JPMorgan Asset Management (JPMAM) has announced its departure from Climate Action 100+, the prominent climate-focused investor network.
According to ESG Today, this decision marks a pivotal shift in the firm’s approach to engaging with companies on greenhouse gas (GHG) emissions reduction and climate transition strategies.
Climate Action 100+, since its inception in 2017, has played a crucial role in mobilising investors around the globe to urge major corporate GHG emitters to take decisive action against climate change. The initiative seeks to align business strategies with the goal of capping the global temperature rise to 1.5 degrees Celsius, reflecting the urgent need for net-zero transitions. Boasting over 700 investors representing upwards of $68trn in assets, the network has become a central figure in the climate advocacy landscape.
However, JPMAM’s withdrawal comes against the backdrop of increasing scrutiny from anti-Environmental, Social, and Governance (ESG) factions, particularly within the United States. The network’s activities have drawn criticism from anti-ESG politicians and have been implicated in discussions around energy company boycotts. Such political pressure, including specific actions taken by states like Texas, has spotlighted the challenges faced by investors committed to climate and ESG principles.
JPMAM’s strategic pivot away from Climate Action 100+ is driven by a considerable investment in its internal investment stewardship team and the development of a proprietary climate risk engagement framework. A JPMAM spokesperson highlighted the firm’s accomplishments in building a robust team of 40 sustainable investing professionals, complemented by a large buy-side research team. This ensemble of expertise has enabled JPMAM to engage in over 780 climate-focused engagements in 2022 alone, underscoring its proactive stance on climate stewardship.
“The firm has built a team of 40 dedicated sustainable investing professionals, including investment stewardship specialists who also leverage one of the largest buy side research teams in the industry. Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements,” the JPMAM spokesperson stated.
This move reflects JPMAM’s belief in the significance of internal capabilities to drive meaningful change in climate risk management and investment stewardship. By focusing on its own framework and resources, JPMAM aims to continue playing a vital role in the global effort to combat climate change, reinforcing its position as a leader in sustainable investing.
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