Biggest Wall Street Bank CEO Condemned Trump's Paris Agreement Pullout - He's Still Financing Fossil Fuels
Wall Street's biggest bank, JPMorgan Chase, just posted record earnings. Its quarterly profit surged 35 percent to an all-time high. CEO Jamie Dimon's take-home pay soared to a stunning $141 million. But while Chase's shareholders and top executives make hay, the climate is reeling from increasing emissions from burning fossil fuels—a trend that Mr. Dimon seems happy to finance.
In one of his precious few public comments on climate change, Dimon condemned President Donald Trump for pulling out of the Paris Agreement last June. One year later, however, he seems fully on board with Trump's agenda to "unleash" fossil fuels and resurrect coal. Since Trump's election, Chase has poured more money than any other U.S. or European bank into the most planet-harming fossil fuels. From 2016 to 2017, Chase quadrupled its financing for tar sands and increased its coal mining funding by 2,100 percent.
Chase has publicly committed to supporting clean energy and has a policy to reduce its lending for coal mining (contradicted by its huge spike in financing for the sector last year). Yet when shareholders submitted a resolution for this year's annual general meeting calling on the company to disclose the risks associated with financing tar sands—one of the most carbon-intensive forms of oil—Chase rejected it by saying it would be like asking for a report on whether the bank offices had "carpeted floors."
This rejection is consistent with Dimon's apparent lack of concern over climate change. His recent 47-page letter to shareholders is filled with commentary on current hot-button political issues—spurring Andrew Ross Sorkin to speculate in the New York Times whether Dimon was contemplating a run for president in 2020. But on climate change—one of the most momentous public policy issues of our era—Dimon is almost completely silent, with just one mention in passing buried deep on page 44 of the shareholders' letter.
He made no mention that 2017 was the world's most expensive year on record for devastation from extreme weather events. No mention that last year, Chase's European competitors BNP Paribas and ING adopted policies that sharply restrict their lending to the worst fossil fuels. No mention that if we are to meet the Paris goals—which Dimon supposedly supports—we need to quickly stop expansion and start a rapid phaseout of these dangerous energy sources.
But at least climate change got to play a cameo this year: Dimon's previous ten letters to shareholders did not mention the phrase a single time. (The only allusion to climate change we can find in these letters—supposedly the second-most anticipated by investors after Warren Buffett's—is a reference in 2009 to Chase making money from trading carbon credits.)
Jamie Dimon is a strong CEO. He's famous for having a firm hand on Chase's tiller. So given that its great helmsman appears to be mostly ignorant of—or perhaps just doesn't care about—global warming, it's not surprising that Chase is the worst Wall Street funder of extreme fossil fuels. (Another relevant and deeply alarming aspect of Chase's executive leadership is that its longest-serving board member is none other than Lee R. Raymond, former CEO of ExxonMobil and one of the world's most notorious corporate climate denialists.)
If Dimon has political ambitions—or even just wants to be seen as the wise oracle of Wall Street—he needs to become an advocate for how banks can stop worsening climate change and start being part of the solution. A positive example for him would be Bank of England Governor Mark Carney, who at the beginning of April warned of the "catastrophic impact" climate change could have on the financial system.
Carney's comment also shows that Dimon must do his part on climate change because of his basic fiduciary responsibility to his shareholders—climate change has major implications not just for the way that banks do business, but even their ability to do business. At the end of 2017, Thomas Buberl, CEO of AXA, one of Europe's largest insurance companies, warned that there could be no insurance if the world continues its current path toward four degrees Celsius of warming. Likewise, a four-degree world smitten by submerged coastal cities, super-storms, droughts, fires, mass human migration and economic chaos will be an unbearably hot planet, but a cold place for banks trying to turn a profit for its shareholders.