London — Global investment bank JPMorgan Chase, which is one of the largest financiers to the fossil fuel industry, has pledged to help its oil and gas clients cut their carbon intensity by 35% by 2030, it said May 13.
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This is part of the US-headquartered bank's efforts to align its financing activities with the climate goals of the Paris Agreement.
It published 2030 carbon intensity targets for its clients in three of its portfolios -- oil and gas, electric power and auto manufacturing, as it plans to help them transition to a low-carbon world.
JPMorgan along with many other investment banks have come under pressure to reduce their funding for oil and gas businesses because of the large carbon footprint of such projects.
In its oil and gas portfolio, JPMorgan has pledged a 35% reduction in operational carbon intensity, as well as a 15% reduction in end-use carbon intensity – "reflecting a decrease in emissions from the combustion of oil and natural gas downstream and increase in renewable energy generation," it said in a statement.
The oil and gas targets cover its clients which are producers of oil and natural gas, as well as refiners and integrated companies.
It said it will work with clients to address methane leakage and flaring activity, in addition to encouraging shifts to renewable electricity to reduce operational emissions.
"[It] will also work with clients to address end-use emissions, including by shifting to lower-carbon fuels and exploring other business diversification strategies," the statement said.
In April, the bank said it was planning to finance and facilitate more than $2.5 trillion over 10 years -- including $1 trillion for green activities -- "to advance long-term solutions that address climate change and contribute to sustainable development."
However, the bank has vowed to adhere to much higher targets for clients in the power and automotive sectors.
It has pledged to cut carbon intensity of its customers in the electric power and auto manufacturing portfolios by 69% and by 41%, respectively, by 2030 versus a 2019 baseline.
"The firm will work to accelerate the power sector's shift to low- and zero-carbon sources, like solar and wind, to help reduce emissions from electricity grids globally," it added.
The bank has however, chosen carbon intensity as its metric rather than measuring targets against greenhouse gas emissions.
"We have carefully chosen our targets and put the resources in place to help our clients transition to a low-carbon world, the bank's chief risk officer Ashley Bacon said.
"Our Carbon Compass methodology creates incentives to deliver capital and advice to our global clients for the purpose of improving carbon efficiency, to help put us on a path to net zero."
Many banks and hedge funds are starting to reduce their investments in oil and gas as part of their net zero carbon targets.
The bank also plans to "satisfy at least 70% of its renewable energy goal with on-site renewable energy and off-site long-term renewable energy contracts by 2025."