To evaluate the net-zero alignment of its global financing portfolio in each of the included sectors, JPMorgan Chase computes a portfolio-weighted average of emissions performance for all its clients in the sector portfolio. Weights are determined based on its cumulative financing to each client as a share of its total financing to the sector.
For the purposes of this calculation, JPMorgan Chase’s financing portfolio is defined to include all lending, tax equity and capital markets activity. It believes that including all these types of financing activities provides a better understanding of how its financing is helping its clients make progress toward their decarbonisation goals.
For capital markets activity, also known as facilitated emissions, JPMorgan Chase uses 100% attribution of its share of the transaction size—i.e., the full value of transactions facilitated in the debt and equity capital markets for in-scope clients—and includes its share of transactions on a three-year rolling average basis. The choice of a three-year versus one-year rolling average helps compensate for the significant volatility often observed with capital markets transactions, driven in part by companies typically only going to the market for additional financing every few years (JPMorgan Chase & Co. 2023).
Read more on JPMorgan Chase & Co.’s net-zero targets here.
This case study was originally published in the Net-Zero Banking Alliance’s Target Setting for Capital Markets Activities report (October 2024).
Disclaimer: NZBA shares case studies to promote member banks’ awareness of new approaches, tools, products, services, and transactions related to financing the transition to net zero. Featuring a case study naming a particular bank does not represent an endorsement of all actions from that bank.