JPMorgan: Biggest CO2 Emitter Among Banks at 961,000 Tonnes

JPMorgan Chase reported the highest GHG emissions among the non-Chinese banks. According to Stocklytics.com’s recent analysis of greenhouse gas (GHG) emissions from the world’s largest banks, JP Morgan Chase is among the biggest CO2 emitters. The leader in financial services contributed a staggering 961,000 tonnes of CO2  in 2022.

Edith Reads, Stocklytics financial analyst, commented on the data:

The spotlight on JP Morgan underscores the urgency for the banking sector to accelerate its efforts and navigate the evolving landscape of emissions reduction commitments.

Stocklytics finance analyst, Edith Reads

CO2 Emissions of the World’s Largest Banks

Engaging in everyday activities, powering up a computer, driving, or charging a phone releases gases like methane, nitrous oxide, sulfur hexafluoride, and more into the atmosphere. Among these, carbon dioxide (CO2) is the most prevalent, contributing more significantly to global warming than any other gas.

The concept of a carbon footprint involves calculating the CO2 emissions generated by our actions. This provides insight into both our direct and indirect contributions to global warming. 

The assessment is crucial for individuals and organizations to gauge their environmental impact and take necessary measures.

The leading Chinese bank with the highest emissions was Agricultural Bank of China( AgBank) Limited, which took the top spot. AgBank produced 2.15 million tonnes of CO2 equivalent in 2022. 

The Industrial Commercial Bank of China Limited (2.02 million tonnes) and China Construction Bank Corporation (1.68 million tonnes) followed closely, collectively dominating the top ranks.

Measuring JPMorgan Carbon Footprint?

Banks and other companies utilize three parameters to gain insight into their environmental impact.

The initial parameter, Scope 1 emissions, encompasses direct emissions. This category also includes “fugitive emissions” resulting from heating and cooling system leaks and machine breakdowns.

The second parameter, Scope 2 emissions, represents indirect emissions. This occurs primarily when a business consumes energy purchased from a third party. By evaluating Scope 2 emissions, companies can assess the environmental impact associated with the energy sources they rely on, even if these sources are generated off-site.

The third parameter, Scope 3 emissions, constitutes other indirect emissions. This category includes gases released from employee transport, supply chain activities, and other outsourced services with assets the business neither owns nor controls. 

Understanding and evaluating these three parameters enables banks and companies to measure their carbon footprint comprehensively. 

How Effectively Banks Address Financed Emissions Can Make All the Difference

In light of the revelation that JPMorgan stands as the largest CO2 emitter among banks outside of China, it becomes imperative for financial institutions to intensify their commitment to reducing financed emissions. 

In recent years, a notable trend has emerged, with many banks publicly pledging to align their emissions with the goals of the Paris Agreement. The membership surge to initiatives like the Net-Zero Banking Alliance reflects a collective industry push. 

The initiative has grown from 43 to 122 banks in just over a year, representing 40 per cent of global banking assets. This alliance mandates a commitment to transitioning emissions from lending and investment portfolios to align with a net-zero pathway. 

The momentum is evident as more banks conduct internal assessments and contemplate setting public targets for their financed emissions. With stakeholders increasingly expecting such initiatives, emerging regulatory requirements in various geographies are poised to transform the disclosure of financed emissions. They will have to change from a voluntary task into a mandated obligation under financial or securities regulations.