Partner in the Global Pursuit of Sustainability - JPMorgan Chase

J.P. Morgan: Partner in the Global Pursuit 

of Sustainability 

By Eric M. Lowitt and Jim Grimsley 

August 2009 

Case Study

J.P. Morgan: Partner in the Global Pursuit of Sustainability 

With J.P. Morgan’s long and storied history of shepherding America through 

new economic frontiers, it should be no surprise that the company is emerging 

as a leader in sustainability. Among its many social and environmental 

initiatives, the firm is leveraging its expertise and resources to help clients 

navigate environmental markets, extend the rewards of entrepreneurship 

through microfinance, and improve the quality of life for the communities 

in which the company operates. 

The bulk of the company’s sustainability 

initiatives are not, however, charitable. 

The goal of making a positive social and 

environmental impact, while important, 

is secondary to that of ensuring the 

stability and profitability of J.P. Morgan, 

its partners, and clients. While the 

current economic crisis is leading many 

companies to abandon, postpone or 

scale back their sustainability projects, 

J.P. Morgan recognizes that sustainability 

is no longer a buzzword of environmental 

activists but rather a necessary 

component of success and longevity. 

“The business case for J.P. Morgan to 

address sustainability is that doing so 

will lead to both improved profitability 

and responsible corporate citizenship,” 

Jim Fuschetti, the Managing Director 

of J.P. Morgan’s Office of 

Environmental Affairs (which was 

formed in 2004), states. “If there were 

no climate change issue, no sustainability 

concerns and no natural 

resource constraints, it would still 

make perfect sense to use resources 

most efficiently.” 

J.P. Morgan’s sustainability efforts 

map clearly to Accenture's proven 

High-Performance Business model. 

As defined by Accenture, a high-performance 

business demonstrates 

quantitative superiority along five 

key dimensions: 

Growth—as measured by revenue 

expansion 

Profitability—as measured by the 

spread between the return on capital 

and the cost of capital 

Positioning for the future—as represented 

by the portion of share price 

not explained by current earnings 

2 | Accenture Institute for High Performance | Copyright © 2009 Accenture. All rights reserved. 

(what Accenture calls “future value”) 

and by the portion of the industry total 

a company’s future value represents 

Consistency—as measured by the 

number of years (out of seven) the 

peer set median in profitability, 

growth and positioning for the future 

was beaten 

Longevity—as measured by the duration 

of out-performance in total return 

to shareholders 

Following a brief overview of J.P. 

Morgan’s history, this case study will 

examine how the company’s sustainability 

initiatives have performed 

along these five dimensions of highperformance 

business.


Company history 

As J.P. Morgan looks to take on a 

leadership role in the amorphous and 

evolving field of sustainability, its 

pioneering history supplies a useful 

template for future endeavors. The 

company’s origins date back to 1799, 

when the Manhattan Company—the 

firm’s earliest precursor—began 

banking operations in New York City. 

Over a half century later, in 1861, J. 

Pierpont Morgan established J.P. 

Morgan & Co., which served as the 

sales and distribution office for the 

European securities underwritten by 

the firm owned by J. Pierpont’s father. 

The mercantile and credit crisis of 

1895 marked the first of many 

moments when J.P. Morgan stepped 

into the public realm and made 

American history. As the US government 

teetered on the brink of default, 

the company worked with President 

Grover Cleveland and American and 

European banks to form a syndicate 

that purchased gold from Europe and 

brought it to the US. These efforts are 

largely credited with saving the gold 

standard—and the US government 

from default. 

A few decades later, in 1940, the company 

went public, becoming J.P. Morgan 

& Co., Inc., and J.P. Morgan, Jr., became 

chairman. Half a century later, in 1989, 

the company received permission from 

the US Federal Reserve to begin underwriting 

and dealing in corporate debt. 

The following year, J.P. Morgan began 

providing a full range of securities 

services to its clients—the first US 

holding bank to do so since the 1930s. 

Just as it entered the last century with 

a splash, J.P. Morgan welcomed the 

twenty-first century with a historic 

merger with the Chase Manhattan 

Corporation, creating JPMorgan Chase 

& Co. After merging with Bank One 

in 2004 and acquiring Bear Sterns 

and Washington Mutual in 2008, 

JPMorgan Chase & Co. has become a 

venerable banking giant: With $2.1 

trillion in assets under management, 

the company’s services include investment 

banking, financial services for 

consumers, small business and commercial 

banking, financial transaction 

processing, asset management and 

private equity under its J.P. Morgan 

and Chase brands. 

J.P. Morgan’s scale and global 

reach underscore to the firm the 

importance of being an honest broker 

and strategic advisor to its clients, 

partners, competitors, and public 

entities to help enable the global 

pursuit of sustainability. 

Growth 

J.P. Morgan is pursuing growth by 

entering new markets and expanding 

existing client relationships through 

investments in new sustainabilityrelated 

services, such as microfinance 

and trading renewable energy and 

greenhouse gas allowances and instruments. 

The company is also expanding 

many of its existing services—in wind 

power, for example—further enhancing 

its credibility among its clients seeking 

solutions to sustainability’s challenges. 

Entering new markets and expanding 

existing relationships 

Few companies share J.P. Morgan’s 

legacy of expanding into—and even 

creating—new markets. In the field of 

sustainability, the company is similarly a 

pioneer, carving roads into new markets 

through its Social Sector Finance unit. 

Launched in November 2007 as part 

of J.P. Morgan’s investment banking 

operations, the Social Sector Finance 


unit is fully independent of the 

company’s philanthropic foundation; it 

taps J.P. Morgan’s existing investment 

and emerging-markets expertise to 

bring financial services—capital markets, 

structured products and principal 

investments—to the base of the economic 

pyramid. Rather than create a 

new service-delivery unit, J.P. Morgan 

supports existing local, domestic, and 

international microfinance and social 

enterprise organizations with capital 

raised through the investment bank. 1 

Christina Leijonhufvud, who runs the 

Social Sector Finance unit, explains the 

decision to structure the unit this way: 

“We seek to support the best-run MFIs 

[microfinance institutions] in the world 

by bringing our full range of investment 

banking products and services to the 

sector; we’re not looking to intermediate 

microfinance products directly to 

customers. That’s a retail activity that 

we are not well set up to do in the 

emerging markets at this stage. But 

we can support existing MFIs in a 

broad variety of ways: through direct 

equity stakes or equity stakes via 

funds; credit capacity; advisory services; 

help with raising capital; help with 

transforming nongovernmental organizations 

(NGOs) to commercial banks; 

help with consolidation in the microfinance 

sector by helping MFIs merge; 

help selected MFIs go to public markets. 

This is not quasi-philanthropy.” 

The Social Sector Finance unit’s work 

includes partnerships with microfinance 

and entrepreneurship organizations 

including ACCION New York, Grameen 

Foundation, and TechnoServe to 

engage employees in the firm’s efforts. 

In 2008, the firm also partnered with 

the China Foundation for Poverty 

Alleviation to bring awareness to rural


microfinance programs in China’s 

Huai’an County; J.P. Morgan jumpstarted 

the initiative with a $33,750 

pledge to support microfinance in 

the area. 2 

Another area of sustainability generating 

growth for J.P. Morgan is the 

carbon-credit-trading market. In 2007, 

the United Nations Intergovernmental 

Panel on Climate Change found “unequivocal” 

evidence of global warming, 

citing human activity as a likely 

contributor. Although climate change 

remains a somewhat controversial 

topic, increasing public, government, 

and private sector awareness around 

greenhouse gas emissions and limited 

natural resources has shifted the 

climate change debate from whether 

it exists to what to do about it. Indeed, 

as the problems of limited natural 

resources and greenhouse gas emissions 

increasingly affect businesses, J.P. 

Morgan sees opportunities to become 

a top player and adviser to companies 

dealing with complex environmental 

and emissions trading markets. 

Increased focus on the environment is 

fueling a growing carbon-trading 

industry. As Caroline Angoorly, Head of 

Environmental Markets in North 

America for J.P. Morgan says, “Using 

the cap-and-trade mechanism in the 

market of greenhouse gases is the 

best way to cost-effectively reduce 

emissions and achieve global emissions 

goals.” J.P. Morgan predicts that, 

within the next 18 months, the US will 

implement a cap-and-trade system 

that covers 85 percent of the national 

economy. 3 In 2008, more than 12,000 

companies and 20,000 emissions sources 

(for example, power generators and 

heavy industries such as glass, metals 

and mining) were subject to carbon 

emissions regulations in Europe. 4 Given 

the swift growth of the carbon-trading 

market, which is estimated to increase 

to more than $550 billion each year 

through 2012, 5 J.P. Morgan is not the 

only major bank establishing a foothold: 

Barclays Capital, Credit Suisse and 

Morgan Stanley–to name just a few–are 

also involved in carbon trading. 6 

To position itself as a leader in this 

nascent market, J.P. Morgan is developing 

financial products and solutions 

that help clients mitigate the risks 

associated with climate change and 

cost-effectively reduce their greenhouse 

gas emissions. For example, the company’s 

Environmental Markets business 

provides carbon-trading expertise to 

clients with support ranging from 

project development through to sales, 

as well as support through ClimateCare, 

a risk-management company acquired 

by J.P. Morgan in March 2008. 78 

Founded by Mike Mason, a British 

entrepreneur, in 1997, ClimateCare 

pioneered the concept of carbon offsetting. 

9 “ClimateCare has differentiated 

itself as being one of the most environmentally 

responsible and innovative 

in the voluntary carbon-market space,” 

explains Blythe Masters, head of J.P. 

Morgan’s global commodities business. 

She describes the impetus behind the 

acquisition: “We decided to acquire 

ClimateCare when we saw that an 

increasing number of our clients needed 

to be involved in carbon markets, and 

we recognized that, over time, the 

distinction between voluntary and 

compliance markets would erode. The 

scope of voluntary markets was small, 

though, and obviously there’s not a 

large amount of voluntary money 

floating around. We looked at the 

projects that ClimateCare has been 

involved in and were very impressed, as 

some of those projects were extremely 

innovative and had application in the 

clients’ space.” 


By establishing an in-house carbontrading 

business, J.P. Morgan is well 

positioned for growth as a cap-andtrade 

system takes hold in the US: With 

the ability to bypass the “middleman,” 

the company can expect even greater 

short- and long-term profitability in 

the cap-and-trade market, which is 

expected to reach $1 trillion by 2020. 10 

Leveraging existing services to 

enhance credibility among clients 

looking for sustainability solutions 

Creating new services is an essential 

component of J.P. Morgan’s sustainability 

strategy, but the company 

believes leveraging existing services 

and expertise is the most effective and 

efficient way to extend into uncharted 

territory. Investment banking has 

proved to be a viable home not only 

for the Social Sector Finance unit but 

also for renewable energy investments. 

Eric Fornell, vice chairman of energy 

investment banking, says: “My role in 

the investment bank is to think about 

how sustainability—which we think of 

as alternative and renewable energy— 

allows us to grow and make money.” 

Recently, J.P. Morgan executed a 

number of successful IPOs in the area 

of wind power. “Wind is a great business 

because it’s gone from little egg beaters 

to giant, 35-story instruments; each 

blade is the length of a football field. 

They’re slow moving and they generate 

a lot of power,” Fornell says. 

The renewable energy business is 

complicated and tied tightly to the 

bourgeoning carbon-trading market. “In 

power, it’s all about CO2 and understanding 

what the CO2 costs might be 

within various CO2 regimes, whether a


tax regime, cap and trade, or allocations,” 

Fornell explains. “For example, 

will a utility be able to pass those costs 

through? Will a merchant generator 

have to bear the costs? What will the 

price for power be in that market?” 

Fornell and his colleagues see significant 

potential in wind but recognize 

that solving the problem of limited 

natural resources will require a wide 

range of prescriptions. The team is 

realistic about the potential for a 

renewable energy industry to lift the 

US economy out of its current financial 

crisis: “Although you hear it said 

politically, renewable energies are not 

going to immediately prop up the 

country,” Fornell says. “Yes, if Gamesa 

builds a wind turbine facility in 

Pennsylvania or Clipper builds a facility 

in Iowa, you’re going to have jobs, but 

compare that to an auto plant. My 

guess is you could take all of the 

manufacturing around the wind business 

and it wouldn’t meet the output 

of General Motors’ Poletown plant.” 

J.P. Morgan is building credibility in 

renewable energy by making sizable 

investments in renewable energy as a 

way to build capital market support for 

future projects. As of December 2008, 

the company has invested (or committed 

to invest) $2.4 billion in renewable 

energy transactions, and has raised 

$3.4 billion from outside parties. While 

the company holds investments in 

solar plants, its principal investment is 

in wind farms. At the end of 2008, J.P. 

Morgan was a leading US institutional 

equity investor in wind power. 11 

Building credibility in the sustainability 

space is imperative to garnering clients, 

particularly at a time when many 

businesses, facing eroding profitability 

and an uncertain economy, are choosing 

to abandon socially and environmentally 

friendly initiatives. Displaying a 

firm commitment to sustainability sends 

a message to clients that sustainability 

is still a priority during an economic 

downturn. Angoorly explains: 

“In this space, there are two groups of 

people: those who are interested 

because they are environmentalists, 

and those who are interested primarily 

because of the bottom line. At J.P. 

Morgan, our point is that one does not 

exclude the other. We have to connect 

with bankers worried about their bottom 

line but also with chief environmental 

officers. It’s very important 

that we demonstrate things like our 

own offset programs, wind, solar, work 

that we’re doing globally on stove 

programs. We’re showing people that 

we have put an enormous amount at 

stake to make these things successful 

because they matter to us for a variety 

of reasons.” 

Profitability 

Profitability is often not a priority 

around issues of sustainability, but 

J.P. Morgan expects its social and 

environmental impact to deliver both 

social benefits and positive financial 

returns—objectives they see as being 

complementary, not mutually exclusive. 

Convergence of social and 

environmental impacts bring 

about social benefits and positive 

financial returns 

The company’s “double bottom line” 

objective is apparent in its Social 

Sector Finance unit: With more clients 

looking to invest in socially responsible 

ways, J.P. Morgan can satisfy client 

demand, help alleviate poverty domestically 

and in developing countries, 

and tap an estimated $300 billion in 

unmet demand for financial services. 


Indeed, the company views investment 

in microfinance as potentially very 

lucrative. “There are some really bankable 

institutions here,” says 

Leijonhufvud. “The great revelation in 

the microfinance industry has been that 

you can serve the poor commercially 

and make a decent profit, and you can 

do so sustainably and have a really 

material impact on people’s lives. 

[Our efforts] are not philanthropic 

but are intended to demonstrate the 

commercial viability of double-bottomline 

opportunities.” 

Leijonhufvud believes the dual nature 

of the Social Sector Finance unit is 

distinct from the microfinance activities 

of other banks. “While other banks’ 

initiatives might be strictly philanthropic 

or commercial, we’ve been 

explicit about the double-bottom-line 

nature of our initiative. We are first 

and foremost screening opportunities 

for social impact but also looking for 

commercial or quasi-commercial 

returns on our activities,” she says. 

Perhaps the greatest differentiator of 

the company’s microfinance work, 

however, is its capital investment 

directly in the equity of microfinance 

and social enterprise institutions. 

“From the start, our willingness to 

put forth our own capital has really 

bolstered our credibility and reputation 

in the sector,” Leijonhufvud says. After 

establishing a foothold in traditional 

microfinance, the company will be 

well positioned to extend to other 

critical services like housing, health 

and education, Leijonhufvud believes. 

Chase’s home mortgage modification 

program also illustrates the company’s 

commitment to both their customers 

and communities. Through the program, 

the company helps families struggling


with mortgage payments to keep 

their homes. A vast roster of initiatives 

comprise the program, including 

homeowner assistance from hundreds 

of mortgage counselors; outreach to 

at-risk homeowners for prequalified 

modifications such as interest rate 

adjustments; and financial support 

intended to stabilize local communities. 

The firm is also lending $70 billion to 

more than 400,000 US families at risk 

of foreclosure. 12 By helping homeowners 

to meet their mortgage payments, the 

company builds community goodwill 

and reduces the mortgage default risk 

in its portfolio. 

While J.P. Morgan recognizes the 

importance of the societal half of its 

double-bottom-line endeavors, the 

company firmly delineates the limits 

of its philanthropic activities. “We 

acknowledge that J.P. Morgan has its 

own environmental policies and agenda, 

but we’re not here to preach to clients 

that they should have one position 

versus another,” Masters explains. “We 

craft solutions that meet our clients’ 

needs. So it’s very important not to 

confuse the business with being environmentalists—though 

many of us 

have very strong views on that topic.” 

Indeed, when the Carbon Principles 

were being created, J.P. Morgan’s 

executives were mindful of this need 

to set limits. As Fornell explains: 

“Environmental NGOs, such as the 

Environmental Defense Fund and the 

National Resources Defense Council, 

kept wanting us to do more, but it has 

to be in our shareholders’ interest to 

do that. We’re businesspeople. We are 

here as people who are thoughtful 

about shareholder risk and want to 

work with clients on mitigating that 

risk. If fewer coal plants get built, it’s 

going to be because the political and 

regulatory risks are such that they 

ought not to be built. It is a practical, 

objective sense of what the world is 

like, what it is going to be like, and what 

is worth—and not worth—fighting over.” 

Positioning for the future 

J.P. Morgan is positioning itself to 

continue its role as an honest broker 

and strategic advisor to its clients, 

partners, competitors and public 

entities to help enable the global pursuit 

of sustainability. Specifically the 

company is participating in the public 

policy debate about regulating 

greenhouse gas emissions and natural 

resource usage and by being a founding 

member in establishing the Green 

Exchange, in partnership with the 

Chicago Mercantile Exchange, among 

others. The company is also preparing 

for a low-carbon economy by investing 

in renewable and efficient energy 

sources and working to reduce its own 

carbon emissions. 

Influencing public policy 

Much of the value created by J.P. 

Morgan’s activities lies in positioning 

the company for the future. For J.P. 

Morgan, having an active voice in 

public policy is critical to taking a 

leadership position in the evolving 

environmental space. Leaders at the 

company hope to tap the firm’s vast 

expertise to lend a voice to the debate 

over environmental policy “We have a 

colleague, John Eber in Chicago, who 

has probably done more wind financing 

than anyone in the world,” says 

Fuschetti. “John, in some ways, is a 

national resource, so we want to make 

sure he gets in front of the right people 

in Washington when they discuss 

fixing problems associated with 

financing wind and other forms of 

renewable energy. Likewise, we have 

experts in nuclear power plants who 


can speak very knowledgably about 

financing any new nuclear assets. Our 

objective is to help our clients and 

government policy makers with the 

transition of the economy from where 

it is today to where it needs to be in 

20 years.” 

According to Blythe Masters, public 

policy will either make or break the 

reforms she views as necessary to the 

future of the commodities business: 

“Sustainability is important to J.P. 

Morgan’s commodity business. I worry 

that the recent collapse in oil and 

commodity prices will lead to yet 

another period of significant dis- and 

under-investment in commodities and 

commodity-related infrastructure, 

particularly energy. This will lead to 

yet another deferral of the necessary 

long-term solutions to address the 

imbalance between supply and demand. 

Our commodities business is driven by 

the implications and consequences of 

failure to tackle sustainability at a 

policy level.” 

Masters recognizes that the Obama 

Administration may make costly environmental 

reforms unpalatable to 

cash-strapped citizens. “Whether and 

how this Administration implements 

cap and trade will partly be a function 

of how much society is willing to bear 

the cost. In the current economic 

environment, any cost is going to be 

very hard to bear.” Regardless of the 

challenges, forging relationships with 

the Obama administration is a requisite 

to being part of the continuing 

debate ahead.


Just as corporate responsibility is 

imperative to gaining credibility with 

investors, clients and stakeholders, it is 

also critical when dealing with Capitol 

Hill. To position itself as an engaged 

policy leader, J.P. Morgan therefore 

makes substantial commitments to 

operate in a sustainable and environmentally 

conscious way. The company, 

for example, has been engaged in developing 

the Green Exchange—a global 

environmental products exchange— 

with the Chicago Mercantile Exchange. 

A leading marketplace of its kind, the 

Green Exchange offers environmental 

futures, options, contracts and swaps 

for markets centered on efficient and 

effective environmental responsibility 

and solutions to climate change. The 

Exchange is a forum for trading global 

carbon-based contracts, such as 

carbon credits under the UN Clean 

Development Mechanism and carbon 

allowances under the European Union 

Emissions Trading Scheme. 13 According 

to Masters, J.P. Morgan’s role in funding 

the Exchange is a ‘strategic 

investment.’ “J.P. Morgan stands to 

benefit by virtue of that investment in 

the success of an exchange through 

which, obviously, we would be contributing 

a significant amount of 

volume by definition if it’s successful. 

Perhaps more importantly, we get to 

contribute our ideas on the design of 

the market infrastructure, which is 

incredibly important to us,” she says. 

In addition to J.P. Morgan’s most visible 

initiatives—actively participating in 

the creation of the Green Exchange, 

constructing “green” office buildings 

in New York City, making major investments 

in wind power and codeveloping 

the Carbon Principles—the company is 

committed to many quieter initiatives: 

investing in “green” housing for low- 

income families, reporting annually on 

the company’s aggregate greenhouse 

gas emissions from power usage, and 

using recycled paper in the company’s 

fax machines and computer printers. 14 

From one perspective, positioning itself 

as a leader in carbon trading, environmental 

markets, sustainable solutions, 

and environmental risk management is 

mainly about client service for J.P. 

Morgan. As Fuschetti says, “Without 

clients, the firm itself is not sustainable.” 

Therefore, the firm makes a point of 

offering well-rounded expertise capable 

of providing risk-management and 

capital raising services that appeal to 

a wide spectrum of clients. For some 

businesses, sustainability is an emissions 

issue; for others it might be access to 

fresh water, for others it’s a reliable 

source of raw-materials. “Our clients 

also need to be sustainable” Fuschetti 

says. “When people ask ‘What’s the 

business case for J.P. Morgan’s involvement 

in sustainability?’ My answer is, 

‘Isn’t it obvious? It’s our clients.’ It has 

nothing to do with us per se, our own 

direct footprint is small. Our clients 

are going to deal with these huge 

transition issues, and if we don’t help 

them, someone else will.” Angoorly 

echoes his sentiment: 

“There’s a large information gap out 

there, and we’ve dedicated enormous 

resources to having world-class people 

with experience in origination, marketing, 

research—all across the board 

understanding this business. Our clients 

really value that. And while making 

money is the goal, there’s value in 

helping clients understand why we look 

at the world through the lens of sustainability. 

For instance, we offset our 

employee airline travel. If we’re already 

doing something, we have more 

credibility in recommending that other 

companies do it.” 


Preparing for the low-carbon economy 

J.P. Morgan has established several 

internal sustainability goals and initiatives. 

Fuschetti remarks, “Other than 

construction materials, our big resource 

uses are electricity, paper, and electronic 

equipment. Our emissions are mostly 

indirect (i.e. generated by others) and 

are very small by comparison to industrial 

companies. That said, environmental 

sustainability is a cornerstone here to 

our efforts.” The company has publicly 

committed to reducing its emissions 

by 20 percent by 2012 (from a 2005 

baseline) and is also working to reduce 

its electricity consumption and use of 

paper and other materials. 

Though wary of overextending the 

firm’s public commitments, Fuschetti 

expects the firm will institute more 

goals to reduce resource use. “I’m 

hoping we can make a commitment to 

reduce paper consumption by a further 

20 percent, but we are still working on 

consolidating paper use data from the 

Bear Stearns and Washington Mutual 

acquisitions before doing so” he says. 

“We are also hopeful that we can 

reduce emissions and save money while 

making our people more efficient by 

expanding our teleconferencing capabilities 

so they need to travel less. 

There are huge efficiencies to be 

gained here. The big challenge is how 

do we make this happen in a culture 

where travel is viewed by many as an 

essential part of the job?” 

The challenge of cutting consumption 

is complicated both by the company’s 

organic growth and by large acquisitions, 

such as the March 2008 takeover 

of Bear Stearns and the September 

2008 buyout of Washington Mutual. 

“What can we do? We cannot reduce 

in absolute terms electricity and asso


ciated emissions or paper use when 

we’re adding large new operations to 

our firm”, notes Fuschetti. “What we 

can do is continue to improve the 

energy efficiency of our buildings by 

installing highly efficient lighting, HVAC, 

elevator and mechanical systems, and 

continue our conversion to electronic 

communication away from paper— 

that’s it. Fortunately, making these 

improvements is very cost-effective 

with rapid paybacks in many instances. 

We can accomplish an awful lot with 

just improved illumination and 

mechanical systems.” 

In a visible commitment to sustainability, 

J.P. Morgan is renovating its 

midtown New York headquarters to 

attain LEED-Platinum certification— 

the largest such conversion of an 

existing building in the world. 15 

Consistency 

To deliver performance consistent with 

its social and environmental objectives, 

J.P. Morgan is institutionalizing its 

commitment to sustainability by educating 

employees across business lines 

about sustainability. The company is 

also refining its long-term philanthropic 

strategy to ensure goals are executed 

in a consistent, fruitful and enduring way 

that provides benefits to the communities 

in which the firm operates. 

Institutionalizing its commitment 

to sustainability 

Given the obstacles many clients 

face in investing in sustainability, J.P. 

Morgan believes that displaying a 

consistent commitment to long-term 

sustainability objectives is essential 

to building expertise and leadership. 

Institutionalizing the sustainability 

mind-set within the company’s culture 

is critical. As a first step, J.P. Morgan 

decided to embed sustainability initiatives 

within existing business lines 

rather than create a new business group. 

“We’re not starting from scratch,” 

Fornell says. “We did not want to have 

one core renewable/alternatives energy 

group that is going to get fired in a 

downturn. Instead, we’re coordinating 

across industry groups where we’ve 

got something that is already up and 

running. Since alternative energy means 

more than electric power, it should have 

involvement across the firm: People in 

technology focus on solar opportunities; 

in chemicals, they focus on biofuels; 

in general industrial, they think about 

demand response companies, metering 

and smart buildings, etc.—all as a way 

for us to provide banking services to 

those sectors.” 

The firm also strives to educate 

employees across its business lines 

about sustainability’s science, challenges 

and opportunities. To earn buy-in 

from employees outside the core sustainability-related 

businesses—Global 

Commodities, Social Sector Finance 

and so forth—the company makes a 

point of communicating the business 

opportunities associated with environmental 

and social responsiveness. 

“I know bankers are always looking for 

something new to speak to their clients 

about,” Fuschetti says. “Sustainability 

gives bankers a great reason to call 

their clients and say, ‘Hey, what are you 

guys doing about the environment? I 

know you’ve got an issue. What are 

you doing about water or emissions?” 

Fornell agrees: “Investment bankers 

bristle at a command-and-control 

structure but respond well to the profit 

motive, so they’re interested in opportunities 

to make money in renewable 

and alternative energy. Spreading the 

alternative and renewable energy focus 

across the business works because, for 


example, clients of the guys in our 

chemical space, working in biofuels, 

have expressed that they’re glad we 

have a big presence in chemicals 

because if oil continues to slide, other 

investment banks are going to fire 

their renewable team—but they see us 

as here for the long run.” 

Angoorly remarks: “We want to show 

clients that, if they improve whatever 

it is they’re doing, they can potentially 

generate credits as a revenue stream.” 

Angoorly believes there are opportunities 

for J.P. Morgan to pitch sustainabilityrelated, 

profitable plans to clients. 

“Say, for example, our client is a rental 

car company that gives customers an 

opportunity to pay a few cents to offset 

their emissions. The rental car company 

is passing all or part of the cost on to 

the end consumer; plus, they can 

effectively use the ‘environmental lever’ 

as a key part of their brand differentiation 

strategy. The job across all of our 

businesses is tailoring our solutions to 

what the clients are trying to achieve. 

There are very different ways of looking 

at the business, all of which can be 

tapped into globally.” 

Because the sustainability field is so 

dynamic, J.P. Morgan must constantly 

work to keep employees up-to-date on 

the latest developments. One way the 

company educates employees across 

business lines is through its intranet. 

Angoorly says, “We have intranet 

materials explaining things like, what 

does it mean to offset your carbon 

footprint? What does it mean that we 

acquired ClimateCare? What can you 

do as an individual? What are some of 

the principles that J.P. Morgan as a 

whole is doing around all of these 

things?” The company also hosts a series 

of teach-ins, which provide a more 

personal learning environment.


Another way the company has ensured 

a consistent commitment to sustainability 

objectives is to adjust the strategy 

of the JPMorgan Chase Foundation, 

the firm’s philanthropic foundation. 

Founded in 1961, the foundation garners 

more than $110 million in annual 

donations and supports programs in 

33 countries and 550 cities in which 

the firm operates. 16 In 2006, the foundation 

developed new goals: to increase 

the philanthropic impact and visibility 

of its grant portfolio and facilitate 

greater employee involvement in the 

communities where the firm operates. 

Mark Rigdon, VP, Director of Global 

Philanthropic Strategy and Programs 

at JPMorgan Chase, explains the shift 

in strategy: 

“We had continuously heard from 

employees that having opportunities 

to participate in community activities, 

and providing firm-sponsored, structured 

vehicles for contributing money, 

is important to them. So, in 2007 we 

reached out to employees and asked 

what they’d like to see, and we got a 

lot of really great information back; 

people were pleased to be asked to 

contribute ideas. This set the precedent 

that interactive communication 

is a good thing.” 

The Investment Bank launched an initiative 

called "Team IB" to encourage 

and support employees involved in the 

community. They have also launched a 

number of programs that match their 

employees to short term volunteer 

opportunities in the microfinance sector. 

The Foundation developed a Web platform 

that uses a questionnaire to 

match employees with current volunteer 

opportunities. Some 13,000 employees 

registered on the platform within 

three days of its launch “This level of 

employee interest serves as a proxy for 

employee satisfaction,” states Rigdon, 

adding that corporate responsibility 

seems to be linked with retention. 

“Our younger employees, in particular, 

want a sense of social connectivity in 

their work. We’re finding that firms 

with more structured, high-quality 

opportunities are better able to retain 

top talent. So now, when we’re giving 

grants, we ask our partners, ‘What are 

the opportunities for employee 

engagement?’” 

Rigdon elaborates on the philanthropic 

measures designed to increase the 

yield and visibility of J.P. Morgan’s 

charitable commitments: 

In the past, we did low-dollar, highvolume 

grants. But we realized that 

by spreading $100 million or more 

annually across more than 30 domestic 

markets and 30-plus countries, our 

resources weren’t enough to address 

the symptoms of problems, much less 

solve them. As a result, we’re trying to 

be more focused, working in communities 

over a longer period of time in 

order to demonstrate increased returns 

on our investments. We’re assuming 

this approach will lead to some sustained 

employee involvement in 

high-need communities. We also think 

that it will begin to change the kind 

of visibility we get in local markets. 

Rigdon adds that partnering with 

influential community decision makers, 

such as public agencies, in areas 

where the company’s businesses operate 

helps to foster comprehensive 

community partnerships: “On the 

employee level, we’re trying to provide 

opportunities we think will benefit 

retention. On the business level, we’re 

trying to work in a way that enhances 

the success of our philanthropic and 

corporate goals. Finally, on the client 


level, we’re looking for opportunities 

that align well with our philanthropic 

priorities and our clients’ interests. We 

think facilitating this philanthropic 

overlap will ultimately encourage people 

to invest additional resources with us.” 

Longevity 

To ensure the longevity of the company 

and its commitment to sustainability, 

J.P. Morgan is embedding sustainability 

throughout the organization, and 

fostering strategic relationships with 

new partners. 

Embedding sustainability to 

strengthen the company for the 

long term 

J.P. Morgan’s leadership believes that 

sustainability has to be a companywide 

initiative—not a dictum from the 

top down. “I think things are smarter 

when they bubble up,” Fornell says. 

“Employees bristle when you have 

people at the top of the food chain 

saying, ‘Thou shalt be sustainable.’ 

When the institution is supportive of 

initiatives, people feel empowered.” 

Fuschetti agrees. “With approximately 

225,000 employees spread out all over 

the globe, we cannot mandate the 

kind of change we are hoping for. We 

aim to empower our people to create 

a more environmentally sustainable 

company. If they own the project they 

will make it work.” 

The company is confident that embedding 

sustainability initiatives across 

business lines and pursuing a more 

durable philanthropic strategy will 

help with corporate citizenship. Indeed, 

many feel that nurturing a positive, 

responsible corporate culture is integral 

to the longevity of the company and 

its sustainability commitments. And


just as Rigdon learned of employees’ 

eagerness to participate in community 

development opportunities, Leijonhufvud 

found that investment banking 

employees were ecstatic about volunteering 

in microfinance: 

When we announced the Social Sector 

Finance initiative, I literally got 1,000 

e-mails in the first week from employees 

who said, “I’ve been waiting for 

the firm to do this. How can I get 

involved? Can I volunteer? Can I get a 

job? Can I just come talk to you?” It 

was completely overwhelming and 

inspiring to see the thirst for an initiative 

like this. And I have a very small, 

four-person team, but I have tremendous 

pro bono support internally. A lot 

of what I’ve accomplished has been 

through people who said, “I’m going 

to do this on the side, even if I have to 

work weekends.” 

Last year in New York, 75 J.P. Morgan 

investment banking employees volunteered 

to teach financial literacy courses 

to customers of the microfinance organization 

ACCION New York. Another 

program recently launched with the 

Grameen Foundation, called Bankers 

without Borders®, has attracted huge 

interest from employees. The firm is 

the inaugural sponsor of the program 

which matches experienced professionals 

who volunteer for short-term 

assignments in the microfinance 

industry. J.P. Morgan is also sponsoring 

a series of business-plan competitions, 

run by TechnoServe, that target 

businesses serving the base of the 

economic pyramid in Latin America. 

These competitions involve employees 

as mentors, business plan advisors, and 

judges. “Engagement is so important 

to the corporate cultural impact of the 

initiative, which has become a bigger 

part than I even realized when I first 

set out to do this,” says Leijonhufvud. 

Fostering partnerships 

J.P. Morgan’s adoption of the Equator 

Principles and participation in creating 

the Carbon Principles are two other 

examples of its commitment to sustainability. 

The Equator Principles 

provide standards by which financial 

institutions can assess the social and 

environmental impact of their investments 

and project-financing activities. 17 

In April 2005, J.P. Morgan became the 

third US bank and thirtieth financial 

institution worldwide to adopt the 

Equator Principles, which the company 

applied to its commercial and investment 

banks. 1819 

In 2008, the company took an active 

leadership role in establishing the 

Carbon Principles, which are guidelines 

to “strengthen environmental and 

economic risk management in the 

financing and construction of electricity 

generation.” 20 Developed by J.P. Morgan, 

Citigroup and Morgan Stanley, in consultation 

with leading power companies 

and environmental NGOs, the Carbon 

Principles are specific to understanding 

and managing the carbon-emission 

risks associated with power projects. 

Conclusion 

J.P. Morgan’s leaders believe that corporate 

responsibility is an essential 

component of the company’s success, 

and that social and environmental 

benefit and profitability can, indeed, 

be two sides of the same coin. While 

acting in the interest of clients remains 

J.P. Morgan’s top priority, leadership 

continues to look for opportunities to 

pioneer double-bottom-line initiatives 

that will benefit all members of the 

communities in which J.P. Morgan has 

a presence. 

Angoorly puts it simply: “Obviously, 

building and running a successful 

business is our first priority, but it’s 


important to remember that we need 

to do this in ways that leave the world 

a better place.” 

Masters elaborates: 

“Given that J.P. Morgan is very client 

focused and employs a significant 

number of people around the globe, 

we have a responsibility to the community, 

to employees and to the 

governments of the countries within 

which we work. A significant amount 

of our business is based on trust and 

confidence, which we have to earn 

from both employees and customers. 

We’re a highly visible company, and if 

we don’t visibly give back, we simply 

won’t have the credibility we need. 

J.P. Morgan has a culture derived from 

many years of success, and employees 

want to be proud of the company they 

work for. It’s hard to be proud of a 

company that doesn’t take its corporate 

social responsibilities seriously. How 

the company does well and does good 

is a self-fulfilling relationship.” 

By establishing itself as a leader in 

sustainability, J.P. Morgan plans to play 

a role in shaping what may be the 

next era in global business—an era in 

which corporate responsibility and 

financial success go hand-in-hand. As 

the financial crisis that began in 2008 

continues, the long-term prospects of 

many Wall Street institutions remain 

uncertain. Investors and stakeholders 

can be confident, however, that J.P. 

Morgan will greet the twenty-second 

century as it has the last two: with one 

foot planted firmly in tradition, the other 

walking steadily on the cutting edge.


About the authors 

Eric Lowitt is a research fellow at 

the Accenture Institute for High 

Performance, where his research 

focuses on the connection between 

sustainability and high performance. 

Lowitt’s recent sustainability research 

has been published by the World 

Business Council for Sustainable 

Development and Forbes.com. 

Notes 

1. J.P. Morgan, “J.P. Morgan Launches Social Sector 

Finance Unit,” press release, November 7, 2007. 

2. J.P. Morgan, “J.P. Morgan Volunteers Help ACCION 

Clients Benefit from Microfinance,” press release, 

June 27, 2008; J.P. Morgan, “Loans Help Fight Poverty 

in China,” press release, May 3, 2008. 

3. J.P. Morgan, “Growing Business to Curtail Carbon 

Emissions,” press release, September 8, 2008. 

4. Ibid. 

5. Ibid. 

6. Fred Pearce, “Dirty, Sexy Money: Carbon Is the New 

Hot Commodity, but Can Trading It like a Currency 

Really Save the Planet?” New Scientist, April 19, 2008. 

7. J.P. Morgan, “Growing Business to Curtail Carbon 

Emissions,” press release, September 8, 2008. 

8. “PRESS DIGEST-British Business-March 27, 2008,” 

Reuters News, http://uk.reuters.com/article/ 

governmentFilingsNews/idUKL2730323020070327 

(accessed November 7, 2008). 

9. Ibid. 

Jim Grimsley is the Accenture 

Sustainability Practice Lead for North 

America. Based in Houston, Texas, 

Grimsley has significant experience 

leading a number of successful reengineering 

and transformation projects. 

Prior to his current role, he was the 

global managing partner for upstream 

in Accenture’s energy industry group. 

His consulting background encompasses 

a broad range of leadership 

experiences, including major merger 

integration efforts in the energy 

industry as well as several significant 

supply chain projects. 

10. Nick Hodge, “The Green Exchange: How Not to Miss 

a Trillion-Dollar Opportunity,” Energy and Capital 

Web site, http://www.energyandcapital.com/articles/ 

green-exchange-carbon+market/644, 

March 17, 2008. 

11. J.P. Morgan, “The Way Forward,” http://www.J.P. 

Morgan.com/pages/jpmc/community/wayforward_ 

energy (accessed November 7, 2008). 

12. J.P. Morgan, “Chase Further Strengthens Robust 

Plans to Keep Families in Homes, Including 

Systematic Review of Entire Mortgage Portfolio,” 

press release, October 31, 2008. 

13. NYMEX, “NYMEX and Other Major Market 

Participants to Form the Green Exchange, the World’s 

Most Comprehensive Environmental Market,” press 

release, December 12, 2007. 

14. J.P. Morgan, “Our Environmental Commitment: 

Section A, B, F,” http://www.J.P.Morgan.com/pages/ 

jpmc/community/env/policy/intern (accessed 

November 7, 2008). 

15. LEED, or Leadership in Energy and Environmental 

Design, is a designation awarded to buildings 

meeting the highest environmental and energyefficient 

standards on a scale consisting of certified, 

silver, gold and platinum (platinum having the 

highest rating). 

16. J.P. Morgan, “Corporate Responsibility,” 

http://www.J.P. Morgan.com/pages/J.P. 

Morgan/ap/about/cr (accessed November 7, 2008). 

17. J.P. Morgan, “A: Environmental Risk Management 

Policy,” http://www.J.P.Morganchase.com/cm/cs? 

pagename=Chase/ 

Href&urlname=jpmc/community/env/policy/risk 


18. The Equator Principles, http://www.equatorprinciples.com/index.shtml 


19. J.P. Morgan, “A: Environmental Risk Management 

Policy,” http://www.J.P.Morganchase.com/cm/cs? 

pagename=Chase/Href&urlname=jpmc/ 

community/env/policy/risk 


20. J.P. Morgan, “Leading Wall Street Banks Establish the 

Carbon Principles,” press release, February 4, 2008.

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