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Photo credit: Kritika Gautam, India

Global financial services firm, JPMorgan Chase & Co. is committed to helping its clients navigate the challenges and opportunities of transitioning to a low-carbon world. In 2020, the firm established its Paris-aligned financing commitment and created its Center for Carbon Transition for sustainability-focused financing, insights, and advisory solutions.

In Autumn of 2020, it enlisted the support of ERM to challenge and enhance their efforts to establish an innovative new framework to better achieve these goals. Released in 2021, the Carbon CompassSM methodology will guide JPMorgan Chase’s Paris-aligned target setting, portfolio measurements, and strategy to support the firm’s clients as they transition to a low-carbon world.

JPMorgan Chase has initially set sector-specific portfolio targets, established against a 2019 baseline, for three sectors that represent a significant share of global GHG emissions: Auto Manufacturing, Electric Power, and Oil & Gas. ERM worked closely with JPMorgan Chase to create a practical and future-ready methodology for these sectors. It was important to establish an approach with a high level of integrity that could be functional based on today’s science and yet ready to evolve in response to changes in climate scenarios and data availability and be extended to address additional sectors.

ERM’s combination of deep technical and business expertise in the low-carbon energy transition, with our thorough understanding of these sectors, external stakeholders and the finance sector was highly beneficial to the process. The breadth of experience ensured a holistic approach that learns from and builds on existing frameworks and climate scenarios to meet the needs of JPMorgan Chase and their clients.

By executing a consultation process across stakeholders, we were able to create a product with considerations of the current policy and science landscape, changing global regulations, and expectations within JPMorgan Chase and across the marketplace.