JP Morgan Doubles Down on Carbon
In a new announcement, J.P. Morgan went over some of their new carbon efforts
J.P. Morgan, one of the world’s largest financial organizations, is doubling down on its carbon sequestration efforts. It announced on May 23 an effort that will spend over $200 million on carbon dioxide removal credits and remove 800,000 tons of carbon dioxide from the atmosphere. Earlier this year, the firm announced the acquisition of 250,000 acres of prime commercial forest land that will be managed for both high-quality timber and carbon sequestration.
In addition to its announcement of the large investment in carbon capture, J.P. Morgan also released a “white paper” focused on voluntary carbon markets called “Carbon Market Principles”, of increasing interest to private forest landowners, who now are a focus of several large efforts to procure voluntary carbon credits. The paper cited J.P. Morgan’s “experience and insight gained through many years as an active market participant.”
The paper cited “tremendous efforts to establish and grow an effective voluntary carbon market” and predicted increasing demand for carbon credits. But it also pointed out “current market challenges”. These fall into four categories:
-Lack of quality supply of credits.
-Variation in the availability of information to assess carbon credit quality.
-Market complexity and fragmentation.
-(Need for) market maturity. “Forward market instruments” and “reference contracts” were cited specifically.
“Overcoming these challenges will not be easy or quick, nor can any single constituency (e.g. project developers, end purchasers, registries) address them alone,” the report said.
J.P. Morgan acquired forest investment management firm The Campbell Group in 2021.
The full white paper is available here: JP Morgan PDF Link