A proposal to disclose JPMorgan Chase’s climate transition plan was ultimately blocked but it received record support from shareholders as the large fossil fuel financer faces increasing pressure to solidify its environmental commitments.
JPMorgan Chase is the latest bank to fend off attempts to publish a climate transition plan but the resolution presented at its May 16 annual meeting won significant backing, with 35 per cent of shareholders supporting the disclosure of such plan.
The proposal, filed by non-profit As You Sow, argued that “shareholders are concerned that [JPMorgan] Chase does not demonstrate a concrete transition plan for achieving its 2030 sectoral reductions targets”. It added: “Currently, [JPMorgan] has not demonstrated whether its planned actions will result in 1.5 degree aligned emissions reductions.”
As You Sow president Danielle Fugere said: “As one of the largest global banks, and one of the largest funders of fossil fuels, the banking sector looks to JP Morgan to set the tenor of climate ambition. JPMorgan can move the needle on meaningful climate action by articulating how it will make its ambitions actionable.”
The JPMorgan board had advised shareholders – in its proxy statement issued prior to the AGM – to vote against the As You Sow proposal, arguing the company’s 2022 climate report offered detailed information on its climate progress. “We have also disclosed our intent to share more details on our plan to report absolute financed emissions in 2023,” the board said.
In its pre-AGM proxy research report, proxy adviser Institutional Shareholder Services recommended that shareholders vote for As You Sow’s proposal.
“Throughout its disclosures, the company touches on some of the elements of a bank climate transition plan,” it said. “However, the company does not clearly disclose transparent metrics and timelines around aspects of its decarbonization strategy.”
ISS continued: “Given its status as the leading financier of fossil fuels, shareholders would benefit from clear and comprehensive disclosure on its climate transition plan. As such, shareholder support for this proposal is warranted.”
Fellow proxy adviser Glass Lewis, however, suggested that shareholders vote against the resolution. “We currently do not believe that the proponent has provided sufficient evidence to demonstrate that the company is not working in good faith toward its stated climate commitments,” its report read, “or that the company’s existing disclosures do not allow shareholders to understand its goals and actions with regard to its climate transition planning.”
Voting platform Tumelo’s chief executive officer Georgia Stewart, meanwhile, told Sustainable Views that “35 per cent is an astounding result given the shrinking support ESG proposals are getting this year, as some investors are under political pressure to scrutinise shareholder requests more closely”.
Troubling message
Campaigners were disappointed by the outcome. “While it is promising to see that JPMorgan Chase received the highest vote total yet among the big US banks on a proposal calling for better transition planning, it is beyond disappointing that investors refused to use their influence to encourage stronger climate risk management,” said Jessye Waxman, senior campaign representative for the Sierra Club’s Fossil-Free Finance campaign.
“Despite JPMorgan Chase being one of the worst perpetrators of climate chaos financing, investors failed to vote for stronger accountability. This sends a troubling message that investors are interested in information, but not in meaningful changes that would reduce systemic risks to their portfolios,” said Waxman.
JPMorgan’s three biggest institutional investors, Vanguard, BlackRock and State Street, together hold around 17 per cent of outstanding shares, according to FactSet. State Street decline to say how it voted in regards to the climate transition plan proposal, while Vanguard and BlackRock did not return requests for comment.
Activists had previously accused the three asset managers of blocking ESG shareholder proposals. In January, ShareAction said 49 of 252 resolutions targeting environmental, social and governance in its dataset in 2022 would have had majority support if the three managers had backed them.
Funding fossil fuels
In 2021, JPMorgan published emissions intensity reduction goals for 2030 covering the oil and gas, electric power and automotive manufacturing sectors, saying at the time that it was the first large US bank to set such portfolio-level emission reduction targets. The bank was also the biggest underwriter of sustainable finance bonds last year, according to Refinitiv, with 5.3 per cent of the market.
However, it is also the world’s largest fossil fuel financier based on overall transactions since the signing of the Paris Agreement, according to research by the Rainforest Action Network, BankTrack and other NGOs. Royal Bank of Canada surpassed the US-based bank in terms of financing provided to the fossil fuel industry in 2022.
At the 2023 AGM, besides the As You Sow resolution, 12 per cent of shareholders also supported a resolution filed by the New York City Comptroller calling on the bank to release 2030 absolute greenhouse gas emissions objectives for its energy portfolio. A similar resolution the previous year was backed by 15.2 per cent of shareholders.
Meanwhile, eight per cent of shareholders voted for a resolution filed by the Sierra Club Foundation urging JP Morgan to adopt a time-bound phasing out of its financing for new fossil fuel exploration and development. This was also down on support for a similar resolution (10.9 per cent) at the 2022 AGM.
Shareholder resolutions requesting the disclosure of climate transition plans received 31.9 per cent backing at Wells Fargo’s AGM, 29.9 per cent at Goldman Sach’s meeting and 28.5 per cent support at Bank of America’s AGM.
JPMorgan declined to comment.