2011 Corporate Responsibility Report - JPMorgan Chase

PUBLIC RESPONSIBILTY COMMITTEE OF THE BOARD
HEAD OF
CORPORATE
RESPONSIBILITY
OFFICE OF
ENVIRONMENTAL
AFFFAIRS
CEO AND CHAIRMAN
CHIEF RISK
OFFICER
GLOBAL
REPUTATION
RISK OFFICE
GESRM (6 FTEs)
Figure 2. Environmental and Social Risk Function
Organization Chart
potential level of environmental and social
risk, and the appropriate level of due diligence.
The team then conducts a corporate-level
assessment looking at a client’s:
− Commitment (typically defined by
Environmental Health and Safety (EHS)
policies)
− Management capacity / approach
(EHS management systems, community
engagement)
− EHS track record (accidents, spills, fines,
negative press)
The corporate assessment is based on
publicly available information, such as a
company’s website as well as annual and/
or sustainability reports. Where capital is
being raised for a specific asset, GESRM
will conduct asset-specific due diligence,
which entails reviewing relevant project
documentation, such as Environmental
and Social Impact Assessments (ESIA),
Environmental and Social Management
Plans (ESMP), specific Action Plans (e.g.,
resettlement, biodiversity) or audit reports.
Higher-risk transactions will often require a
site visit either by GESRM or a consultant to
better understand how the identified risks
are being managed at the project site.
If GESRM’s review identifies material
risks, a transaction believed to be
highly sensitive may be escalated to the
Reputation Risk Committee and/or the
OEA. Where improvement in a client’s
performance is required (whether at a
corporate or asset level), conditions or
covenants will typically be defined by
GESRM and included in the final decision.
Where we require the client to implement
specific recommendations, the GESRM
team will monitor the client’s progress
regularly and as new transactions arise.
Asset-Specific Reviews
The GESRM team’s risk review process
is built on the structure of the Equator
Principles, but is tailored to our individual
business in capital markets. This is due to
the belief that the Principles are a useful
risk management framework that can, in
certain circumstances, be applied beyond
their project finance focus.
The GESRM team assesses all transactions
subject to our Environmental and Social Risk
Policy to determine their environmental and
social impact, categorize them appropriately
and apply the correct level of due diligence.
In 2011, GESRM completed 268 assessments:
SECTOR TOTAL
Agriculture 28
Chemicals 12
Forestry, pulp and paper 11
Infrastructure 8
Manufacturing 32
Mining and metals 76
Oil and gas 67
Power 24
Shipping and Storage 5
Other 5
TOTAL 268
REGION TOTAL
Asia Pacific 97
EMEA 82
Latin America 36
North America 53
TOTAL 268
CATEGORY ASIA
PACIFIC
EMEA LATIN
AMERICA
NORTH
AMERICA
A 1 15 15 5 12 47
B 2 64 51 21 32 168
C 3 18 16 10 9 53
TOTAL
TOTAL 97 82 36 53 268
2011 CORPORATE RESPONSIBILITY REPORT 59