2011 Corporate Responsibility Report - JPMorgan Chase

58
business activities across all sectors and
geographies, we have an opportunity
to contribute to more sustainable
development of energy, infrastructure,
food, fiber and technology. We can
improve environmental and human rights
outcomes by assessing and understanding
potential environmental and social risks
in our investment and lending activities.
From our experience, we have seen that
such risks, in addition to being potentially
harmful to communities and the
environment, can have a negative impact
on a client’s financial performance.
Advise
GESRM
of deal
Review
Assess
Execute
Monitor
Screen and
categorize
Figure 1. GESRM Review Process
JPMORGAN CHASE & CO.
Perform due
dilegence
Review
transaction
ENVIRONMENTAL AND
SOCIAL RISK ASSESSMENT POLICY
Over the past five years, JPMorgan Chase
has developed a robust internal policy to
guide our approach for understanding and
assessing environmental and social risks
associated with our financing activities in
various sectors and geographies. We have
adopted an Environmental and Social
Risk Assessment Policy, which requires us
to evaluate, and in certain circumstances,
mitigate, environmental and social risks
associated with our financing activities. We
do this through a strategic review process,
which is built upon the Equator Principles
and tailored to our specific financial
products and services, particularly in capital
markets. This is an integral part of ensuring
Reputation
Risk
Committee
review
Covenants or
commitments
Decline
Approve
Monitor &
Report
that we conduct “first-class business in a
first-class way,” enabling us to create value
for our shareholders in a manner that is
responsive to the environmental and social
impacts in the markets in which we operate.
GLOBAL ENVIRONMENTAL AND SOCIAL
RISK MANAGEMENT (GESRM)
Our environmental and social risk
assessments are carried out by a
specialized Global Environmental and
Social Risk Management team.
AREAS OF FOCUS FOR GESRM
INDUSTRY
SECTORS
SPECIFIC
ACTIVITIES OR
SUB-SECTORS
Extractive industries (mining, oil and gas)
Heavy industry (power, manufacturing)
Forestry
Agriculture
Shale gas and oil extraction via hydraulic fracturing
Oil sands
Large hydropower
Nuclear power
Uranium mining
LOCATION Protected/sensitive areas
GESRM’s mandate is to assess and manage
the potential environmental and social risks
in JPMorgan Chase’s investment banking,
corporate banking and lending activities
by assessing clients and transactions
in these sectors, and ensuring that
measures are put in place to mitigate such
risks. The team reports to the Office of
Environmental Affairs (OEA) as well as to
the Investment Bank’s Global Reputation
Risk Office.
Figure 1 outlines the environmental and social
review process. First, GESRM undertakes an
initial screen of transactions to determine the