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

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🗞️ 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

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