A huge investment is to be made towards fighting climate change by the largest bank of the United States.
A total of $2.5 trillion over 10 years will be either financed or invested by JPMorgan Chase (JPM) to fund solutions that are targeted at fighting climate change and sustainable development, the bank announced recently. Within that amount, the bank has targeted to invest or finance about $1 trillion for projects that provide green solution such as renewable energy, new clean technology, waste management and conservation.
According to analysts, this announcement was the largest of its kind ever to be made by a major bank and is the latest in a series of such announcements made by financial institutions to help in a global shift towards cleaner energy.
“This is about us not just saying the right thing, but actually doing the right thing,” Marisa Buchanan, JPMorgan’s global head of sustainability, said in television interview.
The $2.5 trillion goal through the end of 2030 marks an acceleration of JPMorgan’s short-term target. In order to support climate solutions and sustainable development, a commitment of deploying $200 billion in 2020 was made by JPMorgan in February last year. That target had been overshot by the bank and it had invested about $55 billion in green initiatives alone, the bank said.
“Technology has to be such a huge piece of the puzzle when it comes to meeting the Paris climate goals. This is a big opportunity for us as a bank,” said Buchanan.
As $1.5 trillion sustainable finance goal was announced by rival Bank of America (BAC) announced last week, which included making investments of $1 trillion in the area of climate change related projects.
A number of the major banks of the US including JPMorgan, Bank of America, Wells Fargo (WFC) and other big banks have already set their own goals to achieve zero carbon emissions which will include the companies and projects financed by them by 2050.
These announcements clearly show the extent of pressure on the banks to show that they are interested in the area of fighting climate change and not to be identified as causing it. The announcements also show the growing importance of green projects and clean energy projects as an investment area for Wall Street.
But there are criticisms by climate groups about the measures taken by the banks being not enough particularly most still continue to fund fossil fuel based projects.
According to a report released by climate groups last month, the world’s 60 biggest banks have provided $3.8 trillion in financing to fossil fuels since the Paris climate agreement was reached in 2015.
“Banks are still net negatives in the overall sustainable finance horizon,” said Vanessa Fajans-Turner, executive director at BankFWD, a network that aims to persuade banks to phase out fossil fuel financing.
“That’s not a coherent sustainable finance strategy, and the bank’s clients and competitors know it,” said Fajans-Turner. “We welcome the announcements by banks to be increasingly engaged climate actors. But banks still have a long way to go.”
(Adapted from CNN.com)