Re: [greenyes] JP Morgan Goes "Green" - Power of Activists

["Doug Koplow" <koplow@no.address>]

My reading of this is that JP Morgan's decision has nothing to do with environmental group pressure and everything to do with better control of the risks associated with their investments.  

With Kyoto in effect, factors such as carbon emissions (and their control or the purchase of emissions rights) already have real financial effects in many countries.  For long-term investments, such as a coal-fired power plant for example, failure to integrate these costs into plant economics (and lending assumptions) would be a rather substantial mistake.  It is probably not a coincidence that we are starting to see changes in bank policies now.

Whether the other changes in JP Morgan's lending criteria represent true successes of environmental and shareholder pressure as the WSJ implies, rather than PR-oriented changes with far less bit than GHG costing, will depend on the details of their 10-page policy soon to be released.  If others on the list read it through, I'd be interested in hearing your verdicts.   

-Doug Koplow

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>>> "Peter Anderson" <anderson@no.address> 04/25/05 12:35PM >>>
[With the total blackout from power in Congress and the White House, it is 
good to see how concerted organized action can still produce solid 
constructive results for change, a fact which shows how out of phase the 
current occupants in power are from the people.  JP Morgan would not change 
its stripes for activists had they not perceived it as necessary to be a 
viable player in the marketplace.- Peter]




WALL STREET JOURNAL

J.P. Morgan
Adopts 'Green'
Lending Policies
By JIM CARLTON
Staff Reporter of THE WALL STREET JOURNAL
April 25, 2005

Following pressure by ecological activists and shareholder groups, J.P. 
Morgan Chase & Co. will adopt sweeping guidelines that restrict its lending 
and underwriting practices for industrial projects that are likely to have 
an environmental impact.
The New York banking giant -- third largest in assets in the U.S. -- is 
expected to issue a 10-page environmental policy today that takes an 
aggressive stance on global warming, including tying carbon-dioxide 
emissions to its loan-review process for power plants and other large 
polluters. The bank also plans to calculate in loan reviews the financial 
cost of greenhouse-gas emissions, such as the risk of a company losing 
business to a competitor with lower emissions because it has a better public 
standing.
And J.P. Morgan plans to lobby the U.S. government to adopt a national 
policy on greenhouse-gas emissions, becoming the first big American bank to 
pledge that kind of activism on such a contentious issue, according to 
shareholder activists.
The bank's move, on the heels of activist campaigns that produced similar 
pledges from Citigroup Inc. and Bank of America Corp., suggest that a shift 
in tactics by the environmental movement is paying off. Green groups have 
largely failed in efforts to lobby the Bush administration on oil drilling 
and other issues. So they are pressuring corporations directly, hoping to 
counter business activity that could harm the environment.
Large banks are a particularly important target because of their potential 
role in financing activity such as energy development and logging. By 
agreeing to put some limits on lending, banks could forgo some profitable 
activity. But activists argue that eco-friendly policies can help banks 
sidestep loan defaults and costly litigation associated with businesses such 
as logging and mining.
"This is increasingly becoming the way all banks operate," says Steve 
Lippman, vice president of social research at Trillium Asset Management, a 
socially oriented investment firm based in Boston that helped lobby J.P. 
Morgan. "J.P. Morgan is now raising the bar for the sector."
"...
"...
"...
"..."

FOR FULL ARTICLE. 
http://online.wsj.com/article_print/0,,SB111438883473915625,00.html 
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