Rainforest Action Network (RAN) is quite pleased with the response they got to the Earth Day challenge they put out to the U.S. banking community.
They called on the 10 largest U.S. banks to adopt standards that meet or exceed those of Citigroup, the largest bank, by Earth Day on April 22.
After a four year relentless RAN campaign, this January Citigroup adopted a far-reaching environmental policy. They agreed not to finance projects in "critical natural habitats" unless borrowers show they "will not significantly degrade or convert the critical natural habitat." They will not to finance commercial logging operations or logging equipment to be used in rain forests, and will protect areas that might suffer ecological damage from development.
The guidelines includ phasing out funding for the oil, gas, mining, and logging industries in endangered ecosystems; reducing funding for greenhouse gas producing industries and tracking the emissions those project generate, among other things. The changes would affect billions of dollars of loans a year.
RAN's challenge went to: J.P. Morgan; Bank of America; Wachovia Corp.; Wells Fargo; Bank One; FleetBoston; U.S. Bancorp; SunTrust; Goldman Sachs and John Hancock.
Eight of the ten banks responded to RAN's letter. RAN is in discussions with Bank of America and JP Morgan Chase is hiring its first environmental affairs officer.
J.P. Morgan Chase CEO William Harrison wrote, "We will endeavor to build a broad (environmental) policy framework by the beginning of October. It is our intention that any such policy would help lead the industry to best practices."
As a result of the positive response from J.P. Morgan Chase, a shareholder resolution was withdrawn by Christian Brothers Investment Services, (CBIS) Trillium Asset Management and Domini Social Investments.
The resolution urged the J.P. Morgan Chase board of directors to review the role of the company as an underwriter, lender and financial adviser for transactions in environmentally and socially sensitive sectors. The firm was asked to consider and report on incorporating criteria related to a deal's likely impact on the environment, human rights and J.P.Morgan Chase's reputation. Prior to the withdrawal, JPMorgan Chase met several times in the last year with the resolution proponents and other interested shareholders and further meetings are planned.
CBIS Director for Socially Responsible Investing John Wilson said: "It is an important step for a leading financial institution like JPMorgan Chase to join its peers and competitors and begin to establish systems to identify, assess and manage environmental risks in its financing decisions."
The members of the group working with JPMorgan Chase are Friends of the Earth and members and associates of the Interfaith Center on Corporate Responsibility: Christian Brothers Investment Services, Trillium Asset Management, Domini Social Investments, ISIS Asset Management, Sisters of St. Dominic of Caldwell, New Jersey, United Methodist Church Global Board of Pensions and Health Benefits, Ethical Funds, Missionary Oblates and Real Assets.
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