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JPMorgan isn’t taking any chances with new EU ESG rule

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By illuminem briefings 🌎

· 2 min read


illuminem summarizes for you the essential news of the day. Read the full piece on Bloomberg or enjoy below

🗞️ Driving the news: JPMorgan Chase & Co.'s asset management unit is voluntarily adhering to a new EU rule requiring fund managers to report social and environmental effects, known as the principal adverse impact (PAI) indicator
• This move contrasts with firms like Vanguard Group Inc. and State Street Corp., who have not provided entity-level PAI reports, and reflects growing demands for transparency in environmental impacts

🔭 The context: The PAI rule, enforced on June 30, aims to create a set of metrics allowing clients to compare asset managers in Europe based on their negative ESG impact
• The rule gives some leeway to firms with fewer than 500 employees in the EU, requiring them only to disclose the impact of financial products

🌎 Why does it matter for the planet: Accurate reporting of negative social and environmental impacts helps in directing capital into sustainable activities and rooting out greenwashing
• PAI is designed to increase transparency and accountability within the industry, aligning it with sustainability factors

⏭️ What's next: These new requirements symbolize a significant shift in transparency and reporting standards, with the EU's objective to steer capital into sustainable activities and minimize greenwashing

💬 One quote: “For every manager, it was kind of a leap of faith, publishing their first PAI statement, because it had never been done before”(Kenneth Robertson, head of sustainable investing for client portfolio management at Robeco)

📈 One stat: JPMorgan disclosed Scope 3 greenhouse gas emissions of more than 88 million tons of CO2 equivalents, compared to 77 million for Amundi, Europe’s biggest asset manager

Click for more news covering the latest on ESG

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