JPMorgan is deploying $2.5 trillion to fight the climate crisis and inequality

America’s largest bank is adding some serious firepower to the fight against climate change and inequality.

JPMorgan Chase (JPM) announced Thursday that it aims to finance or facilitate investments of $2.5 trillion over 10 years to support solutions that address climate change and contribute to sustainable development. The target includes $1 trillion for green initiatives such as renewable energy, new clean technology, waste management and conservation.

The announcement, believed to be the largest of its kind by a major bank, is the latest in a string of pledges by financial institutions to help the world pivot toward a cleaner energy future.

“This is about us not just saying the right thing, but actually doing the right thing,” Marisa Buchanan, JPMorgan’s global head of sustainability, told CNN Business.

The $2.5 trillion goal through the end of 2030 marks an acceleration of JPMorgan’s short-term target. Last February, JPMorgan committed to deploying $200 billion in 2020 to support climate solutions and sustainable development. The bank says it exceeded that goal, including $55 billion in green initiatives alone.

Jamie Dimon, chairman, president and CEO of JP Morgan Chase, in an interview at the annual World Economic Forum in Davos, Switzerland, on January 20, 2016.

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“Technology has to be such a huge piece of the puzzle when it comes to meeting the Paris climate goals. This is a big opportunity for us as a bank,” said Buchanan.

Rival Bank of America (BAC) announced last week a $1.5 trillion sustainable finance goal, including $1 trillion alone for climate-related investments.

The financing pledges come after JPMorgan, Bank of America, Wells Fargo (WFC) and other big banks set goals of net zero greenhouse gas emissions, including in the companies and projects they finance, by 2050.

The announcements underscore how much pressure banks are under to show that they are part of the solution to the climate crisis. And it demonstrates how Wall Street increasingly views clean energy as a viable investment, not merely a feel-good initiative.

‘Banks are still net negatives’

However, climate groups argue the steps by big banks do not go far enough, especially given their ongoing support for fossil fuels.

Since the Paris climate agreement was reached in 2015, the world’s 60 biggest banks have provided $3.8 trillion in financing to fossil fuels, according to a report released by climate groups last month.

Emissions rise from a smoke stack at the Conesville Power Plant in Conesville, Ohio, U.S., on Saturday, April 18, 2020. The Trump administration on Thursday attacked the legal basis of requirements to capture mercury and other heavy metal pollution from power plants, setting the stage for a court to potentially toss out the mandates altogether. Photographer: Dane Rhys/Bloomberg via Getty Images

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“Banks are still net negatives in the overall sustainable finance horizon,” said Vanessa Fajans-Turner, executive director at BankFWD, a network that aims to persuade banks to phase out fossil fuel financing.

For instance, JPMorgan alone financed $51.3 billion in fossil fuels projects in 2020, according to the climate group report. That is roughly even with the $55 billion in green initiatives the bank said it supported last year.

“That’s not a coherent sustainable finance strategy, and the bank’s clients and competitors know it,” said Fajans-Turner. “We welcome the announcements by banks to be increasingly engaged climate actors. But banks still have a long way to go.”

Dimon: We can’t just walk away from fossil fuels

JPMorgan has also reportedly bankrolled projects that have been fiercely opposed by environmentalists, including the Dakota Access Pipeline.

“The fact is we’re long past debating whether climate change is real,” JPMorgan CEO Jamie Dimon said in his annual shareholder letter last week. “But we need to acknowledge that the solution is not as simple as walking away from fossil fuels. We will need resources such as oil and natural gas until commercial, affordable and low-carbon alternatives can be developed to meet all of our global energy needs.”

A person wears a protective face mask outside Wells Fargo bank in Union Square as the city continues Phase 4 of re-opening following restrictions imposed to slow the spread of coronavirus on September 24, 2020 in New York City. The fourth phase allows outdoor arts and entertainment, sporting events without fans and media production. (Photo by Noam Galai/Getty Images)

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In other words, while JPMorgan is stepping up its support for green energy, it is not saying goodbye to fossil fuels.

Even though oil and gas are expected to be major fuel sources over the next decade, climate activists want to cut support for fossil fuels now.

“We cannot meaningfully address the climate crisis without stopping the expansion of fossil fuels,” Natalie Mebane, policy director at environmental group 350.org, said in a statement Wednesday in support of legislation that would stop new oil and gas leases on federal lands and water.

JPMorgan says that it has facilitated and financed about $210 billion toward green initiatives. For example, the bank said it helped raise $230 million for Bloom Energy (BE), which develops efficient energy generators to curb emissions, and provided financing to support the development of an ALLETE Clean Energy wind farm that provides enough renewable energy to power 114,000 homes.

Fighting poverty

The bulk of the $2.5 trillion goal announced by JPMorgan deals with efforts to boost investment in underserved communities.

That includes providing financing to small businesses, affordable housing and education in low to moderate income communities in developed markets like the United States.

In emerging markets, JPMorgan said it will work to advance the United Nations Sustainable Development Goals, which among other ambitious goals aims to end poverty and hunger.

“There are so many communities around the world that don’t have the living standards we do in the United States and are in real need of infrastructure, jobs and economic growth,” said JPMorgan’s Buchanan.