Thu. May 19th, 2022

JPMorgan Chase is fighting four shareholder petitions related to climate change at the Securities and Exchange Commission, despite a new policy by the US agency to take a tougher stance against attempts to block investors’ votes.

The largest borrower for fossil fuel businesses, JPMorgan has come under increasing investor pressure on climate change risk over the past few years.

Tulipshare, a London-based investment platform, is the latest to criticize the US bank for asking the SEC to reject the fintech startup’s proposal that the bank discontinue investment, underwriting and loans for fossil fuel companies.

JPMorgan sought “to silence investors on the issue of climate change”, Tulipshare said.

Two other shareholder petitions are asking JPMorgan for new climate revelations: one seeking climate-related information on support from the Boston Trust, and the other seeking details of its carbon reduction targets through the environmental group, the Sierra Club Foundation.

A third proposal, submitted by the Sisters of Mercy of the Americas, asks JPMorgan to adopt a policy this year to help ensure that its financing does not contribute to new fossil fuel supplies that conflict with the scenario of net zero greenhouse gas emissions set out by the International Energy Agency.

The bank objected to the petitions based on the proposals related to “ordinary business” operations.

'Dirty Dozen' reduces funding but still holds more than $ 2tn in fossil fuel loans.  Graph showing% change in fossil fuel financing from 2019 to 2020 in the world's 60 largest banks.

SEC rules allow companies to block certain shareholder proposals, such as those that allow them to micromanage business decisions. Companies regularly ask the agency for permission to block proposals.

But last year, the SEC said that it will be more difficult to stop climate-related shareholder proposals in 2022. The shift by the regulator has given impetus to those agitating for companies to address climate change risk issues.

A record 12 proposals on environmental issues submitted to U.S. companies, according to law firm Sullivan & Cromwell, received a majority shareholder support in votes held in 2021.

ExxonMobil succumbed to investor pressure and added three new board members after activist hedge fund Engine No. 1 questioned the oil chief’s climate risks.

ExxonMobil’s former CEO, Lee Raymond, was also a longtime board member of JPMorgan until he retired in late 2020 after sustained shareholder pressure. At the bank’s annual meeting that year, just under 50 percent of investors voted require JPMorgan to draw up a climate plan in line with the Paris Agreement to limit global warming.

SEC rulings on the JPMorgan shareholder proposals are expected in the coming weeks. The New York-based bank has not yet announced a date for its 2022 annual meeting.

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