate change?

JPMorgan Chase – the largest bank in the US – is also the lead financier of fossil fuels. Read on to learn about the role banks play in the energy transition.

By Ellie Kim Fromboluti

October 9, 2022

Planet over profit sign protest medium

There’s no question that we need to take action on climate change now if we’re going to avoid irreversible damage to our planet. The latest UN IPCC Report says we need to take aggressive action to limit global warming, and net zero targets aren’t enough. To limit global warming to 1.5 degrees in line with Paris Climate Agreement goals, we need a credible plan to get there – that means backing up net zero pledges with ambitious but achievable targets to reduce global greenhouse gas (GHG) emissions.


In the US alone, fossil fuel combustion accounted for 92% of CO2 emissions in 2020. A crucial step in slowing climate change is to end our reliance on fossil fuels and transition to renewable energy sources. To do this, the International Energy Agency (IEA) calls for a freeze on funding for all new fossil fuel projects, amongst other actions.

Factory smokestack with large plume of smoke, air pollution


JPMorgan Chase is not only the largest US bank but also a lead financier of fossil fuels, having funded USD 382 billion between 2016-2021. With effective policies to phase out fossil fuel financing from major banks, fossil fuel companies would be forced to transition their business models.


Banks profit from fossil fuels, but unlike oil and gas companies, they would not have to enact major changes to their existing business models to stay afloat. So why don’t they take more drastic measures to divest from fossil fuels?

Bank leadership makes these decisions

Bank building city smoke emissions


As Chairman and CEO of JPMorgan Chase, Jamie Dimon wields the power to maintain the status quo, but also the responsibility to push for change. However, contradictory words and actions cast doubt on his commitments. 


On the one hand, Dimon has pledged support for the Net Zero Banking Alliance (NZBA) — committing to net zero emissions by 2050. Several other claims of climate-forward policies are described in Dimon’s 2021 Annual CEO letter and in JPMorgan’s 2021 Annual Report and Proxy. These include a 10-year commitment of $1 trillion towards climate action, setting Paris-aligned carbon emissions intensity reduction targets, and working with clients to improve carbon disclosures and reduce emissions. In 2020, the bank founded a Center for Carbon Transition, which “provides clients with financing, research and advisory solutions to support them in their transition to a low-carbon future.” Across investments, the bank claims to be working to develop and operationalize emissions reduction targets.


On the other hand, Dimon has proposed a “Marshall plan” for energy in response to the war in Ukraine. Dimon calls for an increase in US production of natural gas to export to Europe. World political conditions create energy insecurity, reducing confidence in renewables in the energy transition. Fossil fuels – specifically, natural gas – are a comparatively quick fix. Maybe it’s not surprising that the US is projected to increase its natural gas production in the coming years.


oil rig in the gulf

Although JPMorgan Chase has set targets attempting to align with the Paris Climate Agreement, it has set intensity-only targets, which remain “...compatible with expansion of fossil fuels and increases in absolute emissions,” according to a recent report by the Rainforest Action Network. Focusing on lower-emissions energy sources leaves open the possibility of increasing emissions relative to current investments. The bank does not specify emissions targets for individual clients – meaning it can continue funding big GHG emitters.

And, it’s worth repeating that JPMorgan continues to be the top financier of fossil fuels.


Trouble from shareholders

Climate-conscious shareholders who do not approve of continued investment in fossil fuels proposed two resolutions that were considered at JPMorgan’s most recent annual meeting of shareholders. The first asked the bank to end support for new fossil fuel projects (Proposal 4), in line with a recent report by the IEA. The second requested that the bank set absolute contraction targets (Proposal 9), in line with recommendations by NZBA and the UN Environment Programme Finance Initiative (UNEP FI).

Wind turbine above a field at dusk

The Board of Directors objected to the proposals on the basis of already doing enough to address climate change without creating energy insecurity. Further action, it states, is at the discretion of bank management, which is “best positioned” to make these crucial decisions.

While the bank management asserts that the financial risk of suddenly pulling out of the fossil fuel industry is too great, continued investment in fossil fuels may actually be financially risky. Not only does current funding of fossil fuel projects lock in harmful emissions trajectories into the future, but renewable energy projects are also on the rise and may present a better long-term investment.

Power pylons electricity sunset

The current vote did not adopt either of the proposed resolutions. However, the proposals received 10% and 15% support, respectively. This is enough support that the issues cannot be ignored, and may be proposed again at next year’s meeting. 

Four actions JPMorgan Chase can take to support its claims

Here are the top four actions JPMorgan Chase can take to position itself as a leader - rather than a laggard - in the energy transition.

  • Follow through on its commitments by adhering to the IEA net zero roadmap to transition away from fossil fuels. For one, this means no new fossil fuel funding
  • Phase out all fossil fuel financing on a timeline consistent with a 1.5°C climate change target. 
  • Restrict financing coal projects now, as advised by the recent Rainforest Action Network report, with the intention of a full coal exit between 2030-2040 at the latest.
  • Commit to reporting absolute emissions by joining the Partnership for Carbon Accounting Financials (PCAF) — a coalition of 260+ banks attempting to align the financial industry with the goals of the Paris Climate Agreement. PCAF facilitates banks in measuring and reporting their financed GHG emissions.
road dividing woods

If JPMorgan does not back up its commitments with actions, it risks gaining a reputation for greenwashing.


What this means for you

windmills at sunrise


In the end, JPMorgan can make claims of climate consciousness, but until they stop funding fossil fuels, these claims represent a failure to lead the energy transition.


Regulatory pressure on banks can either facilitate or slow down the energy transition. Get involved and watch out for federal and state legislation requiring banks to lend to fossil fuel projects.


Take a closer look at your bank and investments - GreenPortfolio can help. We offer some green banking recommendations. 


Editor's note: GreenPortfolio is partnering with Climate & Capital Media to support our efforts to bring transparency to the relationship between finance and climate change for American consumers. This article is based on GreenPortfolio’s interpretation of their recent work.



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