Investment banks bolster their climate finance commitments for coming decade in latest wave of Wall Street net zero financing targets
US investment banks JP Morgan Chase and Citi have significantly ramped up their climate finance commitments, yesterday unveiling plans that would amount to several trillion dollars in sustainable and low carbon investment in the coming decade.
In separate announcements yesterday, Citi has committed to delivering $1tr in sustainable finance by 2030, of which half will go to climate solutions, while JP Morgan Chase said it facilitate and finance $1tr in green initiatives by the end of the decade as part of a major $2.5tr sustainable finance target. The two banks, which are among the world's largest funders of fossil fuels, both cited the need to use their significant influence to tackle climate change.
In a blog post on Thursday morning, Citi's head of global public affairs Ed Skyler confirmed the bank would support a wide array of climate solutions, including renewable energy, green buildings, sustainable agriculture, and clean technologies, aimed at accelerating the transition to a sustainable and low-carbon economy.
The bank's existing target to deliver $250bn of environmental finance by 2025 has been ramped up to unlocking $500bn by the end of the decade, it said.
"Given our global footprint and our role in supporting economic activity around the world, Citi has a role to play in achieving the [UN] Sustainable Development Goals - and in this moment as we look towards emerging and rebuilding from the Covid-19 pandemic, it's more crucial than ever that we address these priorities together," Skyler wrote.
It comes just weeks after Citi announced it is targeting net zero operations by 2030 as well as net zero financed emissions by mid-century, amid a wave of climate promises that have swept US investment banks in recent months.
JP Morgan, meanwhile, yesterday committed to unlocking $1tr of investment for initiatives that accelerate the deployment clean energy and facilitate the transition to a low-carbon economy by the end of 2030, as part of a broader $2.5tr investment programme dedicated to sustainable development.
JP Morgan CEO and chairman Jamie Simon said the bank was "committed to doing its part" in delivering a low-carbon economy. "Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities," he said. "Business, government and policy leaders must work together to support long-term solutions that advance economic inclusion, bolster sustainable development and further the transition to a low-carbon economy."
The bank, which is the largest in the US by assets, said it would help its clients "navigate the challenges and long-term benefits" of the low carbon transition through sustainability-focused, research and advisory services and a dedicated 'green economy' team that specialises on clean energy, efficiency technologies, sustainable finance and agriculture and food technology.
It follows the JP Morgan's commitment last year to align its financing activities with the goals of the Paris Agreement.
The latest announcements from JP Morgan and Citi come less than a week after Wall Street rival Bank of America similarly committed to providing $1tr in "low carbon investment" by the end of the decade, as part of its own recently-announced goal of delivering net zero emissions across its financing activity, operations and supply chain by mid-century.
Yet such commitments from major US investment banks are unlikely to quell scepticism from green campaigners, as many of these financial giants continue to plough significant sums of investment into fossil fuel industries. Statistics published earlier this month by the Rainforest Action Network revealed Citi and JP Morgan Chase are the banking sector's most prolific fossil fuel funders, having providing $237.5bn and $316.7 bn respectively into fossil fuel firms in the five years since the Paris Agreement. Green groups have therefore argued long-term climate targets and finance commitments must also be backed by action in the short term to divest from fossil fuel companies.