The Coronavirus pandemic has undoubtedly been a tragedy for many, but a crisis for millions more. The pandemic has aggravated centuries-old bias as well a negatively impacted economic growth. While the long term effects of the pandemic on our lives are still unclear, that sense of uncertainty is not something that should induce paralysis. This moment should be taken as one for change, an opportunity to redraw priorities.
Climate change is perhaps the most significant problem facing humanity; it is imperative that governments and businesses act. To achieve the goals set forth by the Paris Agreement, which aims to slow the growth of the earth’s average temperature would mean us taking a massive step towards a future that is safer, green and more sustainable.
Being able to meet those demands will require great reserves of ingenuity and human energy. For the planet to achieve a net-zero greenhouse gas emissions in 30 years, means that there has to be an acceleration of innovative technologies which are not economically viable or commercially available. What this means is that fossil resources like gas and oil, which fuel 80% of the planet’s energy demands, will continue to play an integral role in satisfying energy needs.
Another hindrance is data. Whilst the private sector has recently made commitments to focus on accounting measures in a bid to quantify the contributions of banks to the climate challenge, there is still an urgent need to better the availability of verifiable and accurate emissions data provided by corporations. Improved data reporting and collection would make it much easier to track progress, measure results, as well as drive accountability in an organised way ensuring financial markets, are able to make better-informed decisions concerning climate risk.
While these obstacles are significant, they are not insurmountable.
JP Morgan Chase, announced earlier this month that it would begin aligning its financing portfolio to meet the Paris Agreement goals. It aims to concentrate on three particular sectors, namely, electric power, automotive manufacturing and oil & gas. This is because these sectors collectively generate a large portion of the world’s emissions. JP Morgan Chase, as a worldwide financial services firm, conducts business with the majority of Fortune 500 companies, with a large portion in the energy sector, so it believes it can make a considerable impact in that capacity.
Working to overcome the difficulty associated with capturing accurate data, the company aims to develop an approach that will include the measurement of carbon intension. This can help track emissions relative to an output unit. For instance, in the power industry, calculations will take into account the metric tons of carbon dioxide for every megawatt-hour of electricity generated.
This will be measured over time, in conjunction with other pertinent indicators. Carbon intensity should provide clearer insights into business strategy and efficiency, helping to identify producers that are bettering their performance and those producers that are not. As the metrics improve and evolve, JP Morgan Chase will adopt best practices.
However, for the time being, it aims to establish a sector-wide intermediate emission target for the next 10 years affecting the 3 major emissions causing industries. This emissions target is to go into effect in 2021.
Furthermore, the company is committed to becoming carbon neutral in its own operations starting this year, ensuring that the company goes beyond its original promise to source and power the company using renewable energy.
While skeptics might be present, the company understands that there is no time to delay. The time to act now, to forge an efficient and sustainable economy that reduces the pressure on the earth’s resources is now. As reported by Fortune.
