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A key aspect of JPMorgan Chase’s environmental sustainability strategy is how we engage with clients that operate in carbon-intensive industries, with the goal of helping accelerate the low-carbon transition and set a path toward global achievement of net-zero emissions by 2050.
We committed in October 2020 to align key sectors of our financing portfolio with what we consider to be the primary goals of the Paris Agreement, which aims to limit the global average temperature rise to well below 2 degrees Celsius, and ideally to 1.5 degrees Celsius, above pre-industrial levels. To meet our commitment we are setting portfolio-level emissions intensity reduction targets in select sectors that are aligned to science-based emissions reduction pathways.
In May 2021, we became the first large U.S. bank to establish 2030 portfolio-level emission reduction targets, which we set for three sectors: Oil & Gas, Electric Power and Auto Manufacturing. We also published our Carbon CompassSM methodology detailing our approach. In December 2022, we expanded Carbon CompassSM with targets for three additional sectors: Iron & Steel, Cement and Aviation.
Over time, we aim to expand this work to address additional carbon-intensive sectors, in alignment with global climate goals and evolving best practices for the financial sector, and to further engage with our clients on their decarbonization journeys. For additional information on our environmental sustainability strategy and how we are supporting our clients, see our most recent firmwide Climate Report.
Key choices and considerations in how we have sought to reasonably design our metrics and targets for individual sectors:
To evaluate emissions intensity in each of the included sectors, we compute a portfolio-weighted average of emissions performance for all our clients in the sector portfolio. Weights are determined based on our cumulative financing to each client as a share of our total financing to the sector. We include both financing that we directly provide (such as through revolving credit facilities) as well as our share of facilitated financing (such as through our underwriting in debt and equity capital markets).