2011 Corporate Responsibility Report - JPMorgan Chase

the suitability of the assets and company for
listing, and its ability to operate according to
international EHS standards. On that basis,
we actively engaged with the company to
develop its capacity to operate in line with
international EHS standards. This process
involved GESRM visiting the relevant
assets with an independent consultant to
determine the actions needed to address
the EHS issues. The company has welcomed
GESRM’s support and in the prospectus has
committed to implement the independent
consultant’s recommendations.
Equator Principles Reporting
As an institution with a limited project
finance business, JPMorgan Chase is
an associate member of the Equator
Principles. J.P. Morgan was not active
in traditional project finance between
2008 and 2010. We did perform one
specific project finance transaction in
2011, for which we contributed a portion
of the project’s total $2 billion value. The
funds were directed toward a combined
integrated upstream and midstream
project finance development in the Middle
East. An independent consultant was
hired by the lending syndicate in 2011 to
conduct a technical report, which reviewed
compliance with the Equator Principles. The
independent technical report confirmed
the project’s broad compliance with the
Equator Principles and the underlying
International Finance Corporation
Performance Standards. The independent
technical consultant was then hired to
monitor project construction to ensure that
any gaps would be addressed and mitigated
during construction phase.
Equator Principles Report
EP CATEGORY NUMBER OF PROJECTS REVIEWED IN YEAR 2011
A 1 1
B 2 0
C 3 0
TOTAL 1
Carbon Principles
JPMorgan Chase adopted the Carbon
Principles in February 2008 in partnership
with Citigroup and Morgan Stanley,
seven leading electric utilities and three
environmental organizations in order
to better assess the risks in financing
greenhouse-gas intensive electricity
generation. The principles came into effect
in August 2008. Since then, we have
applied the Enhanced Diligence Process set
out in the Carbon Principles to transactions
that finance coal-fired power plants for
investor-owned utilities and, effective
February 2009, for public power and
electric cooperatives.
In 2011, the firm applied the Enhanced
Diligence Process to general corporatepurpose
bond issues for two clients. We
did not participate in any municipal bond
or project financing of Carbon Principleseligible
facilities.
Mountaintop Removal Mining
In 2009, JPMorgan Chase announced
its enhanced diligence process on
mountaintop removal (MTR) mining of coal.
As previously described, the enhanced
diligence includes considerations of a
company’s regulatory compliance history,
exposure to future regulation, litigation risk,
and operational performance related to
valley fills and water quality issues. The firm
will continue to apply the enhanced review
until the key controversies surrounding
MTR are thoroughly addressed. We
continue to monitor the ongoing regulatory
and legal developments regarding the
appropriate measures needed to protect
the environment and human health. As a
result of our enhanced diligence process, in
2011 we substantially reduced our financing
for coal producers that use MTR mining.
Training
GESRM conducted training for 166 bankers
in 2011 and is targeting similar numbers
in 2012. Additionally, GESRM will provide
Equator Principles training for all project
finance staff in the bank, with an expected
audience of 30–40 employees.
Environmental and social issues are
captured in our Reputation Risk 2012
online training module, which will be
rolled out in the first half of 2012. This
training will be mandatory for all 26,000
employees in the Investment Bank and
2011 CORPORATE RESPONSIBILITY REPORT 61